Sydney drinking water safe, but CSG wells need insurance

A report released by NSW chief scientist and engineer Mary O’Kane
has found that Sydney Water treatment plants are capable of dealing with the
impacts of mining in the Sydney catchment area (SCA).

Professor O’Kane said she had recommended the government
create a whole of catchment data repository.

“That will enable better modelling of the cumulative impacts
of activities such as CSG extraction and longwall mining,” she said.

The report, ‘On measuring the cumulative impacts of activities which impact
ground and surface water in the Sydney Water Catchment’ said that although the impact of underground
long-wall mining in the catchment could lead to small changes in the levels of
impurities in water entering SCA’s dams, these changes could be coped with by
Sydney Water ’s treatment plants “as evidence to date did not suggest a sufficiently
large change in soluble organic concentrations to be of concern”.

It was found that coal seam methane recovery in the
catchment area could pose threats to the system through the release of salinity
and bicarbonate if storage facilities for CSG production water were overtopped
by a severe weather event.

However, the report suggested that the threat posed by CSG
process water was minimal due to the small amount of CSG industry in the Sydney
basin, and that the main threat would be from stored chemical concentrates for
the CSG extraction process.

O’Kane has also released a report entitled ‘Environmental Risk and Responsibility and Insurance Arrangements for the NSW CSG Industry’, recommending that CSG
companies need to take out insurance against any environmental damage caused by
CSG operations.

Based on studies of international practices, O’Kane has
recommended to the NSW government that appropriate levels of coverage are taken
up by the CSG industry to address three primary levels of risk.

These include expected costs in the form of an up-front
security deposit to the government; coverage against sudden accidental
pollution by CSG wells; and contributions to an environmental fund to address
the long term costs associated with rehabilitation, well abandonment or company
insolvency.

The report was also critical of the NSW government for its
CSG approvals process, relating to licences being approved for “$2 companies”
without sufficient equity to make reparations in the event of any problems.

To keep up to date with Australian Mining, subscribe to our free email newsletters delivered straight to your inbox. Click here.