Coal Seam Gas Mining - Dairy Australia - Victorian overview presentation poowong

Unconventional Gas Mining Communication Sessions

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Provide dairy farmers with a trusted and unbiased source of information on the practices and technologies used,

legislative control measures and landholder considerations.

• Important to note that many factors are shared with other agricultural sectors and therefore require a collaborative approach. Only a few are unique to the dairy industry.

• Dairy specific- Impacts/ reforms relate to quality assurance programs (direct & indirect) & consideration of farm activities in a more intensive farm environment.

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Victoria & CSG LicencingMinerals Resources (Sustainable Development) Act 1990

Exploration Licence (EL) Enables the holder to carry out exploration activities on the land covered by the licence for five years.

Cancelling of Petroleum Applications

Bye-back of Petroleum (onshore) Titles

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NSW Reforms (NSW Gas Plan)

Australian regulatory frameworks

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• The States are largely responsible for regulating this industry.

• Responsibilities include:

• licensing exploration and development

• setting licence conditions

• assessing environmental impacts

• monitoring and enforcing industry adherence to regulation; and

• collecting royalties.

What is CSG Mining?

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Unconventional gas requires the use of extraction technologies to release the gas from complex geological systems.

While aquifers are located 100-200m below ground, the three types of unconventional gas are further below:• Coal Seam Gas (CSG) 300 – 1000m• Shale Gas 1000-2000m• Tight Gas >1000m

CSG mainly consists of methane accessed by drilling wells to depressurise coal seams, allowing water and gas to flow to the surface through a fully encased well. At the surface, water is separated from the gas and both are piped elsewhere for further processing.

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CSG Infrastructure

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• CSG Well Integrity- mandatory codes of practice in place in NSW & QLD.

• Well Pads• 5m2 & 100m2 during a 2 to 3 week

construction period

• 5m2 to 30m2 during the gas production period lasting 15 to 25 years.

• Gas & water gathering systems• Buried at least 1m underground to

transport gas and water

• Surfaces rehabilitated back to agreed condition once in place.

• May include in-field gas compressors

• Centralised gas processing facilities

• Waste Water Treatment Processing Facilities

• Gas Transmission Pipeline (Bass Gas)

• LNG Facilities

18cm diameter

Steel & pressure cemented casing between pipe and rock to isolate formations and aquifers.

Gas & water pipe

Construction

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Contractors will require access to the well pad using existing or newly built laneways. During construction, traffic may include large earthmoving and drilling equipment.

Operational

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Once commissioned, traffic is reduced to vehicles associated with periodic maintenance and monitoring.

• Field based infrastructure is considered to be self-sufficient using remote operations & sensors.

• Maintenance (approx. monthly) of the well and pad site is undertaken by field staff.

• A “Work-over rig” can be anticipated by a landowner aprox. every 1-3 years.

Hydraulic Fracturing • Process of injecting fluids containing sand or small ceramic grains (a ‘proppant’) under

pressure to fracture a rock and enhance its permeability to improve the ability for water and gas to flow to the well.

• The depressurisation of the CSG seam induces a pressure gradient towards the well, which means that water held in the immediate cleats and fractures flows towards the well. This is called “Flow-back Water”.

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Hydraulic Fracturing AdditivesCSIRO outlines:

• Guar gum (a food thickening agent used in ice-cream)

• Sodium Hypocholorite (used in pool chlorine) and sodium hydroxide (used to make soap)

• Ammonium persulphate (used in hair bleach)

• Surfactants such as ethanol and the cleaning agent orange oil (used in toothpastes)

• Acetic acid (vinegar) and sodium carbonate (washing soda)

• The use of additives containing BTEX compounds (benzene, toluene, ethyl benzene and xylenes) is banned.

All of the above are also used in some way in the dairy industry

Refer to Fact Sheet “Unconventional Gas Mining:

Dairy Industry Frequently Asked Questions”

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WaterPotential effects on water quality and quantity are central to dairy industry discussions on unconventional gas mining.

• Effects to groundwater systems raise concern as gas extraction involves the removal of water from gas-bearing geological formations to the ground surface, called ‘Produced water” that most often needs treatment prior to reuse.

• Quality concerns centre on the salinity levels and possible chemical concentrations in the produced water, including any traces of fracking fluid constituents.

• As treated produced water may potentially be reused in agriculture, research and on-farm trials are underway.

Refer to Fact Sheet “Unconventional Gas Mining:

Water quality and quantity”

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Addressing Water Issues- Fracture Stimulation Codes of Practice (NSW & QLD)

• “Flow-back Water” must be tested by a National Association of Testing Authorities (NATA)-certified laboratory to demonstrate compliance with the Australian Drinking Water Guidelines (ADWG).

• The ADWG stipulates acceptable water property concentration parameters for both human health and aesthetic use (i.e. swimming and water sports).

• Samples may be taken at any time by regulatory authorities to verify compliance with environmental conditions, EPA licences and the relevant Codes of practice.

• Additives used in extraction must be disclosed as part of environmental assessment processes and Fracturing Stimulation Management Plans (FSMP) so that the safety of the chemicals for both the community and environment can be determined. All FSMP are publically available and must be provided and fully explained to the landholder where any fracturing is to take place.

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Treatment & Re-useADWG and the Australian and New Zealand Guidelines for Fresh and Marine Water Quality (ANZECC Guidelines) are the main reference guides for parameters and allowable limits.

• Final intended use determines the water quality parameters for Produced Water in environmental approval conditions determined by the State agencies.

• CSG water quality varies across regions- 3000-7000 mg/L TDS and can be alkaline due to high levels of bicarbonate.

• Sea water is between 36,000 and 38,000 mg/L. • Good quality drinking water <500 mg/L • Tolerance levels for dairy cattle without loss of production <4000

mg/L (ANZECC Guidelines) or <3500 mg/L for lactating dairy cows (converted from EC levels in DPI NSW Prime Fact 533).

• Produced water has contained naturally occurring concentrations of metals, dissolved or dispersed oil compounds (that may include naturally occurring BTEX compounds), dissolved gases and naturally occurring radioactive materials (NORM).

Treatment of some kind is therefore necessary

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Dairy related treatment & re-use optionsA number of beneficial re-use and brine management research projects and trials are being undertaken in the agricultural sector .

Irrigation• Blending with freshwater and settlement of suspended solids.• Precipitation of Metals to remove the metal ions (for pasture and feed crops only).• Dissolved solids removal using reverse

osmosis (RO), if blending alone is not adequate.

• Filtration pre-RO to remove suspended solids (both organic and inorganic,including hydrocarbons).

Livestock• Alkalinity correction such as dosing with hydrochloric or sulphuric acid (species-

dependent).• Precipitation of Metals to remove the metal ions. • Filtration and/or Adsorption to remove hydrocarbons.• Disinfection (chlorine or irradiating with ultra violet light), most effective once

suspended and dissolved solids are removed.

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Water Quantity Central to the discussion on groundwater resources is whether current and future demand is sustainable across all industry sectors (including our own).

• NSW and Queensland will now have centralised web portals established, to more accurately inform cumulative studies. These portals are relevant to all groundwater users.

• Companies must make their water data freely available, now in real-time-

http://www.agl.com.au/about-agl/how-we-source-energy/natural-gas/water-portal

• Groundwater modelling and mapping assists to indicate whether coal seams are connected to aquifers, and to predict whether drawing water from one can impact levels and water quality in the other.

• Information can be used to build computer models of sites that can be used to predict the impacts of gas production on groundwater systems, and therefore the suitability of the proposed well site.

• Although absolute guarantees are not possible, existing knowledge from research on aquifers and groundwater models make it possible to estimate the risks and uncertainties of adverse impacts.

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Health• Importance of locational characteristics (geology, hydrogeology) in

attempting to determine likelihood & consequence (severity)- impact assessments are based on this.

• Dosage is critical in consideration of any effects (exposure= concentration & duration)

• Many pathways can result in dilution, decreasing exposure.

• Potential risk requires effective controls & regulation.

• Published peer-reviewed health studies (epidemiological-measurable) are limited due to insufficient statistical populations.

• Recent study of 43 wells in QLD & NSW by CSIRO can compare methane exposure to:

• Median- 2-3 lactating cows on pasture

• Average- 14 lactating cows on pasture

No leaks at all were detected from around the well casings themselves, but from other sources at the well pad.

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Legislative Control Measures

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Commonwealth

• Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act) seeks to protect nationally significant environmental assets.

• Independent Expert Scientific Committee on Coal Seam Gas and Large Coal Mining Developments (IESC) provides scientific advice to decision-makers on the impacts that projects may have on Australia’s water resources.

• Bioregional Assessments- Gippsland bioregional assessment is being undertaken by the Victorian Government and is due for completion in late 2016.

Legislative Control Measures

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Victoria

• Less mature and coherent legislative framework compared to NSW & Qld.

• CSG dealt with under the Mineral Resources (Sustainable Development) Act 1990 (MRSD)

• Tight & Shale Gas dealt with under the Petroleum Act 1998

• Administered by the Earth Resources Regulation Branch in the Corporate Planning and Compliance Services Division of the Department of Economic Development, jobs, transport and resources.

• The relevant decision maker is the Minister for Energy and Resources.

Legislative Control Measures

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Victoria• Exploration Licences are granted with conditions based upon draft Work

Plans or Operations Plans (relevant to the Act under which the licence is to be granted).

• These address considerations relating to land rehabilitation; environmental protection; groundwater protection; proposed works; licensee expenditure; reporting requirements; payment of fees, bonds, levies and royalties and land access.

• Planning and Environment Act 1987- relevant to production only

• Environmental Protection Act 1970- referral only for both stages

• Environmental Effects Act 1978- determination by Planning Minister whether an Environmental Effects Statement (EES) is required

• It is possible that several departments and agencies can have responsibility for enforcing approval conditions.

NSW reformed Control Measures

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Land Access

Generally, at present, companies in all States are working under

principles of land access- both formal and informal.

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Relevant State Mineral, Mining or Petroleum Onshore Acts

State relevant Court Proceedings

Gas mining companies must provide notification to enter private land, but notification periods and how the notification is communicated to a farmer differs from state to state.

VictoriaExploration Land Access• Gas companies must obtain the consent of the owners and occupiers

of the land affected• Make and register a compensation agreement.• Obtain a compensation determination from VCAT; or• Purchase the land. • For ‘low impact exploration work’, an informal verbal consent from the

owner or occupier will suffice; this requirement can be waived where all ‘reasonable efforts’ have been undertaken to find the owner or occupier.

No Land Access Agreement/ Arrangement needs to be in place

Compensation• A compensation agreement must be in place before any mining

activity can take place.• Compensation can be sought in relation to any “direct, natural and

reasonable consequence of the exploration or mining activity”.

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NSWLand and Water Commissioner

• Provide guidance to the community and landholders• Oversee land access agreements• Provide advice to government on applications for exploration or

production activities• Increased openness in compensation process.

New compensation reforms • NSW Gas Plan- Gas companies are to negotiate a land access

arrangements for both exploration and mining of which compensation will be mandatory (fixed rate and economic considerations over the expected life of the wells).

• Independent Pricing and Regulatory Tribunal to benchmark annually.

Refer to Fact Sheet “Unconventional Gas Mining- a dairy farmer’s ability to produce food”

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Landholder Considerations

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• Before Negotiations Begin

• Initial Approach

• What to Cover• Baseline Assessments

• Access to property

• Location of infrastructure

• Protections

• Communication

• Rehabilitation

Refer to the Fact Sheet “Unconventional Gas Mining- Planning and managing in a coexistence scenario”

Broader Dairy Industry Considerations• Clear Policy Position & Principles

• Confident pathways forward

• Keeping abreast of legislative frameworks and input opportunities

• Suite of projects underway- assess outcomes against dairy considerations incl. Bioregional Assessments

• Stakeholder in greater agricultural sector response (ie. irrigation, land access)

• Facilitate collaborative dairy sector approach on dairy specifics- ie. food safety authorities, AFIA (commodity vendor declarations (CVD)).

• Potential for QA program reform based upon peer reviewed, scientifically evidenced investigations.

• Coexistence- especially technology & innovation advancements in “gas farm design”.

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