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Shell’s decision a turning point in gas development

The decision by Shell to withhold further investment in the Arrow coal seam gas project is likely to be a turning point in the development of this industry in Australia, regardless of any approval decision taken by the Queensland govenment.

Lock the Gate Alliance president, Drew Hutton, said the Shell decision was a rational one given the obstacles being faced by the industry as a whole and by Arrow in particular.

"The coal seam gas industry is facing unsustainable costs from labour, the Gladstone LNG construction and the reduced global price of natural gas," Mr Hutton said.

"As well, Arrow has been able to sign up only about 150 out of the 1500 Queensland landowners they need to have access agreements with in order to extract gas.

"Land access agreements, according to industry sources themeselves, have slowed to a trickle with the growing popularity of the lock the gate campaign and Arrow, as the last major coal seam gas project in Queensland, is at a major disadvantage here.

"The Arrow EIS also pointed out several huge problems that would haunt any future project development. These include the massive amounts of salt for which there is no responsible disposal option and the cumulative impacts of underground water extraction."

Mr Hutton called on the Queensland government to withhold approval of the Arrow project but said that, whether it did or not, the state's coal seam gas industry would undergo major disloction because of its own internal contradictions.

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