The prospects for an early resumption of Metgasco’s gas exploration in the Northern Rivers region of NSW are dim with a government agency critical of the company’s inadequate and unsophisticated community consultation.
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The findings by the Office of Coal Seam Gas (OCSG), released a day after the agency had extended the suspension of Metgasco’s plans to drill for gas at Bentley near Lismore, indicate the government will give weight to local opposition, a result that may give heart to other local campaigns against new mining activity in the state.
The OCSG blasted Metgasco for its decision to defer a broader consultation program until after its planned Rosella well had been drilled as “not reasonable given the escalation of opposition to the activity in the Northern Rivers area from the beginning of the year”.
Metgasco on Thursday said it was “very disappointed” by the OCSG’s review of the suspension, saying the Baird government should be “defending exploration and investment in what is a highly regulated and environmentally safe industry, particularly at a time the general community is facing a crisis shortage in natural gas supplies”.
“The government should not allow itself to be intimidated by activities making spurious and ill-informed claims about drilling for natural gas,” Peter Henderson, Metgasco’s managing director said in a statement to the stock exchange.
The company’s shares have roughly halved in value since the May 15 suspension,including 8.3 per cent on Friday. Earlier this week, the company said it had asked the Supreme Court to set aside the suspension on the grounds that it was “unlawful” and did not afford Metgasco “procedural fairness”.
The legal action is limiting the government’s decision to comment on the OCSG’s decision. “As this matter remains the subject of ongoing litigation, I will be making no further comment,” Energy Minister Anthony Roberts said on Thursday.
The initial suspension prompted celebrations by about 1000 protesters who had gathered at the Bentley site. It also headed off a possible confrontation with police days later when the number of opponents to the drilling was expected to swell to as many as 8000.
“No evidence of a plan”
The list of reasons cited by the OCSG for its decision to extend the suspension indicates Metgasco faces an uphill task to prove it has met the necessary consultation requirements of its Petroleum Exploration Licence.
In order to drill the Rosella Exploration well, aimed to tap conventional gas reserves trapped in sandstone about 2.3 kilometres below the surface, the company is required to “undertake genuine and effective consultation with the community”, and develop a “community consultation plan” the OCSG said.
However, the OCSG’s director found there “was no evidence of a plan” as required by the guidelines of the licence.
The OCSG also found Metgasco had “not adequately identified relevant stakeholders” and its consultation efforts “had been limited to landholders” within 2 km of the proposed well, including the Richmond River Council.
The OCSG said those efforts should have extended to the Lismore and Kyogle Councils which have “a significant interest” in the drilling activities, as well as local environmental groups, chambers of commerce and other interested community groups.
The consultation that was undertaken “has not been effective”, the OCSG said.
“The Director considered that Metgasco could take a significantly more sophisticated approach to community engagement than it had done,” the OCSG said.
