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Project update: AGL’s Gloucester CBM project

World Coal,

AGL Energy Ltd has confirmed that natural gas from the Gloucester CBM project will be wholly dedicated to the supply of homes and businesses in New South Wales (NSW), and will not be exported interstate or overseas.

AGL’s managing director, Michael Fraser, has reassured the local and surrounding communities in Gloucester that AGL is committed to producing gas in NSW, for NSW.

“AGL supplies more than 60% of NSW’s gas customers and we need the gas from Gloucester for them,” Fraser said.

“AGL confirms that all of the natural gas produced from Gloucester is for NSW customers. None of the natural gas will be sent interstate or exported overseas. At present, NSW produces less than 5% of its own gas and imports the rest from interstate. NSW is vulnerable to a gas supply shortage because it’s reliant upon gas from Queensland, South Australia and Victoria. Here in Gloucester, we have the potential to bolster that locally produced gas figure to around 20%,” Fraser continued

The Gloucester Gas Project Stage 1 has already been approved.

“The Gloucester Gas Project has been through many years of review, which included approval by the independent Planning Assessment Commission. It was also upheld by the Land and Environment court,” Fraser added.

Positive water and soil test results

Groundwater and surface water quality remains unchanged and soil continues to improve six months into a trial of mixing produced water with fresh water to irrigate crops at the Gloucester site.

Independent water experts, Parsons Brinckerhoff, concluded the blended water (produced water from deep coal seams combined with fresh water) complied with the Australian New Zealand Environmental Conservation Council (ANZECC) irrigation guidelines and was suitable for irrigation.

Soil and crop advisors, Fodder King, reported that the soil in the irrigation trial area showed significant improvement due to the work done to prepare the ground for the winter and summer crops in 2013.

Due to drier conditions, there was a slight increase in salinity within the upper soil layers, however, Fodder King found no indication of adverse effects from the irrigation of blended water.

The Tiedmans Irrigation Trial at Gloucester started in April 2013. The first crop (triticale) irrigated with the blended water was harvested and sold to local farmers in November last year when local conditions were dry and supplementary feed was needed.

“This data shows that blending water from coal seams with fresh water for irrigation can be done effectively. The results are clear – surface water quality remains unchanged and the soil is improving,” said AGL’s Hydrogeology Manager John Ross.

Water pre-dates human arrival in Australia

A separate report by Parsons Brinckerhoff using the latest water dating technology found that the salty water in the Gloucester Basin’s deep coal seams is in excess of 300 000 years old.

“That means this water was recharged from rainfall well before the first indigenous people arrived in Australia,” Ross said.

“Groundwater moves incredibly slowly, and in this case, probably less than a centimetre per year. Given the location of the wells that were sampled, we suspect the water flows from east to west towards the centre of the Gloucester Basin.”

The latest irrigation trial results have been published on the AGL website and given to the Gloucester Community Consultative Committee.

Agreement with farmers

AGL has also agreed to new landholder access principles with farmers and the NSW Government to provide further assurance that farmer’s wishes will be respected during the company’s conduct of its gas operations.

Fraser said the new principles formalised the respectful and collaborative approach AGL has always taken with farmers. “Today we promise that we will continue to respect farmers who say yes or no to our operations. While the arbitration rights will remain in law, AGL has never exercised these rights and expect we never will,” he explained.

“This is an important step in facilitating the development of the State’s natural gas resources for the benefit of the whole community,” Fraser continued.“These principles reflect the vital role farmers play on the land and what AGL has always done – listened with respect. The success of coal seam gas in NSW rests entirely on the trust we have developed with the farmers who host us on their land.”

"AGL is proud of our close relationships with farmers and signing the new agreed principles reflects that we will continue to respect their wishes. We have more than 200 access agreements with farmers across the State - these relationships are very important to us and AGL has never needed to exercise the arbitration rights available under law. It’s about having respectful conversations, being clear about what’s involved and the benefits for the landholder,” he said.

Mr Fraser said all of AGL’s wells at Camden had been developed with the agreement of landholders. He said farmers reported many benefits from hosting coal seam gas operations on their land, including the extra income it can provide the family household and improvements often carried out, such as building or repairing roads and fencing.

“We’ve had feedback that coal seam gas provides a vital income stream to farming families, especially during drought, which pays for essentials like school fees,” Fraser said.

Edited from various sources by Sam Dodson

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