* Santos confirms three spills from former Eastern Star Gas
* Greens say U.S. study calls into question climate benefits
* Gas industry group says will be required to pay carbon tax
By Rebekah Kebede
PERTH, Feb 10 Australia's Santos
on Friday reported three spills of contaminated water containing
heavy metals from its coal seam gas operations in the country's
eastern New South Wales state.
The revelation gives ammunition to Australia's influential
Greens party, environmental groups, and farmers who have been
calling for a moratorium on developments of the unconventional
gas, chiefly for fear it may affect water supplies.
Santos said the spills were from operations formerly owned
by Eastern Star Gas, which the former took over in November
2011, and took place immediately after the acquisition.
"(The spills) shouldn't have happened, they are preventable
and we are upgrading the Eastern Star operations and processes
to ensure that they don't continue to happen," Santos spokeman
Matthew Doman said.
"We believe these leaks represented no material risk to the
The Wilderness Society did independent tests on the site and
reported high levels of arsenic, lead, and chromium. Santos said
it did not dispute the findings.
In January, Santos reported a spill of 10,000 litres of
untreated coal seam water by Eastern Star in June 2011, which
occurred before Santos had taken control of the firm.
Producing coal seam gas, also known as coal seam methane,
requires drawing large amounts of water from coal beds or seams
to unlock gas. The water, often very saline and containing heavy
metals, is supposed to be treated in reverse osmosis plants
before being released back into the environment.
Opponents of coal seam gas, especially farmers who draw on
groundwater for livestock and crops, worry there are
insufficient safeguards to keep contaminated coal seam gas water
out of the groundwater and off arable land.
The coal seam gas industry is in its infancy in New South
Wales, where the spills occurred, but has been booming in the
last few years in the neighbouring state of Queensland, with
Santos, BG Group and Origin Energy
heading up $45 billion worth of coal seam gas export projects.
CSG NO BOON TO CLIMATE?
Coal seam gas operations have also drawn criticism over
industry claims that the unconventional gas can reduce emissions
by replacing coal.
Australia's influential Greens Party on Friday urged a study
of emissions from coal seam gas wells, saying a recent U.S.
study on shale gas production, which has some similarities to
coal seam gas production, debunks industry claims that the fuel
is better for the climate than coal.
A U.S. National Oceanic and Atmospheric Administration
(NOAA) study of shale gas wells showed greenhouse gas leakage
around the wells was almost twice that of the industry's
official figures, according to the U.S.-based journal Nature.
"The coal seam gas industry's claims to be better for the
climate than coal are increasingly being called into question by
the evidence," Australian Greens Deputy Leader, Senator
Christine Milne, said, reiterating calls for a ban on coal seam
"Because methane is so much more powerful a greenhouse gas
than carbon dioxide, a small amount of leakage can undermine the
An Australian coal seam gas industry lobby says on its
website that using coal seam gas to generate electricity instead
of coal can cut greenhouse gas emissions by up to 70 percent and
help cut emissions in other countries as will.
"Unlike the American industry, Australian gas producers will
very shortly have a carbon pricing scheme that requires they pay
for all emissions and which provides an even greater incentive
to reduce emissions," said Michael Bradley, spokesman for the
Australian Petroleum Production & Exploration Association.
Australia will institute a carbon tax of A$23 from July,
switching to full emissions trading from July 2015. LNG projects
will get free carbon permits for at least half their liability.