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  4. 3 May 2005

Wyong Gas Exploration

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About this Item
SubjectsGas; Exploration; Wyong; Energy; Environment
SpeakersHickey Mr Kerry; Hartcher Mr Chris; Crittenden Mr Paul; Acting-Speaker (Mr John Mills)
BusinessMatter of Public Importance


    WYONG GAS EXPLORATION
Page: 15430


    Matter of Public Importance

    Mr KERRY HICKEY (Cessnock—Minister for Mineral Resources) [4.31 p.m.]: I am pleased to bring before the House a matter of vital public importance, that is, gas exploration in the Wyong area. As Minister, my number one concern is the misinformation presented to the people of the Central Coast about proposed gas exploration activity. It is of the utmost importance that all residents of the area and, indeed, the people of New South Wales are presented with the facts. This matter is of public importance because we need to look at gas exploration, and the history and current status of the project, including the efforts I have made on behalf of the Carr Labor Government to ensure that the people of the Central Coast are in a position to make their own informed decisions about this State issue.

    New South Wales is Australia's most populous State. Despite that, and despite our broad industrial base, we are the only mainland State without a sizeable gas industry. At present gas accounts for only 1.5 per cent of the fields used in electricity generation, and our electricity demands are growing. We have to buy our gas from South Australia and Victoria and transport it long distances by pipeline at a considerable cost to residential and commercial customers. The higher prices we pay for gas add to production costs, making New South Wales industry less competitive. Importing gas also adds to the energy bills of hundreds of thousands of families across New South Wales.

    Furthermore, if members cast their minds back to the New Year 2004, the devastating fire at the Moomba gas plant in South Australia demonstrates the risks involved in relying on interstate gas supplies. The development of a local gas industry is crucial if we are to continue delivering jobs and economic growth in regional New South Wales. Local supplies would unlock thousands of jobs and boost investment in gas-dependent industries such as manufacturing, minerals processing and power generation, broadening the economic base for towns across this great State. We could create income and wealth for families in the bush who are hurting because of the drought, and reduce the human tide that has Sydney bursting at the seams.

    For those reasons, governments of all persuasions—the Liberal-Nationals Coalition and the Australian Labor Party, Federal and State—recognise the need for New South Wales to develop its own gas industry. New South Wales has reserves of both natural and coal seam methane gas. Coal seam methane is a natural gas absorbed on the surface of coal and held in place by water pressure. Coal seam methane is produced by fracturing the coal seam and lowering the water level in the coal seam. As water level decreases, gas flow increases. At Wyong, coal seam methane gas is present in coal seams, which are approximately 500 metres deep. The poor-quality water in this coal seam is not connected with the good-quality aquifers close to the surface.

    The first field work in the Wyong area was carried out last year when Sydney Gas drilled exploration wells at two sites, known as Jilliby 1 and Jilliby 2. That explains why the issue has come to such prominence recently. But gas exploration in the Wyong area is not a new idea. It has been on the agenda for more than a decade. In 1991 the New South Wales Office of Energy gave the Australian Petroleum Co-operative Research Centre $835,000 over three years for its coal seam methane gas program. The Greiner Government also drafted the Petroleum (Onshore) Bill 1991, the legislative framework that enabled the original petroleum exploration licence over the Wyong area to be granted by the then Minister for Mines, the Hon. Ian Causley on 11 December 1993. That legislation increased exploration licence terms from one year to six years, and provided for 21-year renewable production licences. The public importance of gas exploration in the Wyong area was highlighted in 1992 by the then Minister for Energy, the Hon. Garry West, who told the joint estimates committee on energy:

    If we cannot extract that coal seam methane gas, it is going to cost many more thousands of jobs than have already been lost by the extremist environmental movement.

    Petroleum exploration licence 5, which covers the Wyong area, was subsequently transferred by the original licensee, Pacific Power, to Sydney Gas in 2001. The same year the then Federal Minister for Industry, Science and Resources, Senator Nick Minchin, granted $4.1 million to exploit the coal seam methane gas resources of the Sydney Basin, including the Wyong area. In a media released dated 14 March 2001, Senator Minchin stated:

    There will undoubtedly be major benefits flowing to consumers … the coal bed methane project in the Sydney Basin will help Australia meet its domestic (energy) demand … (and) the cleaner gas would also have an impact on the Kyoto Protocol commitments which seeks worldwide reduction in greenhouse gas emissions.

    That said, all sides of politics recognise that gas exploration and development must not come at the expense of residential amenity or our unique environment. Under the terms of petroleum exploration licences each application for a new exploration well or group of wells needs to be accompanied by a review of environmental factors [REFs] for approval under the Environmental Planning and Assessment Act 1979. The proposal before me is for the drilling of a further two wells on private land. These wells are known as Jilliby 9 and Jilliby 13. Approvals are based on clear scientific evidence. The material provided in the REF and technical knowledge within the Department of Primary Industries-Mineral Resources is used to determine the level of potential environmental impacts.

    Low-impact exploration licence conditions only permit methods that are unlikely to have a significant effect on the environment, including critical habitat or threatened species, populations or ecological communities, or their habitats. If the REF indicates significant environmental impacts a full environmental impact statement [EIS] is required. To date drilling activities at Wyong have not required an EIS. Sydney Gas submitted an REF for the Jilliby 9 and Jilliby 13 exploration wells to the Department of Primary Industries-Mineral Resources on 16 December 2004. The REF was assessed by Mineral Resources under Part 5 of the Environmental Planning and Assessment Act 1979. Under the Act, there is no legal requirement for public display or consideration of public comments on REFs.

    However, in a show of goodwill to the community, I directed Mineral Resources to assess a hydro-geological report by Tim Jones, of Northern Geosciences which was commissioned by a community group, the Australian Gas Alliance. Furthermore, in the interests of greater transparency, Sydney Gas was asked to submit an electronic copy of the REF so it could be published on the department's web site. The company did so, and the REF was placed on the Mineral Resources web site on 4 March 2005. Furthermore, I have directed the department to develop a draft policy and discussion paper for the future public display of REFs. These decisions clearly demonstrate goodwill and Government transparency over and above the legal requirement.

    I have at all times maintained an open, honest and receptive approach to this project and the high level of community interest it has created. Last September I appointed an independent chairperson, Ms Margaret McDonald-Hill, to form the Wyong Community Consultative Committee. The committee has met three times, on 13 December 2004, 14 February 2005 and 12 April 2005. The department also held an information session for community members at Dooralong on 7 April 2005. Senior departmental officers at this session explained the exploration prospects, the conditions applying to exploration in the area, landholder rights, community consultation, and how environmental issues associated with exploration are addressed.

    As I have said, I based my decision on the best available scientific evidence. I have taken advice from departmental officers on both the REF and the Australian Gas Alliance report, and I have made this information publicly available. It is apparent to me, and for that matter to anyone who reads the reports and analysis on the web site, that the information in the hydro-geological report authored by Tim Jones is not the best available scientific evidence. That report is the basis for much of the misinformation being circulated to the Central Coast community. It is a scare campaign of the highest order. I am interested in transparency and openness, and decisions based on fact, not fiction. That is why I approved the exploration activity on 28 April 2005. I want to make it very clear that I have a responsibility to carry out my ministerial duties for the good of people right across New South Wales. This decision is for the good of the whole State.

    Mr CHRIS HARTCHER (Gosford) [4.41 p.m.]: This is a matter of great public importance to the State and to the people of the Central Coast. Last October I gave notice of a motion seeking an inquiry into activities related to gas exploration in the Yarramalong and Dooralong valleys. It is not without significance that the Government, though prepared to discuss the issue in the House by way of a matter of public importance, which cannot be amended or put to a vote, accordingly allows itself the luxury of claiming that the House has debated the matter while not allowing members of the House to discuss issues relating to the committee or to express their opinion by way of a formal vote.

    That said, the importance of the gas industry is not disputed. Everyone in New South Wales and Australia knows that methane gas is a clean form of energy and one of the best means of complying with the Kyoto protocol. As the Minister said, New South Wales does not have a strong gas industry, which it needs. Balanced against that is the need of 300,000 people on the Central Coast to have access to safe, clean water—and that issue lies at the very heart of this debate. It is well-known that there are areas of gas other than in the Yarramalong and Dooralong valleys. It is just that these two areas are more accessible to markets in Sydney and Newcastle and by the existing gas pipeline that runs between Sydney and Newcastle.

    However, the people of the Central Coast cannot be sacrificed on the altar of economic expediency. Their entitlement to clean, safe water must be paramount. Of enormous concern to those who look carefully at the Minister's speech is that, although the Minister listed all of the steps he has taken and how he has dealt quite exhaustively with the process, the issues critical to Central Coast water supplies have not been addressed. For example, the Minister dismissed scientific information supplied to him by the Australian Gas Alliance as "not the best available scientific evidence", but gave no justification for that statement. That scientific information was dismissed in a single sentence. The people of the Central Coast are entitled to more. Now we discover that on 28 April 2005 the Minister approved two additional wells, at Jilliby 9 and Jilliby 13.

    It is well-known that in the northern Pilliga forest, massive environmental damage was caused by Eastern Star Gas at its Bohena No. 2 drill site as a result of exploration practices. Experiences in the United States of America, and in the State of Wyoming especially, clearly demonstrate disastrous problems associated with this industry through groundwater loss, contamination and waste water. Water is used extensively in gas exploration, as it is in gas mining and development. The Yarramalong and Dooralong valleys account for 50 per cent of the water catchment of the Central Coast. This is in a country that is short of water, in a State that is now in its fifth year of drought, and in an area of the Wyong shire that at present is required to purchase water from the Hunter Valley. Therefore the ground water issue is not an irrelevancy or one to be dismissed in a single rhetorical phrase. It is at the very heart of this debate.

    I am well aware of the Department of Primary Industries report dated 28 March 2005. It deals thoroughly with the importance of water. I am aware of the Tim Jones report, which also deals with water. But those matters are not addressed by the Minister. I would be happy to move a motion to extend this debate by half an hour to allow the Minister to address water system issues. But he would simply indulge in rhetoric to justify his conduct. It is not good enough for the Minister to say: I have been transparent; don't shoot me. When the Minister appeared on A Current Affair he was constantly caught out by new evidence that was put to him by the presenter of that program. All the Minister could say was, "I will take it on board." All he could say about the new evidence was, "I will consider it."

    Only a couple of weeks ago the Australian Gas Alliance met with the Minister and supplied him with legal opinions by Mallesons Stephen Jacques and a Queen's Counsel that show that in fact his action—then only a threatened action—may well be in breach of part 5 of the Environmental Planning and Assessment Act. The Government has now gone so far down the track that it has committed itself to the eventual granting of gas exploration rights in the Yarramalong and Dooralong valleys. At present there are two wells in operation, with a further two wells announced. The Government has done very little work on the crucial issue of safe water for the people of the Central Coast.

    The Government has avoided a full parliamentary debate on this issue. By the way in which it has crafted this debate, the Government allows only one speaker from the Opposition. The Minister delivered his speech, one Government speaker will support him, and the Minister will reply. Only one Opposition member is allowed to speak. Effectively, there will be three speeches from the Government in favour of this proposal and only one from the Opposition against. That is the way this Government deals with an issue of great significance for the people of the Central Coast. The people of the Central Coast are very conscious of the fact that this Government walks all over them. They know the Government does not take a great interest in their concerns.

    Wyong Shire Council has resolved unanimously to oppose further methane mining in the Yarramalong and Dooralong valleys. The Minister said nothing in his speech about the concern expressed by the Wyong Shire Council. The Gosford-Wyong Joint Water Authority has expressed its considerable concern about the potential damage to the Central Coast water catchment. The Minister did not deal with that issue. The proposal with which we are presented is process driven. It may well comply with the Act, but it certainly is not compliant with the need of the people of the Central Coast for clean, safe water.

    The final issue that remains is whether the Minister is complying with part 5 of the Environmental Planning and Assessment Act. The Minister believes he is, but the legal opinion presented to the Minister only two weeks ago would suggest that he is not. It may well be that this is not resolved by the Minister granting his fiat. I draw the Minister's attention to the opinion given by the Environmental Defender's Office on 26 August 2002 in relation to coal seam methane in the Pilliga and Goonoo regions of New South Wales, the concern expressed by the National Parks Association, and the legal opinion presented to the Minister by Malcolm Craig, QC, and Mallesons Stephen Jaques.

    No-one in New South Wales disputes the need for a gas industry. But we on the Central Coast are entitled to satisfactory answers from the Government about our concern for our water supply. I do not believe that any member of this House representing the Central Coast would allow this to go ahead without asking that the water supply to the Central Coast be dealt with. We have not dealt with that today. A recent report by Daniel Cross dealing with Jilliby Creek and little Jilliby Creek addresses the impact of mining on stream beds, and the potential for bed cracks, segmentation of stream systems and ground water movement away from streams and alluvium. We face a serious issue and we are entitled to a better explanation from the Government.

    Mr PAUL CRITTENDEN (Wyong) [4.51 p.m.]: The Minister for Mineral Resources made me aware of this matter of public importance at around noon today. As recently as 4.30 yesterday afternoon in my electorate office I met with constituents from Jilliby who were on one side of this debate. It is important to realise that we are in the exploration phase. Recently, in the course of this debate, the Minister advised the House that he had approved another two exploration drillings on the basis of a satisfactory review of environmental factors, including hydrology. I would be keen to get further details on that.

    To date, media coverage has involved a lot of spin on both sides of the debate, which is an unsatisfactory development in the course of politics in this State and this country. We must distil the facts from the spin, and the facts are that we must ensure there is a proper environmental impact statement [EIS] if it is proposed that the project go beyond the exploration phase. Rather than rumour, innuendo, dancing at shadows, or whispering in the back seat we must ensure we get to the truth of the matter, which will be determined in the course of the environmental impact statement process.

    On the weekend I was advised of a rumour that the Minister for Mineral Resources and the newly appointed Minister for the Central Coast had made a deal to avoid an EIS. I have no doubt that both these Ministers are absolute powerhouses in the Government, but they simply cannot avoid an environmental impact statement. That is the time for debate, when all the information will be revealed. Many local people have approached me. The most high-profile person would be Neville Wran. I have not met with representatives from the company, although I noticed on Friday—which I now find out is the same day on which the Minister signed the approval for the two exploration licences—that they are seeking to have a meeting with me. A lobbyist firm called In Government sent me an email on Friday or Saturday morning, which I found interesting.

    My approach to this matter is totally consistent with how I represent my community. I do not shoot until I see the whites of the eyes. I cannot see any point in wasting valuable time on spin, rumour and innuendo. If anyone were to look at my track record on Warnervale Airport they would realise that I apply the test of "What is a fair thing?" I look forward to ensuring that a proper EIS is undertaken on this most important matter. It is the only basis on which to proceed and it is the way to go forward as a rational community. If the exploration phase determines the existence of a viable quantity of gas, I look forward to the full, frank and robust debate on the EIS process that must ensue.

    Mr KERRY HICKEY (Cessnock—Minister for Mineral Resources) [4.56 p.m.], in reply: The old swamp fox himself, the honourable member for Gosford, said that some 3,500 people need safe clean water. At last the people of Wyong will know what the Opposition is trying to hide: the original petroleum exploration licence was granted during the golden days of the Fahey Government by the Hon. Ian Causley on 11 December 1993. Sure, it was a long time ago. Those opposite really should have been speaking to the honourable member for Lachlan, the honourable member for Upper Hunter, the honourable member for Gosford, and the honourable member for The Hills, because they were in Cabinet at the time. I realise that the honourable member for Upper Hunter was busy with Luna Park but the old swamp fox has no excuse. He was the Minister for the Environment. He is trying to rev up the people around the Gosford area. He is sitting there pretending to be blue on the outside and green on the inside.

    For a former Minister for the Environment to compare the geology around Wyong with that in Wyoming in the United States of America is bizarre. For the benefit of my friend, there is a clear difference between the shale area: Wyong has a clay base that keeps the two aquifers apart. There is no seeping between the two aquifers. It is hypocritical for him to say in this place that I have not dealt with the water supply issue when he has not looked at the site. He is questioning the analysis of Tim Jones and many months of work by our senior Mineral Resources people. What would be the benefit to Tim Jones? What is his title? Tim Jones is a hydrologist in Rockhampton. He has no idea of the hydrology in the Wyong area, and neither has the honourable member for Gosford.

    I find it totally bizarre that the honourable member for Gosford should come into this Chamber and attempt to rev up the people who live in the Wyong area by circulating misinformation and lies and engaging in deceit. The honourable member for Gosford needs to understand that people are not stupid and that they will see straight through him. His comparison of what happened at Eastern Star Gas with what is happening at Jilliby is ludicrous. After water from a bore in the Cessnock region is transported to the Jilliby area and pumped in, it fractures the coal seam. Later the water is pumped out and transported to a treatment plant for processing. The clean water is then pumped back into the Hawkesbury River. Can the honourable member for Gosford show me how that process impacts upon ground water in the Gosford electorate—because my department's chief geologist cannot.

    Mr Chris Hartcher: Tim Jones can.

    Mr KERRY HICKEY: The honourable member for Gosford is a very shallow person. He is misleading this House, misleading the public, and giving people false information. He has been stirring people into a frenzy. Quite frankly, it is bizarre to think that he is a representative of the people in this House. The misinformation he is circulating is a joke; he should not do that. He should search his soul. I do not know how he can look at himself in the mirror when he is shaving—and, frankly, he does a fair bit of shaving. I find it bizarre that in this House he should be critical of truthful and factual information. He is a liar who circulates fictitious information that totally and utterly contradicts what has been said by a senior geologist in the Department of Primary Industries.

    Mr Chris Hartcher: Point of order: As recently as a couple of weeks ago, as I am sure Mr Acting-Speaker, the honourable member for Wallsend, will recall, a ruling was made that the term "liar" is not permitted.

    Mr KERRY HICKEY: The honourable member for Gosford has made this debate political. I will retract the term "liar", but at the very least it should be replaced with "fibber" or "a deceitful person". I really believe that, based on the misinformation peddled by the honourable member for Gosford, he should not be representing people in this House.

    Discussion concluded.

    Mr ACTING-SPEAKER (Mr John Mills): Order! It being reasonably close to 5.15 p.m., with the agreement of the House I propose to proceed to the taking of private members' statements.



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