FRIENDS of the Earth have expressed concern over ExxonMobil Australia Pty Ltd signing an agreement to take an initial 10 per cent interest in an onshore exploration licence in the Gippsland Basin.
However ExxonMobil has played down the concerns, saying coal in the Gippsland basin was a lower rank than coal found in New South Wales and Queensland and may not require hydraulic fracturing (fracking).
The licence, currently held 100 per cent by Ignite Energy Resources Limited, will allow ExxonMobil and Ignite Energy Resources to work together to assess the natural gas potential in the deeper coal seams and determine whether it can be commercially produced.
IER will be the operator of the preliminary assessment phase during the next 12 to 18 months, with any commercial operations not expected for another five to ten years.
Friends of the Earth campaigns co-ordinator Cam Walker said he was concerned that a company of ExxonMobil’s size had signed a farm-in agreement into the exploration of coal seam gas.
“We were really perturbed when we heard that ExxonMobil had signed in on the agreement,” he said.
“Up until now the onshore companies have been quite small and we are deeply concerned that a company of that size has jumped on board.
“They (ExxonMobil) are already offshore and they have the resources (to become commercially involved with CSG) so now is the time for people who are concerned to contact their local councillor or local member of parliament and we urge them to do so.”
The exploration licence obtained by IER stretches from near Foster in South Gippsland to Lakes Entrance in the east, and Mr Walker cited environmental impacts of onshore CSG operations in Queensland as an example of why similar operations should not take place in Victoria.
He said Friends of the Earth welcomed the announcement that the state government has signed up to the National Partnership Agreement for the Regulation of Coal Seam Gas, but called for a moratorium to further investigate the potential environmental impacts of CSG.
“The whole offshore versus onshore debate, we know offshore gas is a valuable energy resource in Victoria but when you start to come onto agricultural land it is a different story,” Mr Walker said.
“It is good that the state government has signed up (to the NPARCSG) because they have ignored it for some time.
“It will improve the science we have, we will get $10 million for research into the water reserve but the state government doesn’t have to follow the recommendations (of the NPARCSG).
“If the state government wants to show they are fair dinkum, they would undertake a moratorium, which would be a six month assessment of the potential environmental impacts.
“We know that they (ExxonMobil) have been out there, saying that it is all lovely and there will be no fracking, but it is just a good time to look into the potential impact.
“After the dire situation of Queensland, it would be a shame if we didn’t get it right.”
However ExxonMobil played down the concerns, with a spokesman saying the evaluation and assessment program would be small in scale and low in impact.
He said any commercial operation was not likely to commence for another five to ten years, and that hydraulic fracturing may not be necessary to produce gas from Gippsland’s coal seams.
“There will be no fracturing during the exploration stage,” he said.
“This 12 to 18 month exploration stage is primarily just to take samples and analyse the coal.
“The coal in Gippsland is different to that found in New South Wales and Queensland.
“It is a lower rank and it is our expectation that there will probably be natural fracturing but we won’t know until testing of the coal has been completed.”