Mining company clears up rumours

BEACH Energy has sought to allay the concerns of the community over its mining practices near Penola.

In response to letters to the editor appearing in last week's Naracoorte Herald, Beach Energy managing director Reg Nelson said there was some misinformation being spread about the industry as his company starts to test for natural gas at two sites on the Otway Basin.

One letter raised the point that companies such as Beach Energy were ultimately entitled to enter a property and drill for gas, and could take a landowner to court to gain access.

But Mr Nelson countered: "We (Beach Energy) would never, ever contemplate drilling without the landholder's consent.

"And the landholders are entitled to compensation under the act (The PGE Act which governs mining practices)."

Mr Nelson, himself a farmer near Kapunda in the State's Barossa Valley, said the company got on "quite well" with the landholder of the current Penola site and had no issue.

Explaining the attitude of the company, he said: "You look after the landowners. Do unto others."

A constant issue brought to the fore in mining debate is the use of toxic chemicals to fracture the shale.

"99.5 per cent of what we use is water and sand," Mr Nelson said. "All other chemicals these days are published online."

He said there was no chance of the fracturing penetrating the surface aquifers, with the drilling going from 2.5-4km below the ground.

"We like to think we're good but we're not that good," Mr Nelson said. "You would be battling hard at that depth to penetrate the aquifers."

Mr Nelson said some people calling for the ban of the use of certain chemicals were off the mark, using BTEX chemicals as an example, saying the industry has moved on from using some of the chemicals they refer to.

"It's just not used anymore," he said. "Why ban it?"

To prevent any substance escaping from the wells, near surface aquifers, the wells will be triple cased with cement and steel. 

This will be done in stages during the drilling process with the first stage set immediately after drilling through the near surface aquifers, well before potential gas targets are encountered. 

The company said all water would be held in containers to prevent evaporation or spillage and a layer of geo-fabric had been laid on the ground beneath the site to prevent anything that does happen to spill from soaking into the ground.

"The potential for contamination is from surface effects," Mr Nelson said. 

"We have observation bores at each end of the site monitoring groundwater before, during and after drilling - it's just part of the process."

High-density mud is injected around the well bores to prevent any natural gas escaping, with Mr Nelson saying there was less than a 0.001 per cent chance of a significant amount of gas escaping.

He also explained there would be minimal "flaring" at the sites - where burning gas is released into the atmosphere - with the practice limited to small amounts for testing.

"You don't burn something you want to sell," Mr Nelson said.

In keeping with their relationship with the landowners, Mr Nelson said the company would not put new roads on their land without permission and traffic around the site was minimal.

Once a site is finished and has been abandoned it is Beach's responsibility to completely rehabilitate the land - with Mr Nelson drawing examples of the company doing so in the past where sites have returned to their original purpose.

He said the potential discovery of new gas fields much deeper than traditionally explored would benefit the community.

What the company is doing is not new for the region, with an existing gas plant and pipelines in place near Penola for decades.

Contrary to a point made in one letter in the January 9 Herald regarding foreign ownership of mining companies, Mr Nelson said Beach Energy was an Australian company primarily owned by Australian private shareholders who benefit from the company's profits.

"Eighty per cent foreign owned we are not," he said. "I totally reject that."

He concluded that certain sections of the community "muddy the waters" with emotive arguments which do not necessarily reflect reality and that natural gas still has large potential as an energy source.

"Apart from wind power the only other potential for energy (in this area) is geothermal," Mr Nelson said.

"In which you do the same as we are doing now, the same equipment and the same processes."

- With set-up still being finished last week at the Penola south site, Beach Energy was also undertaking lease preparation at their site north of the town.

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