The certainty of CSG uncertainty

The Conversation

In NSW the last 12 months has seen a quantum leap in the government focus on coal seam gas (CSG).

In December 2010, the then-Labor NSW state government introduced a moratorium on gas well fracking. They also told the NSW Office of Water to regulate the water impacts of gas exploration, which to that time had been the sole domain of the Mineral Resources Section of the Department of Industry and Investment.

Since 2010, the federal government has used the Environment Protection and Biodiversity Conservation Act to regulate operational CSG projects in Queensland, but since NSW has only one operational field, the Camden project, it has had little impact in NSW.

In late 2011, in a deal with Tony Windsor as part of the carbon trading scheme, the federal government introduced the National Partnership Agreement for the Regulation of Coal Seam Gas (NPACSG). This provides national oversight of CSG projects in areas where the federal government has (limited) regulatory authority under the constitution. Most regulatory authority resides with the state government.

Finally two weeks ago the NSW announced draft guidelines for a GATEWAY approval process for CSG projects. NPACSG and GATEWAY are works in progress, and they overlap and interact. These initiatives also apply to coal mining projects, but here I will focus on CSG.

Both NPACSG and GATEWAY establish independent science panels assessing the environmental impacts of CSG projects. The exact membership and role of these panels is still unclear. But it is unquestionably true that more independent research is needed on the long-term impacts of CSG water extraction, both the potential depressurisation of the aquifers adjacent to the coal seams exploited, and the disposal options for the saline water pumped out of the coal seams during gas production.

NPACSG will facilitate more cumulative impact studies. This is undoubtedly good. Any process that assesses or approves on a project-by-project basis will struggle with the issue of cumulative impact because it is only concerned with the incremental impact of that one project. GATEWAY is focussed on a project basis, so is no better than existing approval processes for cumulative impacts.

The major flaw with the NPACSG and GATEWAY initiatives is that they aren't triggered until a project is proposed and put before the independent panels for assessment. Thus it does not cover exploration impacts, which are a state responsibility. This is an important distinction for CSG.

There are two stages to CSG exploration. The first stage involves drilling core holes to retrieve samples of rock for testing. This is relatively low risk and has been a standard part of mining exploration for many decades.

The second stage, however, is specific to CSG and involves drilling pilot wells and testing them for gas flow. These pilot wells are essentially identical to the wells used for CSG production because they are testing the economic potential of the gas field. The water in the well is pumped out in the same way as a production well, and the wells operate for periods up to six months.

If it's anticipated fracking will be necessary for any subsequent production scheme, the pilot well will be fracked, just like a production well. Thus potential fracking damage may occur before any NPACSG or GATEWAY science approval process is triggered.

For instance, the Pillaga gas field, established by Eastern Star Gas in the Pillaga State Forest in northern NSW (and now owned by Santos), has had numerous environmental problems. Yet it operates under an exploration licence, not a development approval. Despite the demonstrated environmental issues at Pillaga the new regulatory initiatives would have never been triggered and a NPACSG or GATEWAY assessment never required.

GATEWAY envisages an independent panel to assess the project. This is a step forward because the public in NSW are somewhat cynical about the motives and scientific rigour of the standard environmental approval process. Though the details are not spelled out, it appears it might be akin to a permanent Planning and Assessment Commission (PAC).

These PACs involved a small number of independent scientific experts examining all data and evidence, and typically their project brief was quite broad ranging. The previous NSW government set up a number of PACs to look at specific aspects of projects. For instance, it was a water-focussed PAC that recommended the Bickham open cut coal mine proposal in the Upper Hunter be rejected on the basis of the impacts on the headwaters of the Pages River. The NSW government subsequently rejected the Bickham open cut publically referring to the PAC recommendation.

However, Bickham highlights a defect in making a scientific assessment only in response to a project proposal. The Bickham proponents have recently indicated that they will shortly propose a revised project, an underground mine this time, which will no doubt trigger the whole water impact debate all over again.

This is not the certainty for residents and existing industries (in this case thoroughbred studs) that the government is selling as a benefit for GATEWAY. There appears nothing to stop a proponent repeatedly proposing revised projects until one passes the GATEWAY, either on merit or by just wearing the committee down.

The community is looking for a process that scientifically assesses an area as either suitable or not suitable for mining or CSG, and draws a line around any exclusion zones, once and for all time. This would allow the studs to make long-term investments with certainty.

The only certainty GATEWAY seems to provide is for the mining and CSG industry. It will allow them to easily and quickly assess whether their project will be allowed to go ahead. While they will still need to do the normal environmental reports required for the subsequent development application, it would be a brave government department that would contradict a prior independent scientific assessment.

Ultimately both NPACSG and GATEWAY will improve the science base and provide a better understanding of mining and CSG impacts. However, they don't address many of the community concerns about long-term certainty for lifestyle and investment. Consequently, neither are a panacea for what the community see as a flawed and biased mining and CSG approval process.

Garry Willgoose is a Professor of the University of Newcastle.

This article was originally published on The Conversation – theconversation.edu.au  Reproduced with permission.