Coal Seam Gas Mining Economic Impacts on New South Wales Report

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Climate Change Effects of Coal Seam Gas Mining

Australia has already ratified the Kyoto agreement on emission reduction in 2007. Before the voluntary ratification, Australia featured among the top twenty countries that were emitting much of the greenhouse gases into the atmosphere. According to the Department of Climate Change and Energy Efficiency, the commercial exploitation of reserves of coal seam gas (CSG) is on the rise with new plans of exporting liquefied natural gas produced in progress.

Though the exploitation of reserves began in 1996, coal seam gas currently accounts for 10 percent of the national gas production. The coal seam gas accounts for 90 percent of the domestic supply of gas in the East Coast region (Department of Employment, Economic Development and Innovation, 2012). Coal seam gas production in the period between 2010 and 2011 rose by 372 percent compared to five years ago (Department of Employment, Economic Development and Innovation, 2012).

In 1976, the World Meteorological Organization (WMO) alerted the world governments of the impending devastation that could be attributable to an increase of greenhouse gasses, the related climate change and variability, and global warming. An increase in natural disaster occurrences due to extremely unpredictable weather and climate events will lead to devastation (White et al., 1999; World Meteorological Organization, 2012; NSW Treasury, 2012).

In Australia, extreme weather events accelerated by La Nina are leading to heavy precipitation above normal averages (132 percent) that result in flash flooding problems with water borne diseases manifesting themselves (Met Office, 2011). The floods in 2010 were the most severe in terms of the extent and impact since the floods of the 1970s (Met Office, 2011). The economic valuation of the economic damages of the floods focussed on the wider East Coast region of Australia that had received the devastating rains (World Bank, 2011a; World Bank, 2011b). Extreme precipitation in 2010 and 2011 leading to floods demonstrated the impact of climate change on coal mining in Australia and particularly the Eastern countryside.

During the flood events, a quarter of the mining basins became inoperable, while the other two-thirds were running under strict conditions. The economic loss associated with the damages due to floods was $2.38 billion. This implies that Australia may suffer cyclic effects of climate change as La Nina impacts exacerbate precipitation in Australia. Higher levels of emission of greenhouse gases (GHG) appear to be the driving force of severity of occurrence as well as the impact of flood events.

Definitely, further investment in coal mining in New South Wales will not only cause an adverse impact of climate change on the coal seam gas production but also on the general economic production in the country such as agriculture and infrastructure. The economic loss resulting from the flood damage on agricultural production in the East Coast region was at least $500–600 million in 2010–11 (Commonwealth of Australia, 2011). Income from agriculture in New South Wales accounts for 28 percent of the national agricultural income. Floods as disasters cause more economic losses than deaths compared to any other natural disaster type. The East Coast region composes of New South Wales, Victoria and Queensland.

Economic Impacts of the Climate change Events on Agriculture

Resource possibly at riskSource of riskLevel of riskThe economic value of the resource to industry/ costs to replace the assetThe economic benefit to Community
GrainsFlood eventsHigh3.1 metric tonnesLocal consumption and export to the global market
Fruit and vegetablesFlood eventsHighAround $275 million.Local consumption and export to the global market

Direct impacts of mining on Tourism

Gloucester’s river valley has a rich heritage among the white Australians since it has been the historical birthplace of the great Australian Agricultural company established through an Act of Parliament and a Royal Charter in London in 1824 (Heritage Management Consultants Pty Ltd, 2009; Stratford Coal Pty Ltd, 2012). The Australian Agricultural Company consisted of the Manning River Valley, the Liverpool Plains as well as the Peel River (Heritage Management Consultants Pty Ltd, 2009).

Irreversible damage through mining activities may lead to loss of the heritage held within the Manning River valley considering it dates back to the early 19th Century. Moreover, the valley hosts some of the endangered species of flora and fauna in Australia. These species are sensitive to habitat changes resulting from disturbance of the natural ecosystem balances of the river valley. Possible impacts on the environment that may arise against the conservation of the species is the inevitable clearing of land of up to 210 sq km to pave way for earthworks and management premises (Barrington Gloucester Stroud Preservation Alliance Inc, n.d.).

Ecological communities are sensitive to landscape changes. Localised emission of waste gasses and liquid waste into the atmosphere during activities may lead to migration of animals, while others die through eco-toxicity. Toxins may end up in the food chain among wildlife which may interact with the human environment which spreads the contaminants or contract the associated diseases. A case in point is the ascenic contamination in Bangladesh and the burning of coal with fluoride in China. Loss of some of the species will lead to declines in the ecosystem, which will ultimately introduce imbalances in the species richness and density patterns.

Moreover, tourists visiting the river valley may decline because of increased earthworks producing noise as well as ambient air pollutants. Tourism is a services industry that relies on the quality of services and unique destination scenery, particularly among nature lovers. Agricultural visits to farms and farm stays are additional tourist experiences in Gloucester. The economy of Gloucester, New South Wales gains more than $28 million for the tourism industry (Tourism Advancing Gloucester, 2011). This explains why Gloucester has a brand value for tourism in Australia. Data gathered on the parallel between the loss of livelihood opportunities and local health care trends can respond to the economics of the related human health matters.

Effects of Coal Seam Gas Mining on the Tourism industry in Gloucester

Resource possibly at riskSource of riskLevel of riskThe economic value of the resource to industry/ costs to replace the assetThe economic benefit to the community
TourismTourists are less likely to visit the area because of land clearance for making way for coal seam gas (CSG) which makes it unattractiveHighTourism brings more than $28 million annuallyA tourist attraction is a heritage site for local and international visitors. Research destination for ecologists interested in endangered species patterns

Impact on Fishing and Clean Water in Gloucester

The Great Lakes region of New South Wales has several offshore locations for local anglers and those wishing to do recreational fishing. These fish undergo local processing to meet local demand as well as the export market. Among the key anglers landing attractions is the oyster that earns the local harvester an annual sale of over 10 million (Planning and Management Services, 2011). The local’s hire-boat operators benefit financially from tourists to the Great Lakes marine park area interested in snorkelling, scuba diving and recreational fishing.

The introduction of coal seam gas mining poses a threat to the marine diversity within the Great Lakes ecosystem by mining potentially releasing discharge that will slowly degrade the marine environment. Water bodies have been targeted destinations for waste treatment operations for mining activities situated in the vicinity. Accidental spills may pose a great threat to environmental quality leading to loss of livelihoods depending on the integrity of the natural resources that are subject to sensitive sustainable utilization such as nature tourists.

Marine pollution poses huge challenges to both economic costs as well as ecologist restoration capacities. In the event of coal seam gas mining begins, there will be channelling of many resources generated towards environmental management as a way of maintaining its integrity. Coal seams are extracted from coal deposits that involve the separation of water and applying of pressurised systems.

In addition, the depth of mining leads to a demand for heavy investment in such mining projects. There is a need to collect data on the effects of loss of fishing opportunities and compensation on human health matters.

Resource possibly at riskSource of riskLevel of riskThe economic value of the resource to industry/ costs to replace the assetThe forgone economic benefit to the Community
Oyster industryWaste discharge and spills from the mining industryHighmore than $11 million annually made from the oyster catch at the Great LakesIncomes from sales made from the catch
Commercial fishingWaste discharge and spills from the mining industryhigh$2 millionLocal market sales, as well as export which lost in case the catch, are contaminated due to the mining activities
boat operationsWaste discharge and spills from the mining industrylow$62 millionBoat ride for tourists across the marine park for recreational fishermen and nature tourists involved in scuba diving as well as snorkelers

References

Barrington Gloucester Stroud Preservation Alliance Inc (n.d.). Gloucester Csg Blockade – Information Sheet. Web.

Commonwealth of Australia (2011). The impact of recent flood events on commodities. Web.

Department of Employment, Economic Development and Innovation (2012). Queensland’s coal seam gas overview. Web.

Heritage Management Consultants Pty Ltd (2009). Duralie Extension Project Non-Aboriginal Heritage Assessment A Draft Report For Duralie Coal Pty Ltd. Web.

Met Office (2011). Climate: Observations, projections and impacts. Web.

NSW Treasury (2010). Economic Appraisal Guidelines – Guidance on climate change for asset and infrastructure assessments. Web.

Planning and Environment Services (2011). Attachment A. Web.

Stratford Coal Pty Ltd (2012). Non-Aboriginal Heritage Assessment. Web.

Tourism Advancing Gloucester (2011). Inquiry Into Coal Seam Gas. Web.

White, D., Tupper, G., and Mavi, H., (1999). Climate Variability and Research in Relation to Australian Agriculture. Web.

World Bank (2011a). Five Feet High and Rising: Cities and Flooding in the 21st Century. Web.

World Bank (2011b). Five Feet High and Rising: Cities and Flooding in the 21st Century. Web.

World Meteorological Organization (2012). Powering Our Future With Weather, Climate and Water. Web.

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