JP Morgan report raises concerns over coal seam gas industry

The Courier Mail - John McCarthy - 15.12.2010

ONE of the world’s biggest merchant banks has raised serious questions about the reliability and safety of the $50 billion coal seam gas industry, citing the potential for large, uncontrolled gas releases.

The National Water Commission has claimed Queensland underground aquifers could be depleted and take centuries to recover because of gas extraction. Now a report by JP Morgan says the industry has significant water risks, an unknown impact from growth and is a potential risk to public safety.

The detailed report by analyst Garry Sherriff also indicated that it expected the CSG companies would have to pay clean-up costs for salt-affected areas and future legal liabilities to aggrieved landowners.

It cited six key water concerns caused by the industry, including a reduction in the water supply to towns and landowners, reduced quality, gas migration to water bores and the safe storage of salt.

Mr Sherriff said there was a potential that “the build-up of gas in water bores can result in large uncontrolled releases of gas, which may pose a risk to public health and safety”.

Mr Sherriff said the cumulative impacts of multiple CSG developments were unknown. It was also not known whether CSG companies had provided environmental bonds to the Government to cover potential site clean-ups.

Agforce spokesman Wayne Newton said the report backed the community’s call for a moratorium on CSG until more was known on its cumulative impacts. “More and more people are starting to raise concerns and we have not had our questions answered,” he said.

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