THE state government’s decision to offer SA landholders a 10 per cent cut of gas royalties has strengthened anti-mining sentiment in the South East.
Stock Journal understands the royalty payments will cover any productive gas wells arising from four new lease licence areas being offered for government tender near Penola, Robe and Beachport.
It excludes the Coonawarra wine region.
Livestock SA chief executive officer Andrew Curtis said the royalty scheme appeared to be a “simplistic solution” to a complicated issue with the government ignoring the fact a Parliamentary Inquiry found there was no “social licence”.
He said the government was not addressing major concerns about potential damage or contamination of the underground aquifer from gas extraction, especially if hydraulic fracturing was used.
The SE’s significant underground water reserves have made it an economic powerhouse for the state, particularly for the livestock industry. This could be put at risk.
“If we break an aquifer, it could damage the productive capacity of the land for millennia – we are talking about 200 years of gas, but thousands of years of food production,” Mr Curtis said.
Livestock SA is also seeking clarification on how royalties would be paid.
“How do they determine whose property the gas is under with a wellhead often drillled a long way from where the gas is found and often sideways drilling is used?” Mr Curtis said.
Last week Beach Energy, who have been conventionally-drilling in the Otway Basin for 40 years, received a $6 million state government grant to drill another well about eight kilometres south of Penola.
The aim is to drill down 3500 metres to bring new gas online for SA use within three years.
Beach Energy insists it has no plans to pursue unconventional gas extraction in the region. This would require a new set of approvals from the regulator.
Beach Energy will hold a number of public information days in the SE before drilling commences later this year.
But many residents are on edge, believing once more infrastructure is established and landholder agreements reached, it will be easier for fracking to occur.
The Limestone Coast Protection Alliance signed up more than 60 new members at the SE Field Days last weekend.
LCPA chairperson Merilyn Paxton is confident landholder royalties will not sway SE landowners, with 96pc of 47 communities surveyed in the past three years opposed to mining and gas projects.
“We have had huge feedback with people saying ‘well they aren’t coming onto my land’,” she said.
“The odd person may think it is a good thing and that becomes a serious problem if it happens to be a neighbour of yours.
“To avoid this, we will continue to inform landholders of the degradation and devaluation of their property that will occur.”
Robe beef producer and vigneron Will Legoe is adamant the potential risks far outweigh any short-term gains.
“At the end of the day it is only 10pc of what may not be much across a seven-year period, which is the average production life of a well, and that will not make up for the long-term damage,” he said.
“Later in their career or their children’s farming career, they will be up for well repair costs because that is what the legislation states, even if the company still exists in 20 or 30 years time, it is the landholder's responsibility.”
Mr Legoe is angry the community’s wishes continue to be ignored.
“The incumbent Labor government have been told time and time again that we don’t want gas production in the area, yet they continue to try and work out a way of getting it in here,” he said.