Tony Windsor launches TAI’s Fracking the future
Former Independent MP Tony Windsor today launched The Australia Institute’s new research paper on coal seam gas (CSG) at Parliament House in Canberra. The paper aims to bust many of the myths used by the gas industry to justify the expansion of CSG in Australia. Listen to Tony Windsor speak to Fran Kelly from Radio National about the paper here
Read on for more ‘research that matters’ from The Australia Institute on coal seam gas and mining.
Fracking the future: busting industry myths
Claim: We need more gas to keep down prices
Fact: Despite some in the gas industry claiming we’re facing a gas ‘crisis’, the truth is, there is plenty of conventional gas available for the domestic market. The industry wants to extract more gas so that it can export it. Once Australia’s eastern gas market is linked to the world market, via three large LNG facilities in Qld, the prices we pay will jump to match the world price. This is expected to double or triple the wholesale price of gas.
Claim: The natural gas industry was responsible for an estimated 100,000 Australian jobs last year (APPEA)
Fact: In August 2013 the entire gas and oil industry employed only 0.2% of Australian workers – less than hardware retailer Bunnings. The gas industry commissions its own economic modelling, and includes indirect jobs. For example, Santos has claimed that a CSG project in NSW that would employ 30 people would create 570 public sector jobs. They haven’t managed to explain how.
Claim: Coal seam gas is cleaner than coal
Fact: Gas is cleaner than other fossil fuels, but it is still a fossil fuel. ‘Unconventional gas’, like CSG, is extracted from many small reservoirs, making them more difficult to monitor, and providing many more sites for methane to leak from than conventional gas. Methane is a far more potent greenhouse gas than carbon dioxide.
Claim: CSG is good for the economy
Fact: CSG doesn’t stack up economically either. A skills shortage caused by gas construction will poach workers from other industries; the mining and construction boom is keeping interest rates high, and the high exchange rate is hurting industries which are exposed to international competition such as tourism and manufacturing.
Infographic: The CSG jobs myth
NSW Dept of Planning censors TAI
Our submission on the controversial Terminal 4 coal project has been censored by the NSW Department of Planning and Infrastructure, and we’re still trying to find out why.
The submission focuses on the economic assessment of the project and highlights a number of flaws in the economic modelling.
Almost a page of text showing the relationship between an “independent” reviewer of the project and the consultant who wrote the economic assessment has been redacted from the Institute’s submission by the Department. This significantly limits public access to the concerns we have raised about both the process and potential impacts of the project.
You can read our (unredacted) submission here
TAI around the regions
TAI economist, Rod Campbell, has been taking our research on the road recently, presenting to communities and planning bodies in coal mining areas. With the NSW government changing legislation to make economics the focus of mining decisions, TAI has been getting many requests from community groups for assistance.
In NSW, most major project assessments are made not by government ministers, but by a Planning and Assessment Commission (PAC). Commissioners are appointed by the government and are mainly former public servants or private sector consultants. Prior to making recommendations and decisions on projects, particularly coal mines, the PAC holds hearings in communities that will be affected by the project in question.
In late December, Rod travelled to Singleton to present to the PAC considering the extension of the Warkworth Coal mine…again. Rod and Richard had previously given evidence in a major Land and Environment Court case which rejected the mine’s approval. It was that decision that caused the NSW government to change legislation, making it easier for mine approval.
Rod argued to the PAC that nothing had changed since the court’s decision – the costs of the project were still greater than the benefits. Despite economics being at the centre of the Warkworth court case, and the new government focus on economics, Rio Tinto produced no economic analysis to support their application for a new extension this time. Despite this, the PAC approved the mine.
The contradiction between increased focus on economic assessment and reduced provision of it has not gone unnoticed. The economic aspects of the state-owned Cobbora coal project have attracted particular attention and Rod travelled to Dunedoo to guide the PAC through it. “Basically, you’ve got the Department of Planning claiming the project will make $2 billion and NSW Treasury saying it will lose $1.5 billion. They can’t both be right,” says Rod.
Rod’s research, which supports Treasury’s assessment that the project will lose money, was warmly received by locals. You can read some of the local media coverage here and here. The area has been hard hit by the project, which has bought out around 90 farms (45,000 hectares) reducing population and agricultural turnover. Despite this buyout the mine does not look like going ahead anytime soon and as a result taxpayers are about to spend $20 million on a “transition” fund for the area.
Getting quality economic assessment out to these meetings is important, as communities feel they are not taken into account by decision makers without strong economic arguments. TAI is looking forward to more of this grass-roots engagement for our research.
Mining and gas publications
The Australia Institute has been trying to keep the mining industry honest in recent years by detailing misleading claims, revealing the enormous government subsidies that mining receives and highlighting the negative impacts of the mining boom on the rest of the economy.
If you want to know more about the mining industry in Australia, the following body of links will take you to research published by the Institute on mining and coal seam gas. For more of our work on mining, including more research and media, have a look at the mining section on our website here.
Pouring more fuel on the fire– Commonwealth government subsidies to the mining industry
Mining the truth: The rhetoric and reality of the commodities boom– Our original paper that looked at the mining industry in Australia
Too much of a good thing? – Making a case for slowing the mining boom
Still beating around the bush– The effect of the high exchange rate (caused by the mining boom) on the rural sector
Biting the land that feeds you – An analysis of the Acland coal mine in Queensland
Can TAI help you?
If you would like to arrange a ‘Mining the Truth’ or ‘Fracking the Future’ presentation in your area or order hard copies of Mining the Truth or Fracking the Future, please contact us. TAI is also able to arrange training workshops in delivering the Mining the Truth or Fracking the Future presentation, or in understanding economic arguments more broadly.