The natural gas industry has a bright future in NSW

Federal Resources Minister, Gary Gray says that the natural gas industry has a bright future in NSW.

On 31 July, 2013, the Federal Resources Minister, Gary Gray welcomed the NSW Chief Scientists report into coal seam gas which he said demonstrated that the natural gas industry has a bright future in NSW. “The Commonwealth Government is committed to expanding the development of natural gas from coal seams in a sustainable and sensible way”.   “Her (the Chief Scientist) shows that by ensuring best practice across the industry, natural gas from coal seams should be developed in NSW.”

The NSW Chief Scientist initial report on the Independent Review of Coal Seam Gas Activities in NSW can be found on:

Some of the important findings of the report are shown below:

Executive Summary:

“From a technical and scientific standpoint, many challenges and risks associated with CSG are not dissimilar to those encountered in other energy and resource production, and water extraction and treatment.  Some challenges are well defined and can be effectively managed through high standards of engineering and rigorous monitoring and supervision of operations."

Page 55:
Literature on the topic of CSG technologies indicates that with application of best practice technologies and processes outlined in codes of practice, operators can minimise the risk of well failure and reduce environmental effects of CSG production (Carter, 2013; Cook, 2013a; Cook et al., 2013; King, 2012).

Various industry standards have been developed through years of operator experience and technological development and improvement in the more mature CSG and shale gas industries in the US. While they acknowledge that there is some variability in the details of well construction due to geological, environmental and operational settings, the basic practices of constructing reliable wells are similar (American Petroleum Institute, 2009).

In September 2012, NSW Resources and Energy published two codes of practice in relation to CSG activities in NSW: a Code of Practice for Coal Seam Gas for Fracture Stimulation Activities and a Code of Practice for Well Integrity (NSW Resources & Energy, 2012a, 2012b). The codes were developed in consultation with the CSG industry and provide practical guidelines for CSG titleholders about how to comply with applicable restrictions and regulations and how to ensure best practice operations and application of CSG technology. These codes are to be regularly reviewed. CSG titleholders are required to comply with both NSW Codes to assure CSG activities are compliant with the Petroleum (Onshore) Act 1991.

Page 59:
These advances have enabled the rapid expansion of the CSG and shale industries in North America, Australia and other locations. However, it is not only drilling and extraction technologies that have improved, but also technologies that minimise risks and impacts to the environment, human health and safety – these include environmental monitoring technologies for emissions and water; process monitoring; computer modelling and data analytics to understand and predict geology, hydrogeology and geomechanics; down-hole well logging sensors to test the integrity of gas wells; new drilling and fracking fluids to minimise toxic contamination of aquifers.

Australia is poised to take advantage of evolving technological advances and lessons learned here and overseas, with a key challenge in finding ways to transfer effectively the vast industry experience from North America to Australia.

Page 67:
“Thus, the impacts from produced water should be negligible provided best practice is followed--" 

Page 69:
“Methods and codes for drilling and installation of wells and bores are well established”

Page 70:
“there is little risk of mixing of water from the coal seam with surrounding aquifers, due to the hydraulic gradients towards the seam”

Metgasco fully supports the Chief Scientists comments:

“ - - - a commitment from all parties will be required to improve the existing situation  and build trust in the community”

“The Review has heard argument from both sides of the debate that the legislation and regulations around CSG in NSW are complex and opaque. This situation can lead to considerable regulatory burden for those needing to comply and those judging compliance, and can conceivably lead to gaps, overlaps, contradictions, and wasted time in inefficient oversight.” (Section 3.3.7)

It is important to note that the Chief Scientists report does not call for a halt to NSW CSG operations.



West Perth Office
Level 2, 30 Richardson St.
West Perth, WA 6005

Tel: +61 8 6245 0060
Metgasco Ltd  ACN 088 196 383