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Metgasco withdrawal will hurt Casino, says council GM

Casino CBD
Casino CBD DAVID NIELSEN

UPDATE 5.30pm: METGASCO'S decision to suspend its operations on the Northern Rivers will badly damage Casino's hopes of becoming the industrial hub of the Northern Rivers, Richmond Valley Council general manager John Walker has said.

Mr Walker said the town had been relying on the promise of cheap energy through coal seam gas to attract industry to the area.

"We've just embarked on an aggressive push to become a major industrial and business centre, and one of the key elements of that was cheaper power that would give us a competitive advantage," Mr Walker said.

"Without the power station and access to gas, that competitive advantage has gone."

Richmond Dairies general manager Chris Sharpe said the company, which pays double for its gas compared with its Victorian competitors, was relying on gas from an agreement that would have commenced with Metgasco by the end of the year.

"In these times where dairy farmers are suffering significant costs, it's not helping the situation," Mr Sharpe said.

Anti-CSG Rally in Lismore on Saturday, May 5, 2012.
Anti-CSG Rally in Lismore on Saturday, May 5, 2012. Doug Eaton

UPDATE 4.30pm: ANTI-CSG group Lock the Gate is claiming a "massive victory" for the community after Metgasco announced it would suspend its Northern Rivers operations.

In a statement, Lock the Gate spokeswoman Boudicca Cerese said the decision vindicated the efforts of "thousands of people across the region" who had opposed coal seam gas.

Ms Cerese also rejected a claim by Metgasco community opposition had nothing to do with the decision to withdraw.

Lock the Gate spokeswoman Boudicca Cerese.
Lock the Gate spokeswoman Boudicca Cerese.

"Whilst the company may blame regulatory uncertainty for their decision, the fact is that their operations have faced massive opposition from communities across the region," she said.

"In the past two years we have seen the growth of an unprecedented social movement made up of people from across the political spectrum who are totally opposed to the industrialisation of our beautiful region for coal seam gas mining.

"We have seen all sorts of innovative and creative actions from community members ranging from the development of the grass roots gas field free community surveys to the formation of community action groups like the wonderful Knitting Nannas Against Gas.

"We have witnessed the largest ever rally in the region with 7,000 people on the streets of Lismore last May marching against coal seam gas.

"We have been inspired by the courageous efforts of local communities and their supporters at Glenugie and Doubtful Creek who have survived floods and wild weather whilst continuously blockading Metgasco's drilling operations for almost four months.

"People from all walks of life have come together as never before- farmers, townspeople, Aboriginal traditional owners, tree changers, you name it- working collaboratively in the face of our government's failure to protect what we all hold dear- our natural places, food growing land and precious water supplies," she said.

Lock the Gate regional coordinator Ian Gaillard warned Metgasco would face renewed opposition if it ever tried to make good on its plan to return to the region once the regulatory environment had settled.

"The people of the Northern Rivers have shown that coal seam gas companies simply cannot operate in the face of empowered and resolute community opposition," Mr Gaillard said.

Clarence Valley Councillor Karen Toms.
Clarence Valley Councillor Karen Toms. Daily Examiner

UPDATE 3.30pm: WHILE many are rejoicing Metgasco's move to shut-up shop on the North Coast, Clarence Valley councillor Karen Toms says she thinks there are going to be some severe consequences.

Cr Toms said she empathised with the company, and others like it, and agreed the State Government had changed the goal posts.

"Only last year they came up with new regulations and it was all systems go for the industry," she said.

"Now with one stroke of the pen it all changes and impacts negatively on those businesses.

"Any business would have trouble trying to come to terms when the rules are changed so easily."

She said the main negative would be in terms of Northern NSW energy needs.

"Our contract expires in a couple of years and we are going to be in trouble," Cr Toms said.

"We already have the Casino Abattoir waiting to get gas.

"There's already a well there it just needs to be connected."

She said the decision could impact on the price of energy in the state, which would ultimately hurt businesses.

Cr Toms said many had the view CSG would "make the sky fall in" but having grown up in Queensland, where the industry had operated for years without any major difficulties, she said she did not hold that view.

"I understand people have fear," she said.

"And I respect that but I think we need to take the fear away from it and I think information does that."

Metgasco head Peter Henderson at a press conference on the company's decision to suspend operations on the Northern Rivers.
Metgasco head Peter Henderson at a press conference on the company's decision to suspend operations on the Northern Rivers. Hamish Broome

UPDATE 2.50pm: METGASCO may be going, but it wasn't "people power" that forced the company out of the Northern Rivers, chief executive Peter Henderson says.

Speaking at a press conference at Casino, Mr Henderson denied local opposition to the industry had influenced its decision to suspend its operations in the Clarence Moreton basin.

The decision would cost the jobs of most of Metgasco's staff in Casino and Sydney with 21 of 27 positions to go.

Mr Henderson said the decision would cost the Richmond Valley local government area hundreds of millions of dollars and potentially "more than $1 billion" in investment.

Mr Henderson said it was  the unstable regulatory environment created by the NSW and Federal Government on the company's decision to suspend its exploration program.

The NSW Government has announced plans to intruduce CSG exclusion zones around built-up areas and the Federal Government yesterday announced it would include ground water among the triggers in the Environmental Conservation and Biodiversity Act, which would mean coal seam gas sites would have to be proven safe to ground water before they could be exploited.

Mr Henderson said the CSG industry was safe and clean, but said Metgasco could not afford to continue exploration in such a politically charged and uncertain environment.

The company would maintain its leases and hoped to return in two or three years when governments might be more supportive of Coal Seam Gas.

Mr Henderson said the primary reason for the suspension was the residential 2km CSG-free buffer zone announced thre weeks ago by the NSW Government three weeks ago, which remained unclear in its definition of a residential area.

However, he also blamed the previous 18-month moratorium on the industry by the NSW Government and what he said were increasingly lengthy delays in approvals for continued exploration.

Mr Henderson said the Clarence-Moreton Basin was the largest gas field on the Australian East Coast without sales contracts in place on it.

Metgascp still needed to spend about $50 millon on exploration to reach the point where they could look at sales arrangements for the gas - a necessary precondition for production.

The sign outside the Lismore Workers Club this morning.
The sign outside the Lismore Workers Club this morning.

UPDATE 1.30pm: COAL seam gas opponents on the Northern Rivers are loudly celebrating Metgasco's announcement it has suspended operations on the Far North Coast.

While social media sites Facebook and Twitter continue to buzz with the news, the Lismore Workers Club this morning changed its sign to read "CSG free Northern Rivers sanity at last!"

At Metgasco's Doubtful Creek site, protesters who have 49-days into a vigil were ecstatic.

Local farmer Don Durrant, who described his 44 days at the protest as an arduous and sometimes depressing ordeal, said "it was well worth it".

"Even though we were depressed when the drill rig came in, we didn't consider stopping," he said.

Iron Pot Creek grazier Peter Stackhouse said: "Metgasco have finally realised they have bitten of more than they can chew", while Doubtful Creek resident Angela Froud couldn't help but cry with relief when she heard the news.

"It was a huge relief for all the hard work we have done over the last two years," she said.

"Walking around the site today people are beaming ... we are now CSG-free in the Northern Rivers for the first time."

But the vigil is not disbanding anytime soon, with protestors vowing to remain until the drill rig is removed.

"This threat is not over and we will continue to oppose inappropriate mining on the Northern Rivers," protestor and Doubtful Creek resident Dean Drapper said.

Happy protesters at Doubtful Creek.
Happy protesters at Doubtful Creek.

However, not every one was happy with the news. Richmond Valley mayor Ernie Bennett said businesses in the area would lose out from the lost opportunity of cheaper energy.

"It concerns us as a council that government seems to be changing the ball game mid-stream," he said. "They were talking about how gas was crucial to supply of energy in the state and now they seem to have changed there mind. Is it crucial or isn't' it?"

Page Nationals candidate Kevin Hogan has also welcomed the news, releasing a statement praising Metgasco for suspending its operations.

"I think in the wake of community concerns over CSG in the Northern Rivers, Metgasco's decision to suspend its activities is a good outcome for the community," Mr Hogan said.

"I am always very sorry for people who have lost their jobs, and for the loss if investment in the region, but I think a suspension is the right thing for the area."

See Mr Hogan's full statement here.

*****

UPDATE 12.15am:  THE Australian share market has voiced its opinion on Metgasco's decision to suspend its operations on the Far North Coast - and it's not happy.

Metgasco's share price has fallen by 25.81% as of 11am today following this morning's shock announcement.

At present, Metgasco shares are trading on the ASX at an all-time low of 6.9 cents each, down from a high only six months ago in September of about 28 cents.

Clarence MP Chris Gulaptis.
Clarence MP Chris Gulaptis. Adam Hourigan

UPDATE 12pm: CLARENCE MP Chris Gulaptis has defended the State Government's handling of coal seam gas rules, saying  it was just regulating an industry that was previously unregulated.

Speaking after Metgasco announced it would cease its Clarence/Moreton exploration and accused the NSW Government of creating an "uncertain operating environment", Mr Gulaptis said his government was not in the business of advocating on behalf of Metgasco or any other company.

"We're playing catch up in trying to establish some rules and some policies to regulate the industry," he said.

"We had nothing to work from."

Mr Gulaptis conceded the government had a tough task on its hands trying to put down some industry ground rules as well as delivering cheap energy and jobs.

"Some ten years ago Metgasco was welcomed to the area," he said.

"It was to bring jobs, cheap, green energy to the region and it was welcomed by everybody.

"Now as the community has come to dig deeper into the CSG industry there's some concern about it.

"We are simply trying to regulate an industry previously unregulated and there's some fallout from that unfortunately and we have to take some responsibility.

"But we have to look at the big picture."

Mr Gulaptis said residents on the relatively closely populated North Coast "weren't used to" mining.

"Our vision is it's somewhere out West where there are thousands of square miles of nothing," he said.

"To have that close impact puts us in a real quandary."

With regard to yesterday's Federal Government announcement to make water a trigger for federal intervention in CSG and large coal mining development approvals, Mr Gulaptis lamented the inconsistent approach.

"As far as I'm concerned there's a bit of electioneering here," he said.

"It's having a bob each way saying they're going to toughen up."

*****

UPDATE 11am: TWITTER is buzzing with the news of Metgasco's decision to suspend its operations on the NSW Far North Coast, with people both celebrating and mourning the news.

Clarence Valley Councillor Karen Toms is among the latter, condemning anti-CSG activists and warning of the consequences of the suspension for the state.

"How can anyone condone the actions of anti CSG activists against land owners who have said yes? Death threats sabotage and more," Cr Toms said in one post.

"How sad that a legitimate business has been hounded and harassed to the point to suspend operations. The consequences will be painful for NSW," she said in another.

On the other side of the divide, Aiden Ricketts declared the suspension a win for "people power".

"Now let's save the nation," he Tweeted.

Keep up to date with the latest CSG Twitter posts with our live feed below.

9.45am: METGASCO is shutting up shop on the Northern Rivers, saying exclusion zones announced by the NSW Government created an "uncertain operating environment".

Metgasco boss Peter Henderson is expected to address the media on the decision today. However, in a statement to the Australian Stock Exchange, Metgasco said it had suspended its "Clarence Moreton exploration and development program".

Managing director Peter Henderson Metgasco.
Managing director Peter Henderson Metgasco. Jacklyn Wagner

The company, which has seen big falls in its share price over recent months, would retain its exploration licences on the Northern Rivers, but will maintain them with only a "minimal work program" with the intention of returning to the region once the rules around coal seam gas drilling had settled and "it once again becomes prudent to invest shareholder capital exploring and developing CSG reserves in New South Wales".

"This is a carefully considered decision by the Metgasco Board in light of the uncertain operating environment created by the New South Wales Government's announcement on 19 February that it intends to change the regulations for Coal Seam Gas (CSG) operations in the State," the company says in the statement.

The statement makes no reference to Federal Environment Minister Tony Burke's announcement yesterday that coal seam gas companies would be allowed to operate only where it could be shown they did not threaten the water table.

In the statement, Mr Henderson said the suspension was disappointing but necessary.

"The CSG industry in New South Wales endured an 18 month shutdown while the State Government reviewed the industry and put in place regulations it lauded as the toughest in Australia, if not the world," he said.

"Only five months after introducing these new regulations and confirming its support for the industry, the NSW Government has yet again announced new regulations, this time without any consultation with the energy industry.

"Until the New South Wales CSG regulations are firmly established and tested, Metgasco plans to scale back its organisation while maintaining a small presence in the Northern Rivers region to manage community consultation and maintain key relationships.

"The company will rehabilitate most, if not all, wells and facilities located on its permits. This was not an easy decision to make, but a necessary one given the regulatory uncertainty."

Topics:  asx, csg, metgasco, mining, nsw government



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