Scathing report into NSW coal seam gas could create new hurdles for Santos Narrabri project

Anne Davies
Photograph: Bloomberg/Bloomberg via Getty Images

Santos’s coal seam gas project near Narrabri could face further obstacles after a parliamentary inquiry delivered a scathing assessment of the state government’s progress in implementing recommendations to regulate coal seam gas extraction.

A New South Wales legislative council inquiry found that 14 of 16 recommendations from the 2014 report by the chief scientist have not been implemented in full. Half were found to have not been implemented at all.

This included recommendations for a world-class single regulatory regime for CSG extraction in NSW, developing an environmental data portal, making the Environmental Protection Agency the lead regulator of the industry, developing clear rules on access to farmers’ land and rules around compensation, and developing a system to consult with communities.

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The findings are likely to increase support for a legislative moratorium on coal seam gas across in NSW which was proposed by independent MP Justin Field last year. He plans to put it forward again in March.

Labor and the minor parties are now more likely to support the moratorium – Labor took this policy to the March 2019 election – but to become law it would require support from the Coalition, which controls the lower house.

This will particularly put pressure on the Nationals especially from the north-west of the state.

Coal seam gas projects have been widely opposed by farming communities in NSW because of concerns about the impact on underground water tables and the use of chemicals to assist in fracking the layers that contain the gas.

In 2015, following widespread protests, the NSW government asked the state’s chief scientist to make recommendations to ensure that industry could safely extract coal seam gas.

The NSW gas plan was implemented in 2015, including a ban on gas extraction in the northern rivers region.

Santos’s plans to extract gas in the Pilliga region of north-west NSW and near Gloucester and in the Sydney basin remained on the table and were subject to the recommendations in the plan. Several projects have since been abandoned, but the Santos project at Narrabri is still proceeding.

It is currently under consideration by the Department of Planning which is expected to make a recommendation on the project, either way, during March.

It will then go to an Independent Planning Commission to formally determine whether the project should be approved. The IPC, which takes public submissions, rarely goes against the department’s recommendation.

Lock the Gate Alliance called for an immediate halt to the assessment of the Narrabri CSG project.

Spokesperson Georgina Wood said: “We’re calling for an immediate halt to any further assessment of the Narrabri CSG project in light of this scathing report, which found landholders are left to bear the risks of CSG because the industry is uninsurable.”

“The NSW government must not approve the Narrabri project when we now know that the measures that the chief scientist said were needed to control CSG are not in place,” she said.

Chairman of the committee, Mark Banasiak, from the Shooters and Fishers party, described the report as “an important check and balance” on the government’s plans.

“While the committee acknowledges the efforts of the government to date in implementing these recommendations there is clearly more work to be done,” he said.

“Where the committee has identified that the government has not implemented the recommendations of the NSW chief scientist in full, we have recommended that all outstanding aspects of each recommendation be implemented.”

Last month the NSW government struck an $2bn agreement with the federal government to assist with funding in the transition to renewable energy. But part of that agreement included a commitment by NSW to inject a further 70 petajuoules of gas into the eastern seaboard gas market, more than a 50% increase on current use by NSW.

This could be achieved by importing gas from the west – NSW is building a new gas terminal at Port Kembla – but it could also be achieved through Santos’s controversial coal seam gas project.

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Field said he will bring forward debate on a coal seam gas moratorium bill following today’s tabling of a parliamentary inquiry report that has been scathing of the government’s regulatory failures of the industry.

“The government has had five years to fix this and they’ve failed. It’s time for the parliament to act and I’ll be pushing for the coal seam gas moratorium bill to be debated in the March sitting of parliament to press pause on this industry,” he said.

“This is a real test for the Nationals and leader John Barilaro as NSW resources minister. The Nationals have hung their hat on the NSW gas plan as a way to protect farmers and regional NSW, but it’s been shown to be full of holes and a fraud,” he said.

“Critical recommendations around assessing cumulative risks, ensuring landholders have access to appropriate insurance against long-term risks and establishing an expert standing advisory body have not been implemented at all,” he said.

“The Narrabri project should not go ahead. The clearest way to address the risks of this industry is now with clear legislative action to put a moratorium on the industry/”