Inquiry Bursts The Gas Bubble


As wildcat booms go, it has been a doozy. Coal seam gas exploration took many years to get underway in Australia, and we came to the party somewhat later than the continental United States. But once the invitations went out, mining companies turned up in their droves, drilling thousands of exploration wells all over inland Australia.

Radio National’s Ian Townsend filed a report on the gas rush in mid-2010. It gives a flavour of the excitement in the coal seam export industry at the time. Townsend talked to a rural consultant named George Houen who told him that "people have to realise that we’re sitting on probably one of the greatest energy provinces in the world, and between the coal and the coal-seam gas, we have a resource here which is obviously going to be exploited for its value to the country".

A number of energy companies such as Santos and the Queensland Gas Company have announced vast gas export projects worth tens of billions. According to Bond University’s Tina Hunter, there are plans to drill over 40,000 wells in Queensland alone over the next five years.

What are they drilling for? Natural gas. Methane, to be precise, a hydrocarbon that is a potent greenhouse gas, but also a valuable source of energy. When burnt in a new combined cycle gas turbine, methane is responsible for about half the greenhouse gas emissions of coal, which is why many energy analysts see it as transition fuel on the road to fully renewable electricity generation. Coal sea methane gets its name from its origins, in the vast coal beds that lie underneath much of central Queensland, the Darling Downs and down into New South Wales. Coal mines have long been known to be "gassy"; the trick of coal seam gas is to capture the gas and eventually sell it to generators either in Australia or overseas.

Unfortunately, to get the gas often requires hydraulic fracturing, or "fracking". Fracking requires lots of water, and some nasty chemicals. And where this polluted water goes, once injected deep underground, and what effects it will have on vital aquifers, is very much the subject of the current controversy.

It’s also the focus of a recent Senate inquiry, chaired by New South Wales Liberal Senator Bill Heffernan, on "the impact of mining coal seam gas on the management of the Murray Darling Basin". The inquiry was launched earlier this year, in response to growing community alarm, particularly in rural and farming communities, that has led to the prominent Lock the Gate protest movement.

The interim report was handed down yesterday. It’s the most comprehensive so far on the possible environmental effects of coal seam gas mining on groundwater aquifers. The Committee discovered that very little is truly known about the Great Artesian Basin, and the likely impacts of such a widespread drilling program on it. A CSIRO expert who gave evidence to the inquiry told the committee 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".

The problems of pinning down what the environmental impacts of mining might be are exacerbated by the behaviour of many mining companies, which fall short of "best practice".

The Committee found that "particularly in its early stages there was no shortage of examples of ‘cowboy’ behaviour by exploration companies". It records "examples of land degradation caused by seepage from extracted water storage ponds, leaking gas pipes, untreated water seeping into watercourses and erosion caused by poorly installed pipelines". It also discovered an embarrassing level of uncertainty among mining companies about their processes.

The report doesn’t pull punches. It recommends that coal seam gas exploration be suspended in Queensland and New South Wales "in that part of the Murray-Darling Basin overlying the Great Artesian Basin".

Speaking on Lateline Business last night, Heffernan was at his forthright best. "Obviously I think there’s been some serious errors made," he told the ABC’s Ticky Fullerton. One of the big issues the report identified was the amount of saline brine that would be generated by all the fracking. Heffernan points out that one proposed drilling field will have 7,000 wells with the potential to generate three million tonnes of salt. It’s a dramatic demonstration of the toxic possibilities of the industry.

On the issue of fracking itself, the report sits on the fence, stating that it was "beyond the resources of this Committee" to settle to controversy about just how toxic fracking really is. The report notes that fracking is common practice in the industry and that Geoscience Australia and the CSIRO think it is low risk. However it also recommends that fracking fluids used in wells be kept in separate water-tight storages, or, before being disposed of, "are treated to the highest standards".

Perhaps most alarmingly, it found that only two of the 23 commonly used chemicals in the fracking process were even the subject of the National Industrial Chemical Notification and Assessment Scheme. It recommends that the government provide funds to have all these chemicals properly assessed in the next two years.

Perhaps the most important aspect of the report was that it was tripartisan. There aren’t many issues that can unite the Coalition, Labor and the Greens, but coal seam gas exploration appears to be one. The political kaleidoscope has suddenly aligned against coal seam gas exploration; a moratorium of further exploration should logically be the government’s next move. The release of this report shows that political action can indeed make a difference: it is difficult to believe the industry would ever have been subject to this much scrutiny, particularly from the conservative side of politics, if farmers had not joined with environmentalists to make the issue impossible for parliamentarians to ignore.

Ultimately, the responsibility for the boom must lie with the states who approved it in the first instance. Most of the Australian states, particularly Queensland, have long prided themselves on a pro-development mentality, seen in this instance by the Queensland Government’s policy of "adaptive management", which loosely translates to approving exploration until it can be proven that they are a danger to the environment. It’s hard to argue with Bill Heffernan’s point that the lure of mining royalties and jobs for the regions has allowed sensible precautions to be put aside in this instance.

As the interim report makes clear, coal seam gas is likely to be an evanescent boom, running out within 15 years, but with the potential to despoil prime agricultural land that could help feed Australian cities for generations.

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Ben Eltham is New Matilda's National Affairs Correspondent.