who'll take the csg blame?

Who'll take the CSG blame?

Robert Gottliebsen

Published 7:03 AM, 18 Aug 2011 Last update 10:30 AM, 18 Aug 2011
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When I attacked the $50 billion coal seam gas industry?s management practices I knew there would be a sharp reaction but I was surprised at what happened.

A great many in the industry actually agreed that there had been a vast number of mistakes, usually caused because the crazy race to get into production quickly caused companies to cut corners (Beware the CSG enfants terribles, August 17). But everyone said it was the 'other' groups that were the problem. Origin chief executive Grant King phoned me to say that Origin had bought large areas of land before Santos made its purchase and had been producing coal seam gas for a long time. With its partners, including ConocoPhillips, it had not fast tracked the development and they had good relations with most farmers, he said. He made good points.

In The Conversation, and in private emails I received, it was clear that the Santos operation in the Liverpool Plains in NSW has aroused the anger of a great many people. Grant King said that he had not attempted to develop coal seam gas in the Sydney Basin because he believed it would be too hard. He might be right.

In Queensland, Santos was helped because its areas were further west where properties were larger and so it was easier to deal with farmers because there were smaller numbers.

One of the reactions from the companies was that although the development of coal seam gas was potentially disruptive in the construction phase, the longer-term production disruption to farmers was less than from wind farms. But wind farms have not received anything like the coal seam gas publicity, because various green groups support them. They were even showcased in the federal government's green energy advertisements.

By contrast, although coal seam gas is a lot more carbon efficient than coal, it still involves carbon so it is opposed by green groups. As a result, farmers get strong backing from such groups, which multiplies the impact of the management mistakes.

It is very clear, from reading The Conversation, that there is deep and genuine public disquiet over the effect of these developments on the water tables and basins. The companies are adamant that there should be no concern and I was bombarded with material to back up that view, pointing to the detailed inquires that had taken place.

I am not going to be the umpire in that dispute but it's clear that while the companies may have done a lot of work with governments, regulators and various official bodies, they have not done nearly enough with communities, which were equally important because governments are no longer trusted on this issue.

This was part of the industry mismanagement.

I am not sure any of the companies, including Grant King's Origin, fully realise the extent of the community anger which culminated in Opposition leader Tony Abbott taking the side of the farmers over the coal seam gas companies, albeit that he had more of an eye to NSW than Queensland. This is an industry that is making huge investments on the back of poor community management. In today?s world, that is very dangerous.

And Queensland and Australia needs a fourth coal seam gas project at this time like a hole in the head. Sorry Shell.