Summary of AGL's Camden Gas Project Open Day 2012/11/10

Social, legal and health issues related to air and water toxic pollution in Australia.

Summary of AGL's Camden Gas Project Open Day 2012/11/10

Postby HVPA_research » Tue Nov 20, 2012 6:02 am

* Archived from Rivers SOS mailing list *

This post includes some very good insights into the AGL's coal seam gas mining strategies. The most significant probably is that AGL management is so sure about their CSG projects that they did not renew wholesale gas supply contracts with Santos!




[rivers-sos] Fw: AGL csg Summary 2012/11/10

From: Julie Sheppard To: chatlist <rivers-sos@googlegroups.com>


FYI everyone. This is from a friend down here who went to an AGL open day.

It makes interesting reading.

Julie



Hi All

SUMMARY: This is my summary of AGL's Camden Gas Project Open Day 2012/11/10. It may interest people who would be affected by AGL's northern expansion and their existing operations. There are mistakes in my memory of what went on so you may not rely on its accuracy. It gives a different perspective, including my opinions so I apologise both for its length and if some people are offended.



PEOPLE: Some of their people included Mike Roy, Head of gas operations; Aron ..., Environment Manager; Kevin Rofe, Land and compliance officer; Nicola ?, Hydrology manager.

Fewer than 20 attended, some were competitors including Santos, Dart Energy and ... . Three people asked questions about the environment. Everybody was polite. AGL says it is in their interest to be open about what they do and why they do it. That attitude appears to improve their credibility.



REGULATION: The NSW Government has failed to prohibit (or place any limit at all, or regulate or licence) carbon dioxide [CO2 ] and methane [ CH4 ] emission. This omission to regulate two of the most important global warming gasses came to light after Mike Roy had spoken for some minutes about how they comply with so many government regulations. AGL's website lists under "Environment" the Acts limiting the Rosalind Park [it is not a park] Gas Plant (RPGP) discharges and field emissions, so unless read in detail, it seems impressively onerous. It took a question from the audience to discover they send their CO2 downstream to customers. The technique of talking about how good you are until the audience is bored, is an effective way of shifting the agenda. This is just one example of how AGL avoids covering the issue of global warming.



WHY ARE WE HERE?

AGL says CSG is a transition fuel after coal, before renewable energy. They expect the population to accept that rather than pay anything extra for renewable energy. The answer to: "Why didn't AGL secure a longer term supply contract from Santos?" was "Global economics" and "We can't do anything about it", perhaps because I found out later a Santos person was in the audience. If you were on the Board of AGL and you knew you had not signed contracts for a gas supply after Santos's contract runs out in 2014 or 2015, would you expect shareholders to forgive you for wasting their investment in billions of dollars of gas reticulation under Sydney? I think AGL is responsible for bad planning. AGL can not expect the NSW Government to reduce royalties or make concessions or bugger our environment just because AGL didn't feel like paying whatever Santos was asking for long term supply of natural gas.



GLOBAL WARMING:

It is my opinion that continuing to use fossil fuel because we have in the past and it is convenient, is not sufficient justification to continue. [[An aside: An evolutionary disadvantage of intelligence is too much of it enables smart people to argue against doing anything about a problem.]] Although methane CH4 is a cleaner burning fuel and produces less CO2 than coal (because it has more hydrogen and less carbon than coal), AGL does not classify CSG as a "green energy source" because it is not renewable.



MONITORING: AGL does not monitor its wells for fugitive CO2 and CH4 emission. It samples or surveys emissions at each well yearly (according to the Environment manager) or quarterly (according to the Head of gas operations). AGL takes safety, public relations and appearance seriously. They say they want to look like they are good neighbours. After their Maintenance person got into his personal safety clothing and monitoring gear, he opened the well compound and explained each component and how it worked. His monitoring alarm sounded. He said it was a warning its battery was flat, so it is good that we get warnings about the warning systems, and turned it off. He continued explaining inside the compound.



ECONOMICS. The typical well we saw serves 7 000 houses, cost $260 000 to complete and they get paid $1 635/day at wholesale prices by the Moomba Sydney Gas Pipeline to supply it into the pipe. I guess gas consumers might pay about $21 000 for a day at retail prices for the same gas. Moving the profit to the retail end of the supply chain might offer advantages to the AGL parent company but I do not know what they are.

A horizontal well may cost $2 million to drill 2 km away from a drill pad versus $150 000 for a vertical well. [At an earlier 2011 talk to NSW Farmers Association, AGL's Mike Roy quoted figures of $1.2 to $1.4 million for a typical short horizontal bore compared to $600 000 to $800 000 for a vertical well.] AGL's Northern Expansion is now planned for 11 (formerly 12) pads each with one vertical and up to five (or six) horizontal wells. [They didn't say this explicitly but I'd expect they'd need to drain both of the two coal seams, Bulli and Balgownie, so each horizontal possibly branches at the upstream end.] They said from 11 pads, they would like to drill 55 to 65 wells.



AGL is willing to pay for more expensive horizontal drilling to minimise community opposition. When I asked last year what their legal costs would be if I lost my hypothetical Land and Environment Court challenge (and I had costs awarded against me, which I estimated might be $100 000), AGL's person [he may have been their Operations Manager] said they would probably not go that far. He said AGL would prefer to drill on a neighbour's property and suck the gas from under my place, to avoid the bad publicity and long term problems of dealing with a person who didn't like them. Perhaps in the Scenic Hills, owners of the properties planned for well pads could be persuaded to change their minds?



CARBON TAX: AGL pays the Carbon Tax on CO2 emitted by their gas engines in the RPGP. They burn the methane they collect. The power of their first (of three) compressors is 2.2 megawatt [MW] or 3 000 horsepower. It is cheaper for AGL to pay the carbon tax than to capture and sequester the CO2 and CH4 they free from underground. I suppose gas consumers pay the carbon tax on what they use.



AQUIFERS. AGL ignores all aquifer interference below 150 m under the surface. They say they have not observed any effects (drop in water table or changes in saltiness) in wells down to 250 m below the surface. They say bacteria living deeper than that does not survive once they are brought to the surface because our environment is not as salty, warm or high pressure. If aquifer interference occurs at levels deeper than used by people, then I suppose the bacteria would have to initiate a court case before AGL would start to worry. AGL has dated water from aquifers at older than 30 000 years. Aquifer interference is an issue AGL likes to discuss because their data from measurements within 150 m from the surface doesn't appear to show any change due to their activities.

This could be another case of agenda shifting. What happens below 250 m?



LEAKAGE: When asked about the life of wells and leakage, Mike Roy gave the example of their experience in the Surat Basin, Qld. AGL bought the petroleum rights of Mozaic Energy who extracted gas in the 1970s. AGL wanted to store gas underground for later export. [The Qld government was also involved.] To find out if the old wells were usable and if any wells had to be blocked off because they could leak, they "logged" each well using several techniques [including "gamma"]. They found most were still good after 40 years.



HISTORY: AGL's head office is in North Sydney. [They are the people who caused the pollution at Barangaroo and Cabarita.] They acquired the Camden Gas Field from Sydney Gas. AGL also bought prospects at Gloucester and in the Hunter Valley.



GAS COMPOSITION

The gas is about 97% methane, 2% CO2 about 1% nitrogen, some ethane with very little liquid petroleum or "hydrocarbons". They can supply about 3% CO2 to the pipeline but not more than 5% as that lowers their heating index.



NOISE: They use a petroleum drill rig treated to reduce its average maximum noise to 5 dB(A) above nighttime background (average minimum) noise levels. They still have issues with the easily identifiable "clangs" from pipes banging together and reversing alarms from front end loaders, but they are working on that. When asked about gas emission during drilling, they didn't think that would be a problem (or worth treating) because the seams they drill through are only a small percentage of the overall drill depth, so they don't do anything about gas leakage.



WATER CATCHMENT:

AGL said they wouldn't mine in the Water Catchment. That means we are likely to be stuck with fighting Apex, Ormil under their new name Magnum Gas and Power, who AGL describe as a group as rough, or miners (perhaps not petroleum people like them). I got the impression AGL feels it is different to Apex, Ormil, Magnum and Dart. I think their reason for saying or implying they wouldn't come to the water catchment is it would antagonise the locals. It may have been unstated that it could be too risky. I am having to guess a reason for why they wouldn't come.



BLOCKADE TRAINING:

AGL are smooth operators who know the advantages (to them) of getting on well with the community they want to work with. Instead of going in to drill sites with bags of cement like Ormil did, AGL take slabs of beer, repair fences and build roads. AGL runs contractor training to make sure all their people know how to behave if they expect a blockade. AGL tells their contractors what to say, who can say it and when and who to say it to. AGL is going to be much tougher opposition than the underfunded Apex and Magnum.



Explosive perforation: Once they have drilled through the coal seam and forced liquid cement and water down the inside anulus of the pipe and up the outside, they lower a controlled explosive charge down to the coal seam. Detonating that perforates their steel pipe to allow the water and gas to flow to the surface.



If you want more, I could cover what I learnt about:

Well pressures:

Pipe pressure is 80 kPa when it reaches the Gas Plant.

Pipe diameters:

up to 610 mm, Buried 1 or 1.2 m below the surface. Smaller diameters 75, 100 etc from individual wells.

Salt: They send their produced water to Windsor. It is treated and used there to make bricks. Would you want salty bricks?

Produced water:

is low volume and recycled. From one garbage tin a day to 6 000 L a week.

Daily collection of water: Would you want to have a truck visiting every day to suck a tonne of water out?



Regards

David


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