One of the Scientific Inquiry into Hydraulic Fracturing in the NT's many recommendations was that the practice should not occur during the wet season due to the potential for evaporation ponds storing wastewater to overflow during high-intensity rainfall events.

 

"There is a risk that groundwater and/or surface water will be contaminated as a result of spills of chemicals, flowback water or produced water," the interim report warned. 

 

"Most spills are related to the storage of water and materials in tanks and pits and in moving wastewaters in pipelines between equipment.

 

"The greatest incidence of spills is during the first three years of well life, which is the period when wells are drilled and hydraulically fractured."

 

The panel believes the likelihood of spills can be reduced with well-engineered wastewater containment facilities and existing management strategies, and will obtain more information regarding industry best practice. 

 

"There is also the potential for evaporation ponds storing wastewater to overflow during high-intensity rainfall events," the report said. 

 

"The panel's preliminary view is that hydraulic fracturing should not be permitted during the wet season for this reason."

 

 

Addressing the panel in Darwin on Wednesday, Santos drilling and completions general manager Geoff Atherton drew paralells with its work in Indonesia to explain the best way of handling tropical-style weather patterns.

 

"We and many others have run and continue to manage drilling and production operations in the tropics," he said. 

 

"In our last campaign in South Sumatra we completed drilling and long-term well testing throughout the year with no spills or contamination. 

 

"With sufficient planning and consideration to local weather and terrain, I believe these operations can be managed without incidents. 

 

"Sometimes tanks need to be covered to prevent overflowing with rainwater or locations and roads sealed or matted to allow safe movement of vehicles and control the run off of rain water. The sites can be prepared to allow containment of fuel and chemicals and separation of hazardous and non-hazardous materials."

 

Atherton said there would be significant inconvenience and costs associated with restricting operations to the dry season.

 

"It may result in a cyclic work program and restrict employment for locals providing labour and support services for only half the year, which will obviously create local issues," he said. 

 

"Water management is significantly easier to manage if we operate all year round because, similarly to our Queensland operations, it will allow us to better recycle most fluids and minimise waste. 

 

"Considering that the drilling equipment and services and associated haulage will need to be re-deployed outside of the state during the wet season, most likely taking the nearly 3000km journey back to the Cooper Basin, we estimate an additional cost to each operator of restricting operations to the dry season only to be approximately $15 million a year during the appraisal phase and up-to $50 million per year during development. 

 

"This seems like an unnecessary burden to projects, and more importantly local communities and workforces."

 

 

The interim report noted, however, that while shale gas extraction always needs fraccing it does not need to first remove the large quantities of existing groundwater to unlock gas that CSG does.

 

There is also accumulated expertise around the management of site infrastructure, well integrity, well decommissioning, water supplies, wastewater and solid waste, particularly from knowledge evolved over three decades in the US and UK.

 

The panel conceded that those issues have been addressed overseas by implementing strict regulatory controls and technological improvements to reduce the risk of detrimental impacts from shale gas development.

 

Yet the interim report also said there was a "real risk" that the NT's existing regulatory framework may not achieve the objectives of ensuring that any onshore shale gas industry develops in a way that protects the environment, is safe to people and is consistent with community expectations.

 

Origin and Santos have also engaged the CSIRO to undertake regional and local shale studies to improve understanding of local recharge mechanisms and total aquifer storage and sustainable yield in the region, which are due for completion by September 2018.

 

The panel has also commissioned Coffey Services to develop and implement a social impact assessment framework for a potential onshore unconventional shale gas industry in the NT if the government were to lift the moratorium.

 

Coffey will then apply the framework to the communities in and around the Beetaloo Sub-basin where, according to the interim report, it is known that there are economically viable shale gas deposits.