Can farmers and coal seam gas miners live together? It's that question on which Australia's emerging $13.2 billion CSG export market may hinge.
A pitched battle has raged between farmers and miners over regions in Queensland and New South Wales rich in both food crops and gas wells. Miners are developing technology they say will make it safe to extract gas from cropping land.
In Queensland, most of the CSG will be processed at Curtis Island off Gladstone. Already under construction are sites controlled by QCLNG (Queensland Gas/BP Group), GLNG (Santos/Petronas, Kogas and Total) and APLNG (Origin, ConocoPhillips and Sinopec) with gas piped from the Bowen Basin. Arrow LNG (Shell/PetroChina) -- with feedstock from its 8600 square kilometre Surat Gas Project
-- is awaiting final approval.
Arrow's CSG is mostly concentrated on the Darling Downs' fertile cropping lands, especially the prized black alluvial soil of the Cecil Plains, whereas the Origin and QGC acreage sits further west on marginal or grazing country. Livestock can easily move around gas wells so getting graziers on board with the prospect of additional farm income is a possibility -- not so cropping land with its 30-foot harvesters, ploughs and fragile soil.
It's the same story in NSW. Santos has crucial acreage on the Liverpool Plains, another of Australia's major cereal, oilseed and cotton production regions. Its black vertisol soil absorbs and holds moisture, delivering two crops a year, even in drought.
These two iconic agricultural regions, along with the Hunter Valley in NSW, have emerged as flashpoints in the hostilities. Last November, Santos' quest to win the hearts and minds of crop farmers backfired when one of its TV ads -- spruiking Santos' proposed Spring Ridge CSG operation on the Liverpool Plains -- was exposed as fantasy
and pulled from air. Farmers mounted a blockade until Santos agreed to suspend drilling activities pending completion of the Namoi Catchment Water Study
on the vulnerability of underground and surface water systems.
Rosemary Nankivell, a Liverpool Plains crop farmer and spokesperson for the Caroona Coal Action Group
, says farmers take care ploughing the delicate vertisol soil of the floodplains. "These farmers are cutting-edge, using groundbreaking technology such as navigational satellites," she explained to Crikey
. "If you start putting roads and pipes in, it will upset the surface flows along the plains and everything will get washed away."
Santos' Matthew Dorman believes multi-well pads might be the way to go and drilling wells on the corners or boundaries of properties. Farmers remain sceptical -- especially over aquifer depletion and subsidence from the controversial practice of "fracking".
"They should walk away from this risky venture now before they lose even more money on it."
While Santos' operation in NSW is largely exploratory, Arrow Energy is dependent on Cecil Plains, its biggest single reserve, as feedstock for LNG contracts. Both regions are among the world's most valuable producers of cereals, oilseed and cotton because of the self-cracking black alluvial soil and water from the Condamine Alluvium and Great Artesian Basin.
The Queensland government's "strategic cropping land" policy
doesn't quarantine land but relies on
"reasonable efforts to avoid and minimise any impacts on SCL" (the NSW policy is the same). What constitutes "reasonable" is part of the stalemate for Arrow.
At the end of August, 60 Cecil Plains farmers met with Arrow, rejected its "co-existence" commitment
, burnt the document and threatened blockades if Arrow tried sending in drilling rigs. Cecil Plains crop farmer and Save Our Darling Downs
spokesperson Ruth Armstrong says the model is flawed.
"One party benefits to the detriment of the other," she said. "If they can't get Cecil Plains, it makes their Surat project unviable."
Graham Clapham is a third generation farmer, running an intensive, irrigated cropping operation on the Cecil Plains. "We have no obligation to Arrow which is now foreign-owned by Royal Dutch Shell and PetroChina, but we do have an obligation to protect Australia's long-term interests," he told Crikey
Like Santos, Arrow says it can work with farmers. It has two community committees
to consult. "Arrow is technically demonstrating this through new pitless drilling, multi-well pads (up to eight per pad) and flexible well locations," a spokesperson said.
But while fracking is not required with gas seams near the surface, farmers fear fresh ground water, also close to the surface, will be depleted.
Arrow has 500 landholder agreements in place but Carmel Flint, of the Lock the Gate Alliance
, points out that they still need 1500. She believes Arrow Energy should cut its losses now and abandon coal seam gas plans for the Darling Downs.
"Cecil Plains is up to 40% of its gas resources. We predict Arrow's plans for an LNG export plant are never going to be realised. They should walk away from this risky venture now before they lose even more money on it," she said.
*Sandi Keane holds shares in Santos and Origin as well as a couple of small CSG start-ups. She is a former president of Up2Us Landcare Alliance and is currently environment editor at Independent Australia. Tomorrow, the politics of the CSG debate ...