Business Spectator
Feb 22nd 2011

The coal-seam gas industry is going to have to get its act together, and fast, or it will not achieve anything like the future the share market expects.

Just about every group that looks at Australia’s coal-seam gas industry says that there are too many players and that rationalisation is required. To date those concerns have come from those who saw the impossibility of constructing so much duplicated infrastructure.

But last night on Four Corners we saw an even more dangerous aspect to the over rapid development of our coal-seam gas – a farmer and environmentalist revolt at a time when such groups have great power in the federal parliament.

And to see the chairman of Macquarie Bank, David Clarke, telling AGL (and by implication most of the other coal seam majors) that they had lost community trust should be a massive wake up call for the industry. I suspect, with the calibre of management that has been recruited, that coal-seam gas players aim to win a race, not deal with communities or environmentalists. Yet loss of community trust can be a disaster for any industry in today’s environment.

It will take a long time before the oil and gas industries restore the loss of global trust that followed the BP Gulf of Mexico disaster, where executives simply did not work out what they had to do and did not understand the risks.

In Australia we have not encountered a BP-style disaster but the management style seems similar – they have not worked out what they have to do and the risks they face.

And attacking rural communities can back-fire in Australia.

The federal government has been planning to attack large farming-based communities in the Murray-Darling Basin to provide long term water for the Murray River. There are already clear indications that the initial buy-back targets are simply not feasible in the current political environment.

Now we have a new ground-up revolt where doomsayers are suggesting the Great Artesian water table will be affected by too rapid a development of coal-seam gas.

I am not in the business of endorsing or denying those fears, but when you have a mad scramble for resources and that scramble is taking place in farming communities, then the miners better understand that they are treading down a dangerous path.

As things stand, the combination of repairing the damage of the floods and building a multitude of gas projects simultaneously probably presents a construction materials and labour drain that will seriously disrupt the nation.

Coal-seam gas is a great Australian resource, but the mad scramble to develop it quickly could actually endanger the industry.

Newcastle Herald
17th Feb 2011

GLOUCESTER farmers have vowed to fight to save one of the state’s last remaining repositories of prime agricultural land from being swallowed by mining.

Dozens of concerned farmers and community representatives will meet at a NSW Farmers Association mining taskforce meeting in the town today to discuss how mining and farming can coexist.

It follows a call from the association last October for a moratorium on new mining and coal seam gas development across the state.

The Gloucester Valley has been one of the state’s richest agricultural resources for the best the part of 200 years. But in recent years the area’s land and water reserves have been under increasing pressure from the rapidly growing mining and resources sectors.

NSW Farmers Association Stroud branch president, Doyne Lanham, said it was essential that prime agricultural land in areas such as the Gloucester Valley and the Liverpool Plains be protected for future generations.

“There’s a lot of feeling in the community at the moment; there is the possibility of 100 (gas) wells between Gloucester and Stratford,” he said.

He said the continued expansion of mining activities was threatening the viability of some farmland.

“We are not opposed to mining,” he said. “We are happy for them to operate within the rules that were set down but they just push, push, push all the time.”

Today’s meeting will also hear from Port Stephens oyster growers who are concerned about the potential impact of mine water runoff into Mammy Johnsons Creek, which eventually empties into Port Stephens.

State election candidates will also address the meeting.

NSW Farmers Association mining taskforce chairwoman Fiona Simson said many landholders were concerned about the future of agriculture in NSW.

“A lot of people are very concerned about what they are seeing going on around them and there’s a feeling that they want more information,” Ms Simson said.

“I’m hoping people will come to the meeting with questions and ideas about where we are going in the future.”

Ms Simson said the Coalition’s land use policy had been generally well received by farmers.

“It’s certainly talking about some agricultural productivity assessment and about giving regional people input into the process,” she said.

“We are also pleased to see there’s a focus on water and the importance of agricultural land on a triple bottom line.”

Invitations were extended to gas and coalmining industries working the area to attend today’s meeting, but they have indicated they would not be attending.

A NSW Minerals Council spokesman said the council had met recently with Gloucester Shire Council to hear about some of the challenges for the council and the local community.

“The NSW Minerals Council supports a strategic approach to regional land use planning, which should help to address concerns about land use conflicts and exploration,” he said.

“The government is attempting to address these issues through its coal and gas strategy and the Opposition through its Strategic Regional Land Use Policy.”

“It is unfair to expect that one policy document will be the cure-all for questions about competing land use, but we are pleased that both sides of government are heading in the right direction.”

Macarthur Chronicle
7th February, 2011

STATE authorities are urging AGL to assess the environmental risk of fracking (hydraulic fracturing) in its Macarthur area coal seam gas operations and to start ground water monitoring.

In a submission on AGL’s so-called Northern Expansion of the Camden Gas Project, the Environment Department says its planning counterpart should determine “the number and location of wells to be stimulated by fraccing (sic)”.

Believed to be responsible for polluting ground water at some locations, fracking injects a mixture of water, sand and chemicals into wells under high pressure, to release gas. AGL admits to fracking in the area but denies any environmental harm.

Among requests in the submission are calls for a “complete inventory and characterisation of the chemicals used within the fraccing process”, and “an overall environmental risk assessment” on the technique.

A water office submission makes similar calls and suggests ground water monitoring plans as a condition of consent. “The lack of information … with regards to ground water is disappointing, given that (AGL) has been operating in this area for over 10 years,” it says.

The Sydney Catchment Authority is concerned fracking’s “potential impacts” on the Upper Canal, feeding Prospect Reservoir, “have not been specifically addressed”. The Environment Department has also called on AGL to clarify the potential impact on endangered Cumberland Plain Woodland and whether the existing processing plant at Rosalind Park has enough capacity.

Up to 72 new wells would be added to the existing 130.

AGL spokesman Nathan Vass said: “We take the public submissions process seriously and AGL is confident its proposal is sympathetic to the local environment and community.”

Sydney Morning Herald
February 10, 2011

What makes a town or city?

Surely not just a sparkling harbour or a beautiful river – nor a power plant or a quarry – it surely requires depth of character. A culture perhaps not just skin deep but one that goes beyond the urban and includes its food production.

Just as the Napa Valley is to San Francisco or the Yarra Valley is to Melbourne – isn’t productive farmland essential to a city’s character?

Even beyond the outskirts of our cities, as a looming global food crisis becomes more evident, is it not madness that Governments don’t look beyond miners and developers and take food security more seriously?

Agriculture Always Comes Last

In any government development assessment, agriculture always comes last. Whether it be from the relentless call to expand urban sprawl to the inexorable march of tree changers to the miners of brown coal– the reality is that food production is under threat by all quarters.

This surely, is simply not good enough for a forward looking progressive society.

Eating Away at the Food Bowl

This week, pandering to the development lobby, the NSW opposition (these days called the incoming Government) has announced their intention to ramp up the supply of land on the outskirts of Sydney’s fringes and wind back the urban-consolidation – that is building in urban areas alongside existing infrastructure.

It is disturbing that few seem to take seriously how inappropriate planning chips away at our farming sector and also damages the character and resilience of our towns and cities.

Easter Island?

Take Cessnock in the NSW Hunter Valley, the sign welcomes you by saying “Cessnock – Mines, Wines and People”.  Sadly, the local government’s priorities lie in that order as well.

Upper Hunter local government areas such as Maitland are amongst the most intensely mined local government areas in the country. I am not anti-mining but I don’t fancy a repeat of Easter Island either.

Tragedy Beyond Measure

The Wollondilly, that takes in towns like Picton and Tahmoor on Sydney’s south fringe, is replete with market gardeners and, unfortunately-long wall miners also.

Heartbreakingly, the Thirlmere Lakes are a chain of lakes within the Greater Blue Mountains World Heritage Area and is/was well known for possessing some of the last pristine fresh-water lakes and wetlands in the country.

The locals thought these ancient lakes were drying out because of drought and would one day be replenished when the drought broke. That is – until it starting raining and the lakes kept draining away.

The current theory expounded by locals is that long-wall mining has fractured the sandstone layer which keeps the water in higher aquifers that feed ground-water systems. The crack in the upper level of the sandstone works like the plug hole in the bath, allowing the water to drain away into the deeper aquifers.

When this water disappears below, creeks and dams run dry. Of course, the Department of Environment and operator of the Tahmoor mine Xstrata (whose long wall mine incredibly extends to within a kilometre of the lakes) both maintain that there’s no evidence that long-wall mining is affecting the lake levels. Humph!

That they were ever allowed to operate this close to a world heritage listed National Park is scandalous by any measure. Once we stop shaking our heads the real implications for farming viability in the area begin to dawn on us.

From an environmental and food security perspective – the Department of Environment for NSW gets a big “F” for Fail on this one.

Want an Open Cut Coal Mine Next Door?

Places like Mudgee, are filled with colonial character and have a strong gourmet following with wines, cheeses and berries, all being grown or processed in and around the township.

One lady I spoke to yesterday, who had bought her block of land there and is half-way through building, has just found out that the adjoining property has been sold to a miner intending to establish an open-cut coal mine.

Before you go off blaming local government don’t forget that NSW, under the highly controversial Part 3A of the development act, allows for the Minister to exercise ultimate discretion on all parts of the approval process for any state significant project.

In this process, an environmental impact statement need only to be carried out if the Minister agrees. Astonishingly, the Minister has executive power to circumvent breaches of environmental and heritage laws and worst of all there is no legal recourse.

As they say in the classics – no further correspondence will be entered into. If you don’t like the coal mine in your back yard well tough!

Is this really the best way to prepare our towns and cities for the future?

Food Security Not a Planning Priority

Let’s face it, the NSW Government has thumbed its nose at the farming sector for years. The Brumby led Victorian government threw over $200M to the future farming initiative educating and providing assistance with start-up capital to young farmers.

By contrast the NSW Government offered young farmers AgStart – which offered a paltry total of $3M of grants over the term of their excruciatingly long tenure. It is now scrapped and NSW is now just about the only state Government totally uninterested in young farmers.

The upshot is that aspiring-farmers are often pushed further out, to the most marginal of farming land allowing tree-changers, developers and miners to skim the cream.

Clearly, we are currently lumped with state Governments, like NSW Labor, that have very little understanding of the benefits that a thriving farming sector provides and little comprehension of the massive risks in eroding our capability to preserve water and produce food.

Farmers versus Miners

A perfect example where the mining versus food issue is the source of heated debate is in the Liverpool Plains Government area, in and around towns like Gunnedah, Tamworth and Narrabri.

There is no doubt that the Liverpool plains is one of the jewels in the crown of Australia’s agricultural sector, producing a vast range and volume of crop, sheep and cattle.

However agriculture in the Liverpool Plains is now diminishing by the day as miners, more devastating than locusts, start eating up some of our country’s best arable land. BHP Billiton, China Shenhua Energy and Santos are all active in this area writing irresistibly large cheques to farmers to leave their lands.

Even if on the surface, pastures and paddocks appear undisturbed the fact is that both miners and a reliable clean water supply are unhappy dance partners.

Haven’t we learnt our lessons from Thirlmere and others. There will come a day when coal will be seen as the fuel of bygone era and what will be left with? Waste lands of over-burden aren’t worth much!

The Pitt St Farmer

Right up there with miners on their affect on reducing the amount of available arable land is the wealthy (mostly baby boomer) tree-changers.

Let’s take the Southern Highlands of NSW just an hour south of Sydney for example. Once saturated with dairy and potato farmers, Robertson and Kangaloon with their temperate climate, rich basalt soils and very high rainfall contain some of the finest grazing land in the country.

Lamentably, there are only a couple of die-hard dairy farmers left and only two large scale potato growers.

What was once highly productive farm land is now home to some corporate refugees – directors of failed investment schemes, owners of collapsed development companies, claimants in high profile but dubious compensation cases (I could go on but I have probably offended enough people for one paragraph).

These guys clearly fancy a block of land with a nice view to go with their sports cars (all in their wife’s name of course). Most of these Pitt St Farmers intend to post hideous losses to avoid tax.

At least some pretend to farm – one wealthy landowner I spoke to recently doesn’t even see the point of running cattle anymore. Maintaining his pastures every year is a burden and now he seems to be using his 100 acres to grow a fine crop of scotch thistle, bracken and fire-weed much to the chagrin of his neighbours.

The reality is that when 50 acres in Kangaloon might set you back the best part of $3.5M, it is hardly surprising that not too many genuine farmers can afford this area. It makes it no less regrettable though.

Dairy Farms or McMansions?

Down the escarpment into the Illawarra, places like Albion Park extending out to Jamberoo are being closed in upon. Already, right next to dairy farms are cookie cutter housing estates crammed in, barely a tree between them.

Recently, in this area, despite Shellharbour Councils opposition, a new estate comprising over 700 hectares and 4800 new homes just to the north west of Albion Park called Calderwood Estate was approved by the State Planning Minister Tony Kelly.

The council said that the new development was “economically, environmentally and socially unsustainable”. When developers have the power to over-ride democratically elected local representatives there is surely something wrong with the world.

What is happening here is that we have a NSW state Government that won’t listen to anyone save for miners and developers. Not residents, not councillors and least of all farmers.

What happens if we don’t remedy this myopia soon? What sort of legacy do we leave future generations?