Feds criticise states' "unnecessary policy barriers" to CSG

WHILE public furore over coal seam gas in NSW is forcing the State Government to tighten its regulation, the latest Energy White Paper from the Federal Government argues the opposite.

Released by Industry Minister Ian Macfarlane, the report states that gas supply on Australia's East Coast is tightening, and "not helped by unnecessary policy barriers imposed by some states on new onshore production".

"Demand for gas exports is pushing up local gas prices towards the international price, affecting both our industries and households", with "unnecessary state regulatory barriers … limiting much-needed new gas supply."

In 2012-13, the amount of Australian gas exports and domestic use were on par, however the report notes by 2018 exports could more than triple domestic gas consumption.

But an Australian gas reservation policy, which could allow exports without harming domestic users is off the agenda.

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The White Paper says it would have the "perverse effect of discouraging needed investment in new production".

But the report has been attacked by anti-gas and mining alliance Lock the Gate, who said Minister Macfarlane had failed to take community concerns over gas seriously.

"The Government has taken the simplistic, hands-off approach of leaving gas regulation to the market," national coordinator Phil Laird said.

"Legitimate concerns raised by the NSW Chief Scientist were not referred to at all by the Energy White Paper, nor the recommendations of the NSW Gas Supply Inquiry.

But Lock the Gate did welcome one recommendation to launch an ACCC investigation into the transparency of the gas market, with Mr Laird saying it could help expose a "co-ordinated scare campaign" predicting gas shortages.

"These public statements have been made by a range of companies who seek to benefit by ramping up CSG and unconventional gas development on the Eastern Seaboard."