NSW Government contests CSG bill (9-June-2020)
NSW Independent Justin Field has passed a coal seam gas (CSG) moratorium bill through the NSW Legislative Council, with the support of the Labor opposition; the Shooters, Fishers and Farmers Party and the Australian Greens.
However, the Liberal Government, alongside the Nationals, has rushed to defeat the bill, which aims to derail Santos’ Narrabri gas project.
The bill is proposing to ban the prospecting for, or the mining of CSG in NSW, and will now go before the Legislative Assembly.
Field said it was madness to put the state’s land and water at risk when the world was quickly moving to new and exciting alternatives in renewable energy.
“We have an opportunity in this place to take a different path. For that reason I am proud to introduce a bill that will place a moratorium on coal seam gas development across the state,” Field said.
Santos achieved an approvals milestone in April with the Narrabri gas project after being referred to the Independent Planning Commission (IPC) in NSW.
The NSW Department of Planning is set to complete its assessment report on the project and provide it to the IPC for consideration, which the IPC making a decision within 12 weeks of receiving the report.
Santos has outlined that the Narrabri project has the potential to supply enough natural gas to meet up to half of the demand in NSW.
However, Field added that “we do not need this project” and “we do not need it for gas supply and it will not reduce the price of gas” during a speech to the Legislative Council.
“All it will do is impact on land, water, communities and industries. By comparison, unconventional gas is expensive gas. Unconventional gas fields are high-cost, low-yield operations in comparison with conventional gas plants that are currently delivering for our domestic needs,” Field said.
“Unconventional gas, fracked gas, coal seam gas, shale gas – whatever you want to call it – takes a lot of infrastructure and hundreds of wells.”
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Disclosure: I do not hold Santos (STO) shares, but I do hold shares in other gas producers such as WPL, SXY and COE. I believe this bill has some merit but will be defeated in the NSW Lower House (the Legislative Assembly). I don't see this as being too damaging for Santos, but it does underline the risks associated with CSG (Coal Seam Gas) projects, especially new ones.
While the Morrison federal government is particularly supportive of natural gas as a transitional energy source (as we transition from fossil fuels to an eventual 100% renewable energy future) because natural gas is a far less polluting option (in terms of greenhouse gas produced when gas is used to produce electricity) than coal - natural gas is produced from different sources in different ways, and CSG is always going to be a contentious issue I think.
Those energy (oil/gas) companies that produce their gas offshore or from arid or otherwise unproductive or undesirable areas of land (well away from prime farmland and towns/cities) are far more likely to have a smoother run and encounter less opposition, so are more likely (IMHO) to prove to be superior investments within the sector, all other things being equal. Additionally, those energy companies that do NOT need to rely on contentious extraction methods that are thought to often result in environmental damage - will also have a smoother run and will also likely prove to be superior investments (all other things being equal) - in my humble opinion.
Van Gogh Infill Development Phase Two Project has been approved.