Last week Dart Energy suspended its coal seam gas (CSG) operations in NSW citing recent government decisions as their reasons. Earlier in March Metgasco did the same in the Northern Rivers. Planet Gas, who have CSG interests in the Shoalhaven, Hunter and Moree Plains also seem to be walking away from NSW.
The industry has taken to the media in the last month crying foul at the uncertainty that has been created by the multiple policy changes. The peak industry body APPEA, the Australian Petroleum Production and Exploration Association released a report claiming green tape threatened billions in investment.
But unfortunately for the Government the public is increasingly well informed when it comes to CSG and thinks policy is being made on the run. Contrary to the claims of the CSG industry, a closer look at the dynamic in NSW tells a different story.
The experience for both Metgasco and Dart energy has not been a challenge of Government policy; they have significant holdings of land outside of residential areas. The challenge has been community organising by genuine grassroots groups; characters like the Knitting Nanas stand together on blockades with the radical left and local farmers.
Sustained local campaigns, community organising, blockades and legal challenges has crippled the financial viability of CSG projects. Exploratory drilling that should have taken days in the Northern Rivers took weeks with over 20 arrests and escalating media coverage painting the industry in a bad light.
It's clear: the CSG industry is not grinding to a halt in the face of government regulation but by strong and expanding community opposition. The only thing expanding down on Macquarie Street is the media output.
In December 2010, Steve Whan, the then NSW Energy and Resources minister in the Labor Government put out a media release: "Tough new rules on coal seam gas exploration". The announcement was a response to the discovery by the NSW Greens of plans by Dart Energy to drill a coal seam gas exploration well at St Peters in Sydney’s inner west.
Two and half years, an election, and a new minister later, and the tough new media releases keep coming, including the July 2011 release "Tough new conditions for coal and coal seam gas" and its February 2013 sequel, "Tough new rules for coal seam gas activity". The second of these included plans to introduce a two kilometre exclusion zone around residential areas and areas designated critical for the thoroughbred breeding industry and Hunter Valley vineyards.
A casual observer might believe we actually have “tough new rules” for coal seam gas in NSW. In fact, far from trying to regulate the industry, the government has been trying to get the community to back off to give the industry space to proceed, an approach that has demonstrably failed.
Recent polling by the Sydney Morning Herald shows there is massive support for farming community's opposition to CSG. The two kilometre exclusion zone around residential areas has not quelled community concern. Seventy-five per cent of respondents oppose CSG activities on agricultural land.
Inherent in the public's mistrust is a deep logic gap in the policy announcements to date. In an effort to try to shut down opposition, the Government ran hard on the two kilometre exclusion zone, selling it as protection against the risks CSG presented to residential communities.
But all this has done has further convinced regional areas they're being sold up the river — like at Gloucester, where 330 wells are already approved and won't be captured by the new laws. If CSG poses too significant a risk to residential areas, how can it be ok in rural areas, in our drinking water catchments and on our farms?
Even the Deputy Premier and National Party leader, Andrew Stoner, said he would not want CSG near his property for fear it would have an impact on the value of the land. The biggest failure of policy has been in relation to agricultural land and water, which remain essentially unprotected under NSW law. Attempts to redress the situation by the federal government have met criticism from NSW.
When all's said and done, the news is increasingly good: the government have finally acknowledged the risks and opened the door to no-go zones. For two years they have rejected the legitimate concerns of the community and made hollow announcements to try to skirt the issues. But now the CSG drillers have a truly tough new foe — organised communities. Unlike the O'Farrell Government, they follow through, and are succeeding.
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