The Guardian, which has a publicly stated policy campaign to encourage fossil fuels divestment, published a story last Friday titled: Commonwealth Bank: coal seam gas makes property ‘unacceptable' as loan security.

The newspaper claimed an ‘exclusive' report that it had obtained a letter from the bank that showed the presence of four wells on a 240-acre property currently on the market was the sole reason given for refusing the owners' application for a $500,000 bridging loan to buy a new home.

"Long form valuation has revealed coal seam gas wells on the land, making the security unacceptable for residential lending purposes," was what the bank said, according to The Guardian.

Later that day the bank issued a statement saying: "The basis of the story, that Commonwealth Bank does not lend to individuals or businesses involved in coal seam gas, is wrong.

"Commonwealth Bank assesses every loan application on a case-by-case basis. Commonwealth Bank does not have a policy of excluding coal seam gas wells as acceptable security in our regional and agribusiness banking."

Shell-owned Queensland Gas Company, which operates the Queensland Curtis LNG project, said no properties had been negatively affected by the presence of their infrastructure.

QGC also reportedly refused to buy the property when approached by the property owners.

The Australian Petroleum Production and Exploration Association jumped on Commonwealth Bank's prompted denial, saying there was "no evidence" that the gas industry was having an impact, negative or positive, on property valuations or loan applications.

"The Gasfields Commission Queensland recently noted that some property listings underline the benefits of compensation paid to landholders or the economic opportunity that comes from being located near gas operations," APPEA said.

Evidence lacking

While Energy News understands APPEA is right about the lack of evidence either way, compensation and internal corporate ambiguity are part of the complexities that make the issue so hard to get clarity on.

Associate Professor Will Rifkin, chair in Social Performance at the Centre for Social Responsibility in Mining at the University of Queensland's Centre for CSG, said the Commonwealth Bank issue highlighted not only how banks make decisions on the basis of CSG wells but how much to loan farmers.

"If a farmer has a compensation agreement for $100,000 a year, will the bank loan them any more money?" Rifkin, who heads up UQ's team that has forensically researched the industry's impact on everything from agriculture to the property market, pondered to Energy News.

His team recently undertook a major project on the CSG industry's impact on productivity and profitability of farms which will be released in the next few weeks.

"We did some peripheral research and found that there weren't very many farms changing hands, so you couldn't draw conclusions," he said.

"What we've found out in the initial investigation was that the amount of money being loaned doesn't necessarily go up, but the interest rate might go down a bit because of that steady income.

"So there's this secondary level in terms of value of farms, where the farmers are cash poor and asset rich, and you have this intermediary which is the financial sector making decisions.

"The challenge with the Commonwealth Bank story is that you don't get the whole story about who in the bank was making the decision, what were the factors they were considering, and what was the history of the person who was asking for the loan."

Though the Commonwealth Bank denied the policy claimed in The Guardian, Rifkin said this inconsistency was typical across various sectors.

"You have the bankers in Western Downs and in Brisbane. We don't know what's happening within the various parts of the organisation - and that's the story of CSG development in general," Rifkin said.

"You have large organisations that have silos and regional offices and offices in Brisbane, so with any one incident you can't tell what the whole organisation wants or whether that's what some manager wants - and that's as true for the gas industry as it is for the state government, as it is for the financial institutions.'

Rifkin said his team could well embark on another comprehensive study of how having wells on CSG properties impact valuations.

"Making things more complicated is that some of these farmers might have had multiple businesses, including something construction related, so there was a fairly significant influx of income in these non-farm businesses into this region," he said.

"So for those farmers who have that extra money, how does that affect the financing and their disposition to sell or hold onto their farm?

"Whether farmers have a ‘non-farm business' or multiple businesses will shift the financial strategy being undertaken in the region."