Food and fuel security

The rapid growth of coal seam gas in Queensland and NSW has led to claims that this development threatens Australia’s food security. This note attempts to bring together some of the basic facts. 

Individual communities rightly want to ensure that CSG development does not undermine their existing agricultural industries over the long-term. However, overall Australia does not appear threatened by food insecurity.

Australia a major agricultural exporter

  • Australia is a major agricultural exporter (number 14 in the world). According to Australian Food Statistics 2009-10 from the Department of Agriculture, Fisheries and Forestry:
    • Food production was $36.7 billion
    • Food exports were $24.3 billion
    • Food imports were $10.1 billion
  • Australia has a food trade surplus of $14.2 billion. Imports are dominated by manufactured food products, seafood and fruit and vegetables from the northern hemisphere in opposite seasons. The value of exports of grains, meat and dairy has been growing.

Low impact of coal seam gas on agriculture

  • Not all of the land covered by petroleum permits is suitable for agriculture. Detailed analysis by one of the LNG project developers has found that only around 56% of their acreage is suitable for agriculture.
  • APLNG estimates that its activities will only affect about 7% of good quality agricultural land within its permit areas. Due to the progressive nature of development and progressive nature of rehabilitation there probably will not be more than 2-3% at a peak. Following rehabilitation (within 1-2 years) this reduces to about 1.3% being removed for the life of the project (with final rehabilitation at the end of the project).
  • Provision of treated produced water for irrigation will benefit agriculture. Regular payments to farmers for CSG activities will underpin financing of farm improvements.

Agriculture depends on energy

  • Agriculture relies on fertiliser and fertiliser production relies on natural gas. Fertiliser production is one of the largest uses of natural gas in Australia. According to the Fertilizer Industry Federation, around half Australia’s fertilizer demand is supplied by imports of finished products, a quarter from domestic manufacturing using imported raw materials, and a quarter from domestic manufacturing from domestic raw materials.
  • According to ABARE, agriculture, forestry and fisheries use around 2 billion litres a year of diesel. Most Australian diesel is either imported directly or produced from imported crude.

Australia has an energy security issue that will be rectified by LNG growth

Australia currently runs a balance of payments deficit on petroleum (transport fuel and LNG) of around $7 billion. Current LNG projects under development will increase LNG exports by around $30 billion, giving Australia a petroleum surplus.