CSG: our saviour?

taking full advantage of CSG availability would make a huge difference to our energy security

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ALTHOUGH Australia is a prosperous country, are we so wealthy that we can spurn investments that would increase our wealth? Some people certainly think so.

America’s economy is about to coming roaring back to life, not because Obama or the Congress are doing anything useful (they aren’t), but because low cost shale gas is transforming the country’s competitiveness.

The US is rapidly becoming a magnet for manufacturing while drastically reducing reliance on imported oil and, coincidentally, reducing carbon dioxide emissions.

Fairly soon now millions of Americans will be back in jobs and paying taxes, reducing pressure on the country’s massive budget deficit and helping to even up the trade imbalance with China.

France is thought to have Europe's largest reserves of shale gas, yet it remains untouched as the government has imposed a ban on fracking.

As a result the country continues to import 93 per cent of its gas, a quarter of it from Russia and Algeria, and its industries remain chronically uncompetitive. Furthermore, the economy will be mired in recession for years to come with a relatively new government that does not understand the need for balance between expenditure and revenue.

Australia is currently somewhere between these two.

While our coal seam gas (CSG) is starting to be exploited, it is far from reaching the transformative scale seen in America. On the other hand, many people are starting to regard it as something like venereal disease – to be kept well away from civilised people.

The NSW government has repeatedly moved the goalposts, while the federal government is not much different from that of France. The outcome is slowing investment, with Metgasco’s withdrawal from NSW the latest indication.

Plenty of people will argue they prefer to be like the French than the Americans, and when it comes to food and wine it is hard to disagree. But a lot more is required to maintain a growing, successful economy than that, as France can confirm.

It is a simple fact that Australia has far more food than it needs for itself. Not that CSG requires much land, but the loss of agricultural land to CSG extraction, whether “prime” or not, would make no difference to our food security, wine security or the competitiveness of our racehorse industry for that matter.

However, taking full advantage of CSG availability would make a huge difference to our energy security as well as greatly strengthening our overall economy.

Like France, we import a high proportion of our fuel and are highly vulnerable to interference to its availability and delivery. While it will soon be irrelevant to the US economy where Islamists are attempting to impose Sharia law or Shiites and Sunnis are fighting each other, it will continue to be important to Australia. And while it ought to be obvious, if there is not enough fuel for tractors there won’t be much food produced.

Unemployment among French men under 25 is now 26.4pc, with overall unemployment at 10.6pc despite tough laws that prevent sackings. Underlying unemployment is much higher. There are plenty of French people who cannot afford to enjoy the benefits of French cuisine and wine and live a life best described as genteel poverty. Eight million are said to be living in relative poverty, with incomes far below the national average.

If Australia turns up its nose at investments that increase our wealth, that’s the fate that awaits many of us too.

  • David Leyonhjelm has been an agribusiness consultant for 25 years. He may be contacted at reclaimfreedom@gmail.com
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    READER COMMENTS

    Tigerdicky
    18/03/2013 2:29:03 AM

    It always makes me sick in the guts that these idiots who continually push these types of developments and schemes are never the ones who they affect!
    bigpen
    18/03/2013 3:20:24 AM

    The problem with CSG is fraccing. When they can develop a protocol and onsite monitoring to control hydraulic fracturing so that it does not fracture non-porous beds or existing bore linings it could proceed. Until that time Australia's major water resources including GAB are at threat!
    Dale Stiller
    18/03/2013 4:22:56 AM

    Oh come on! David yet again you have shown that you know very little about what is going on in the gasfields themselves. A very weak arguement that because Australia currently produces more food than we need, we can afford to bugger up land. There is also investment security that needs to be maintained of our ability to earn money for this nation by exporting food. I take your point of the importance of certainty to maintain confidence that investment will continued to be made so very large projects are possible in the future. However the goal posts were set far too wide on CSG.
    Terrance
    18/03/2013 7:01:02 AM

    David, stick to agribusiness consulting. You don't have the credentials to speak about economics or the environment, and you are no Paul Sheehan. TjL
    mal
    18/03/2013 7:16:00 AM

    Pathetic David! If you were really interested in Australia's investment in the economy and not just being a mouthpiece for the CSG industry you'd research some real facts and figures; such as, Australia last year imported a record $10.6 billion of food. Far from your "fact" that "Australia has far more food than it needs" (no wonder you didn't reference a source). World wide investment, $ for $, in renewable energy sources returns more $ and jobs, investing in coal/oil/csg is no longer a valid choice compared to investment in renewabes. Your article shows how unethical you are!
    JPP
    18/03/2013 9:13:44 AM

    David, please, research C.S.G. it's very obvious you haven't.
    Patriot
    18/03/2013 9:55:14 AM

    Hi David, sorry, too shallow. Needs more research, not just this superficial treatment. Many things can bring "economies roaring back to life". Piracy, (Good for some in Somalia), drugs (good for some in Colombia), cigarettes (good for some in many countries as a way to drive economic activity), and of course from a historical perspective, opium. The Chinese still hate the Brits for introducing that little number back in the 1800s. An unbalanced piece, totally ignoring the downside of CSG. Don't do this again, it impacts your reputation as a credible journalist.
    Kev
    18/03/2013 10:15:11 AM

    As a nation we need to reduce our reliance on overseas oil imports from the Middle East.
    M.C
    18/03/2013 5:38:41 PM

    Sounds like he borrowed the words straight out of the APPEA "handbook of industry spin". Clueless.
    Carlie
    18/03/2013 5:59:10 PM

    To claim that Australia has an energy security issue is truly extraordinary. This is not America mate, we are not running out of gas. It sjust that some people want to flog it all to China for a quick buck and bugger the rest of us. CSG and shale gas mining IS in our prime agricultural land and it threatens the supply of Sydney's drinking water. We DONT rely on Middle East oil imports. International companies are gambling on the quick LNG bubble prices which will soon EVAPORATE. You can't fool us mate.
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    Agribuzz with David LeyonhjelmCommentary, news and analysis with agribusiness consultant David Leyonhjelm. Email David at reclaimfreedom@gmail.com

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