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The coal seam gas industry could extract 300 gigalitres a year from groundwater systems for 25 years, according to the National Water Commission.
The commission’s submission to the state inquiry said the CSG industry posed significant long-term risks to surface and groundwater systems if it was managed poorly.
It said the potential impact of CSG developments, particularly cumulative effects of multiple projects, were “not well understood”.
It said the depressurisation of coal seams could also impact on adjacent aquifers and reduce water surface flows.
The first public hearing of the inquiry was held in Alstonville yesterday.
Local residents, famers, and activists were present, as well as business leaders.
Metgasco chief executive Peter Henderson told the gathering the public had nothing to fear over CSG development.
“There’s a small part of the community that is quite radical and believes a lot of the misinformation out there,” he said.
“People are losing sight of the fact that we are only going to be using about two per cent of the land anyway, so it shouldn’t make that much difference.”
“The footprint of a CSG well or a pipeline is actually very small indeed.”
Metgasco holds gas exploration licences covering 5800-square kilometres around the NSW farming regions of Lismore and Casino.
It plans to ramp up production from an existing handful of CSG test wells to around 1000.
While the debate raged on in NSW, a new report from Moelis energy analyst Gundi Royle said the risks of community conflict, and unresolved or irresolvable issues in the industry could delay QLD CSG expansion by up to three years.
Royle said the huge increase in the number of wells needing to be drilled was paving the way for heightened industry regulation.
The report said Origin Energy’s $14 billion APLNG venture, the Santos-led $16 billion GLNG facility, and BG Group’s $16 billion QCLNG project faced fresh risks from the delays.
“We sense that there is sufficient worry among the political class to be rushing in with a few extra plasters and we can see a two to three-year delay for APLNG, GLNG, and QCLNG,” said Royle.
The report said Origin and Santos could face balance sheet revisions, and predicted penalties would apply to changed construction deals and missed LNG contracts.
On Monday Origin said it had reached 600 agreements with farmers for access to their properties without approaching the Land Court for access.
But the company hinted at rising opposition from landholders and environmental groups.
Earlier in the week the Australian Petroleum Production and Exploration Association accused the Lock the Gate Alliance of attempting to mislead the community in its inquiry submission.