PROTECTING WATER RESOURCES WATER AT A GLANCE OUR PURPOSE Appropriately manage our impacts on water resources and ensure water security for our business and other water users. Laws and regulations Water management is governed by extensive federal and state laws and regulations, including the Water Act 2000, EPBC Act and Queensland s CSG Water Management Policy. Our additional actions Origin developed an integrated water distribution system linking the Talinga and Condabri water treatment facilities to supplement existing irrigation and provide water for new irrigation across 13 properties. Our approach Our management program for water is governed by strict conditions imposed by law, and we make additional commitments that extend beyond the law. Our performance As at 30 June 2014, we treated a total of 4,906 ML of CSG water, of which 75 per cent was redirected to beneficial uses. Origin, as the Upstream operator of Australia Pacific LNG, has consulted widely with local communities and governments to determine the preferred uses for treated water in our area of operation. PROTECTING WATER RESOURCES In Australia, water use attracts great interest, focus and discussion. We understand the importance of safe and efficient management of this resource in our project development and operations. Origin manages water as a valuable resource in its fuel and electricity generation businesses and activities, including gas production and power generation. The way we use, re-use and dispose of water is of considerable interest to our stakeholders and we take our responsibilities for water management seriously. Our management program for water is governed by conditions imposed by law. In addition, we collaborate with stakeholders on water management to help maximise the value of the water we use and produce. We engage with concerned parties, and listen, inform, and provide appropriate evidence of our water use and associated impacts. We work closely with governments and scientific organisations to develop and implement ongoing research and monitoring programs to quantify and predict the potential for environmental risks associated with our water use. The vast majority of our water use and management at Origin takes place in our LNG and Energy Markets divisions, and specifically in our extraction of CSG and at our Eraring Power Station near Lake Macquarie. Coal seam gas and water The production of CSG requires the lowering of water pressure within the coal seams through the extraction of some groundwater to allow gas to flow to the surface. The water naturally contains elevated salt levels, which generally means that it needs to be treated before it can be considered for other potential uses. A small portion of the extracted water is used for project purposes while the vast majority is treated and supplied for beneficial use. Drawing on our extensive CSG experience of over 16 years, and incorporating science-based investigations and assessments, we manage water for the Australia Pacific LNG project by: studying underground water systems; drilling wells which extract water and gas from coal seams; pumping extracted water, which is typically brackish, up the wells and via gathering pipelines to our water treatment facilities; treating the extracted water at our water treatment facilities to remove the salt and purify it to Australian drinking water standards; and providing the majority of the treated water for beneficial use. Underground water systems Coal seam gas production relies on the lowering of water pressure within coal seams through the extraction of some groundwater, to allow natural gas to be released from the coal seam and be collected in the wells. In order to understand the potential impacts of this process, we study the underground water systems and geological formations and, using scientific groundwater models, we predict the expected outcomes of our activities and determine how to best manage them. Throughout our activities, we thoroughly monitor changes in groundwater and check that our predictions, and our management, are appropriate. Independently the Office of Groundwater Impact Assessment predicts the potential impacts of CSG production on aquifers. Groundwater modelling Computer modelling is used to predict potential impacts from CSG operations. If this modelling reveals a landholders access to groundwater may be reduced, we develop and implement make good arrangements with the impacted landholders. Australia Pacific LNG s modelling has been subject to comprehensive reviews by both state and federal regulatory agencies. During our Environmental Impact Statement (EIS) process in 2009/10, Australia Pacific LNG undertook computer modelling of the impact of the project on regional groundwater levels as well as the cumulative impact of the entire proposed Queensland CSG industry and other groundwater users. In 2011, the region around the Surat and southern Bowen basins was declared as a cumulative management area under the Queensland Water Act (2000) due to the major expansion in CSG production across multiple locations. As a result, the Queensland Government assumed responsibility for cumulative modelling across all CSG operations in this area. The first Underground Water Impact Report for the Surat Basin was released by the Office of Groundwater Assessment (OGIA) in 2012 and is updated annually. The report contains the assessments and water monitoring and management responsibilities for groundwater in the Surat Basin. Detailed knowledge has been gained from operations within existing CSG fields in the Bowen and Surat basins over the recent decade, including comprehensive exploration drilling and seismic programs, detailed field investigations and testing. This knowledge is being used in conjunction with the results of our modelling to develop and install a wide-ranging bore monitoring network.
Groundwater monitoring Our groundwater monitoring began during the project s Environmental Impact Statement studies in 2010. Our monitoring network consists of dedicated monitoring bores, project water supply bores, government monitoring bores and private landholder bores. This network is regularly updated as our operations change, and in 2014 we have over 120 monitoring bores in service. We conduct baseline testing of water levels and water quality of all accessible landholder bores within the project s tenements before production commences in their area. This data, combined with historical records, provides invaluable information to landholders, government and Australia Pacific LNG. This helps to determine any pre-existing conditions, and provide a baseline to compare with future monitoring results. In 2013, we completed a groundwater bore baseline assessment program for landholders which allows us and the community to better understand the bore water supplies in our area of operation. We use this and other baseline assessments to monitor changes in groundwater levels in existing landholder bores and purpose-built monitoring bores. We also conduct water quality and water level monitoring in the major aquifers and in other geological formations which are not generally accessed for groundwater, and monitor for changes in pressure and water quality in the geological zones immediately above and below the coal seams. This allows us to monitor potential impacts to aquifers, so that we can implement any necessary mitigation impacts before any adverse effects can migrate to landholder bores. In addition, our environmental conditions require us to complete a more detailed baseline assessment on all active landholders groundwater bores that are located within a 2 km horizontal radius of a hydraulic fracture stimulation well, and in an aquifer within 200m vertical separation of the target formation. These bores must also be monitored monthly for the first six months following hydraulic fracture stimulation activities, then annually for the first five years unless the analytes required to be tested are not detected above baseline levels on two consecutive monitoring occasions. Under the Queensland Water Act, if we impact on bore water supplies, we are required to Make Good the impact by entering into a compensation arrangement with landholders which may involve replacement of the impacted bore with an alternative water supply bore. For more on these make good requirements, see the Make Good section below. We drill wells which extract water and gas from the coal seams The presence of gas has been recorded in Surat Basin water bores from early pioneering days. Historical state government records clearly report the presence of natural gas in many bores and in all commonly used Great Artesian Basin aquifers. The extraction of CSG brings water to the surface because the gas is dissolved within the salty water that lies within coal seams. This gas is extracted using wells designed to ensure the safe and environmentally sound production of gas by containing it within the well without leakage and not introducing substances that may cause environmental harm. Our well construction, design and operations are mandated by the Queensland Government Code of Practice for Constructing and Abandoning Coal Seam Gas Wells. Our Well Integrity Management Plan prescribes the monitoring and maintenance required to provide assurance that wellbores continue to comply with this Code of Practice. Well integrity and preventing groundwater contamination CSG wells are encased in both steel and cement to prevent any substances used in drilling and completion activities, or removed in the production process, from entering the surrounding rock formations and aquifers. The wellhead provides additional barriers at the surface. These wells are constructed in stages and thoroughly integrity tested before being brought into production. The CSG wells allow water and gas to enter the steel casing via purpose designed holes situated across the coal seam. The water and gas is then brought to the surface in a safe and controlled manner. The Australia Pacific LNG Project extracts CSG from the Walloon Coal Measures in the Surat Basin, which are generally located between 200 and 1000 metres underground. These coal measures are separated from the most commonly used groundwater supply aquifers by aquitards, which are low permeability formations of significant thickness. This natural barrier means that there is very limited potential for any activity in one layer to directly impact the other. Typical Section of the Walloon Coal Measures We continue to conduct assessments and monitor for changes in the levels of gas in groundwater conditions throughout the period of CSG production. Once the integrity of the well is confirmed through a variety of tests, completion operations can begin, with multiple barriers that prevent fluids from moving between formations or coming to the surface. Image above Typical Section of the Walloon Coal Measures from aplng.com.au/home/ sustainable-water-practices
Hydraulic fracture stimulation Hydraulic fracture stimulation technology, or fraccing, as it is commonly referred, is used to improve the flow of gas from coal seams. It is a well established, tightly regulated technology that has been used safely to improve production around the world for several decades. It involves pumping a fluid mixture of predominantly water and sand under pressure through the wells to open up existing rock fractures and create better pathways for gas to flow to the surface. 1 Origin exclusively uses water based hydraulic fracturing fluids on the Australia Pacific LNG Project. The viscosity (or thickness) of the fluid used is engineered to cater to specific formation characteristics and to optimise the volume of sand placed in the coal seams A low viscosity, or low thickness, hydraulic fracturing fluid consists of treated water, sand and additives such as: acetic acid (vinegar); caustic soda (found in hair remover); calcium chloride (found in sports drinks); and guar (found in ice cream) (0.1%). A higher viscosity, or thicker, frac fluid usually called a gel frac, is used in different formations and has an additive content of (0.33% to 1.21%) depending if produced or fresh water is used. The significant difference between the various hydraulic fracturing fluids is the inclusion or exclusion of guar and KCl (potassium chloride, a common salt). Guar is a natural gummy substance that forms a gel when mixed with water. Both guar and KCI have many common uses. Our fraccing fluids use additives that you can eat, drink or wash in and these are entirely safe in the amounts in which they are used. Read the full list of additives used in the fraccing process at aplng.com.au/pdf/factsheets/ Factsheet_Fraccing-APLNG.pdf. In areas of low permeability in the rock, this process can unlock productivity potential, convert a non-productive well into a productive one and increase the drainage area of each well. The Queensland Government regulates this process and the additives used in fraccing fluids. We comply with regulated processes and implement specified monitoring conditions. To ensure compliance, we have developed and apply stringent procedures for this process. Prior to any hydraulic fracturing activity, Origin is required to complete source water sampling. The mixed frac fluid is sampled and tested before being used to ensure it meets regulatory requirements, and samples are taken of the hydraulic fracturing fluid being pumped and tested. The testing is undertaken by the National Association of Testing Authorities (NATA) certified laboratories and all testing results are available to the regulator. Water bores adjacent to a hydraulically fractured well site are baseline tested prior to any activity and then, on a regular ongoing basis as per regulation. We are also required to take samples of produced fluid following completion of hydraulic fracturing, which are tested on a regular basis as per regulation. Additionally, where hydraulic fracture stimulation is required we must have a discussion with neighbouring landholders. After the activity is completed, we provide a report to the landholder and the regulator within 10 days, with a comprehensive final report provided to the regulator two months later. See a full list of our Regulatory and Compliance requirements in relation to hydraulic fracture stimulation at aplng.com.au/pdf/factsheets/factsheet_ Fraccing-APLNG.pdf. Well decommissioning Well decommissioning occurs when the well is no longer productive. The life of a well is generally around 20 to 30 years. When a well is decommissioned, it is plugged with cement to ensure all formations underground are isolated from each other. The cement ensures the integrity of the well and maintains isolation from other zones. Our plug and abandonment procedure complies with all Australian regulations. Extracting water and gas from the coal seams CSG production requires the reduction of water pressure within the coal seams to enable the natural gas to be released from the coal seams and to flow into CSG wells. This is achieved by extracting some groundwater from the coal seams, which reduces the water levels in a CSG well to approximately 30 metres above gas producing coal seams. In FY 2013 there was 4,632 ML of produced water from 269 operating wells. In FY 2014 we more than doubled our operating wells to 546, and increased our total produced water by just over 44 per cent, to 6,691 ML. There is concern from some stakeholders that water extraction to depressurise the coal measures will impact on the water levels in the most commonly used Great Artisan Basin (GAB) aquifers. Our modelling indicates that CSG activities may cause minor depressurisation in the geological layers directly above and below the coal measures. In general, this will have insignificant impacts on groundwater pressure in commonly used aquifers and the bores used to access the water in these aquifers. Australia Pacific LNG has established an extensive groundwater monitoring network to monitor water levels within the coal seams and aquifers within the Great Artesian Basin to verify the modelling predictions. The coal seams in Australia Pacific LNG s operating areas are generally much deeper than the commonly used aquifers in the GAB and are also often surrounded by thick aquitards. Graziers, farmers and others mainly take water from the sandstone aquifers that are above, and sometimes below, the coal measures that hold the coal seam gas. Make Good agreements Government legislation has established a process to monitor groundwater impacts associated with the CSG extraction process. CSG related water extraction is not expected to significantly impact on farm groundwater supplies, as those supplies are typically separated from coal seams by hundreds of metres of low permeability rock. However, in some cases CSG activity could affect bore water levels in specific areas. As a result, we are required to rectify or Make Good in advance any impact on landholders water supplies and their operations. This is done on the basis of water modelling projections. As at 30 June 2014, five Make Good agreements have been signed and 17 were being negotiated with landholders. Water treatment Water brought to the surface as part of producing CSG is separated from the natural gas and pumped to our water treatment facilities. The water sent to a water treatment facility is treated via filtration and Reverse Osmosis (RO) to remove dissolved salts and impurities. RO is a process that pushes water at high pressure through very fine membranes. The membranes essentially trap salt and other impurities on one side and allow clean water to pass through. RO is also used to purify drinking water in Australia. Origin pioneered the adaptation of RO technology to treat water that comes to the surface from CSG production and was the first company to apply it in Australia s CSG industry. There are currently two Water Treatment Facilities (WTF) treating produced water from the Spring Gully and Talinga gas fields. We expect two additional facilities at Condabri and Reedy Creek to commence operations within the next 12 months. The treatment process recovers approximately 85 per cent of produced water volume as clean water which is suitable for a range of beneficial uses. The remaining 15% of the produced water volume is RO reject water which contains the salts removed from the clean water. This water is transferred to brine ponds as part of the projects brine management strategy. (1) For a full listing of fluid mixtures, please refer to Origin s online Sustainability Report: originenergy.com.au/sustainability
Beneficial use Origin, as the Upstream operator of Australia Pacific LNG, has consulted widely with local communities and government to determine the preferred uses for treated water in our area of operation. A combination of water management solutions is used across our operations. In the existing Talinga and proposed Condabri water treatment facilities, the majority of treated water is being supplied for irrigation. In the western fields, the existing Spring Gully and proposed Reedy Creek water treatment facilities overlie beneficial aquifers which will be replenished with treated water through injection. A portion of the treated water is also used for project purposes. In FY 2014, we treated a total of 4,906 ML of CSG water, of which 75 per cent (1) was redirected to beneficial uses including irrigation, construction activities and potable drinking water in our accommodation facilities. Water to landholders Origin has constructed an integrated water distribution system, working with local landholders near our Talinga and Condabri operations, which links the Talinga and Condabri water treatment facilities. The purpose-built Fairymeadow Road Irrigation Pipeline supplies treated water to local participating landholders which supplements both existing and new irrigation and stock watering. This scheme was commissioned in April 2014 and provides irrigation water to an estimated 4,000 hectares. In FY 2014, the volume of treated water provided for agricultural purposes was 2,927 ML, an increase of 2,338 ML, almost four times more than the previous reporting period. Aquifer injection Aquifer injection offers the potential to replenish aquifers using treated water and potentially offset some groundwater level declines that have occurred over the last 100 years. Prior to injection, this water is treated by RO or filtration, or a combination of both, to a standard where the quality is equivalent to that of the groundwater in the aquifer. The Australia Pacific LNG project is currently undertaking injection trials in various aquifers to understand the feasibility of aquifer injection at selected locations. The Spring Gully injection project received the first environmental authority approval in 2013 for an operational aquifer injection scheme using treated CSG water in Australia, setting an industry standard. Assessments of technical feasibility for injection in the Gubberamunda Sandstone, the Hutton Sandstone, and the Precipice Sandstone have been completed. Assessment of feasibility of aquifer injection at Condabri is underway. Image above David Fry, Deputy Project Director, Integrated Water Delivery at the Condabri Water Treatment Facility. (1) Excludes treated CSG water used in camp accommodation facilities. Water Management BENEFICIAL USE OF WATER 75 per cent (1) of treated water is redirected to beneficial uses 4,458 ML 2,454 ML 1,961 ML 2,927 ML 1,224 ML 36 ML 48 ML 589 ML 553 ML 145 ML 696 ML FY 2012 FY 2013 FY 2014 53 ML Irrigation Construction River releases Aquifer reinjection
Releases to local waterways Our beneficial use schemes are also designed to meet the CSG water policy and our regulatory obligations while protecting environmental values of local watercourses. Our beneficial use schemes are also designed to minimise any discharges to creeks or waterways. At present, we have approval for releases to waterways which take into account a number of factors including available facility capacity, facility upset, weather, environmental flows in the water course and beneficial use availability. We monitor creeks quarterly at sections upstream and downstream of our release points under a Receiving Environment Monitoring Program regulated under the Environmental Authority. This program is designed to protect ecological values and offer baseline data to monitor trends over time. To date, no harmful site impacts have occurred. In FY 2014, releases to rivers reduced by 38 per cent to 1,224 ML. Re-use of water in construction and operations As Australia Pacific LNG facilities come online, we can use groundwater or treated water from our facilities to minimise use of water sourced from local communities. This beneficial use minimises the impact of the development on local water resources, and minimises transport on local roads by reducing water truck movements in and around local communities. In the 12 months to 30 June 2014, 696 ML or 14 per cent of the treated water from CSG production was used in construction activities. This compares with 553 ML in the previous reporting period. Brine management The brine that is separated from treated water during the RO process is stored in specifically designed and lined brine ponds. The base case for the management of brine generated from our water treatment process, as identified in our approved Environmental Impact Statement (EIS), is the crystallisation of salts and disposal of the salt in a suitably designed landfill which is disposed of under strict regulations. We continue to evaluate other brine management options. While these investigations are underway, brine ponds provide a stable solution. Generation In our electricity generation business, water is used in the operation of our coal and gas fired power plants. We have regulated licences for the extraction of water from aquifers or rivers. Within our generation business, the Eraring Power Station (Eraring) in New South Wales accounts for the majority of our water use. Eraring is located approximately two kilometres north of the town of Dora Creek on the western shores of Lake Macquarie. It has a generation capacity of 2,880 MW and is the largest power station in Australia. Eraring uses water for operations, fire services and domestic use, and utilises lake water for cooling. It was one of the first power stations in the world to use recycled water, which is further treated to become ultra pure water used in the production of electricity. The power station was designed to take salt water from Lake Macquarie as cooling water, minimising the impact on municipal or other fresh water sources. Following its use, this water is returned to Lake Macquarie with minimal evaporative losses. This design becomes particularly important during periods of water scarcity and, as a result, the power station has comparatively lower impact on the community compared with inland power stations reliant on other water supplies. Water at Eraring is managed in accordance with a documented Water Management Plan. Water consumption While some potable water is sourced from the domestic water supply, Eraring also utilises waste water from the Dora Creek Wastewater Treatment Works, the onsite sewerage treatment plant and the Myuna Bay Sport and Recreational Club, which is treated before its use onsite for plant washdown or in the power station units high pressure boilers. Eraring was transferred to Origin operational control in August 2013. During this period, the volume of water consumed remained in line with that under previous management. We target a maximum water use on site of 100 kl/ GWh generated. This year on average, water use on site was 139 kl/gwh, 3.5 per cent lower than the previous year s performance of 144 kl/ GWh, reflecting an improvement in production efficiency. In FY 2014, total water consumption at Eraring was 1584.2 ML, representing a 1.8 per cent increase on FY 2013 volumes despite 6 per cent growth in electricity production. Also, the reliance on potable water decreased as the volume of reclaimed water generated on site increased by 80 per cent from 1.4 ML per day to 2.4 ML per day. Managed water from Lake Macquarie The power station sources water for cooling purposes from Lake Macquarie. Once this water has passed through the power station it is returned to the lake. Our licence conditions permit the return of a maximum of 11,000 ML of salt water per day to Myuna Bay via the outlet canal, with a maximum temperature of 37.5 degrees Celsius. In 2014, we operated under that maximum every day of the year and returned an average of 6,684 ML per day, up from an average 6,252 ML per day to Myuna Bay.