The coal seam gas industry is unlikely to bloom near Maitland after the state government’s announcement that it will buy back Hunter gas exploration licences from energy company AGL.
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Minster for Industry, Energy and Resources Anthony Roberts announced on Monday that the government would buy Petroleum Exploration Licence (PEL) Two, Four and 267 as part of a strategy to reduce the CSG footprint in NSW.
PEL 267 applies to 489,827 hectares of land at Maitland, Broke, Singleton and surrounding areas, while PEL Four covers 383,492 hectares in the Upper Hunter at Muswellbrook, Scone and Denman.
The other licence applies to land between Fitzroy Falls, Western Sydney and Lake Macquarie.
Mr Roberts said the buy-back scheme had led to the cancellation of 15 PELs across the state so far.
“We have now reduced the footprint of CSG from around 60 per cent of NSW to 9 per cent,” he said.
“The NSW Gas Plan is the NSW Liberal and National government’s clear, transparent path to provide world’s best practice regulation of the gas industry and we are delivering.”
Maitland MP Jenny Aitchison said the announcement was good news for Maitland because it meant the region would remain free of CSG mining.
She said the government had planned to finish the buy back scheme on June 30, but extended the initiative to September 30 after a push from the opposition.
Ms Aitchison said the extension allowed this week’s purchase of the Hunter licences.
“Labor has called for a moratorium on all CSG activity in NSW until the Chief Scientist’s recommendations are implemented in full – and there is a complete ban on CSG activity in the Northern Rivers,” she said.
“The majority of the PELs reclaimed have had no CSG stores worth extracting or were not financially viable – the companies didn’t even want the licences anymore.”
In a statement to shareholders on Monday morning, AGL officials announced that the company had a strong gas supply that could cater for household demand until 2027 and commercial and industrial demand until 2021.
It said the company had a chance to release poorly performing assets and focus on a small number of projects, without significant capital spending.
“Assets to be divested include the Hunter Gas Project assets (PEL Four and PEL 267) and associated agriculture activities,” the statement said.
“While there is significant coal seam gas in the Hunter Valley, the overlay of Critical Industry Clusters and the two kilometre setback result in this resource not being economic to develop.”
