New South Wales taxpayers will pick up an $80 million bill for the Coalition government’s bungled attempt to save National-held seats in the Northern Rivers, Clarence, Lismore, Ballina and Tweed Heads.

A year ago, Energy Minister Anthony Roberts announced, via 2GB’s Alan Jones program, that the government was cancelling the gas exploration licence held by energy company Metgasco.

He also referred the company to the Independent Commission Against Corruption “following receipt of information concerning shareholdings and interests in Metgasco Limited”. It was an incendiary claim because it was made during the public uproar over former Labor minister Eddie Obeid’s involvement with controversial mining licences in the Hunter Valley.

The licence had been originally granted to the company in 1996 by the Carr government, and over the years the company had earned a reputation among landholders for brash and uncommunicative behaviour.

News of Roberts’ cancellation of Metgasco’s licence spread like wildfire on the NSW north coast, which had become a mini-battleground between CSG explorers and environmental protectors.

At the Bentley site, Camp Liberty, protesters staged a wild celebration, with Adam Guise from Lock the Gate saying the licence cancellation was “a Franklin Dam moment”. Others sang and chanted: “Hear us, can you hear us?” and “We shall not be moved”.

Drew Hutton, Lock the Gate’s leader, issued a statement saying: “We offer our warm and heartfelt congratulations to the people of the Northern Rivers for this incredible people’s victory.”

Metgasco expressed its dismay at the government’s abrupt decision and suspended share-trading for two days. Its share price tumbled by 40%.

ICAC responded swiftly to the government’s move to drag it into the dispute. On June 2, a fortnight after Roberts’ decision, the anti-corruption watchdog announced that there would be no inquiry into the company.

“We are pleased to clear the company’s name so quickly,” said company chairman Len Gill.

Metgasco also commenced legal action in the NSW Supreme Court contesting the validity of the government’s licence suspension. Last month, Justice Richard Button found that the government’s decision to override the licence was “not made according to law” and ordered the government to pay all Metgasco’s costs.

The judge found Roberts’ cancellation decision “came as a bolt from the blue” and “undoubtedly damaged Metgasco substantially”.

The court victory provided Metgasco with the green light to launch action against the government for damages.

Today the government ruled out an appeal against the Supreme Court’s highly damaging judgement. The result? The company’s legal and damages bill, amounting to an estimated $80 million, will be picked up by taxpayers.

The original licence cancellation was imposed by Roberts, Liberal MP for Lane Cove, to protect National MPs holding the seats of Clarence, Lismore, Ballina and Tweed Heads, where the anti-CSG campaign was drawing wide community support from farmers, retirees, students, long-term residents and recent arrivals.

National MPs had lobbied Roberts with desperate intensity, and so had commercial broadcaster Alan Jones, who has given generous coverage to anti-CSG protesters in NSW and Queensland.

In his previous career as a media adviser to prime minister John Howard, Roberts was the PM’s “link” to Jones’ high-rating program in Sydney.

At the state election on March 28, the Nationals clung to all of their Northern Rivers seats with the exception of Ballina, which fell to the Greens’ Tamara Smith, a local high school teacher and solicitor.

The cost of rescuing the other three seats? About $27 million per seat.

It is money that would have been better spent on schools and hospitals, but that’s another story for another time.

Peter Fray

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Peter Fray
Editor-in-chief of Crikey