Federal Industry Minister Ian Macfarlane claims that New South Wales will run out of gas by 2016 – possibly leaving thousands without work, unless energy companies leap into coal seams.

“We've got 4,000 agreements between farmers and the gas industry in Queensland to co-exist and that's allowed the LNG industry to develop,” Macfarlane said in a radio interview over the weekend.

“Without that in NSW, we've seen the CSG supplies stay in the ground and NSW is facing a situation now where it will run short of gas by 2016.”

A recent Grattan Institute report disagrees, saying; “While the eastern gas market is likely to tighten over the next five years, overall gas availability does not appear to be the issue. Rather, it appears to be a question of price.”

The Australian Petroleum Production and Exploration Association (APPEA) says frequent government imposition in NSW “continues to send the signal that the state is closed for business.”

Various industry bodies have helped douse the Industry Minister’s somewhat alarming claims. Though there are several projects whose leases expire in 2016, for the most part the state’s gas industry remains only partly developed, with an adequate reserve.

Several proposals have been made to prevent NSW running out of gas, if that is indeed happening. Some say the state should take on a reserve system as Western Australia has, where it compulsorily dedicates a percentage to the local market.