An upper house inquiry into CSG mining in the state has concluded any expansion of the industry should stop until all of the recommendations of the NSW chief scientist, Professor Mary O’Kane, are complied with.
The report also found there is no substance to the claim that CSG mining would help reduce gas prices in the country and said that would only happen if a national gas reservation policy were introduced.
Prof O’Kane made 16 key recommendations in her final report, which was released last September after 19 months of investigation.
The state government subsequently released a gas plan but has not committed to enacting the recommendations in full.
The upper house inquiry, chaired by Shooters Party member Robert Borsack, included representatives from the Greens, ALP, Liberals and Nationals.
It made four recommendations:
- That information about the total amount of gas available for sale should be available publicly.
- That a national gas market similar to the national electricity market be created with ‘more transparency and openness’ than currently exists.
- That all the recommendations of the chief scientist’s report be enacted before any expansion of the industry in NSW is contemplated.
- That the minister pursue, through COAG, the implementation of an Australia-wide domestic gas reservation policy.
No cost saving
Gasfields Free Northern Rivers has seized on the report to again call for the Coalition to declare the region CSG free and Lock the Gate has called for a halt to existing drilling in Gloucester and Narrabri.
‘This report clearly shows that CSG expansion in NSW will not alleviate costs to the consumer, and that those costs and the resultant fear campaign of a gas shortage in NSW are fabricated by the companies,’ said Elly Bird, regional coordinator of Gasfield Free Northern Rivers.
‘The only reason Metgasco and other companies with licenses in this region want our gas is to sell it to overseas markets, for inflated prices – there is plenty of gas right here in Australia for our domestic needs’ she said.
‘In the northern rivers it is abundantly clear what the interests of our community are – we want full cancellation of all licenses and for our region to be Gasfield Free, now and forever,’ she said.
‘With the election coming, the NSW Government and the National Party have tied themselves to a speculative and destructive industry that offers nothing to NSW except inflated export gas pricing.’
Lock the Gate national coordinator, Phil Laird, said, ‘The government must take these recommendations to heart and act now to put the Gloucester and Narrabri projects on hold before any more damage is done’.
‘After waiting so long to hear the chief scientist’s recommendations, we cannot wait any longer for them to be implemented. The NSW Gas Plan is now in tatters, and must be completely re-written off the back of this report.
‘We are calling for Mike Baird to immediately announce a completely new approach which puts CSG mining on hold in NSW.
Greens MP and inquiry deputy chairman Jeremy Buckingham said, ‘The inquiry has found it is the pursuit of coal seam gas for export as LNG that is squeezing supply and driving prices up, and that coal seam gas projects in NSW will make no meaningful difference to this equation.
‘Resources minister, Anthony Roberts himself admitted that modelling he’d seen showed the completion of both Santos’ Narrabri and AGL’s Gloucester projects would only lower gas prices by 3 per cent. For such a tiny benefit, coal seam gas is simply not worth the risk.
‘It is a massive failure of governments and the industry that no thought was given to the knock-on consequences of moving into the export of coal seam gas. The inquiry heard evidence from business, economists and unions that billions in economic activity and tens of thousands of jobs particularly in manufacturing are being put at risk.
‘What we are witnessing here is both the market failing to benefit Australian businesses and households and governments failing to regulate the market to address this issue,’ Mr Buckingham said.
Labor’s energy spokesperson Adam Searle said, ‘These are commonsense recommendations to protect local communities and pristine agriculture land from coal seam gas and fracking which support the position taken by Labor.
‘Labor will suspend all existing CSG exploration licenses and will not issue any new exploration or extraction licenses.
‘Our policy also makes it very clear that there will be defined no-go zones in which CSG will never be permitted, including the NSW north coast, the Sydney Water Catchment and other defined water catchment areas Mr Searle said.
There were three dissenting reports, one from Liberal Peter Phelps, who wrote that the inquiry’s report was ‘so flawed it is difficult to know where begin with my criticism of it.’
Dr Phelps concluded ‘a restriction of supply’ that the inquiry called for would ‘in a freely floating market, lead to an increase in its equilibrium price’.
A similar conclusion was reached by fellow Liberal Scot MacDonald, who went further, calling the gas reservation policy ‘protectionism’, which he said would lead to ‘higher domestic prices’.
Greens Jeremy Buckingham wrote that while he was overall satisfied with the report, ‘The NSW government should not risk public health, the quality or quantity of water resources or the nature of farmland and rural communities by developing an indigenous gas supply from unconventional resources.’