Coal Seam Gas in NSW

What is coal seam gas?

Coal seam gas (CSG) is a form of natural gas found in coal seams formed over millions of years. In NSW, the coal seams targeted for gas production are generally between 200 metres and 1000 metres below the ground. CSG is primarily methane with small amounts of other gases.

CSG differs from shale gas which the USA have a significant industry for. Due to the nature of shale, it generally requires extensive hydraulic fracturing (also known as fracking) to extract the gas. CSG does not necessarily require hydraulic fracturing, this depends on geological characteristics. In NSW, there is no shale gas extraction.

Why extract coal seam gas?

As energy demands continue to grow in Australia, CSG has the potential to become an important energy source. CSG is used as fuel for heating, cooking and to produce electricity. It can also be converted to liquefied natural gas (LNG).

CSG burns cleaner and more efficiently than coal. As an alternative lower carbon energy source it produces less greenhouse gas emissions than coal per unit of energy supplied

How is it extracted?

CSG occurs within coal seam beds. It is kept in place by the pressure of groundwater and the overlying geological formations. To extract the gas, the water pressure in the coal seam is lowered by pumping water from the coal seam to the ground surface through a CSG well, a specially constructed well.

This diagram shows what happens to groundwater flow when a coal seam gas production bore is operating. In most situations the vertical component of water flow is much smaller than the horizontal component as shown by the arrow sizes

How are coal seam gas impacts on water regulated?

Exploration and production activities for CSG and their potential impacts on water sources are regulated by both NSW and Commonwealth government agencies.

A range of measures have been introduced in NSW. In 2011 the NSW Government banned the use of BTEX chemicals in CSG hydraulic fracturing fluids and banned the use of evaporation basins for the disposal of CSG produced water.

The NSW Aquifer Interference Policy (2012) ensures that potential impacts on groundwater sources from CSG and other mining activities are subject to comprehensive assessment and licensing requirements. Two codes of practice applying to hydraulic fracturing and CSG developments were released by the NSW Government in 2012 to strengthen the controls applying to gas exploration and production. The NSW Gas Plan provides a framework for best practice regulation of the gas industry in NSW.