Not closing the door so use or lose it, page-6

NSW tells coal seam gas companies 'use it or lose it' like AGL Energy

NSW Energy Minister Anthony Roberts has warned coal seam gas firms their exploration licences could be stripped from them if they do not follow AGL's example of selling licences in sensitive areas back to the government.
Mr Roberts announced on Monday that AGL had agreed to sell back three large exploration licences in the Hunter Valley and the area around Sydney under a NSW government buy-back offer announced last year.
But Mr Roberts said that the "very generous" buy-back scheme would only last till September and after that companies with exploration licences would have to "use it or lose it".
The threat seemed to be directed at Metgasco, which has an exploration license in the politically sensitive Northern Rivers area. Mr Roberts said Metgasco was one of the companies he was negotiating a buy-back with.

Mr Roberts however said the government was still looking positively at AGL's remaining project in the Gloucester region and Santos' Pilliga project which are both in relatively sparsely populated areas north-west of Sydney. "They are going through a planning process," Mr Roberts said.
But he said the government would insist on world's best practice and a "triple bottom line" approach. He denied there had been a "quid pro quo" where AGL agreed to surrender the Sydney and Hunter Valley licences in exchange for approval for Gloucester.
Drilling has been on hold for over two years in the three areas where AGL agreed to sell back licences on Monday because the NSW government imposed a series of bans on drilling near homes, water catchments, horse studs and vineyards.
'NOT ECONOMIC TO DEVELOP'


AGL told the Australian Stock Exchange on Monday that: "While there is significant coal seam gas in the Hunter Valley, the overlay of Critical Industry Clusters and the two kilometre setback result in this resource not being economic to develop."
AGL simultaneously announced a $193 million write down for the Gloucester project because of "significant delays in production of first gas and the latest estimates of gas volumes, development costs and lower forward gas prices." It said that it would delay until 2016 a final decision on the project.
Lock The Gate Alliance, an anti-CSG group, welcomed AGL's decision to sell back the Hunter and Sydney licences but vowed to block its Gloucaster project too.
"The Gloucester project has been plagued with environmental difficulties and community resistance. AGL's announcement that they are again delaying their final investment decision on Gloucester is welcome relief, but in reality, we expect that in a year's time, they will pull out of Gloucester too."

Mr Roberts criticized the former ALP government for handing out too many exploration licences and said the buy-back program which started earlier this year had cut the share of the state's territory covered by tenements from 60 percent to 9 percent.
The Coalition lost the seat of Ballina in the March election to the ALP after a strong local campaign against Metgasco's coal seam gas projects in the Northern Rivers area.
Metgasco recently won a Supreme Court case overturning a ban on drilling in the area which the government imposed last year on the grounds that Metgasco had failed to consult adequately with the community.
Mr Roberts publicly announced he had asked the Independent Commission Against Corruption to investrigate allegations of corruption against Metgasco but ICAC said these alegations were without merit.

• Jul 6 2015 at 1:42 PM
• Updated Jul 6 2015 at 1:42 PM