The New South Wales Chief Scientist’s endorsement of safe and sustainable coal seam gas operations being performed by responsible operators under sound regulations has received a chorus of support from leading Australian oil and gas company Santos Ltd., and the Australian Petroleum Production Exploration Association (APPEA).

NSW’s tough legislation of coal seam gas operations occurring within its jurisdiction has sent gas prices soaring in the eastern states, with peak manufacturing and business bodies appealing for the moratorium to be lifted in the state.

Santos said in a statement that the supply of natural gas from NSW is vital to the economic viability of local industry and affordable energy for families. The Adelaide-based company added that continued delays in developing natural gas resources would only increase cost pressures.

“Santos has a long and successful track record of safely delivering natural gas to New South Wales since 1976,” added the company, which is more than 85 per cent through the construction phase of its GLNG, CSG-LNG plant on Curtis Island.

While Santos said it will take a keen interest in the findings and recommendations of the NSW Chief Scientist’s final coal seam review, it said it was confident that with robust science, strong regulation and a continued commitment to working with communities it could continue to deliver much needed natural gas to NSW.

“We expect this report to build on a number of comprehensive reports and studies already undertaken into the natural gas industry,” Santos said in the statement. “The overwhelming message from these reports, including the final report from the NSW Chief Scientist, is that when properly regulated, natural gas extraction from coal seams can be done in a safe and sustainable manner.

“Santos is committed to high engineering standards and best practice approaches, particularly in relation to water, environment and community engagement.”

Santos added that the Narrabri Gas Project could supply up to 50 per cent of NSW’s gas needs, while also providing up to 1,200 jobs during construction and approximately $1.6 billion in royalties.

APPEA said the Chief Minister’s report, “should give the green light to the responsible development of the state’s natural gas resources. The report states that the technical challenges and risks posed by the industry can be safely managed and notes the high standards of engineering and professionalism in natural gas companies.

“This is a far cry from the alarmist and misinformed claims that have too often characterised debate about natural gas projects in NSW”.

APPEA added that NSW consumes around one-quarter of the gas used in the eastern Australia gas market, yet supplies only about 1 per cent of the gas production for that market.

The state’s 1.3 million gas customers rely on interstate producers for 95 per cent of their supply, despite the state possessing very significant reserves and experienced gas companies being willing and able to produce local gas for local consumers, according to the association.

“New production depends upon successful exploration activity. And without new exploration and production in NSW, it will be very difficult to put downward pressure on NSW gas prices, which are increasing by more than 10 per cent this year,” APPEA said.

Dale Granger can be reached at dgranger@hartenergy.com.

Comments