Late last year, the Australian Energy Market Operator produced a report that found the price of domestic gas was about to take off because supply deals to LNG projects at Gladstone were about to launch.
In all, it found that less than 10% of the nation’s proved plus probable reserves were “uncommitted gas currently available”
However, the market operator told The Weekend Australian that its underlying assumptions did not take in increasing resistance against gas companies seeking access to land for drilling.
“Reserve estimates do not consider landholder access issues,” a spokesperson for the market operator was quoted as saying.
“Reserve projections consider that reserve development will occur maintaining 15-year reserves to production ratio, where production is allocated on a least-cost basis.”
The latest revelation comes in times of increasing opposition to the coal seam gas industry, which has developed in response to the demand being created by the LNG projects, and rising domestic gas prices associated with them.
Pressure on the industry is also being applied politically, with independent MP Tony Windsor making noises about CSG water impacts, with federal environment minister Tony Burke subsequently publicly lambasting the NSW government for not signing up to a national plan on CSG.
There have also been suggestions that CSG activity in Sydney’s west near Camden could lead to land subsidence, or a lowering of the ground in response to water extraction.
Federal Environment minister Tony Burke suggested to Fairfax media that subsidence was a consequence of CSG extraction, citing an approval given to a CSG project in Darling Downs.
''In that case it was unlikely to have had an impact on the endangered species, which is what we were assessing, but if the same danger exists for the projects in built-up urban areas in western Sydney the potential risks are extraordinary and that is why I want to satisfy myself that all the scientific assessments are done, and that they have to be taken into account,'' he was quoted as saying.
''We are talking about settled areas where you could be having that subsidence under people's homes, under schools, under roads.''
In response to the growing unease surrounding AGL Energy’s plan to extract gas from under Camden, it decided to put a halt to its plans late last week.
The Australian Petroleum Production and Exploration Association has blasted the suggestion that CSG activity could lead to land subsidence in the region, and said the debate was getting out of hand.
“There has been no evidence of ground subsidence over that period and the amount of groundwater extracted at Camden is extremely small,” APPEA’s chief for the eastern region Rick Wilkinson said.
“Technical reviews conducted by AGL confirm that the potential for subsidence is not a real issue.”
He said the debate was especially important given the market difficulties faced.
“Development of NSW gas resources is critical as NSW currently imports 95 per cent of its gas and major supply contracts start to expire next year,” he said.
“The failure to develop new supplies will affect the cost of gas, the price of energy, the price of electricity, and the cost of doing business and living in NSW.”
