Independent Review of Underground Coal Gasification - Report

4. Environmental and Health and Safety Issues

4.0 This chapter and the next were greatly aided by inputs from SEPA, the Coal Authority, HSE, Marine Scotland, SNH and regulators past and present in a number of Australian jurisdictions as well as discussions with academics, EU officials and the literature itself.

4.1 Health issues are explicitly considered separately in chapter 6 but given the nature of the data and research material available - its relative paucity and the interconnectedness of the subjects - environment and health and safety issues are taken together here.

4.2 Evidence for impacts, hazards and risks are taken first, in this chapter, and the frameworks and arrangements for regulation in the Scottish context follow in the next chapter.

4.3 Given the material content of the coals involved in UCG, combustion/gasification has the potential to produce and liberate a variety of potentially problematic material. Releases to air and water as well as waste materials removed from the combustion site, drilling materials and treated materials at the surface, and products and wastes from syngas plant operation all require consideration. In order to understand the potential impact on groundwater of coal geologies, see first Younger and Sapsford (2004). Liu et al (2007) also describe risks of groundwater pollution, highlighting the significance of local hydrogeological conditions. Depth, transmission potential and permeability impacting on the ability of contaminants to migrate to sensitive areas and receptors were shown to be critical. This is consistent with issues addressed in the Geology chapter.

4.4 The assessment of impacts of UCG at the local, regional and national level would in all likelihood include a strategic environmental assessment of the policy and plans associated with the application of the UCG technology. "Underneath" that, an environmental impact statement would be required to address the specifics of the application.

4.5 An appropriate environmental impact assessment report would reasonably be expected to address the nature, extent, duration, intensity, probability and cumulative dimensions of impacts on the geology, hydrogeology, hydrology, water use, freshwater (and marine in the Scottish context) ecology, terrestrial ecology, soils and agricultural capability, built and cultural heritage biodiversity, waste, air quality and visual amenity. We might also expect consideration of climate impacts. All of these dimensions would then need to be considered from testing, construction, operational and decommissioning phases of the development.

4.6 A number of operations worldwide have undertaken an EIA or ES of some kind. Two examples are the Majuba EIS (SAf RHDHV, 2014) - at 215 pages, one of the more thorough and best I have seen, and that for Linc Energy at Chinchilla (Linc Energy, 2007; actually the terms of reference for their EIA, not found.). Clearly an ex ante statement is a part of the picture and an assessment of impacts during operations and then ex post, following decommissioning and during long term reassurance monitoring, might be more instructive on the realities experienced and relevant to a credible assessment of impacts.

4.7 The range of possible impacts from UCG activity includes the controlled and uncontrolled presence of -

• gases and particulates vented and flared to atmosphere as well as gathered for production and use which have the potential to escape, with associated hazards and odour.
• light, noise and vibration from operations, transport etc
• collection, storage and disposal to sewer or waste of produced and extracted liquids, waste waters from the deep and surface operations
• collection, treatment and disposal of solid wastes from drilling, gas extraction and surface processes, including ash and tars if removed
• containment of surface liquids, gases, fuels and other materials required for Syngas plant operation or from system purges and at closure

4.8 In addition to the essential consequent combustion products of carbon dioxide, carbon monoxide, hydrogen and of course methane, the condensate produced by the UCG process usually would be expected to contain organic compounds typically found in the Gasoline Range organics ( GRO's), some Polyaromatic Hydrocarbons ( PAHs), Phenols and BTEX (Benzene, toluene, ethylene, and xylene). In most global jurisdictions, it would also be expected that maximum limits would be set for the release to the environment of these materials. US EPA, WHO or local standards would be likely to be, and are, commonly applied.

4.9 On top of the regulatory dimensions that would follow planning and licensing of the underground activity and the production site operations, the context of sub-marine or sub-estuarine UCG operations appears likely to mean that some aspects of the standard EIA framework and monitoring in general would be more than usually challenging. How the terms would be set and by whom is as yet also unclear but would connect land, water, pollution, marine, energy and health and safety regulatory interests.

4.10 Preliminary but highly relevant work has been undertaken by SEPA in this space and is included in Annex 2. This sets out the range of environmental hazards potentially identifiable for UCG: groundwater and surface water pollution and GW depletion, air emissions, underground explosion hazard, cavity collapse, seismicity and uncontrollable fire. In most cases at this point, the assessment is that for these hazards not enough is known as to the nature of the hazard or the effective regulatory controls likely to be required. These are being actively explored.

4.11 In order to connect broad principles to operational practicalities, data were sought from examples worldwide. US cases, projects in the period to the 1990's (see the Livermore data from Hoe Creek for example in https://fossil.energy.gov/international/Publications/ucg_1106_llnl_burton.pdf ) and even EU pilots (Creedy et al., 2001 for El Tremedal, pp 23-29), had relatively little public data. Somewhat clearer pictures emerge from Australian cases as initially indicated above.

4.12 Australia

Generally, consideration of the documented and reported experience in Australia is limited, often partial but instructive. UCG activity has largely been restricted to Queensland although related activities in the UGE grouping of technologies and operations have been running for a number of years, alongside conventional oil and gas activities, in every state and territory except ACT, most productively in Queensland, Northern Territory, South Australia and New South Wales. But whereas shale gas is minimally relevant in NSW and CSG has dominated, in Northern Territory the dominant experience has been in shale gas. Geoscience Australia (2014) provides a great deal of detail.

4.13 Groundwater quality issues and the environmental hazards associated with unconventional gas exploitation, including UCG, are reviewed in Geoscience Australia (2008).

4.14 A wide suite of conventional and unconventional coal, oil and gas technology has been deployed in Queensland and it has as a state great mineral assets. Given its active exploitation of the resources, it is perhaps the most informative area to study for this review.

4.15 Queensland

The Queensland Government gave the go ahead for a trial by three companies into the potential to develop and realise a UCG industry in the state, based on a commitment developed through the late 1990s.

4.16 In 1999, Linc Energy established a pilot UCG facility within its Mineral Development Licence ( MDL) 309, 20 kilometres south-west of Chinchilla, in southern Queensland. Linc Energy gasified approximately 35,000 tonnes of coal at a depth of 120 metres below surface during a 30-month test period, with the produced syngas being flared to the atmosphere. (Linc 2007) Linc engaged technical advisers from the Skochinsky Institute (in Russia), which invented the UCG process, and brought in expertise and IP from the Yersotigaz (Uzbekistan) site - then 60% owned by Linc Energy - as operators, since 1964, of the only commercial UCG power plant worldwide. The Marubeni Corporation, Japan provided direct investment.

4.17 Following the pilot, Linc proposed to establish a full commercial-scale operation with a gas to liquids ( GTL) plant for synthetic diesel and aviation fuel as well as a combined cycle gas turbine power generation plant to provide onsite power and surpluses going to the grid.

4.18 Linc (2007) articulates the terms of reference for the EIS for their Chinchilla operation and this follows an appropriate framework and appears to cover the range of aspects that might realistically be expected at that stage in the plans for the location and activity. On 11 March 2015 the state of Queensland, published on the website of the Department for Environment and Heritage Protection QLD DEHP (2016) that Linc had been committed for trial, "on five charges of wilfully causing serious environmental harm, in contravention of the (state) Environmental Protection Act 1994. On 11 March 2016, Magistrate Kay Ryan handed down her decision in the Dalby Magistrates Court, determining that Linc Energy should stand trial on these charges. The Department of Environment and Heritage Protection filed a complaint in the Chinchilla Magistrates Court in 2014 with four charges against Linc Energy for allegedly wilfully and unlawfully causing serious environmental harm.

4.19 "In 2015 a further charge was commenced, also alleging Linc Energy wilfully and unlawfully caused serious environmental harm. All charges relate to operations at the Linc Energy underground coal gasification site near Chinchilla, from approximately 2007-2013, and allege that contaminants were allowed to escape as a result of the operation.

"The committal proceeding involved 12 days of hearings in Dalby and Toowoomba from 21 October 2015 to 27 November 2015. Submissions by the parties were completed on 24 December 2015.

"As the matter remains before the courts, EHP is unable to comment further on the legal proceedings. In the meantime, EHP has retained the excavation caution zone in the area and has asked landholders in this zone to contact the department if they intend to excavate to a depth of two metres or more.
Details of the excavation caution zone and monitoring being undertaken in the Chinchilla region are available at www.ehp.qld.gov.au/management/hopeland.html. " QLD DEPH (2016)

4.20 Media coverage and reporting of the committal provided additional detail. ( ABC, 2016). It was alleged that "fugitive gases from the site - including carbon monoxide, hydrogen and hydrogen sulphide - polluted a widespread area up to six metres underground. The Magistrates Court in Dalby decided the company should face trial on all five charges brought against it.

4.21 Linc Energy said it was disappointed by the magistrate's ruling, arguing the case against it was a circumstantial one. And stating,
"Linc Energy reiterates its innocence and is steadfast in its belief that the evidence put before the Court by the DEHP (Department of Environment and Heritage Protection) had glaring holes and suffered from inconsistencies, and as a result it fell well short of the standard required," the company's spokesman said in a statement.
"Should the Director of Public Prosecutions ( DPP) decide to proceed further and take the company to trial, Linc Energy will be seeking a court hearing at the earliest opportunity in order to present its evidence, which so far has not been heard."
The legal action was the result of the biggest investigation ever undertaken by the department." ABC (2016)

4.22 Court Reporting, by the Daily Telegraph (Courier-Mail affiliate John McCarthy in Brisbane) (2016) indicated,

"Workers at Linc Energy's controversial gas site near Chinchilla were told by superiors to drink milk and eat yoghurt to line their stomachs to prevent the effects of contaminants."

4.23 "Linc, owned by millionaire Queenslander Peter Bond, faces a committal hearing in Dalby Magistrates Court on five charges of wilful and serious environmental harm at an underground coal gasification plant. Opening the prosecution case, Ralph Devlin, QC, said evidence, including "fingerprinting" of contaminants, would show that Linc was the only possible source. The contaminants had explosive or asphyxiating properties and included volatile organic compounds and benzene and toluene. Workers at the site also complained of health effects consistent with contaminants.

"Evidence would also be produced that a water bore 150m from one gasifier was well known for leaking high levels of carbon monoxide and was dubbed 'Puffing Billy' by workers. Mr Devlin said staff were also seen wearing white safety suits at the site while other workers wore respirators and personal gas meters, which went off as soon as they left their dongas."

"These witnesses are saying they felt ill and were having illness episodes consistent with exposure (to gas)," Mr Devlin said. He said workers saw large areas of bubbling on the ground at the site and one worker, Timothy Ford, sprayed dishwashing detergent on the ground and ended up with a large area covered in suds that was dubbed "Christmas in Chinchilla".

"The evidence would also show that Linc operated the project at pressures that led to the fracturing of the geology and allowed contaminants to escape. The issues dated back to 2007 and coincided with the operational control being held by 'Oleg from Uzbekistan' and workers would find data had been written in Russian."

"Mr Devlin said at the early stages of the project Linc knew the environmental risk of operating its gasifiers at higher-than-allowed levels. Evidence will show Linc's over pressurising of the landform created new fracturing," Mr Devlin said. "These pathways allowed synthetic gas to escape from gasifiers. The UCG test site was shut down in 2013."

4.24 Whilst a somewhat colourful combination of journalism and court presentation, this raises a number of issues that court submissions from the state appear to substantiate.

4.25 Before the case reached trial, the Queensland Government, on April 18 ^th 2016, announced a ban on UCG in the state. QLD Cabinet and Ministerial Directory issued a joint statement by the Minister for Natural Resources and Mines and the Minister for Environment and Heritage Protection announced an immediate ban and "committed to a legislated ban before the end of the year."

4.26 The statement goes on,

"We have looked at the evidence from the pilot-operation of UCG and we've considered the compatibility of the current technologies with Queensland's environment and our economic needs. The potential risks to Queensland's environment and our valuable agricultural industries far outweigh any potential economic benefits," he said.

"The ban applies immediately as government policy, and I will introduce legislation to the Parliament by the end of the year to make it law. This will give certainty to the resources industry, so they know very clearly where the government stands, and to the community.

"As a government, we support our resources sector for the jobs and economic growth it generates, but UCG activity simply doesn't stack up for further use in Queensland."

4.27 The statement continues, "Environment Minister Steven Miles said that the Government was also taking strong steps to address issues that had arisen during the UCG pilots. One of the companies involved in the UCG pilot, Linc Energy, was recently committed for trial in the District Court on five counts of wilfully and unlawfully causing serious environmental harm.

"The investigation of Linc Energy is the largest and most expensive case ever handled by the State's environment regulator, the Department of Environment and Heritage Protection ( DEHP)," Minister Miles said.

"The Palaszczuk (State) Government has already provided DEHP $15.8M in special funding to deal with this important case. In addition, our new chain of responsibility laws will provide new powers to require that contaminated sites must be cleaned up."

"Trials have been underway for several years. Cougar Energy's trial at Kingaroy was shut down in 2010 after benzene was detected in nearby water bores. Carbon Energy is currently decommissioning and rehabilitating its site at Bloodwood Creek near Dalby."

4.28 The foregoing highlight the issues alleged and reported as well as those considered of longer term significance, such as decontamination, site clean-up, public reassurance and certainty for the resources industry. It is at least interesting that the issues reported at committal and in potential trial papers were considered sufficient for the government to reach for a ban as the preferred way ahead, in a state with rich resources and a long history of exploitation, not all of which has performed to the highest standards of environment protection or community engagement.

4.29 Shortly after the ban was announced, on 14 May, reported by Reuters, the administrator indicated Linc Energy should be liquidated. On 22 May 2016 Linc Energy's creditors voted and administrators acted, based upon their Singapore listed holding entity, to liquidate Linc Energy. The company shifted its listing to Singapore at the end of 2013. At closure borrowings and debts exceeded assets.

4.30 ABC (2016b) reported the view that the company had chosen administration so as to avoid penalties for polluting the environment.

Queensland's Environment Minister said this, "was a prime example of why the Government introduced "chain of responsibility" laws in a bid to make it easier to recover the costs of environmental clean-ups if a company crashes. We need better laws to ensure companies can't avoid their environmental obligations," he said." ABC (2016b)

4.31 Separate legal action was initiated on 10 June 2015 in relation to soil contamination as a result of drilling and sampling identifying the presence of carbon monoxide, hydrogen and hydrogen sulphide in the soil at depths between 2 and 6 metres underground and across an area of over 300 square kilometres. This cautionary zone for any excavation activity, which must be approved now by the Department, remains in place.

4.32 Monitoring of soil continues at and around the site at Hopeland. (QLD DEPH, 2016b). The state Environment and Heritage Department indicated that,

"In June, Linc's liquidators used Commonwealth (Australian Federal) legislation to 'disclaim', among other things, its underground coal gasification site in Hopeland. The Queensland Government has now secured and taken responsibility for the site. The Queensland Government has engaged contractors with expertise in managing petroleum facilities to provide care and maintenance at the site. EHP and the Department of Natural Resources and Mines ( DNRM) closely oversee health, safety and environmental matters."

4.33 The department also stated at that time that,

"It is important to note that extensive testing and monitoring has confirmed that the regional air quality remains safe, as does the drinking, stock and underground water supply."

4.34 In the course of this review, I have been made aware of a range of concerning incidents in Australia, the US, South Africa, from the European trials and in China that suggest this industry is still in an early stage of development where hazard management and best practice are not yet fully appreciated or in place. I have been shown and given oral reports, some conforming to media reports, company worker and regulatory staff observations, some of which are captured in FoE and Broad Alliance submissions, interviews and reports, and some of which were shared on the basis that they would not be quoted or localised.

4.35 In general they suggest what the partial or largely absent public reporting hints at: that there has been in most locations worldwide a catalogue of experiences by some if not most operators which demonstrate that they have fallen below the standards of performance in environment and health and safety management that it would be reasonable to expect. Until such data are provided, both allowing full hazard assessment and clearly demonstrating that best practice is understood, possible and can be routinely achieved, it is hard not to conclude that it would not be acceptable or desirable to replicate experience of companies active in recent years elsewhere, in the contemporary Scottish context.

4.36 I fully accept that some operations are in potentially higher hazard, shallower contexts than apply say in the FoF and some operators have better records than others and I acknowledge the ambition and intent as stated of other operators to deliver a best practice performance. The gap however between intent and impact has to be borne firmly in mind when considering the granting of permissions to a fledgling or immature industry without extensive demonstration effort and appropriate safeguarding.

4.37 Summary

At this point, there is no single or comprehensive overview of the environment and health and safety issues relating to UCG. Not least given again the lack of publicly available data, there has not been a desk testing or expert review of such monitoring data or collected materials from operators and regulators, as exists. Shaping policy in detail without a scientific review, perhaps including the HIA-type inputs considered in the Health section, it is difficult to assess from the literature the nature and extent of the issues or to suggest proceeding without significant precaution.

References

ABC (2016) Linc Energy to stand trial over alleged gas breach at Chinchilla trial site.
http://www.abc.net.au/news/2016-03-11/linc-energy-committed-to-stand-trial-over-alleged-gas-breach/7240956

ABC (2016b) Linc Energy placed in administration "to avoid penalties"
http://www.abc.net.au/news/2016-04-15/linc-energy-goes-into-voluntary-administration/7331154

Creedy, D.P., Garner, K., Holloway, S. Jones, N. and Ren, T.X. (2001) Review of Underground Coal Gasification Technological Advancements. Report COAL R211. DTI/ ETSU

Daily Telegraph (2016)
http://www.dailytelegraph.com.au/news/national/workers-suffered-ill-effects-from-coal-gas-site-court-told/news-story/d7501489bef91ccce94e291109859c6b

Geoscience Australia 2008, Australia's identified mineral resources 2008, Geoscience Australia, Canberra. (see also, in relation to Australian groundwater quality issues)
http://www.agriculture.gov.au/SiteCollectionDocuments/water/nwqms-groundwater-quality-protection-guidelines.pdf)

Geoscience Australia (2014) Upstream Petroleum and Resources Working Group Report to COAG Energy Council on Unconventional Reserves, Resources, Production, Forecasts and Drilling Rates. November 2014.

Linc Energy (2007) Terms of Reference for an Environmental Impact Statement. Underground Coal Gasification Gas to Liquids and Power Generation Project.
http://www.statedevelopment.qld.gov.au/resources/project/linc-energy/linc-energy-tor.pdf

Liu, S-q, Li, J-g, Mei, M and Dong D-l et al (2007) Groundwater Pollution from Underground Coal Gasification. Journal of China University of Mining and Technology Vol 17, Issue 4 0467-0472

Moore V, Beresford A, & Gove B (2014). Hydraulic fracturing for shale gas in the UK: Examining the evidence for potential environmental impacts. Sandy, Bedfordshire, UK: RSPB.
http://www.rspb.org.uk/Images/shale_gas_report_evidence_tcm9-365779.pdf

QLD CMD (2016) Joint Ministerial Statement - UCG Banned in Queensland
http://statements.qld.gov.au/Statement/2016/4/18/underground-coal-gasification-banned-in-queensland

QLD DEHP (2016) Linc Energy Committed for Trial
https://www.ehp.qld.gov.au/mediareleases/2016-03-11-link-energy.html

QLD DEHP (2016b) Hopeland Area Soil Sampling
https://www.ehp.qld.gov.au/management/pdf/hopeland-update7.pdf

SAf RHDHV (2014) Draft Environmental Impact Assessment Report for the Integrated Environmental Authorisation associated with the Underground Coal Gasification Pilot Project and Associated Infrastructure in support of co-firing of gas at the Majuba Power Station, Amersfoort, Mpumalanga. For Eskon Holdings by Royal Haskoning DEA Ref: 14/12/16/3/3/3/61 July 2014
http://www.rhdhv.co.za/media/UCG%20Majuba/FINAL_MASTER%20EIR%20Draft_Public%20Review.pdf

Younger PL and Sapsford DJ (2004) Evaluating the potential impact of opencast coal mining on water quality (Groundwater Regulations 1998): An assessment framework for Scotland. University of Newcastle Upon Tyne, SEPA and NuWater Ltd.