This paper argues that there is little for Australia to gain by rushing into an expansion of CSG operations.

Summary

The purpose of this paper is to bust the gas industry’s myths about coal seam gas (CSG). The gas industry has been prolific in putting out exaggerated claims about CSG’s economic benefits while at the same time staying almost completely silent on the health and environmental risks. This paper will look at both the economic claims and the health and environmental risks and will show that, while the economic benefits are likely to be relatively small, a lot more work needs to be done to assess the health and environmental risks. There is little for Australia to gain by rushing into an expansion of CSG operations.

The gas industry in Australia is keen to produce more gas. Worldwide gas demand has grown in recent years as the world searches for less carbon-intensive forms of energy in an attempt to fight climate change. This growth in demand has led to a boom in world gas prices. With gas prices high, the industry is keen to tap and sell new sources of gas. This includes CSG – a new form of unconventional gas found on the east coast of Australia.

There is heightened public concern about the environmental and health impacts of CSG extraction and the industry has met fierce opposition from a range of different groups. It has also met resistance from policy makers, with several governments enacting restrictions aimed at CSG projects.

These restrictions include the federal government’s introduction of a new water trigger, which requires further study to be done on the impact of resource projects that will use a large quantity of water. This will capture CSG projects as well as some large coal mining projects.

The Victorian government was sufficiently worried about the effects of CSG that in 2012 it introduced a moratorium on hydraulic fracturing of rocks to release coal seam gas, a process also known as fracking. The NSW government introduced two-kilometre CSG exclusion zones around residential areas and banned CSG extraction in the Sydney water catchment area due to fears it might contaminate Sydney’s drinking water.

Despite these new regulations, the federal government is pushing to devolve responsibility for approving resource projects, including CSG projects, to state governments. This is part of the government’s push to reduce regulation, or so-called ‘green tape’, in the resources sector.

Results from The Australia Institute’s November survey found that the general public has a very different view from the government on how CSG should be regulated.

When asked about which level of government should regulate CSG, 71 per cent thought that the federal government should do it. When asked about the level of regulation of the CSG industry, 56 per cent wanted more regulation, with only seven per cent thinking there should be less regulation. This puts the general public’s views at odds with the federal government’s views.

An earlier survey in August 2013 looked at the general public’s perceptions of CSG and found that people’s concerns were mainly environmental while the perceived benefits were mainly economic. The industry has highlighted the alleged economic benefits while ignoring the environmental concerns.

This paper looks in detail at the perceived benefits and concerns raised in the surveys to find out which have merit and those that do not. Below is a summary of those findings.