Author Archives: maxphillips

Greens expose Santos’ multimillion dollar CSG royalty loophole

MEDIA RELEASE: 1 August 2015

The Greens NSW water spokesman Jeremy Buckingham today accused the NSW Government of creating a loophole which has allowed Santos to avoid paying $3.68 million in royalties on the 4,250,938 gigajoules of gas supplied to Wilga Park Power Station in the four years to last month and millions more in the years ahead. The calculations to substantiate this assertion are below.

Last week Santos were granted approval to send all gas produced from 12 existing coal seam gas wells in the Pilliga to their Wilga Park Power Station for 1000 days under a ‘beneficial use’ exemption for gas exploration. The Greens refute Santos’ claim that this is genuine exploration.

Gladys Berejiklian needs to explain why her government has created a loophole which allows Santos, and Santos only, to avoid paying millions of dollars in royalties,” said Greens Energy Spokesperson Jeremy Buckingham.

Santos has clearly been given special treatment with a loophole in the regulations which allows them to avoid paying royalties when any similar new development would be required to.”

“The NSW Government and Santos should also drop the outrageous fiction that this is genuine gas exploration. Santos have been operating these wells for up to 8 years, they have submitted a detailed application for a commercial 850 well gas field and they have dodged the key question about how much more gas will be sent to the power station than would otherwise have been flared.”

“Santos were only seeking between one and three years to operate the Tintsfield and Dewhurst wells when they got approval in 2009 and 2013. They have now been operated these wells for between four and eight years and there is no justification for an additional 1000 days of testing. There was certainly no detail in the woefully inadequate development application from Santos that has just been approved. 

“This whole process stinks.  It is coal seam gas production by stealth and a multi-million dollar taxpayer subsidy to Santos.

“The Greens oppose coal seam gas as unnecessary, unwanted and unsafe.  We do not need a new fossil fuel in an age of climate change and competitive renewable energy technologies,” Mr Buckingham said.

Contact: Jack Gough 9230 2202 or 0427 713 101

Santos NSW CSG production and lost royalties

2014

(from 18 July)

2015 2016 2017 2018

(to 30 June)

Bibblewindi West (MSCF) 47,960 340,879 433,887 519,421
Bibblewindi East (MSCF) 233,194 844,192 755,588 572,383
Total (MSCF) 281,154 1,185,071 1,091,804 1,091,804
Converted to GJ (MSCF  = 1.0551 GJ) 296,646 1,250,368 1,151,962 1,151,962 400,000
East coast average wholesale gas price (ex. transmission costs) about $7 $7.60 $9.78 $9.19 $8.60
Estimate of well-head value $2,076,522 $9,502,796 $11,266,188 $10,586,530 $3,440,000
Total well-head value $36,872,036
Estimate of royalty (10% of well-head value) $207,652 $950,280 $1,126,619 $1,058,653 $344,000
Total lost royalties $3,687,205

 

  • Based on the previous Gas Price Trends Review 2015 report, the gas price for 2014 was about $7.
  • According to the ACCC Gas Inquiry 2017-2020 interim report from April this year the “range of producer prices for gas supply in 2018 under the more recent GSAs is between $8.60/GJ and $9.80/GJ”.

 

Under the exemption Section 28B of the Petroleum (Onshore) Act 1991, which allows the beneficial use of gas yielded through prospecting, it is left up to the regulations whether a royalty is payable.  The regulations were silent on this until 2016 and so no royalty was payable before then.  When the 2016 regulations brought in a 10% royalty for beneficial use (Section 16) the government put in a loophole which means that if the recovery and use is authorised by a relevant development consent granted under Part 3A, 4 or 5.1 of the Environmental Planning and Assessment Act 1979 before 18 December 2015 they don’t have to pay. Santos’ Wilga Park power station is the only project to which this loophole applies.

Timeline of Wilga Park development applications and modifications

  • On 18 July 2014 the Government approved an amendment to the Wilga Park Power station approval allowing the use of coal seam gas from existing or future wells within PAL 2 or PPL 3 at the Wilga Park Power Station.
  • Following concerns raised by the Wilderness Society, the Planning Department’s assessment report at the time specifically mentioned that Santos’ use of the gas from their test wells should not be open ended, saying:

“the Department is concerned to ensure that the resource appraisal period for carriage of gas from PAL 2 and its use at Wilga Park is not open-ended. It considers that a reasonable time period should be included in the modified approval to provide an upper limit for the use of gas gathered from wells within the PAL, before a modified approval for ‘petroleum production’ and a consequent PPL, is required for continued use.”

They then said that “Santos considered that an appropriate period for future resource appraisal was 3 years, from the date of any modification approval.”

And so, despite Santos seeking unlimited and open ended use of the gas in their application, the approval specifically restricted it to 3 years as so that it “is limited to a reasonable period”

1.4A Gas may only be received for use at the Wilga Park Power Station from wells located within Petroleum Assessment Lease 2:

a) for a period of 3 years from the date of approval of Modification 3, in the case of any existing well; and

b) for a period of 3 years from the date of commencement of such receipt, in the case of any well which is drilled following the date of approval of Modification 3.

Note: The purpose of this condition is to ensure that the supply of gas to the power station arising from gas flow appraisal at exploration and/or appraisal wells is limited to a reasonable period. Supply of such gas to the power station from wells located within a Petroleum Assessment lease for longer periods would require further modification to this approval.

  • Santos then applied in August 2016 to expand this ability to use gas at Wilga Park so that it applied to all their “existing or future wells within PEL 238” –  they subsequently dropped this application.
  • In May 2017 they applied to scrap the 3 year limitation on use of the gas and extend it for another 3 years “to enable the ongoing use of natural gas extracted from coal seams in the Wilga Park Power Station whilst continuing to assess and appraise the gas.” This was approved in July 2017.
  • Santos then applied for a further extension of their beneficial reuse, along the lines of the withdrawn 2016 application, for gas “from the Tintsfield and Dewhurst South 26-31 pilot wells located within PEL 238.” The justification given for this increased use is to “increase the supply of gas available to the power station”.  This will mean Santos is able to extract gas from an additional 12 coal seam gas wells in the Pilliga without any Environmental Approval – essentially production by stealth.  This was approved on 23 July 2018.

Greens celebrate big win for western Sydney as waste incinerator finally refused

MEDIA RELEASE – 19 July 2018

NSW Greens energy spokesman Jeremy Buckingham today said the decision by the Independent Planning Commission to refuse the proposed western Sydney waste to energy incinerator was a huge win for the residents of western Sydney and the lungs of all the people in Sydney. He called on the government to back the Greens bill to ban such incinerators within 15km of residential areas to secure clean air into the future.

The Independent Planning Commission found that “the project is not in the public interest because there is uncertainty around:

  • The project’s impact on air quality due to the uncertainty around the project’s emissions and the results of the applicant’s predicted modelling;
  • The project’s impacts on human health;
  • The suitability of the site; and
  • The relationship between air quality impacts and water quality impacts.”

“This is a fantastic win for the residents of western Sydney and the Greens, who have been fighting this toxic proposal for years,” said Greens MP Jeremy Buckingham.

“I am concerned that the Commission has made it clear in their determination that under the current planning process the level of public opposition to the project was not a relevant consideration in the determination and therefore there is still the possibility that a new amended application could be approved.

“The government should now back the Greens Bill which will ban large waste to energy incinerators within 15 kilometres of residential zonings to end this uncertainty permanently.

“Incinerating waste is not green energy. We should be seeking to reduce, reuse and recycle waste rather than create a large incinerator and permanent waste stream to feed its boilers,” he said.

The Greens have introduced the Environmental Planning and Assessment Amendment (Waste Incinerator Facilities-Residential Exclusion Zones) Bill 2017 to ban large waste to energy incinerators within 15 kilometres of residential zonings.

Contact: Jack Gough – 9230 2202 or 0427 713 101

Humphries 1 – 0 Blair: Last minute amendment degrades protection for environmental water

MEDIA RELEASE – 20 June 2018

The Greens NSW water spokesman Jeremy Buckingham today accused the water minister Niall Blair of being rolled by former minister and National Party rival, Kevin Humphries and his allies by introducing a last minute amendment to the Water Management Amendment Bill 2018 to reduce his own powers to protect flows of water released for environmental purposes.

Irrigators pumping during environmental water flows has become a major issue.  In mid-2017 a significant environmental release aimed at connecting the Macquarie and Barwon Rivers to allow golden, silver and spangled perch fingerlings to spread, was severely impacted when an irrigator broke a handshake agreement and pumped a considerable amount of water from the environmental flow.

A subsequent Department of Primary Industries report ‘Making the Connection: Designing, delivering and monitoring flows between catchments’ recommended:

“Adequate legislative protection of environmental flow events from extraction in both the regulated and unregulated Macquarie water sources is required. Protecting the integrity of flows is also emerging as a key factor to the success of connectivity watering events and facilitating this should be a focus in current planning and legislative frameworks throughout the Basin.“

“The original public consultation draft of this bill gave the minister strong and explicit powers to protect environmental water. These powers were watered down under pressure from irrigators in the bill introduced into parliament, but then a further amendment abolishing specific protections was handed to parliamentarians only five minutes before debate resumed last night,” Greens MP Jeremy Buckingham said.

“It appears that Kevin Humphries and his allies have rolled Niall Blair in the National’s party room to further diminish protections for environmental water in NSW.

“The last minute amendments removed the Minister’s power to place mandatory conditions on licences to protect environmental flows.”

Prior to this amendment, water minister Niall Blair justified the original provision for mandatory conditions in his second reading speech as a way ‘to provide a simpler, clearer and more transparent regulatory framework’:

“The bill allows mandatory conditions to be imposed on a water access licence or approval by regulation. Prescribing mandatory conditions by regulation will provide a simpler, clearer and more transparent regulatory framework. This is consistent with the application of mandatory conditions by regulation under other legislation such as the Biosecurity Act 2015. Stakeholders raised some concerns about imposing mandatory conditions on licences and approval by regulation without consultation. The Government has listened to these concerns and the bill now provides at item [56] that a mandatory condition, other than one that is of a machinery nature or is minor in its effect, must not be prescribed unless it is publicly exhibited for at least 28 days.”

The final Third Read vote will happen when parliament resumes today. The Greens will oppose the bill.

Water Management Bill has loopholes you can fit an irrigation pipe through

MEDIA RELEASE – 19 June 2018

The Greens NSW water spokesman Jeremy Buckingham today accused the NSW Government of watering down its Water Management Amendment Bill 2018 to create loopholes to benefit large irrigators meaning the full recommendations of the Ken Matthews Inquiry will not be implemented and mismanagement of water in NSW will continue into the future.

“Some of the provisions in the bill currently before parliament are a recipe for killing the Darling River. Essentially you will have water extraction concentrated in the upper reaches, while the lower Darling dies and Broken Hill is fed by a pipeline from the Murray at Wentworth,” Greens MP Jeremy Buckingham said.

“There are massive holes in this legislation and considerable differences between the Public Consultation Draft of the Water Management Amendment Bill 2018 and the bill introduced into parliament last week. Most of these differences favour irrigators and effectively create loopholes that will see over extraction and mismanagement of water continue in NSW.

“Many of the original provisions of the bill, based on the Ken Matthews Inquiry recommendations and the ‘Better management of environmental water – interim solutions package’ interagency taskforce, have been taken out or watered down at the request of the NSW Irrigators Council as detailed in their submission.

  • Privatisation of water metering following irrigators lobbying.
  • Exemptions for ‘no meter no pump rule’.
  • Watering down ministers mandate to embargo pumping of environmental water.
  • Removal of the clause the prohibits seeking compensation for embargos to shepherd environmental water following irrigators lobbying.
  • Fails to create individual daily extraction limits (IDELs) immediately as recommended by Mathews Report.
  • Allowing IDELs to be traded up river and between catchments.
  • Removes requirement to review water sharing plans every five years.
  • Allows NSW to pull out of requirements under the federal Water Act 2007 (e.g. Murray Darling Basin Plan) by regulation not legislation.

 

“Apart from water theft and an over allocation of water generally in the Barwon Darling, there are numerous other issues that have created a regime of mismanagement with disastrous ecological and social implications.

“The over allocation of A Class licences, which allow irrigators to pump at a low river flow, combined with allowing larger pump diameters and allowing irrigators to pump 300% of their entitlement in any one year, has resulted into over-extraction in dry times.

“The delay in implementing individual daily extraction limits (IDELs) is compounded with the provision to allow the trading of IDEL’s across catchments. This is a recipe for concentrating extraction upstream or allowing inappropriate extraction because of cross-catchment trading.

“It’s clear that we need all water extraction metered and to have telemetry provide a transparency in water management. Not only has the government blown out the deadline for the ‘no meter no pump’ rule by 3 years, but the bill allows the government to privatise water metering and creates exemptions for metering, undermining this vitally important aspect of monitoring and compliance.

“The public consultation draft had a strong provision to grant the minister the power to mandate an embargo on pumping to ensure water released for environmental purposes was not taken by irrigators. This provision also ensured that irrigators could not claim compensation from taxpayers when the minister used this mandate.  However, the government has bowed to pressure from the irrigation industry to water down the mandate and allowed claims for compensation.

“The bill should be the chance to fix water management and compliance in NSW.  Instead the government has caved to the big irrigators and created loopholes that will haunt us into the future and result in the death of the Darling River.”

Bloating energy subsidies highlight electricity privatisations failure

MEDIA RELEASE – 19 June 2015

The Greens NSW energy spokesman Jeremy Buckingham today said the $196 million increase in energy rebates in today’s NSW budget (Budget Paper Number 3 – 7-8) demonstrated that the policy of privatisation and deregulation had failed and was now being propped up by $1.9 billion in subsidies over four years. The new “one-click energy switch” program through Service NSW was another indication that the ideology of privatisation had failed households in NSW.

“The privatised and deregulated energy market is gouging customers to the extent that subsidies have blown out by $196 million from $257 million in 2017-18 to $483.2 million in 2018-19,” said Greens MP Jeremy Buckingham.

“Having deregulated energy prices, the government is now having to step in with a new program where Service NSW will help customers find an energy deal.

“While the Greens support providing financial assistance to assist low income households avoid energy poverty, the huge increase in subsidies is an indication of a failing energy market where the big gentailers are exploiting their market power to gouge customers.

“The NSW budget used to get a healthy dividend from publicly owned energy utilities. Now the budget must allocate more and more in subsidies to try to counteract price gouging in the privatised marketplace.”

(Budget Paper Number 3 – 7-8)

Draconian anti-protest laws need to be repealed despite Wollar Three charges being dismissed

The Greens NSW resources spokesman Jeremy Buckingham today congratulated the ‘Wollar Three’ protesters – Bev Smiles, Stephanie Luke and Bruce Hughes – after serious criminal charges for obstructing a mining operations were dismissed for lack of evidence.  He called for the law to be changed so that the act of protesting against mining operations could not lead to a potential seven year jail term.

“I’m very pleased that the court has dismissed the serious criminal charges that these brave protesters faced, but the draconian anti-protest laws brought in by the Baird Government need to be urgently repealed as future cases may result in a significant injustice,” Greens MP Jeremy Buckingham said.

“While the prosecution failed to present enough evidence in this case to convict the protesters under the draconian anti-protest laws, it’s alarming the magistrate noted that a different charge of ‘interfering with equipment associated with the mine’, may have been interpreted far more broadly and resulted in criminal convictions.

“The lack of evidence also meant that the magistrate did not have to consider whether these anti-protest laws breach the implied freedom of political communication under the Australian Constitution.  This is still a live question that should be answered by the parliament by repealing these laws and guaranteeing the freedom of political communication – the right to protest.

“The Greens call on the Premier Berejiklian to listen to the legal experts who warned that these laws and associated penalties represented significant overreach. These laws are far too harsh and far too broad.

“Australians should have the right to express their views and protest projects they see as harmful to the humanity and the environment.”

The Big Lie: Calls for transition plan away from coal following T4 cancellation

MEDIA RELEASE: 31 May 2018

The Greens have welcomed the news that the proposal for a fourth coal loader at Newcastle Port has been cancelled and called on the government to use this as a catalyst to develop a serious plan for a just transition away from the coal industry.

Greens Resources and Energy spokesperson Jeremy Buckingham said:

“This is wonderful news. Reality is catching up with the great lie that we can continue to export coal in an age of climate change.

“The possibility that we might have yet another coal loader at the world’s largest coal port made a mockery of Australia’s commitments to action on climate change.

“The Greens call on the government to develop a transition strategy away from coal and will be making this a key election issue,” Mr Buckingham said.

Greens Newcastle City Councillor John Mackenzie said:

“This is fantastic news for our city.  T4 was part of the old Newcastle and the air pollution and heavy industry that it represents has no place in the modern emerging global city that Newcastle is becoming.

“From the outset the economics was against this, the science was against this and the community was against it but because of our broken planning system it was approved anyway.

“Cancellation of T4 means that we can now open up Newcastle’s port capability to more diversity rather than having it quarantined for a coal industry that is on its last legs.

“Communities are sick of being placed in limbo by a planning system which has no red lights and a Government who won’t show leadership by refusing new fossil fuel projects at the outset,” Councillor Mackenzie said.

Contact:  Max Phillips – 9230 2202 or 0419 444 916

John Mackenzie – 0408 533 010

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