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An overview of possible impacts from coal seam gas development in Northern Rivers, New South Wales
by Elfian Schieren, 2012

Contents
1. Introduction
2. Energy and coal seam gas development

2.1 Economic viability underpinning coal seam gas development
2.2 Renewable, sustainable energy development
- Solar
- Wind
- Biogas
2.3 Coal seam gas development at a global scale
2.4 Coal seam gas development in Australia
3 Coal seam gas extraction process
- Drilling and dewatering
- Hydraulic Fracturing
- Produced Water
4 Risks to water resources from coal seam gas development
4.4 Ground water use
4.5 Water produced by coal seam gas
4.6 Contamination of Groundwater
5 Other Consequences of coal seam gas development
5.4 Impacts to agricultural production
5.5 Health impacts on humans and animals
5.6 Impacts on greenhouse gas emissions
5.7 Impacts on seismic activity
5.8 Economic impacts
5.9 Cumulative impacts
6 Potential for coal seam gas development in Northern Rivers, New South Wales
6.1 Northern Rivers Region
6.2 Using trade-offs and opportunity costs in evaluating CSG development
6.3 Prospects for development in Northern Rivers region
6.4 Energy development in Northern Rivers region
6.5 Northern Rivers community actions and groups in response to CSG development
7 Discussion
8 Conclusion
9 References

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An overview of possible impacts from coal seam gas development in Northern Rivers, New South Wales

Integrated Project by Elfian Schieren, 2012

7. Discussion

This section will attempt to draw together the general CSG impacts as they relate specifically to Northern Rivers region, NSW and identify some of the opportunity costs and trade-offs associated with CSG development in that area.

It attempts to provide an overview of the impacts of CSG development in the Northern Rivers region, NSW, and how this might potentially be a net benefit or cost.

Impacts such as effects on biodiversity have not been included in this study but in consideration of the high biodiversity values of Northern Rivers, NSW it is recommended that further research could be undertaken on this subject.

Firstly it is necessary to acknowledge that the CSG industry represents a major economic growth for Australia in terms of resource export.

Strong international gas prices and a growing gas market see CSG as a valuable export for Australia and considered vital to the future of Australian energy development (Australian Department of Resources, Energy and Tourism, 2011).

However the relatively short life of the industry, around 19 – 27 years (Rutovitz et al, 2011) and multitude of possible impacts, may affect the net value of the industry when viewed in relation to potential costs to other longer term resources and industries such as water and agriculture.

For Northern Rivers there is a need for economic growth and employment opportunities (NSW Department of Planning, 2006) and some believe that CSG can provide for these needs.

Lack of scientific assessment of the trade-offs between short term, fly in-fly out employment in CSG developments and employment in other industries such as tourism and agriculture creates uncertainty as to whether there is a net employment benefit for the region.

If using the theory of economic efficiency and considering foreign and external investors against possible tra

de offs (Asafu-adjaye, 2005) there is a possibility that benefits will be distributed away from the region at a cost to the local economy.

Other substitutes such as biogas may provide employment and exports at a lesser cost to the community. Biogas appears to be the most viable liquid fuel alternative to CSG and further assessment of potential biogas production from waste in Northern Rivers, NSW could provide comparable options.

The Northern Rivers region has a strong community with a diverse economy that highly values the environment and sustainable development.

Growth in local food production provides valuable input to the regional gross output and these values are considered to be highly important to the regional image as a major drawcard for investment and growth (NSW Department of Planning, 2006).

There is considerable anecdotal evidence from Queensland and the United States to suggest that trade-offs will occur between these values as landscapes become industrialized and local economies change possibly displacing long term residents (Saggers, 2012).

The underlying reasons for these changes, such as rising house prices (Figure 7) and land surface impact (Figure 4) can be mostly verified by scientific and statistical evidence although the range of sources is limited and potentially biased.

The potential for loss of local community and food production values, that are such a major asset to the region, calls for a comprehensive assessment of CSG impacts on the agricultural and rural community in Northern Rivers, NSW.

While the scientific data for water and public health impacts is limited there are several similarities between different studies and anecdotal evidence that enable some tentative assumptions.

The Northern Rivers region has a large population of rural dwellings and towns and a social and economic dependence on environmental resources such as clean water, conservation and enhancement of environmental assets, agriculture and sustainable development (NSW Department of Planning, 2006).

It appears scientifically certain that produced water contains a variety of compounds from drilling and fraccing fluids and mobilization that vary in their toxicity to humans and the environment (NTN, 2011).

Some of the health risks are quite serious such as long term damage to various systems in the body and possible sudden death of livestock (Bamberger and Oswald, 2012).

There is substantial evidence to suggest that CSG developments create a multitude of opportunities for contamination of the environment to occur.

Anecdotal evidence from Queensland correlates with many of these symptoms although it is currently not feasible to make direct assumptions due to lack of scientific data (Larson et al., 2012 and Bamberger and Oswald, 2012).

Due to the high density of rural living in Northern Rivers and the range of disposal issues associated with CSG produced water it seems that there is high probability for contact between contaminants, humans and livestock.

Similarities in scientific and anecdotal evidence on health issues and the potential severity of health impacts definitely indicate that further research should be undertaken before CSG development continues.

The scientific confidence of impacts to groundwater seems to be mostly limited by lack of understanding of the groundwater principles and lack of research (NSW Parliament, 2012).

However, there are considerable anecdotal and scientific records that groundwater contamination can occur throughout development and operation (Asquith and Krygowski, 2004., Wroe, 2012., Arrow Energy, 2012 and Osborn et al., 2011).

There was some indication that treatment of CSG produced water could engender significant capital and operating costs (Greenlee et al, 2009) without dealing with the actual contaminants of concern.

This process needs to be evaluated as a scientific tool to provide a more accurate estimation of the opportunity cost of CSG development.

Anecdotal evidence suggests that CSG is not always compatible with agriculture according to the interruptions and costs to farming operations experienced by farmers in QLD with CSG development on their land (Rowling, 2012).

Although there is little or no scientific data and no Australian studies apparent, the existence of reported incidents and possible trade-offs between CSG industry and agriculture emphasizes a strong need for further research.

Impacts from CSG related road and well site development also warrant investigation considering their potential to increase soil erosion (Woodlots and Wetlands, 2008).

With regard to climate change, while CSG has more potential as an export (Department of Resources, Energy and Tourism, 2006) therefore allowing other countries to reduce GHG emissions it may not be the best option for clean energy production Northern Rivers, NSW.

There is evidence to suggest that the actual reduction in emissions from CSG compared to existing coal technology is marginal (Howarth et al. 2012), especially in comparison to renewable energy (Schleisner, 1999).

It seems apparent that Australia has considerable renewable energy resources and that technological advances overseas are providing opportunities for these to be integrated effectively for power generation (Schleisner, 1999., Van Ginkel et al., 2004., Weimers, no date. and Zweibel et al., 2007).

Given that Northern Rivers shows such high support for renewable energy development (NSW Department of Planning, 2006), investment in this region might be better served in renewable energies such as solar, wind and wave power.

When considered in conjunction with other issues such as food and water security the renewable direction seems more apparent, instead of CSG which is more likely to have adverse impacts on these other factors.

The potential for biogas to be a viable liquid gas export (National Society for Clean Air and Environmental Production, 2006) requires further investigation as it may provide a direct, possibly sustainable alternative to CSG for the Northern Rivers region, NSW.

Accurately assessing CSG emissions seems to be central in defining the industry’s value as a transition fuel and adoption of the correct emissions horizon is a key factor in accurately assessing climate impacts of CSG along with the correct identification and inclusion of fugitive emissions (Howarth et al., 2012).

Other impacts such as increased seismic activity warrant further investigation but priority may not be as great a concern in Northern Rivers as it may be in areas with higher earthquake potential.

Considering the range, scale and longevity of risks that have been raised, a proper assessment of cumulative impacts seems predominantly important before further large scale developments are pursued, particularly in areas of such high density and environmental value as the Northern Rivers.

Conclusion

The magnitude of scientific uncertainty surrounding the impacts of CSG combined with the possible severity of these potential risks highlights the need for precautionary measures.

The NSW government itself admits with regard to water contamination that the consequences could be “disastrous”.

When words such as this are used they should not be taken lightly. Furthermore there are sufficient parallels between scientific and anecdotal evidence that many of these risks are quite likely to be realised and therefore should not be ignored.

The Northern Rivers is a vital community with many growth opportunities in a variety of industries and these are true long term values for the region. Regional scale impacts appear to be a significant problem associated with CSG development.

Extensive independent scientific research should underpin such a development to engender community security and improve prediction accuracy and management strategies.

This study has managed to provide a brief assessment of the possible impacts associated with CSG development in Northern Rivers, NSW and has highlighted the imperative need for further research in several areas.

These areas include but do not end with:

 Impacts to water resources, paying particular attention to groundwater removal, groundwater contamination and treatment and disposal of CSG produced water

 The potential for and identification of regional social and economic impacts in the long term to provide a basis for cost-benefit analysis

 Impacts to human and animal health with particular regard to contact with contaminated water and air in CSG development areas

 A comprehensive assessment of the net treatment and disposal costs for CSG produced water based on sound science

 Assessment of the emissions reduction value in comparison to renewable resources

 Assessment of the economic viability of renewable energy development in Northern Rivers, NSW with special attention to biogas as a liquid fuel export
 A comprehensive assessment of the cumulative impacts from CSG drawing on an improved, sound scientific base

CSG development may be a more commercially viable option in areas of Australia where there is less environmental or social capital, thus reducing the scale of trade-off and opportunity cost impacts that may consequently increase overall extraction costs.

Furthermore the value of other industries and resources need to be properly calculated and weighed against CSG development to ensure that the best possible option and management for the region is being undertaken.
 

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