Documents released under a Freedom of Information request reveal the NSW government receives just $2500 per year for each active coal seam gas well in Pilliga State Forest under the land access agreement negotiated with Eastern Star Gas in February last year.
A statement from Greens NSW mining spokesperson Jeremy Buckingham noted:
…the agreements released by Freedom of Information revealed that Forests NSW was only receiving a pathetic $2,500 per annum from every active coal seam gas well.
Eastern Star Gas (now purchased by Santos) has previously said that each well in the Pilliga project would produce revenue of approximately $800,000. A $2,500 payment per well means Forests NSW will receive only 0.3% of the revenue from each well.
More details in this report from ABC local radio:
ABC New England North West News, 3 January 2011
Reporter: Catherine CliffordAn FOI request has revealed Forests NSW and Eastern Star Gas signed off on an occupation permit giving the coal seam gas explorer access to two state forests for 30 years. The occupation permit covers 139,000Ha of the Pilliga state forest and the adjacent Bibblewindi State Forest in the region’s north west in the area of petroleum exploration licence 238. Carmel Flint from the Northern Inland Council for the Environment who made the FOI request with the Wilderness Society said the deal was struck with the state government in February last year. She says inquiries are now being made of the state government as to whether the occupation permit still stands after Santos took control of Eastern Star’s exploration licences.
Carmel Flint: It is unclear from reading the permit itself whether it would automatically roll over and Santos will have the same right that Eastern Star Gas had, so under those circumstances we are calling on the NSW government to basically scrap this flawed permit and to reclaim the Pilliga State Forest for the people of NSW because we think it’s really important that the community has a say in these things.
Here is some info from Forests NSW on their role managing State Forests and the purpose of occupation permits:
FNSW is a government trading enterprise and hence must deliver services and/or products that generate income or at least are cost neutral to the organisation. Because of the nature of its business, the delivery of Recreation and Tourism services are complementary to, but not the same as, those conducted by National Parks, local government recreation services and the commercial sector. FNSW commands a unique place in the recreation and tourism market and this policy optimises the management of this integral part of the core business of the organisation. [...]
Occupation Permits. Designed to manage the occupation of State Forests by a variety of organisations and commercial enterprises. Cost recovery is the focus of the fee structure for non-commercial entities, whilst a cash positive approach has been taken with commercial business occupation.
In June 2009 in a document submitted to the state government as part of licencing requirements, Eastern Star Gas said:
The land in the general area surrounding the lateral pilot is predominantly native woodland vegetation within the Bibblewindi State Forest. This area is made up of forest types 190 (White Cypress Pine-Brown Bloodwood) and type 189 (White Cypress Pine-Narrow leaved Ironbark) and terms of commercial forestry operations is considered of low quality/low productive capacity.
The occupation of Forestry Lands for the purposes of petroleum exploration and production is subject to an occupation permit (pending as at 01/06/08) under the Forestry Act 1916. Eastern Star Gas will engage the assistance of Forests NSW in assessing the commercial value of forestry resources located on or adjacent to operational areas including the proposed lateral well pads. (Supplementary Review of Environmental Factors, Eastern Star Gas, p. 16)
We now know that 9 months later a deal was struck between the state government and the CSG company and that the ‘commercial value of forestry resources’ equated to a to kick back to the state of $2500 per well (which in terms of space in the forest is around half a hectare per well pad plus additional clearing for access roads, pipelines and other associated infrastructure like holding ponds, water treatment facilities and site offices).
Buckingham commented on this land access figure together with the state government’s royalty holiday for CSG production (which was brought in over a decade ago to encourage CSG exploration in the state):
“Taxpayers will also be ripped off when it comes to royalties from coal seam gas, with a five year royalty holiday for gas in NSW. In Queensland gas royalties are 10% from day one, yet here in NSW the gas companies will pay no royalties for the first five years, and only 10% after 10 years of operations. It’s a swindle,” he said.
“Santos plans to turn an important nature reserve into a heavy industrial zone, but pay virtually nothing to the community.”
To round up, in a photograph, $2500 will get you this:
See more photos of the Santos CSG project in the Pilliga here.
I would love to see what the director of forests nsw got paid by cockatoo coal or the Hume coal project for the occupation permit that trumped my pastoral OP in belanglo state forests. Can we get access to this. The director doesn’t return calls