The discussion of coal seam gas (CSG) development in north west NSW rarely focuses on the potential positive economic impacts of CSG development.
The North West NSW coal seam gas debate has so far had very little to say about how the region's economy would be impacted by the development. In 2011, Santos, a major Australian oil and gas exploration and production company, commissioned the Allen Consulting Group to identify and quantify the economic impacts of a proposed CSG development in north west NSW.
ACG’s analysis identified a range of benefits, including:
CSG is natural gas extracted at low pressure from coal and is widely used in Australian homes and businesses today. It is formed through the same natural processes that produce coal over millions of years. The gas is absorbed within the coal by pressure exerted by deep rock layers and aquifers.
CSG is recovered by extracting water from the coal seams which releases pressure, allowing the gas to de-sorb from the coal and flow to the surface through specially designed wells.
In Australia, large coal resources lie in geological basins over a large area of eastern Australia, extending approximately 2,000 kilometres from Townsville to Sydney. Queensland has Australia's largest known reserves of CSG in the Bowen and Surat Basins.
Like natural gas, CSG is used for space heating, water heating, cooking and other domestic uses, as well as an input for industrial processes. The demand for gas in Australia has increased year on year for the past half century. Demand is projected to continue increasing nearly every year for the next 30 years as Australia seeks ways to reduce its carbon footprint.
ACG uses Monash Multi Region Forecasting model (MMRF) to estimate the impacts of the proposed CSG development. This model accounts for the interconnections and relationships that exist throughout the community and adopts the same framework used by the Australian Treasury and the Garnaut Climate Change Review.
The analysis used information provided by Santos about the scale and capacity of a potential development in the region. ACG’s analysis also used publically available data, such as Census data and other information about the economy.
The key result of the analysis was the impact the development was expected to have on regional, state and national GDP.
The increased economic activity in the region and across NSW as a result of the proposed development would lead to increased employment opportunities:
As part of the CSG process, an extra 5 gigalitres per annum of water from deep coal seams would be made available to the regional community. This water, when treated, has the potential to benefit agricultural production in the region by nearly a full percentage point once the project is fully operational.
By Tim Bradley