Australian Industry Group calls for considered approach to CSG mining restrictions

The Australian Industry Group has spoken out on the issue of coal seam gas production, arguing for the need to balance a secure gas supply with concerns over environmental impact.

Gas supply has been a long-time concern for the group, which commissioned the Unintended Consequences report last year on the possible impacts on energy affordability from the looming boom in gas exports.

"Ai Group has been warning for some time that supply is tight and prices are rising due to the looming gas export boom,” said CEO Innes Willox in a statement today.

“Many have assumed that high gas prices would encourage more production and prevent an extended supply squeeze.”

Describing the limiting of CSG extraction in as a “clamping down”, Willox said that industry and others could run “disastrously short of supply” if caution wasn’t exercised.

This week the NSW government’s resources minister Chris Hartcher defended the government’s decision to put limits on extraction, with a decision in February to ban exploration within two kilometres of residential areas, and a ban in areas used for horse breeding and winemaking.

“We are determined to protect our agricultural land, our water and our environment, which is why we do have these stringent requirements, which is why, of course some of the companies have made commercial decisions that they won't proceed in NSW, " he told the ABC.

Unconventional gas explorer Dart Energy recently announced that it was cutting 70 per cent of its workforce and pull out of NSW. Some analysts, reports today's The Australian, have said there has been no clear link between regulations in the state collapse of dart, which has seen its market value shrink from $1 billion to $50 million in the last two-and-a-half years.

NSW Community sentiment appears to be strongly against gas extraction, with a Fairfax poll cited in Australian Mining yesterday finding that 75 per cent of respondents were against exploration on agricultural land.

Further clamping down on gas exploration could create supply issues, warns the AIG, affecting regular consumers as well as industrial users.

"Even higher prices and a permanent supply crunch would result,” said Willox.

“That would hit jobs, investment and household budgets, not just in Gladstone and Brisbane but in Sydney, Melbourne and Adelaide.” 

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