The Queensland government has hit one of Australia’s leading unconventional gas extraction companies, Linc Energy Ltd, with landmark legal action following a nine month investigation by the state’s Department of Environment and Heritage Protection.
Minister for Environment and Heritage Protection Andrew Powell has finally revealed the state’s environment watchdog had filed charges against Singapore-listed Linc Energy over alleged serious environmental harm stemming from Linc’s pilot Underground Coal Gasification (UCG) plant near Chinchilla in the Queensland’s foodbowl of the Darling Downs.
The Queensland government’s legal pursuit of Linc over environmental damage comes as political and grass roots friction between the energy and mining industries and farmers and environmental advocates increases over the extent of the hunt for new ways to get energy from coal without literally digging it out of the ground.
“While the harm allegedly caused to the environment is considered serious, the information available to the department suggests there is no immediate risk to neighbouring landholder water bores,” Mr Powell said.
“The department is continuing its formal investigation into the activities of Linc Energy Limited.”
The environment charges by the usually pro-mining Newman government are significant because they again raise real questions as to whether UCG is an environmentally safe method of fuel extraction.
(A report by an Independent Scientific Panel, appointed to assist the government to assess the technical and environmental aspects of the UCG technology, is available at www.ehp.qld.gov.au)
The Mayor of Western Downs Regional Council, Ray Brown, voiced strong concerns over the nine month delay between the state government’s official notification environmental damage and the incident occurring.
“Why has it taken nine months to jump on this?” Councillor Brown told Government News.
“The concern I have is that landowners were only informed last Friday. Why has it taken this long for our landowners to be informed?”
Councillor Brown told said a big issue with the UCG industry was that it was regulated by the state’s Minerals Act while the more heavily regulated Coal Seam Gas industry was governed by the Petroleum Act.
This meant that controls governing the required notification of environmental incidents relating to CSG were not incumbent of UGC extractors that have a chequered environmental history.
Underground Coal Gasification differs from more commonplace coal seam gas extraction in that coal is converted to gas while it is still underground using what the Queensland government call “controlled partial combustion.”
“The resultant product is known as ‘syngas’ and can be used as either a fuel or as feedstock for a range of chemical products. Syngas is a mixture of hydrocarbons and other gases which vary according to the inputs to the combustion process,” the Queensland Department of Mines and Natural Resources description says.
Part of the commercial appeal of the UCG process is that it can be used to derive gas from coal deposits that would otherwise be too expensive or difficult to extract using other methods.
Councillor Brown told Government News that his understanding was that the Chinchilla facility combusting at 1600 degrees centigrade at 150 metres underground.
He noted that another UCG plan operated by Cougar in Kingaroy had also been shut down amidst environmental concerns.
Councillor Brown said that it was now time the state government reviewed the laws that regulated UCG, primarily that UCG plant operators were governed by the Minerals Act while Coal Seam Gas extractors were regulated by the Petroleum Act that had more stringent controls and disclosure obligations.
“If the Minerals Act is different to the Petroleum Act, let’s change the act to make sure it has good bones in place and the regulations are complied with,” Councillor Brown said.
“I’ve been chasing the CSG industry to make sure they do it right – and here is the other industry, UCG, but it’s controlled under the Minerals Act – isn’t it time we review those acts?.”
The state government’s regulatory action comes as Linc Energy continues the decommissioning of its controversial UCG pilot project in Chinchilla in favour of pursuing opportunities in Poland and Africa.
According to a 2013 investor relations presentation, Linc Energy is stopping “operations at Chinchilla after 14 successful years” and that the focus of the plant is now “on decommissioning and rehabilitation.”
The company’s presentation also takes a swipe at the Queensland government saying there is an “ongoing lack of Queensland Government UCG policy direction.”
Meanwhile, the Lock the Gate Alliance has accused the Newman government of trying to bury the bad news by putting out a press release on the environmental charges late on a Friday afternoon.
“Releasing this important information at 5pm Friday and on the night a major cyclone was about to hit the state was obviously designed to ensure as few people as possible read about it,” Mr Hutton said, adding that the release timing was a cynical act.
“This underground coal gasification technology is highly dangerous and the State Government should never have allowed it. Any sensible government would ban it now,” Lock the Gate’s national president, Drew Hutton said.