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Under pressure - Wine VS Mine

Winemaker Andrew Margan is standing on a rock on a ridge overlooking his vineyard at Broke, in NSW’s Hunter Valley. The landscape is idyllic: vine rows plunge down the hillside; Wollombi Brook curls through the middle distance; tree-covered ranges rise up steeply behind.

He’s talking about how different this country could have looked had energy company AGL got its way.

“If CSG (coal seam gas) mining had gone ahead here as AGL were planning,” says Margan, “there could have been 300 wells sunk between here and Pokolbin.”

Just five years ago it seemed that CSG was a foregone conclusion in the Hunter wine region. A couple of exploratory wells had already been sunk, not far from Margan’s vineyard at Broke, and AGL were attempting to ingratiate themselves with the local winemakers - buying vineyards, sponsoring a local winemaking scholorship, joining the wine industry association.

But the local winemakers were having none of it. They had serious concerns about the environmental impact of CSG mining. They worried that hydraulically fracturing - or “fracking” - deep coal seams to release the gas could contaminate the local aquifer and lead to geological instability. And they were outraged that, under then-current legislation, the miners would be able to drill among the vineyards and wineries of the country’s leading wine tourism destination.

As fourth generation winemaker Bruce Tyrrell told me at the time: “It’s simple. If any of those bastards come onto the land my family have owned for 150 yrs I’ll bloody shoot ‘em. And I’m still a good shot.”

Eventually, the vignerons’ well-organised protest campaigns - including a high-profile march on the NSW Parliament in 2012 - helped encourage the state government to declare the viticultural and equine industries in the Hunter off-limits to CSG mining: boundaries were drawn around these two newly-declared Critical Industry Clusters that prevented any further resource exploration.

“We won,” says Andrew Margan. “But it was a hell of a fight.”

“The CSG battle almost destroyed us,” admits Andrew’s wife Lisa Margan. “Having to take on such a big issue like that fractures the community, it pulls resources out of the community, it exhausts the community.”

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The Hunter isn’t the only wine region to have tussled with unconventional gas mining in the last few years. Just before Christmas 2013, resource company Beach Energy sank its first exploratory shale gas well just south of Penola, the main town in the famous wine region of Coonawarra, in South Australia’s Limestone Coast.

I visited the region during vintage 2014, a couple of months later, and witnessed that first rig being moved to a second exploratory site west of the main vineyard area. It’s only when you see one of these installations up close - or as close as security will allow - that you get a feel for how much the landscape is affected and what impact dozens or hundreds of such wells would have on the nature of a region: temporary roads carved through paddocks, the four-storey rig itself, the holding ponds dug into the earth to retain contaminated water, lights and sound running 24 hours a day, seven days a week.

“I just can’t envisage co-existence with a gas well like that next to my cellar door,” said Dennis Vice of Highbank, one of Coonawarra’s leading wineries as we watched another truck loaded with drilling equipment roar by. “How can anyone argue that industrialized gas extraction can sit comfortably alongside wine - a brand that’s based on clean green production? Even if they do put a well in and I’m forced to sell, my vineyard would be worthless because of that rig. The implications for landowners are immense.”

During the same visit, local vineyard manager Stuart Sharman, chair of the Limestone Coast Grape and Wine Council’s unconventional shale gas committee, detailed his deep concerns about shale gas extraction - a process that, like CSG mining, involves drilling down through the aquifer and using large amounts of local water in the process.

“We don’t have a lot of confidence that the miners can give us an iron clad guarantee that well integrity will be maintained,” he said. “We know that the wells break down over time - their own documents show that. And (energy company) Santos has just been fined for contaminating the acquifer with uranium up in the Pilliga. If our vineyard irrigation water here becomes contaminated we can kiss goodbye to our sector of the economy: the Coonawarra brand and the whole district will be tarnished.”

When I spoke to him again for this article, Sharman told me the pressure has eased. Not long after my visit during vintage in 2014, Beach Energy announced they had decided to concentrate on conventional gas extraction, and not in close proximity to the vineyards. The level of exploratory drilling I witnessed had “slowed right up”.

But Sharman says it’s the slowdown in the energy market at the moment that’s contributed to the change of heart, not necessarily the very vocal opposition of the vignerons.

“Depressed energy prices are slowing up further expectations,” he says. “It’s just not worth the miners’ while to go to the effort of unconventional gas extraction right now. But I think what we’re seeing is probably a lull, not the end. I imagine it could well ramp up again if the situation changes.”

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It’s a similar story in the Hunter. Yes, says Andrew Margan, with the declaration of the Critical Industry Clusters, winegrowers have had a reprieve. And yes, AGL announced earlier this year that they were pulling out of CSG in NSW. But the state government hasn’t reversed its stand on CSG overall: the exploratory and mining licences haven’t been revoked.

So if - when - the economic climate and the political balance shift, the pressure may build once more to start extracting precious hydrocarbons in the heart of wine country. And if that happens, says Stuart Sharman, there will always be a conflict between the short-term gain of the energy companies and the long-term sustainability of the winegrowers.

“In the wine industry we’re busy spending millions of dollars redeveloping vineyards and setting ourselves up for another 50-plus years,” he says. “The mining guys are very publicly saying they’ll only be here for 20 years. But what’s it going to be like - what’s the impact not only to the physical environment but also the social environment - when they walk out in 20 years time and we’re still here.”

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