Senior NSW Ministers back CSG development, reject gas reservation

September 6th, 2016

The NSW Parliament’s Budget Estimates hearings ran through the course of last week.

For those unfamiliar with the process, Estimates hearings give members of Upper House Committees the rare opportunity to directly question portfolio Ministers and senior public servants on matters directly relating to their portfolio areas.

It’s a prime opportunity for a ‘gotcha’ moment, with the annual Estimates hearings a reliable font of stories in an otherwise quiet Parliamentary period in Macquarie Street.

Greens MP Jeremy Buckingham went hunting, but try as he might, he just couldn’t get the answers he was looking on a range of gas issues from several senior Ministers, including Premier Mike Baird:

Mr JEREMY BUCKINGHAM: Do you think the development of a coal seam industry in New South Wales is essential to the economic development of this State?

Mr MIKE BAIRD: I think it is important.

Mr JEREMY BUCKINGHAM: Can you elucidate? Why is it essential? Why is it important?

Mr MIKE BAIRD: There are a number of issues. If you follow through your argument and you want to transition away from coal, obviously the provision of power through gas will result in fewer emissions, so because of its very nature it makes sense. From a risk management point of view it makes sense because at the moment we rely on gas and we are basically importing most of our needs. If we have appropriate reserves in appropriate places then from an economic point of view it makes sense to pursue costs. You do remember—and I know that you follow this space very closely—that we inherited a regime with licences everywhere, no protections and no regulations. We have been systematically and methodically fixing that.

Mr JEREMY BUCKINGHAM: Do you think a transition in New South Wales from coal to gasfired power is appropriate if sourced from coal seam gas? Is that something the Government is actively considering?

Mr MIKE BAIRD: As a broad policy mix I think it makes sense. I mean, The Greens used to support that position. That used to be a strong platform.

(Source: this transcript, page 11)

Undeterred, the Greens MP tried again:

Mr JEREMY BUCKINGHAM: Do you think, seeing as you are considering this as an industry that is great for New South Wales, pivotal to economic development, you should go and have a look at a coal seam gas operation, an unconventional gas operation?

Mr MIKE BAIRD: You would criticise me for going if I did.

Mr JEREMY BUCKINGHAM: Would you commit here to tour one with me—to come and have a look with some of the farmers? Maybe some of your staff? I can take you on a trip with Santos to have a look.

Mr MIKE BAIRD: I think that is a reasonable request. I am happy to do that—but not necessarily with you.

Mr JEREMY BUCKINGHAM: I would not want to go with you either. You are assured by the Chief Scientist that it is perfectly safe and you are happy to see the industry develop across New South Wales. The Government is saying that it is about to release its strategic release framework. So you think that there are significant parts of the State, according to the right geology and the Chief Scientist’s recommendations being implemented, where this coal seam gas industry should develop?

Mr MIKE BAIRD: Yes, I mean the Chief Scientist, I take her word. She has looked at it in some detail and relied on international evidence and her conclusion is it can be done safely.

(Source: this transcript, page 31)

So off he went to try questioning Energy & Resources Minister Anthony Roberts on whether the Government would support a domestic gas reservation policy:

Mr JEREMY BUCKINGHAM: For a couple of years now I have raised the issue of a domestic gas reservation and about exposing the east coast gas market to the international price parity at these forums, and I have been laughed at and ignored by the Government.

Mr ANTHONY ROBERTS: Mostly.

Mr JEREMY BUCKINGHAM: That is right, and what a catastrophic mistake that was. Is it not the case that the increased gas supply in Queensland has not had a downward impact on prices; it has only driven up prices?

Mr ANTHONY ROBERTS: Both the Australian Competition and Consumer Commission [ACCC] and the Australian Energy Market Operator [AEMO] oppose reservations, as we do. I cannot reserve New South Wales gas because we only produce—correction, it is all reserved.

(Source: this transcript, pp21-22)

And then over to an Estimates hearing with Treasurer Gladys Berejiklian, where even though he thought he had a headline, there really wasn’t one:

Mr JEREMY BUCKINGHAM: Minister, I have limited time. Do you think that coal seam gas will play an important role in economic development in this State over the coming years?

Ms GLADYS BEREJIKLIAN: I think the Government has made its views on that issue very clear.

Mr JEREMY BUCKINGHAM: What are they?

Ms GLADYS BEREJIKLIAN: You should refer to what the Minister for the Environment has said about that. We appreciate the community concerns in relation to that and we have responded. In fact, we inherited—

Mr JEREMY BUCKINGHAM: I was talking about economic development. Do you think—

Ms GLADYS BEREJIKLIAN: No, you were not. You are kind of changing what you were saying.

Mr JEREMY BUCKINGHAM: The question was, “Do you think coal seam gas will play an important role in economic development in this State?”

Ms GLADYS BEREJIKLIAN: No. You asked me a question: Do I think it is going to provide economic development? No.

Mr JEREMY BUCKINGHAM: Thank you. That is the zinger right there.

Ms GLADYS BEREJIKLIAN: It is a zinger. I do not know what your impression of economic development is but when we look at sources of what will most stimulate our economy—

Mr JEREMY BUCKINGHAM: So you do not think that Anthony Roberts, who has been saying it is essential to economic development in this State and driving down prices—

Ms GLADYS BEREJIKLIAN: Hang on, they are two different things. The impression I formed from your question was: Is it in my thinking that overall strategically that is one of the top things that I would think about? No, my job is to look at the levers that generate economic development generally. Industry is one, but there are a whole bunch of factors that determine economic development. If you are asking me whether that is my realm of responsibility and area specifically, I would say that is not what takes up a lot of my time in terms of determining what is economic development in New South Wales.

(Source: this transcript, pp29-30)

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