Hot air fuels gas threat

The car crash is in NSW. They currently import around 95 per cent of their gas from SA and Victoria, with around half coming from Victoria during peak periods. From beyond 2015 the SA gas contracts will dial off. More gas could be pushed from Bass Strait up to Sydney through existing pipelines, but some suggest it may not be enough. According to the Grattan Institute'sGetting Gas Right study, NSW customers could face supply shortfalls at peak times as early as 2016.

There is no pipeline from the Queensland gas fields to NSW, no secret stash of gas that is being ripped out of the NSW market and sent elsewhere.

There is a really simple solution. Sydney is ringed by vast coal reserves that have been exploited for decades to fuel the city's electricity supply. So it is also ringed by coal seam gas reserves. Coal seam gas has been flowing out of Camden in Sydney's south-west since 2001, there are gas reserves throughout the Hunter Valley and out to Pilliga in the central west.

A well-orchestrated and largely activist campaign has evolved to oppose development of these resources, many of these voices appear to be against development on any terms.

The NSW Government has reacted to this campaign by imposing 2km setbacks against not only dwellings, but vineyards and even horse stables. This decision has shut down the gas needed to supply industrial customers screaming for gas.

It's harder to see the genuine public outcry. The "Stop CSG" party ran in the recent Federal election in the Senate. It got only 4,225 votes in NSW. That's 0.1 per cent. Both the Smokers' Rights Party and the Bullet Train for Australia parties received twice as many votes. The Pirate Party received three times as many and the Sex Party ten times more.

The setback laws are having an impact. Gas is fuelling an investment boom in Queensland and filling government coffers. The reverse is happening in NSW.

Gas fields take years to develop. If we are any chance of getting gas supplies from NSW projects by 2016-17 we need to get cracking now. Developing these projects will not mean NSW gas prices will magically move back to $3-4/GJ. But it will guarantee that NSW won't run out of gas.