The NSW government has suspended 16 CSG licence applications and put a freeze on new licences being granted until next year under a plan aimed at overhauling the industry’s regulatory framework.
Deputy Premier Troy Grant and Resources Minister Anthony Roberts made the announcement on Thursday and have promised tough reforms for the controversial sector.
Roberts said by adopting all of the recommendations in the Chief Scientist’s final report, the NSW Government was listening to the concerns of the community, industry and independents experts in the CSG field.
“The Final Report concluded that, in general, the risks of gas development can be effectively managed with the right regulation, engineering solutions and ongoing management,” Roberts said.
As part of the changes, the NSW Environment Protection Authority would become the lead regulator for the sector.
The government said it will seek to reduce the land covered by CSG titles from 60 per cent of the state to just 15 per cent and titles would be removed from National Parks.
It has also offered up a one-off buy-back offer that will compensate title holders for surrendering their licences.
A “use it or lose it” policy will be implemented requiring licence holders to demonstrate a serious commitment to investing in the licence or face the cancellation of their titles.
The government has also said that as a priority, industry performance will be lifted through the implementation of minimum standards of assessment of applications “that are clear about the outcomes Government requires to be achieved”.
To ease community tensions around CSG, landholders are set to receive compensation for petroleum exploration and production, and will be supported by the Independent Pricing and Regulatory Tribunal which will benchmark compensation rates annually.
Further, a Community Benefits fund will be set up with contributions from both gas companies and the government to help bankroll local projects in communities where gas exploration and production occurs.
The government will also ask companies to disclose their gas supply arrangements to demonstrate the development of NSW gas reserves will benefit the State’s gas consumers.
Speaking at a media conference yesterday, Roberts said the government was “unashamedly raising the standards” of the state's gas industry.
"It will deliver, not just certainty for the energy supply in NSW but certainty around protecting what's most important to us and that is our water and our agricultural land,” he said.
Roberts said the state’s existing CSG projects in Camden, Narrabri and Gloucester would be allowed to proceed as long as they meet the new standards.
The Lock the Gate Alliance said the plan does not go far enough to protect landholders.
"The NSW government seems intent on using compensation to buy community support but they've done nothing to stop landholders and communities being forced into giving access against their will," spokeswoman Georgina Woods said.
Meanwhile Greens MP Jeremy Buckingham has described the gas plan as “nothing but lipstick on a pig of an industry”.
The NSW Business Chamber was more optimistic, and stated the plan was an important step in addressing gas pricing and supply challenges.
"Bringing on additional gas supply as quickly as possible is essential if NSW is to stay open for business, and the NSW government should be commended for developing a firm plan to ensure gas users can access the gas they need at competitive prices," it said in a statement.