Life's a gas for the former deputy PM

WHEN he resigned as deputy prime minister five years ago, John Anderson was planning to spend most of his time farming in north-western NSW.

But the former leader of the Nationals has found no such peace and quiet after jumping into the corporate world.

As chairman of the NSW hopeful Eastern Star Gas, Anderson is back in the spotlight as the company grapples with a backlash from farmers opposed to its development plans.

Irate farmers picketed the annual meeting this month and Anderson is putting his political skills to use again.

He concedes his new role has pitted him against friends but the former MP and sixth-generation farmer is confident of striking the right balance between exploiting natural resources and farming.

And the clash between farmers and the gas industry is just one of the political issues he is encountering in corporate life, alongside such challenges as regional development and executive pay.

Anderson, who was the National MP for the now-abolished seat of Gwydir for almost two decades, has added to the challenge by moving into an industry that although booming, has polarised the public.

Coal seam gas, a type of methane found in coal deposits, really only took off this decade in response to soaring demand for cleaner energy than coal.

To supporters, it provides a relatively clean form of energy, that is in plentiful supply, and helps to rejuvenate struggling rural regions. But critics say the gas extraction poses serious risks to water supplies and is a threat to the livelihood of farmers.

Eastern Star is one of several mid-sized NSW explorers trying to grab a piece of the huge success of Queensland's $40 billion industry. With its prime assets in the central western Gunnedah basin, the $750 million company is progressing plans to sell its gas to power stations and hopes to crack the lucrative export market by shipping liquefied natural gas from Newcastle.

Its plan to exploit Narrabri's gasfields by building a pipeline will funnel about $1 billion into the area, and Anderson says it was this prospect of developing a new industry in a rural area that drew him to the sector.

"I'd had 20 years of people saying 'can't you bring more businesses and more jobs into our towns, so we can get our services back and we can stop the drift?' " he says. "It seemed to me that here was something that really offered the opportunity to develop a new and significant industry."

But the promise of development has divided opinion about the trade-offs between resources and farming. On one hand, the mayor of Narrabri Shire, Robyn Faber, has welcomed the pipeline, saying she would like a series of gas-fired power stations down the Hunter Valley.

But farmers are less enthusiastic. The Mullaley Gas and Pipeline Accord says their land cannot support Eastern Star's plans for a pipeline and they have refused to meet Anderson.

There has also been criticism of some of the drilling practices of Eastern Star's 19.99 per cent shareholder, Santos.

Some environmental groups privately say Anderson is betraying the communities he hails from, but he vehemently rejects this claim. "I would prefer not to be at odds with some of my farming friends on this, but it is important to note that even those people at Mullaley, the majority are saying 'we want the pipeline to go somewhere else - we're not trying to stop Eastern Star'," he says.

Managing this tension is difficult for the Nationals, wedged between farmers and the generally pro-development Liberals. But the Queensland senator, Barnaby Joyce, who has taken up farmers' concerns with the gas industry, supports Anderson.

Joyce disagrees that moving into gas has compromised Anderson.

"As chairman he has a job to look after shareholders," Joyce says. "My job is not to be influenced by former members [of Parliament]."

But Anderson concedes there are genuine reasons for some communities to be worried about coal seam gas extraction.

This week landholders, scientists and the industry met in Brisbane to discuss the industry's rapid rise. In coming decades gas companies are expected to drill up to 40,000 wells in Queensland, raising questions about the impact on vital aquifers.

Alarmingly, recent tests from larger producers such as Origin Energy and Arrow Energy have detected cancer-causing chemicals. Although Eastern Star has returned no such results, Anderson concedes some people have cause for concern.

"I can understand that in some locations coupled with some extraction techniques there are serious environmental issues. However, no two [gas] fields are the same," adding that many farmers welcome the extra income from gas developments.

Anderson says he backs coal seam gas because of its potential to turn around the dwindling fortunes of the rural economy.

But among its investors, Eastern Star has been in the spotlight about executive remuneration. At the recent annual meeting shareholders voted against an employee incentive plan and nearly half abstained over the issue of 625,000 shares awarded to the chief executive, David Casey.

Anderson defended the pay practices but conceded the company would be moving away from options packages after investors' objections.

With concern over coal seam gas and the disquiet over remuneration, one might conclude it has been a tough year for Anderson. But he rejects this. "I've had far tougher issues and I don't think I need to defend my record in supporting agriculture and farmers."

It seems that while politicians and business may be vastly different disciplines, a thick skin is helpful in both pursuits.

Vaile makes his mark Page 17

THE CV A

NDERSON, John EducationMA(Syd) Occupation chairman, Eastern Star Gas, since 2007 CAREER _ Director, Allomak, 2007-09 _ Deputy prime minister, 1999-2005 _ Leader of the Nationals, _ 1999-2005; deputy leader, 1993-99 _ Federal minister for transport and regional services, 1998-2005; primary industries and energy, 1996-98; transport and regional services, 1998 _ Federal opposition spokesman on primary industries, 1993-96 _ MPfor Gwydir, 1989-2007