The Gas Boom Transforming Chinchilla

In Chinchilla, four hours west of Brisbane, the town’s first Indian restaurant opened a few months ago, next to the IGA. There was a line out the door every night during their first week of trading.

Throughout the town, hotels display No Vacancy signs. You’re lucky to get a park in the main street. On the side of the Warrego Highway on the drive into town, KFC has a Coming Soon sign pitched. On Friday night, the pub goes off.

Chinchilla is no tourist town. These are some of the visible effects that a mining boom has on a small agricultural town.

Companies have been drilling for coal seam gas in the Chinchilla area for the past 11-12 years, but the speed of development in more recent years has been astounding. And the impact on the town has been enormous.

From the 2006 census to the 2011 census, the population of Chinchilla increased from 3681 to 5487. That’s a nearly 60 per cent increase in just five years.

The median house price in Chinchilla grew from $90,000 in 2003 to $335,000 in 2011 — a growth of 17 per cent per year. In April this year, the average house price reached $415,000, although there are some properties that are selling for up to $800,000.

Co-Founder and Director of Surat Basin Property Group Warren Daniells anticipates that Chinchilla’s population will reach 14,000 in five years.

Daniells drives through one of the newest housing estates in Chinchilla and counts out loud the number of pools on the street.

"Six or seven," he concludes.

"As well as five jet skis, two really good boats, and maybe six Harleys. The street’s full of boys with their boys’ toys," he says; "money’s no object."

In this street, the houses are selling for $550,000 – $750,000. They’re modern, and are each individually and architecturally designed. It feels like we’re in the suburbs, certainly not a place where, ten years ago, the average annual income was $26,000.

Some of the older houses in town have For Sale signs pitched and Daniells points out the ones due for demolition, to be replaced by a couple of townhouses or units.

Surat Basin Property Group (SBPG) is easily the largest real estate and developer in the Surat basin. Surat Basin Developments, the first company of the group, started in just 2005. With the addition of building company Surat Basin Homes and the Surat Basin Real Estate, SBPG now employs over 60 people between Chinchilla and Brisbane. There’s an obvious and growing demand.

Although Daniells is positive about the changes to the town (business has never been better, for him and other local businesses), when there is a sharp increase in industry, a town is affected in many different ways.

Ian Hayllor is the former Chair of the Basin Sustainability Alliance (BSA) and a cotton farmer who lives just out of Dalby. (Hayllor was the Chair of the BSA at the time of interview; the new BSA Chair is David Hamilton.) Hayllor came from England to Australia on holiday many years ago and decided to stay, taken in by the clear blue skies of regional Queensland.

The BSA is a community organisation that represents landholders, regional communities and agribusiness in rural Queensland, particularly the Surat Basin area. Its focus is on ensuring the sustainability of water resources, agricultural land and regional communities in Queensland areas affected by the coal seam gas industry.

Hayllor is not opposed to the gas industry, and is not looking to alternatives in energy production.

"We’re not here to oppose the industry because it’s pretty obvious that we’re not going to be successful in that," he said.

"The reality is that the best we can do is take the industry to a level where it is accepted by the community, it is sustainable, and it can come do its job and leave, and we can carry on," he said.

But many have felt the industry’s impact, literally, much closer to home.

The Chinchilla showgrounds hosted the 100th Chinchilla Show in June this year. A week of rain had left the grounds in a muddy and unforgiving state for the opening day. Dotted along the fence-line at the front of the grounds, across from where hundreds of cars were parked to attend the show, were about 20 tents and caravans.

A collection of potted plants and garden ornaments were arranged underneath the annex of one caravan. When night fell, a few of them started fires out the front.

The tents weren’t pitched for the show. The caravan-owners weren’t visiting. They’re living here because they can’t afford to live in houses. One of the effects of a rapidly increasing population is rapidly increasing house value, which means drastically higher rents.

This is a big concern for Mayor of the Western Downs Regional Council, Cr Ray Brown, although there isn’t a clear solution in sight. Rising rental prices are causing a big problem for residents. But while those who rent their homes are put in a near impossible situation when their rent rises, those who own their homes are presented with a clear way out.

"We’ve got people leaving our community because they’ve been living all their life in a house that, five years ago, might have been valued at $200,000," Cr Brown said.

"Now that same house is worth $500,000, and they’re out of here."

However, he said that when a family leaves Chinchilla, it’s not often a family that replaces them.

Cr Brown said that many of the town’s new residents are single males, who don’t contribute to the local economy as well as a family of four would. This is a common problem for towns like Chinchilla. The town’s resources are put under pressure by an increase in population, but the new residents don’t engage with the community enough to bolster it. They’re there for work and little else.

Cr Brown is facing a huge challenge and appears genuinely concerned for the future of his communities. He’s also concerned about how rapidly the gas industry is expanding and wants to see more stringent monitoring of its practices.

In April this year, there were an estimated 2100 coal seam gas wells in Queensland alone. That number is tipped to grow to 40,000 in 20 years.

"The greatest asset that we have in Queensland, I believe, is the Great Artesian Basin," Cr Brown said.

"I’m not closing my eyes to the enormous prosperity we have beneath our feet to our state and our nation, but I don’t want it wasted, and I don’t want it destructed."

For a man whose region is reaping the economic benefits of a mining boom, he is strangely optimistic about the potential of renewable energy. He has views of a future Australia where the roof of every home is covered in solar panels, not Colorbond. But he’s also in control of a region that is atop one of the biggest energy resources in the country, although perhaps control is not the right word.

"You think the last three years have been crazy," he said.

"Well you just watch the next few."