Saturday, 5 October 2013

The facts about the O'Farrell Government's October 2013 announcements as they relate to coal seam gas exploration and mining on the NSW North Coast

CSG exclusion zones are in force from 4 October 2013 for existing residential areas and areas zoned as villages across the state, and the North West and South West Growth Centres of Sydney.....
The CSG exclusion zones prohibit new coal seam gas exploration and development in and within a 2 kilometre buffer around existing residential and village areas in all 152 councils across the state, and the North West and South West Growth Centres of Sydney. [NSW Dept. of Planning & Infrastructure,4 October 2013]

More than 250,000 hectares in the Mid and Far North Coast regions have been identified as high-quality farmland as part of Government initiatives released today to better protect agricultural land from mining and coal seam gas (CSG) projects. [Minister for Planning & Infrastructure and Minister for Primary Industries,joint media release,4 October2013]

Pipelines associated with CSG development will also be prohibited within the exclusion zones, but are permitted within the two kilometre buffer zone, subject to development approval. [NSW Strategic Land Use Policy,FAQ sheet,October 2013]

Existing coal seam gas pilot/test and production wells in exclusion zones and within the 2km buffer zones are not affected by this announcement and, presumably any existing tenements which are under active exploration are also exempt from these provisions. It is also possible that current exploration licences per se may be exempt from these exclusion and buffer provisions.

High quality Northern Rivers agricultural land is not automatically exempt from coal seam gas exploration and mining – it must be assessed by the gateway panel against any proposed coal seam gas development application. This panel does not have the power to reject any development proposal and can only recommend further studies or modifications to the application under consideration.

Legislation has been drafted which makes it mandatory that the estimated economic significance to the state is to take precedence over environmental, agricultural or social considerations when a coal seam gas development application is being considered. 

No Northern Rivers agricultural land appears to be is within an identified critical industry cluster.

A limited amount of land on the NSW North Coast has been identified as subject to exclusion zones, as it has been classified by the NSW Government as future residential growth land.

None of the smallest rural villages appear to be formally in exclusion zones at this stage (with the exception of part of Goonengerry in Byron Local Government Area found to meet village criteria for exemption) and State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) Amendment (Coal Seam Gas) 2013 is yet to passed by the NSW Parliament.

Metgasco Limited’s plans for an estimated 1,000 gas wells in the Casino district may be affected by these recent NSW Government announcements. This exploration, mining and production company has itself revised down its gas reserve potential by 20 per cent in anticipation of new legislation and industry regulations.

Whether the company's attempt in the Casino area to classify tight gas (which is highly likely to require fracking) as conventional gas survives scrutiny, should one or more local residents take any development consent to court, remains to be seen.

Metgasco’s ordinary share price has never fully recovered from the combined effects of the market’s knowledge of widespread community opposition to its commercial plan for the region, its cessation of mining activity and loss this year of yet another potential farm-in partner. 

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