Two months ago, Robbert de Weijer, Australian manager for Dart Energy, was confident that his company would be drilling for coal seam gas at a waste dump in inner city suburb of St Peters sometime this year. Today, as he prepares to meet a group of concerned residents about the proposed site next week, he is far less certain.
The company is similarly uncertain about future plans for its exploration licence over the entire Sydney basin, as well as other licences in Gunnedah, Catherine Hill Bay on the NSW south coast and at Putty, near two national parks in the lower Hunter region.
For a start, Dart is still waiting to be told by the NSW Government what its 60-day moratorium on new exploration licences, announced last month, actually means. The NSW Department of Planning has imposed a moratorium on the issuing of new licences for coal, coal seam gas and petroleum exploration. New arrangements will allow for public comment before licences are issued, impact statements on farming land, and a policy to deal with interference with underground water supplies.
Adding to the uncertainty is a bill to be launched by NSW Greens MLC Jeremy Buckingham that seeks to ban all coal seam gas drilling in metropolitan areas and institute a 12-month moratorium on the industry so that a policy responding to environmental and other concerns can be developed.
Technically Dart has approvals for drills at Catherine Hill Bay and St Peters, but the company is not sure if these are still valid. "I’m not entirely sure what it means," De Weijer told New Matilda. "What we have seen is as much as you will have seen." He is expecting that further "no-go areas" may be imposed where drilling sites are near to national parks but says "this will not be a huge deal" for the company.
Even if Dart’s existing licences are valid, the company may decide it is more practical to comply with new requirements than try to impose its existing approvals.
Dart’s optimistic global drilling program was announced last week after the company raised $100 million in additional capital for its projects.
In an interview with New Matilda today, De Weijer described St Peters as only a "default position" for an 800-metre vertical drill with a casing down to the coal bed. But company engineers are still conducting desktop studies on the site, considering whether horizontal or vertical drills would be best, and how many hours a day the drill could operate without too much noise interference for nearby residents, some of whom already have signs on their houses opposing drilling. As well they are studying detailed Sydney maps to find other suitable sites for drilling, such as other waste dumps and industrial land, and land near freeways.
News that the company may not go ahead with the St Peters drill will be encouraging for the No Gas Mining in Sydney campaign and other local environmental activists who have drawn up a list of questions for next week’s meeting with the company and prepared a detailed submission questioning the safety of the drill.
Spokesperson for Sydney Residents against Coal Seam Gas drilling, biologist Jacinta Green, says key concerns include contamination of water and noise. Green told New Matilda, "If something goes wrong then rehabilitation of soil, water, health are impossible. In occupational health and safety terms the consequences of failure are extremely high, and at present the likelihood of failure is also high with an inadequate environmental impact study and proposed well casing, with unknown chemicals involved in the process".
Contamination of fragile aquifers in the inner Sydney region is a particular concern at St Peters. As New Matilda reported in March, a company commissioned 2010 Review of Environmental Factors (pdf) the Sydney Basin site found that "the proposed drill hole location is located within the footprint of the Botany Sands Aquifer which lies beneath the surface". The report argues that the aquifer is "highly vulnerable to contamination". Water from the aquifer seeps through the sands, silts and clay lying beneath the ground surface and flows towards Botany Bay.
De Weijer remains confident however that coal seam gas drilling can be conducted sustainably and says it is safer to live "near a drill than living next door a petrol station". He worked for Shell for 20 years and until last year for Arrow Energy. He was surprised and disappointed at the explosion at the Arrow coal seam gas well in Dalby, Queensland in May. He says that the industry will learn from the report into the incident.
He acknowledges that developments may be slower than hoped in Australia but the company’s response will be "to shift capital and resources to its other operations elsewhere". According to the company website, Dart is focusing on progressing its "large portfolio rapidly through exploration, appraisal and pilots, reserve certification and early development/monetization". It has made already made an aggressive start to this program with "seven rigs operating with four extra rigs planned soon in Dajing and Luilin in China".
Even if Australia slows, Dart expects to complete between 50 and 60 wells across its international portfolio during 2011.
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