PERTH (miningweekly.com) – Federal Minister for Industry Ian Macfarlane on Tuesday urged coal seam gas (CSG) developers not to abandon their efforts in New South Wales.

Macfarlane pointed to the recent New South Wales government decision to freeze all petroleum exploration licence applications and audit existing petroleum exploration licences as it reconsidered its options for CSG in the state.

The state government previously placed a number of restrictions on further CSG developments, introducing an exclusion zone to cover critical industry clusters, residential zones and seven rural villages and future growth areas.

Macfarlane warned on Tuesday that the state faced a gas shortage from 2016 if its CSG assets were not developed.

“The consequences will be most significant for manufacturing and other industries that rely on gas for production, as well as for the jobs that rely on these industries,” the Minister said.

Macfarlane applauded the state government’s efforts to ensure that the community had full confidence in the development of CSG, adding, however, that the industry was equally keen to ensure that communities had long-term faith in the integrity of CSG and its ability to co-exist with farming.

“For a long time I’ve advocated that New South Wales should look to the example of Queensland, where gas companies and farmers have been working together, to mutual benefit, for more than a decade.

“The evidence is compelling in terms of the hard evidence and reports by word of mouth on the ground,” Macfarlane said.

However, he noted that industry participants in New South Wales faced a less welcoming community than their counterparts in Queensland, prompting CSG developers to think outside the box for solutions, such as a memorandum of understanding between majors Santos and AGL and land-holders.

“The agreement essentially states in writing the principles under which CSG companies have long been operating, that is, only going on to people’s land with the farmer’s permission,” Macfarlane said.

“In a perfect world, there wouldn’t be the need for this agreement in writing, given that farmers and miners have a long history of working together without resorting to acrimony or court action.”

Queensland currently has some 4 900 CSG wells drilled with the sector employing more than 29 000 people, while New South Wales currently only had 230 wells drilled, and employed only 200 people.