Thursday, 22 December 2011

Coal seam gas miners won't be putting any presents under the Chrissie tree

Royalties paid by coal seam gas miners in NSW are next to nothing so, as Janet Cavanaugh writes in today's Daily Examiner, don't hold your breath waiting for funds from those sources to amount to anything worth talking about.

Don't expect it any time soon
For those expecting Metgasco's royalties to fund the Pacific Highway upgrade, the second Grafton bridge or a 24-hour police station in Casino (DEX, December 17 "CSG could co-exist: Metgasco") - don't expect it any time soon.
The NSW Government's assistance to encourage the industry includes a five-year holiday on paying royalties for each and every well, and then discounted royalties for a further five years. In contrast, coal seam gas royalties in Queensland are a flat 10% each year.
Peak production of wells often occurs in the first few years of a well's life, with production dropping off significantly after that. In 2010, the total paid to the NSW Government in coal seam gas royalties was only $462,000.
Does Metgasco seriously think this can fund anything more than a fraction of the bureaucracy which is meant to regulate the industry?
Janet Cavanaugh, Whiporie

Source: Letters, The Daily Examiner, 22/12/11

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