FAQ: coal seam gas

What is coal seam gas?

Coal Seam Gas (CSG), or coal bed methane (CBM) as it’s sometimes known, is a form of natural gas, typically extracted from coal seams at depths of 300‑1000 metres. It is a colourless, odourless, mixture of a number of gases, but is mostly made up of methane ‑ it’s usually more than 95 per cent pure methane. (Source: Gisera)

Coal seam gas is a type of unconventional natural gas.

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.

There are several types of unconventional gas such as CSG, shale gas and tight gas. (Source: CSIRO)

How is coal seam gas extracted?

It is extracted using a drill rig. This diagram from CSIRO shows the process:

How much water is extracted from underground during coal seam gas operations?

Coal seams contain both water and gas. Before the gas can be extracted, the water must be pumped out.

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. (Source: CSIRO)

In its fact sheet on predicting the impacts of coal seam gas development, CSIRO also says:

Typically, large amounts of water are produced during the process of CSG extraction. In Queensland, the average well has produced around 20,000 litres of water each day, although this can vary widely among individual wells.

A recently approved two well coal seam gas exploration project in NSW expects to extract around 16,000L of water a day.

What is the quality of this water, and what happens to it?

The water extracted during coal seam gas operations is often referred to as “produced water” and can be quite salty. It is stored in tanks on coal seam gas sites or in holding ponds before treatment, and disposal or reuse.

CSIRO says, “Produced water quality is highly variable from site to site, but it is generally not fit for human consumption.”

The Australian Petroleum Production and Exploration Association (APPEA) says that this “produced water” can be treated (for example via reverse osmosis) and reused. APPEA lists a number of potential “beneficial uses”:

  • Stock watering
  • Crop irrigation
  • Tree plantations
  • Augmenting town water supplies
  • Aquaculture
  • Industrial and manufacturing operations
  • Dust suppression for construction activities

Santos is currently operating a number of projects in Queensland that reuse water produced from their coal seam gas operations, you can read details of those projects here.

What is the difference between evaporation ponds and holding ponds or dams?

Evaporation ponds have been used as a method of treating salty produced water previously, however due to various concerns, including potential for overflow during rain, 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, and in NSW dams or “holding ponds” are continuing to be used and built to hold produced coal seam gas water. Both Metgasco’s operations in Casino and Santos’ operations in the Pilliga use ponds to hold water extracted during coal seam gas operations.

Here is how the NSW government recently described its thoughts on the difference between an evaporation pond (banned) and a dam holding coal seam gas produced water (not banned):

Evaporation ponds are typically used to concentrate salt and are specially constructed to achieve this.

Temporary storage dams in contrast need to be part of a water management system, which includes options for the disposal of water without the use of evaporation ponds. (Source: Minister for Resources media release)

What is hydraulic fracturing/fracking/fraccing?

Hydraulic fracturing (also known as fracking or fraccing) is used to stimulate gas flow.

Hydraulic fracturing typically involves injecting fluid made up of water, sand and additives under high pressure into the cased well. The pressure caused by the injection typically creates a fracture in the coal seam where the well is perforated. [...]

Water and sand make up around 97 to 99 per cent of the hydraulic fracturing fluid. Added chemicals make up about 1 to 3 per cent of the hydraulic fracturing fluid. (Source: CSIRO)

Hydraulic fracturing has been used on coal seam gas operations in both NSW and QLD.

There are significant concerns associated with hydraulic fracturing.

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. (Source: CEDA report)

There are widespread calls from environmentalists and local community groups to ban hydraulic fracturing in Australia.

“Fracking” became a talking point around the world following Josh Fox’s 2010 film Gasland which explores the stories of a number of Americans living near shale gas operations, in regions where fracking has been used extensively.

What is BTEX?

BTEX is an acronym that stands for benzene, toluene, ethylbenzene, and xylenes, which are volatile organic compounds (VOCs).

BTEX chemicals have been associated with the coal seam gas hydraulic fracturing (fraccing) process due to their presence in a number of fraccing fluids. (Source: Arrow Energy)

The use of BTEX in coal seam gas operations has been banned in both NSW and QLD. BTEX can be naturally occurring and benzene is a known carcinogen (cancer causing). The process of hydraulic fracturing can release naturally occurring BTEX.

What is coal seam gas exploration?

Exploration is the first phase of coal seam gas operations, it occurs before production can take place.

The exploration stage is all about gathering detailed information to help us determine potential gas reserves in a given area. We start by conducting a review of existing data, then we drill vertical core holes to collect solid coal and rock cores for testing. [...]

If adequate gas reserves are located, we may convert the holes for ongoing monitoring, or suspend them for later use in a pilot program. If adequate reserves are not found, we plug the holes with cement, seal them below ground level, and rehabilitate the site. (Source: Origin)

What are the common concerns associated with coal seam gas?

The key issues considered in the report of the NSW parliamentary inquiry into coal seam gas reflect the key concerns voiced by the community in regards to the coal seam gas industry:

Water, Fraccing, Remediation, Community Engagement, Land access and compensation, Agriculture, Economic benefits, Energy security, prices and greenhouse gas emissions, Breaches of environmental regulations, Regulation, Moratorium on Production Leases.

The report said:

A key theme throughout this report is the level of uncertainty surrounding the potential impacts of the coal seam gas industry. The many unanswered questions include: will the industry threaten the quality and quantity of water resources? How dangerous is fraccing? Are there other potential health and environmental impacts? Is coal seam gas a cleaner energy source than other fossil fuels? And what are the economic benefits for New South Wales?

More data needs to be gathered to assess the potential impacts of the coal seam gas industry. In order to do this, we need to allow the exploration phase to proceed.

Other key concerns expressed by the community are around the inequitable negotiating power between landholders and coal seam gas companies (a landholder does not have the right to say no to coal seam gas on their land). Another concern is property values:

Farmers adjacent to Santos’s Kahlua pilot production site have suffered a 30 per cent decrease in the value of their properties. Registered bidders to an auction of one property two months ago simply withdrew “because of the Kahlua development next door”. (Source: Letter to the Editor, AFR)

Who has raised concerns about coal seam gas in Australia?

There are hundreds of groups and thousands of individuals across Australian and particularly in NSW and QLD that have expressed concerns about the coal seam gas industry in Australia. Some of those include:

Hundreds of community groups, many represented by Lock the Gate Alliance, NSW Farmers Association, GetUp!, Country Womens’ Association of NSW, Nature Conservation Council of NSW, Hunter Valley Thoroughbred Breeders Association, The Wilderness Society, NSW Irrigators Council, National Toxics Network, Hunter Valley Wine Association, The Greens, many local councils have also imposed moratoriums.

Coal seam gas operations in NSW

In NSW a licence to conduct coal seam gas exploration is called a Petroleum Exploration Licence (PEL) and a production licence is a Petroleum Production Lease (PPL). For a list of all coal seam gas licences in NSW, click here (July 2012).

Companies currently holding coal seam gas licences in NSW are Santos, AGL, Petrel Energy, Comet Ridge, Metgasco, B.N.G Pty Ltd, Apex Energy, Pangaea, Clarence Moreton Resources, Leichhardt Resources, Energetica Resources, Drequilin, and Dart Energy.

The NSW Government has outlined general information regarding the potential impacts of coal seam gas.

Coal seam gas operations in Queensland

In Queensland a licence to conduct coal seam gas exploration is called an Authority To Prospect (ATP) and a production licence is a Petroleum Lease (PL). For a list of all coal seam gas licences in Queensland, click here (February 2012).

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

The Queensland Government has answered some frequently asked questions about coal seam gas.

Have I missed something? Let me know.