Underground Coal Gasification (UCG) and Coal Seam Gas (CSG) production are two vastly different processes. While UCG and CSG both produce gas from coal deposits, the product gases they create are very different and applied to different end uses.

The Queensland Government has placed a moratorium on all future UCG exploration and development activities because of the unfavourable outcomes from the UCG trial projects undertaken in Queensland to date.

UCG is a process by which coal is burned in situ underground via a controlled combustion process to produce syngas—a mixture of various hydrocarbon gases, hydrogen and carbon monoxide. The exact composition of syngas depends on the coal type, operating pressure, combustion temperature, water concentration, and the oxidant used (air vs pure oxygen). Syngas is used as a chemical feedstock to produce various petrochemicals and plastics as well as a fuel for power generation.

The extraction of syngas is considered a mining activity and is governed under the Mineral Resources Act 1989. UCG is an unconventional coal mining activity, providing a way to extract energy from coal deposits that are uneconomical to mine using conventional methods.

In comparison, the extraction of CSG is a petroleum and gas extraction activity governed under the Petroleum and Gas (Production and Safety) Act 2004. CSG has been commercially produced safely in Queensland for more than 15 years and currently accounts for more than 70% of the state's natural gas consumption. Table 1 (below) illustrates the difference between UCG and CSG.

Table 1: Underground Coal Gasification vs Coal Seam Gas

Conventional and unconventional petroleum resources

Petroleum resources are distinguished as 'conventional' or 'unconventional' based on the differences in the methods of extraction. Conventional petroleum resources are oil and gas reserves found in concentrated pockets that form as a result of underground geology that allows the oil and gas to accumulate in one spot. The method of extraction involves drilling a single vertical well and pumping the gas out.

Unconventional petroleum resources are oil and gas reserves found dispersed through low permeability and low porosity rock formations, including sandstone, coal and shale. The extraction of oil and gas in these types of reserves may involve using either multiple vertical wells and/or vertical wells in combination with horizontal or directional drilling.

Note: Hydraulic fracturing is a technique used to increase the volumes of gas extracted from both conventional and unconventional wells, although it is most frequently used when drilling unconventional wells.

Types of unconventional gas

Australia has vast resources of unconventional gas including coal seam gas (CSG), shale gas, and tight gas. Currently, only coal seam gas is being developed in Queensland.

CSG production in Queensland

Queensland has two basins currently producing CSG, the Bowen and Surat basins. A number of other basins have potential and are currently being explored.

For further information about CSG production in Queensland, refer to the Queensland Government website Petroleum and coal seam gas.

In Queensland, a petroleum resource authority is required under the Petroleum and Gas (Production & Safety) Act 2004 to explore for and produce gas.

Types of impacts

The construction and installation of onshore gas industry infrastructure (e.g. gas wells, pipelines, access roads, laydown yards), by virtue of the project area footprint and the heavy machinery involved, may cause localised environmental disturbance, including soil degradation, contamination and the introduction of invasive species.

Protection of agricultural land

In Queensland, agricultural land is protected under environmental and regional planning legislation.

One of the purposes of the Regional Planning Interests Act 2014 is to manage the impacts of resource activities on areas of regional interest and to manage the coexistence of these resource activities and other regulated activities with highly productive agricultural activities. An area of regional interest defined under the Act is called a strategic cropping area. This is an area containing strategic cropping land that is highly suitable for cropping because of a combination of the land's soil, climate and landscape features.

A priority agricultural area is an area of regionally significant agricultural production that is identified in a regional plan.

The purpose of identifying priority agricultural areas and strategic cropping areas is to ensure that resource activities in these areas do not hinder agricultural operations. They must not result in a material impact on a priority agricultural land use. The assessment criteria in the Regional Planning Interests Regulation 2014 provide prescribed solutions for managing impact.

Read this fact sheet for more information on the Regional Planning Interests Act.

Under the Environmental Protection Act 1994, the Department of Environment and Science may require financial assurance as a condition of an environmental authority. Considerations include the degree of risk of environmental harm being caused or that might reasonably be expected to be caused by the activity and the likelihood of action being required to rehabilitate or restore harm to the environment caused by the activity.

Soil impacts

For a discussion of impacts on soil in the Surat and Bowen Basins, refer to Vacher et al (2014), Quantifying the impacts of coal seam gas (CSG) activities on the soil resource of agricultural lands in Queensland, Australia. (PDF 1.02 MB)

This paper examines the importance of quantifying the different impacts that CSG activities have on soils in order to better inform the development of gas industry guidelines to minimise impacts to the soil resource on joint CSG-agricultural lands.

The Gas Industry Social and Environmental Research Alliance (GISERA) undertook a study of farms in the Surat Basin: The effects of coal seam gas infrastructure development on arable land. Project 5: Without a trace (Final report) (PDF 1.42 MB). The aim of this study was twofold:

1. To assess the extent of damage to agricultural soil caused by the various elements of CSG development, and
2. To estimate the likely impact of soil compaction, caused during the establishment of CSG infrastructure, on crop productivity.

Weed management

Callinan, B. (2014) Agriculture, Big Business and the Gas Fields: Practical Tools for Weed Hygiene at the Mega-Scale refers to a range of measures to prevent weed spread. These measures include landholders' practices; legislation; and weed hygiene procedures adopted by the onshore gas industry.

Landholders can help prevent weed spread by regularly cleaning vehicles and equipment, ensuring weed hygiene declarations accompany seed stock and fodder, adopting quarantine procedures before introducing new livestock and maintaining pastures in good conditions. They can benchmark their weed status and establish risk management practices, ideally prior to any significant gas activity on their property.

The Land Access Code, made under the Petroleum and Gas (Production and Safety) Act 2004, imposes mandatory conditions concerning the conduct of authorised activities, including petroleum authorities, on private land. One of the mandatory conditions (section 15 of the Code) is to prevent the spread of a declared pest while carrying out authorized activities. A declared pest is defined under the Biosecurity Act 2014 and can also be an animal or plant declared under a local law to be a pest.

Callinan (2014) discusses weed prevention strategies developed by the onshore gas industry as part of standard operating procedures. These strategies help to find collaborative weed management solutions with other industry partners and to guide biosecurity management planning, hygiene management planning and practices and land access agreement negotiations.

What is CSG water?

The groundwater that is removed from coal seams in order to produce CSG is known by several different names, including CSG co-produced water, CSG produced water, CSG associated water and CSG water.

CSG water contains natural salts and other minerals in varying quantities. All groundwater extracted to produce CSG in Queensland is treated to ensure that it meets the quality standards and environmental guidelines for its intended re-use purpose.

In Queensland, the majority of the treated CSG water is re-used for crop irrigation, livestock watering, industrial manufacturing or dust suppression. Treated CSG water is also re-injected into groundwater aquifers for future use. The treatment and re-use of CSG water is strictly regulated.

Regulation

The Coal Seam Gas Water Management Policy 2012 (PDF 154 KB) encourages CSG operators to manage CSG water in a way that benefits regional communities and reduces impacts on the environment.

The Environmental Protection Act 1994 imposes requirements on the management of CSG water, including its use, treatment, storage and disposal.

The Waste Reduction Recycling Act 2011 recognises that CSG water, which is a 'waste' under the Environmental Protection Act 1994, may have beneficial uses. This Act prescribes the process whereby CSG water can be re-classified as a resource and used for a beneficial purpose.

Until recently, the beneficial use of CSG water needed to be approved by the Queensland Government under a Beneficial Use Approval. While some of these approvals are still in effect until they expire, recent legislative changes have introduced ‘End of Waste’ approvals and codes that allow for produced water to be used for beneficial purposes.

The main drive for this change was to reduce the regulatory burden on a bi-product (e.g. CSG water) that fits the criteria to be deemed a ‘resource’ instead of a ‘waste’. For produced water to be deemed a resource, trials must be conducted to demonstrate it meets a set of requirements. If the produced water meets these requirements and is deemed a resource, further regulatory approvals for its use would not be required.

For more information on the End of Waste framework, visit the Department of Environment and Science's website.

Case Study

The Chinchilla Beneficial Use Scheme is an example of CSG water being put to a beneficial use. It is a contractual arrangement between Queensland Gas Company (QGC) and SunWater, a bulk water infrastructure developer and manager.

QGC treats CSG water from its gas fields in the Surat Basin at its Kenya Water Treatment Plant south-west of Chinchilla. The Kenya plant treats and recovers approximately 90% of the raw CSG water and transports it by pipeline directly to landholders and to the Chinchilla Weir on the Condamine River, where it is mixed with river water and supplements water reserves available for agricultural use and public consumption.

What is hydraulic fracturing?

Hydraulic fracturing, also commonly referred to as fraccing or fracking, is a method used by the oil and gas industry since the late 1940s to increase the rate and total amount of oil and gas extracted from reservoirs. It has also been used to enhance coal seam gas (CSG) production from coal seams since the 1970s in the United States of America and since the 1990s in Australia. It is estimated that only eight percent (8%) of all existing conventional and non-conventional oil and gas wells in Queensland have been fracced.

Hydraulic fracturing involves pumping high pressure fluids into a target gas formation to fracture the rock to release the oil and gas. Hydraulic fracturing is primarily used in the production of shale gas and tight gas. However, it is also used in the production of CSG from deeper, lower permeability coal seams.

It is estimated that, as the CSG industry expands in Queensland, 20-40% of CSG wells may require hydraulic fracturing at some point in their lifecycle.

What chemicals are used in hydraulic fracturing?

Water and sand make up 97-99% of fraccing fluids. The remaining volume is made up of chemical additives to reduce friction, inhibit bacteria growth, dissolve minerals and enhance the fluid's ability to transport sand into fractures. The exact chemical composition of fraccing fluids varies with the geological formation being fracced and the temperature and depth of the target formation.

BTEX refers to the chemicals benzene, toluene, ethylbenzene and xylene which are naturally found in petroleum, including crude oil and natural gas. The use of BTEX chemicals in fraccing fluids in Queensland is strictly prohibited under section 206 of the Environmental Protection Act 1994.

How is hydraulic fracturing regulated in Queensland?

The transport, storage, use and disposal of chemicals used in hydraulic fracturing that may present a hazard to people, property or the environment are strictly regulated and controlled in Queensland.

Environmental protection

The Department of Environment and Science requires a description of the chemicals proposed to be used in hydraulic fracturing, along with a Stimulation Management Plan, as part of the application for an Environmental Authority. The Environmental Authority approval imposes strict environmental conditions on the storage, use, disposal and monitoring and control of the chemicals to be used in the hydraulic fracturing process. These conditions are legally enforceable and carry heavy penalties for non-compliance. Gas companies are legally bound to notify government of any environmental incident or breach of a condition.

After fracking has occurred, the quality and quantity of fracture flowback water must be monitored until one-and-a-half times (150 per cent) the amount of the fluid used in the hydraulic fracture procedure has been removed from the well. This is to ensure that all the frac water that goes downhole is recovered and reused or treated appropriately.

The Environmental Protection Act 1994 lists general obligations and duties to prevent environmental harm, nuisances and contamination. The two primary duties that apply to everyone in Queensland are:

• General environmental duty – a person must not carry out any activity that causes or is likely to cause environmental harm, unless measures to prevent or minimise the harm have been taken; and
• Duty to notify of environmental harm – to inform the administering authority and landowner or occupier when an incident has occurred that may have caused or threatens serious or material environmental harm.

Workers' health and safety

Some chemicals used in fracking may be defined as 'hazardous', based on an internationally agreed system for classifying and labelling hazardous chemicals, known as the globally harmonised system of classification and labelling of chemicals or GHS.

Workplace health and safety legislation in Queensland is administered by Workplace Health and Safety Queensland and uses the GHS classification system to identify hazardous chemicals.

The Intergovernmental Agreement for Regulatory and Operational Reform in Occupational Health and Safety is an agreement between the Commonwealth, State and Territory governments to harmonise occupational health and safety legislation across Australia.

Under this agreement, the Queensland Work Health and Safety Act 2011 (WHS Act) and the Work Health and Safety Regulation 2011 (WHR Regulation) provide a nationally consistent framework to protect workers against harm to their health, safety and welfare through the elimination or minimisation of risks arising from work with hazardous chemicals. The WHS Act puts the duty on employers to do everything reasonably practical to keep workers and the general public safe, including adequately managing the risk of chemical spills and exposure.

The following codes of practice, enabled under section 274 of the WHS Act, are model codes of practice developed by Safe Work Australia and adopted by the Queensland Government.

• Managing Risks of Hazardous Chemicals in the Workplace Code of Practice 2013 (PDF 1.7 MB)
• Preparation of Safety Data Sheets for Hazardous Chemicals Code of Practice 2011 (PDF 1.2 MB)
• Labelling of Workplace Hazardous Chemicals Code of Practice 2011 (PDF 2.2 MB)

Transportation

'Dangerous goods' is a term used to classify chemicals which might present an immediate hazard to people, property or the environment and is defined in the Australian Code for the Transport of Dangerous Goods by Road and Rail (known as the Australian Dangerous Goods Code). This Code regulates the transport of dangerous goods in Queensland.

The Transport Operations (Road Use Management) Act 1995 and the Transport Operations (Road Use Management) – Dangerous Goods Regulation 2008, administered by the Department of Transport and Main Roads (DTMR), govern the transport of dangerous goods by road in Queensland. This includes the requirement for all vehicles transporting dangerous goods to have a dangerous goods vehicle licence and for all drivers transporting dangerous goods to have a dangerous goods drivers licence.

The Transport Infrastructure Act 1994 and the Transport Infrastructure (Dangerous Goods by Rail) Regulation 2008, also administered by DTMR, govern the transport of dangerous goods by rail in Queensland.

Additional reference materials

• IESC (2014). Hydraulic fracturing ('fraccing') techniques, including reporting requirements and governance arrangements. (PDF 1.1 MB)
  Provides an overview of the hydraulic fracturing process; the use of fracturing chemicals; key environmental concerns (subsurface contamination, surface contamination, induced seismicity; and water use); and the regulatory framework in the various jurisdictions, including the Queensland's code of practice for constructing and abandoning coal seam gas wells.
• Batley, G. & Kookana, R, (2012). Environmental issues with coal seam gas recovery: Managing the fracking boom. (PDF 84 KB)
  An outline of the types of research required to fill the information gaps to better understand the ecological risks from gas recovery.