Are the Tara coal seam gas fields any indication of the effect Metgasco's mining plans will have on NSW North Coast property values?

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 2011 Google Earth image
Click on image to enlarge
 

This is an image of one section of the coal seam gas well cluster and other associated infrastructure between Tara and Chincilla townships in Queensland.

 

Metgasco Limited appears to have similar plans on the NSW North Coast, with an estimated 1,000 gas wells proposed for the Lismore-Casino area alone.

 

Recently Clarence Valley residents concerned over Metgasgo’s test drilling in the Clarence Valley have expressed fears that land values may decrease if gas production wells are eventually established in the local government area.

 

As usual Metgasco director, shareholder and CEO, Peter Henderson, is quick to deny any negative relationship between coal seam gas mining and land values.

 

Using the Western Downs local government area in Queensland as an example, it is clear that overall property values have only increased by a moderate 3 per cent between 2011-12.

 

In towns around which the gas fields are centred, the residential sector saw an increase of between 10-30% from October 2010 to October 2011. While commercial and industrial property valuations in these towns have apparently responded with a range of valuations going from no increase, through to moderate increase and, in the case of Chinchilla’s fringe commercial market a large increase in that same period falling away to a moderate increase in 2012.

 

However, the Queensland Valuer-General states in his 2012 Property Market Movement Report that; Sales of rural land purchased by resource companies for the purposes of mining or other extractive industry are not used to determine statutory land values of rural land and rural land values showed a small reduction in Miles and Tara with the balance of the local government area remaining unchanged.

 

According to anti-CSG activist Peter Ralph, in practical terms this translated for one Wieambilla rural residential property owner into a fall in his land valuation from $115,000 last year to $77,000 this year. This same landowner had seven drill rigs and a gas compressor station within seven kilometres of his house in 2011 and a pipeline 300 metres from the front door.

 

As the majority of established gas wells are sited on rural land, one can assume that production wells on or near a rural property may have a detrimental impact on the value of that property.

For an area such as the Clarence Valley, where the majority of land is classified rural and much of this used for forestry, agriculture, grazing and ‘tree change’ retirement, such a valuation trend does not bode well.

Ballina local government area is in a similar position, with an estimated 20 per cent of its population living in rural zones predominately given over to agricultural activities.

Background:

A short helicopter tour of the Tara region gas fields.