Coal news and updates

NSW election: Coalition promises to buy back Lismore coal seam gas licence

A week before the state election, the New South Wales government has announced it will buy back a controversial coal seam gas (CSG) licence covering vast swaths of the Lismore electorate.

The electorate lies in the state’s northern rivers district, where the National party is under intense pressure from Labor and the Greens over community opposition to CSG.

The deputy premier and Nationals leader, Troy Grant, said in Lismore on Friday that the government would block the proposed sale of the PEL 445 exploration licence by Dart Energy to the AJ Lucas Group announced last week. The government says the announced sale, for $2.5m, gave it the opportunity to buy it back.

“We will buy out PEL 445. Any transfer will not happen under the Liberals and National government,” he said. “We’re asking the companies to come and see us to allow us the opportunity to buy back 445 and give the Lismore electorate comfort and certainty about this issue.”

Also on Friday, the minister for resources and energy, Anthony Roberts, announced the government, if re-elected, would extend its buy-back scheme for CSG licences until 30 June under its gas plan. So far, 12 licences had been bought back, although critics say most are in areas where exploration is not active.

CSG has dominated the election campaign in regional NSW, with Labor announcing late on Thursday that it would ban coal seam gas production in the Pilliga forest in the state’s north-west.

The government has designated a $2bn project in the forest, near the town of Narrabri, of strategic importance for NSW’s energy needs. Energy giant Santos has estimated it could provide half the state’s gas requirements.
But the Labor leader, Luke Foley, said the risk of water contamination was too great in the area.

“There’s some parts of the state that must be off limits to coal seam gas permanently, and the recharge zone for the great artesian basin has to be one of them,” he said.

Labor said it would not cancel Santos’s exploration licence, but would not grant it a production licence at Narrabri.

Santos Energy NSW general manager Peter Mitchley said the Narrabri gas project would not harm farming land.

“We don’t affect the recharge of the great artesian basin, so it’s an entirely safe and sustainable project,” he told the ABC. “Coal seam gas has no more risk than any extractive industry. I’m still at a loss to understand the policy.”

The environment minister, Rob Stokes, said he was “stunned” by Labor’s announcement.

In Lismore, the minister for the north coast, Duncan Gay, joined Grant and local Nationals MP Thomas George to announce the PEL buy-back. Gay said Dart had “no choice” but to sell the licence to the government. “We’re going to make it absolutely clear to them. We’re not going to let it go to anyone else, except us … whatever we have to pay for it, we’ll pay. This is Labor’s cost.”

He would not speculate on how much the licence buy-back would cost the government, although previous buy-backs have reportedly cost about $200,000.

The Nationals have three seats in the northern rivers – Lismore, Ballina and Tweed – which the party holds by comfortable margins of more than 20%. But the issue has become toxic for the party, with a growing alliance of farmers, locals and environmentalists campaigning against what they see as the risks of the industry in prime agricultural areas. Labor, which issued the licences when it was last in government, has now promised a ban on all CSG in the northern rivers and other “no go” zones, and the Greens want a state-wide ban.

Grant denied the party was panicking before the election. “I’m not worried,” he said. “I’m cranky. I’m extraordinarily cranky that Labor has the audacity to come up here to the northern rivers and make promises that they can’t keep and write cheques they can’t cash. They are lying to my communities here in the Northern Rivers, and I find that totally unacceptable. As far as I’m concerned they can rack off.”

He defended the government’s renewal of the 445 licence in November, saying the contracts inherited from Labor gave it “very little capacity” to do anything but apply additional conditions unless there was a breach of the licence. Labor has said it would ban CSG in the northern rivers, and no compensation would be payable.

Gasfield Free Northern Rivers co-ordinator Dean Draper said the buy-back announcement “has absolutely no substance, it’s a weak commitment to negotiate after the election”.

“There is still time for the Liberal-National government to keep faith with the people of the northern rivers, and match promises by the Greens and the Labor party to make our region off-limits to gas mining,” he said.

Local member George said PEL 445 covered 70% of his electorate and if it were bought back it would leave less than 3% covered by a CSG exploration licence.

The other big CSG issue in the northern rivers is the Metgasco operation at Bentley near Lismore. The government suspended its licence to drill last year citing a lack of community consultation. The company is challenging that decision in court.

“There is bugger all I can do about the Metgasco issue until the courts have resolved that issue and then we’ll get on to that one,” Grant said.

Asked whether the government would guarantee there would be no CSG mining in the northern rivers, Grant said: “The gas plan gives us the capacity and ability to achieve that outcome.”

source: http://www.theguardian.com