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Review of hydraulic fracturing in Tasmania

Final Report 25 February 2015

Department of Primary Industries, Parks, Water and Environment

REVIEW OF HYDRAULIC FRACTURING IN TASMANIA Final Report 2

Further information about the Review

Please refer to the Department’s website: www.dpipwe.tas.gov.au

Contact:

Policy Division Tasmanian Department of Primary Industries, Parks, Water and Environment GPO Box 44 HOBART TAS 7001 Phone: 1300 368 550 email: [email protected]

Disclaimer Information in this publication is intended for general information only and does not constitute professional advice and should not be relied upon as such. No representation or warranty is made as to the accuracy, reliability or completeness of any information in this publication. Readers should make their own enquiries and seek independent professional advice before acting on or relying upon any of the information provided. The Crown, its officers, employees and agents do not accept liability however arising, including liability for negligence, for any loss resulting from the use of or reliance upon information in this publication.


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Executive Summary This report is the final output of the Review of Hydraulic Fracturing in Tasmania Project (the Review Project) led by the Department of Primary Industries, Parks, Water and Environment (DPIPWE) in conjunction and collaboration with the Environment Protection Authority (EPA) Division and Mineral Resources Tasmania (MRT) in the Department of State Growth. The Report contains the considered views of the Project Team and takes into account relevant information about fracking, as well as the views and concerns expressed in the public consultation phase of the Review Project.

The Review Project has been conducted whilst a moratorium on fracking in Tasmania has been in place. The following Terms of Reference (ToR) for the Review were issued by the Minister for Primary Industries and Water:

1. To consider the potential use in Tasmania of hydraulic fracturing, including technology and processes, scientific evidence, as well as best practice environmental and safety standards.

2. To examine the potential impacts of hydraulic fracturing in Tasmania, in particular potential impacts on:

a) agriculture; b) groundwater; and c) the broader Tasmanian environment.

3. To consider developments and experiences in the regulation of hydraulic fracturing nationally and internationally.

4. To examine the robustness and operation of the current laws governing exploration licences and any future extraction licences in Tasmania, and consider whether any changes are required to improve protections for land users and industry engagement with landholders and local community.

5. To consider any other relevant matters, including economic costs and benefits.

DPIPWE released an Issues Paper on 30 October 2014 to help inform public submissions and allowed for a five week advertised public consultation period. In total the Project Team received 157 submissions to the Review.

The Project Team has considered all submissions and provided findings against each ToR for the Review. This report presents a summary of the key issues raised in submissions and a discussion of these issues along with the following 17 findings for consideration by the Tasmanian Government:

1. Further exploration by industry is required to establish the potential for any economically viable unconventional hydrocarbon resources in Tasmania;

2. The potential use of fracking in Tasmania is unknown due to the nature of Tasmania’s geology, the size of any potential prospective area, and the lack of exploration for hydrocarbon resources to date;



3. Whilst the risks associated with this technology are seen as low and manageable by industry, via the use of current best practice environmental and safety standards that continue to evolve, on the basis of the submissions received there appears to be substantial community concern that fracking is inherently unsafe and unmanageable;

4. Appraisal and production of unconventional hydrocarbon resources have implications for agricultural areas including water resources and potential for contamination of land, water and air. Any potential flow on effects on land values and market access will need to be considered, should a project which is to use fracking proceed to the development appraisal stage;

5. The process of unconventional hydrocarbon resource appraisal and production may pose a potential risk to groundwater and surface water quality. Sources of risk include surface mishandling of chemicals and contaminated water, and potential leakage from production wells into shallow, potable aquifers;

6. There is a current lack of detailed information and knowledge on groundwater resources within the Tasmania Basin. However, proponents would be required to undertake detailed groundwater investigation at an appropriate geological and geographical scale prior to being granted approval to drill a petroleum well;

7. Fracking poses a potential risk to the broader Tasmanian environment, including surface water quality and localised impacts on air quality, visual amenity and natural ecosystems. These potential risks may increase as the scale of a potential unconventional gas project increases, and will therefore need to be addressed in a strategic manner if a significant unconventional gas resource is identified;

8. Fracking for the production of hydrocarbons has been in use in Australia for over 50 years. During this time the industry regulation and best practice methodologies have evolved to the point where the risks associated with this technique can be managed;

9. Tasmania has the opportunity to continue to learn from other Australian jurisdictions where unconventional gas exploration currently occurs and from Coal Seam Gas (CSG) regulations and guidelines where relevant, including the National Harmonised Regulatory Framework for Natural Gas from Coal Seams and recent codes of practice for CSG fracture stimulation activities and well integrity;

10. Proposals to undertake fracking in Tasmania are subject to the regulatory regime for mineral resource development in the Mineral Resources Development Act 1995 (MRDA). There is also scope for the Environmental Management and Pollution Control Act 1994 (EMPCA) to be applied for further environmental assessment of a fracking proposal;



11. Production and development of hydrocarbon resources are subject to the Land Use Planning and Approvals Act 1993 (LUPAA) and may also be subject to EMPCA, providing further opportunity for community involvement and engagement with the assessment and approvals process;

12. The regulatory regime that applies to exploration and development of mineral resources is complex;

13. The current code of practice, the Mineral Exploration Code of Practice 5th Edition 2012 (MECOP), requires that landholder consent is provided before approval to drill an onshore well can be given. Concerns have been raised that this requirement does not provide enough protection for landholders, as it is not specified in legislation;

14. Fracking does not, of itself, have any direct climate change impacts because it is solely a well development process. Greenhouse gas may be released during hydrocarbon well completion, however, although these effects can be minimised using best practice technologies. Any future hydrocarbon production would lead to the release of carbon dioxide as processed fuels are burnt to produce energy. This would be a secondary impact that would not be directly related to the process of fracking;

15. An expansion of Government support for renewable energies as an alternative to development of an unconventional hydrocarbon resource is a strategic matter for the State and Federal Governments to consider over the coming decades;

16. The public submissions to the review outlined significant concern that the establishment of an unconventional hydrocarbon production industry in Tasmania would be detrimental to Tasmania’s clean and green image and associated food, beverage and tourism industries. Additional concerns include potential public health and community impacts; and

17. The potential costs and benefits of an unconventional hydrocarbon industry in Tasmania are unknown and cannot be properly analysed unless a resource has been discovered and its potential confirmed.



Table of Contents EXECUTIVE SUMMARY.................................................................................... 3

INTRODUCTION ............................................................................................... 7

Background .............................................................................................................................................. 7

Terms of Reference ................................................................................................................................. 8

Review Governance Arrangements ......................................................................................................... 8

The Issues Paper ...................................................................................................................................... 8

Consultation Program ............................................................................................................................. 9

SUMMARY OF SUBMISSIONS ........................................................................ 11

Preliminary analysis ............................................................................................................................... 11

Summary against Terms of Reference .................................................................................................. 12

FINDINGS AGAINST THE TERMS OF REFERENCE ............................................ 27

1. To consider the potential use in Tasmania of hydraulic fracturing, including technology and processes, scientific evidence, as well as best practice environmental and safety standards. ...... 28

2. To examine the potential impacts of hydraulic fracturing in Tasmania, in particular potential impacts on agriculture, groundwater and the broader Tasmanian environment. .......................... 31

3. To consider developments and experiences in the regulation of hydraulic fracturing nationally and internationally. .......................................................................................................................... 35

4. To examine the robustness and operation of the current laws governing exploration licences and any future extraction licences in Tasmania, and consider whether any changes are required to improve protections for land users and industry engagement with landholders and local community. ...................................................................................................................................... 37

5. To consider any other relevant matters, including economic costs and benefits. .......................... 39

REFERENCES .................................................................................................. 44

APPENDIX A: INDEX OF SUBMISSIONS .......................................................... 46



Introduction Background Fracking is sometimes used in the oil and gas industry to extract hydrocarbons from unconventional reservoirs to achieve commercial rates of production from resources that would otherwise be uneconomic. To date there has been no fracking in Tasmania and the potential for unconventional mining in Tasmania has not been established.

In March 2014 the Tasmanian Government introduced a 12-month moratorium on the practice of fracking in Tasmania. The moratorium fulfilled an election commitment that included a review into fracking in Tasmania.

The focus of the Review is on the practice of fracking and potential impacts of fracking for hydrocarbons in Tasmania, taking into consideration the current and anticipated mineral resources in the State.1

The technology can be used in exploration and development phases of mineral resource extraction. Responsibility for legislation that is used to regulate fracking in Tasmania falls across the following Ministerial portfolios, depending on the phase:

• For exploration, the Mineral Resources Development Act 1995 (MRDA) primarily applies, with the Minister for Resources responsible for administration of that Act;

• The Minister for Environment, Parks and Heritage is responsible for the Environmental Management and Pollution Control Act 1994 (EMPCA) that contains power for the Director, Environment Protection Authority (EPA) to ‘call in’ activities, including mineral exploration and development, if it is in the public interest that the activity be subjected to environmental assessment; and

• In the development phase of mineral extraction the MRDA applies for licensing and development. Approval would also be required pursuant to the Land Use Planning and Approvals Act 1993 (LUPAA), for which the Minister for Planning and Local Government is responsible.

Although the practice and impacts of fracking are regulated under various portfolios of the State Government, the Policy Division of the Department of Primary Industries, Parks, Water and Environment (DPIPWE) was asked to lead the Review in collaboration with the EPA Division and with Mineral Resources Tasmania (MRT) in the Department of State Growth.

On 30 October 2014 the Minister for Primary Industries and Water announced the Terms of Reference (ToR) for the Review and the release of the Review of Hydraulic Fracturing in Tasmania Issues Paper and Invitation to Comment (the Issues Paper).

This Report contains the results of the Review and presents findings in relation to each ToR. The findings of the Review will assist the Government in determining future policy on fracking in Tasmania.

1 Note that fracking is not only used in the hydrocarbon industry. It is also utilized in non-hydrocarbon industries such as enhanced geothermal systems and to stimulate groundwater well productivity.


REVIEW OF HYDRAULIC FRACTURING IN TASMANIA Final Report 8 Terms of Reference The ToR for the review are:



a) agriculture;

b) groundwater; and

c) the broader Tasmanian environment.




Review Governance Arrangements An Interdepartmental Steering Committee provided oversight of the Review. The Steering Committee comprised:

• The Deputy Secretary, Agriculture, Corporate and Heritage, DPIPWE; • The Director, Environment Protection Authority; • The Director, Policy and AgriGrowth Tasmania; and • The Director of Mines, MRT.

The Review was undertaken by a Project Team that reported to the Steering Committee. The Project Team comprised senior officers from the DPIPWE Policy Division and EPA Division and a Senior Geologist from MRT.

The Issues Paper The Issues Paper was released by DPIPWE on 30 October 2014.

The purpose of the Issues Paper was to increase awareness of the main issues related to any potential fracking in Tasmania in order to assist the preparation of submissions to the Review.

The Issues Paper contained:

• An invitation to comment from the Secretary DPIPWE, encouraging all stakeholders to consider the ToR for the Review and the information contained in the Issues Paper and provide their views on the potential impacts of fracking in Tasmania;



• Information on how stakeholders could have their say, including links to the Department’s website and contact details for further information, including the email established for the Review – [email protected]. This included the requirements that all submissions must be in writing and address the ToR for the Review and that all submissions would be treated as public documents and made available on the DPIPWE website unless a specific request for confidentiality was received;

• A confidentiality notice, disclaimer and information on the Right to Information Act 1999; and • Key source documents for the Issues Paper and the Review.

The Issues Paper noted several times that to date there has been no fracking activity in Tasmania. Basic information was outlined as follows:

• In Part 1 of the Paper the technology and process of fracking for hydrocarbons were outlined in order to give a basic overview of the science behind the practice. The potential oil and gas resource in Tasmania was also discussed and a distinction made between potential exploration and or development in coal seam gas (CSG) and unconventional reservoirs. Much of the fracking debate so far in other jurisdictions has concentrated on fracking in coal seams (which occurs in other mainland states of Australia). Given the composition of coal deposits in the State and surrounding geology it is considered highly unlikely that Tasmania has economically viable CSG resources;

• An overview of the regulatory system in Tasmania as it applies to fracking was presented in Part 2 of the Paper. This system includes not only laws governing mineral exploration but also environmental management and land use planning laws. It was noted that responsibility for regulation of fracking falls across several Ministerial portfolios. A summary of regulatory approaches to fracking in other Australian and selected overseas jurisdictions was presented as a point of reference;

• Part 3 of the Paper canvassed the potential for fracking to result in contamination and damage to the environment and surrounding landscape. Access to mineral resources under private land, including farmland, raises issues of consent to exloration and/or development and these were also discussed; and

• The ToR for the Review require that any other matters, such as economic costs and benefits are considered. Part 4 pointed towards some of the matters that are relevant to economic issues which include the social and environmental issues discussed in other parts of the report.

This Final Report should be read in conjuction with the Issues Paper.

Consultation Program The period for public submissions was five weeks in total from announcement of the Review and publication of the Issues Paper.

The purpose of public consultation was to provide relevant and accurate information on fracking in Tasmania and to ensure that all interested parties had an appropriate opportunity to be informed and provide comment.

The consultation program for the Review consisted of:


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• Announcement of the Review, ToR and release of the Issues Paper by the Minister for Primary Industries and Water on 30 October 2014;

• Notice of the Review published in the Mercury, Examiner and Advocate newspapers on Saturday 1 November 2014 in the Public Notices sections of each newspaper, and also in Tasmanian Country on 7 November 2014 (each of these advertisements clearly stated the ToR for the Review, closing date for submissions and details of where further information and a copy of the Issues Paper could be found);

• Further information and the Issues Paper being available on the DPIPWE website; • Publicity about the Review on the Tasmanian Government’s website ‘Have Your Say’

(www.tas.gov.au/haveyoursay) as part of the Tasmanian Government’s Framework for Community Engagement;

• The Secretary of DPIPWE writing to key stakeholder associations and groups advising of the Review and providing a copy of the ToR and the Issues Paper; and

• Project Team meetings with key stakeholders during the consultation period to discuss their issues and assist in preparation of submissions.2

In addition to the planned consultation program, the Review has also attracted media attention in the press and on radio.

The Review has had exposure through a number of other industry and interest group websites. One organisation in particular, Frack Free Tas prepared template responses to Terms of Reference 1, 2 and 5 of the Review and links to key references for use in writing submissions.

In total 157 submissions to the Review were received. Of these submissions 51 used the Frack Free Tas template response, with four of those making additional (and identical) submissions against ToR 3 and 4; another 10 submissions were identical; and the University of Tasmania also provided 2 identical submissions to the Review. Three submissions to the Review were made in confidence. The Project Team has ensured that all submissions have been taken into account in preparing this Report.

All submissions, other than the three provided in confidence, are published on the DPIPWE website www.dpipwe.tas.gov.au. A list of submissions is provided in Appendix 1.

Outside the formal submissions process 57 postcards developed by Frack Free Tas were received by the Government from community members opposed to fracking in Tasmania.

DPIPWE and the Project Team would like to sincerely acknowledge and thank all those who took the time to consider the Issues Paper and provide submissions to the Review.

DPIPWE would also like to acknowledge and thank the Department of State Growth and MRT in particular for their assistance in conducting the Review and preparing this Final Report.

2 The Project Team met with the Tasmanian Farmers and Graziers Association and the Tasmanian Conservation Trust on 28 November and 2 December 2014 respectively.


http://www.tas.gov.au/haveyoursay

http://www.dpipwe.tas.gov.au/


Summary of submissions

Preliminary analysis Of the 157 submissions received, 131 expressed opposition to fracking in Tasmania3; 20 did not appear to specifically express opposition to fracking in the longer term, but raised concerns of potential adverse impacts that may not be adequately met through existing regulatory arrangements. Six submissions were supportive of fracking in Tasmania using existing regulatory and policy controls.

Submissions were received from the following stakeholder groups:

Stakeholder Group #

Members of the public, including small business 130

Industry – mining 0

Industry associations 7

Government/regulators/local government/GBEs 6

NGOs and community groups 10

Political 1

Research/educational organisations 3

Total 157

The invitation to comment to the Review specifically encouraged stakeholders to consider the ToR and the information contained in the Issues Paper, noting that the Issues Paper had been prepared to increase awareness of the main issues related to any potential fracking in Tasmania so as to assist in the preparation of submissions. Many submissions contained perceptions or assertions that were not supported by evidence. It is clear that in many cases the Issues Paper had not been fully considered by those making submissions.

Submissions that were made using the Frack Free Tas template response were critical of the Issues Paper, stating that it has ‘some serious deficiencies in covering technology and processes and scientific evidence. Important features of the use of the technology are missing from the overview …’ [and] ‘this is an

3 A large number of template responses were received as submissions.


REVIEW OF HYDRAULIC FRACTURING IN TASMANIA Final Report 12 irresponsible misrepresentation of the facts’. The Environment Association4 considered that the Issues Paper was inadequate as an information document and ‘can be described as abject avoidance of a proper description and discourse’, whilst Eric Tierney5 expressed concern that the ‘review glosses over the potential environmental impacts of hydraulic fracturing to ground and surface water bodies’.

The Project Team has taken criticism of the Issues Paper on board, but in so doing notes that in the Issues Paper it was clearly stated that the intent of the Paper was ‘to present a broad but concise overview’ and further ‘the aim of (the) Paper is to encourage input and submissions by providing basic information and pointers to the issues’. The Issues Paper was not intended to be a comprehensive discussion of all aspects of the science, technology and potential impacts behind fracking as such discussion would be difficult given the ‘unknowns’ in Tasmania regarding geology and resource potential. Key sources for additional information were provided in the appendix to the Issues Paper given the plethora of information already produced on fracking in Australia and worldwide.

Summary against Terms of Reference It is not possible to incorporate all the comments made in submissions in this Final Report. As stated previously, all submissions other than confidential submissions are available on the DPIPWE website for reference.

This section of the Report is intended to represent the substantive issues and concerns presented to the Review during the public consultation phase of the Project. In so doing care has been taken to present the submissions without bias or judgement. Nonetheless, the Project Team would like to note that while a lot of submissions raised issues and provided examples of critical incidents many of these were in relation to fracking in coal seams as opposed to unconventional mining in shale, siltstone or fine grained sandstone. As stated in the Issues Paper, the latter is considered a possibility in Tasmania, the former is not.


As stated in the Issues Paper and in the majority of submissions to the Review, fracking for hydrocarbons has not yet occurred in Tasmania and the extent of the resource is unknown. The Tasmanian Minerals and Energy Council (TMEC)6 confirmed that ‘the potential for the widespread use of hydraulic fracture stimulation, or fracking, in Tasmania is limited due to the geology of the State’.

Of the submissions that sought to address this ToR, and not many did, the main concerns that were raised involved the composition of fracking fluids, well integrity and the potential for the process of fracking to

4 Submission 076. 5 Submission 119. 6 Submission 054.


REVIEW OF HYDRAULIC FRACTURING IN TASMANIA Final Report 13 induce seismic activity and release ‘trapped’ substances and contaminate the environment. The size of current exploration areas and potential production platforms were also of concern to some submitters7.

Many expressed a general concern that fracking is, of itself, an unsafe practice. The Frack Free Tas template responses stated that ‘the best practice environmental and safety standard for hydraulic fracturing is to ban it’. Most submissions that addressed this ToR referred to jurisdictions that have banned fracking, including France, Bulgaria, Germany, several States and counties in the United States of America (U.S), Nova Scotia, and Geelong in Australia.

Whether fracking is a new technology or not was the subject of many submissions. In general those opposed to fracking were of the view that fracking is a new and therefore untested technology, whereas submission 003 and those from industry associations and regulators tended to agree that fracking has been used safely and sustainably in Australia for around 40 - 60 years, with highly researched techniques and best practice baseline studies and monitoring being followed.8 For many the perceived lack of scientific data translated into concern that impacts cannot be understood or addressed. Our Tasmania Group9 provided a typical response stating that ‘there has not been sufficient scientific research undertaken to determine the effects from hydraulic fracturing on the environment’.

The nature and volume of fracking fluids attracted many comments in the submissions received, with concerns raised about the nature of the chemicals used, toxicity and potential exposure pathways. The National Toxics Network submission10 covers the more typical concerns on this issue, stating that ‘while chemical additives make up less than 2% of the fracking fluid, this nevertheless translates to large quantities of chemical additive’. The submission discusses the numbers of chemical products identified by the US House of Representatives Committee on Energy and Commerce Chemicals Used in Hydraulic Fracturing (2011) and cites substances including carcinogens, neurotoxins, irritants/sensitisers, reproductive toxins and endocrine disruptors as having been used in fracking activities in the US. The submission goes on to conclude that ‘a quick review of the health impacts associated with HF [hydraulic fracturing] chemicals demonstrate they are far from non-toxic and safe for human health or the environment’. Non-disclosure of chemical composition of fracking fluids was another issue raised in the submissions where fracking fluid composition was discussed.

The design, construction, use and decommissioning of petroleum wells were the subject of many submissions to the review and well integrity was recognised as a significant contributor to identified risks from fracking. Some typical concerns raised regarding well integrity include that current Tasmanian regulations are inadequate and/or that industry cannot be trusted to design, construct or maintain adequate wells so as to ensure minimal or no risk to the environment from well failure.

In relation to well integrity, the Australian Petroleum Production and Exploration Association Ltd (APPEA)11 indicated that it is financially important to industry for wells to be constructed to the highest possible standards, with responsible companies relying on ‘established standards relating to well design, well

7 For example see submissions 032 and 039. 8 See for example submissions 014, 054 and 151. 9 Submission 155. 10 Submission 077. 11 Submission 121.


REVIEW OF HYDRAULIC FRACTURING IN TASMANIA Final Report 14 construction, well integrity management and well abandonment that adhere to practices published by organisations such as the American Petroleum Institute. These meet or commonly exceed expectations of the regulator and are subject to review and audit.’

Conversely, those that used the Frack Free Tas template response stated that ‘well integrity is an issue that has not been solved by the industry’, relying on examples from the US and citing a 2014 CSIRO report that found 40 of 43 production wells in Queensland and NSW were emitting gas into the environment.

The Environmental Defender’s Office (EDO)12 suggested that Tasmania does not have adequate measures in place to ensure well integrity and should adopt the NSW Code of Practice for Coal Seam Gas Well Integrity that sets out minimum requirements for maintaining well integrity in construction, use and maintenance. The issue of well integrity is discussed further in the Key Findings against the Terms of Reference section of this Report.

Concerns regarding the potential for fracking to induce seismic activity were raised in several submissions, most of which cited instances in the US and/or an incident in Lancashire in the United Kingdom (UK) in 2011.13 In discussing the potential for induced seismicity APPEA14 stated that ‘Microseismic studies undertaken in the Cooper Basin and extensive research on hundreds of wells in the US have conclusively demonstrated that the fractures induced by the process are normally confined to the rocks close to the zone of interest’ and ‘the industry believes there is clear evidence that the technology has been and will continue to be applied safely and sustainably in Australia’.

The Australian Academy of Technological Sciences and Engineering (ATSE)15 responded to the Review through the 2013 report by the Australian Council of Learned Academies (Cook et al, 2013) that provides information on a number of issues raised in the ToR. On the issue of induced seismicity, Cook et al (2013) report:

‘The issue of induced seismicity associated with shale gas operations falls into two categories. The first relates to seismicity induced by the hydraulic fracturing process itself, and the second is seismicity induced by the disposal of fluids (such as produced water from shale gas plays) by deep injection (deeper than several km) into wastewater wells. … In Australia, there have been no reported incidents of induced seismicity associated with hydraulic fracturing, either in coal seam gas or tight gas operations.’

Cook et al (2013) conclude that induced seismicity from fracking itself does not pose a high safety risk, and it is the disposal of fluids by deep injection that poses a bigger risk.

The potential for fracking to result in fugitive emissions was another theme of many submissions, with references in particular to methane seepage, radioactive compounds and carbon dioxide.16 Further discussion on this issue is provided in the summary against ToR 2 below in relation to the potential for environmental impacts.

12 Submission 095. 13 For example see submissions 015, 024 and 109. 14 Submission 121. 15 Submission 014 and attached report: Cook et al (2013). 16 See for example the Frack Free Tas template submissions and submissions 039, 056, 077 and 085.


REVIEW OF HYDRAULIC FRACTURING IN TASMANIA Final Report 15 As outlined in the Issues Paper, many submissions opposed to fracking recommended that the precautionary principle should be applied to fracking. The Tasmanian Greens submission provides a good example of the expression of this concern, as follows:

‘the application of the precautionary principle is crucial when striving for best practice in environmental and safety standards…If the lack of proven technology capable of providing sustainable water treatment of fracking flowback fluid, warrants other jurisdictions such as Germany to ban fracking – then clearly the best practice standard of the precautionary principle must apply to Tasmania as well’.

The TFGA17 stated that the precautionary principle ‘must be brought into account and that the current moratorium should be extended by another three years to provide adequate time to thoroughly undertake the required studies’.

Others, such as Kathryn Adams18 suggested that the ‘best practice’ guidelines of the oil and gas fracking industry in the US, UK, New Zealand and Australia are not matched by their actual practices (details providing an account of practices in each jurisdiction are provided in the submission).


a. agriculture;

b. groundwater; and

c. the broader Tasmanian environment.

This ToR was addressed in the majority of submissions to the Review, with the main focus being on contamination from fracking activities pre, during and post production. Many submissions raised the general contention that surface and groundwater will be contaminated from fracking activities with subsequent adverse impacts on crops, livestock, the landscape and biodiversity. A number went on to suggest that such contamination would create loss of markets for agricultural products and result in declining tourism to the State.

Many of the concerns raised in relation to this ToR in the submissions were amplified by the lack of understanding of deep groundwater systems in Tasmania, citing Cook et al, 2013, p180:

‘We lack data on many deep groundwater systems or an understanding of those systems and therefore of the potential impact of shale gas exploration and production on those systems. We do not fully understand the chemistry of many groundwater systems, their behaviour, their dynamics, and in particular there are many areas where we have a poor understanding of the physical structure and geology of the basins.’

17 Submission 153. 18 Submission 101.


REVIEW OF HYDRAULIC FRACTURING IN TASMANIA Final Report 16 The following sections summarise the substantive concerns and issues that were raised with the Project Team by those opposed to fracking in Tasmania. As stated previously, the Review also received submissions from some individuals, companies, industry associations and regulators that were supportive of fracking, or potentially supportive provided certain risks were managed. APPEA19 advised that:

‘Companies use extensive monitoring to detect any possible changes in the environment as a result of operations. Before, during and after activities commence, monitoring is put into place to measure the potential impact on the environment. Before drilling a well it is standard practice that companies undertake extensive surveys to fully understand the environment…standard forms of monitoring include:

• Water sampling (e.g. surface water, groundwater) • Air quality (e.g. gas, dust and noise) • Vegetation and flora (e.g. weed infestations) • Fauna (e.g. for conservation species) • Fracture monitoring (e.g. geophone arrays to assess stimulation extent) • Well head (e.g. pressure changes within the well) • Soils/topography (e.g. for erosion) • Social (e.g. impact on communities) • Cultural (e.g. disturbance of cultural sites).’

TMEC20, whilst noting that there are potential impacts from mining, supports the ability of applied best practice principles to effectively minimise those potential impacts. Similarly in the key findings from Cook et al (2013) it is suggested that regional environmental impacts from shale gas developments can be managed and minimised by applying environmental assessment and appropriate regulatory controls. This finding is supported by industry.21

Potential impacts on agriculture The TFGA22, whilst making submissions about mining more generally, noted that the primary impacts from fracking are on landowners and in particular farming families, stating that ‘the economic and social impact on affected families is immense, and needs to be considered far more carefully than has been the case in other jurisdictions’. Lock the Gate Alliance23 agreed, and stated that when unconventional gas development takes place on agricultural lands, impacts include loss of productive land, reduced viability of farming operations and water resource competition.

The Review heard from a number of primary industry businesses concerned that fracking will jeopardise their industry. Truffles of Tasmania24 stated that if fracking occurred on their farm the ‘entire business would be ruined overnight’. Similarly Brett Hall25expressed doubt that shale gas fracking and farming could

19 Submission 121. 20 Submission 054. 21 Submission 121. 22 Submission 153. 23 Submission 136. 24 Submission 074. 25 Submission 093.


REVIEW OF HYDRAULIC FRACTURING IN TASMANIA Final Report 17 co-exist in Tasmania due to contamination and subsequent loss of brand identity. This view was countered by the Energy Resource Information Centre (ERIC)26 with examples given of successful co-existence in Queensland, NSW and remote Western Australia and South Australian locations.

Wine Tasmania27 expressed concern that the reputation of Tasmania’s premium cool climate wines is at risk due to the amount of land used, inability to achieve effective remediation post-fracking and potential lack of irrigation from water diversion to fracking activities.

Contamination of aquifers was a concern raised in many submissions and this is discussed further below in relation to potential impacts on groundwater. Specifically in relation to potential impacts on agriculture it was noted that water quality is vital to farming operations, with Houstons Farm28 stating:

‘We are deeply concerned that if our limited sources of high quality water are degraded by the impact of hydraulic fracturing activities, then our business will prove to be unviable.’

Many submissions drew on reported cases in the US of livestock losses due to contaminated surface and groundwater29 and the Lock the Gate Alliance30 listed several potential contamination pathways for livestock from unconventional gas activities, including disposal of wastewater, spills, leaks or well failure, discarded chemicals onsite, wastewater in irrigation channels, airborne contamination, re-use of drilling mud, inadequate waste management and accidental contamination events.31 The potential for fracking to affect food safety and infrastructure requirements in the Tasmanian dairy industry was also raised as a concern.32

Access to farmland was a key theme in a number of submissions, with concern that farmers have no statutory right to ‘veto’ exploration or production licences. The TFGA33 in particular submitted:

‘We believe the current landowner consent process is lacking strength and recommend a requirement for landowner consent to both exploration and development ...’

A number of other submissions raised landowner consent as a fundamental issue to fracking and further concerns were expressed about the process for those affected by an exploration or development licence and the adequacy of compensation to land owners. These concerns are summarised below under ToR 4.

Concern on remediation responsibilities and costs was also expressed specifically in relation to potential impacts on agriculture. For example:

‘Farmers and other landholders have raised major concerns about the likelihood that they may ultimately be liable for any negative impacts caused by hydraulic fracturing.’

26 Submission 151. 27 Submission 109. 28 See for example submission 138. 29 See for example the Frack Free Tas template submissions. 30 Submission 136. 31 See also submission 077. 32 Submission 157. 33 Submission 153.


REVIEW OF HYDRAULIC FRACTURING IN TASMANIA Final Report 18 The surface footprint of unconventional gas mining activities and consequent impacts on farming families and the community were raised34, as was the potential for valuable farmland to be damaged from fracking activities and not effectively remediated. A characteristic view was that ‘exploration licences have been granted across much of Tasmania’s rural landscape. Yet massive evidence is there to show that fracking involves the industrialisation of large areas of good land, having terrible effect (sic) on agriculture … and destroying local communities.’35 The TFGA recommended that an ongoing fund be established to provide adequate resources for remedial works.

In outlining industry’s approach to minimising impacts on the landscape, APPEA36 outlined the commitment of companies to minimise disturbance and inconvenience of petroleum activities ‘by locating operations in areas of least impact’. APPEA went on to state that all sites are effectively rehabilitated unless otherwise agreed with the landholder.

In relation to potential impacts on agriculture, Cook et al (2013) noted that:

‘Experience with production of unconventional gas in Queensland and NSW has shown that access roads and well networks can compromise the landscape for productive agricultural and pastoralist activities, and for indigenous land use, as well as for its habitat values and scenic and aural qualities … Projects will need to minimise competition for land, water and infrastructure with other resource development projects, agricultural uses and communities.’

Potential impacts on groundwater The potential for fracking activities to impact on groundwater resources was a significant concern in many submissions. General concerns were expressed that fracking pollutes water supplies, while specific issues were raised about groundwater depletion, the potential for contamination of aquifers from fracking and contamination of surface water from chemicals, emissions and returned fluids. Industry practices and well integrity were identified as contributors to groundwater contamination, as were activities associated with fracking such as transport and infrastructure requirements.

Dealing first with the issues raised on the amount of water used in fracking operations, submissions indicated that ‘the amount of water used in fracking operations is significant – approximately 7.7 – 38 megalitres per fracture with multiple fractures (up to 30) usually needed for each well … this will place significant stress on groundwater systems, particularly if they are already utilized by existing industries.’37

In relation to water use in fracking operations and potential impacts on aquifers APPEA38 noted that:

‘most of the water used in tight and shale gas production is used in the hydraulic fracturing process and quantities vary depending on local geological conditions, such as depths, porosity and the length and number of horizontal wells. Water is generally obtained within the vicinity of operations and is typically brackish (i.e. not potable). Companies are committed to minimising their footprint and all water used in hydraulic fracturing operations will be captured and reused where possible. As

34 See for example submissions 39, 136 and 152. 35 Submission 117. 36 Submission 121. 37 Submission 136. 38 Submission 121.


REVIEW OF HYDRAULIC FRACTURING IN TASMANIA Final Report 19 part of the approvals process, a company must also demonstrate that the taking of water will not have unacceptable impacts on aquifers.’

The risk of contamination to aquifers from fracking was raised in a substantial number of submissions. The submission from the Tasmanian Branch of the International Association of Hydrogeologists (IAH)39 provided a representative view of the ways that this contamination may occur, including:

• well integrity failure and decommissioned wells resulting in cross contamination or long-term release of oil and or gas into groundwater;

• upwardly migrating gas; • poor management of recovered fluids/uncontained flowback; and • methane seepage.

In relation to each of these concerns APPEA40 submitted that they were not aware of any problematic, abandoned oil and gas wells in Tasmania, it is not possible for a fracture to rise vertically a thousand metres or more to reach shallow water aquifers, and at no point does recovered fluid contact groundwater sources. Brian Best41 stated that ‘methane has always seeped out of coal seams’ and TMEC42 noted that ‘methane emissions recently detected at drill sites on mainland Australia are from an area of CSG wells; these types of impacts are often erroneously associated with all types of unconventional hydrocarbon projects’.

It should be noted that where submissions outlined instances of contamination of groundwater, examples from fracking activities in CSG operations, mostly in the US, were used.

Additional concerns that were raised in the context of potential groundwater contamination were that there is a lack of understanding of the linkage between surface water and groundwater in Tasmania and the fact that DPIPWE no longer has a groundwater unit was seen as accentuating the problem.43 Hydro Tasmania44, for example, commented that ‘Tasmania’s ground and surface water resources are generally considered to be highly connected meaning any impact on the water quality of the various aquifers has the potential to impact surface waters’. That submission went on to anticipate that environmental risks would be analysed and considered in any approvals process for fracking in the State.

Potential impacts on the broader Tasmanian environment Concerns raised in relation to this section of ToR 2 focused on the broader potential impacts from fracking activities and in particular resulting from contamination of the air and groundwater. Many submissions outlined potential impacts of unconventional gas activities and contamination on human health and safety, including concern that the potential impacts on human health and safety were not specifically included in

39 Submission 112. 40 Submission 121. 41 Submission 003. 42 Submission 054 43 See for example submissions from Frack Free Tas and 112, 117, 123 and 155. 44 Submission 084.


REVIEW OF HYDRAULIC FRACTURING IN TASMANIA Final Report 20 the ToR for the Review. Most submissions that addressed this ToR called for further studies to be done specific to the Tasmanian context so that the potential impacts can be known and minimised.

The Department of Health and Human Services45 responded to the Issues Paper by stating:

‘The primary potential risk to public health from fracking is through ground and surface water contamination. Fracking has the potential to contaminate groundwater and drinking water supplies primarily through fracking fluid and flowback water infiltration, but also through the mobilisation of naturally occurring contaminants such as metals, radioactive material and salts. These contaminants along with the chemicals and proppants used during the fracking process, will need to be identified and risk assessed.

Other potential sources of groundwater contamination include disturbance of aquifer sediments and gaseous seepage’.

In their submission, Doctors for the Environment Tasmania46 focused on the potential human health implications for those in proximity to unconventional gas extraction activities. They noted that the ‘key determinants of public health include clean air, clean water and a safe food supply’ and that the threats to water quality and quantity from fracking provide potential routes for livestock and human exposure. Impacts of air, light and noise pollution were also canvassed in this and other submissions,47 as were the potential psychological impacts from sickness, stress and disturbed sleep patterns.

Potential serious impacts on local ecosystems were raised including potential impacts on biodiversity, native wildlife48, karst and cave systems, enclosed lakes, rivers and estuaries49 and other groundwater dependent ecosystems.50 The potential ‘reach’ of contamination was described by the Tasmanian Land Conservancy51 referring to the:

‘significant potential for ground water to be contaminated and its availability reduced for environmental assets such as aquatic systems, wetlands, riparian vegetation and the myriad of native species and communities dependent on freshwater sources above and below ground [and] the potential for areas containing values of environmental significance to be subject to the process of hydraulic fracturing. This potentially includes land protected by legally binding conservation covenant or deemed to contain values significant for conservation.’

45 Submission 094. 46 Submission 075. 47 See for example submissions 135 and 077. 48 See for example submissions 107 and 152. 49 See submission 104. 50 Submission 112. 51 Submission 154.


REVIEW OF HYDRAULIC FRACTURING IN TASMANIA Final Report 21 3. To consider developments and experiences in the regulation of hydraulic fracturing

nationally and internationally.

This ToR was not widely addressed in the submissions and of those that responded the majority considered that the best developments were in those jurisdictions that have followed a precautionary approach and imposed bans on the practice.

Many examples of negative international experiences, from the US and the UK were given. The TMEC52 noted:

‘Techniques have been widely used internationally and nationally for a number of decades. Many of the issues highlighted in the media relate to operations in the USA and cannot be directly related to the situation in Tasmania. The US has allowed for the rapid development of this technique without having in place adequate environmental safeguards, something that would not be permitted in Tasmania or Australia. The exemption in the US, from the Safe Water Drinking Act for oil and gas operations (the ‘Haliburton Loophole’) is a good example of the lack of regulatory oversight (especially environmental) under which operations are being conducted. Regulation in Tasmania and in other Australian Jurisdictions is vastly more refined …’

APPEA53 outlined some innovations in products and technology being utilised by companies to improve well construction and the durability of casings.

At the national level attention was drawn to regulatory arrangements in New South Wales (NSW) and Queensland (QLD) and to the national uniform regulatory framework for CSG endorsed by the Council of Australian Governments’ (COAG) Standing Council on Energy and Resources. The EDO54 noted that even though Tasmania is in the very early stages of exploration for unconventional gas, there is an opportunity to learn from the experiences of these jurisdictions. Brett Hall55 was of the view that regulatory frameworks in Australia have not kept pace with the development of the unconventional gas industry. The Meander Valley Council56 made a preliminary observation that the experiences of communities in QLD and NSW57 ‘demonstrate the importance of resolving regulatory and technological issues before allowing the industry to develop’.

Specific examples given of positive developments in the regulation of hydraulic fracturing nationally are:

• The NSW Chief Scientist and Engineer, Final Report: Independent Review into Coal Seam Gas Activities in NSW (2014) and the incorporation of the recommendations into the NSW Gas Plan;

• NSW Code of Practice for Coal Seam Gas Fracture Stimulation Activities; • NSW Code of Practice for Coal Seam Gas Well Integrity; and • The establishment of the Office of Groundwater Impact Assessment in Queensland.

52 Submission 054. 53 Submission 121. 54 Submission 095. 55 Submission 093. 56 Submission 120. 57 See submission 125.


REVIEW OF HYDRAULIC FRACTURING IN TASMANIA Final Report 22 A number of submissions called for an independent scientific review similar to that of the NSW Chief Scientist and Engineer to be conducted in Tasmania in relation to unconventional mining.58


As outlined earlier, 6 submissions to the Review were supportive of the current regulatory measures in Tasmania. The response from TMEC59 provides a good representation of these views:

‘The Council Board reviewed the relevant information and as a result we wish to confirm our support for fracking exploration and development within Tasmania. We have full confidence in MRT’s capacity to oversee the granting of requisite licenses and approvals subject to proponents meeting the current legislative requirements in full.’ [and] ‘The current legislative framework has proven to be effective in managing all industry activities in the State, and provides the certainty required by all in the community from explorer to land owner.’

Those that raised concerns with the robustness and operation of current Tasmanian laws for mineral exploration and development did so in relation to notification requirements, landowner consent for fracking activities, appeal rights, compensation, compliance and enforcement measures and perceived lack of accountabilities. Many submissions stated that regulations specific to unconventional mining are required due to the unique issues raised by fracking.

As outlined in the Issues Paper the primary legislation for mineral exploration and development in Tasmania is the MRDA. Under the MRDA the intention to grant a licence must be published in the relevant newspaper. Once a licence is granted written notice to affected landowners is required prior to entry onto property for exploration activities. The TFGA60 along with several other submitters61 did not consider the notice requirements in the MRDA to be adequate and believed that personal notification of all affected landowners and/or occupiers should be a basic requirement of the legislation, noting that this is the case in other states. A number of these submissions also linked notice requirements to community consultation, suggesting that proponents should be legally required to consult farmers and the community in a timely and effective manner.

Landowner consent was a major issue raised in many submissions that addressed this ToR and those that expressed general opposition to fracking. As indicated by the Tasmanian Greens62:

‘A clear and obvious area of deficit within the Tasmanian context is the lack of legal recourse for state farmers and landowners to have a say on whether fracking occurs on their land.

58 See for example submissions 095 and 153. 59 Submission 054. 60 Submission 153. 61 See for example submissions 093, 125 and 138. 62 Submission 152.


REVIEW OF HYDRAULIC FRACTURING IN TASMANIA Final Report 23 Currently under state, territory and federal laws, most landowners have no right to refuse mining companies access to explore, and then later, mine their land should mining licences be granted.’

Lock the Gate Alliance63 considered this issue as a significant impact on communities faced with unconventional gas development, in particular the ‘injustice’ that landowners and communities do not have the right to refuse access to companies for these activities, saying that ‘this industry is being forced on an unwilling population’. Others linked this concern with restrictions on the right to protest under the new Workplaces (Protection from Protesters) Act 2014.64

Existing compensation provisions in the MRDA were seen as lacking by many65 as were current statutory rights of objection and appeal; as stated by Malcolm Mars66 ‘any affected landholder or member of the community should have the right, legislated by law, to object to both the application for exploration licences and any subsequent hydraulic fracturing activities’. Some considered that rights of appeal and compensation should apply more broadly; for example Michael Wadsley67 believed that ‘where it is intended to drill wells through any aquifer then all persons who have a connection to that aquifer should be able to participate in the planning process and should be able to receive compensation if the water table in an aquifer is adversely affected or if the quality of the water in an aquifer is adversely affected.’ The Didel Institute for Scientific Research and Development68 (the Didel Institute) considered that the legislation should contain ‘escape clauses’ for landholders where fracking causes damage to their land.69

The matters to be taken into account when granting licences received some attention in submissions, notably that impacts on adjoining landowners should be taken into account70 - including land bound by conservation covenants71; baseline studies should be required prior to licences and work plans being approved; and sustainable development objectives of the Resource Management and Planning System (RMPS) be incorporated into the MRDA.72 The EDO73 in particular drew attention to impacts of fracking on Aboriginal cultural heritage and suggested this become part of an environmental impact assessment with all relevant Tasmanian Aboriginal representative bodies being notified of applications.

Lack of data and perceived lack of adequate legislation were the basis of some claims that the Tasmanian Government cannot adequately address applications for fracking and therefore a further moratorium is required for these issues to be addressed.74 Others were concerned that the MRDA lacks adequate

63 Submission 136. 64 See for example submission 093. 65 For example see submissions 11, 85, 88 and 125. 66 Submission 115. 67 Submission 088. 68 Submission 085. 69 See also submission 154. 70 See submission 125. 71 Submission 154. 72 Submission 095. 73 Submission 095. 74 See for example submissions 071, 093, 097, 101, 115, 130 and 134.


REVIEW OF HYDRAULIC FRACTURING IN TASMANIA Final Report 24 enforcement mechanisms particularly for company failure to prevent damage and/or provide adequate compensation.75 Others argued that there was a lack of resourcing for monitoring and enforcement.76

Specific calls were made for unconventional gas production and fracking activities to be assessed as Level 2 activities under the Environmental Management and Pollution Control Act (EMPCA).77


Issues and concerns raised against this ToR spanned the Review process itself, the Issues Paper and ToR as well as what could be described as possible ‘flow on’ effects should the potential agricultural, environmental and regulatory impacts identified under other ToR transpire. Some raised issues not specific to fracking but to mining more generally. Although few submissions specifically addressed the issues raised by this ToR, a number raised other relevant matters in general discussion or under other ToR and these have been taken into account in this summary.

A small number of submissions were of the view that the Review will not add any value to the current debate on fracking in Tasmania and that either an independent scientific review and/or parliamentary inquiry would be preferable.78 Criticism of the Issues Paper has been outlined in the ‘preliminary analysis’ section in the Summary of Submissions.

A large number of submissions79 provided comment on the ToR for the Review, in particular that public health was not specifically raised in the ToR. As put by Lock the Gate Alliance80:

‘…the designated Terms of Reference for the Inquiry fall short of a thorough investigation into the range of issues surrounding the unconventional gas industry in general and the process of hydraulic fracturing in particular. The Terms of Reference of this Inquiry should be broadened so as to include a thorough investigation of the full range of risks inherent in the hydraulic fracturing process including:

• Risks of contamination and depletion of ground and surface water resources • Risks to human health from hazardous air pollutants and water contamination • Social and economic impacts of gas field development • Lack of existing baseline data by which to measure impacts • Cumulative impacts of gas field development.’

In their submission, Doctors for the Environment Tasmania81 noted that environmental and health impacts should assess detrimental social effects, illness and stress that also arise from mining developments and that a full cost benefit analysis should be conducted prior to development. Specific social impacts

75 See for example submission 011. 76 See for example submission 062. 77 Submission 095. See also submission 076. 78 See for example submissions 114, 076, 119, 138 and 152. 79 Note that many of these were template responses from Frack Free Tas. 80 Submission 136. 81 Submission 075.


REVIEW OF HYDRAULIC FRACTURING IN TASMANIA Final Report 25 mentioned in various submissions included division and protest, displacement due to pollution and environmental contamination, corporate control over the water supply and increased infrastructure in the production phase.

In relation to the Tasmanian Brand, Brett Hall82 stated:

‘The presence of these wells across the landscape poses a serious risk to our successful branding of Tasmanian produce as being ‘clean, green and safe’. The result of an incidence of contamination, in our water, soils, air quality and chemical residues in our products would close down market access to many countries immediately. If the mining sites pose an ongoing risk the loss of these markets could be permanent.’

The potential for fracking, including perceived or actual contamination events to affect Tasmania’s tourism industry was raised by Wine Tasmania83and many others.84

Many submissions argued that climate change issues should be addressed in relation to fracking in Tasmania, some suggesting that rather than permitting fracking in unconventional reservoirs for hydrocarbons the Government should be encouraging investment in renewable energies such as geothermal, marine, wind and solar, thereby leaving fossil fuels in the ground in order to help combat climate change.85

In addition to the societal issues outlined above, a number of submissions questioned the direct economic benefits from an unconventional hydrocarbon industry in Tasmania and submitted that any gains would be outweighed by the environmental costs. For example Karen Beltran & others86 said:

‘Any financial gain Tasmanians may receive from hydraulic fracturing will be needed to pay for the long term environmental damage caused by this practice.’

The potential economic benefits to Tasmania from fracking were outlined by TMEC, APPEA and ERIC87. TMEC88 stated:

‘The minerals industry contributes significantly to the Tasmanian economy … and is an important economic pillar to the state’s economy. Without the explorer discovering mineral deposits the State would forego many opportunities in areas such as the creation of employment and training, especially in regional area, economically viable access to strategic mineral resources (including road base, and agricultural products) and the creation of wealth that goes towards funding many of the vital public services we all take for granted’.

82 Submission 093. 83 Submission 109. 84 See for example the Frack Free Tas template response. 85 See for example those submissions that used the Frack Free Tas template response and submissions 075, 106 and 152 as a representative sample on climate change issues. 86 Submission 032 and identical submissions 033, 035, 036, 038, 063, 064, 066, 079 and 128. 87 Submission 151. 88 Submission 054.


REVIEW OF HYDRAULIC FRACTURING IN TASMANIA Final Report 26 Some concern was expressed that overregulation and compliance costs were ‘holding back’ the Tasmanian economy.89 APPEA90 outlined the following economic benefits of petroleum exploration and production to Australia:

• Reliable, clean and efficient energy supply; • Employment; • Regional investment; • Export income; and • Significant tax revenue for Government.

In terms of regional investment ERIC cited that in Queensland more than 5000 land owners have entered into commercial agreements with gas drillers and more than 40,000 people are employed in the gas industry.

One key finding of Cook et al (2013) is that:

‘The Expert Working Group considers that there is a clear need for Australia to quickly move to better assess its shale gas resources - and reserves and to consider their potential social, economic and environmental impact, whilst exploration in Australia is still at an early stage’.

Flow on costs to the Government, companies and possibly landowners in a contamination event or from abandoned wells were also cited by some as potential economic costs to the State.91 Many submissions cast doubt on whether there would be any discernible economic benefits to the State from fracking,92 questioning, for example:

• Whether there is a potential unconventional gas industry in Tasmania at all; • Whether employment would be increased given that specialised operators would be flown in to the

State; • Whether regions would benefit or be disrupted by FIFO workers, damaged infrastructure, increased

rental and increased house prices; and • Whether profits and revenue would flow to the State or elsewhere.

The index of submissions is appended to this Report at appendix A.

89 Submission 003. 90 Submission 121. 91 See for example submissions 011, 112 and 136. 92 See for example submissions 011, 032, 039, 045 and 155.



Findings against the Terms of Reference The Project Team has reviewed the submissions received and conducted further research where required in relation to the key issues raised during the Review. As previously stated, most of the issues were raised in objection to fracking, however some submissions were supportive of fracking and some appeared generally supportive provided regulatory measures are tightened so as to mitigate potential risks.

In analysing the submissions there appears to be a widespread perception that fracking exploration quickly and almost inevitably leads to a large-scale, multi-well production field producing large quantities of contaminated water and associated environmental damage, as well as serious social, health and economic impacts on whole communities.

In the Tasmanian context it is not known whether there are sufficient resources for unconventional mining and exploration for the resource is required in order for this to be established. Figure 1 below outlines the likely phases and timeline for any exploration and development of unconventional hydrocarbons in Tasmania:

It is fundamentally important to recognise that shale gas exploration in Tasmania is in its infancy – Stage 1 indicated in Figure 1. It can take more than a decade to develop a resource to the production stage, assuming that there are sufficient volumes of gas to justify the high costs of development, processing and distribution. Production may then continue for many more years, depending on the volume and content of the resource.

Figure 1: typical phases of development for unconventional mining in the Tasmanian context


REVIEW OF HYDRAULIC FRACTURING IN TASMANIA Final Report 28 We can extrapolate from Figure 1 that early exploration for unconventional gas has the lowest risk profile. The risk rises as the project progresses, and management of the risks must be commensurately increased. The increase in risk would be mainly due to the ‘scaling up’ of activities, which would be offset to a significant extent by increased knowledge and understanding of the geological environment.

As outlined in the Issues Paper and discussed further below, there would be significant resourcing, strategic and investment implications for both State and local government if a project progressed to Stage 3 and beyond.


At this point in time the use of fracking in Tasmania is a possibility not a probability. The extent of the possible prospective geology is limited to the southern central areas of the Tasmania Basin. This approximates to an area south of Ross in the central midlands.

Prior to any fracking taking place, a work plan under MECOP must be approved by MRT93. Any application for a work program approval where the proposed work involves fracking is required to provide a significant level of detail in relation to the proposed techniques and location specific information including but not limited to:

• the environment of the surface and sub-surface; • potential risks and risk management techniques to be employed in reducing these risks to as low as

reasonably practicable; and • an appropriately engineered well design for the drilling of a fit-for-purpose petroleum well to

facilitate any proposed fracking operation.

In Tasmania there are three current exploration licences for Category 4 minerals, but only one of those exists where the technique of fracking may be required in the search for hydrocarbon resources. The licence has been in force for approximately one year, and detailed exploration will be required prior to the licence holder having the required level of information and data to submit a work program that contemplates fracking. No work program applications have been received for fracking.

The Issues Paper sought submissions on the use of hydraulic fracturing for unconventional gas in the Tasmanian context. Many submissions opposed to fracking based their submissions on coal seam gas (CSG), however the Issues Paper discussed that this technique is highly unlikely to be required in Tasmania, and that CSG and its particular issues were outside the scope of the review process.

The key differences between CSG and shale gas include:

93 Mineral Exploration Code of Practice, 5th Edition, Appendix 1



• The depth and geology of the reservoir. CSG is mainly mined from coal seams at depths of ~300 – 1000 metres underground. The gas is held in place within the coal seam by water pressure. Shale gas, on the other hand, is generally located at greater depths than CSG in excess of 1000 metres and the gas, is held within very small pores in the essentially non permeable shale. Shale is much less permeable than coal;94

• Extraction techniques. CSG does not always require fracking however shale gas due to its non-permeable nature almost always require fracking. 95CSG is extracted by reducing the water pressure in the coal seam, the gas is released from within the coal matrix and flows through natural or sometimes stimulated fracture systems to the well;

• Water and chemicals. CSG requires large amounts of water to be extracted during the production life of the CSG bore hole.96. Shale by its nature does not contain large amounts of water and water production is usually limited to the flowback water during the early stimulation phase. Waste water from especially CSG wells may be hypersaline and can contain a wide range of chemical compounds including radioactive elements. The composition of the produced water is dependent on the local geology and groundwater chemistry. The composition of the produced waters can cause issues for treatment, however in shale gas wells the reuse of flowback water is increasing as a standard methodology. All CSG produced water must be disposed of as there is no further use for it in the production cycle; 97 and

• Well integrity can be an issue for any hydrocarbon production and is one potential source of groundwater contamination. Studies have shown that there is a greater incidence of surface and groundwater contamination as a result of surface spills than from well integrity issues.98

Very few submissions recognised that there has been extensive use of fracking in Australia in the hydrocarbon industry since the 1960s.

The Project Team notes that the issues associated with the use of fracking are complex and divisive. Some of the commonly expressed opinions in submissions on this term of reference included:

From those opposed to fracking in Tasmania:

• Fracking fluid composition is of concern including perceived lack of chemical disclosure; • concern that the technology is unsafe, including having the potential for induced seismicity; • contamination of the environment is inevitable via poorly constructed, managed and

decommissioned wells and through the release of trapped substances as a result of fracking; and • a lack of confidence was also expressed in the industry following any set regulations/guidelines.

Of those that supported the use of fracking key points included:

• confidence in the regulatory framework to manage the industry undertaking this specific technique;

94 CSIRO, 2013. 95 Cook et al, 2013. 96 Ibid. 97 Cook et al, 2013. 98 Bachu & Valencia, 2014.



• recognition of the usefulness of baseline studies to ensure compliance and protect the environment;

• recognition of the long history of fracking operations undertaken in Australia; and • knowledge of the limited potential for this type of hydrocarbon occurrence in Tasmania.

The relatively large percentage of submissions opposed to fracking in particular and the hydrocarbon industry in general, did not acknowledge the technical and regulatory situation in Tasmania in relation to the extent of the geology that is a viable target for fracking; the current regulatory regime that applies to exploration and development; or the long history of fracking that has been in operation in Australia for more than 50 years.

Findings 1 and 2:

• Further exploration by industry is required to establish the potential for any economically viable unconventional hydrocarbon resources in Tasmania.

• The potential use of fracking in Tasmania is unknown due to the nature of Tasmania’s

geology, the size of any potential prospective area, and the lack of exploration for hydrocarbon resources to date.

MRT advise that the current regulatory regime in Tasmania has drawn upon the existing controls in place in other jurisdictions and technical publications from independent organisations (for example CSIRO and ACOLA) and has implemented controls on activities associated with potential fracking through licence and work program approval conditions to allow for on-going adaptation in response to advances in technology and current best practice methodologies in the industry. In addition MRT are already actively engaged with other Australian jurisdictions as part of ensuring the Tasmanian regulatory regime maintains validity and currency in the context of the emerging industry and community trends.

However, there appears to be an inherent lack of trust in the information sourced from the Government and industry and this is a potential impediment to the dissemination of relevant information.

Many submissions called for the permanent banning of fracking in Tasmania however many of the views submitted were opinions based on the CSG industry and experiences in the US and a general philosophical opposition to the hydrocarbon industry in general, and fracking in particular. Despite this, the available evidence suggests that to date over 700 wells have been fracked in South Australia’s Cooper Basin with no evidence of adverse impacts on aquifers within the Great Artesian Basin and other shallower aquifers (Department of State Development, 2014).

In the Project Team’s view, a best practice approach to the effective management of hydrocarbon exploration is an adaptive learning process rather than a fixed set of rules or guidelines. The best practice approach focuses on fostering improvements in quality and promoting continuous learning, critical in an evolving industry and where large amounts of new research and development are occurring.


REVIEW OF HYDRAULIC FRACTURING IN TASMANIA Final Report 31 Finding 3:

• Whilst the risks associated with this technology are seen as low and manageable by industry, via the use of current best practice environmental and safety standards that continue to evolve, on the basis of the submissions received there appears to be substantial community concern that fracking is inherently unsafe and unmanageable.

2. To examine the potential impacts of hydraulic fracturing in Tasmania, in particular potential impacts on agriculture, groundwater and the broader Tasmanian environment.

The following section discusses, in turn, each element of this ToR, including available evidence, what the submissions expressed and the Project Team’s conclusions on the issues raised. Many of the issues and therefore much of the discussion cross over, particularly in relation to impacts on the broader Tasmanian environment.

Agriculture The southern Tasmania Basin is the most prospective for unconventional hydrocarbons, and also has a wide range of agricultural activities. Some activities, such as cropping and grazing, have been in place for many decades, while in recent years a number of niche agricultural enterprises have moved into areas where irrigation water has become available. The general market perception is that many agricultural products from this region are produced in a ‘clean, green’ environment founded on reliable, good quality water supplies, healthy and productive soils, and sustainable property management.

The submissions express understandable concerns about whether it would be possible for the agricultural sector to coexist with an unconventional hydrocarbon production industry that would require significant quantities of water and may potentially release contaminants that could affect agricultural viability. Some submissions stated that any level of fracking represents an unacceptable risk to the sector, while others envisaged the potential environmental effects of large-scale hydrocarbon production on whole communities or sectoral niches. There was also a concern that fracking water supplies would be diverted from agriculture at that sector’s expense.

The Project Team has concluded that any market affects are impossible to quantify at this stage. It is not known whether a viable resource exists, or whether global energy and financial markets would provide the conditions necessary for such a resource to be exploited. However, it would clearly be necessary to proceed with caution if unconventional gas exploration indicated the need for fracking to appraise a resource, as this may lead to larger scale production that could conflict with the interests of the agricultural sector.

In terms of water supply, shallow groundwater aquifers (less than 100m depth) in the Tasmania Basin are unlikely to provide the yields necessary for fracking injection, although they may be able to supply the relatively small volumes needed for exploration drilling. As a consequence, injection water would have to


REVIEW OF HYDRAULIC FRACTURING IN TASMANIA Final Report 32 be obtained from existing surface water sources (streams and dams), which are likely to be fully allocated to existing agricultural users.

Before water licences and allocations could be leased or sold, both parties would have to ensure that approval has been given by DPIPWE to transfer the licence(s) and/or the allocation(s) under Part 6 (Division 4) of the Water Management Act 1999. Transfers could either be for a limited period (temporary transfer) or on a permanent basis (absolute transfer).

Consideration should be given to the use of Water Management Plans (as provided for under the Water Management Act 1999) to ensure that any water-sharing arrangements represent the interests of stakeholders.

Any permanent or long-term transfers of surface water allocations to unconventional gas production may have significant strategic impacts for the agricultural sector, and these potential impacts should be considered by both Government and industry if unconventional gas exploration identifies a viable resource over the next few years.

Consideration should also be given to a strategic government review to address these potential impacts if a Stage 3 ‘exploration appraisal’ indicates that there may be a viable unconventional gas resource.

Finding 4:

• Appraisal and production of unconventional hydrocarbon resources have implications for agricultural areas including water resources and potential for contamination of land, water and air. Any potential flow on effects on land values and market access will need to be considered, should a project which is to use fracking proceed to the development appraisal stage.

Groundwater

Little is known about the groundwater resources of the Tasmania Basin. It is considered likely, however, that shallow aquifers in this region are only capable of meeting stock and domestic requirements on agricultural properties. The lack of groundwater data and monitoring was noted in several submissions, including that from the Tasmanian Chapter of IAH99. The lack of data relates to a wide range of variables such as aquifer type, location, yields, quality, flow directions, connectivity with surface water, and groundwater-dependent ecosystems.

The project team notes that Government funded Statewide or regional groundwater assessments and monitoring, as proposed in some submissions, would require a substantial increase above the current levels of mining exploration and regulatory funding.

These approaches would not necessarily be a cost-effective way of improving the understanding or management of unconventional gas exploration areas, but may be of assistance in meeting the State’s overall environmental management obligations.

99 Submission 112


REVIEW OF HYDRAULIC FRACTURING IN TASMANIA Final Report 33 There would also be a substantial time lag, measured in years, before meaningful trends in groundwater level and quality data could be established through regional groundwater monitoring. It is questionable as to whether such data, collected with much effort and cost, would necessarily provide information of relevance to a proposal for fracking at the property or sub-regional level, particularly as the probability of finding a viable unconventional gas resource in the Tasmania Basin is low.

Any fracking proposal would only be considered for MRT assessment if the proponent has funded and undertaken a detailed groundwater investigation at an appropriate geological and geographical scale. The investigation would include collection of baseline data on all aquifers within the area of interest, including groundwater yields, flow directions and quality.

In general terms, a project proponent would be expected to fully fund and undertake all groundwater investigations necessary for each stage of the project. It would not be feasible, or necessary for any baseline groundwater quality assessment to include all potential chemicals of concern. Current best practice allows for the selection of a range of representative analytes, to assess local aquifer chemistry, including the possible background presence of drilling chemical constituents within the aquifer. It would be possible, however, to store water samples for possible further analysis, should this be considered necessary.

Many submissions pointed out the potential risks to groundwater and surface water quality posed by unconventional gas resource appraisal and production, and the uncertainties surrounding the long-term performance of any decommissioned wells.

The main risks to groundwater and surface water quality relate to surface spillage and leaks. In contrast, the risk of potential leakage from deep petroleum wells into shallow potable aquifers during fracking or water reinjection has been shown to be very low (Bachu and Valencia, 2014). Further detail on potential risks is described in Cook et al (2013).

These potential risks can be minimised if:

• The design, construction, supervision, and decommissioning of wells, and the management of related activities are undertaken according to best practice, recognising that best practice standards are continually evolving;

• Flowback fluid and well chemicals are contained and processed in bunded and sealed storage areas, with adequate provision for spill management (OGP/IPIECA (2013);

• The proponent is able to demonstrate that they can treat and dispose of any flowback fluid in an environmentally sustainable manner;

• A rigorous assessment and regulatory process is followed and adequately resourced by Government, including reviews of the process as a project moves to each new stage; and

• There is a detailed characterisation of the hydrocarbon resource, related geological formations and potentially-affected aquifers before any approval to drill a petroleum well is considered for approval.

A meaningful assessment of the magnitude of these risks will only be possible if a potentially viable resource is identified. The risks cannot be entirely eliminated due to the inherent uncertainty of human


REVIEW OF HYDRAULIC FRACTURING IN TASMANIA Final Report 34 behaviour and the difficulty of fully defining the geological, hydrological and hydrogeological characteristics of a particular region.

In regard to water treatment, the Project Team is not aware of any onsite water treatment systems that can provide cost-effective treatment of contaminated flowback fluid to a standard suitable for safe disposal to local waterways or potable aquifers, with the important proviso that the chemical characteristics of the flowback fluid would not be known until the resource has been drilled and tested. The issue of flowback fluid treatment should receive particular attention during any well approval process.

The long term environmental risk of any decommissioned wells is low, provided they are sealed, secured and regulated according to evolving best practice standards. The overall risk level would increase if an unconventional gas exploration project moved into the development appraisal and production stages. Consideration could be given to adopting best practice well decommissioning guidelines from another jurisdiction, and including these in the Stage 4 production licence approval process (Figure 1).

The remediation and securing of any decommissioned wells would be the sole responsibility of the company that has undertaken any fracking. It should be noted that total elimination of environmental risk in this regard is not feasible, particularly as the long term performance of well decommissioning technologies is yet to be determined, nor is it possible to predict socio-political conditions or ‘lock in’ the State’s environmental management priorities beyond a period of a few years.

The Project Team is of the view that the current lack of detailed information on groundwater resources within the Tasmania Basin is not, in itself, sufficient reason to ban fracking, nor should it be seen as an impediment to government oversight of hydrocarbon exploration.

Nevertheless, consideration could be given to:

• including the drilling of a petroleum well as a Level 2 activity within Schedule 2 of the Environmental Management and Pollution Control Act 1994, so that it must, rather than may, be referred to the EPA Board for assessment under that Act; and

• Further defining the groundwater assessment and management requirements for Stages 2 to 5 of an unconventional gas project (Figure 1), with reference to other jurisdictions. This work would support and clarify the existing requirements of MECOP.

Findings 5 and 6:

• The process of unconventional hydrocarbon resource appraisal and production may pose a potential risk to groundwater and surface water quality. Sources of risk include surface mishandling of chemicals and contaminated water, and potential leakage from production wells into shallow, potable aquifers.

• There is a current lack of detailed information and knowledge on groundwater resources within the Tasmania Basin. However, proponents would be required to undertake detailed groundwater investigation at an appropriate geological and geographical scale prior to being granted approval to drill a petroleum well.



The Broader Tasmanian Environment In line with the findings for the agricultural sector, groundwater and surface water, fracking also poses a potential risk to the broader Tasmanian environment, including impacts on air quality, visual amenity and natural ecosystems. These potential risks would be low during Stages 1 to 3 of an unconventional gas project (Figure 1), but may become significant in Stages 4 and 5. Consideration should be given to addressing them in a strategic fashion if a promising unconventional resource were to be identified in Stage 3.

Finding 7:

• Fracking poses a potential risk to the broader Tasmanian environment, including surface water quality and localised impacts on air quality, visual amenity and natural ecosystems. These potential risks may increase as the scale of a potential unconventional gas project increases, and will therefore need to be addressed in a strategic manner if a significant unconventional gas resource is identified.


Within Australia, and in some overseas jurisdictions, much of the current publicised activity in relation to fracking is within the CSG sector. As stated in the Issues Paper, any potential prospectivity in Tasmania would be in unconventional reservoirs and therefore much of the experiences with CSG are not directly applicable to the Tasmanian unconventional gas context.

Even for unconventional gas extraction care must be taken when extrapolating experiences from other jurisdictions as the geology, operations and regulatory environment are likely to differ.

In Australia, Victoria currently has a moratorium on fracking while a community and stakeholder engagement program is completed.100 And there are also parliamentary enquiries in progress in SA101 and in WA.102

Some Australian State regulatory controls, in particular those from SA and WA have already been recognised as being useful for adoption in Tasmania in the regulation of any potential unconventional gas (fracking) operations. These controls include public release of proposed chemical use, a ban on benzene, toluene, ethylbenzene and xylene (BTEX) chemicals, hydrogeological studies, requirement for community

100 Natural Gas Community Information, 30 April 2014, State Government of Victoria, viewed 6 February 2015, http://www.vic.gov.au/news/natural-gas-community-information.html. 101 Natural Resources Committee, 2014, Inquiry into Unconventional Gas (Fracking). 102 Environment and Public Affairs Committee – Legislative Council, 2013, Inquiry into the Implications for Western Australia of Hydraulic Fracturing for Unconventional Gas.


http://www.vic.gov.au/news/natural-gas-community-information.html

REVIEW OF HYDRAULIC FRACTURING IN TASMANIA Final Report 36 consultation prior to fracking approvals being given and baseline environmental studies.103 All of these measures have already been incorporated into Tasmania’s regulatory regime for mineral resource development.

Nationally the National Harmonised Regulatory Framework for Natural Gas from Coal Seams (SCER, 2013) provides guidance to regulators in the management of CSG and contains some relevant components that can and have been incorporated into the current Tasmanian licensing and regulatory framework.

A number of submissions called for a total ban on fracking, however the basis for this was generally CSG issues faced on mainland Australia or the US, not from a complete understanding of Tasmania’s geology, unconventional gas prospectivity or the current regulatory regime. There was recognition by some submissions that there are significant differences between proposed activities in Tasmania and those faced by the mainland CSG operations, and by the US experiences.

The general message from many submissions included calls for:

• codes of practice based on CSG codes; • a complete ban on fracking as a best practice approach; and • the adoption of the precautionary principle when determining if exploration and development of

any unconventional gas resource should proceed.

Others considered that existing codes of practice and frameworks already deliver strict regulatory controls in recognition that the US and CSG operations are not directly applicable to the Tasmanian context.

The use of hydraulic fracture stimulation in hydrocarbon production and exploration has been in use across Australia since the 1960s. During this time regulatory frameworks have been developed and tested in other jurisdictions to ensure works are undertaken in keeping with industry best practice and environmental standards are maintained.

The continuation of close relationships with other jurisdictions is important in ensuring newly adopted regulatory controls applicable to any Tasmanian operation can be readily implemented. This can be achieved through licence conditions, and amendments to the MECOP.

Tasmania is in the infancy in relation to an unconventional gas project being explored for or developed. With only one potential operator in this field it may be premature to implement specific legislation to regulate this industry.

Licence conditions can be applied to require any proposed fracking activity to be undertaken in such a way as to ensure there is a risk minimisation approach to any project, and that best practice operations are undertaken by any proponent. Maintaining a flexible regime with regard to the regulation of fracking would provide Tasmania with the ability to ensure that the most relevant and up to date processes and practices can be implemented quickly and efficiently. The experience available via other jurisdictions in Australia and from within the research organisations (including CSIRO and ACOLA) provide a pathway to maintaining an up to date regulatory framework.

103 See Petroleum and Geothermal Energy Act 2000 (SA) and the Petroleum and Geothermal Energy Resources (Environment) Regulations 2012 (WA).



Findings 8 and 9:

• Fracking for the production of hydrocarbons has been in use in Australia for over 50 years. During this time the industry and regulation and best practice methodologies have evolved to the point where the risks associated with this technique can be managed.

• Tasmania has the opportunity to continue to learn from other Australian jurisdictions

where unconventional gas exploration currently occurs and from CSG regulations and guidelines where relevant, including the National Harmonised Regulatory Framework for Natural Gas from Coal Seams and recent codes of practice for CSG fracture stimulation activities and well integrity.


As discussed in the Issues Paper the regulation of exploration activity in Tasmania is under the legislative framework of the MRDA. Should an exploration project progress to production there are then legislative requirements under LUPAA and discretionary provisions under EMPCA that provide the framework for development proposals.

Under the MRDA the grant of a licence does not provide any authority to undertake on ground work. All proposed work programs must first be assessed by MRT to ensure the proposed work practices are in keeping with the expectations as outlined in MECOP, including the use of best practice techniques as a minimum expectation. Approvals will not be given if there is insufficient information provided relating to the proposed work program, or if the proponent has not provided an adequate security deposit that is put in place to ensure the State or land owner do not get left with legacy issues associated with environmental damage as a result of the works undertaken. Compensation provisions also exist within the MRDA that provide further protection for the land owner in relation to any compensable losses as a result of the activity.

Current requirements prior to undertaking the drilling of a petroleum well, which would be required for fracking, include the requirement for landowner consent prior to approval being given for any petroleum drilling activity. Baseline environmental studies are also a prerequisite to drilling/fracking. The current suite of legislation is capable of going above and beyond normal processes for approvals, including for the EPA to call in an activity, under EMPCA, that is considered to be potentially damaging to the environment.

Whether fracking in an unconventional reservoir would require a referral under the EPBC would depend on whether it is likely to have a significant impact on matters of national environmental significance (ie: national threatened species and ecological communities).


REVIEW OF HYDRAULIC FRACTURING IN TASMANIA Final Report 38 Some submissions were targeted at issues outside the scope of the review, in that they relate to general processes under the MRDA, such as general licensing requirements, rather than the specific activity of fracking. Some submissions came from a position of a lack of understanding of the current practices and regulatory framework for example:

• That specific legislation for landowner consent for land access to drill a petroleum well is required; • Baseline studies should be required as a pre requisite to fracking operations; • All fracking operations in Tasmania should be referred under the EPBC; • Compensation provisions in relation to damage to land are required; • MRDA should have a publically available register; • Industry should be transparent; and • Application of precautionary principle should be applied to work approvals.

Further to these submissions the following opinions were also provided:

• Available Government resources are inadequate to regulate the industry; • Rights to object to activities outside a land holding should be provided; • Further specific regulation is not required as would increase red tape for no added benefits; • The current regulatory provisions are adequate to manage associated risks; • There is a conflict of interest for the Government to regulate and collect royalties; • Land owners should be exempt from the Workplaces (Protection from Protesters) Act 2014; and • Specific regulations are suggested to be needed for fracking operations.

Concerns were raised in the submissions citing a lack of confidence in the regulatory framework in place relating to regulating any potential fracking to be undertaken in Tasmania. Currently there is no automatic requirement for this type of activity to be assessed under EMPCA although the Director EPA may refer the activity to the Board of the EPA for environmental assessment. Once production is provided for through the issuance of a production licence under the MRDA the proposed development activity would require a land use permit under LUPAA, and may also require assessment under EMPCA if the Director, EPA is of the opinion that it is expedient in the public interest to do so.104 Any assessment of an exploration proposal under EMPCA that includes fracking would have similar requirements for the type and level of detail to be provided as those required for a work program approval under the MRDA.

Many submissions gave opinions relating to the regulation of any proposed fracking operation in Tasmania without reference to actual current processes, licencing conditions, approvals processes and regulations that are already in place including the need for landowner consent prior to drilling. Some comment went beyond issues associated directly with fracking including whether notification requirements are adequate, compensation provisions in place under the MRDA for landowners, the security deposit system in place under the MRDA for remediation damage to the environment, the operation of the Environment Protection and Biodiversity Conservation Act 1999 (EPBC), the existence of the publically available mining register under the MRDA and objection rights for the general public who do not have an estate or interest within the licence area (available via LUPAA and EMPCA during development proposals, but not for exploration).

104 Section 27 EMPCA.


REVIEW OF HYDRAULIC FRACTURING IN TASMANIA Final Report 39 Current regulations and processes allow for balance and provide for compensation for damage to land. The security deposit system that is in place also insures the state and land owners against the inheritance of any mining legacy issues.

Findings 10, 11 and 12:

• Proposals to undertake fracking in Tasmania are subject to the regulatory regime for mineral resource development in the MRDA. There is also scope for EMPCA to be applied for further environmental assessment of proposals.

• Production and development of hydrocarbon resources are subject to LUPAA and may also

be subject to EMPCA, providing further opportunity for community involvement and engagement with the assessment and approvals process.

• The regulatory regime that applies to exploration and development of mineral resources is

complex.

Current approvals processes within MRT would not provide approval for a petroleum well to be drilled without landowner consent. However, a number of submissions expressed a desire for the land owner consent provisions of the MECOP to be strengthened by being made a specific legal requirement. These opinions suggest a lack of trust in and understanding of the regulation of mining activities, and specifically petroleum exploration.

Finding 13:

• The current code of practice (MECOP), requires that landholder consent is provided before approval to drill an onshore well can be given. Concerns have been raised that this requirement does not provide enough protection for landholders, as it is not specified in legislation.


Climate change impacts During post-fracking well-completion and clean-up, fluids flow back to the surface. In this phase of development, water and excess sand proppant are removed from the fluid, and any gas produced may be vented or ‘flared’ (burnt). This process is potentially one of the most significant sources of greenhouse gas emissions for any unconventional gas industry.

Cook et al (2013) noted that the potential sources of greenhouse gases from unconventional gas extraction include:



• Emissions of methane during pre-production operations associated with well completion; • Emissions of methane during gas production operations; • Carbon dioxide vented from gas sweetening operations; • Carbon dioxide emissions from fuels and energy used during operations; • Carbon dioxide from flaring of gas during operations; • Carbon dioxide emissions from fuels and energy used during compression and pipelining of the gas

to markets; and • On a life-cycle basis, the carbon dioxide emitted during combustion of the fuel, including for

electricity generation.

Other gaseous pollutants could include volatile organic compounds, nitrogen oxide, sulphur dioxide, hydrogen sulphide and particulate matter depending on the chemistry of the target formation (IPIECA/OGP, 2013).

Some submissions expressed concerns about possible climate change impacts, with most of these approaching the issue from the perspective of increased government support for renewable energy being more appropriate than potential development of an unconventional gas industry. This aspect is further discussed below.

The Project Team notes that the greenhouse gas impacts of an unconventional gas industry in Tasmania cannot be quantified unless a viable resource has been found and assessed. If fracking activities were to lead to gas production, it is likely that there would be greenhouse and other fugitive gas emissions, in common with all other industries and activities that extract or depend on hydrocarbon fuels.

These potential impacts would only become significant as a project evolved beyond the initial exploration into production, processing, transport and distribution. The impacts could be ameliorated, however, through a gas capture process known as ‘Reduced Emissions Completions’ (RECs). This process uses portable equipment to separate gases from the well fluid, which can eliminate or greatly reduce atmospheric emissions associated with well completion. The equipment includes sand traps, separators, portable compressors, membrane acid gas removal units and desiccant dehydrators (U.S. E.P.A., 2011).

Consideration could be given to making the use of a RECs system a requirement of any production licence approval.

Finding 14:

• Fracking does not, of itself, have any direct climate change impacts because it is solely a well development process. Greenhouse gas may be released during hydrocarbon well completion, however, although these effects can be minimised using best practice technologies. Any future hydrocarbon production would lead to the release of carbon dioxide as processed fuels are burnt to produce energy. This would be a secondary impact that would not be directly related to the process of fracking.


REVIEW OF HYDRAULIC FRACTURING IN TASMANIA Final Report 41 Renewable energies In some sectors of the energy industry, gas is seen as a ‘transition fuel’ that would allow society to move from conventional hydrocarbon fuels to renewable energy sources, based on the typically lower greenhouse gas emissions produced by the gas industry. Others have rejected this view, seeing unconventional gas extraction as an extension of an outdated industry that continues to have significant environmental impacts. The latter view was predominant in submissions that commented on the issue of renewable energy.

This review does not make a finding either way in regard to these conflicting opinions, other than to note that the Tasmanian Government has already made a considerable investment in renewable hydroelectric and wind power, and may eventually need to give consideration to whether unconventional gas could, or should play a part in supplying Tasmania’s energy needs, or be sold on the national energy market.

Finding 15:

• An expansion of Government support for renewable energies as an alternative to development of an unconventional hydrocarbon resource is a strategic matter for the State and Federal Governments to consider over the coming decades.

Health impact assessment Many submissions either directly or indirectly expressed concerns about the potential health impacts of fracking and unconventional gas production. Some argued or implied that these impacts were essentially unmanageable and others that they were if best practice management were to be applied. Some submissions called for a health impact assessment before any fracking takes place.

While there may be some difference of opinion in the submissions about how to deal with health issues, Coussens and Martinez (2014) suggest that Health Impact Assessment (HIA) could be used to identify opportunities for planning and managing the potential negative impacts of a project and to inform decision making, rather than to decide whether an unconventional gas industry is a good idea or not. In this respect, an HIA would be a qualitative management tool and, more importantly, a process that the Government and community could use to assess the health effects of a potential unconventional gas industry. This would be achieved by:

• identifying the health risks and benefits of the industry, including those related to specific activities such as fracking;

• providing an opportunity for stakeholders to have a reasoned discussion about these risks and benefits;

• assessing complex industry-related decisions that may have health implications, and the options available for managing any health effects; and

• making recommendations on any data gaps, specific risk assessments or monitoring.

If this approach were adopted in Tasmania, the HIA could be integrated with any social, economic and environmental analyses to form an overall view of a proposed industry. It should be noted that s74(5) of


REVIEW OF HYDRAULIC FRACTURING IN TASMANIA Final Report 42 EMPCA makes provision for an environmental impact assessment to include an assessment of the impact of the proposed environmentally relevant activity on public health, if required by the Director of Public Health.

The most appropriate time for the Government and industry to consider undertaking an HIA (in common with a cost benefit analysis) may be if a resource has been found and its potential confirmed, as this would mark a significant ‘decision point’ between the exploration and resource development phases.

Social division Recent Tasmanian history has shown that significant social conflict can arise from resource extraction, power generation and industrial activities, even at the proposal stage.

Although the majority of the submissions express concerns about fracking, including outright rejection of the process, it is not known whether these reviews reflect those of the wider community or even whether a significant number of people in the community are aware of the issue or have given it sufficient consideration to form an opinion.

An emerging unconventional gas industry in Tasmania could result in social division if the exploration and potential development process is not effectively managed. Establishing a ‘social licence’ for any such industry should therefore be a key focus of both industry and Government, based on open communication, a detailed assessment process, transparent regulation, and meaningful stakeholder involvement. The project team recognises, however, that the fundamental objections of some stakeholders to a potential industry may not be assuaged by further studies or any refinements to Government oversight.

Finding 16:

• The public submissions to the review outlined significant concern that the establishment of an unconventional hydrocarbon production industry in Tasmania would be detrimental to Tasmania’s clean and green image and associated food, beverage and tourism industries. Additional concerns include potential public health and community impacts.

Cost benefit analysis An unconventional gas industry in Tasmania would clearly be a significant economic force that would be quite different to any existing industry in the State. The industry could take many years to develop to its full potential, and would require significant production, processing and pipeline infrastructure to deliver the products to energy buyers. The industry would also have to coexist with other major industries, including agriculture and tourism as well as the social structure that has been built around those industries.

At this stage the specific costs and benefits of an emerging unconventional gas industry are unknown. Many submissions emphasised the environment costs of any industry, and some were of the opinion that any financial benefit would be exceeded by these costs, which would ultimately be borne by the community. Others argued that the mining industry provides major benefits to the Tasmanian community, such as increased employment, tax, training, and investment.


REVIEW OF HYDRAULIC FRACTURING IN TASMANIA Final Report 43 An important issue to note is that any resource investigation beyond the current ‘desktop’ study would likely require a significant financial investment from industry for a period of at least several years. Industry commitment to such an investigation would depend on factors such as international oil and gas prices which are largely beyond the control of local industry or Australian government policy. This means that an assessment of costs and benefits at this early stage would be problematic, at the very least.

An appropriate time for the Government to consider undertaking a cost benefit analysis may be at the point where a potentially viable hydrocarbon resource has been confirmed, and planning and other approvals are being sought. This would involve working in partnership with the proponent to assess the level of financial, legislative and other support a fledgling industry may require to get underway, and whether such support would produce a net benefit for Tasmania.

Any such assessment should consider project risks associated with commodity price fluctuations, possible changes to national climate change policy, and potential conflicts with existing industries and social structures. It should also assess the financial risks to the proponent and government of any resultant change to government policy or regulation.

Finding 17:

• The potential costs and benefits of an unconventional hydrocarbon industry in Tasmania are unknown and cannot be properly analysed unless a resource has been discovered and its potential confirmed.



References Bachu, S & Valencia, RL 2014, ‘Well Integrity Challenges and Risk Mitigation Measures’, The Bridge Linking Engineering and Society, summer 2014.

Standing Council on Energy and Resources, 2013, National Harmonised Regulatory Framework for Natural Gas from Coal Seams, Department of Industry and Science, available at: http://www.scer.gov.au/workstreams/land-access/coal-seam-gas.

Cook, P, Beck, V, Brereton, D, Clark, R, Fisher, B, Kentish, S, Toomey, J and Williams, J (2013), Engineering energy: unconventional gas production, Report for the Australian Council of Learned Academies, available from www.acola.org.au.

Coussens, C. and Martinez, R.M. (2014), Health Impact Assessment of Shale Gas Extraction: Workshop Summary, Roundtable on Environmental Health Sciences, Research, and Medicine; Board on Population Health and Public Health Practice, Institute of Medicine of the National Academies, available from: http://www.nap.edu/catalog/18376/health-impact-assessment-of-shale-gas-extraction-workshop-summary

Department of State Development (2014), Petroleum – Frequently asked Questions Unconventional Gas in South Australia, available at:

http://www.petroleum.dmitre.sa.gov.au/prospectivity/basin_and_province_information/unconventional_gas/frequently_asked_questions#Has%20hydraulic%20fracturing , viewed 12 February 2015.

CSIRO, 2012, What is Coal Seam Gas, factsheet, CSIRO website, viewed 19 February 2015, available at http://www.csiro.au/Outcomes/Energy/Energy-from-oil-and-gas/What-is-coal-seam-gas.aspx#Forms

IPIECA/OGP (2013), Good Practice Guidelines for the Development of Shale Oil and Gas, OGP Report No. 489, available from http://www.ipieca.org/publication/ogp-ipieca-good-practice-guidelines-development-shale-oil-and-gas.

Natural Gas Community Information, 30 April 2014, State Government of Victoria, viewed 6 February 2015, available at: http://naturalgasinfo.vic.gov.au.

NSW Chief Scientist and Engineer (2014) Final Report: Independent Review into Coal Seam Gas Activities in NSW (2014), available at: http://www.chiefscientist.nsw.gov.au.

U.S. E.P.A. (2011), Reduced Emissions Completions for Hydraulically Fractured Natural Gas Wells, available at http://www.epa.gov/gasstar/documents/reduced_emissions_completions.pdf.

US House of Representatives Committee on Energy and Commerce, 2011, Chemicals Used in Hydraulic Fracturing, available at:


http://www.scer.gov.au/workstreams/land-access/coal-seam-gas

http://www.acola.org.au/

http://www.nap.edu/catalog/18376/health-impact-assessment-of-shale-gas-extraction-workshop-summary

http://www.petroleum.dmitre.sa.gov.au/prospectivity/basin_and_province_information/unconventional_gas/frequently_asked_questions%23Has%20hydraulic%20fracturing

http://www.petroleum.dmitre.sa.gov.au/prospectivity/basin_and_province_information/unconventional_gas/frequently_asked_questions%23Has%20hydraulic%20fracturing

http://www.csiro.au/Outcomes/Energy/Energy-from-oil-and-gas/What-is-coal-seam-gas.aspx%23Forms

http://www.ipieca.org/publication/ogp-ipieca-good-practice-guidelines-development-shale-oil-and-gas

http://www.ipieca.org/publication/ogp-ipieca-good-practice-guidelines-development-shale-oil-and-gas

http://naturalgasinfo.vic.gov.au/

http://www.chiefscientist.nsw.gov.au/

http://www.epa.gov/gasstar/documents/reduced_emissions_completions.pdf

REVIEW OF HYDRAULIC FRACTURING IN TASMANIA Final Report 45 http://democrats.energycommerce.house.gov/sites/default/files/documents/Hydraulic-Fracturing-Chemicals-2011-4-18.pdf.

Legislation

Environmental Management and Pollution Control Act 1994

Environment Protection and Biodiversity Conservation Act 1999 (Cth)

Land Use Planning and Approvals Act 1993

Mineral Resources Development Act 1995 and Mineral Exploration Code of Practice 5th Edition 2012

Water Management Act 1999


http://democrats.energycommerce.house.gov/sites/default/files/documents/Hydraulic-Fracturing-Chemicals-2011-4-18.pdf

http://democrats.energycommerce.house.gov/sites/default/files/documents/Hydraulic-Fracturing-Chemicals-2011-4-18.pdf


Appendix A: index of submissions NUMBER NAME

001 Jo McRae

002 Buck Emberg

003 Brian Best

004 Linda Seaborn

005 Anne Layton-Bennett

006 Janet Reid

007 Kerrie Cross

008 Saxen Young

009 Lyrae Love

010 Vera Thompson

011 Martin Hensher

012 John Harwood

013 Xan Nunn

014 Australian Academy of Technological Sciences and Engineering (ATSE)

015 Estelle Ross

016 Trixie Gillard

017 Trudy Phibbs

018 Melinda Gonzalez

019 John Biggs

020 Forestry Tasmania

021 Veronica Douglas

022 April Krause

023 Diane Martin

024 Lisa Bartholomew



025 Cayne Layton

026 Alison Bleaney (Tasmanian Public and Environmental Health Network)

027 M Phelan

028 Lola Figuero (LUSH Cosmetics)

029 Vicki Veness

030 Latrobe Council

031 Kathleen Muller

032 Karen Beltran

033 Ruben Lapa Jesus

034 Rod Broadby

035 Jennifer O’May

036 Rhonda Plummer

037 Marion Curtain

038 Clive Plummer

039 Robert Jackson

040 Pauline Zack

041 Daniel Panek

042 Erin Blanchard

043 Catherine Horan

044 CONFIDENTIAL

045 Hans Sipsma

046 Celia Leverton

047 Andy Del Vecchio

048 Catherine Morse

049 Kelle Ryan

050 Andrew Cole

051 Nicole Crane



052 Kentish Council

053 Lisa Rime

054 Tasmanian Minerals & Energy Council (TMEC)

055 Rowena McDougal & Geoff Sharp

056 Judi Knoop

057 Amanda Sinclair

058 Robyn Harper

059 Digvijay Agrawal

060 Illegible

061 CONFIDENTIAL

062 Catherine Nicholson

063 Janelle Keynes

064 Tim Butler

065 Mark Downie

066 Jasmine Bellette

067 Nigel Mack

068 Brendan Dean

069 Geoff Dickinson

070 CONFIDENTIAL

071 Ian and Marsha Ferris

072 Nan Bray

073 Cathryn Kelly

074 Truffles of Tasmania

075 Doctors for the Environment

076 The Environment Association

077 National Toxics Network

078 Bob Hawkins



079 Paul Beltran

080 Rebecca Howarth

081 Mirabai Phillips

082 Bo Boulot

083 Emilie Boulot

084 Hydro Tasmania

085 Didel Institute

086 E Pugh

087 Shaun Thurstans

088 Michael Wadsley

089 Tim Slade

090 Peter Dufferin

091 Larna Pittiglio

092 Helma Stevenson

093 Brett Hall

094 Public & Environmental Health Services, DHHS.

095 Environmental Defender’s Office (EDO)

096 Fem Koenders

097 Lois Reid

098 Jaiia Earthschild-Techau

099 Rocelyn Ives

100 Deanna Fleming

101 Kathryn Adams

102 Michael Drell

103 Kell Conway

104 Tasmanian Conservation Trust (TCT)

105 Kate Shaw



106 Climate Action Hobart

107 Rick Calitz

108 Jill Mann

109 Wine Tasmania

110 Kathryn Trail

111 Elizabeth Jane

112 Tasmanian Branch - International Association of Hydrogeologists

113 Snezana Cook

114 E-Systems

115 Malcolm Mars

116 Will Caught

117 Karuna Knights

118 University of Tasmania

119 Eric Tierney

120 Meander Valley Council

121 Australian Petroleum Production & Exploration Association Ltd. (APPEA)

122 Beris Hansberry

123 Jen Van-Achteren

124 S Y

125 Anthony and Michael Bayley

126 Lorraine Perrins

127 Lure Wishes

128 Anne Pettit

129 Paul Winter

130 Carol Rea

131 Kevin Moore

132 Rosalind Jones



133 Jane Christie-Johnston

134 Janice May

135 Jo Country

136 Lock the Gate Alliance

137 Thea Webb

138 Houston’s Farm

139 Dydee Mann

140 Weston Farm

141 Karen Jones

142 Kim Seagram

143 Susan Kaden

144 Daphne Toombs

145 Tanyia Maxted

146 Richard Glazebrook

147 Neylan Aykut

148 Tim Douglas

149 Jayne Azzopardi

150 Naomi Lambie

151 Energy Resource Information Centre

152 Tasmanian Greens

153 Tasmanian Farmers and Graziers Association (TFGA)

154 Tasmanian Land Conservancy

155 Our Tasmania Group

156 S J Ashbolt

157 DairyTas Board


Date post:	20-Aug-2018
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