The NSW government has announced a six-month freeze on processing new applications for coal-seam gas exploration licences, while the cost of applying will soar from $1000 to $50,000, in the latest shake-up for the industry.
Premier Barry O'Farrell told Parliament on Wednesday the freeze until September 26 would allow an audit of existing coal-seam gas licences and pending applications to be carried out before a new assessment-and-allocation regime was put in place.
''Not only will this process reflect the best practice we demand of the natural-gas industry, it will also reflect the expectations that the people of this state have towards the use of our natural resources,'' he said.
Mr O'Farrell said the Labor government in 2002 set the cost of a coal-seam gas application fee at $1000, which was ''simply and utterly incredible''. He said the Minister for resources and energy, Anthony Roberts, would immediately raise the fee to $50,000.
The announcement followed a decision by Mr Roberts to refuse five coal-seam gas exploration licence applications being sought by the company Grainger Energy, covering 43,000 square kilometres of the Riverina.
He said Grainger Energy has one owner-director, was formed six days before its application was lodged, had no history of conducting petroleum exploration activities and ''has submitted a manifestly deficient application''.
Mr Roberts has also asked another company, Leichhardt Resources, to show cause why its three licences - near Moree and Nowra and between Bylong and Denham - should not be cancelled.
''We want an application process that sends a clear message that the Liberals and Nationals government will only accept best-practice standards,'' Mr Roberts said on Wednesday. ''Speculators or cowboys need not apply.''
Last year the O'Farrell government introduced a ban on CSG activity within two kilometres of residential areas and in sensitive areas used by horse breeders and the wine industry. But it has resisted a call from Labor to extend the ban to water-catchment areas.
Greens MP Jeremy Buckingham said the party welcomed the announcement of a licence freeze and audit but said the Premier was ''tinkering at the edges''.
''The key issue remains the right of farmers to say no to CSG activity on their land,'' he said.
The national exploration body agreed with the O'Farrell government's stand.