The New South Wales government and gas industry face significant challenges if they continue to forge ahead expanding the state’s gas production capabilities.
In an initial independent report on NSW coal seam gas activities released yesterday chief scientist and engineer, Professor Mary O'Kane confirms there are wide-ranging community concerns about CSG and suggests tougher regulation, increased penalties for breaches and more environmental research be conducted.
Premier Barry O'Farrell ordered O'Kane to start the study earlier this year announcing a ban on all CSG activity within two kilometres of residential areas and critical industry.
"CSG is a complex issue which has proven divisive chiefly because of the emotive nature of community concerns, the competing interests of the players, and a lack of publicly-available factual information," O'Kane said.
She explained that the polarising CSG debate has been fuelled by unanswered community concerns “surrounding landholders' legal rights, land access and use; human health; the environment, particularly relating to impacts on water; engineering and operational processes; and industry regulation and compliance”.
"The challenges faced by government and industry are considerable and a commitment from all parties will be required to improve the existing situation and build trust with the community," she said.
While O’Kane recognises CSG extraction, like all forms of energy production, poses human health and environmental challenges, she explains that many of the issues can be offset by ensuring engineering best practice, transparent compliance checks conducted by regulators, and rapid response plans formulated should an incident occur.
The report found the government can build public confidence and support for the sector by implementing industry best practice for all stages of CSG extraction, including stringent compliance inspections, monitoring efforts, and imposing hefty penalties for licence breaches.
O’Kane recommends the state government conducts a subsidence survey going back 15 years "and that, from 2013 onwards, an annual whole-of-state subsidence map be produced so patterns could be traced for the purpose of understanding and addressing any significant cumulative subsidence".
The report states a complete environmental database should be established which includes all data collected around water management, gas extraction, mining, manufacturing, and chemical processing activities.
"As the review continues, the team will be undertaking further work in relation to landholders' legal rights; examining appropriate levels of industry insurance; conducting a full industry compliance study; reviewing government best practice in the management of CSG extraction; and analysing in-depth the methods for CSG risk and assessment," she said.
The report highlights training is a critical step, recommending all CSG workers, including subcontractors complete mandatory certification requirements.
"The issue of CSG is a very tough one and requires a commitment from government to sound policy implementation based on highly developed data," O'Kane said.
O'Kane said the gas sector is still evolving and as the science advances major companies should be prepared for rolling changes and new regulations.
"Further research will also be essential to filling knowledge gaps," she said.
Peak industry body the Australian Petroleum Production and Exploration Association said the report ''raises complex issues'' that it would consider over the next few days, SMH reports.
APPEA spokesperson Michael Bradley said many of the recommendations laid out in the report are already being adopted by gas producers.
''APPEA is committed to working with the Chief Scientist throughout the next phase of this process to find a solution to the state's impasse, as NSW consumes almost a quarter of the east coast gas supply but produces less than 1 per cent of that supply,'' he said.
Currently developing CSG operations in Gloucester and the Hunter Valley, gas producer AGL said it is in agreement with O’Kane’s findings.
“AGL agrees with Professor O’Kane that CSG concerns ‘can be effectively managed through high standards of engineering, rigorous monitoring and supervision of operations,” a company spokesperson said.
“We hope that the report will help ease the concerns expressed by the community and enable the NSW Government to support the CSG industry and its significant economic benefits.”
AGL explained that it is committed to working transparently with government and communities to build a world class CSG sector in NSW.
“AGL has developed an industry first water and air emissions testing program for its Camden Gas Project, planned and designed in partnership with the local community and industry experts,” the company said.
At its Gloucester gas project AGL is implementing a water quality testing program which will have a total of 45 monitoring bores, and has also provided funding to the Gloucester Shire Council for an independent water scientist.
The independent review will continue well into next year.
"There is indeed more work to be done," O'Kane said.