The state of New South Wales (NSW), Australia, has implemented new regulations that would keep some areas off limits to new coal seam gas (CSG) drilling.
The rapidly expanding CSG industry in Australia has received criticism from farmers and environmentalists over concerns that drilling techniques – in particular hydraulic fracturing – could pose a contamination risk to groundwater supplies.
The state’s new regulations come in the wake of a request made earlier this week by AGL Energy to frack existing wells in NSW as part of its Gloucester gas project.
Buffer zone
Under the new rules, the state will require a 2 km buffer between new CSG activities and existing residential areas, limits that will potentially affect the plans of gas companies such as AGL Energy.
“We have put in place the toughest coal-seam gas controls in Australia”, NSW Minister for Planning and Infrastructure, Brad Hazzard said.
The new regulations, which were proposed earlier this year, would mean that 95% of homes in the state would fall into the area off limits to coal seam gas.
Pressure on gas prices
AGL Energy commented: “On face value, the government’s announcement will only add upward pressure on gas prices in New South Wales and exacerbate the gas supply issues facing the state.”
Santos Ltd, the Australian oil and gas producer, does not believe its activities will be affected. “We are glad that this process has been concluded…the industry needs certainty as to the regulatory environment that it is working in before it can proceed with any certainty”, the company stated.
Edited from various sources by Katie Woodward