At the moment, expansion of the coal seam gas (CSG) industry is one of the most controversial topics affecting engineering construction in Australia.
On one hand, the importance of CSG cannot be understated. Already, coal seam gas accounts for 32% of Australia’s domestic gas production. Going forward, the CSIRO estimates that Australia has enough CSG in the ground to power a city of five million people for 1,000 years.
Yet public anxiety over its effect on health, the environment and agriculture continues to grow. Such concerns have only intensified following the latest developments in the US, whereby the Environment Protection Agency has recently implicated CSG ‘fracking’ in the pollution of groundwater in a community in Wyoming.
In this context, the recent announcement of a national framework for coal seam gas regulation in Australia is a welcome development. The framework, announced at the inaugural meeting of the Standing Council on Energy and Resources in Melbourne, seeks to develop best practices and guidelines and address many of the issues associated with concern regarding the industry.
How the framework will work
The objective of the framework is to develop national guidelines and best practices for CSG well design and construction in Australia. The framework will be flexible and will set out principles to guide both industry practices and the ongoing development of state-level regulation. Each state will continue to set its own requirements, but these will be guided by the framework, thus ensuring a broad level of consistency across Australia.
The framework will cover four key areas: management and monitoring of water use; well integrity; hydraulic fracking practices and procedures; and chemical use and management. It will be developed in four stages. First, a stocktake of existing practices and regulation will be undertaken to identify areas where common ground exists or gaps occur. This will be followed by the identification of key elements for a ‘best practice’ approach, drafting of a harmonised framework and evaluation and consultation.
The drafting process is scheduled for completion by the middle of next year. The framework is set to be finalised by the end of September.
Benefits for engineering construction
The framework will deliver important benefits for engineering construction. By driving greater consistency in regulation, it will simplify project management and compliance associated with CSG construction. Ministers also hope the framework will deliver more effective regulation, and that its development process will further enhance existing efforts regarding the development of best practices in the industry. Finally, whilst the framework will not, in itself, dispel concerns about coal seam gas, it does represent a step in the right direction toward gaining community acceptance of CSG.
This last point is important. The recent episode involving national gas company AGL, which was forced to suspend drilling to allow for community consultation after farmers blockaded a farm in Gloucester, New South Wales, highlights the extent of the impact community opposition can have on CSG construction work.
Moreover, over the longer term, the CSG industry – expected to be a very significant source of growth in engineering construction activity in coming years – can only reach its full potential if its existence is accepted by the communities in which it operates.
