The State Government is gambling public money on non-existent mining royalties in the hope of keeping Queensland’s finances afloat, says the Lock the Gate Alliance.
Lock the Gate’s national president, Drew Hutton said mining companies were producing insufficient amounts of gas to prop up the state’s economy through royalties.
Origin Energy is set to invest about $864 million into Western Australia’s gas ventures, instead of in Queensland’s coal seam gas (CSG) fields.
Origin had previously touted that it would expand a $20 billion CSG export plant being built at Gladstone, to double its present capacity.
Mr Hutton said Queensland’s major CSG proponents in the Surat Basin – Origin, Arrow Energy, Santos and QGC - had scaled back or abandoned plans as costs have blown out and concerns have increased about the safety of CSG.
“The Newman government has budgeting for several hundred million dollars a year from gas royalties and is dependent on these to keep the state's finances afloat,” Mr Hutton said.
"The big gas producers in the Surat Basin are realising they have to hedge their bets on gas because its coal seam gas fields are not producing as well as they need them to.
“That will leave the Newman government in a lot of trouble. Unconventional gas is certainly no saviour for the Queensland economy and, unfortunately, the Newman government's obsession with it will cause many development opportunities in other sectors of the economy to be lost.”
Mr Hutton said the LNP government has helped drive up prices in the rush to meet coal seam gas export demand.
“Queenslanders will have to pay much higher prices for gas as domestic prices as much as triple to achieve parity with gas export prices,” he said.