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Mining & Resources

NSW government unveils ‘restrictive’ CSG reforms

4 Feb 2014, by Informa Insights

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The NSW government has finalised new CSG reforms, but proponents of natural gas development have called them restrictive and damaging to business.

Deputy premier Andrew Stoner, minister for planning and infrastructure Brad Hazzard, and energy and resources minister Anthony Roberts announced the reforms, claiming they strike the right balance between communities and industry.

“Today marks a significant milestone in this government’s commitment to balance the energy needs of the state and the need to support our vital agricultural industry,” Mr Stoner said.

“Coal seam gas exclusion zones are now in force for an estimated 95 per cent of dwellings covered by current petroleum licences and tough regulations are also now in place for NSW’s most valuable agricultural land.”

CSG restrictions

The reforms include several new restrictions hampering the exploration and development of CSG resources, such as:

·      Applying CSG exclusion zones to cover ‘Critical Industry Clusters’, residential zones and an additional seven rural villages and growth areas across 55 council areas
·      Preventing all new CSG activity in Critical Industry Clusters
·      Implementing Critical Industry Clusters for 254,000 hectares of equine land and 60,000 hectares of viticulture land in the Upper Hunter
·      Appointing the Gateway Panel to assess the impact of resources projects on agricultural land
·      Requiring mining proposals to go through an independent assessment of the Gateway process

Mr Hazzard said the changes will benefit NSW residents, while giving resources companies the appropriate framework within which to operate.

“Industry can plan ahead with certainty, the rules are clear and communities can rest easy in the knowledge that NSW has the toughest CSG controls in the country,” he explained.

Industry opposition

Industry groups have slammed the reforms, including the Australian Petroleum Production & Exploration Association (APPEA).

The organisation said the state government’s claims that it is pursuing a science-based energy policy have been seriously undermined by the new restrictions.

Paul Fennelly, APPEA chief operating officer of the eastern region, said it is “not surprising” that NSW’s reputation as a good place to do business is faltering.

“Despite knowing that NSW imports 95 per cent of its gas supply and that a failure to develop local supplies will lead to higher energy prices, the state government has again turned its back on both the science and the industry’s proven track record,” he explained.

CSG courses and employment opportunities

CSG training is on the rise across Australia due to notable growth in the sector last year and projections of similar success in 2014.

Mr Fennelly said NSW’s new restrictions could dent the state’s employment prospects and prevent foreign and domestic businesses from investing money.

He cited Queensland as an example, where 30,000 jobs have been created through natural gas projects worth $60 billion. Gas companies have also invested more than $100 million in regional community schemes, and have signed land access agreements that have boosted farmers’ income.

csg_overview_and_understanding_reserves_P14GR20WEBPDF-1The Fraser Institute’s Global Petroleum Survey examines barriers to oil and gas exploration in 157 jurisdictions worldwide. Last year, the organisation listed NSW in 145th position for environmental regulation costs.

The price of complying with regulations overall saw the state ranked 127th, putting it behind Bolivia, South Sudan, Uzbekistan, Kyrgyzstan and Kazakhstan.

NSW’s energy future

According to the APPEA, the reforms could have a substantial economic impact on the state, as well as a lasting effect on local energy markets.

Mr Fennelly said: “The measures announced today (January 28) put a stranglehold on natural gas development, business investment, job creation, regional growth and small business opportunities.”

He urged the NSW government to reconsider blanket exclusions for CSG exploration and development, adding that they will result in the state facing “unnecessary” energy risks.

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