Chapter 2
WATER
Introduction
2.1
There is a range of potential impacts on the Murray-Darling system from
the coal seam gas industry which are of major concern both in their own right
and to the committee's general inquiry - the impacts on ground water and
aquifers, the extraction or recovery methods used, the treatment and disposal
of extracted water, the management of salt and brine, the impact of the whole
process on surface water and soils and the implications for agricultural land
use where gas production facilities are located on productive land are all areas
of concern to the committee. These matters are considered in this and later
chapters.
2.2
Groundwater is a vital resource for agricultural, domestic and urban use
across much of the Murray-Darling Basin. Nor can it be considered in isolation
from surface water. Depending on the topography and geology, at various places
in the Basin surface flow recharges aquifers and, conversely, groundwater
contributes to surface flows. The National Water Commission has stated:
Although it is not always apparent, surface water in many
rivers, dams, lakes and wetlands is connected to underground water resources in
aquifers. There are several different examples of these connections ...This
connectivity means that issues such as over-extraction, environmental flows and
river salinity could impact on the water quantity and quality in both ground
and surface water systems.[1]
2.3
The major risks associated with the coal seam gas industry are whether
it has the potential to significantly deplete the groundwater on which
agriculture and regional communities depend, to contaminate higher quality
water, to alter the hydrology of the affected regions, or to do irreparable
damage to the aquifers containing that water.
Groundwater
2.4
As described in the previous chapter, CSG mining requires the removal of
very large volumes of water from coal seams to reduce the pressure in them,
enabling the gas to flow into wells for extraction.
2.5
The CSG water is, generally, extracted from much deeper underground than
the depths of bores used in agriculture or for town water supply and the coal
seams are separated from those water sources by low permeability aquitards.
However, while most town and agricultural bore water is at much shallower
levels, and the water in coal seams is of low quality, there is some limited
use of water extracted from these seams, including, as AP LNG acknowledged in
information material, the Walloon Coal Measures in south-west Queensland.[2]
2.6
Some of the gas companies have tended to express the amount of water to
be extracted as a proportion of the total volume of the Great Artesian Basin
(GAB). For example AP LNG, in its submission to the committee, commented that:
Compared to the total storage capacity of the GAB, the amount
of water projected to be extracted during CSG production is very small. At the
peak of water production, the annual water extraction is likely to be less than
0.0002% of total storage. ... It is therefore submitted that the CSG industry
will have negligible impact on total storage volumes.[3]
2.7
QGC in its submission stated that:
At this continental scale, the QCLNG Project environmental
impact assessment did not identify any measurable impacts on the MDB surface
and subsurface water resources as a result of QGC’s gas development.
Hydrogeologic evaluations using available data and modelling
also indicated that the impact of coal seam gas extraction on the overall Great
Artesian Basin would be insignificant with the QCLNG Project likely to extract
less than 0.001% of the water in the basin over the life of the Project.[4]
2.8
The impact on the total storage volume of the GAB is not the issue. The
core issue with regard to the possible impact of the CSG industry on
groundwater is clearly stated in advice to the Australian Government:
...we consider that the overriding issue in CSG development
is the uncertainty surrounding the potential cumulative regional scale
impacts of multiple developments. The information provided in the
assessed EIS documents is not fully adequate for understanding the likely
impacts of CSG development across the Surat and Bowen Basins; nor will any
level of information or modelling that can be provided by individual proponents.[5] [emphasis
added]
2.9
The Geoscience Australia/Habermehl Advice goes on to state that what is
required to provide a full understanding of the possible impacts is "... a
regional-scale, multilayer ground water flow model which incorporates data from
both public and private sector sources".[6]
The Advice's third recommendation is for the creation of such a model,
requiring "concerted Commonwealth and State action" as a "high
priority".[7]
2.10
There is an element of 'Catch 22' in the Advice, given that it is
part of the approval process for production, in that it also concludes that,
... any modelled outcomes will be accompanied by high
inherent uncertainties until sufficient CSG production data is available to calibrate
the groundwater model.[8]
This suggests that the cumulative impact of CSG production on
groundwater will only be fully assessed as production increases.
2.11
The GAB underlies much of the northern part of the Murray-Darling system
in northern New South Wales and south-west Queensland, the major areas in which
CSG exploration and production is currently taking place. The GAB is,
... composed of a sequence of sediments that form aquifers
and confining layers (aquitards). The thickness and lateral extent of
sediments that have formed aquifers and aquitards depend on conditions at the
time of sediment deposition, which ranges from 65 to 250 million years ago, and
all the geologic forces that have occurred since.[9]
2.12
The CSIRO adds, with masterly understatement, that "... it is
challenging to visualize the exact structure". Aquitards are layers of
very low hydraulic conductivity; i.e. water flows through them, if at all, at a
very slow rate. The aquitards restrict vertical flow of groundwater resulting
in artesian pressure in the aquifers. Similarly aquifers have varying rates of
horizontal conductivity.
2.13
The structure of the Basin is important when considering the likely
impact of CSG extraction on groundwater. It is not a vast underground 'sea' in
which levels and pressures quickly and uniformly adjust to the extraction of
water from one part. Rather it is a highly complex system of geological
formations at a range of depths, of variable permeability holding water of
different quality, at different pressures and through which water flows at very
different rates, if it flows at all.
2.14
The reduction in pressure in a coal seam will result in a local fall in
the water level and pressure in that particular area which may alter the rate
and direction of the movement of groundwater in adjacent formations. The impact
of this change may take many years to have a measurable impact on adjacent
aquifers. Similarly the contingent loss of water from adjacent aquifers may not
be made good by natural recharge for decades or even centuries.
2.15
As CSIRO states:
The principles [of hydrogeology] are well understood, but
applying those to characterise the unique situation of each aquifer is fraught
with difficulty. To properly understand a groundwater aquifer relies on
information about aquifer dimensions, structure, and permeability, as well as
the timescales of recharge, discharge and groundwater flow. It requires many
bore holes to be drilled and pumped tests to be undertaken.[10]
And:
The difficulty in the Great Artesian Basin is that
groundwater flow velocities are slow, waters are old and any unforeseen
consequences of extraction will take decades or centuries to work through the
aquifers. The overriding issue is the uncertainty of the potential
cumulative, regional impacts of multiple developments.[11] [emphasis
added]
2.16
In addition to the possible loss of water from aquifers used for
agriculture, town supplies or to maintain environmental flows, depressurisation
may allow lower quality water to contaminate higher. CSIRO has warned that,
The complex movement and interactions of different layers of
water can be hard to detect but they have a direct effect on the sustainable
use of the resource, such as protecting fresh groundwater from being polluted
by nearby saline layers.[12]
2.17
Landholders' organisations have also identified the local impact of
water extraction as a key issue. A spokesman for the Basin Sustainability
Alliance in Queensland told the committee that,
The water has to go back to where it came from. We have to
maintain that groundwater system; there is no option. The companies cannot
develop irrigation farms or tree plantations or pipe it down the river or send
it to Toorong or Nathan Dam. It has got to be used beneficially in the area of
extraction to maintain the groundwater system for future generations.[13]
2.18
The question of the level of understanding of the system and the
capacity to predict likely impacts is at the heart of this whole inquiry. The
National Water Commission (NWC) has produced a position paper on coal seam gas
in which it identifies a number of areas of concern, both for surface and
groundwater. The Commission considers that "...Potential impacts of CSG
developments, particularly the cumulative effects of multiple projects, are not
well understood".[14]
2.19
The NWC's reservations are based on its scientific work, which has been
supported by other scientific bodies. In a recent briefing to members of
Parliament, CSIRO emphasised that:
Prediction of specific impacts of CSG developments requires
ongoing research because groundwater responses may take decades or centuries to
move through aquifers, especially when groundwater flow velocities are slow.[15]
2.20
CSIRO notes that the attitude to the management of groundwater in
Australia has changed in recent decades:
Groundwater was managed as a resource to be mined, much like
the rocks in which it lies, but it is now managed as a renewable resource,
recognising that it is recharged from rainfall and discharges in to rivers,
lakes and oceans, and through vegetation. Consequently groundwater management
faces many of the same sustainability issues as surface water. Ecosystems
depend on the discharging groundwater, and over-extraction of groundwater can
lower water tables or the pressure of water ... .[16]
2.21
The Organisation has also emphasised the level of uncertainty with
regard to the various risks associated with the extraction of water on this
scale. In a briefing to the committee, it identified a range of risks
associated with lowering aquifer pressures:
- migration of methane ... through aquifers and to other wells;
- changed hydraulic gradients, leading to leakage of water from
aquifers or of migration of saline water into aquifers; and
-
impact on mound springs; and subsidence.
2.22
CSIRO also commented that "whether these risks are significant
depends on the hydrogeological context: information is not available to judge
this at the larger scale".[17]
2.23
A paper from the Queensland Department of Mines & Energy makes
similar points:
With the large induced pressure gradients induced by
dewatering, hydraulic connections with other seemingly isolated aquifers can
easily appear ... the reduction of pressure in the aquifer because of
dewatering could induce noticeable hydraulic connection in places where it was
not noticeable previously.[18]
2.24
CSIRO noted the it was "Difficult to accurately estimate impacts
because of":
- the relatively recent history of extraction;
- long time delays associated with groundwater processes; and
-
the challenges with setting baseline conditions and measuring
cumulative impacts.[19]
2.25
It is important to bear in mind, when considering this issue, that the
Murray-Darling system including groundwaters and aquifers, was already a system
under stress before the gas industry appeared. The NWC has identified a major
risk:
Extracting large volumes of low-quality water will impact on
connected surface and groundwater systems, some of which may already be fully
or overallocated, including the Great Artesian Basin and Murray-Darling Basin.[20]
2.26
Major efforts have been undertaken in recent years to try to rectify
this situation.
Thousands of wells have been drilled into the Basin's highly
productive confined aquifers, and many have been left to flow, lowering aquifer
pressure and encouraging feral animals and weeds ... a program of well capping
is restoring pressure to the system to enable sustainable use and maintenance
of dependent ecosystems.[21]
2.27
At a regional level, a witness described the impact of the situation on
local water users to the committee:
About 20 years ago bore owners within the entire management
area were cut back to 70 per cent of their nominal entitlement and in the last
few years during the height of the drought bores within subarea 3 were cut back
to 50 per cent. This was without compensation and without access to north
branch water or overland flows and so we had to turn the pumps off and watch
our crops die.[22]
2.28
This comment refers to the area dependent on the Condamine Alluvium,
described elsewhere as, "...one of the most heavily extracted aquifers in
the Murray-Darling Basin".[23]
Another key area for coal seam gas development, the Namoi Catchment in northern
NSW, is described as:
... one of the most intensely exploited groundwater resources
in Australia. It is a stressed system in which it was realised too late that
rates of groundwater pumping were too high.[24]
2.29
Government and the industry are not blind to these concerns. Extensive
research is being undertaken. The Queensland Government is close to completing
a groundwater model of the cumulative impact on the Surat Basin of the CSG
industry and the industry itself is undertaking very extensive drilling to
contribute to this model and to try to predict the impact of this industry's activities.
2.30
The Environmental Impact Statements (EIS) submitted by QGC, Santos and
AP LNG for their Queensland projects were reviewed by Geoscience Australia and given
qualified approval at the individual project level. The need for further work
and the accumulation of more data was referred to repeatedly.[25]
2.31
In some areas, particularly with regard to the risk of cross
contamination and artesian pressure, the likely impact was assessed as low.
Groundwater was considered likely to flow into the coal seams rather than the
reverse and, because most of the bores in the CSG tenements are sub-artesian
(not under natural pressure) they were unlikely to be affected by changing
artesian pressures in the medium term.[26]
The large variation in pressure between aquifers which gas company drilling
confirms does suggest that the strata between them – the aquitards – have very
low permeability.
2.32
The wells themselves are also a potential channel which could cause
linkage between aquifers, especially in the long-term where abandoned wells
degrade over time. Evidence to the committee suggested that this area has not
received much attention in Australia.[27]
2.33
It is in the longer term and having regard to the cumulative impacts of
a number of developments that uncertainty becomes a real cause for concern. This
is acknowledged by the gas companies. For example AP LNG commented in its submission
to the committee that:
The Queensland and Commonwealth Governments have taken the
approach of adaptive environmental management with regard to the CSG to LNG
industry. This acknowledges that there are some unknowns with regard to
groundwater behaviour and allows for changes to be made to processes to
accommodate new understandings.[28]
[emphasis added]
2.34
A study carried out by the University of Southern Queensland for four
major gas companies[29]
operating in the Surat Basin commented that:
Despite the low permeability of the aquitards overlying and
underlying the Walloon Coal Measures, groundwater extraction to reduce the
water pressure in the coal seams may induce some vertical leakage into the coal
seams and produce impacts on the surrounding sandstone aquifers.[30]
Baseline Knowledge & Make good provisions
2.35
A key issue for both affected communities and the gas industry is the
development of reliable baseline knowledge of groundwater levels and pressures
and the condition of existing bores. The issues of compensation and making good
adverse affects attributable to the gas industry depend on having such
knowledge.
2.36
The industry has already had to deal with claims that its activities are
resulting in methane flowing into agricultural bores. AP LNG in its submission
to this inquiry noted that, in the Hopelands area in Queensland:
... where the Walloon Coal Measures are shallow and are used
for stock water supply ... heavy water extraction from water bores can
replicate the CSG production process, depressurising the coal measures and
causing significant amounts of natural gas to flow.[31]
2.37
As part of its baseline monitoring program AP LNG has tested a
large number of bores and "...
more than 80% have
recorded various levels of methane within the bores. This is prior to CSG
operations taking place in these areas".[32]
Anecdotal evidence suggests that the presence of methane in stock and domestic
bores in this region has been obvious for generations.
2.38
The state governments in cooperation with industry sets trigger points
for water levels and pressures in bores which are monitored to give early
warning of an adverse impact from CSG mining. To avoid uncertainty (and
litigation) no project should be given approval until a comprehensive study of
all bores likely to be impacted by a project has been undertaken not only to
assess water levels or pressure but also to test for the presence of methane.
2.39
The Queensland Government has recently amended its Water Act to require
the industry to:
- provide baseline assessment plans and conduct baseline bore
assessments;
- determine potential impacts to landholder’s water supply bores
and enter into ’make good‘ agreements with bore owners if bore supply is likely
to be impaired by a petroleum tenure holder’s extraction of underground water;
- avoid and manage impacts on springs; and
- respond to groundwater modelling by the Queensland Water
Commission which will identify areas that are likely to experience groundwater
level decline and therefore areas where bores may experience an impaired
capacity.[33]
2.40
As an example, Santos has developed a program of groundwater monitoring
that:
includes installation of more than 40 new groundwater bores,
installation of automated monitoring facilities on more than 40 existing farm
bores, installation of several deep multi-level pressure sensors, and
conversion of conventional oil and gas wells to deep basement groundwater
monitoring locations. A baseline inventory of more than 350 bores in the Roma,
Fairview and Arcadia Valley regions, has been completed already, accompanied by
an extensive sampling program.[34]
2.41
The company argues that this will enable it to detect "...groundwater
changes several years in advance of their first appearance in local aquifers".[35] This early
detection would allow the company to implement 'make good' actions well in
advance of any impact on local landholders or communities. Santos has indicated
that the 'make good' provision could include the ceasing of water production in
the affected area.
2.42
Where there is proven impact by a CSG company on an adjacent landholders
water supply, the company is required to make good that damage. The most likely
impacts are the loss of pressure in a landholder's bore or the lowering of the
water level to such an extent that the bore no longer produces water. Make good
options range from the relatively straight forward to the complex and unproven.
2.43
The simplest responses will be to deepen existing bores, sink new bores
or improve the capacity of pumps. It may also be possible to provide the
landholder with suitably treated water from the companies own storage ponds to
supplement or replace the impacted supply.
2.44
The Queensland Government has adopted reinjection of produced water as
its favoured method of managing CSG water. One application of this would be to
inject suitably treated water from a coal seam into the aquifer supplying
agricultural or domestic users. The gas companies are working on the
reinjection question but, at this stage its feasibility is not proven.[36] As a last
resort the gas companies acknowledge that some form of 'alternate compensation'
may be necessary.
2.45
The committee did not get a satisfactory explanation of what alternative
compensation means. A farmer deprived of his water supply requires an
alternate, reliable, long term supply; without it the property may cease to be
viable. Does alternate compensation mean that in extreme circumstances the
property holder will be bought out at a price that reflects the pre-CSG value
of his property plus a premium reflecting his loss of livelihood?
2.46
The committee believes that the extent of the gas companies' liability
in such extreme circumstances needs to be clarified.
Committee view
2.47
The committee is concerned that the combination of the complexity of
interactions within and between aquifer systems, uncertainty with regard to the
long-term impact of CSG-related water extraction and the fact that the GAB in
the areas under most intensive CSG development is already generally
acknowledged to be a system under stress is not being given sufficient weight
by policy makers in approving the expansion of the industry.
2.48
As mentioned above the Commonwealth and Queensland Governments have
adopted an approach described as adaptive management, which will enable the
management of the industry to be adjusted in response to the developing body of
knowledge and unanticipated problems. This approach assumes that any unforeseen
consequences that appear within the relatively short lifetime of the industry
will be manageable.
2.49
The uncertainty inherent in such an approach would be significantly
reduced if, before any more approvals are granted for CSG production, the
Commonwealth acted on the advice of Geoscience Australia and developed:
... a regional-scale, multi-state and multi-layer model of
the cumulative effects of multiple developments and a regional scale monitoring
and mitigation approach ... to assess and manage these impacts.
Geoscience Australia considered the need for this to be a
"high priority".[37]
2.50
The committee recognises that the accumulation of understanding of the system
is a major undertaking.
To resolve the issues of water extraction ... across several
development proposals and thousands of wells requires a good characterisation
of basin geology and how it controls groundwater pressures, flows, connections
and quality. This will help to answer the critical question of how much leakage
will occur between coal seam beds and useable aquifers.[38]
2.51
The development of the necessary knowledge is heavily dependent on the
research work being carried out by the gas companies. Exploration bores are
expensive and, without commercial incentives, including a level of security
that discovery of commercial quantities of a resource will lead to production
of that resource, it is unlikely that industry would undertake the necessary
research.
2.52
Origin Energy report that early production experience in Queensland
suggests that the volume of water required to be removed from coal seams is
significantly less than was predicted in the early stages of development.[39] While this
is welcome it does underline the uncertainty with regard to the reliability of
estimated impacts.
2.53
In this situation it appears that the best workable compromise is that
future production approvals be delayed until comprehensive modelling at a
regional level is undertaken and sufficient data is accumulated to ensure the
robustness of the modelling and that no individual project be given approval
unless it has been fully assessed in terms of the cumulative impact of all
proposals in a given region.
2.54
The Queensland Government is developing "...a regional groundwater
model to predict possible cumulative impacts of CSG extraction" including
data provided by the CSG companies.[40]
CSIRO and Geoscience Australia have also been commissioned by the Commonwealth
to undertake "...a basin-scale investigation of water resources to fill
knowledge gaps about the status of water resources in the basin and the
potential impacts of climate change and resource development".[41] This study
is expected to be completed by the end of 2012.
2.55
In New South Wales the Namoi Water catchment includes most of the
area currently subject to exploration for coal seam gas. The catchment is the
subject of a study undertaken:
- To provide a spatial understanding of underground and surface
water flows in the catchment ... [and]
- To undertake a strategic assessment of the likelihood of
potential impacts posed by coal and gas developments in the Namoi catchment on
the quantity and quality of surface and ground water resources in the
catchment.[42]
2.56
In view of the consensus of expert opinion that detailed regional
studies of underground water should be undertaken before CSG production is approved,
and given the comment quoted above from CSIRO that the Namoi catchment is
"... one of the most intensely exploited groundwater resources in
Australia", it is clearly desirable that no production permits should be
approved for this region prior to the completion and evaluation of this study.
The study is scheduled for completion in April 2012.
2.57
In this committee's opinion, in view of the levels of uncertainty
acknowledged by professional bodies and industry, the production approvals for
the initial projects in Queensland were given prematurely. Studies that are
underway should have been completed and their implications fully assessed and
recommended studies such as that in the Geoscience Australia/Habermehl report
should have been undertaken.
Recommendation 3
2.58
The committee recommends that, given the degree of uncertainty
about the long-term consequences of the CSG industry on the water resources of
the Great Artesian Basin, that the Commonwealth not give any further approvals
for production of CSG in that part of the Murray-Darling Basin overlying the Great
Artesian Basin pending the completion of the Queensland Government's regional
groundwater model and the CSIRO & Geoscience Australia basin scale
investigation of water resources.
Recommendation 4
2.59 The committee recommends that the Commonwealth await the
completion of the Namoi Catchment study before considering any applications
under the Water Act or the Environment Protection and Biodiversity
Conservation Act 1999 for approvals to undertake coal seam gas production.
Recommendation 5
2.60
The committee recommends that all future CSG development
approvals should be preceded by the development of "... a regional-scale,
multi-state and multi-layer model of the cumulative effects of multiple
developments" of ground and surface water as recommended by Geoscience
Australia.
2.61
The potential for the resource industries generally to require special
regulation was recognised in the National Water Initiative (NWI):
Under clause 34 of the NWI the signatory governments agreed
that there may be special circumstances facing the petroleum and minerals
sectors that need to be addressed by policies and measures beyond the scope of
the NWI Agreement.
2.62
The NWC paper notes that "...little progress has been made ... in
fleshing out the special provisions for the minerals, petroleum and related
industries. As a consequence, there has been little integration of those
industries with broader water markets and water planning processes".[43]
2.63
The committee notes the recent announcement by the Commonwealth that it
will establish an Independent Expert Scientific Committee to advise the
Commonwealth on 'best practice' for the CSG industry. This body may assist in
the better integration of the CSG industry with broader water policy. It needs to be noted that this body is primarily to
advise the states, which will continue to be the primary regulator of the CSG
industry. If implemented as currently envisaged by the Commonwealth Government
the states will only need to "take account" of that advice.
2.64
The committee is concerned that the impact of the coal seam gas industry
on the Great Artesian Basin is being considered in a piecemeal way. Approvals
for the first two CSG projects in Queensland only considered their likely
impact at the level of the individual project.
2.65
Later approvals now require an assessment of the regional or cumulative
impacts. However given that the Great Artesian Basin in the areas subject to
intensive CSG development does not fit neatly into state boundaries, the
committee believes that it is important to assess cumulative impacts on the
Basin of all projects. The Commonwealth has two main legal avenues to do this.
2.66
The Water Act 2007 (C'wealth) at section 255 AA states
that:
Prior to licences being granted for subsidence mining
operations on floodplains that have underlying groundwater systems forming part
of the Murray-Darling system inflows, an independent expert study must be
undertaken to determine the impacts of the proposed mining operations on the
connectivity of groundwater systems, surface water and groundwater flows and water
quality.
2.67
This part of the Act has been used by the Commonwealth to require
independent studies of CSG proposals. However the committee believes it would
improve the approval system to go further and include the relevant parts of the
GAB in the definition of Murray-Darling Basin water resources. This would make
it explicit that 'groundwater' included the deep aquifers of the GAB.
2.68
The general object of the Commonwealth's
Water Act 2007 is "... to enable the Commonwealth, in conjunction
with the [Murray-Darling] Basin States, to manage the Basin water resources in
the national interest", and specifically to:
(i) to ensure the return to environmentally sustainable
levels of extraction for water resources that are overallocated or overused;
(ii) to protect, restore and provide for the ecological
values and ecosystem services of the Murray-Darling Basin (taking into
account, in particular, the impact that the taking of water has on the
watercourses, lakes, wetlands, ground water and water-dependent
ecosystems that are part of the Basin water resources and on associated
biodiversity); and
(iii) subject to subparagraphs (i) and (ii)—to maximise
the net economic returns to the Australian community from the use and
management of the Basin water resources.[44]
2.69
The Act specifically excludes "ground water that forms part of the
Great Artesian Basin".[45]
The committee believes that the effective management of the Murray-Darling
Basin, having regard to the objects set out in section 3 of the Act, requires
management of the surface and underground water in an integrated manner.
Recommendation 6
2.70 The committee recommends that the Commonwealth take the necessary
steps to amend the Water Act 2007 to include that part of the Great
Artesian Basin that underlies the Murray-Darling Basin within the definition of
Basin water resources.
2.71
The Environmental Protection and Biodiversity Conservation Act 1999
(EPBC Act) also has a significant part to play in regulating the coal seam gas
industry. One of the specific 'triggers' for review of a project under this Act
is that it may pose a threat to Ramsar wetlands and "...listed threatened
species or endangered ecological communities".[46]
2.72
The committee notes the view expressed by CSIRO that the GAB:
... is one of the world's largest continuous groundwater
systems and supports hundreds of springs and wetlands, many of which are listed
as significant by the Ramsar Convention on Wetlands of National Importance.[47]
2.73
The approvals for the three projects currently in the production phase
in Queensland – QGC, Santos and AP LNG – all required approval under the EPBC
Act for, among other things their potential impact on Ramsar listed wetlands
and the communities of native species dependent on natural discharge of
groundwater from the GAB.
2.74
All the literature on the movement of groundwater in aquifers,
particularly artesian aquifers, agrees that it is slow and complex and that the
consequences of changes in one part of the system may take many years to show
up in another place. Therefore protecting wetlands and springs ultimately dependent
on the GAB must require consideration of 'actions having a significant impact'
on the GAB generally, not just in the specific area of the particular spring or
wetland.
Recommendation 7
2.75 The committee recommends that the Commonwealth take the necessary
steps to amend the Environmental Protection and Biodiversity Conservation
Act 1999 to include the sustainable use of the Great Artesian Basin as a
'matter of national environmental significance'.
Subsidence
2.76
Land subsidence as a result of water and gas extraction has been raised
as an issue for the industry. There is concern that significant subsidence
could alter surface drainage patterns, with a serious detrimental impact on
agriculture on the affected land.
2.77
Extraction of groundwater is a common cause of land subsidence. However
the incidence of subsidence is a product of the geology both of the seams from
which the water is extracted and the surrounding layers. In the case of coal
seams they are largely composed of consolidated material with a very limited
capacity for compaction.
2.78
The committee notes the conclusion of Geoscience Australia's advice to
the Australian Government on this question: that although "...there is a
likelihood of subsurface subsidence and that this could result in surface
subsidence...we consider the risk of impacts to surface water and shallow
groundwater systems is very low".[48]
2.79
The advice went on to recommend that monitoring by two of the three
proponents be "... strengthened by assessing deformation at the land
surface". Both surface and subsurface monitoring by the third proponent
was considered appropriate.[49]
2.80
The committee has been advised that the three proponents considered in
the Geoscience Australia advice, QGC, Santos and AP LNG, plus Arrow Energy have
now combined and:
... have commissioned a regional Interferometric Synthetic
Aperture Radar study of historical and current earth surface movements to
provide certainty for regulatory and public concerns.[50]
Recommendation 8
2.81 The committee recommends that all future approvals require independent
comprehensive monitoring of regional earth surface movements to assess whether
any measurable subsidence is occurring. Where subsidence occurs and has an
adverse effect on land management or the natural environment, for example by
altering drainage, the responsible gas companies would be liable for any
necessary remediation. Further all gas exploration and/or production in an area
subject to subsidence or impacts from subsidence not foreseen in the EIS should
cease until action is taken to ensure that no further damage will occur. Where
subsidence occurs in a gas producing region the onus lies with the gas
companies to demonstrate that the subsidence is not a result of gas production
activities.
Fraccing
2.82
Much of the anxiety about this industry has focussed on the process of
flow enhancement by hydraulic fracture. Fraccing has become almost synonymous
with the industry as a whole and a shorthand for a wide range of anxieties
about the industry.
2.83
As described in the introduction methane, is trapped in pockets or
cleats within coals seams. If those seams are relatively open, once the water
pressure in them is reduced, the gas will flow. However in some seams the cleat
system is too tight to permit easy gas flow and the seam must be opened by
fraccing. Fraccing may also be used to increase the efficiency of individual
wells thus reducing the number of wells that need to be drilled.
2.84
This involves the injection of large volumes of water, up to 10
megalitres according to CSIRO,[51]
mixed with chemicals and sand directly into the target seam to cause cracks to
run through the seam; the sand is there to hold the cracks open after the
fraccing water is withdrawn. The chemicals have a number of functions,
principally to keep the sand in suspension in the water. After fraccing most of
the fluid used, including chemicals is withdrawn from the well. The fluids extracted
contain both the fraccing chemicals and other chemicals mobilised in the coal
seam plus other elements including heavy metals.
Recommendation 9
2.85 The committee recommends that it be a requirement of all
exploration or production approvals that the fluids extracted from wells after
fraccing are kept isolated in secure separate storages and prior to disposal
are treated to the highest standards.
2.86
Fraccing is not a new process; it has been practiced in Australia and
overseas for many years. It is not in the industry's interest for fraccing to
cause unintended damage or leakage into adjacent aquifers during the productive
life of the well – that would defeat the purpose of the frac.
2.87
It is important to note that fraccing is not necessary in a large
proportion of wells and there are alternative and less intrusive methods of
encouraging gas flow. Eastern Star Gas has stated that there is no requirement
to use fraccing in its Narrabri, NSW, project:
Fraccing was tried at Narrabri but the process was found to
be unsuitable ... Lateral wells as now utilised are much more efficient and
cost effective.[52]
2.88
Similarly Dart Energy, which is undertaking exploration activities in
the Newcastle region of NSW indicated that they would rely on horizontal
drilling rather than fraccing.[53]
AP LNG estimates that approximately 30% of its wells will require fraccing. Note
that fraccing and horizontal drilling are not mutually exclusive production
methods. Horizontal wells may be fracced. This will reduce the impact of
drilling on the land surface.
2.89
In addition to the potential of fraccing to cause damage to geological
structures public concern has focussed on the toxicity of the chemical
additives in the fraccing fluid and the potential of the fraccing process to
mobilise naturally occurring BTEX chemicals. The industry has tended to play down
the potential risks associated with the chemical additives used in fraccing,
pointing out that they are subject to stringent regulation requiring testing of
water both before and after their use, reporting to the authorities and
landholders and publication of the chemicals used.[54] However the
wide discrepancies in the lists of chemicals used suggests that there is a need
for more stringent reporting requirements. There must be a public listing of
all fraccing chemicals used by the industry.
2.90
The chemicals represent a small proportion of the fluid and are almost
all present in ordinary household products:
Materials used in the fracturing process include around 99%
water and sand, as well as about 1% of a range of chemicals in minute, diluted
quantities, which assist in carrying and dispersing the sand in the coal seam.
The chemicals are not specific to the CSG industry and have many common uses
such as in swimming pools, toothpaste, baked goods, ice cream, food additives,
detergents and soap.[55]
In addition, it is claimed, residues of the chemicals used
quickly degrade.
2.91
The chemicals, when used in household products, are very carefully
regulated as to concentrations and use. For example, hydrochloric acid is
included in one company's list of fraccing chemicals with the note that it is
used in swimming pool maintenance while caustic soda is described as being used
as a cleaning agent and in food preparation. At different concentrations or
'not used as directed' many of these chemicals can in fact be extremely dangerous.
2.92
Critics point out that while the proportions may be small the actual
amounts used and the residue left in the ground can be very large:
Environmental authorisations by Queensland regulators
identified that in one CSG operation, approximately 18,500kg of additives were
to be injected during the hydraulic fracturing process in each well, with only
60% of these recovered and up to 40% of the hydraulic fracturing fluid volume
remaining in the formation, corresponding to 7,400kg of chemicals per injection
well.[56]
2.93
It is beyond the resources of this committee to settle the claims and
counter claims with regard to the safety of the chemicals used in the fraccing
process. However it was claimed by the National Toxics Network that,
In Australia, a review of a selection of CSG companies’
environmental authorisations identified 23 compounds commonly used in fracking
fluids. Australia’s industrial chemical regulator, the National Industrial
Chemical Notification and Assessment Scheme (NICNAS) has assessed only 2 out of
the 23.[57]
2.94
The committee heard from NICNAS and formed the impression that it is
drastically underfunded for the responsibilities it has.[58] NICNAS has
considered only four of the "50 to 60" chemicals used in fraccing
fluids. The wide discrepancy between the figures given for the number of
chemicals used reinforces the need for a public listing of all chemicals used
by the industry.
2.95
NICNAS does establish priorities for reviewing chemicals and relies on
assessments conducted in other countries that have similar regulatory systems
and standards to Australia in deciding whether review of a particular chemical
is a matter of urgency. In addition, many of the chemicals used by the gas
industry have been in common use in this country for many years and were 'grandfathered'
on to NICNAS registers and may never have been subject to assessment in the way
that new chemicals are.
Recommendation 10
2.96 The committee recommends that the Commonwealth provide funds to
NICNAS to enable that organisation to undertake a comprehensive review of the
chemicals used in fraccing, having particular regard to the quantities,
combinations of chemicals and the way in which these chemicals are used and to confirm
safe levels for their use. This study should be completed within the next two
years. The Commonwealth and state governments should act promptly to ensure all
fraccing activities comply with any NICNAS recommendations.
2.97
The committee notes that the BTEX group of chemicals which have attracted
some comment are not permitted to be used as fraccing chemicals in either
Queensland or NSW.[59]
2.98
The responsibility for licensing the use of these chemicals in mining
lies with state authorities, who do not have to take NICNAS's findings into
account.[60]
Action needs to be taken by the Commonwealth and state governments to ensure
all fraccing activities comply with any NICNAS recommendations.
2.99
A second major cause of anxiety with regard to fraccing is the physical
impact of the process on the coal seams and the surrounding formations. Here
again there are disputed claims about the safety of the process. Recent
publicity of fraccing carried out in shale formations in north-west England has
talked of explosions and minor earthquakes.
2.100
CSIRO has described fraccing as "... injecting fluid ... under high
pressure into the cased well. The pressure caused by the injection typically
creates one fracture in the coal seam where the well is perforated that ...
might typically extend to a distance of 200 to 300 metres from the well. The
fracture will grow slowly ... an average velocity may be less than 10 metres
per minute initially and slowing to less than 1 metre per minute ...".[61]
2.101
In contrast, the industry describes the process thus:
Hydraulic fracturing is not an explosive or high impact
process. It involves pumping a specifically blended fluid, charged with
proppants[62]
such as sand, down a well at sufficient pressure to force small passageways
into the coal seam.[63]
2.102
There is a risk that fraccing, in addition to opening up the coal seam,
might also affect geological structures surrounding the coal seam thus allowing
the movement of gas and/or water from the seam into adjacent aquifers or
conversely allowing groundwater to flow from the aquifer into the depressurised
coal seam. Secondly, there is a risk that residues of chemicals used in
fraccing may contaminate groundwater and aquifers used for human or stock
consumption or irrigation.
2.103
It is acknowledged that in one case in Australia, fraccing resulted in
damage to the Walloon Coal measures, causing leakage between that and the
Springbok aquifer. While apparently the damage was eventually made good by
sealing the damaged area, submissions to the committee raised a number of
concerns:
- that there seemed too little accountability. It is claimed that
the company involved did not advise the government for 13 months and the
Commonwealth Water minister may never have been advised;
- that the potential for damage to occur was known prior to the
fraccing and that this was treated as an acceptable risk;
- that part of the boundary between the aquifer and the coal seam
was intentionally fracced; and
- that it took 21 months to seal the interconnection.[64]
2.104
The Geoscience Australia report to the Commonwealth concluded that
"... the potential risks posed by fraccing are low". While fraccing
would "... fundamentally alter the structure of the targeted coal seam
aquifers" and that "... the potential for fraccing activities to
impact on ... other aquifers and aquitards ... can never be completely
eliminated ..." the report concluded that the measures adopted would
minimise any risk.[65]
2.105
The Queensland Government has tightened its regulations with regard to
fraccing, requiring notification to landholders both before and after a frac
and comprehensive reporting to the Government within two months which must
include details (and volumes) of all the chemicals.[66] These
details should be made public to afford the opportunity for independent
evaluation of the health implications of the chemicals.
2.106
With regard to contamination from fraccing fluids, CSIRO advised the
committee that "The risk associated with contamination from fracking is a
fairly small-scale, low-volume risk associated with a particular well bore".[67]
2.107
The committee accepts that fraccing is an established practice in the
industry for which there is many years experience and accepts Geoscience
Australia's assessment of the risks involved. However the incident referred to
above where fraccing did damage an adjacent aquifer does emphasise the need for
the applicable regulatory regimes to be backed up by an independent regulatory
agency with the capacity to impose significant penalties for breaches of the
regulations.
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