CSG lobby welcomes fall of O’Farrell

Mike Baird's appointment as NSW premier was welcomed by the CSG lobby.

It is difficult to accept that NSW Premier Barry O’Farrell lost his position over the alleged gift of a $3000 bottle of Grange connected with the push to award lucrative contracts to Australian Water Holdings (AWH).

Conceivably, he could have stonewalled that accusation and ridden out the storm had he enjoyed the backing of cabinet and the Daily Telegraph.

O’Farrell conspicuously lacked this backing — witness just how savagely the Daily Telegraph turned on him after practically ushering him into office a few years ago. But this had little to do with the swirling cross-bench corruption scandal involving AWH.

AWH was clearly a catalyst for this latest Australian political knifing, but it was not the only or perhaps even the main cause.

In a larger sense, coal seam gas, rather than AWH, was what felled O’Farrell.

For months now, it has been emerging that certain Liberal Party interests connected with the powerful fossil fuel extraction industry have been looking for an excuse to remove him.

The reason for their hostility is easy to understand. O’Farrell is seen by gas giants like Santos and AGL as a staller and blocker to their expansionist plans. For that, he had to go.

For these expansion-driven companies, it has to be corporate profit that wins out every time. O’Farrell showed himself willing in so many ways to bend to the petulant whims of the billionaire class, for example, rubberstamping the scandalous expropriation of prime public harbour foreshore land for James Packer’s casino complex. But in the end, it wasn’t enough.

The coal seam gas issue had caught O’Farrell between a rock and a hard place ever since he took office. On the one hand, the party he represented was completely beholden to the corporate sector, which thirsts for a conversion of NSW agricultural land and even urban areas to full-scale industrial gas production.

Yet on the other hand, O’Farrell was keenly aware of the overwhelming extent of public opposition to the activities of the CSG industry. Across the state, polls show 70% of people are opposed to CSG drilling. In areas directly affected by coal seam gas operations, more than 90% of residents are against it, including many National Party voters.

These are polling figures that O’Farrell felt he could not ignore. Fearing a public backlash for his early failure to honour election pledges for tighter CSG regulation, O’Farrell announced a series of measures last year and this year that were designed to reassure the public that the government was listening to them. From the standpoint of the industry, these showpiece gestures, which it denounced as a de facto moratorium on coal seam gas extraction, were alarming. In the wings, murmurs of discontent were growing.

At a gas conference held in October last year, heavyweight fossil fuel lobbyist and ex-Labor federal resources minister Martin Ferguson suggested with characteristic bluntness that: “Mr O’Farrell needed to show political leadership to move the stalled [CSG] industry forward ...

“The industry is there to be grabbed, but time is running out for New South Wales ... We’ve now got to work with the premier to get him over the line and seize this opportunity.”

Perhaps it was not a case of “time running out” for NSW — but time was certainly running out for O’Farrell.

Other critics of O’Farrell’s “lukewarm” approach to CSG development included the current federal resources minister, Ian Macfarlane. The Australian Financial Review said the minister “would personally drive the push to remove impediments to gas extraction in NSW”.

“We need to make sure we get this gas out of the ground,” Macfarlane said last September.

Peter Reith also lashed out at O’Farrell, accusing him of pandering to populist politics.

While O’Farrell’s political stock was crashing in value as far as the fossil fuel lobby was concerned, some members of his cabinet were demonstrating the right sort of attitude.

These included NSW resources minister Chris Hartcher and former treasurer Mike Baird, both outspoken advocates for the expansion of CSG in the state.

In September last year, the Australian reported: “NSW Treasurer Mike Baird warned at the weekend that the state's supply contracts were running out and replacement gas had to be found, making it critical that the community found a balance between economic need and environmental concerns over CSG.”

This was a reference to an “energy security conference” organised by Hartcher and Baird and attended by an elite gathering of invitation-only politicians and industry figures.

Since the start of the year, O’Farrell has been, in political terms, a dead man walking. The pretext for his execution has now been delivered with farcical aplomb, courtesy of former NSW Labor minister Eddie Obeid and family.

Mike Baird was elevated to the office of premier on April 17 after O’Farrell’s “surprise” resignation following the ICAC allegations.

It was a decision welcomed by the CSG lobby, which said it was looking forward to “constructive dialogue”.

Having earned the backing of the mining lobby and its corporate media cheer squad, Baird will now be expected to “step up” and take on the “greenies” who are threatening to prevent the full-tilt acceleration of the neoliberal development agenda.

This is likely to result in an attempt to dramatically loosen CSG restrictions as well as a concerted push on other matters dear to Baird’s heart, such as asset privatisation.