New South Wales sets up coal seam gas exclusion zones

The government of New South Wales plans to establish 2-km exclusion zones around towns in the state with populations above 1,000 or more people to keep coal seam gas exploration and production activity away from residential areas.

The exclusion zone will cover future expansion of residential areas in Sydney’s northwest and southwest as well as away from sensitive industries such as wineries and horse studs.

In addition, Mary O’Kane, state chief scientist, has been asked to undertake a review of CSG activities and hand down her initial report by July.

Under the new rules the CSG industry will be regulated by the Environment Protection Agency, which will be given the power to revoke licences if companies concerned do not follow the environmental conditions imposed.

The government’s move has come amid increasing concern about CSG drilling since it withdrew its embargo on hydraulic fracturing in June 2012.

Recently, AGL Energy’s proposal to drill in the Campbelltown region in Sydney’s western region drew criticism from both state and federal politicians and forced AGL to suspend its plans for an extension of the existing Camden CSG project, which has been supplying gas to Sydney market for a decade.

Federal Environment Minister Tony Burke had criticised the New South Wales government for not joining a national plan for CSG, which involves the Australian states taking advice on CSG projects from the recently established Independent Experts Science Committee on Coal Seam Gas & Mining. The committee was established following demands for an inquiry by Independent Federal MP Tony Windsor.

AGL Energy reacted to news of the exclusion zone by saying the ban would only exacerbate the looming gas supply crisis in New South Wales. The company pointed out that existing gas supply contracts are due to end in 2014-17.

“The absence of multiple new sources of supply in [New South Wales] will add to the substantial upward pressure on gas and electricity prices in the state,” it said.

AGL and fellow CSG company Metgasco have requested immediate meetings with the New South Wales government to ascertain the precise impact to its operations. Another major player, Santos, is also seeking clarification for its operations northwest of Sydney in the Gunnedah basin.

The Australian Petroleum Production & Exploration Association objected to the lack of consultation before the New South Wales government move. APPEA claims the government keeps shifting the goal posts through a red-tape laden decision-making process that ignores science and the excellent environmental record of an industry that has been operating in Australia for more than 4 decades.

It added that the industry has operated safely in western Sydney for a decade and the latest decision is arbitrary. It sends a clear signal that New South Wales is closed for business.

On the other hand, activist group Lock the Gate Alliance says the government’s new measures do not go anywhere near calming public concern about the CSG issues.

The alliance charges the government with an appalling level of irresponsibility in the granting of mining approvals in NSW which has allowed what it calls “a tsunami of destruction” to threaten many areas of the state.

Anti-CSG farmers in northwest New South Wales added their voice to the affair asking why communities of under 1,000 people should not be treated the same way as communities of more than 1,000 people. The group said that if CSG is unsafe in Campbelltown, then it is unsafe everywhere. If CSG is a risk to wine-growing and horse breeding areas, then it is a risk to food and fibre producing areas in the state’s northwest.

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