An interesting piece from The Land. Although it applies...

An interesting piece from The Land.  Although it applies specifically to the Santos plan for the Liverpool Plains, it also relates to Metgasco's plans for the Northern Rivers.  CSG (and I assume tight gas) is apparently an uninsurable risk!

NORTH West farmers are questioning the viability of coal seam gas (CSG) production in their paddocks as fresh evidence reveals the risk of potential contamination to water and soil makes their properties and produce uninsurable.
A leading environmental insurance specialist said the risk of contamination from CSG activities couldn't be insured, but Santos general manager NSW Peter Mitchley refuted the claim and argued the company itself was insured against property damage.
Wee Waa potato and peanut grower Sarah Ciesiolka, whose farming relies heavily on groundwater, learnt her property couldn't be covered after asking for a quote to cover potential contamination from CSG activities in the area.
Mrs Ciesiolka and her husband Matt live and work about six kilometres from the northern edge of Santos' Narrabri Gas Project area.
"We were absolutely staggered to learn that our insurer can't provide a policy for coal seam gas risks," Mrs Ciesiolka said.
"We expected there'd be insurance available but it'd mean much higher premiums.
"They were not aware of any insurance product available in Australia for those circumstances."
The Land contacted multiple insurance brokers and three major insurance providers, but none could identify a product to insure against potential CSG contamination was available.
Sydney-based environmental insurance specialist Anthony Saunders, EnviroSure, was the only insurance broker to confirm the lack of insurance covering the sector which includes the farmers, the explorers and the indigenous land owners.
He said one international insurance broker had made available an insurance policy for the CSG explorers, but the fine print excludes the financial costs to rectify the effects of gradual contamination to the land or the aquifer.
"If the trigger in the policy is any accident the deliberate process of injecting a cocktail of chemicals and air to extract the gas negates the cover," Mr Saunders said.
"Logically, if the process of contamination is deliberate there is no cover in the event of pollution.
"The coal seam gas companies are 100 per cent responsible for that chance and because of that, there's no insurer that will cover an event that has a likelihood of certainty.
"If there's no cover available then why are they licensed to carry out the process?"
Mr Saunders said he recognised the concerns of farmers who were viewing the CSG industry as risky.
"No insurance company wants to be responsible for a future claim that is quite likely," he said.
"In order to calculate the premium they look at the future potential risk, which includes contamination created as a result of drawing water from an aquifer to irrigate crops, meaning the farmers may not be able to use their land for its intended purpose.
"If future financial loss to the landowner as the result of CSG mining being carried out 300 kilometres away is uninsurable, then the activities of the CSG company could be considered as reckless."
Mr Saunders said the message was clear - CSG production risks aren't mitigated unless an insurer would cover all liabilities.
However, Santos's Mr Mitchley said the possibility of contamination was "pretty far fetched".
"Oil and gas always has and continues to have insurance products which cover environmental accidents or contamination and I find it staggering that somebody would say otherwise," he said.
"We take great care to make sure there is not going to be contamination but if there were to be contamination we would be liable for that damage.
"Only Santos can take insurance for that because it is Santos's liability."
"The insurance policy that covers Santos would cover us from any claims made by any other party, including farmers.
"Santos has insurance in place to cover those risks and moreover the NSW government has a bank guarantee in its favour from Santos to cover remediation costs in the event that Santos or its insurance doesn't cover the event."
Wee cover in Wee Waa
WATER is the most valuable resource on Matt and Sarah Ciesiolka's potato and peanut farm at Wee Waa.
Both the crops are irrigated adding to their value.
"Through the years we've invested a lot of money in centre pivot irrigators to farm as efficiently and sustainably as we possibly can because we're mindful of our water resources," said Mrs Ciesiolka (pictured).
The Ciesiolkas grow about 6500 tonnes of potatoes annually, 1000t of peanuts and depending on the season, about 1000t of wheat.
"The concern for us is we're growing a food product and we have to sign a declaration saying it's safe," Mrs Ciesiolka said.
"In the event that any contamination is picked up, we will be liable and we can't mitigate that risk through insurance.
"We would have to take an action against the third party, being the coal seam gas company.
"The burden of proof would ultimately rest with us and we'd have to finance a case against them, which would bankrupt any farmer."
Mrs Ciesiolka has spoken to other farmers who were unaware of the issue.
"The reality is the market has spoken," Mrs Ciesiolka said.
"An entire business model which is premised on mitigating risk is saying the risk of the gas industry to our farmland and our water is too great.
"Not being able to insure our business and our produce I think speaks volumes of how risky this industry is."

http://www.theland.com.au/news/agri...o-risky-for-insurers/2743615.aspx?storypage=0