Starting to rise, page-7

From The Australian

Woohoo

The coal-seam gas development moratorium in NSW and Victoria risks entrenching higher gas prices for up to six years and could ultimately have a perverse effect of increasing Australian carbon emissions.
The Productivity Commission, in a research paper released yesterday, questioned some of the fears about the CSG industry, arguing it faced higher risk management levels than other land-use activities.
Opposition to CSG development sparked big swings against the Baird government in some seats in last weekend’s NSW election. But the Productivity Commission report found the science did not suggest that the industry represented an unacceptable risk.
It said sound risk management “does not equate to eliminating all risk’’. “The scientific evidence suggests that the technical challenges and risks can be managed through a well-designed regulatory regime, underpinned by effective monitoring and enforcement of compliance.’’
It argued there was scope for improvements to legislated compensation provisions to better reflect the costs to landholders from negotiating land-access agreements and from the decline in the value of their properties.
The Productivity Commission said an independent body to manage the interactions between the industry, landholders and communities should also be examined.
It opposed a domestic gas reservation policy, which is being argued for by unions including the Australian Workers Union, and found that exporting gas to emerging Asian markets at a higher price produced an overall economic benefit to the community.
The report questioned some of the science used against the CSG industry, citing a study which found warnings of health effects caused by CSG production lacked scientific methodological rigour.
The Productivity Commission called for a transparent examination of the costs and benefits of the moratoria in NSW and Victoria, arguing it took three to six years to bring on new production.
It said Lock the Gate and the Public Health Association of Australia opposed the CSG industry because growth of a non-renewable resource would delay the transition to renewable fuel industries in Australia and lead to increased greenhouse gas emissions in the long term.
But restricting the development of new gas reserves could add to pressure for an increase in the price of gas and reduce consumption.
The net effect on emissions was far from clear.
“For example, if a rise in the price of gas in the eastern market led to a substitution to electricity, then this may lead to a rise in the consumption of coal, which is currently used to produce about two-thirds of Australia’s electricity.
“Nor is it clear that a potential reduction in the supply of gas from the east coast of Australia would lead to a greater reliance on renewable energy, or lead to an overall decline in global emissions.’’
Australian Petroleum Production and Exploration Association acting chief executive Paul Fennelly welcomed the commission’s key finding that developing a gas export industry in eastern Australia would deliver a net benefit to the community.