It’s been a big few weeks for the coal seam gas sector in Australia with federal industry minister Ian Macfarlane speaking out about his frustration over slow project development and the NSW government pushing out its freeze on new projects and production licences for another 12 months – after the state election.
Today NSW chief scientist Mary O’Kane released her final report on the CSG sector in the state.
It’s a report the gas industry has been counting down the days for since O’Kane was commissioned 19 months ago by then Premier Barry O’Farrell after community backlash towards the industry started bubbling over.
The report includes 16 recommendations to government but overall found many of the technical challenges and environmental risks posed by the CSG sector can be managed.
The initial review of the industry was released in July 2013 and looked at the impact of CSG activities on the state’s water resources, the final report also takes into account the regulatory requirements needed to safely kick-start the sector.
O’Kane said safe CSG production in NSW can be managed through carefully selecting the areas which can handle CSG extraction, establishing a state-wide environment database, ongoing monitoring of activities and employing well-trained, technologically advanced workforce.
“All of this needs to take place within a clear, revised, legislative framework which is supported by an effective and transparent reporting and compliance regime and by drawing on appropriate expert advice,” O’Kane said, adding it is possible “unexpected events, learnings or even accidents” could occur as the industry matures.
Submitting 16 recommendations, O’Kane said it’s important for both industry and government to approach the issues with open eyes.
“Implementing the recommendations of the review involves non-trivial tasks,” she said.
“All industries have risks and, like any other, it is inevitable that the CSG industry will have some unintended consequences, including as the result of accidents, human error, and natural disasters.
“This is common for new applications in the extractive industries and underlines the need for government and industry to approach these issues with eyes wide open, a full appreciation of the risks, complete transparency, rigorous compliance, and a commitment to addressing any problems promptly with rapid emergency response and effective remediation.”
About 5% of the gas consumed in NSW is extracted from the state’s resources, namely from AGL’s operation in Camden. However, with production starting to taper at the site and little in the development pipeline, NSW could be in for a price shock when surrounding states, including Queensland ramp up LNG exports from next year.
The full report is here.
NOW WATCH: Briefing videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.