Coal seam gas restrictions imposed by the federal government are hindering economic growth in the Illawarra, according to some experts.

Wollongong’s economy is slowing, but new federal policies restricting CSG activity will only cause more difficulties

Daniel Skora from professional infrastructure and environmental services Cardno ENTRIX, says there is a distinction between coal seam gas that occurs as part of the mining process and “businesses that seek to use coal seam gas for capital gain, which is the venture anti-CSG groups portray as damaging.”

However, both business and what already occurs will be restricted by the federal government’s new policies.

Tougher environmental checks on coal seam gas activity will prevent some mines’ operation in the Illawarra, as coal seam gas is an inherent byproduct that must occur for regulatory and safety reasons.

Mr Skora also says coal seam gas mining could aid the Illawarra’s economy, whose industrial end is currently in a lull, but that CSG does not follow the life cycle of booms and lulls in heavy industry.

“Businesses for capital gain will not be here long-term. They will drain an area and move on. It’s a different style of business.

“But more than 20 per cent of Queensland’s energy comes from coal seam gas, with a number of significant projects for gas pipelines in development. It could be successful if the same techniques are applied to New South Wales.”

However, University of Wollongong Associate Professor Ed Wilson says the manufacturing and energy industries are no longer the backbone of Illawarra’s economy, which has transitioned to service and IT.

“That structural adjustment has been happening for decades and it’s taken a while for these other industries to come in, but the nice thing about it is there’s a variety of different things. Coal seam gas is just an underlying, peripheral thing to that major structural change.”

Professor Wilson says it has not at all been a smooth transition, and downscaling has caused “a lot of hurt” in the Illawarra, “but there will always be a demand for the coal we have here because it’s a very high quality coal. And that is used to generate high quality steel because high quality coking coal goes to very high temperatures. The industry will always be around, it is just no longer central.”

But South Coast Labour Council Secretary Arthur Rorris argues economic change isn’t so black and white, “it isn’t just industry X replacing industry Y,” he says, “and there’s a lot of potential for renewable energy.”

But he notes coal seam gas mining won’t do much to aid the Illawarra’s rising 7% unemployment rate.

“My understanding is that it’s not a labour-intensive industry, and most of the process is mechanised. And it’s not locally owned so money will drift out of the area.”

Mr Rorris says before coal seam gas mining can even be assessed on its economic sustainability “we have to establish what the risks are. There are still big question marks over a lot of it, such as long-term topographical damage and risk to water catchments.”

“It’s not the silver bullet, that’s for sure.”


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