1. BAD PRESS – GOOD VIBES Mr Stephen Hancock Special Consultant URS Australia Pty Ltd Melbourne

2. BAD PRESS – GOOD VIBES The GOOD NEWS ? Or The BAD NEWS ? About Coal Seam Gas An Introduction Note: CSG Exploration and Development is NOW contentious NOW contentious

3. BAD PRESS – GOOD VIBES

4. What is Coal Seam Gas ? It is a biogenic gas comprised of Methane (CH4) and Carbon Dioxide (CO2) generated by the anoxic decomposition of organic matter As occurs in - Sewage ponds / Landfills / Swamps / Sewage ponds / Landfills / Swamps / Coal Deposits

5. BAD PRESS – GOOD VIBES How does it occur ? CSG is restrained in source strata by hydrostatic and lithostatic pressure within the matrix of coal / lignite CSG is restrained in source strata by hydrostatic and lithostatic pressure within the matrix of coal / lignite

6. BAD PRESS – GOOD VIBES How is it extracted ? A By fully sealed (cased and cemented) drillholes orientated to intersect permeable structures (cleats) in the coal intersect permeable structures (cleats) in the coal B By reducing the hydrostatic pressure containing the gas C By supporting the permeable structure where necessary with sand in a process called fracturing or “fracking” `

7. BAD PRESS – GOOD VIBES Does CSG extractions inhibit alternative land uses ? NO ! NO ! BUT – Exploration and evaluation may stimulate new uses ! BUT – Exploration and evaluation may stimulate new uses !

8. BAD PRESS – GOOD VIBES What is involved in CSG exploration ? A Drilling test wells generally to depths > 1000m B Sampling and evaluation of the hydrogeology, hydrochemistry of the sequence including CSG source strata CSG source strata Overlying and underlying aquifers Overlying and underlying aquifers Hydrogeological environment Hydrogeological environment C Undertaking qualitative testing involving Depressurisation (water extraction) Depressurisation (water extraction) Water pressure monitoring in all aquifers Water pressure monitoring in all aquifers Gas flow depressurisation analysis Gas flow depressurisation analysis D Hydrogeological and gas kinetic modelling of local and regional impacts of local and regional impacts

9. BAD PRESS – GOOD VIBES What deleterious effects can arise from exploration and development ? What deleterious effects can arise from exploration and development ? Gas leaks via poorly constructed wellsGas leaks via poorly constructed wells Interaquifer leakage via poorly constructed wellsInteraquifer leakage via poorly constructed wells Microseismic events due to overpressurising during “fracking”Microseismic events due to overpressurising during “fracking” Interaquifer leakage due to aquitard fracturingInteraquifer leakage due to aquitard fracturing Land subsidence due to strata compression on depressurisationLand subsidence due to strata compression on depressurisation

10. BAD PRESS – GOOD VIBES What beneficial effects can arise ? What beneficial effects can arise ? The sourcing of a readily and efficiently convertible energy sourceThe sourcing of a readily and efficiently convertible energy source Reduced GHG emissions in energy generationReduced GHG emissions in energy generation Valuable data on groundwater resources and their sustainabilityValuable data on groundwater resources and their sustainability Water availability for other beneficial uses (geothermal, spa, water supply)Water availability for other beneficial uses (geothermal, spa, water supply) Use of aquifers as reservoirs for water securityUse of aquifers as reservoirs for water security

11. BAD PRESS – GOOD VIBES Can the deleterious impacts be managed ? YES ! YES ! By appropriate application of the data obtained during exploration and operational monitoringBy appropriate application of the data obtained during exploration and operational monitoring By managed aquifer recharge of water not approved for other usesBy managed aquifer recharge of water not approved for other uses

12. BAD PRESS – GOOD VIBES Why does CSG get such a Bad Press ? A Because NGO’s oppose any form of energy derived from fossil fuel B Because the need for transitional energy sources to get to a carbon free energy is not recognised by NGO’s C Because some CSG developers in Queensland were initially insensitive in their approach to landholder interests

13. Bad Press is catalysed : By misunderstandingsBy misunderstandings By misinformationBy misinformation By a lack of confidence in regulatory and political processesBy a lack of confidence in regulatory and political processes BAD PRESS – GOOD VIBES

14. It all started in the Great Artesian Basin (Qld and NSW) A The issue was pressure maintenance - Landholders were subject to strict restrictions on water use - Landholders were subject to strict restrictions on water use - CSG developers appeared not to be subject to restrictions - CSG developers appeared not to be subject to restrictions B Lock the Gate emerged and brought in NGO’s C Lock the Gate and NGO’s spread - Fear - Fear - Risk - Risk - Distrust - Distrust - Misinformation and - Misinformation and - Confusion - Confusion D The media feed on the controversy BAD PRESS – GOOD VIBES

15. Are there real issues of concern ? YES - there are YES - there are Quality data gathering and modellingQuality data gathering and modelling Quality engineering of wells and pipelineQuality engineering of wells and pipeline Rational water managementRational water management Quality in rational risk based regulatory regimeQuality in rational risk based regulatory regime Transparency in all aspectsTransparency in all aspects Adequacy of regulatory conditionsAdequacy of regulatory conditions

16. BAD PRESS – GOOD VIBES What are potential benefits in Victoria ? 1.Reliable evaluation of groundwater resources for all uses 2.Knowledge of alternative water uses 3.Improved water supply reliability 4.Provision of engineering facilities for future water management 5.Improved local and regional infrastructure 6.Economic stimulation (employment, maintenance, servicing) 7.Reduced GHG releases 8.Enhanced local industrial development

17. BAD PRESS – GOOD VIBES

18. Do we have enough CSG to sustain Australia ? YES YES But we need to develop it where it is most economic

19. BAD PRESS – GOOD VIBES What are the generic benefits of CSG ? The availability of data on hydrological, hydrochemical, hydrogeological and geothermal parameters derived from CSG explorationThe availability of data on hydrological, hydrochemical, hydrogeological and geothermal parameters derived from CSG exploration The value of the engineering compensation and infrastructure supplied to sustain the industryThe value of the engineering compensation and infrastructure supplied to sustain the industry The reduced GHG releases associated with the energy efficiency conversionThe reduced GHG releases associated with the energy efficiency conversion The efficient energy to transit to a carbon free sourceThe efficient energy to transit to a carbon free source