Former federal resources minister Martin Ferguson has urged NSW...

Former federal resources minister Martin Ferguson has urged NSW Premier Barry O’Farrell to use Santos’ and AGL Energy’s leading coal seam gas projects as blueprints for a new streamlined approvals process.

Mr Ferguson said Mr O’Farrell needed to show political leadership to move the stalled industry forward amid an escalation of warnings about price shocks that would put manufacturing jobs at risk. He said last week’s energy security summit in Sydney had shown the commitment of NSW Treasurer Mike Baird and Energy Minister Chris Hartcher to get the state’s coal-seam gas resources together and now it was up to Mr O’Farrell.

“We’ve now got to work with the Premier to get him over the line and seize the opportunity,” said Mr Ferguson.

“The industry is there to be grabbed but time is running out for New South Wales.”

Mr Ferguson proposed that Santos’s Pilliga CSG project in west-central NSW and AGL Energy’s Gloucester project be used as blueprints for the introduction of streamlined approvals between the NSW and federal governments.

HEADING OFF A PRICE SHOCK
The former minister’s words, at an onshore gas conference held in Adelaide by the Australian Petroleum Production & Exploration Association, came as Santos’s vice-president for eastern Australia James Baulderstone said that moving ahead with the $2 billion Pilliga project was now “very urgent” to head off a price shock.

He said the project, which could meet about a quarter of NSW’s gas needs, had already been delayed by changing and uncertain regulations, so that the original start-up date of 2015-16 had slipped to 2017.

“Every month that goes by pushes that gas out, so the gas is now in the 2017 window, another six months it will be in the ’18 window, another year it will be in the ’19 window.

“There are serious consequences of not bringing that on. If the gas gets that expensive then there will be losses of manufacturers in NSW.

“That means people won’t have jobs in those sectors.”

NSW GOVERNMENT CAN’T SIT BACK
Mr Ferguson said the NSW government has to accept it has a responsibility to develop its own CSG resources as some of the gas supplies it has relied on until now are redirected north to LNG export projects in Queensland.

“It can’t sit back and have all these indigenous reserves and basically decide that you can deny industry the opportunity to develop those gas reserves in NSW, when you import 95 per cent of your gas ,” he said.

Mr Ferguson said the government has to be upfront in explaining the CSG industry to the broader community despite “some shock jocks” who will offer no opportunity to “sell the message.”

He said the Pilliga and Gloucester projects, which could meet 45 per cent of NSW’s gas needs in their initial phases, should be implemented.

“The sooner the two governments – NSW and the Commonwealth – sit in a room and work out how we could ­co-operate to create a one-stop shop on these two developments [the better], as an example of what we can do more generally in the resources and gas industry from an environment and regulatory point of view,” he said.

Deloitte will release research on Wednesday showing government intervention in the east coast market, to set aside gas for local use, would cost $6 billion in forgone GDP by 2025.

The report shows the impact of a gas reservation scheme would be to simultaneously tax domestic gas production while subsidising consumption. The result is that the economy foregoes export income to inefficiently subsidise domestic consumption.

“Like all taxes and subsidies, the Domestic Gas Reservation distorts economic decisions and generates an unequivocal economic loss – one which compounds over time as future investment decisions are affected,” the report, commissioned by APPEA, said.