The Economic Contest Between Coal Seam Gas Mining and Agriculture on Prime Farmland: It May Be Closer than We Thought

Abstract

There is substantial market impetus behind the expansion of coal seam gas (CSG) in Australia, driven by buoyant international demand for liquefied natural gas. The benefits of CSG development come in the first few decades, followed by a potentially long period in which the agricultural and environmental costs dominate. We identify the key drivers influencing the economic contest of CSG versus agriculture on prime farmland, and undertake a Darling Downs case study using evidence from primary and secondary sources. Despite the momentum driving CSG development, under some plausible scenarios, the long-term economic net benefits from agriculture-only exceed those from CSG-only and CSG-agriculture coexistence.

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