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Santos confident of coalbed methane support

World Coal,

One of Australia’s leading oil and gas producer, Santos, says it is confident that it retains support for its proposed coalbed methane (CBM) project in the New South Wales (NSW) Pilliga state forest.

The NSW state government’s Planning Assessment Commission held its first public meeting in Narrabri on Thursday to gauge local input on Santos’ plans to drill CBM exploration wells at the Bibblewindi and Dewhurst sites. The company is expected to lodge its environmental impact statement for the full project imminently.

Before the meeting took place, a small number of opponents to the plan made their voices heard, however, Santos remains confident that it retains local support.

Glenn Toogood, water manager for Santos, said: “We have signed 40 local access agreements with land holders...we're generating a lot of local economic activity and a lot of businesses appreciate that."

Toogood rejected claims made by opponents that more information on the water resource and how it will be affected by CBM operations is needed.

"We do have the data in relation to the project area,” Toogood claimed. “This area is a vast resource of ground water. It's been very well studied not only by ourselves but by the NSW Office of Water. There's been an independent study called the Namoi Water Catchment Study [...] and we've established good base line monitoring points right across the Great Artesian Basin.”

"We're utilising an extensive network across the alluvial system put in place by the Office of Water since the 1980's and it's important, moving forward, to continue to build this data, including the information in the Environmental Impact Statement, which we'll use as part of our modelling," Toogood continued.

He also said that the company's facilities are state of the art.

"If you looked at our new centralised water treatment facility at Leewood and the level of technology we've applied to that, certainly you'd walk away getting a really good appreciation that we are a first class operator," he added.

Protestors and opponents of CBM often carry concerns over water reserves near to drilling sites that are based on ideas misrepresented in the media. One industry professional told World Coal that “If you don’t know the full information about these drilling projects, but you hear that there’s a small chance it could affect the supply of water you’re drinking, then you’re not going to want to support those projects – you’ll want to do everything you can to make sure there’s absolutely no risk to the water. But in truth, the risk posed to water by CBM projects is largely a myth fabricated by the media – as long as the proper precautions are taken, water supplies won’t be affected.”

Misleading job creation statistics

One aspect of Santos’ project that has been called into question is the supposed number of jobs the project will create.

The think thank, the Australia Institute, claimed Santos’ own economic analysis showed the project would create only 30 long-term jobs, but require 500 public service jobs to manage it.

Mark Ogge, from the Institute, said "a couple of years ago Santos commissioned […] economic analysis from Allen Consulting Group, to demonstrate an economic benefit from the project for NSW and the local region.They got some economic modelling done and it had some bizarre results.”

"The modelling suggests that there would only be 30 gas jobs from the whole project once it's operational [...] and yet it would generate 500 public service jobs paid for by the tax payer." (From the "Economic Impacts of Developing Coal Seam Gas Operations in Northern NSW 2012, p16).

Toogood rejected these claims, too, and said that Santos expects 1200 contractors will be employed overall during the development phase and that about 200 will employed full time once it is operational.

He further rejected a second claim, also made by the Australia Institute, that Santos hasn't met the government's requirements for economic modelling.

"We're confident about the modelling,” Toogood said. "We have a great resource for the state of NSW, we believe there are impending gas shortages coming forward, and we believe the Pilliga project plays an important part in providing that energy source and security for the state."

CBM vital to NSW

Santos said that developing CBM reserves in NSW was of critical importance to the region – as it would provide a much-needed source of natural gas for the state.

Natural gas from coal seams now accounts for around 90% of Queensland’s gas supply and 30% of the east coast gas demand. 

NSW currently receives more than 95% of its natural gas from interstate. 

The long-term gas contracts which have supplied gas to NSW in the past will expire over the next two to three years. This coincides with the commencement of liquefied natural gas (LNG) exports from Queensland which will see annual gas demand triple and the other states look to use their gas for their own economic benefit. 

Unless NSW can develop an alternate source of natural gas, Santos said it believes the NSW State is likely to face much higher prices than if there was plentiful and certain supply for all domestic, commercial and industrial gas users. 

Santos’ Narrabri Gas Project could supply NSW homes, small businesses, major industries and electricity generators with almost half the State's natural gas needs and bring substantial economic benefits to Narrabri and the region. 

Written by Sam Dodson

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