PERTH (miningweekly.com) – The New South Wales chief scientist and engineer has found that coal seam gas (CSG) was a viable option for the state, despite the perceived risks.

In her report, which took about 19 months to complete, Professor Mary O'Kane pointed out that many of the technical challenges and risks posed by the CSG industry, in general, could be managed.

Some of O’Kane's suggestions for a safer CSG industry include designating areas for CSG extraction, ensuring high standards of engineering and professionalism in CSG companies, creating a state environment data repository, comprehensive monitoring of CSG operations with ongoing scrutiny of collected data, a well-trained and certified workforce and applying new technologies as measures to corral the CSG industry.

She stated that New South Wales would require a clear, revised, legislative framework, supported by an effective and transparent reporting and compliance regime. The state would also have to draw on appropriate expert advice.

O'Kane said there was still much for government to do, adding that implementing the 16 recommendations of the review was “no trivial task”.

The Australian Petroleum Production and Exploration Association (Appea) welcomed O’Kane’s report, saying it was a far cry from the “alarmist and misinformed” claims that have too often characterised debate about natural gas projects in New South Wales.

“Appea welcomes the chief scientist’s observations that the natural gas industry is mature and well equipped to manage extraction and related technologies through its high engineering standards and level of professionalism,” the industry body said.

It was estimated that New South Wales consumed about one quarter of the gas used in the eastern Australia gas market, yet supplied only about 1% of the gas production for that market.

The state’s 1.3-million gas customers had to rely on interstate producers for 95% of their supply, despite the state possessing significant reserves and experienced gas companies, Appea pointed out.

The industry body noted that new production depended upon successful exploration activity, without which it would be difficult to put downward pressure on the state’s gas prices, which were increasing by more than 10% this year.

Last month, the New South Wales government announced that it would extend the freeze on petroleum exploration licence applications (PELAs) by at least a year.

The freeze had initially been expected to expire by September, but Resources and Energy Minister Anthony Roberts said that the extended timeframe would allow the Office of Coal Seam Gas to complete its examination of current PELAs and allow the government to further assess the application process for petroleum titles.