Santos defends CSG plans

The company also insists coal seam gas (CSG) drawn from the district's significant reserves almost 1000 metres underground will be available to power local farms, cotton gins, or other regional processors, and will not be piped to interstate for sale overseas.

Despite widespread suspicion about what CSG developments within a pocket of the designated 95,000-hectare project area, in and around the Pilliga Forest will mean for the long-term sustainability of underground water reserves, the energy company was urging critics and anybody else to question its claims and its scientific research at forums at Commonwealth Bank AgQuip.

"The Santos gas wells will have no more impact on water for agriculture in the Namoi Valley or the Great Artesian Basin (GAB) than the Newell Highway does now," insisted Santos' NSW general manager Peter Mitchley.

"The gas project is not in a recharge area which contributes to the GAB - it doesn't have any bearing on artesian reserves below the Coonamble district or water around Mudgee either.

"The project's groundwater model has been reviewed by CSIRO and found very much to be fit for purpose.

"Our findings are supported by the $4.5 million Namoi Water Study which was co-funded by State government and industry groups including NSW Farmers and Cotton Australia.

"That study's conclusion was the impact of CSG on water would be negligible."

He said Adelaide-based Santos had no current plans to explore for new gas fields outside the Narrabri project in the Namoi Valley.

Mr Mitchley was part of the Santos team, including hydrogeologists and environmental specialists and external consultants, fronting the information sessions aimed at quelling doubts and answering queries about the proposed gas project during the Gunnedah field days.

While vocal CSG opponents were notable in the audience on the first day, the program was not disrupted and attracted plenty of on-going interest and inquiry, particularly on water issues.

Santos is poised to submit its 6000-page gas project Environmental Impact Statement to the NSW government within a few months - a major step forward in its efforts to receive approval to extract 1m to 2m terrajoules (Tj) of gas hundreds of metres below the GAB.

Although NSW was long thought to have limited natural gas reserves, the Narrabri gas field is now recognised as capable of supplying half the State's gas needs for two decades.

Test wells already supply 4.5Tj a day (equivalent of to almost 100,000 litres of diesel power) to run an electricity plant at "Wilga Park" near Narrabri generating 12 megawatts daily for the North West power grid.

Santos and Energy Australia are relying on their Narrabri gas joint venture to extract enough gas over 25 years to provide 200Tj daily, primarily to service about half the Sydney market's needs.

NSW currently depends on gas piped from South Australia's Cooper Basin and Gippsland in Victoria to supply 95 per cent of its gas needs.

Santos and Energy Australia claim long-term contracts for NSW imports expire in the next two years, potentially leaving the State bidding in much higher priced markets to maintain current supplies to power plants, households and industries ranging from brick making to food processing.

During its lifetime the Narrabri gas field is planned to involve gradual commissioning and de-commissioning of steel and concrete cased wells on about 400 sites, with about 30pc of the project area on approved private land, but only 1pc of the area used for extraction at any period.

Principal hydrogeologist with consultancy firm Eco Logical Australia, Dr Richard Cresswell, said water extracted with the gas as part of the process to release it steadily from the underground coal seams would total about 37 gigalitres over the life of the project - equivalent to the amount required to annually irrigate 200ha of cotton.

Santos plans to purify the extracted water in a reverse osmosis plant and re-use about 90pc to grow almost 100ha of drip and pivot irrigated lucerne on its property "Leewood".

"The first thing people talk about is losing water from the GAB or contaminating the GAB, but because the gas and the GAB resources are separated by layers of aquitard rock which don't transmit water it will be 2000 years before GAB water will seep into the layers where gas has been removed," Dr Cresswell said.

That equated to about a 100th of a millimetre of annual rainfall recharge into the GAB.

Santos boss Mr Mitchley noted the Narrabri project would not last anywhere near 2000 years and therefore "its effect will be miniscule".