Environmental and community groups reacted with outrage after the NSW Independent Planning Commission approved the Narrabri Gas Project on Wednesday, but the Hunter man behind a proposed pipeline from Newcastle to Queensland was popping the champagne.
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"We're the only approved route to market," Hunter Gas Pipeline managing director Garbis Simonian said after the IPC gave his $1.2 billion project its second shot in the arm in two weeks.
The commission concluded that the Narrabri project's 850 coal seam gas wells in and around the Pilliga State Forest proposed a "low" environmental risk.
Mr Simonian was handed a potential main customer for his pipeline on September 16 when Scott Morrison arrived in the Hunter to announce he would build a gas-fired power plant at Kurri Kurri if the industry did not lock in enough new energy investment by April.
The government will also underwrite new pipelines in the event of a "market failure" to ensure cheap gas supply to the southern states.
The approval for Santos' $3.6 billion coal seam gas field gives HGP a potential supplier, though the pipeline is also designed to connect with the Wallumbilla gas hub in western Queensland.
Lock the Gate Alliance, Country Women's Association, Greenpeace, Climate Council, Wilderness Society, climate scientists and some industry analysts condemned the approval after 98 per cent of the more than 23,000 public submissions opposed the project.
"It is fundamentally at odds with protecting Australians from climate change. It is sending us backwards," Climate Council professor Will Steffen, who gave evidence to the IPC, said.
"It is also a huge loss for the local communities and farmers who have fought against this polluting project for almost a decade. Gas is expensive, polluting and a poor public investment."
The IPC placed 134 conditions on the consent.
NSW Environment Minister Matt Kean has opposed gas as anything but a short-term fix, arguing it is an expensive way of making electricity.
"You only need to look at capital and investment cycles. Already people are getting out of fossil fuels, and that will only increase," he said on Wednesday.
Santos said in a statement to the stock market that it was "excited" about the IPC decision and would work with the federal government to secure final approval under national biodiversity laws.
It would then start 12 to 18 months of appraisal drilling before finalising its plans.
Australian energy companies, including Santos, have written down the value of gas investments by tens of billions of dollars as the related oil price has slumped.
But Mr Simonian, who also runs retailer Weston Energy, said gas prices were cyclical and time would tell if the industry would invest.
"No one's going to put billions into these projects if they're not viable," he said.
"Right now we're in the middle of a low point in the cycle because of a lack of demand ... due to COVID and the economic cycle.
"The prices will recover, but the government just wants to make sure they don't go too high and business can then be sure long-term that they're going to have reasonable prices so they can invest and create jobs."
He was confident Santos would proceed with the Narrabri project "because NSW desperately needs gas".
"We're in talks with potential customers. Some of them were holding off to see if Narrabri would be approved."
Mr Simonian said he understood the concerns of residents and farmers around Narrabri "but the IPC has looked at the science and clearly say those issues can be managed".
"You can't find a bigger greenie than me," he said.
NSW Shadow Minister for Climate Change and Energy Adam Searle said Labor supported the IPC decision.
Hunter MP and federal opposition energy spokesman Joel Fitzgibbon described the IPC approval as "great news".
An Australian Competition and Consumer Commission report in August found the risk of a gas shortfall on the east coast would ease next year but warned prices would remain high.
"If we really want permanently lower prices in the south, we need more gas in the south," ACCC chairman Rod Sims said while acknowledging that the competition watchdog's assessment did not take into account the environmental impacts of the Narrabri project.
The IPC said in its ruling that NSW was "unlikely to be able to meet any of its gas needs from the state's own resources by 2024" without the Santos project.
On pollution fears, the IPC said the gas was separated from the "shallow, high-quality productive aquifers" by thick layers of "relatively impermeable rock".
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IN THE NEWS
Michael Parris
Michael Parris reports on politics for the Newcastle Herald. He started at the Herald in 1994 after working in the ABC Newcastle newsroom. Michael spent much of his career as a sub-editor before moving into political reporting in 2017. He was a finalist in the Sports Australia national media awards for his stories about a male-only tennis club in Newcastle. He has covered NSW and federal elections, state and federal budgets and local politics. He has also written extensively about the COVID-19 pandemic with a special focus on data analysis and the effects of lockdowns on the Hunter community.
Michael Parris reports on politics for the Newcastle Herald. He started at the Herald in 1994 after working in the ABC Newcastle newsroom. Michael spent much of his career as a sub-editor before moving into political reporting in 2017. He was a finalist in the Sports Australia national media awards for his stories about a male-only tennis club in Newcastle. He has covered NSW and federal elections, state and federal budgets and local politics. He has also written extensively about the COVID-19 pandemic with a special focus on data analysis and the effects of lockdowns on the Hunter community.
