The multi-billion dollar coal seam gas industry has arrived on the outskirts of Australia’s biggest city and everyone’s ducking for cover. At the last minute in February, utility AGL suspended an application to drill 66 coal seam gas wells in Camden and Campbelltown – some just 150 metres from homes.
It’s a temporary reprieve. AGL still wants the resource developed, and so does the state government, with predictions NSW could start running out of gas as soon as 2014. Getting the gas out of the target coal seams will mean drilling – and quite possibly fracking – beneath thousands of homes in the new suburbs of Sydney’s sprawling south-west growth centre. Worried about toxic spills and flare-ups, airborne emissions, groundwater contamination and possible subsidence, concerned residents have joined community groups, farmers and other major landowners fighting AGL’s proposal. Local, state and federal MPs are opposed and, with Sydney’s western suburbs set to be a key election battleground, the Coalition was palpably relieved at AGL’s decision to pull back ... for now.
Coal seam gas is not going away: $60 billion has been committed to convert Queensland's coal seam gas to liquefied natural gas (LNG) for export from Gladstone – a world-first that will suck up every petajoule of gas available, once the hungry LNG ‘trains’ are turned on from next year.
The eastern states are about to experience a doubling and tripling of gas prices and possible shortfalls as domestic users compete with cashed-up foreign buyers. It’s a race and in the frenzy of construction, gas companies such as Origin Energy and Santos, and foreign-owned QGC and Arrow Energy, are suffering schedule delays and cost blowouts.
Angry communities and pressure for more regulation doesn’t help.
The new directional drilling and fracking technologies developed in the USA are reshaping the world of energy. Suddenly, there is economically recoverable gas everywhere – under farms, under homes, under forests – but nowhere is coal seam gas extraction an easy sell.
The NSW Government promised to learn from the mistakes made in Queensland, where the country’s coal seam gas industry was born and gave rise to a powerful backlash from farmers and environmentalists. The lessons were too hard. They have not been learned: even Queensland, where 30 000 wells were controversially approved, imposed a two-kilometre buffer zone around urban areas.
So development of NSW’s coal seam gas industry will also be marred by confrontation and the pattern is set to be repeated over and over as exploration and production of coal seam gas – and shale gas coming up behind – takes off.
Paddy Manning is the author of What the Frack? Everything You Need to Know About Coal Seam Gas, e-book out now from NewSouth.
