1. CSG in Victoria Geoff Collins Manager Energy Resources Development and Engagement

2. Presentation Overview: 1.Context 2.What is CSG 3.How is it produced 4.Hydraulic fracturing 5.Water 6.Access to land 7.Prospectivity - how likely is CSG to eventuate 8.Questions

3. Context Victorias gas demand will have doubled by 2030 Current gas reserves will be depleted somewhere between 2025 and 2030 There are three possible sources of local supply which need to be investigated: Sources:AEMO Gas Statement of Opportunities DPI Annual Statistical Review conventional gas offshore shale gas and tight gas onshore coal seam gas onshore

4. What is CSG? CSG is methane, the principal component of natural gas. It is formed by: CSG is largely held on the surface of the coal. The greater the hydraulic pressure, the more gas that can be stored. temperature as coal is buried (black coals) biogenic activity in coal (brown coals)

5. How is it produced? To produce CSG, pressure must be reduced to allow the methane to come off the coal surface Methane flows through natural fractures to a collecting well where it is brought to surface Depth is in the range of 200 to 1000 metres Drill rigs are truck mounted and occupy a space of about 60 by 80 metres Well spacing is of the order of 500 to 700 metres A producing well occupies a space of about 10 by 10 metres

6. Hydraulic fracturing Hydraulic fracturing or fraccing is used to enhance permeability where natural fractures are insufficient to allow gas to flow to the well Fraccing uses a fluid that is 98% water and sand. Wells are cased to contain the fracturing to the coal seam and to isolate shallower aquifers Victorian regulations mean any proposal for the use of additives in hydraulic fracturing requires detailed assessment For a list of chemicals that might be used in fraccing fluids: www.appea.com.au

7. Water - sub-surface Including lowering of (non-coal) aquifer pressures connection between aquifers natural connection connection caused by fraccing fraccing fluids Water extraction requires licensing by SRW

8. Water - surface Disposal of water disposal to land is exempt under EPA licensing disposal to an aquifer requires EPA licensing disposal to a waterway requires EPA licensing

9. Access to land Victoria wants to see both development of its earth resources and a thriving farming sector. The area that a CSG operation occupies means that farming activities can continue While there is no right of veto, the MRSDA puts requirements on companies that want to access land and provides a general requirement to consult

10. Prospectivity - how likely is it to eventuate? Most of the worlds CSG is coming from black coal Victoria largely has brown coal or disseminated black coal. Around Wonthaggi there are some thicker black coal seams but their extent is limited There is little information about the characteristics of Victorias coal from which to draw conclusions What evidence there is, is inconclusive.

11. Where Victorian brown coal is located

12. Questions?

13. Gippsland Basin Coal Cretaceous Black Coal Tertiary Brown Coal

14. Otway Basin Coal