Gas squabble shows that farmers now have muscle
Summary: THE gas mess just gets worse. How can a country so abundant in natural gas now have such high domestic gas prices? And how can our political parties — of all persuasions — continue to make such a hash of the issue?....
From John Howard and his deal to sell much of our northwest Australian gas far too cheaply, to the current fight over conventional and unconventional onshore gas exploration and extraction, the proverbial hole appears to be getting bigger.
The latest group to re-enter the fray is the Victorian Coalition, which this week backflipped on its support for the state government’s ban on onshore gas exploration and extraction.
The Andrews Government last year slapped a complete ban on unconventional gas mining (aka fracking), and a moratorium on conventional gas exploration and extraction until 2020.
The latter move ignited much of the debate around gas availability. Some have applauded it, others can’t understand why.
Until the fracking issue arrived on the scene, no one batted an eyelid about conventional onshore gas exploration, where a well is drilled straight down into a gas reserve. There has been little exploration and mining of it, as companies such as Exxon Mobil concentrate on offshore reserves where they have rigs already established.
The Coalition now says it will allow conventional onshore gas mining in its first 100 days of government, if elected in November 2018.
That reverses its support for the ban, declared two years ago during two southwest Victorian by-elections.
The Liberals and Nationals now say they will allow farmers to receive 10 per cent of the royalty mining companies pay to the government.
As it stands, farmers have no rights to what lies beneath their land.
The Coalition also wants to ban gas sales to other states, leaving it to the resources minister’s discretion.
That raises the awkward issue of blocking trade between states, which appears to be unconstitutional.
No one really knows how much gas is beneath Victoria. The government is spending $43 million for a scientific study to find out. The Coalition believes the best way is for the mining companies to conduct that research through exploration.
I am writing this as I travel on a V/Line bus through the part of Gippsland that is said to sit above much of the gas reserves. I am trying to imagine what the passing paddocks would look like with gas outlets. While opponents would have you imagine we might be in for the oilfields of Texas, those few farmers who do have gas wells on their property in Victoria say they are unobtrusive and well managed. But those farmers are reluctant to let the public see those wells for fear of a backlash.
That is where this issue is at, with fears that a neighbour may consent to a gas well, affecting neighbours who get no economic benefit from it. We’ve seen the same issue with wind farms.
But there is another issue that has emerged in all this — the growing power of agriculture.
Once upon a time, a mining company could drive on to a farm and start drilling without the need for any permission. Not any more.
That political parties accept farmers could have rights over mining — and may even deserve compensation — shows agriculture’s power is growing.
In the past financial year, agriculture was the biggest contributor to Australia’s economic growth, worth $63 billion. It is expected that will hit $100 billion by 2030.
What was once a David and Goliath struggle, now looks like a more even fight.