Exposed: crafty corner-cutting cuts coal mine deal to take too much groundwater

Published: June 07, 2016

Documents obtained under freedom of information law reveal the NSW Department of Primary Industries created a loophole in a key water sharing plan to allow the coal mining industry to access large volumes of extra groundwater, despite receiving a report warning the system was already beyond sustainable limits. 

Lock the Gate Alliance says the documents show the obscure "buried groundwater storage" rule was introduced into a draft water sharing plan for the porous rock groundwater of the Hunter Valley and Gloucester Basin expressly to provide for the further expansion of coal mining after research indicated the use and removal of that groundwater, mostly for mining purposes was at or beyond the level where its exploitation could be sustained.

Lock the Gate Alliance spokesperson Georgina Woods said, "We are frankly shocked that the Department of Primary Industries would create a loophole like this to allow exploitation of groundwater by the coal mining industry in the Hunter, raising the threat of water scarcity."

According to background documents obtained by Lock the Gate, the amount of water potentially available to the coal industry under this loophole could increase the allowable extraction of water from this source to 20% more than the level deemed sustainable under the plan.

"The mines already have more entitlments than they're using, and they're using a lot of water. The documents we've seen warn that when a drought comes, "major economic impact is certain" because they will simply not be able to operate. Making this loophole to give them more water than this poor mined Valley can give will damage the economy and the environment.

"The plan is not yet finalised. Water Minister Niall Blair must ensure that when it commences on 1 July, there will be no crafty corner-cutting for coal mines, but robust and sustainable management of our groundwater, as the public expects.”

The documents concerned are available on request. 

 

Background: GIPA documents reveal water sharing plan loophole created to give coal industry unlimited water in over-exploited Hunter region aquifers

Summary

  • Documents obtained by Lock the Gate reveal that a loophole was introduced into water plan for the heavily-exploited porous rock groundwater of the Hunter and Gloucester coalfields to allow the coal industry to continue increasing its use of the water, despite findings that it was already allocated beyond its sustainable yield.
  • The “North Coast Fractured and Porous Rock Groundwater Sources Water Sharing Plan” includes the Sydney Basin – North Coast water source (the Hunter) and Gloucester Basin water source, which are the targets of expansion plans by the coal mining industry.
  • Studies undertaken to inform preparation of the plan, obtained by Lock the Gate, found that recharge of the porous rock aquifers was far lower than previously thought, prompting a dramatic downward revision of the volume of water able to be sustainably removed from both the Gloucester Basin and Hunter Valley sources.
  • As a result, the plan set the annual water extraction limit that the sources can sustain at roughly the same level as existing entitlements, which are mostly in the hands of the coal industry.
  • This meant that previous plans to allocate an additional 10GL of water for coal mining expansion in the Hunter and 2GL for coal mining expansion in Gloucester had to be abandoned.
  • Instead, policy developers introduced into the plan a “buried groundwater storage” loophole that they had previously deemed not applicable in the Hunter and Gloucester.
  • According to documents obtained by Lock the Gate, the amount of water potentially available to the coal industry under this loophole could increase the allowable extraction of water from this source to 20% more than the level deemed sustainable under the plan. 
  • In the case of Gloucester, the application of this “buried groundwater” policy is directly contradictory to the purpose and parameters of the policy. An early background paper notes, “Access will not be considered in porous rock groundwater sources that do not have significant buried portions” and lists Gloucester as one of these.
  • In February this year, the draft water sharing plan was released and it is due to be finalised in time for commencement on 1 July. Lock the Gate has made a submission urging the Government to uphold its commitment to sustainable water management, and not give the coal industry leeway to deplete groundwater and do lasting damage to the water security of the Hunter region. 

 

How heavily exploited is the porous rock groundwater of the Hunter and Gloucester coal basins?

  • In the Sydney Basin – North Coast porous rock groundwater source, the bulk of the water extracted is removed by coal mines. The mines don’t always need to use water to process the coal, but must remove it because it flows into their pits, the porous rock aquifer being the coal seam itself.
  • In the central part of the Valley, where mining is most intense, the aquifers are heavily overexploited.
  • According to the Mid Hunter Groundwater Study obtained by Lock the Gate under GIPA mining, the proportion of water in this water source that is used for mining or dewatered for mining is 71% of the 81GL water licenced for use from the Hunter’s porous rock aquifers (see Document 83), with only a small amount licenced for irrigation and town water.
  • Not all of this entitlement is actually used each year. Data was not available for the entire water source area, but the Mid Hunter Groundwater Study revealed that usage data is collected for the Murrundi to Singleton zone of the source, where most of the mines are located, and within that area, only 15-22GL per annum is used of 48GL in entitlements.
  • This means the mines already have significant potential to increase their water usage, if the water were available, even before the new loophole is applied.
  • In a background note for a May 2013 meeting of DPI Water’s working group in developing the plan, a water planner from the Hunter, “presented Cabinet in Confidence findings. In summary, mines are currently using much less water than they are currently entitled to take. This is due to the dropped water table and [groundwater] not being available. Mining has the potential to substantially increase if more water was available. Should another drought occur, major economic impact is certain. Mines need to be aware of any changes to security of supply in the Plan. The amount of water made available in the Plan needs to be consistent with the Strategy.” (Document 53).
  • The challenges of managing the coal mines’ heavy extraction of groundwater prompted an inter-agency reference panel to commission a study to quantify the water balance and impacts of extraction in the Sydney Basin – North Coast Groundwater Source.
  • One of the major outcomes of the report was recommendations to dramatically reduce the estimated recharge from rainfall in the area.  
  • Adoption of the reduced recharge rate greatly reduced the calculated long term average annual extraction limit (LTAAEL), which begins with a calculation of rainfall recharge in order that it be based on sustainable rates of extraction.
  • For the Hunter, the new LTAAEL for the Sydney Basin – North Coast porous rock groundwater source was found to be equal to the current entitlement: “this will have the effect of no new entitlement being made available, and any new developments requiring groundwater will have to purchase it on the trade market.” (Document 102) 

 

Background: adoptions of the “buried groundwater storage” rule for the Hunter and Gloucester

  • The team developing the water sharing plan adopted this new long term average annual extraction limits for the Sydney Basin – North Coast and Gloucester groundwater sources at a meeting in September 2015. At the same meeting, they adopted the decision to allow access to groundwater storage, reversing a decision made two years previous (see Document 61)
  • The background paper for the decision to adopt the buried groundwater storage rule, contrary to their previous decision not to apply that policy in the Hunter and Gloucester, clearly makes the need of expanded water use by the mining industry the prevailing context for the decision: “Within both of these groundwater sources, mines hold the majority of water entitlement and the areas have a high socio-economic dependence on mining. DPI Water has fully considered the future requirements that have been made known by mining companies, and both areas are forecast to require additional groundwater entitlement.” (Doc 103)
  • The decision was made not to ensure the sustainable management of water use in the Hunter, but to accommodate the mining industry: “It is believed that, in order to ensure future economic viability of the mining industry in these areas, access to water held in storage should be allowed.” (Doc 103)
  • In the case of Gloucester, the application of this “buried groundwater” policy is directly contradictory to the purpose and parameters of the policy. An early background paper notes (Doc 88) “Access will not be considered in porous rock groundwater sources that do not have significant buried portions” and lists Gloucester as one of these.

 

How much extra water will they get?

  • The “NSW policy for managing access to buried groundwater sources” says that water sharing plans may provide for up to 0.002% of the total stored water in a buried groundwater source to be made available as a “one-off” in supplementary water access licences.[1]
  • A background paper for an early DPI Water working group 17 December, 2012 (Doc 38) gives some indication of the scale of water the coal industry may be able to access under this loophole: “In this Plan, the Policy will apply to the Sydney Basin – Lower Hunter Groundwater Source, the buried portion of which has approximately 809,000GL of water in storage, and the Sydney Basin – Upper Hunter Groundwater Source, the buried portion of which has approximately 178,600 GL of water in storage.”
  • Using the figures provided in this backgrounder, the total volume of stored water in the buried porous rock of the Sydney Basin – North Coast could be 987,600GL. This is significantly more than the maximum volume of water about to be stored in the Hunter River’s main water storage, Glenbawn Dam.
  • Applying the 0.002% extraction loophole to this volume indicates that the “buried groundwater” loophole could potentially make around 19GL available for the coal industry to access beyond the adopted long term average annual extraction limit of 90GL.

 



[1]           The NSW policy for managing access to buried groundwater sources is available here: http://www.water.nsw.gov.au/__data/assets/pdf_file/0010/548218/avail_ground_policy_access_buried_gw_sources.pdf

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