Ballina MP Tamara Smith has called on the state government to either buy back or cancel Metgasco’s license to drill for coal seam gas in the northern rivers.
Ms Smith said an announcement yesterday by mining giant AGL that it would divest coal seam gas assets in Western Sydney and the Hunter Valley was a clear sign the industry was also unviable in the region.
NSW Energy Minister Anthony Roberts has been negotiating with Metgasco over compensation after the company successfully challenged the government’s decision to cancel its drilling license for its Bentley project.
The cancellation was made as thousands of local residents readied themselves for an expected force of 900 police being sent to break the Bentley blockade.
Metgasco chief executive Peter Henderson said at the time that the company was committed to the project, and that it expected compensation and support from police when it was ready to resume its exploration.
But Ms Smith said AGL’s decision to withdraw from the Hunter Valley because of the conflict with agricultural land and local communities should ring warning bells for Metgasco and the owners of PEL445.
‘There is a lesson for potential gas producers in the northern rivers that trying to advance projects in agricultural and close knit communities just doesn’t work.
‘The government should be using the AGL decision to up the pressure on PEL445 owners and Metgasco and ensure the licences are either bought back or cancelled in the public interest.
‘I think AGL have missed an opportunity to also withdraw from Gloucester and start to repair their corporate reputation which has been badly damaged in recent years. I suspect they will be forced by the weight of community opinion and increasingly challenges with waste water management to revisit the Gloucester decision in the future.’
Greens NSW coal seam gas spokesperson Jeremy Buckingham AGL’s decision was recognition that coal seam gas was unwanted and unviable.
‘The writing is on the wall for coal seam gas as communities around the country refuse to accept the risks to their land, water and the climate.
‘This is a great victory for the communities that have been opposing coal seam gas and reflects well on the direction the new CEO Andy Vesey is taking with AGL.
‘But it is also a missed opportunity for AGL to repair their battered corporate reputation by ditching their risky Gloucester gas plans.
‘The community opposition to this crazy project will continue grow and this latest announcement will only strengthen the people of Gloucester’s resolve not to be the only place in NSW destroyed by this toxic industry.
‘The $193 million write down of this project is a recognition that coal seam gas in Gloucester doesn’t stack up and the Greens look forward to AGL packing their bags in the near future.
‘The buy-back process should not be a cash cow for the gas industry and the Greens believe that AGL’s worthless licenses should be handed back without compensation.’
NSW Shadow Minister for Energy Adam Searle also welcomed the decision, saying it was a step in the right direction to protect land and water from the risks posed by coal seam gas.
‘The news that AGL will not proceed with a number of projects is a step in the right direction to protecting our land and water from risks posed by coal seam gas,’ he said.
‘We remain concerned that the Gloucester project will proceed despite serious questions and significant community unease about its environmental impacts.”
‘Operations that cannot prove to be safe at every stage of the process should not proceed – and AGL has not proven to the Gloucester community that this CSG project is safe.
‘The vast majority of CSG licences being bought back have no gas worth extracting – and as we see today, major CSG projects are going ahead despite strong community opposition.
‘Labor will continue to press for a statewide moratorium on CSG, and for all of the Chief Scientist’s recommendations to be implemented.’
Meanwhile, NSW Energy Minister Anthony Roberts has warned coal seam gas companies their exploration licences could be stripped from them if they do not follow AGL’s example of selling licences in sensitive areas back to the government.
Mr Roberts told the Financial Review that the ‘very generous’ buyback scheme would only last until September and after that companies with exploration licences would have to ‘use it or lose it’.
The buyback scheme was due to end last week but the NSW government extended it for three months.
The threat seemed to be directed at Metgasco, one of the companies he was negotiating a buyback with.
However, Mr Roberts said the government was still looking positively at AGL’s remaining project in the Gloucester region and Santos’ Pilliga project which are both in relatively sparsely populated areas north-west of Sydney.
‘They are going through a planning process,’ Mr Roberts said.
But he said the government would insist on world’s best practice and a “triple bottom line” approach.
He denied there had been a ’quid pro quo’ where AGL agreed to surrender the Sydney and Hunter Valley licences in exchange for approval for Gloucester.