Australia: CSG Freeze Would be Cold Comfort for NSW, APPEA Says

The NSW coal seam gas industry could make a major contribution to the state’s economy by producing 12 million tonnes per annum (mtpa) of liquefied natural gas, according to an ACIL Tasman study released today by the gas industry peak body.

The final report: Economic significance of coal seam gas in New South Wales was commissioned by the Australian Petroleum Production & Exploration Association (APPEA). It completes earlier work included in APPEA’s submission to the NSW Legislative Council Coal Seam Gas Inquiry.

The report shows that imposing a moratorium on the NSW CSG industry, rather than letting it grow to supply a 12mtpa LNG project, would cause:

• Wholesale gas prices in Sydney to rise $1.48/GJ or 21% on average over 2025 to 2035;

• Emissions of CO2 from power generation to rise by 6 million tonnes per year by 2030;

• NSW wholesale electricity prices to be 8.35% higher on average between 2020 and 2030;

• Real income in NSW to fall $73 billion on aggregate over the period to 2035;

• NSW employment to fall by an average of 5362 annual full-time equivalent positions; and

• NSW Government receipts from CSG royalties and payroll tax over the period to 2035 to fall by $4.7 billion on aggregate.

APPEA’s Chief Operating Officer for Eastern Australia, Rick Wilkinson, said: “Allowing the NSW gas industry to reach its full potential will reduce growth in greenhouse gas emissions, curtail energy price hikes, and revitalise rural and regional economies.

“This report shows CSG can be an economic and environmental game-changer for NSW. With a strong CSG industry, NSW can meet growing energy demand while maintaining economic growth and curbing greenhouse gas emissions.

“NSW has significant natural gas potential resources, yet gas is used to generate less than 5 per cent of the state’s electricity. And of the gas used in NSW, about 95 per cent is imported from other states.

“Queensland’s CSG industry has already created more than 9000 jobs. It supplies a third of Eastern Australia’s natural gas and it is set to contribute $850 million per year in State Government taxes. These projects will also pay billions of dollars in Federal income tax – the Gladstone LNG project alone will pay an estimated $40 Billion.

“The recent NSW State Budget highlighted that CSG is the type of new industry that NSW needs.”

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LNG World News Staff, November 17, 2011; Image: APPEA