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AGL Energy Limited 86
Introduction to water management
Australia remains the driest inhabited continent, even
though rainfall trends vary considerably with time and
there are some areas of Australia that have relatively
high average annual rainfall. Approximately half of AGL’s
power generation assets and upstream gas projects are
located within typically water stressed areas in South
Australia, Queensland and New South Wales.
As a company that owns hydro power stations and petroleum
exploration and production projects, the sustainable management
of water resources is of direct relevance to AGL’s businesses, and
is a responsibility that AGL takes seriously.
AGL uses water resources in various ways:
>> to produce steam in thermal power stations;
>> to reduce emissions to air at some thermal power stations;
>> to generate power at hydro power stations;
>> to cool and lubricate drill bits in petroleum drilling operations; and
>> for hygiene purposes in offices, where the majority of AGL’s
employees are located.
This water is drawn from a variety of sources, including from fresh
and marine surface waterbodies, aquifers, collected rainwater and
from water retailers.
AGL also produces water from coal seams and conventional oil
and gas projects as a by-product of its petroleum exploration
and production activities. Continued growth of the Upstream Gas
business is a core part of AGL’s integrated business strategy and
as such the management of groundwater brought to the surface
(hereafter referred to as produced water) is a key focus of AGL’s
environmental management program.
For coal-seam gas, the Camden Gas Project is the only AGL-
operated coal seam gas project that has progressed through the
exploration phase into full scale production. AGL’s projects in the
Hunter Valley and the Galilee Basin are currently in exploration
phase, and the AGL project at Gloucester is in development phase.
These three projects can be expected to progress to full-scale
production over the coming years, increasing the volume of
produced water compared to the amount reported this year.
Presently, the Silver Springs Underground Gas Storage project
and surrounding production fields account for the majority of
water generated by AGL’s conventional oil and gas projects.
Further exploration and production testing at AGL’s Cooper Basin
project is expected in FY2013, although volumes of produced
water from this project are forecast to remain low given it is still
in exploration phase.
Vision for water management:
AGL’s vision is to be a prudent and
responsible user of water that seeks to minimise the adverse impact
of its operations on local water resources.
Information about produced water, consumed water
and managed water across AGL’s sites is presented in the
following pages.
AGL recognises that stakeholders including communities, regulators
and investors, are concerned about the management of water
issues, particularly in relation to the growing coal seam gas sector.
The extraction of gas from coal formations involves the drilling
of gas production wells into the earth (typically several hundred to
around one thousand metres deep), stimulating the coal formation,
and allowing gas to flow to the surface. Before the gas can be
brought to the surface, water that exists within the coal formation
must first be removed so that the gas can ‘flow’ and be extracted.
This process is referred to as dewatering.
To determine whether there is any impact on local groundwater
resources resulting from dewatering, in FY2012 AGL continued
to develop dedicated groundwater and surface water monitoring
networks across its upstream gas projects. Results to date from
AGL’s dewatering program at the Galilee, Gloucester and Camden
Gas Projects suggest that groundwater in deep coal seams in these
project areas is relatively isolated from water resources in shallow
aquifers and streams, and negligible water level declines and water
quality impacts have occurred due to AGL’s exploration activities.
In relation to the management of produced water that is brought
to surface, during the previous reporting period AGL developed a
Produced Water Management Strategy (the PWM Strategy) for
CSG projects. The long-term objective of the PWM Strategy is
to substantially increase the proportion of produced water that is
beneficially reused for environmental, industrial/commercial, mining
and/or primary production purposes. The PWM Strategy identifies
appropriate treatment and beneficial reuse options for produced
water for each of AGL’s coal seam gas projects.
In FY2012, a number of initiatives, such as the development of site
specific water plans and reuse trials, were undertaken in line with
the PWM Strategy, and these will be further progressed in FY2013
as the relevant regulatory frameworks in Queensland and New
South Wales are finalised.
During FY2012, AGL also developed draft strategies for drill water,
fracture stimulation and flowback water, and produced water from
conventional petroleum projects. A brine water strategy is also
planned for 2013. Together with the existing PWM Strategy for
CSG projects, these strategies will form the water management
framework for AGL’s upstream gas projects.
The following pages provide further details on AGL’s approach
and performance in relation to water management.
8 As defined in the World Business Council for Sustainable Development Global Water
Tool 2010.