Wine growers in Hunter Valley who belong to the area's wine industry association sought to kick out gas giant AGL Energy Limited (ASX: AGK) from their ranks because of the firm's stand on coal seam gas (CSG).

The Hunter Valley Wine Industry Association (HVWIA) has long been against CSG exploration and mining because it could not environmentally or aesthetically co-exist with wine growing and tourism.

"CSG exploration and mining just don't belong in Australia's most iconic winery region. Unsightly gas wells and rigs are a blight on the local landscape and are a threat to underwater aquifers. Heavy vehicles, mining infrastructure and waste don't belong adjacent to historic vineyards and boutique hotels. AGL doesn't belong in the HVWIA," HVWIA President Andrew Margan said in a statement.

Mr Margan said that the association asked AGL in November to withdraw its membership, but did not. He added the HVWIA gave AGL a fair hearing, but the group nevertheless believes it is in their fair interest to expel the gas firm from their ranks.

He cited as proof of AGL's acting against the interest of wine growers an incident in early November when an AGL employee removed CSG protest signs and a banner from private property near Broke. AGL arranged for the signs to be returned after the incident was made public and apologised for the employee's behavior, which Mr Margan noted that AGL did not condone.

However, he pointed out that it was an example of the tense relationship between local residents, vignerons and the gas company.

"Viticulture, tourism and CSG mining are not compatible land uses. It's vital we protect the Hunter Valley from the proliferation of gas wells which has already begun with AGL's purchase of properties in the region. We simply can't sit by and let one of Australia's key areas for wine production and tourism be environmentally and aesthetically ruined by CSG exploration," said Stewart Ewen, spokesman of the Hunter Valley Protection Alliance (HVPA).

The HVPA and HVWIA have been pushing the New South Wales government to implement a ring-fence policy in the state to protect known vineyard areas by excluding other forms of development or industrial activities, including CSG exploration and mining. The two groups presented to NSW Premier Barry O'Farrell a petition signed by 11,000 residents who sought a stop to CSG projects in the state.

AGL, in its 2011 Sustainability Report, said that in response to concerns by residents of Hunter Valley, Camden and Gloucester in NSW and Moranbah in Queensland that its CSG activities have disrupted local house markets and caused housing prices to suffer, it commissioned an analysis of these markets.

AGL tapped RP Data to undertake the analysis of median house price movements and number of transactions record over time.

"The analysis shows that the housing markets within each of the regions where AGL are active have shown no discernible deviation from broader market trends. Across each of the four operational regions studies, median price movements and transaction volumes are generally moving in line with the broader benchmark results," AGL quoted the study.

AGL added that in May 2011 in opened the Hunter Customer Service and Community Information Centre to share information on CSG operations in the area. Besides Hunter Valley, AGL has a similar centre in Burra, South Australia to provide information about its Hallett wind farm projects.

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