The NSW Government has extended its freeze on all new gas projects in the state for another 12 months.
The decision extends the moratorium until after the state election in March, putting all petroleum exploration licence applications on hold until September 2015. More on that here.
Federal minister for Industry Ian Macfarlane has been cranky about the glacial pace NSW is developing its gas industry. Currently it only produces about 5% of its own gas, importing the remainder from other states.
Today he told Business Insider it’s imperative NSW gets a move on developing its own supply because of increasing demand for gas on the east coast and with the state’s reliance on imported gas, mainly from South Australia and Queensland.
“It is in the best interests of NSW to develop its own gas reserves, both in terms of increasing supply and containing costs as the other states who have traditionally been selling the gas to NSW begin to export LNG,” he said.
“The window in which NSW can do this is closing quickly. Ultimately it’s up to NSW to manage its gas resources, but the longer it waits to advance its local gas industry, the more reliant it will be on higher priced gas from other states for a longer period of time.”
He said the impact of delaying development will mean additional costs to businesses and industries in the state.
“NSW can’t expect other states to subsidise its industry by selling gas to NSW at a discounted rate, thereby short-changing the people of their own states,” Macfarlane said.
He said at a federal level the government will have to take a “leadership role” coordinating discussions about creating a national gas market, including building a pipeline from the Northern Territory to the east coast. More on that here.
“This proposal is unlikely to result in cheaper gas for the NSW market nor is it likely to be completed by the time NSW faces a gas supply crunch in 2016/17,” Macfarlane said.
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