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AGL Energy Limited (ASX:AGK) says the NSW Government decision to make one million hectares of land off-limits for coal seam gas drilling will wipe $2 billion from the industry.
The New South Wales government has ruled the land cannot be touched for CSG but left open the possibility that the protected areas could be further expanded.
AGL Energy chief executive Michael Fraser told media the move will erase $2 billion from the NSW industry and jeopardise thousands of manufacturing jobs if gas prices spike.
The change is expected to affect AGL's plans to expand its Camden project south of Sydney, as well as plans for its Hunter project.
The move has also sparked concerns of gas shortages for the state as it is likely to prevent several projects from being developed.
AGL generated a net profit of $389 million in fiscal 2013.