THE federal government has called on Santos and BG Group to provide more information on the environmental impact of their projects, meaning almost $30 billion worth of investment in Queensland's coal seam gas sector could be delayed for months.
Environment Protection Minister Peter Garrett has written to both companies asking for extra information on water management strategies amid concerns by Queensland's Coordinator-General and local communities about the effect on the Great Artesian Basin, one of the few reliable sources of fresh water in inland Australia.
Mr Garrett has given Santos and BG until October 11 to submit revised environmental impact statements, potentially pushing out both companies' final investment decision.
The letter follows a site trip to Gladstone and Curtis Island by Mr Garrett more than a week ago and meetings with both BG and Santos about their projects, where he expressed concerns about giving the projects the environmental green light.
The delay on a decision means it is unlikely voters will know the fate of thousands of potential jobs in Queensland until after the election.
Treasurer Wayne Swan last night moved to reiterate the government's support for the $50 billion liquefied natural gas industry in Queensland, a battleground state that Labor needs to win.
"It is well known that the Minister for Resources and I are two of the biggest supporters of the LNG "We are acutely aware of just how important this industry is for jobs, growth and the community — and recognise the need to get this resolved quickly.
"These are large and complex projects and, whether we like it or not, we need to operate within the confines of the rules," Mr Swan said.
While BG and Santos say they still expect to make their final investment decisions this year, it is a setback, particularly for BG, which was the closest to a decision on its $20 billion project.
A spokesman for Mr Garrett said the extra time was needed to assess properly "areas identified as deficient in the Queensland Coordinator-General's report".
Last month, Coordinator-General Colin Jensen expressed serious doubts after reading BG's 9000-page submission. “I am concerned regarding the potential for widespread, irreversible, serious environmental harm associated with the widespread application of highly saline and sodic water," he said.
"I am concerned that the cost to future generations will be substantial should rehabilitation works associated with coal seam gas LNG industry activities be ineffectively undertaken."
The Coordinator-General had raised similar issues with Santos's 13,500-page submission into its $8 billion project.