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What the frack? The Coal Seam Gas cheat sheet.

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If you dug up every ounce of the Coal Seam Gas (CSG) reserves in Queensland and used no other power source at all, they could power the entire state for the next 500 years. Under Sydney too, there are vast deposits. Enough to power the city alone for the next 65 years using no other resource. 13 trillion cubic feet of it.

It may as well be liquid gold, too, with an industry already worth more than $100 billion in Queensland alone and tens of billions more across the rest of the country. The only question now is: what kind of price do we put on the environment?

Protestors all agree that the economic benefits are huge and that gas is largely preferable to coal; but they also argue the methods of extraction are unstable, unproven and unpredictable.

They’re worried about contaminated water (which feeds Australia’s massive agriculture industry), loss of water, salinity problems created on fertile land, health related to toxic chemicals used in drilling, destruction of natural vegetation and habitats and pollution of above ground environments as well.

Let’s take a look at the industry.

What is Coal Seam Gas (CSG)?

Coal Seam Gas is the gas that is produced naturally along the fissures of coal reserves. It’s mostly methane and about ’40-50′ per cent ‘greener’ than burning coal. So among fossil fuels at least, it’s the best of a bad bunch. Environmentalists say while gas may be cleaner to burn, if you add in the effects of its total life cycle from extraction to export to burning, there is almost no difference between gas and coal.

There are vast reserves of CSG in Queensland, the biggest in Australia, but it also occurs all over Australia.

That CSG exists is not the problem, rather how it is extracted.

The gas is extracted using drilling wells. Estimates suggest Queensland alone could build up to 40,000 of the wells (on a one hectare footprint each) by 2030.

That drilling is sometimes associated with a process known as ‘fraccing’ – described as a ‘mini earthquake’ which injects a host of fluids and chemicals into the rock to stimulate the gas reserves. Those fluids can be anything from sand, water, ice cream emulsifiers, instant coffee. Yup, instant coffee. Or they can include chemicals that give humans cancer.

Here’s a really useful video that explains the process of ‘fraccing’. It needs to be noted (in fairness) that this technique is not often used in Australia (though it isn’t phased out completely), and the use of the Benzene chemical mix has been outlawed in Queensland and apparently used ‘sparingly’ elsewhere. How sparingly is not exactly known

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The industry says CSG production in Queensland hardly uses fraccing at all.

Only an estimated 8 per cent of CSG wells drilled in Queensland to date have been fracced and industry estimates are that between 10 and 40 per cent future wells may be fracced in future.

So what’s the big deal anyway?

This is one of the biggest battles of the moment. Coal Seam Gas is an ‘economy rescuing’, green(er) fuel industry worth billions upon billions. It’s also remarkably untested, say farmers and green groups in what has been the unlikeliest of alliances of modern times. Campaigns Manager for the Wilderness Society Newcastle Warrick Jordan sheds some light on the opposition when he spoke with Mamamia.

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“The key issue is that we don’t really know what the Coal Seam Gas extraction methods are impacting, and we won’t know until we get some good data. It’s a giant experiment over huge swathes of the country. We have a range of concerns. During the extraction process, huge amounts of water (produced water) is created or withdrawn from the ground and we don’t have any solid ways of dealing with this. We have real concerns around the possibility of interfering with underground aquifers and water supplies and clearance of native vegetation to build the gas wells for extraction,” he says.

The Queensland Government, the centre of the CSG-extraction universe, disagrees. Treasurer Andrew Fraser recently told ABC Radio that the industry was not just some ‘wild experiment’ and had been operating in the state for the past decade. Indeed, Queensland has the toughest laws in Australia having banned the toxic mix of chemicals Benzene, Toluene, Ethylbenzene and Xylene known as BTEX used in controversial ‘fraccing’ exploration mostly overseas. It’s not used so much in Australia, although trace amounts have still been found in wellheads, possibly from the diesel used and disturbed in the extraction process.

But even a tightly controlled industry is prone to cowboys.

The Cowboys

Warrick Jordan is fairly blunt about his appraisal of the industry.

“This is a new industry and there will always be cowboys. In the Piliga Scrub, where exploration has started, we’ve found water dumped directly into creeks, produced water left in unlined ponds so it gets soaked straight back into the ground. Regulations need to be much tighter, but even when they are it’s not enough. There is no room for error when it comes to the environment.”

Arrow Energy was recently fined $40,000 after breaching Queensland’s gas laws and drilling on a property near Dalby for two years without permission from the landowner.

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In a separate incident on the same property, a gas well erupted sending gas and water shooting 100m into the air. A report into the incident found there had been lax safety. A further report found 2 per cent of wells of the 2719 tested in Queensland were leaking; though not beyond acceptable health standards, it said.

Energy company AGL was forced to investigate after NSW Greens MP Jeremy Buckingham filmed a ‘soapy residue’ erupting from a gas well near Glen Alpine. AGL says the incident posed absolutely no risk to the environment after voluntarily having soil and water samples tested.

Queensland Gas Corporation also ‘unintentionally provided a route for water’ to pass between two underground water sources during drilling at a property near Dalby … and did nothing for 13 months, despite concerns from the landowner.

But there are also cases of ‘problems’ that make the news when there are no apparent problems; like this Northern New South Wales company that ‘admitted fault’ when it left behind an empty hole in the ground, and not polluted produced water as was originally accused.

It’s a jungle out there.

The industry responds to criticism

The head of Australia’s biggest Coal Seam Gas project, Catherine Tanna, is fed up with critics and misinformation, she says. She’s the Managing Director of British Gas’ (BG’s) Australian operations, known as the Queensland Gas Corporation (QGC).

She told the Australian:

“We accept that we have to substantiate what we say. That’s reasonable on the part of the group and the host communities,” she said.

“But we think others should substantiate what they say too. I think what’s unhelpful is when wild statements are made and they’re not substantiated.

“This is not a new industry. In Queensland, we’ve been extracting the natural gas which comes from the coal seam for 12 years.

“We at (BG’s) Queensland Gas supply 20 per cent of Queensland’s gas today. The message that’s getting lost is that gas is good, gas is reliable, and gas is a transitional fuel to a cleaner economy.”

Ms Tanna says that Queensland Gas Corporation tries to negotiate land access and compensation with owners wherever possible and that so far 700 of the 1000 properties they need access to have been negotiated directly with the landowners themselves.

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Lock the gate?

You don’t own your land.

Let’s clarify. You own about the top few inches and the soil (good for primary producers) but nothing underneath. That’s why no Joe Blow becomes rich when the mining companies find natural resources below the carrots. Sure, you’ll be compensated for them but you don’t own them. And you don’t really get a say in whether somebody can come in and dig them up, if they’re considered sovereign wealth.

Exploration companies are required to ask permission in person or by post to come and explore your property if they expect there are goodies to be found. This is where the ‘Lock the Gate’ campaign springs from, the hope that farmers and landowners can keep the companies out by not letting them ask permission to mine in the first place.

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But the system seems to be geared toward letting them in. If landowners refuse permission, a mining company can take it to arbitration. As Warrick Jordan laments: “I can’t think of any examples where somebody has been able to keep out an exploration company.”

The economy

What makes Coal Seam Gas as an industry seem so compelling as an industry is its worth. The figures are startling.

In Queensland, 18 per cent of all the electricity generated is from gas (that’s Coal Seam gas converted into Liquefied Natural Gas). In Queensland alone the industry is providing 18,000 direct and indirect jobs with thousands more across the country.

The investment brings royalties back to the states, not to mention providing what many call a ‘transitional fuel’ to greener electricity. It’s a hard case to argue, but farmers and green groups say the science is not nearly strong enough to make any of this worthwhile.

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The New South Wales Government responded to a request for information from Mamamia and said it ‘recognises there is an immediate need to strengthen the assessment of Coal Seam Gas extraction impacts on agricultural land and water resources to ensure that these valuable resources have a much greater protection than was available under the former Government’.

New exploration licenses for coal, coal seam gas and petroleum have been halted under the new Government while it develops a Strategic Regional Land Use policy.

Federal Resources and Energy Minister Martin Ferguson refused to answer questions regarding Coal Seam Gas, despite having more than two weeks to do so.

Gasland

Gasland is the 2010 documentary about the gas industry in the United States that put a rocket up the authorities over there. It was also controversial as the industry tried to discredit the science used. It’s important to be clear that the fraccing methods used in the United States are different to those used in Australia, for the most part.

Australia uses newer extraction technologies such as ‘horizontal well completions’ – which come in at wells from the side after a vertical drill. These wells are individually larger but access more than vertical wells. This basically means the total land required for wells would reduce.

You can check out the trailer here:

So, what do you think? How do you measure the benefits of a multi-billion dollar industry to the economy versus environmental concerns? Is it a risk worth taking?