CSG water - Salt water dilemma behind a gas bonanza ...

Sydney Morning Herald:

Salt water dilemma behind a gas bonanza

18 May 2009

Solving the toxic water issue is key to reaping coal seam gas riches

As dawn breaks over south-east Queensland's Darling Downs, a peak-hour procession of yellow-shirted workers trundles along the Warrego Highway. The motels have hoisted their no vacancy signs and the local papers are crammed with job ads.

Anyone who does not have a job in the Darling Downs these days "probably doesn't deserve one", Dalby Regional's Mayor, Ray Brown, says. "We are seeing no effect of [the global financial crisis] at all."

His region encompasses vast underground reserves of coal seam gas, which can be converted into liquefied natural gas and exported. As demand for traditional mining commodities slumps, governments are pinning their hopes on a new resources boom in LNG.

Eight projects worth over $50 billion are planned for Queensland. They have the potential to create 13,000 jobs and generate hundreds of millions of dollars for the economy. The Chinese Government bought into the industry this week, taking a stake in the coal seam gas fields owned by QGC and signing a 20-year deal to buy the gas produced.

Grazier John Campbell is already making money: energy company Origin pays him for the right to put a gas plant and sink gas wells on his Taloona property near Roma. "My cattle are grazing on the grass on top of the ground, the gas producers are getting gas from below the ground, and the Queensland Government is getting tax from both of us," he said.

But accessing this resource requires pumping out toxic, salty water in volumes equivalent to multiple Sydney harbours. What to do with gigalitres of contaminated water has become a sticking point for industry and government.

The Queensland Government is grappling with how to ensure the environment is protected without jeopardising the viability of the LNG industry. Proposals range from purifying coal seam gas water for community use (potentially expensive) to injecting it back into the ground (potentially polluting).

Gas companies like Origin are sweating on government approval for their water disposal strategies before they decide whether to proceed with building multibillion-dollar LNG plants. "They are not going to write large cheques before they know how the water will be used," one industry source said. "The gas is very valuable, [it's a question of] how are you going to make the water economical as well?"

The Government has ruled that evaporation ponds - where areas as large as 100 football fields are flooded with salty water - can no longer be the main method of disposal. They are considered a waste of water, and the salt left behind can destroy fertile farm soil.

Cleansed of salt, the water could be used by coalmines and power stations, to irrigate, and to drought-proof towns. Origin already purifies coal seam gas water at its Spring Gully reverse osmosis plant near John Campbell's farm. It irrigates a trial biofuel crop with some of the water and discharges the rest into a local creek.

Like other budding LNG producers QGC, Santos and Arrow Energy, Origin is talking to regional councils and coalmining companies to supply them with treated water. "From a sustainable point of view we'd like to match water with consumers," said Origin's oil and gas manager, Paul Zealand.

Yet how much water is available, what quality can be guaranteed, who will fund its transport to towns and industries hundreds of kilometres away, and how much it will ultimately cost is unclear.

Some farmers remain concerned that the 10 to 15 per cent of salty water which cannot be purified poses its own environmental hazard, sitting in ponds where it could leach into the soil.

See - Sydney Morning Herald - Salt water dilemma behind a gas bonanza.