Greens have 'hijacked' CSG debate

Gas producer Santos has escalated its war against environmental groups opposing coal seam gas exploration, accusing them of hijacking the debate and exacerbating NSW's looming energy supply "crisis".

Gas producer Santos has escalated its war against environmental groups opposing coal seam gas exploration, accusing them of hijacking the debate and exacerbating NSW's looming energy supply "crisis".

Chief executive David Knox said the Greens and other environmental groups in Australia originally supported gas as a transitional fuel to wean the country's energy grid off coal and onto renewables.

But he said they had turned against the industry because the success of gas exploration - particularly in the United States - meant it would be part of the long-term energy mix.

"This is a concerted campaign to shut this industry down," Mr Knox said. "When we all started this journey, gas here in Australia was viewed as a transition fuel. And I think what has happened, interestingly, and I have to say incredibly disappointingly, the Greens are now opposing gas."

NSW Resources and Energy Minister Chris Hartcher said the intensity in the debate was unlike anything else, and blamed the industry, in part, for failing initially to engage with communities and explain coal seam gas exploration.

"That vacuum has very quickly been filled by extremist Greens, fortified by a level of ignorance in the community," Mr Hartcher said.

One of the Greens' election policies is to ban all new coal seam gas exploration - a move federal Resources Minister Gary Gray this week branded as "absurd".

Mr Hartcher said the community backlash on coal seam gas, exacerbated by the distrust brought by corruption proceedings in NSW, meant it would be difficult for the O'Farrell government to loosen its tough regulatory regime.

Santos is using the annual APPEA oil and gas industry conference in Brisbane this week to win "hearts and minds" in the community for its plans to mine coal seam gas in NSW's Pilliga forest.

More than 60 per cent of homes are connected to gas, including 1.1 million in NSW. While there are various sources of gas, NSW pipes in 95 per cent of its natural gas, and Santos said more than 30 per cent of NSW's natural gas was coal seam gas from Queensland.

The industry has been highlighting the potential for gas prices to soar because the state's contracted gas supplies start to run out in 2016.

"I see things in the paper saying the industry's creating this supply issue ... that's complete nonsense," Santos executive James Baulderstone said. "There's an issue that needs to be dealt with.

"We're actually creating a supply crunch when we were one of the luckiest countries in the world as far as energy goes."

-Global energy supplier Chevron said it was in talks with customers to increase the amount of liquefied natural gas sold from its Gorgon mega-project under long-term contracts from 65 per cent to 85 per cent. "The closer we get to first LNG the more valuable the volumes are going to be," the company's Australia head, Roy Krzywosinski, said. "We're confident we're going to be able to market those incremental volumes."