Gas firms angry over 10-year fracking ban in part of SA
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The South Australian Liberals adopted the 10-year moratorium as a policy cornerstone in late 2016, and aren't budging after a win in the March 17 state election.
by Simon Evans
Resources industry figures are angry over new Premier Steven Marshall's plans to impose a 10-year ban on fracking in a 21,000-square-kilometre region in South Australia's south-east, and say it undermines his mantra that the state is open for business.
Chairman of ASX-listed Lakes Oil, Chris Tonkin, said the ban was based on "stupidity" and was another example of politics overtaking scientific evidence and common sense.
Lakes Oil, part-owned by billionaire Gina Rinehart, has been a vigorous opponent of a ban on unconventional gas exploration in Victoria, and Mr Tonkin said it was similarly bad policy in South Australia.
"It's based on pure stupidity," Mr Tonkin said. "It doesn't send a positive message."
But Mr Marshall and his government have no qualms about hydraulic fracturing being used elsewhere in the state, with oil and gas group Santos having used fracking for decades in the state's Cooper Basin in the far north.
The Liberal policy is built around the Limestone Coast region being a prime source of food and wine, encompassing 21,000 square kilometres of prime agricultural land surrounding towns that include Mount Gambier, Penola and Naracoorte.
It also includes the famous Coonawarra wine region, an important base for the Wynns premium wine brand owned by Treasury Wine Estates.
Local farmers and grape growers are vehemently against fracking and the region is a safe Liberal seat that became more complicated when the sitting Liberal Party MP, Troy Bell, resigned from the party in August after being charged with allegedly misappropriating $2 million in taxpayer funds.
He won the seat again in the election as an independent MP and has been strident in his opposition to fracking while campaigning in the local community.
Beach Energy is also concerned about the policy. "Beach's focus in the south-east has solely been on the rejuvenation of conventional gas development in the region, none of which requires fracking," a spokesman said. "However, Beach is concerned with any policy that seeks to inhibit the development of a clean and reliable source of energy for the state".
Rebecca Knol, the chief executive of the South Australian Chamber of Mines and Energy, said the moratorium was a handbrake on the economy.
"The last thing South Australia needs is a moratorium on vital energy sources based on perceived rather than factual impacts," she said.
"Decision-makers who impose resources moratoria need to do so based on scientific facts," Ms Knol said.
But Mount Gambier mayor Alan Lee said the fracking ban was backed by an overwhelming number of people in the local community. "It's something they feel very strongly about," Mr Lee.
"We have to make sure there is a clean and green approach."
Residents are worried that fracking might contaminate groundwater and underground aquifers, and damage the region's reputation as a "food bowl".
Tom Koutsantonis, the South Australian energy minister in Jay Weatherill's defeated Labor government, was a big believer in fracking throughout the state and had lambasted the Liberal policy for the past 16 months, arguing it would push up gas prices and be a contributor to a national gas shortage.
The shortage, exacerbated by the big LNG export plants off Gladstone in Queensland that have been set up during the past few years, has fuelled plans for two rival LNG import projects for the eastern seaboard of Australia, by AGL Energy in Victoria and the Andrew Forrest-backed Australian Industrial Energy in NSW.
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