Santos CSG comes under fire

The polarising coal seam gas debate has hit Santos as exiting chairman Peter Coates was repeatedly questioned yesterday by farmers and shareholders at the company’s annual general meeting.

Responding to insistent questioning about the environmental impacts of Santos’ CSG operations, Coates said the company needs to do a better job to educate communities about the positive impacts, SMH reports.

 ‘‘We do recognise that there is community concern around coal seam gas,’’ Coates said.

‘‘And we recognise that we have to do a better job with demonstrating to the public that coal seam gas operations can have a positive impact on farming, and minimal and sometimes positive impact on water.’

 ‘‘As I’ve said on many occasions, this gas is absolutely essential to the future prosperity of NSW.’’

The key concern voiced by farmers in the Gunnedah Basin in NSW and a number of Santos shareholders, is that the company’s mining activities in the region could pollute water aquifers.

One farmer said a census conducted in the Gunnedah region found 96 per cent of farmers in the area were opposed to CSG mining.

The mounting community backlash also has financial analysts worried, as risks making the Gunnedah projects marginal.

‘‘When you get farmers … blockading roads, isn’t that causing cost blowouts?’’ one concerned shareholder asked.

Coates has insisted the industry focus on the science of CSG mining, rather than the emotion.

At the meeting in Adelaide on Thursday he said Santos had been mining CSG reserves for 20 years without incident, and that the company has funded a 20,000 page environmental impact document canvassing the issues.

‘‘Our safety record speaks for itself,’’ he said.

Coates’ prepared speech had no mention of any potential environmental impacts of CSG mining.

Instead he criticised the uncertainty caused by duplicated government regulatory and environmental approvals, and warned of the rising cost of doing business in Australia.

‘‘The result is a complex mix of regulatory and policy hurdles, without the appropriate coordination to ensure that developments can be assessed efficiently and effectively,’’ he said.

He explained that while it is imperative government ensures oil and gas companies operate safety, it is equally important that projects are able to proceed in a timely fashion.

‘‘Getting the balance right isn’t easy – but it is essential,’’ he said.

Coates also said Australia needs to address its cost competitiveness as a gas producing nation, especially as the country’s proximity to Asia is a huge opportunity.

‘‘However, we must protect that position,’’ he said.

‘‘LNG projects are being developed in Canada, East ‘‘Africa and the US.’

‘‘The challenge for Australia’s projects and for policy makers is to ensure that Australia remains cost competitive. This is the only way that further Australian projects can be sanctioned to meet both domestic and Asian demand. If we don’t remain competitive, others will step in.’’

For Santos, this means the company needs to be a lean and efficient operation that prioritises innovation.

Coates is stepping down from his role as chairman to pursue an executive role at international commodities trader Glencore.

To keep up to date with Australian Mining, subscribe to our free email newsletters delivered straight to your inbox. Click here.