There is significant interest in the development of a liquefied natural gas (LNG) sector in Queensland based on processing coal seam gas (CSG). As the CSG-LNG sector presents both opportunities and challenges, the Queensland Government is conducting a review to help shape its policy response.

What is coal seam gas water?

Saline water is produced from gas wells as part of the CSG production process. This water is referred to as ‘associated water’ and has a high sodium adsorption ratio and may contain other substances such as hydrocarbons.

At the operational level, how is CSG water currently managed?

CSG water is considered a waste by-product from an industrial activity. Although it is classed as a waste product, it may be approved as a ‘resource’ on a case-by-case basis. This would occur when the water has a beneficial use.

CSG water is currently disposed of in evaporation ponds ranging from 1–100 hectares in area. Limited quantities of untreated CSG water are also used for feeding stock, coal washing and related petroleum activities. A number of CSG producers have trialled other beneficial uses including the use of treated CSG water to augment town water supplies, as cooling/blowdown water in power stations and for irrigation and aquaculture.

The Queensland Government has determined that evaporation ponds are to be discontinued as a primary means for the disposal of CSG water. Remediation of existing evaporation ponds will occur within three years.

Why is a CSG water policy being developed?

In 2007, 12.5 gigalitres (GL) of CSG water was produced in Queensland. Based on continuation of the domestic CSG market, it is estimated that CSG production in the Surat Basin will produce an annual average of 25 GL of CSG water for the next 25 years. With the development of a LNG sector in addition to the domestic market it is expected that gas and water extraction quantities will increase considerably.

The salinity and other properties of CSG water may have the potential to cause environmental harm if released untreated. There are could be ecological risks associated with the disposal of untreated CSG water, however, there may also be beneficial uses if handled correctly. The government is currently examining both of these points.

What does the government need to know in order to finalise this policy?

Government wants to consult on the following two issues before finalising the policy:

1. The circumstances under which industry should be required to cooperate to develop and fund a CSG water aggregation and disposal system (or systems) to deal with CSG water which cannot be directly re-injected into surrounding aquifers or has noimmediate customers.
2. What remediation action for existing evaporation ponds is reasonable and appropriate?

Government wants to encourage the greatest beneficial use possible for treated CSG water and recognises that CSG production occurs in locations where not all treated water can potentially be beneficially used.

Government therefore wants to encourage the CSG sector to cooperate and collectively investigate opportunities to transport water to locations where there are more potential uses. This might involve the development of CSG water aggregation and disposal systems.

While the government is not being prescriptive about the design of such systems, it proposes to assist industry through facilitation and possibly through technical investigations. The opportunities for use of CSG water should also be taken into account in regional water supply planning, decisions about infrastructure development, when addressing issues such as the over-allocation of groundwater.

In addition, as part of the commonwealth-funded Healthy Head Waters project in the Queensland Murray-Darling Basin, five million dollars have been allocated for a feasibility study to examine the use of CSG water in addressing water sustainability and adjustment issues. This includes relieving demand on groundwater for irrigation in heavily committed aquifer systems near the Condamine River.

Government wants to ensure that the CSG sector is provided the opportunity to address concerns about the current CSG water management practices and proposes to work with industry to address problems with existing evaporation ponds within a three year period.

What options have been considered by government in developing this policy so far?

Continue with current requirements: This would allow the use of evaporation ponds to continue as a primary water management option. Government considers this option presents significant ecological risks to landscapes, shallow aquifers and nearby streams, particularly when considering the likely expansion of LNG projects. Further, the government believes evaporation ponds will not maximise beneficial use of CSG water.

Relax current requirements: This option would respond to industry views that the current regulatory arrangements do not encourage beneficial use of CSG water. This option is likely to increase risks to agricultural and ecological values, through an inability to regulate impacts. Government believes that the current regulatory regime provides for beneficial use and appropriately balances the interests of stakeholders.

Tighten current requirements to achieve more environmentally sustainable outcomes and greater beneficial use of CSG water: This option responds to the significant increase in anticipated CSG water production and associated management risks. Government believes the proposed policy represents a balanced response to the need for CSG producers to dispose of their industrial waste appropriately, while also considering the need for environmental protection and the interests of regional communities and agricultural stakeholders. This is the government’s preferred option.

What policy decisions has the government already made?

The Queensland Government has determined the following policy responses to concerns related to the current management of CSG water:

1. CSG producers are responsible for treating and disposing of CSG water and the government will not subsidise these activities.
2. Unless the producers use direct injection of CSG water or have arrangements for environmentally-acceptable direct use of untreated CSG water, the producers must treat CSG water to a standard defined by the Environmental Protection Agency (EPA) before disposal or supply to other users.
3. Evaporation ponds are to be discontinued as a primary means of disposal of CSG water. Transitional arrangements will be developed by the government in consultation with industry to address existing evaporation ponds issues. Remediation of existing evaporation ponds is to occur within three years.
4. Ponds necessary for water aggregation and the storage of brine from treatment facilities must be fully-lined to a standard determined by the EPA.
5. An associated CSG water management plan is to be incorporated into the environmental management plan required for an application for a level 1 environmental authority.

Which legislation is applicable in the management of CSG water?

The removal, use and on-supply of CSG water are governed by the following legislation:

• Petroleum and Gas (Production and Safety) Act 2004
• Petroleum Act 1923
• Water Act 2000
• Water Supply (Safety and Reliability) Act 2008

Contact the LNG projects team

tel:        +61 7 3404 8206
email:    lng.team@dip.qld.gov.au
post :    LNG Industry Unit
Department of Infrastructure and Planning
PO Box 15009, Brisbane City East QLD 4002

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