Energy giant AGL has warned NSW faces a gas shortage within three years without new coal seam gas projects as it fends of criticism of the controversial sector.
Chairman Jerry Maycock said NSW had long relied on gas from interstate to meet demand, but the construction of large-scale LNG projects in Queensland would soon see much of that gas exported to Asian buyers at significantly higher prices.
“This places NSW at great risk of being materially short of gas from 2017,” he told shareholders at the company’s annual general meeting on Thursday.
“The consequences will be felt most directly in the industrial sectors of the economy, although the flow on effects in terms of higher prices and higher unemployment will be felt more broadly across the state.”
Mr Maycock said only five per cent of NSW’s gas needs were currently being met with local supply, though that could rise to around 20 per cent if the company’s controversial Gloucester project in Northern NSW goes ahead.
“Even with gas from Gloucester, NSW will continue to face materially higher gas prices unless additional projects also come on stream,” he said.
Earlier, around 100 protesters staged a demonstration outside the AGM, calling on AGL to halt the Gloucester project over fears it could contaminate the water supply and damage agricultural land.
Actor Michael Caton, star of hit Australian film The Castle and 1970s TV show The Sullivans, said gas extraction should take place away from prime agricultural land.
“You are really risking long-term damage to the environment, to rich agricultural land,” he said.
“It’s uncanny how they hone in on the really good agricultural land, where there are places you could extract gas from, where the water table isn’t as valuable.”
And he called on city residents to get involved in the cause.
“I think city people in some ways feel removed from all of this and its going to concern them when it (contamination) starts showing up in their crops and showing up in their beef,” he said.
Mr Maycock defended the environmental safety of coal seam gas, saying AGL took great care to protect water supplies.
“I can assure you that the health of local residents and the wellbeing of the environment is a matter of paramount importance to the AGL board,” he said.
Meanwhile, AGL has flagged a rise in underlying profit for this financial year as it banks on a colder winter in 2015.
In a trading update, AGL said it expects to report an underlying net profit of between $575 million and $635 million for 2014/15, up from the $562 million last financial year.
However it faces a $156 million charge against its net profit in relation to the recent acquisition of Macquarie Generation.