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About Coal Seam Gas

What is coal seam gas?

Coal seam gas is a type of unconventional natural gas. It is made up primarily of methane gas (generally 95-97%) and is found in coal seams at depths of 300m-1000m underground. It is sometimes referred to as coal bed methane (CBM).

What is the difference between conventional natural gas, and unconventional natural gas like coal seam gas?

The difference between conventional and unconventional gas is the geology of the reservoirs from which they are produced and the methods required to extract the gas. Coal seam gas is just one type of unconventional gas, others include shale gas and tight gas.

How is coal seam gas extracted?

Coal seam gas is extracted by drilling a well vertically through rock strata until reaching the coal seam, at which point the well may also be drilled out horizontally to increase access to the methane gas. Coal seams contain both water and gas. During coal seam gas operations the water must be pumped out of the coal seam to lower the pressure and allow the gas to flow to the surface.

Because coal seam gas wells are drilled through soil, rock strata and aquifers to reach the coal seam, the wells are lined with layers of steel and cement casing to isolate the gas flow from the aquifers in an effort to prevent cross-contamination.

Why is hydraulic fracturing/fracking?

Hydraulic fracturing, more commonly known as fracking or fraccing, is used to stimulate and accelerate the flow of coal seam gas. The process involves high pressured injection of sand, water and chemicals into the coal seam gas well. The injection causes fractures in the coal seam allowing the gas to flow to the surface of the well.

There are significant concerns associated with hydraulic fracturing including the potential to contaminate water sources and cause earthquakes. A report by the Committee for Economic Development of Australia said: "In addition to concerns over contamination of aquifers from the chemicals added to fracking fluid, issues have also been raised about contamination of water supplies from fugitive gas after fracking, and seismic activity and tremors associated with the drilling and fracking process".

Fracking has been used during coal seam gas operations in both Queensland and New South Wales.

What is BTEX?

BTEX is an acronym that stands for benzene, toluene, ethylbenzene, and xylenes, which are volatile organic compounds (VOCs). BTEX can be naturally occurring and benzene is a known carcinogen (cancer causing).

BTEX chemicals have been used in fracking fluids used by coal seam gas companies. The use of BTEX by coal seam gas operators has been banned in both NSW and QLD, however the process of hydraulic fracturing can release naturally occurring BTEX so it remains a risk factor during coal seam gas operations even when regulation is in place to ban gas companies using it as an additive during drilling.

How much water is involved in coal seam gas exploration and production?

The amount of water involved in coal seam gas operations varies from project to project. The CSIRO says: No two wells or coal seams behave identically and water production can vary from a few thousand to hundreds of thousands of litres a day, depending on the underground water pressures and geology.

What is the quality of the water?

The water extracted during coal seam gas operations is often referred to as “produced water”. This water is generally salty and can contain toxic and radioactive compounds and heavy metals. Once the water has been extracted from the coal seam it is stored in tanks or holding ponds at coal seam gas sites before being trucked or piped to treatment facilities. The CSIRO says, “Produced water quality is highly variable from site to site, but it is generally not fit for human consumption.”

What are evaporation ponds, are they legal?

Evaporation ponds are large uncovered ponds where produced water is allowed to evaporate by sunlight. Due to various concerns, including potential for overflow during rain, inadequate lining allowing seepage of waste water into soil, and because of the large surface area that ponds take up, both the Queensland and NSW governments have banned evaporation for new coal seam gas developments.

Some existing coal seam gas operations continue using evaporation ponds. Evaporation ponds are sometimes referred to as ‘holding ponds’ by the industry and state governments.

How does a company get permission to conduct coal seam gas exploration or production?

The coal seam gas company must first apply to the state government for an exploration licence so that it can conduct seismic surveys and exploratory drilling to ascertain the quantity and quality of gas reserves in an area. Once an exploration licence has been approved the coal seam gas company must identify specific sites within the licence area to conduct their activities. The company must negotiate a land access agreement with the owner of the land. The company must get approval from the state government to drill on the site that they identify within their licence area. After exploration, if the coal seam gas reserves are found to be viable for commercialisation, the company may then apply to the state government for a production licence.

What are my legal rights regarding coal seam gas exploration or production – can I refuse a coal seam gas company access to my property?

Lock the Gate encourages landholders to ‘lock the gate’ to coal seam gas companies as a form of non-cooperation.  The law is strongly in favour of coal seam gas companies but locking the gate to them is an effective means of preventing access.

Coal seam gas resources are owned by the Crown, not the property owner.  The Crown provides access to these resources to gas companies and gives landholders only a minor right to ‘negotiate’ an access agreement and compensation deal with those companies.

Once a coal seam gas company has been granted a licence to explore or produce coal seam gas by the state government, it must identify sites within its licence area where it will conduct its activities.  If the activities are proposed on private land, the gas company will seek to negotiate an access arrangement with the landholder and may offer compensation as part of negotiations.

If a landholder does not negotiate an agreement, then the gas company can take the matter to arbitration and then to a court if it wants to force access – in NSW it is the Land and Environment Court and in Queensland it is the Land Court.  Many gas companies have indicated that they are not prepared to force access in this way and it is untenable for them to take every landholder who locks their gate to court.

If the site is on government land (such as the project in the Pilliga State Forest in north-west NSW) an access agreement must be negotiated between the coal seam gas company and the state government.

Locking the Gate is a form of peaceful non-cooperation that shows companies and the government that landholders are determined to protect their land, water and health from inappropriate mining.

How many coal seam gas wells are operating currently?

According to the latest industry data there is currently a total of 3508 active coal seal seam gas wells, with 3249 of these wells being in QLD and the remaining 259 in NSW. These figures include both exploration and production wells.

Who are the coal seam gas companies in Australia?

Companies holding coal seam gas licences in QLD are Arrow EnergyMolopo EnergyOrigin EnergyQueensland Gas Company (BG Group), SantosWestSide Corporation.

Companies holding coal seam gas licences in NSW are SantosAGLPetrel EnergyComet RidgeMetgascoB.N.G Pty LtdApex EnergyPangaeaClarence Moreton ResourcesLeichhardt Resources, Energetica Resources, Drequilin, and Dart Energy.

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About Coal Seam Gas