In the first of a series of investigations into issues facing regional Australia, we report on how locals in a north-western New South Wales town are bracing to learn the fate of the state’s last coal seam gas project

CSG's last stand? In Narrabri everyone has a stake in the farming v mining fight

Country towns are, by their nature, conservative. Change happens slowly and traditions are not discarded easily.

The conservative thinker Edmund Burke wrote that we must act as trustees of the world – what he called “temporary possessors and life renters”, rather than its “entire masters”.

Or more directly, leave it as you found it for the next generation.

The idea coal seam gas production and agriculture production can coexist is like saying lions and zebras can coexist Rohan Boehm, Narrabri Ratepayers and Residents Association

Nevertheless, the modern environmental movement is squarely considered an issue of the left. But that is changing as mining and coal seam gas comes up against farmland. Mostly conservative farmers are resisting gas and coal development on agricultural land.

The Narrabri gas project is the last existing CSG project in New South Wales. The oil and gas company Santos proposes 850 wells in the Pilliga, seven hours’ drive north-west of Sydney. CSG caused such a political headache on the state’s north coast that the NSW Liberal government bought back most of the petroleum exploration licences. The remainder are north of Dubbo and west of Tamworth and go all the way up to the Queensland border.

Like the Bentley CSG project and the Shenhua mega coalmining project on the Liverpool plains near the Pilliga, the Narrabri project has faced fierce opposition from sections of the farming community and has split the nearby towns, none more so than Narrabri. It has also forged new alliances between conservative communities and environmental groups and caused the rise of groups such as the anti-mining organisation Lock the Gate.

Consultation on the environmental impact statement closed at midnight on 22 May. Six hours before the deadline, the NSW planning department had thousands of submissions - too many to collate and count immediately. The NSW government will be the final approving authority, with approval required from the commonwealth under the Environmental Protection and Biodiversity Conservation (EPBC) Act.

Those opposed to the Narrabri CSG project fear underground water loss and/or contamination, the boom-bust cycle of manic construction followed by economic freefall, and mine creep over some of the most fertile agricultural land in the country.

Those in favour accept the promises of employment, economic diversity to drought-proof agriculture, and an extra reason for younger generations to stay in their home towns.

There is no gas crisis in Australia, but there is an attack on our natural assets Read more

What is undisputed is what lies beneath. The coal reserves in the Gunnedah basin dwarf the famed Hunter Valley resource.

The NSW government’s 2012 draft strategic land use plan described the basin as “a diverse and varied landscape including some of the most fertile soils in Australia in the Liverpool plains, the largest extent of woodland/forest in the NSW wheat-sheep belt and the Pilliga forest which is the largest temperate forest in inland NSW”.

Jon Maree Baker is the executive office for Namoi Water, representing water licence holders in the Namoi basin.

“If you imagine you have a dinner plate and on that dinner plate you put a 50c piece, the 50c piece is the coal reserves in the Hunter, the dinner plate is the [coal reserves in the] Namoi,” Baker says.

“So substantially over the next 50 years, there is significant potential to expand both coal seam gas and mining resources here in the Namoi Valley. Part of that assessment is what is the impact regionally and cumulatively on water resources.”



At issue, the landholders only own the top of the land while those with an exploration approval own what lies beneath.

It drought-proofs the region Narrabri Chamber of Commerce's Russell Stewart

Coal seam gas and the gas crisis

Residents of north-western NSW have been watching the Pilliga project for 10 years. It was previously owned by Eastern Star Gas, chaired by the former National party leader John Anderson. Santos took control of Eastern Star in 2011 at about the same time as a contaminated water spill that ultimately led to fines in the land and environment court.

Facebook Twitter Pinterest Santos’s Narrabri gas project has forged new alliances between conservative communities and environmental groups and caused the rise of groups such as the anti-mining organisation Lock the Gate. Photograph: Dean Lewins/AAP

From the beginning of the project, a section of the farming community have opposed CSG on the grounds of a risk to their water supply. The project fell off the public radar for a number of years but, after the South Australian blackouts, talk of a looming domestic gas crisis saw the overdue development application and the 7,000-page environmental impact statement lodged on the same day as Malcolm Turnbull committed to work with the states to develop more gas.

Weeks later the Australian Energy Market Operator warned that Australia – the second largest exporter of Liquified Natural Gas in the world – was facing energy shortages if governments did not carry out national planning.

The Turnbull government has repeatedly chastised the states for their moratoria on conventional gas and coal seam gas while threatening gas companies with a domestic reservation policy.

The prime minister took a step closer to reservation when he announced new gas security export controls on companies when there is a shortfall of gas supply in the domestic market.

His energy and environment minister, Josh Frydenberg, praised a Queensland government move to reserve specific areas in the state where any gas development would be quarantined for domestic use.

At the same time, Santos has been signalling the Narrabri gas project could supply more than half the state’s gas needs on a daily basis. Its general manager energy NSW, Peter Mitchley, tells Guardian Australia “all of this gas will be sold into that pipeline to supply NSW”.

He says he can guarantee that it would go into NSW “because the pipeline is only going south” – even though the project is yet to be approved and the gas contracts are yet to be sold.

This is the political backdrop to the Narrabri gas project.



Facebook Twitter Pinterest A Santos drill rig west of Brisbane: ‘If you look at the scale of the projects in Queensland, there’s 6,000 wells in one application. This is 850. I can’t see how they are going to have this much investment and not expand it,’ says farmer Matt Norrie. Photograph: Tim Wimborne/Reuters

Narrabri gas flares

As you drive through the Pilliga forest, you can’t see much of the project. Sixty per cent of the land within the project boundary is in state forest and 40% will be under private land. Santos has promised not to go on to farmers’ land if they do not agree. We see two gas flares, one known as the Tinsfield flare, just out of the town of Narrabri, and the other at the Bibblewindi treatment plant in the Pilliga state forest.

The boom-bust cycle can have really big impacts on a community, especially rural communities People for the Plains' Sally Hunter

Third-generation farmer Matt Norrie’s farm, Mollee, is one kilometre from the northern boundary of the Narrabri project. He can see the Tinsfield flare from his house. He is also an irrigator who relies on water.

Norrie is involved in the community. He chairs the NSW Farmers Association Narrabri branch and he sits on the Santos community consultative committee. He starts by saying that if you have to have coal seam gas, you would want a company like Santos. It puts back into the community, he says, but then he does not hide his fears about the process.

“I can’t see how the Narrabri gas project is going to stay in one area,” he tells us. “Santos has spent nearly a billion dollars buying it. They’ve spent another billion and a half developing it. They are going to spend another half a billion dollars on a pipeline. Now that’s a fair bit of return of investment [required] just on 850 wells.

“If you look at the scale and the size of the projects in Queensland, there’s 6,000 wells in one [development] application. This is 850. I can’t see how they are going to have this much investment in one small area and not expand it.

“It is that expansion that I fear we can’t talk about or address at the moment. Under the current planning process, there is nowhere where we can take into consideration or the community can formally voice their concern over exactly what a larger gas field will mean.”

The chair of the Narrabri chamber of commerce, Russell Stewart, reckons the whole of the chamber is in favour of the project but that is disputed by other locals. “I can remember when I grew up here agriculture was where everybody worked, really,” he says.

“Unless you worked in a shop in the main street you worked in agriculture. Really what [the gas project] does is it drought-proofs the region.”

Stewart owns main-street shops rented by Santos, a fact he is open about.

Sally Hunter grew up in Roma in Queensland and she says its experience of boom and bust motivated her to become involved in the community action against the Narrabri project. Hunter is secretary of People for the Plains, a community group opposed to the project.

“The scary thing, from a landholder’s perspective, is that you are completely powerless in the face of these companies that know what they are doing and know what they want and know how to get what they want – so that is very frightening,” she says.



“From an economic perspective the boom-bust cycle can have really big impacts on a community, especially rural communities. It threatens the resilience of a community.”

What community benefit?

Since economists worked up their first model, there are a lot of claims and counterclaims made about economic outcomes caused by mining and infrastructure projects.

For example, Adani first claimed its proposed Carmichael coalmine would create 10,000 jobs and generate $22bn in royalties until an Adani expert witness told a court case that it was closer to 1,464 jobs and up to $4.8bn in royalties.

We don’t believe we have a monitoring network able to manage any level of impact or predict any level of impact Jon Maree Baker, Namoi Water

Santos says, in its environmental impact statement, there will be a maximum of 1,300 jobs in the construction phase and 200 when the project drops back to operations. That 200 includes 50 existing jobs.

The statement also says the project would pay $1.1bn in royalties over 25 years.

The NSW government committed that for every $2 paid by a gas producer into a community benefit fund, the company will receive a $1 rebate on its gas royalties, up to a maximum of 10% of the royalty due in each year.



The deputy prime minister, Barnaby Joyce, has gone a step further, suggesting companies should pay resource royalties to farmers whose land is affected, as flagged in the South Australian government’s plan.

Facebook Twitter Pinterest Anti coal seam gas mining rally outside parliament house in Sydney: CSG caused such a political headache on the state’s north coast that the NSW Liberal government bought back most of the petroleum exploration licences. Photograph: Mick Tsikas/AAP

Norrie is sceptical about royalties.



“If the farmer is going to receive a royalty, that royalty isn’t going to kick in for a while and if it’s only 10% of that royalty, the royalties that are going to be going to government anyway, I can’t see it’s going to be that great.

“So if you going to incentivise farmers to have gas on their place, I think it’s not something that’s got to be tied to royalties, I think it’s got to be tied to production.”

Whether it is royalties or the community benefit fund, opponents of the projects suggest this is simply buying social licence for the approval.

Throw a bucket of paint in a stream

More than economic boom and bust, opposing farmers fear the effect on water. They rely on water from the upper layers for irrigation and stock while CSG drilling goes through a deeper layer called aquitard to get to the coal seams below. The wells are lined with steel and concrete.

Waste products include water, salt and other minerals, which companies have to treat and/or dispose of.

At its peak, according to the environmental impact statement, the project will produce 115 tonnes of salt a day in the first two to four years and an average of 47 tonnes a day across the 25-year life of the project.

Farmers fear accidents will cause cross-contamination – a possibility which would be hard to fix once it has happened.

“Think of throwing a bucket of paint in a stream and then trying to fix it,” says one farmer. “It has already got away before you know about it.”

Mitchley says it is hard to imagine what kind of accident could cause contamination.



Santos' coal seam gas jobs claim at odds with original projection Read more

“It really is difficult to imagine what kind of accident somebody is talking about,” he says. “We are not in a seismic area, the rocks have been here for thousands of years, they are completely stable. Our water source is completely separate to the water that farmers take.”

But Baker says the science is advancing to reveal increasing interconnection between the various layers and NSW as a state does not have a good deep groundwater monitoring network which allows any level of certainty about the predictions of impact on water.

“We don’t believe we currently have a monitoring network that is able to manage any level of impact or predict any level of impact,” Baker says.

“Our current review of the Santos EIS suggests there is a lack of detail in what has been provided that doesn’t allow community any level of confidence that the project could proceed without any level of impact.”

The plan was to leave

In country towns globally, the imperative revolves around keeping people in the joint. Walk down the main street of Narrabri and there are empty shops mixed with cafes and retail businesses. It has the telltale signs of a town reliant on agriculture, the service businesses, the big farming machinery moving through the streets, the stock and station agents.

It also generates the usual tension between those who rely on agriculture and those who would like to see more economic diversity. And as with all small towns, everyone seems to have a dog in the race when it comes to mining versus agriculture.

Max Davis has a farm but also drives the bus for a local open-cut coalmine. “I don’t want the town to die,” he says.

“I like a bit of versatility in the economy and we’ve got coalmining here now and we have got agriculture, which has been a mainstay but it is not employing as many people as it used to.

I don't want the town to die Max Davis

“Also, with the gas it will add a bit more to it. We are vying for the inland rail hub so I think with the gas as well it will help push that even further.”

Ron Campbell is a councillor at Narrabri shire and owns Namoi Waste Corp, which contracts to Santos. He believes the project risks are minimal and urges the town to get behind the plan.

“You can’t say you can drive a car and never have an accident,” Campbell says. “It’s the same thing. You would be a fool to say there is no way that there could not be an issue there.

“The chief scientist Mary O’Kane said in her report the risks are so minimal that it should be allowed to go on.

“I can be accused of having meat in the sandwich with Santos. I am comfortable with that because I know my role in the community.”

Facebook Twitter Pinterest Coal fragments from a coal seam gas well rig in the Pilliga forest, part of Santos’s Narrabri gas project. Photograph: Dean Lewins/AAP

Abbie Campbell is operations coordinator for Santos. She grew up in Narrabri and has been working there since 2014. The plan was to leave town before she got the job.

“With high school, the majority of my friends have left to study, a couple of them have come back,” Campbell says. “But most of them have left and haven’t returned.”

Likewise Brendan Ward, who is the Santos project manager for land access. He is the contact point for farmers with gas wells or who are interested in access agreements. He was also born and bred in Narrabri. His father works for Narrabri shire council and his mother works at the local high school. He studied business.

“Back in high school we all just wanted to get to university and see where it took us and there wasn’t a great deal of opportunity back then for coming back to town,” he says. “But now it looks like there is something we can get our teeth into and really make a career out of it. It’s good.”

Lynn Trindall is the chief executive of the Narrabri Land Council. She has worked with Santos, including a grant of $360,000 for a computer system to collate all known Indigenous heritage in the area. She faced criticism for taking part.

“We work closely with Santos to protect our culture and heritage because they have got information that I have known they have had from Eastern Star Gas days,” Trindall says.

“Everyone has their personal views in relation to the industry and because we are bound by an act of parliament it states in there we must protect culture and heritage, and that is what I do as the CEO.

“A lot of people don’t believe we do the right things but we do.”

Approvals

Locals in Narrabri and further afield wait on tenterhooks for an outcome that may change the area completely.

Davis, a project supporter, says most of the opposition has been from “out-of-town people”. “There is a few dedicated ones who are against it in the town,” he says.

“When I say ‘outside’ I don’t mean ... well, there are some from the city areas as well but like surrounding districts – Coonamble, Coonabarabran, Gunnedah, which won’t be impacted.”

But underground water runs well past the shire boundaries and it affects those towns and shires in the surrounding districts, including the famed Liverpool plains.

Rohan Boehm, the chairman of the Narrabri Ratepayers and Residents Association, says prime agriculture and mining cannot exist together. “The very idea that coal seam gas production and agriculture production can coexist is very much like saying lions and zebras can coexist,” Boehm says.

“Really that cannot be sustained. You cannot have high-production, high-value agriculture like we have here on this farm or across the north-west and expect it to continue while the industry skirts around the outside of it.”

Boehm says he is not against mining per se as “we all consume energy”.

“But I am a realist when I hear miners talk about their great economic impacts,” he says. “Really we should always take that with a grain of salt.”