When New South Wales Premier Barrier O’Farrell was advised to avoid using ‘certain words’, it was a clear indication that debate around coal seam gas is no longer about facts. It seems that politicians are trying as hard as possible to develop CSG in NSW without angering the electorate.
The Premier’s advice suggested replacing the term ‘CSG’ with the more neutral ‘natural gas from coal seams’ .
As Shakespeare said: “A rose by another name would still smell as sweet.”
Whether it’s called ‘natural gas from coal seams, ‘unconventional gas’ or ‘CSG’, the intense community opposition to it remains unabated.
Producers of CSG now understand that they failed to appropriately engage with the community. They made a serious tactical mistake by arguing that Australia’s abundance of CSG would make the nation wealthy. Australia also has more than 30% of the world’s known reserves of uranium – but has been very cautious about allowing development of these reserves.
The CSG producers have now changed tack. Having failed to woo community with the carrot, they have turned to the stick.
According to the industry website, NSW faces looming gas shortages. NSW is running out of natural gas. NSW faces a gas crunch.
Dig a little deeper and the story changes considerably: “NSW has an abundant supply of natural gas that can be developed safely from coal seams. While anti-CSG activists continue to take great delight in the demise of family jobs and investment, development of an affordable, safe and secure gas supply remains under threat.”
There is no looming shortage – the wells have not run dry.
What’s happening in NSW is the long-term supply contracts are expiring. If there are no new sources of supply in NSW the price of natural gas will rise.
If the industry wanted to be truthful, it could legitimately claim that, unless something is done, the price of natural gas will rise sharply. As a consumer, this may be a persuasive argument in favour of exploiting CSG.
But this is not about gas consumers. This is an argument designed to scare politicians and uses a psychological phenomenon known as loss aversion. A study published by Kahnemann and Tversky in 1984 showed that problems can be framed in different ways to produce seemingly irrational outcomes.
The study found that many people will refuse to bet $10 on a coin-toss if they stood to win less than $30. Even though the odds are 50:50, the ‘rational’ behaviour changes once there is something to lose.
By arguing that there is an impending shortage of gas, the industry is suggesting to politicians that they will lose jobs, lose investment and, worse still, lose control of the economy!
The Grattan Institute’s Tony Wood says that there is fundamentally no shortage of gas in eastern Australia. However there will be upward pressure on prices as producers can make better money exporting their gas overseas.
CSG producers employ the best and brightest. It is simply inconceivable that long-term gas contracts had been filed away and forgotten, only for producers to suddenly remember them and declare an impending shortage.
Having failed to entice Australians with the prospect of riches, the industry has turned to a strategy of scaring politicians. Even the ABC’s fact-checking unit finds the industry claims to be unverifiable. Unfortunately scaremongering and misinformation continues.
The only looming shortage the industry faces is the shortage of facts.