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The eastern states of Australia face a shortage of domestic gas.  This is a result particularly of restrictions on gas development in Victoria, New South Wales and the Northern Territory. The large Narrabri coal-seam gas project in New South Wales has the potential to remove this shortage in one fell swoop.

The project

The proponent, Santos, says that, subject to approvals, it is ready to start construction by mid-2018, with first gas production in 2020.

However, bureaucratic wheels in New South Wales move slowly.

The approvals process for the project has been underway since early 2014. In the view of the Australian Financial Review (28 September 2017), “the project is expected to remain in regulatory quicksand for at least another two years”.

This will delay first production at Narrabri until at least 2022.

Most of the project is located in the Pillaga forest near Narrabri, in an area of the forest set aside for forestry, recreation and resources development. None is in the area set aside for conservation.

The project will entail the development of up to 850 wells, over 20 years. No hydraulic fracturing (“fracking”) will be involved. There will be a gas-processing plant and facilities for the storage and processing of water that is a by-product of coal-seam gas production.

The gas will be a transported by a new pipeline, to be developed by APA Group, that will join the existing pipeline to Sydney from Moomba in South Australia.

Not everyone wants it …

The project faces strong opposition from environmental groups and others, including Lock the Gate, Doctors for the Environment, People for the Plains and Knitting Nannas Against Gas.

For more than a decade, the influential Sydney-based broadcaster, Alan Jones, has conducted a crusade against onshore gas developments in New South Wales and Queensland.

Objections to the Narrabri project cover its alleged threat to just about everything: water resources, the Pillaga forest, aboriginal heritage, birds, koalas, the climate, health, the local housing market and tourism. 

… but what’s the problem?

A 2014 report by the NSW chief scientist, commissioned by the then government, concluded that the “technical challenges and risks posed by the coal-seam gas industry can in general be managed”, e.g. through high standards of engineering and comprehensive monitoring.

Very few of the objectors acknowledged this report, let alone responded to it.

No local councils oppose the project, subject to particular issues (such as water) being properly addressed.

And why such a delay?

New South Wales produces less than 5% of the gas it consumes. Almost all is from AGL’s coal-seam gas operation at Camden, where production is being wound down and will cease in 2023.

Notwithstanding the potential importance of the Narrabri project, for New South Wales and the country as a whole, the state government has made clear it is in no rush to make a decision on it.

In the meantime, the danger is that:

– businesses will continue to move overseas or close because they cannot obtain gas at an acceptable price
– low-income households will continue to suffer from “energy poverty” and other households will simply suffer
– electricity prices will continue to go up, given the increasing use in generation of gas in place of lower-cost coal

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