Environmental Concerns Associated with the Rapid Expansion of Coal Seam Gas Mining in Australia

Table of Contents

Abstract

Acknowledgements

List of Figures

List of Tables

Nomenclature

Chapter 1 - Introduction
1.1 Background
1.2 Scope and Objectives
1.3 Methodology
1.4 Thesis Layout

Chapter 2 - Literature Review
2.1 Introduction
2.2 Unconventional Gas
2.3 Gas as a Transitional Fuel
2.4 Coal Seam Gas Development
2.5 The Eastern Gas Market
2.6 Coal Seam Gas Production Lifecycle
2.6.1 Exploration
2.6.2 Development and Production
2.6.3 Processing, Transport & Storage
2.7 Environmental Impacts
2.7.1 Fragmentation of Agricultural Land and Habitat
2.7.1.1 Loss of native biodiversity & displacement of wildlife
2.7.1.2 Soil erosion and reduction in water quality
2.7.1.3 Invasion of non-native species
2.7.2 Contamination of Surface and Groundwater Resources
2.7.2.1 Groundwater Depletion
2.7.2.2 Groundwater Contamination
2.7.2.3 Surface Contamination
2.7.3 Emissions of greenhouse gasses

Chapter 3- Discussion and Conclusion
3.1 Discussion
3.2 Conclusion
3.3 Recommendations for future studies

Chapter 4 - Project Reflection

References

Abstract

Natural gas is expected to play an important role in Australia’s transition to a low-carbon economy. In comparison to coal, the combustion of natural gas generates half the greenhouse gas emissions and does not produce harmful by-products such as sulphur, mercury, fly ash and particulate matter. Despite this, the rapid expansion of coal seam gas mining in Australia has raised significant concerns amongst the community.

This project aims to determine if the production of CSG at commercially viable rates would adversely impact the environment, and if so, to what extent. An extensive literature review was undertaken and identified three main potential impacts associated with the rapid expansion of coal seam gas. These include; the fragmentation of agricultural land and habitat, groundwater contamination and diminished water supply, and emissions of greenhouse gasses. Case studies from the United States and Australia were also examined.

The study found that the majority of literature publications expressed some concern towards the rapid expansion CSG mining in Australia, however a high level of uncertainty exists as to their direct environmental impact. Without rigorous scientific studies, coal seam gas is expected to remain an uncontrolled risk, posing substantial threats to the environment in which we live. This study recommends that mitigation measures be applied in accordance with the precautionary principle, and that scientific research be undertaken to prevent the occurrence of serious or irreversible environmental harm.

Research in this field will benefit the community through the identification of opportunities and challenges faced during the initial expansion of the CSG industry in Australia. Furthermore, the introduction of preventative measures will maintain the sustainability of our environment for future generations to come.

Acknowledgements

I would like thank Professor Huu Hao Ngo for his support and assistance throughout my Capstone Project. Hao provided constructive feedback on the quality of my work and helped fine-tune the scope of my project to achieve a successful engineering outcome.

I would also like to thank my family, friends, and colleagues for their constant support and moral upkeep over the duration of my Civil Engineering degree at the University of Technology, Sydney. I value your patience and willpower in keeping me driven towards achieving my ultimate goal of providing a more sustainable environment for future generations to come.

I would also like to thank my previous employer for providing me with the opportunity to travel to remote areas of Queensland, where I experienced first-hand the opposition by local communities towards the development of coal seam gas mining. This influenced the selection of my project topic and helped keep me motivated towards identifying environmental impacts within Australia’s rapidly expanding coal seam gas industry.

List of Figures

Figure 1 Geological settings for conventional and unconventional gas deposits (Department of Industry, Innovation and Science 2015)

Figure 2 LNG Exports by Destination (Jacobs 2011)

Figure 3 Australia's CSG reserves and gas infrastructure (Department of Industry, Innovation and Science 2015)

Figure 4 Australia's gas supply chain (Geoscience Australia 2012)

Figure 5 Aerial view of a CSG drill rig and construction footprint (DTEM 2015)

Figure 6 Indicative diagram showing core hole design (APPEA n.d)

Figure 7 A schematic of a CSG well with perforations shown in the well casing. Water in the coal seam is pumped to the surface, allowing gas to flow freely through the well to be collected at the surface. (Coffey Environments n.d)

Figure 8 A schematic of a CSG well undergoing hydraulic fracturing. In this case, fracking fluids are injected under high pressure to create fissures in the coal seam, allowing gas to escape through the well to be collected at the surface (United States Environmental Protection Agency 2016) 12

Figure 9 Annual Coal Seam Gas wells drilled in Queensland (Department of Industry, Innovation and Science 2015)

Figure 10 Reduced footprint of a typical CSG well post construction (Manning, Nicholls & Cubby 2013)

Figure 11 Landscape fragmentation of a CSG Field in Southern Queensland (Eco Logical Australia 2012)

Figure 12 Intactness Index (Williams et al 2012)

Figure 13 Water and Gas Production over Time (Williams et al 2012)

Figure 14 Water production from CSG Gas wells (Worley Parson 2013)

Figure 15 Make Good Obligations (GasFields Commission Queensland 2014)

Figure 16 Cross Section of double steel casing used in CSG wells (APPEA n.d)

Figure 17 Cross Section of abandoned CSG well (APPEA n.d)

Figure 18 Fracking Fluid Composition (WorleyParsons 2013)

Figure 19 Wastewater Evaporation Pond (Citizen Journalism 2014)

Figure 20 An overview of the Leewood Water Treatment Facility (left) and aerial imagery of a drained pond following a leak in the primary pond liner (right). (Santos n.d. & Barker 2016) 31

Figure 21 Greenhouse Gas Emissions based on a 100-year methane global warming potential (Hardisty et al 2012)

Figure 22 Greenhouse gas Emissions based on a 20-year methane global warming potential (Hardisty et al 2012)

Figure 23 Methane Concentrations recorded at the Cape Grim monitoring station in North West Tasmania (CSIRO 2016)

Figure 24 Spatial Survey in the Tara gas field and Casino region. (a) & (c) CH4 Concentrations. (b) & (d) CO2 Concentrations (Maher et al 2014)

Figure 25 Methane leak identified in a damaged actuator diaphragm (Day et al 2014)

Figure 26 Scenarios in which hydraulic fracturing may impact groundwater resources

Figure 27 Cross-sectional representation of the Walloon Coal Measure in the Surat Basin, showing the potential for interconnectivity with overlying aquifers (Independent Expert Scientific Committee on Coal Seam Gas and Large Coal Mining Development 2014)

List of Tables

Table 1 Fugitive emissions of methane from gas production - A summary of current literature estimates

Table 2 Sources of methane leakage and possible mitigation measures

Nomenclature

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Chapter 1 - Introduction

This report has been prepared to investigate the environmental effects of CSG mining in Australia. As part of this investigation, an extensive literature review was undertaken identifying risks associated with CSG mining, as well as their overall environmental impact based on recent case study analysis.

1.1 Background

The CSG industry in Australia has developed rapidly since 1995, and is expected to continue to grow as international demand for LNG increases. According to a report by Paragreen & Woodley 2013, the CSG industry in Australia is expected to export between 10 and 40 megatonnes of LNG per annum and will generate in excess of $850 million in royalties for the Australian state government. The CSG industry in Australia coexists amongst Queensland’s most diverse agricultural landscapes, with approximately 92% of Australia’s gas reserves presently located in the Surat and Bowen basins of Queensland. The rapid expansion of CSG mining within well-established agricultural regions has raised significant concerns on the impact of such development on the environment. With Australia’s CSG industry still within its infancy, the importance of early investigations is crucial in identifying potential risks and minimising the occurrence of serious or irreversible environmental harm.

1.2 Scope and Objectives

The aim of this project is to identify environmental risks associated with CSG mining, and provide recommendations on whether or not growth within the industry would contribute positively towards the environment as a whole. This report will analyse the impact of CSG extraction throughout all stages of the mining lifecycle, including exploration, production, transportation, and de-commissioning.

The following are objectives of this report.

- Identify environmental risks associated with CSG mining in Australia.
- Analyse case studies from the United States and Australia to support the report’s findings.
- Provide conclusions on the environmental impact of CSG mining and identify areas of improvement for future studies.

1.3 Methodology

The project was undertaken using the methodology shown below.

- Project Proposal: A proposal was prepared to outline the scope, quality, and time constraints of this project.
- Literature Review: A literature review was undertaken identifying the extraction process, potential economic benefits, and adverse environmental effects associated with coal seam gas mining in Australia. The literature review relied heavily on peer- reviewed journal article publications to develop a greater understanding of the subject matter and ensure information provided were accurate and reliable.
- Case Study Analysis: Case studies from both the United States and Australia were analysed to provide scientific data in order to determine the environmental impact of CSG mining activities.
- Discussion and Conclusion: The main findings and conclusion of this report were discussed based on information obtained through current literature publications as well supporting evidence from relevant case studies. In addition to this, areas for improvement were identified for future studies to come.

1.4 Thesis Layout

- Chapter 1: Introduction to project topic, including background summary, scope and objectives, and report methodology.
- Chapter 2: Literature review identifying potential environmental impacts with coal seam gas mining in Australia, including case study analysis and lessons learnt from projects in the United States and Australia.
- Chapter 3: Main findings and conclusions of this project are discussed and summarised, including shortcomings of this report and recommendations for future work.
- Chapter 4: A personal reflection of the Capstone project.

Chapter 2 - Literature Review

2.1 Introduction

Australia is a fragile continent with an abundance of low-cost fossil fuel resources, including substantial conventional gas and coal seam gas deposits. In 2007-08, the main energy sources produced in Australia were coal, uranium, and gas, with renewable energy accounting for only 2% of total energy production. (Geoscience & ABARE 2010). According to the Climate Change 2007 Synthesis Report, global increases in Carbon Dioxide (CO2) concentrations are due primarily to the burning of fossil fuels (IPCC 2007). Since the beginning of human civilisation, atmospheric levels of CO2 have increased substantially from 278 ppm to over 380 ppm in 2009 (Hare et al. 2011). In 2013, CO2 accounted for 82% of total greenhouse gas emissions in the United States (United States Environmental Protection Agency 2016). CO2 is an important greenhouse gas because of its capability of trapping heat within the Earth’s atmosphere. It is estimated that at the end of the 21st Century, global average temperatures would increase by 1.5 to 5.8°C due to increased concentrations of greenhouse gases within the atmosphere (IPCC 2007). Such a warming trend can be expected to push the natural carbon cycle out of balance and affect the entire thermal and hydrological regimes governing our agricultural systems (Rosenzweig et al. 2001).

With modern economies relying heavily on the burning of fossil fuels for energy, and increasing demand from domestic and overseas customers continuing to rise, the importance of transitioning to alternative fuel sources is crucial in reducing the effects of climate change for future generations to come. In Australia, the transition from coal-fired power to CSG is an important step in reducing greenhouse gas emissions. Recent studies have shown that CSG is a less greenhouse gas intensive energy source compared to coal (Hardisty et al 2012), however this was based on best-practice emissions management and did not take into consideration fugitive emissions of methane (CH4) in any detail. Although considered to be a remarkably clean gas when used properly as a fuel (Singh 2010), CSG represents a significant threat to the future of Australia’s foodprocessing and agricultural industries.

2.2 Unconventional Gas

Vast resources of unconventional natural gas such as coal seam gas, shale gas, and tight gas are presently located in different geological formations within Australia (Figure 1). The gas is used across the residential, commercial and industrial sectors for generating electricity and heating. It differs from conventional gas in that it requires innovative technological solutions to extract depending on the permeability of the gas’ geological setting.

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Figure 1 Geological settings for conventional and unconventional gas deposits (Department of Industry, Innovation and Science 2015)

Coal seam gas is a methane-rich gas produced by bio- and thermogenic degradation of buried plant materials (Singh 2010). It is found in coal seams typically 200-1000 metres underground and is held in place due to water pressure and low permeability within the coal formations. This limits the capacity of CSG to flow freely from the coal bed, adding some difficulty to the CSG extraction process. However, recent technological advancements in the form of hydraulicfracturing and directional drilling are significantly increasing extraction of unconventional gas resources (Osborn et al 2011).

2.3 Gas as a Transitional Fuel

Natural gas is expected to play an important role in Australia’s transition to a low- carbon economy. In comparison to coal, combustion of natural gas generates half the greenhouse gas emissions and does not produce harmful by-products such as sulphur, mercury, fly ash and particulate matter (Cathles et al 2012). For this reason, natural gas is widely considered a greener energy alternative in comparison to coal. However, a recent study by Howarth et al 2011 recognised fugitive emissions of methane as being a major contributor to global warming. The study estimated that 3.6-7.9% of methane from a single gas well ended up in the atmosphere, unburned. Although these values have been disputed by Cathles et al 2012, the lack of evidence available in current literature is concerning.

In 2010-11, power generation from coal and natural gas accounted for 68% and 20%, respectively, of Australia’s total energy needs (BREE 2012). In the same year, Australia produced 2095 PJ of gas. According to the Bureau of Resources and Energy Economics (BREE 2012), gas production is projected to increase four- fold over the next two decades due to growing demand for LNG exports, and is expected to reach over 8000 PJ in 2034-35. The substitution of coal with natural gas is thought to lower the level of greenhouse gas emissions released into the atmosphere, but is not expected to meet climate change targets of keeping global warming below 2°C. This can only be achieved through the implementation of renewable sources of energy which, at this point in time, are neither price competitive nor economically viable.

2.4 Coal Seam Gas Development

With natural gas currently regarded as the next cheapest source of energy after coal (Rutovitz et al 2011), it is no surprise that growth within the domestic and international markets has grown strongly in recent years.

In North America, the development of new innovative techniques involving the use of hydraulic fracturing and horizontal drilling have allowed access to large volumes of natural gas from within shale formations. Estimates of economically recoverable shale gas in the United States have increased rapidly over time, in line with technological advancements and drilling activity.

The potential for gas to be used as a greener source of energy has strengthened the global LNG market, reaching a near historical high of 241.1 million tonnes (Mt) in 2014 (International Gas Union 2015). In 2011, the world’s largest LNG exporters were Qatar (31%), Malaysia (10%), Indonesia (9%) and Australia (8%). In the same year, Japan (33%), South Korea (15%) and the United Kingdom (8%) made up the world’s largest LNG importers (CEDA 2012).

As shown in Figure 2, LNG exports from Australia are destined to Asian importers such as Japan, China, and South Korea.

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Figure 2 LNG Exports by Destination (Jacobs 2011)

With global demand for natural gas projected to increase from 21% in 2010 to 25% in 2030 (International Energy Agency 2011), the expansion of CSG production in Australia (and its subsequent export to the Asia-Pacific LNG market) is considered essential to Australia’s future economic growth.

2.5 The Eastern Gas Market

Proven and probable reserves of CSG are presently located within Australia’s eastern gas market, mainly in the Surat and Bowen basins of Queensland (Figure 3). The Eastern gas market is the only region where CSG production supplements conventional gas supplies.

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Figure 3 Australia's CSG reserves and gas infrastructure (Department of Industry, Innovation and Science 2015)

The transmission and distribution of gas between the Western, Northern, and Eastern gas markets is uneconomical at present due to the geographical isolation of these markets. Gas produced in these regions is either consumed within each market or exported overseas as LNG.

As of August 2010, it was estimated that proven and probable reserves of CSG exceeded 28,000 petajoules (PJ), with Queensland accounting for 92% of this figure (Rutovitz et al 2011). The remaining 8% located within the Clarence- Moreton, Gunnedah, Gloucester, and Sydney Basins of New South Wales.

2.6 Coal Seam Gas Production Lifecycle

The coal seam gas production lifecycle can be broken up simplistically into 4 stages; exploration, development & production, processing & transport, and final consumption (Figure 4).

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Figure 4 Australia's gas supply chain (Geoscience Australia 2012)

2.6.1 Exploration

During the exploration stage, extensive work is undertaken to determine the economic viability of a natural gas reserve. This includes an assessment of the permeability, porosity, and gas content of the coal seam. Strategies used to undertake this assessment include seismic surveys and exploratory drilling.

2.6.2 Development and Production

Once an area is identified as likely containing commercial quantities of CSG, a drill rig is mobilised to commence drilling of the core holes. An area of approximately 80x100m is cleared to allow sufficient space to accommodate for the drill rig and its associated infrastructure (Figure 5).

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Figure 5 Aerial view of a CSG drill rig and construction footprint (DTEM 2015)

Core holes containing an inner layer of steel, ranging between 10cm and 30cm in diameter, are drilled vertically through the ground until refusal depth is reached, then cemented in place to create a casing.

The purpose of the casing is to maintain the well’s integrity and isolate the production zone from other underground formations (i.e. aquifers). The casing allows the well to withstand subsurface forces exerted on it, facilitates the extraction of gas from the production zone, and protects groundwater resources from contamination. Once installation of the casing is complete, a pressure test is undertaken to certify construction of the core hole with the design intent as shown in Figure 6.

Beyond refusal depth, coring of solid rock and coal takes place progressively until the well reaches the required depth.

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Figure 6 Indicative diagram showing core hole design (APPEA n.d)

CSG is typically found deep underground at depths ranging from 200 to 1000 metres below the surface, and is considered an ‘unconventional’ natural gas is it requires more invasive solutions for its successful extraction.

The general process is illustrated simplistically in Figure 7, and involves drilling, dewatering, and sometimes hydraulic fracturing (Figure 8) to stimulate gas flow within the coal seam. This ensures the extraction process is a commercially viable one.

CSG which is trapped within the coal by water under pressure, is extracted by reducing the pressure in the seam and allowing the gas to be released to the surface. This is achieved by drilling vertical wells through the geographic layers into the coal seams and then pumping groundwater, known as ‘produced water’ to the surface. The gas and produced water are then separated at the well-head.

In some locations were water and gas don’t flow freely, hydraulic fracturing (or fracking) may be used to stimulate the process and extract the gas at a higher rate. Fracking physically and chemically increases the porosity of the coal seam thereby increasing gas flow to the surface. The process involves pumping water, sand, and chemical additives down a well under high pressure to either create or expand existing fractures within the coal.

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Figure 7 A schematic of a CSG well with perforations shown in the well casing. Water in the coal seam is pumped to the surface, allowing gas to flow freely through the well to be collected at the surface. (Coffey Environments n.d)

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Figure 8 A schematic of a CSG well undergoing hydraulic fracturing. In this case, fracking fluids are injected under high pressure to create fissures in the coal seam, allowing gas to escape through the well to be collected at the surface (United States Environmental Protection Agency 2016).

2.6.3 Processing, Transport & Storage

Once the gas is extracted from the well, it is processed through the removal of water, carbon dioxide, and other impurities. The gas is then transported using pressurised pipelines to the end market costumer; for domestic use or export overseas as LNG.

2.7 Environmental Impacts

Chen & Randall 2013 describe CSG as a highly intrusive process entailing a considerable catalogue of potential environmental risks and land use conflicts. The major potential environmental risks associated with CSG mining are summarised below and will be assessed in further detail throughout the body of this report.

-Fragmentation of agricultural land and habitat
-Groundwater contamination and diminished water supply due to the depressurisation of coal seams
-Emissions of greenhouse gasses; including fugitive emissions of Methane

2.7.1 Fragmentation of Agricultural Land and Habitat

The rapid development of CSG wells and their need to co-exist amongst prime agricultural farmland has been the source of much conflict in Surat and Bowen Basins of South-East Queensland. This is due to the geographical dispersion of CSG developments, which require mining activities to be undertaken within pre- existing land uses such as agricultural grazing, cropping, and irrigated cultivation (Department of Industry, Innovation and Science 2015). Some studies suggest that the agricultural industry within this region has become host to a large scale extractive industry, covering an area approximately 300,000 km2 (Vacher et al 2014).

As shown in Figure 9, coal seam gas wells drilled in Queensland have risen substantially since the early 00’s. With increased exploration and development, changes to the physical appearance of the landscape have become evident, particularly due to the construction of CSG wells and their associated infrastructure.

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Figure 9 Annual Coal Seam Gas wells drilled in Queensland (Department of Industry, Innovation and Science 2015)

CSG developments directly impact the landscape through the construction of infrastructure including; production wells, production facilities, high pressure pipelines, water treatment & storage facilities, power generation facilities, and access roads. This increases the footprint of the industry’s operations and is further exacerbated due to the natural dispersion of CSG over a large subsurface area.

Some stakeholders argue that CSG developments have minimal impact on the landscape because pipelines are buried and aligned with existing roads and property fences (Dart Energy Limited n.d). This argument is flawed as it does not take into consideration the construction footprint of underground pipelines, or the fact that CSG occurs predominantly within agricultural landscapes (Williams et al 2014) which lack the infrastructure to accommodate for heavy vehicles during the early stages of exploration and development. It is therefore acknowledged that the construction footprint associated with CSG developments significantly exceeds the area devoted to a typical well-head (Figure 10), or that of ‘half the size of netball court’ as stated by Origin Energy.

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