What the frack with coal seam gas?

Media reports of aquifers contaminated with carcinogenic chemicals in Queensland. Footage of kitchen taps exploding in balls of methane in gas well areas in the US in the documentary Gasland. Webs of wells and pipelines dotting and crisscrossing the countryside.

Could they happen here on the North Coast?

Coal seam gas (CSG) is a boom industry in NSW, with nearly 100 exploration permits approved this year – up from only four in 2005. As well as the Sydney and Gunnedah basins, there appear to be large reserves of conventional or natural as well as CSG (both composed largely of methane) in the Clarence Moreton Basin, which runs from south of Grafton up to the border and joins the Surat Basin in Queensland.

There are currently three companies operating on the North Coast (see map). This article summarises what we know about Metgasco’s activities. Next week we’ll look at Arrow Energy and Red Sky Energy.

In response to concerns about this new industry, the EDO will be holding a public seminar from 6-8pm on Wednesday, February 2, at the Red Dove Hall, corner of Keen and Woodlark Streets, Lismore. For an overview of the legal process for gas exploration and production, have a look at the fact sheet on the EDO website www.edo.org.au/edonsw.

What’s the issue?

The main issue identified to date by local communities is the potential contamination of aquifers and streams by so-called BTEX (benzene, toluene, ethylbenzene and xylene) chemicals used in hydraulic fracturing (‘fraccing’ or ‘fracking’), the blasting of cracks into coal seams to release the methane.

However, there can be other environmental and health problems associated with coal seam gas, including:

• The need to dispose of potentially large amounts of so-called ‘produced water’ (water brought up in wells along with gas), which often contains large amounts of salt and other toxic substances.

• The removal of large quantities of groundwater where it is used for irrigation, stock and domestic purposes.

• Air pollution and greenhouse emissions associated with the energy-intensive processing of gas for liquefaction or electricity production.

• The noise, aesthetic and economic impacts of infrastructure including drilling rigs, evaporation ponds, truck movements and pipelines.

This is not to say that all of these impacts are present in every case, or that they could not be responsibly managed in some cases. But the US and Queensland experiences suggest that this new ‘gas rush’ has seen inadequate consideration of both the precautionary principle and the cumulative environmental and social impacts of numerous wells in any area.

It’s important first of all to distinguish between exploration and production wells and associated infrastructure. Let’s start with the latter, because Metgasco – a small, Australian-owned, stock exchange-listed company – recently received planning approval for a 30 megawatt (MW) power station close to Casino, fuelled primarily by CSG but also by conventional gas. State government approval for the Richmond Valley Power Station includes drilling up to 45 production wells on adjacent farming land between the Casino-Coraki Road and Ellangowan Road. The power station will supply electricity to the Country Energy distribution network, and has a life expectancy of 15 years.


The environmental assessment for the power station states that the company “does not currently expect to use fracturing techniques”. Nevertheless, it addressed the potential impacts and mitigation measures associated with fracking. It referred to a 2004 US Environmental Protection Agency (EPA) report which concluded that fracking does not represent a significant threat to underground sources of drinking water, and that no confirmed evidence of well water contamination by fracking techniques had been found (but see below).

Apart from the power station, Metgasco is exploring elsewhere in petroleum exploration licences (PELs) 13, 16 and 426 around and between Casino and Grafton. Not all the exploration sites involve the drilling of wells. Some involve laying lines on the surface to record subsurface seismic activity, so fracking is automatically excluded in these cases.

There is one well which is likely to be fracked, however. Metgasco claims to have discovered significant reserves of conventional gas as well as CSG in the Kingfisher E01 well, near the Casino aerodrome. This conventional gas is trapped in sandstone up to two kilometres below the surface, rather than in the coal seams which lie closer to the surface.

This is the only known approval to date for the use of fracking in the Clarence Moreton Basin. Approval does not include the use of BTEX chemicals, and the EDO has been informed by Metgasco that it does not use BTEX in any process.

This does not mean that BTEX could not be found in groundwater around fracking sites. In response to recent evidence of BTEX in groundwater close to exploration wells in Queensland, the exploration companies there (which do not include Metgasco) are blaming “lubricants used at the sites” or are suggesting they may be naturally occurring. The use of BTEX in fracking was recently banned in that state, but has not been banned in NSW.

The environmental assessment for the power station refers to the contents of fracking fluid as “typically water” “and/or gas under pressure”, often mixed with “a propping material such as sand.” However, the Kingfisher approval includes fracking with the use of a fracking fluid, a cocktail of chemicals called “acid wash” and the use of a “radioactive tracer” containing isotopes with half-lives of up to 85 days for “completion diagnostics”.

Material safety data sheets have been provided by the US company Halliburton for only seven of the 16 listed chemicals, but even the sheets for these seven – including crystalline silica, a brominated biocide and ethylene glycol – commonly include the statement “not determined” in relation to human and ecological toxicity.

The fracking fluid will be disposed of initially in a sump pit at the well site, and ultimately to Metgasco’s “existing offsite lined evaporation pond NW of Casino off Tenterfield Road… used for disposal of drilling fluids.”


Metgasco states that the CSG it will extract for the power station will be drawn from the Walloon coal measures, which are well below the aquifers in the area, and that when they are drilling and completing wells they will ensure that the aquifers are protected by steel casing and cement.

Metgasco argues that this stratigraphical separation is likely to reduce the amount of water that will be produced along with the gas. The amount and the salinity of “produced water” have been major problems in the Surat Basin in Queensland, where large quantities of saline water must be disposed of. Concerns about the handling of contaminated surface water recently led to the Queensland government temporarily banning the use of evaporation ponds.

But not here – yet. In its environmental assessment for the power station, Metgasco stated that it plans to dispose of produced water from production wells by pumping it into evaporation ponds occupying up to 12 hectares around the power station. It estimates that a maximum of 2.5 litres per second will be produced – small by Queensland standards, but by our rough calculation still equivalent to at least 30 Olympic swimming pools per year.

The company is unclear how much water is likely to be produced in the power station production wells; what levels of minerals, salt, acid sulfate, drilling fluid residues and other toxic chemicals may be contained in the produced water; and therefore whether any of the produced water will be suitable for re-use.

According to the company, produced water from exploration wells, on the other hand, “will be stored in on-site tanks or sumps before removal to Richmond Valley Council’s Woodview Quarry” eight kilometres west of Casino, while “any water contaminated by hydrocarbons or non-degradable additives… will be removed to a Council approved disposal site.” Metgasco is apparently seeking development approval from Richmond Valley Council for an evaporation pond at Woodview. According to a media report last month, the pond would be 150 X 30 X 1.5 metres and would contain high levels of minerals, salt and acid sulphate as well as water.


The company is also seeking planning approval (the environmental assessment hasn’t been placed on public exhibition yet) for a gas pipeline from Casino via Lions Way over the Border Ranges to a new gas-fired turbine at Swanbank Power Station (Ipswich). Recently it has reportedly been talking about piping gas either to Gladstone for export from the recently approved liquified natural gas (LNG) plant and port there, or to the NSW North Coast. A 30km undersea pipeline would then allow a ship bigger than an aircraft carrier to convert the gas into LNG before transferring it to another vessel for export.

In an example of what appears to be poor infrastructure planning (which is not the company’s fault), we may be piping gas over the border to Ipswich to make electricity while TransGrid and Country Energy are seeking approval to build a high voltage transmission line from west of Tenterfield to Lismore that will bring more electricity (most of it currently coal-fired) from Queensland to service the North Coast.

Finally, while conventional and CSG typically have about half the greenhouse emissions of coal-fired power, according to some experts this advantage may be largely negated by the escape of gases (mostly methane, a much more potent greenhouse gas than carbon dioxide) during production, transport, processing and use to generate energy.

Mark Byrne is education officer at the EDO Northern Rivers. For more information or help about this or any other environmental law issue, phone 1300 369 791 or email edonr@edo.org.au.

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