The government of New South Wales has made a surprise announcement to extend its ban on gas exploration in the state by a further 12 months.
The original freeze was announced for a 6-month period from Mar. 26 to Sept. 26. The extension means the ban holds until Sept. 26, 2015.
The ban is being applied to the award of petroleum exploration licence applications and petroleum special prospecting authority applications.
It is targeting coal-seam gas work and has held the CSG industry back at a time when New South Wales is already dependent on interstate gas supplies to fill its demand. The government has refused 10 exploration licences since the ban was put in place.
New South Wales Resources and Energy Minister Anthony Roberts explained that the extension of the ban would provide the Office of Coal Seam Gas more time to examine existing petroleum exploration licence applications and review the licence application process.
He maintained that the government had established the most comprehensive regulations for the CSG industry in Australia. These ensured that gas extraction from coal seams is done in a way that is safe and has minimal impacts on the environment and other industries.
He added that the regulations in place also ensure companies involved in the New South Wales gas industry meet the highest standards of technical expertise and financial capability to undertake exploration.
The Australian Petroleum Production & Exploration Association, however, is at odds with this stance.
APPEA said the announcement comes just a few days after the federal government released its Draft Energy White Paper that specifically flagged the need for urgent uplift in New South Wales gas production.
APPEA added that New South Wales consumes about 25% of the gas used in eastern Australia, yet supplies just 1% of gas production for that market. Thus the state’s 1.3 million gas customers rely on interstate producers for 95% of their supply, despite the state’s possessing significant reserves and having experienced gas companies willing to develop and produce local gas for local consumers.
Without new exploration and production in New South Wales, it will be very difficult to put downward pressure on the state’s gas prices, APPEA said.