Frequently asked questions

What is coal seam gas?

Queensland's coal seam gas was created millions of years ago when buried compacted plant material (known as peat) formed into coal. In Queensland underground layers of coal, known as coal seams, are between 200 metres and 1000 metres below the ground and contain water. The pressure of the water holds natural gas found underground, primarily methane, to the surface of the coal particles.

In order to access the gas, wells are drilled into the coal seams, bringing the water from the coal seams to the surface. This process reduces pressure and allows the gas to be released.

This water is treated, to ensure it meets water quality standards, before it is either injected into underground water systems, called aquifers, or used for other purposes such as irrigating crops, watering livestock or for commercial uses.

What is liquefied natural gas?

Coal seam gas is a cleaner energy source. Electricity generated from coal seam gas produces around half the emissions as electricity generated by coal. That is why coal seam gas provides a significant opportunity for reducing electricity-related greenhouse gas emissions.

Proposed LNG facilities will cool coal seam gas to minus 161°C. At this point the gas becomes liquid, reducing it to 1/600 of its original size. This liquid is then known as LNG and becomes a product that can be shipped safely and economically to Queensland's export markets.

LNG is used in the same way as coal seam gas, including fuelling natural gas appliances, such as heaters and stoves, and generating electricity.

How long has the CSG industry been operating in Queensland?

Coal seam gas is not new to Queensland, it has been produced for over 15 years.

The first exploration for coal seam gas in Queensland was in the late 1970s in the Bowen Basin in central Queensland and by the early 1990s coal seam gas exploration had expanded and extended south into the Surat Basin in the State's south west.

Today, coal seam gas is the major domestic gas fuel source in Queensland providing about 90 per cent of the State's domestic gas supply.

Why is it considered as a low emission alternative fuel source?

Electricity generated from coal seam gas produces around half the emissions as electricity generated by coal. That is why coal seam gas provides a significant opportunity for reducing electricity-related greenhouse gas emissions.

Both coal seam gas and LNG offer low emission alternative fuels to coal. Electricity generated from Queensland coal seam gas is about 50 per cent cleaner than electricity produced from black coal in New South Wales and about 70 per cent cleaner than electricity produced from Victorian brown coal.

Independent research commissioned by the Australian Energy Market Commission, as well as results achieved at Queensland's coal seam gas-fired power stations, have shown that electricity generated from coal seam gas produces lower emissions than coal-fired generation. When Queensland's LNG is used to displace coal-fired power in other countries this industry will make a significant contributing to reducing global electricity-related greenhouse gas emissions.

What is hydraulic fracturing or fraccing?

Hydraulic fracturing (fraccing) is the process of creating or enlarging cracks in underground coal seams (usually by pumping fluid) to increase the flow and recovery of gas out of a well.

Water and sand make up about 99 per cent of fraccing fluids - the remaining one per cent includes everyday household chemicals such as those used in swimming pools and as components of soap and vinegar.

A list of chemicals and compounds commonly used in the fraccing process is available.

Fraccing does not occur for all coal seam gas wells - only around eight per cent of Queensland's domestic coal seam gas wells have been fracced.

All fraccing activities are closely monitored and strictly regulated. Where fraccing is to occur, strict standards must be met by the operator to protect the environment and landholders' water bores.

What checks and balances are there for fraccing?

After the fracc, up to one and a half times the amount of water used in the fracc is drawn from the well. This helps ensure that the fluid used for the fracc is removed from the coal seam.

Operators seeking to undertake coal seam gas activities must obtain government approval. This approval will include requirements relating to fraccing activities such as having to prepare and submit a risk assessment that includes over 20 environmental considerations. Operators are required to notify the government and landholders both prior to and after the completion of fraccing and to monitor the activities while they are underway and also after the fracc has occurred.

New laws have been introduced which strictly regulate adding chemicals to coal seam gas fraccing fluids. Under these laws, BTEX chemicals, benzene, toluene, ethylbenzene and xylene, are not allowed to be added to fraccing fluids.

The government undertakes its own independent audits and reviews of fraccing operations in Queensland.

What is the impact on the Great Artesian Basin?

Coal seam gas extraction in Queensland will not drain the Great Artesian Basin.

The Great Artesian Basin holds about 65 million gigalitres of water. This is equivalent to about 116 000 Sydney Harbours.

Over the life of the coal seam gas industry in Queensland (around 50 years), it is estimated that the industry will extract around 2,500 gigalitres (averaging about 125 gigalitres per year over the initial 14 years) of water from the Great Artesian Basin. This is about 0.004 per cent of the Basin's total volume and far less than the amount extracted by residential and agricultural use.

More detailed information about the underground water management framework is available.

How do the authorities monitor underground water impacts?

The government has established an underground water management framework for assessing, monitoring and making good impacts on underground water. The framework is designed to prevent or minimise water level impacts on natural springs in the Great Artesian Basin and water bores on properties.

Under the framework:

• Coal seam gas operators have to undertake baseline assessments of water bores - to obtain information such as the level and quality of bore water before testing or production commences.
• If the use of a water supply bore is likely to be impacted, the coal seam gas operator must negotiate a make good agreement with the bore owner. The agreement could, for example, involve deepening the bore, constructing a new bore or establishing an alternative supply.
• Coal seam gas producers must prepare underground water impact reports which include a water monitoring program.
• A spring impact strategy, and projections of potential future water level impacts.

What assistance is available for landholders affected by CSG operations?

The government has introduced measures to strengthen the protection of and assistance to landholders, including the introduction of a new Land Access Code and mandatory conditions for coal seam gas operators.

The government has also ensured landholders receive better and fairer compensation including reimbursement for legal, accounting and valuation costs incurred in negotiating and preparing a compensation agreement.

Free legal assistance and support services are also available to landholders. In particular the government funds the rural landholder legal service in Toowoomba, through Legal Aid Queensland, as well as a legal officer who helps Central Queensland landholders in their dealings with resource companies over land access and compensation issues.

What rights do landholders have?

Under the Land Access Code, coal seam gas operators must provide detailed information to the landholder about all their activities undertaken on the land whether it's exploration, drilling, maintenance of assets or fraccing. These laws are designed to improve transparency, equity and cooperation between coal seam gas operators and landholders.

The land access laws require:

• Entry notices for preliminary activities that have no or only minor impact on landholders.
• Conduct and Compensation Agreements to be negotiated before an operator comes onto a landholder's property.

The Land Access Code delivers a graduated process for negotiating and resolving agreement disputes to ensure matters are only referred to the Land Court as a last resort. Advice and support on breaches of the code and compliance issues is also provided to landholders through the CSG-LNG Enforcement Unit.

Landholders can choose to release the details of their compensation agreement with coal seam gas operators but will not be forced to do so under the Land Access Code.

What does strategic cropping land legislation cover?

Read about strategic cropping land legislation.

What independent oversight is there to review advice to government and decision makers?

The regulation of coal seam gas to LNG in Queensland is subject to rigorous independent scrutiny by science, landholder and community-based representatives. This includes scientific advice and peer review, special studies on issues such as water management and input from a diverse range of community representatives.

The Queensland Government understands the importance of independent scientific research. As announced by the Commonwealth Government on 21 November 2011, an Independent Expert Scientific Committee will be established to provide scientific advice to governments about coal seam gas and large coal mining activities, and oversee research on potential impacts to water resources as a result of these activities. The Queensland Government will be working collaboratively with the Commonwealth on this issue.

There are also three community engagement consultative groups established by the Queensland Government in early 2011 to provide input to and feedback on government policy and regulation. This brings together senior representatives from landholder groups, mining companies, local and state governments.

The Surat Basin Engagement Group is the overarching group with two regional sub-groups established in Roma and Dalby to provide a specific focus for those areas. The Surat Basin Engagement Group Independent Chairman is former AgForce Queensland President John Cotter.

What about gas leak incidents?

Coal seam gas operators must undergo regular gas well head audits. The government has also undertaken a Coal Seam Gas Well Head Safety Program audit. Of the more than 2700 well heads tested in the audit, 98 per cent showed no reportable leak. All detected leaks have been repaired.

New reporting standards have also been established under the Queensland Government Code of Practice for detecting and managing gas emissions at well sites. The Code requires operators to immediately fix leaks over the reportable level, even in cases where there are very low volumes of gas, and to report on their detection and remediation activities.