News

CSG protests will end expansion: report

Protests opposing coal seam gas projects with ‘myths’ are jeopardising around $150 billion investment bonanza, according to a mining industry report.  

Executives at mining companies are eager to exploit the rising liquefied natural gas (LNG) markets, which could otherwise go to gas producers in Africa and North America.

Australia is currently building seven of the 13 LNG plants in the world but community activism is putting further expansion at risk, news.com.au reported.

Federal Resources Minister Gary Gray said in April Australia would become the largest natural gas exporter in the world within five years.

In a speech to the natural gas conference in Houston, Texas, he said demand for energy was on the rise from Asia and the region would play an important role in the future.

LNG emits lower carbon emissions than coal power and it is currently supplying nine per cent of the world’s energy and this could climb to 15 per cent by 2020.

According to the McKinsey study, demand for LNG in the Asia-Pacific is set to grow from 160 million tonnes to 320 million tonnes a year by 2025.

“The window of opportunity for LNG projects is open for about 18 months. We have momentum on projects, and want to get through that window,” departing Australian chair of Shell Ann Pickard said in Brisbane.

The world’s largest energy companies met in Brisbane on Sunday for the industry’s yearly conference, and the central message was Australia needed better policies if the industry is to survive.

Chevron Australia’s managing director Roy Krzywosinski opined Australia needs a steady Federal tax regime, increased productivity and a review of IR laws if it is to attract another series of LNG projects.

"While the industry, partners and governments have together delivered more than $160 billion in committed LNG investment in Australia, another $100 billion- plus in projects hangs in the balance," he said.

"Governments and industry must make changes now to capture this second wave of investment.

"There is an 18 to 24-month window in which to do so and it will require a significant structural change in Australia's costs."

Minerals Council of Australia chief Mitchell Hooke said last year Australia’s position as a leading global supplier is falling, as new markets become more competitive.

He said with countries like Kazakhstan, South America and India offering lower costs, natural resources companies will be compelled to look elsewhere for future, cheaper resources.

He blamed higher total cash costs, saying they are 30 per cent more than the global average, and said this makes Australia less appealing for foreign investors.

As miners find LNG supplies wearing out or being too expensive to mine, they are increasingly turning to coal seam gas.

But Greens, farmers and broadcaster Alan Jones are putting up a fight against CSG in parts of NSW and Queensland.

The Lock the Gate Alliance has blamed mining companies for ‘riding roughshod over our governments and local communities’.

Another obstacle miners point out is the substantially lower labour costs in America.

An industry executive said Australian labour costs exceed not only developing nations but the US and Canada for the same work.

The report, commissioned by the Australian Petroleum Production Exploration Association (APPEA), said state and federal governments on both sides of politics are jeopardising mine expansions that could generate an additional $13 billion in taxes and royalties paid by 2020.

“We do have some very big hurdles in front of us in order to keep this investment wave going,” APPEA’S chief executive David Byers said.

He added in an election year there are ‘a lot of people who are looking to win friends and votes by raising the hurdles that we face even higher”.

“And here I’m not just talking about the Greens,” Byers told reporters in Brisbane.

“In recent time we’ve seen government of both political persuasions at both federal and state levels prone to flip flopping on gas regulation.”

The mining industry is pushing for the Coalition to establish harsher workplace laws and cut regulation before this year’s federal election.

Send this to a friend