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Australian coal-seam gas ban puts projects at risk

02.19.2013  | 

Coal-seam-gas drilling will be banned within 2 kilometers of residential areas in Australia's most populous state, the conservative Liberal government said, adding that bans would also apply to land containing vineyards and horse studs. The moves may constrain the activities of energy companies.



SYDNEY -- Lawmakers in Australia's New South Wales on Tuesday tightened restrictions on the production of coal-seam gas, prompting an angry response from energy companies planning a host of new projects in the state.

Coal-seam-gas drilling will be banned within 2 kilometers of residential areas in Australia's most populous state, the conservative Liberal government said, adding that bans would also apply to land containing vineyards and horse studs.

The moves may constrain the activities of companies including AGL Energy, which has significant coal-seam-gas drilling projects planned in the state.

"The New South Wales government has listened to community concerns about CSG," Premier Barry O'Farrell said in a statement. "These new measures build on what are already the toughest controls in the country."

The government's stance is in stark contrast to neighbouring Queensland state, where companies including ConocoPhillips and Total are spending more than $60 billion combined to liquefy coal-seam gas for export to Asia.

The decision illustrates the difficulties facing companies attempting to replicate the US boom in unconventional gas production in other parts of the world.

US unconventional gas production has accelerated thanks to the advent of "fracking technology" that allows access to gas trapped in dense rock formations using high-powered bursts of water, sand and chemicals. The product obtained through this method is known as shale gas.

Some countries, including France and Bulgaria, have banned fracking, while other EU nations have raised environmental bars high enough to discourage the practice.

The extraction of coal-seam gas carries in particular the risk of water contamination, as salt water mixed in with the gas is sucked up to the surface from the rock in which it is embedded. Some more experienced coal-seam-gas producers have claimed their wells are safe because they're cased in concrete to prevent leakage, while contaminated water is collected at the surface and treated.

On Tuesday, the chief industry body representing Australia's oil and gas producers said the New South Wales government's bans "ignores science". It added that the planned export of large quantities of coal-seam gas from neighbouring Queensland would push up domestic energy prices.

"We are concerned that the decision today will have serious ramifications for households and businesses given that New South Wales imports 95% of its natural gas from interstate," said Rick Wilkinson, an official at the Australian Petroleum Production & Exploration Association.

The company most likely to be affected by the rules, AGL Energy, said it was seeking an "urgent meeting" with Premier O'Farrell.

AGL has proposed three large coal-seam-gas developments in New South Wales, including the expansion of its existing Camden project, located in a residential area about 60 kilometers southwest of Sydney. The company last week suspended the expansion, estimated to supply 580,000 households, as it attempted to address community concerns over safety.

AGL also has a proposed project in the Hunter Valley that has sparked widespread criticism from the area's established wine and horse-breeding industries. Its third project, Gloucester, is located in a more remote part of the state.

Santos owns coal-seam-gas properties in the Narrabri region, in the north of the state. A spokesman for the company said it was too early to say whether its development plans would be affected.

"We need further details around the proposed measures, to better understand the potential implications," he said.

Smaller developer Metgasco said the decision could have a "significant impact" on its Northern Rivers coal-seam-gas operations, while Dart Energy said the restrictions would put thousands of jobs at risk and drive the industry out of the state.

Dow Jones Newswires

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My SubmissionDear Sir or Madam,I am totally oposped to fracking being used in the Tweed Valley of NSW.There is not one aspect of this industry I would support.I am appalled to see the use of the word minimise when you talk about health risks. How can any government allow any industry to affect the health of residents? Minimise just isn't good enough. All Australians have a right to good health and it should never ever be put at risk.Neither should good farming land, or land that is as environmentallyas biodiverse as that in the Tweed Valley.The thing that concerns me the most if the fire hazard this industry would cause. Leaking methane gas, escaping into a valley which fills with heavy fog most nights has to ring alarm bells. This valley is heavily forested with both rain forest and worse,. sclerophil forest.Areas in the Tweed are already recognised by fire authorities as being high fire risk areas. How can you even consider adding methane to the coctail of eucalyputs trees, inaccesable locations, heavy dry undergrowth, and a reasonably large rural population living within these heavily timbered areas. Further more, many residents in the Tweed take very seriously our aboriginal community and their connection to this land. To pepper this sacred place with gas pipes and drilling sites is to me disrespectful, unthinking and scandlous. Hardly the way to show we are sorry This area is known as the rainbow region, strongly connected with aboriginal custom and tradition. Many people were attracted to come and live here for spiritual reasons and many have a strong sense of connection with the earth. To drill deeply within it for the sake of the dollar will bring these people out and they will fight any mining company that should venture into this area. This could turn very ugly and no Australian should have to fight to protect his land, his health, his home, his childrens future so a few fat lambs can grow even fatter.This issue is far more important than jobs, government revenue or anything else you can name..Up here, we see it as fighting for our lives, and fight you we will.Sincerely yours,Julie McNamaralot 17 Warragum Drive,Pumpenbil 2484

Abdul qadeer Khan

safety rules and regulation .

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