Underground Coal Gasification is a new technology approved for limited trial in Queensland at three sites, under the supervision of a scientific expert panel.

The department will also direct Cougar Energy along with Carbon Energy Ltd and Linc Energy, which operate Underground Coal Gasification trial plants at Chinchilla where contamination issues have also been reported, to carry out Environmental Evaluations of their plants.

This will require the companies to provide detailed information about their water quality monitoring, which will determine whether their pilot projects should be permitted to continue.

Carbon Energy failed to report a discharge of contaminated water from their plant to a nearby creek in November, and Linc Energy reported an exceedance of salt levels in groundwater.

DERM Director General John Bradley said the department would require urgent action in relation to these matters and the Evaluation results would be reviewed by the Government’s independent expert panel.

This Panel has been appointed to assess and report on the technical, environmental and social impacts of the Underground Coal Gasification industry and if it is not satisfied that these projects can resume operations without environmental harm, the pilot projects will not be given approval to continue.

The department is particularly concerned about multiple reports by Cougar Energy of benzene and toluene in ground water near their Kingaroy plant.

—John Bradley

Rural property owners within a two kilometer radius of the UCG plant, and two kilometers of Plantation bore, are being advised not to use water from their bores for human consumption or stock watering until tests confirm there is no further contamination.

The department has begun an investigation into whether Cougar Energy has breached its Environmental Authority (license conditions) and whether it has caused environmental harm. The maximum penalty for a wilful breach of the Environmental Authority is A$1 million (US$867,000) for a company, and A$200,000 or two years imprisonment for an individual. The maximum penalty for causing serious environmental harm is A$2,082,500 for a company and A$416,500 or five years imprisonment for an individual.