THE ban imposed on coal seam gas exploration in New South Wales has been extended until September 2015, a move which has concerned industry groups.

NSW Resources and Energy Minister Anthony Roberts imposed an initial six month freeze on NSW Petroleum Exploration Licence Applications (PELAs) and Petroleum Special Prospecting Authority applications on 26 March, but said in a statement the halt would now be in palce until 26 September next year.

Mr Roberts said the extended timeframe would allow the Office of Coal Seam Gas (OCSG) to complete its comprehensive examination of current PELAs and allow the government to further assess the application process for petroleum titles.

NSW Resources and Energy Minister Anthony Roberts imposed an initial six month freeze on NSW Petroleum Exploration Licence Applications (PELAs) and Petroleum Special Prospecting Authority applications on 26 March, but said in a statement the halt would now be in palce until 26 September next year.

Mr Roberts said the extended timeframe would allow the Office of Coal Seam Gas (OCSG) to complete its comprehensive examination of current PELAs and allow the government to further assess the application process for petroleum titles.

“The former Labor Government handed out 39 Petroleum Exploration Licences in a careless and clumsy fashion with little oversight,” he said.

“NSW deserved better.”

According to Mr Roberts, the NSW Liberal and National Government have put in place the most comprehensive regulations for the CSG industry in the country.

“These regulations ensure that gas extraction from coal seams is done in a way that is safe and has minimal impacts on the environment and other industries,” he said.

“The framework also ensures that companies involved in the NSW gas industry meet the highest standards of technical expertise and financial capability to undertake exploration.”

The timing of the decision was questioned by the Australian Petroleum Production and Exploration Association.

“The oil and gas industry finds extraordinary both the timing and the content of reports that the NSW Government plans to extend its freeze on natural gas exploration,” APPEA said.

“The announcement comes just days after the Federal Government released its draft Energy White Paper that specifically flagged the need for an urgent uplift in NSW gas production – a call that has been backed by a wide coalition of business and manufacturing bodies in NSW and more widely.”

The industry group highlighted the fact that the state’s 1.3 million gas customers relied on interstate producers for 95 per cent of their supply despite NSW possessing very significant reserves.

“New production depends upon successful exploration activity,” APPEA said.

“And without new exploration and production in NSW, it will be very difficult to put downward pressure on NSW gas prices.”

Mr Roberts said the NSW government had refused ten PELAs since March, with a number of companies asked to provide further information around environment, exploration and production reporting, community consultation and work programs.

Petroleum Assessment Leases will remain available to companies with existing PELs or those applied before the freeze.

This means companies such as AGL and Santos will still be able to undertake their respective work programs in NSW.

A spokesman for Mr Roberts said Metgasco, which earlier this year had its drilling licence for the Rosella exploration well near Lismore suspended, said the company wouldn’t be impacted by the exploration ban as it was an existing title holder.

The spokesman assured the ban would not need to be extended beyond the renewed September 2015 date now set.

Committed to gas development

Mr Roberts said the NSW government was committed to increasing its domestic supply of gas but would do so in parallel with working to ensure only “safe and sustainable gas supply projects proceed.”

In additional comments provided to Oil & Gas Australia, Mr Roberts reiterated that future gas projects would not go ahead unless they meet the government’s comprehensive regulations.

At the same time, Mr Roberts called for greater transparency around the export contracts for the three LNG projects coming online in Queensland.

“These projects will for the first time, see wholesale gas prices tied to the international price,” he said.

“As the Commonwealth’s Energy Green Paper rightfully points out, the large scale of the LNG export developments mean that even small deviations from their delivery schedules could have serious implications for the East Coast gas market.

“To better understand these impacts, it is vital that policy-makers get a better understanding of what has been promised in export contracts, at what prices and with what penalties if there is a failure to deliver. If you don’t measure you can’t manage.”

A final report on the state’s CSG industry, which is being prepared by the independent NSW chief scientist and engineer, is expected in the near future.