Natural gas company Santos (ASX: STO) is taking the offensive on the fight for coal seam gas in Australia. After Monday's ABC 4 Corners program ran a damning investigative report accusing Santos (and BG Group's QGC) of improperly assessing their projects' environmental impacts, Santos CEO and Managing Director David Knox released a response letter on Wednesday.
In his open letter, Knox states that he was concerned that the program may have given viewers "a misleading impression about Santos" and the industry at large. Contrary to the program's accusations, Mr. Knox asserts that his company's GLNG Queensland project underwent an exhaustive and comprehensive three-year environmental approval process.
This account stands in stark contrast to a 4 Corners interview with Senior Environmental Specialist Simone Marsh. In the program, Ms. Marsh states: "I was taken into a meeting room, sat down and told that there wasn't going to be a chapter on groundwater and I was stunned…It was quite frightening that they would consider approving such a project without the basic information that a normal mining project would have been asked to submit, given that this was like six hundred times the size of your standard, large mine."
Mr. Knox states that the environmental assessment consisted of 20,000 pages of materials, including 208 pages specifically addressing groundwater impact. The letter does not provide a link to this assessment, but Santos does publish all its groundwater monitoring results online at www.santoswaterportal.com.au.
Foolish takeaway
If you're wondering who's right and who's wrong, you're missing the message that matters most to shareholders and stakeholders. Natural gas controversy is erupting across the globe, and objective information often comes second to emotion and/or economic reasoning. Proponents and opponents alike are frequently more interested in pointing fingers than finding facts. When Mr. Knox writes that "natural gas represents a huge opportunity for Australia," he isn't lying. Santos' GLNG project alone carries a $18.5 billion price tag and is set to begin exporting LNG in 2015. But community buy-in is absolutely essential, and Santos could find itself in the red without the public's green light.
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The Motley Fool's purpose is to help the world invest, better. Click here now for your free subscription to Take Stock, The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson. Motley Fool contributor Justin Loiseau has no position in any stocks mentioned in this article. You can follow him on Twitter @TMFJLo.
