By Sarah Byrne

THE NEW South Wales Government has accepted all recommendations outlined in NSW Chief Scientist Mary O’Kane’s report into the coal seam gas industry.

The report advised CSG extraction was no more dangerous or damaging than other industries providing it was managed under the appropriate regulations.

Released following the report, the NSW Gas Plan outlines a strategic framework for managing the CSG industry taking into account economic factors, environmental issues and community concerns.

A moratorium on new petroleum exploration licence applications will remain in place until a new system is approved and all 16 pending licence applications will be extinguished and the cost refunded to the applicant.

Energy Minister Anthony Roberts said the amendment will give current applicants, whose applications have been expunged, first right to apply should the area they had under application be released under the new Strategic Release Framework, for a proposed future title.

“Based on science, environmental impact, the community’s concerns and consideration of the economic benefit, the government will decide what land is released and to whom,” he said.

A Community Benefits Fund taking voluntary payments from the government and gas companies will be set up to compensate landholders affected by CSG activities.

“Landholders and communities will share in the financial benefits during exploration and production and a Community Benefits Fund will deliver infrastructure for communities upfront,” Mr Roberts said.

Mr Roberts said the NSW Environment Protection Authority will take over all environmental compliance and enforcement regarding CSG activities.

“The NSW Government’s Gas Plan spells out how we will deliver best practice regulation, while increasing gas supplies and putting downward pressure on gas prices for the state’s households and businesses,” Mr Roberts said.

Centre of International Minerals and Energy Law director Tina Hunter spoke with Oil and Gas Australia raising concerns of whether the regulations outlined in the NSW Gas Plan will be implemented correctly.

“The NSW Gas Plan is one of the best legal frameworks we’ve seen in the industry, the challenge is whether the government will be able to execute it,” she said.

“It is important the regulator is trained and has the knowledge to implement the legislation and understand when companies should or shouldn’t be allowed to develop to avoid developing the region too fast,” Dr Hunter said.

Metgasco welcomed the NSW government’s recognition that the gas industry can be managed safely but raised concerns regarding repeated changes in regulation and policy and the uncertainty the government’s response to the report created.

“The new policy announcement does not sufficiently clarify the business and regulatory environment for the gas industry in NSW. Business needs a degree of certainty to justify expenditure.”

“We now have new rules and regulatory responsibilities, many of which will not be defined until well into 2015, uncertainty about the rules for land holder compensation and some indication that the royalty regime might change to encourage exploration,” the company said in a statement.

AGL Energy welcomed the government’s response to the report saying it will assist them in securing local gas supplies for their customers.

“We have the answer and it’s under our feet ready to be produced safely with strict adherence to NSW regulations, which are among the toughest in the world,” AGL managing director Michael Fraser said.