The best form of CSG insurance is a moratorium

MEDIA RELEASE – 2 June 2014 

The Greens NSW mining spokesperson Jeremy Buckingham today said the best form of insurance on coal seam gas (CSG) is for the industry to not go ahead, after the Chief Scientist of NSW released a report calling for a tougher insurance regime for the CSG industry.CSG well Pilliga

On ABC radio the Chief Scientist and Engineer Mary O’Kane called for prudence saying: “Whenever you go into a new geological system, you’re experimenting, you’ve have to find out how it’s going to work in that.”

Greens MP Jeremy Buckingham said: “The Greens welcome the Chief Scientist’s recognition of the broad range of risks associated with the coal seam gas industry, however, we believe the best way to deal with these risks is to avoid having a coal seam gas industry at all.  Instead we should transition to renewable energy.”

According to OneSureInsurance.co.uk, while some risks associated CSG may have a low likelihood of occurring, the impact of an occurance may be extremely high.  Developing thousands of gas wells increases the chance of even unlikely events occurring.  Others risks may be cumulative and gradual, but substantial – something that is not covered by the current insurance regime.

“The Greens have long campaigned for the establishment of an environmental rehabilitation fund, similar to that recommended by the Chief Scientist, which would apply to the whole mining sector and partially address the costs associated with long-term environmental impacts and remediation.

“I’ve seen the wreckage of the CSG industry in Wyoming where taxpayers and individual land owners must now foot the bill to cap abandoned gas wells and rehabilitate a polluted landscape.  Locals referred to the operations of the gas companies as the ‘rape, ruin and run’ industry,” he said.

While a comprehensive insurance scheme is necessary, the consultant’s report by Hicksons Lawyers identifies risks which cannot be undone.  For example:

  • Aquifer contamination: “Unlike surface contamination [their] may be no effective means of restoring/rehabilitating an aquifer.”  
  • Fugitive climate change impacting emissions: “Accurate assessment are not available”
  • Fire risk: “Potential fire risk from loss of well control”

“We have already seen a series of serious water contamination incidents by Santos near Narrabri, and fire risk from 850 gas wells and associated infrastructure in the Pilliga forest is huge.  Studies have consistently shown that fugitive emissions from unconventional gas extraction make its climate impact as much as coal, with associated liabilities under any emissions pricing regime,” said Mr Buckingham.

Greens MLC Jeremy Buckingham currently has a Private Members Bill before the NSW Parliament, the Responsible Mining (Protecting Land, Water and Communities) Bill, which will establish an environmental rehabilitation fund and a responsible framework which addresses community concerns and protects valuable land and water.

Contact: Max Phillips – 9230 2202 or 0419 444 916

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