The Australian National University will sell its shares in Metgasco, a company involved in coal seam gas extraction in Northern NSW, following student opposition to the investment.
ANU Vice Chancellor Professor Ian Young announced the decision in a statement to students on Tuesday, in response to a campus campaign raising concerns about the environmental and social impacts of the booming coal seam gas industry.
The ANU’s decision is the latest controversy for the coal seam gas industry in NSW, which is drawing opposition from across the political spectrum. The rush to develop NSW’s vast reserves is seeing farmers, environmentalists, students, and even Alan Jones, all calling for caution.
Tom Stayner from the ANU Environment Collective, the student group behind the Metgasco campaign, says they are excited about the decision and hope it will set a precedent.
“He took some convincing, but the Vice Chancellor is showing leadership on this urgent issue”, Stayner says. “The ANU should be about the public good. It shouldn’t be risking Australia’s clean water and farming communities--not to mention impacts on the climate.”
The Vice Chancellor’s short statement “notes” the students’ concerns, but does not say why the University will sell its shares in Metgasco. An ANU spokeswomen said in a further statement “The decision was made by the Vice-Chancellor after concerns were raised with him, and he investigated the matter.”
The Canberra Times reports the Vice Chancellor said the decision was “pragmatic” and based on the low price of the shares, and also downplayed the role of the student campaign. (“Students Call for Shares Accountability at ANU” - 14/10/11, http://www.canberratimes.com.au/news/local/news/general/students-call-for-shares-accountability-at-anu/2323685.aspx)
The ANU currently holds a 1% share in Metgasco, worth around $1 million, making it the 12th largest shareholder. The ANU’s total investment portfolio is valued at over $1 billion.
Students from the Collective say they discovered the investment in Metgasco’s annual report. They were spurred on by contact from several people in areas affected by Metgasco operations, who urged a push for divestment.
The students launched their campaign by installing a ‘gas rig’ made out of milk crates in Union Court on campus and starting a petition.
At a recent student forum, Vice Chancellor Young said that Australian Ethical Investments gives “the tick” to coal seam gas companies that don’t use the controversial “fracking” technique, which he said includes Metgasco. Critics say fracking, or hydraulic fracturing to release the gas, can cause major problems for water systems.
In a letter to the Vice Chancellor, the students cited Metgasco reports showing that fracking occurred at its Kingfisher natural gas operation and suggesting plans to use the technique elsewhere. They also noted Australian Ethical Investments recently pulled out of Origin Energy due to its coal seam gas activities.
The NSW Government has banned fracking until the end of the year and introduced new regulations for the industry. A Parliamentary Inquiry on the impacts of CSG is currently underway and is due to report in April 2012.
Stayner, who has been studying coal seam gas and policy in class, says it can have serious impacts even without fracking. “They have to extract huge amounts of water, and the CSIRO is worried that will cause permanent damage to the water table, which could really damage farming in these areas.”
“And in the end, gas is still a fossil fuel. It causes climate change,” Stayner says. “In fact, it might be worse than coal overall.”
The students point to recent US studies which challenge the idea that unconventional gas is cleaner than coal overall as a source of energy, due to the methane that leaks during extraction and transport. Methane is 25 times more powerful than carbon dioxide as a greenhouse gas over 100 years, and up to 70 times more powerful over 20 years.
There has been no independent study of the lifecycle emissions of coal seam gas in Australia.
Although methane is included in the new legislation for a price on greenhouse gases, further regulation will determine whether and how much of the coal seam gas industry will have to pay for its ‘fugitive’ methane emissions. (Section 5, definitions, of the Clean Energy Bills)
The students urge the ANU to focus more of its investments on renewables. They point to the Beyond Zero Emissions study outlining a plan for moving Australia to 100% renewables in 10 years.
The University spokeswomen said “The University invests in renewable energy assets indirectly via managed funds.”
The Collective is currently considering what students can do to ensure that the ANU’s investments have the greatest possible positive environmental and social impact. They say the ANU’s investment guidelines, listed on the website for the ANU’s Financial and Business Services, seem not to include specific social or environmental criteria.
The University spokeswoman explained that “There is not a specific ethical investment policy, but all ANU investments are made with a consideration of their environmental and ethical impact, in consultation with the University's Investment Advisory Committee.” She said the current “guidelines” lead “to the best ethical and financial results for ANU.”
Metgasco is yet to return calls about its coal seam gas operations.
This article was updated on 15/10/2011 by the author
