The NSW Environment Protection Authority has criticised AGL for a lack of transparency and launched a "full investigation" after the energy giant disclosed it had detected banned BTEX chemicals in water samples taken at its pilot coal seam gas field in the state's mid-north.
AGL copped a rebuke by the EPA on Tuesday, hours after the company announced it had suspended operations near Gloucester following the detection of the toxic chemicals – benzene, toluene, ethylbenzene and xylenes – in water from two of its four CSG wells and an above-ground water storage tank.
"AGL informed the EPA that it was aware of these elevated levels of BTEX chemicals on 15 January, but it did not make these results known to the EPA or the public until today," Mark Gifford, EPA Chief Environmental Regulator, said in a statement released late on Tuesday.
"The EPA is very concerned at AGL's lack of timeliness and transparency in informing us of these results and we will be conducting a full investigation," Mr Gifford said.
The company said it could "categorically state" that none of the fluids used in the hydraulic fracturing – fracking – of the wells at the Waukivory project contained BTEX components.
"The BTEX detected in the samples is most likely to be naturally occurring, from within coal seams located at an average depth of approximately 600 metres and brought to the surface as part of the flowback of water from the hydraulic fracturing process," AGL said in a statement released on Tuesday.
However, Groundswell Gloucester, a community group opposed to CSG, said the detection of the chemicals should trigger a review of the whole project.
"This confirms our worst fears and demonstrates yet again that there are significant environmental problems with AGL's Gloucester Gas Project," John Watts, a spokesman for the group, said. "This disturbing disclosure comes on top of the detection of two fracking chemicals in the ground water and unexplained changes in the groundwater levels during and after fracking."
Energy Minister Anthony Roberts "now has no choice but to immediately place a moratorium on all of AGL's coal seam gas activity at Gloucester pending a full and independent enquiry", Mr Watts said.
A spokesman for Mr Roberts said the government supported AGL's decision, adding it had banned the use of BTEX chemicals in fracking in NSW.
Five samples included BTEX, four of them in the 12-70 parts per billion (ppb) range – a result AGL said was in line with groundwater test results of 30-60 ppb in the Gloucester Basin prior to the recent fracking of the wells.
A fifth sample, however, found a BTEX concentration of 555 ppb.
Michael Fraser, AGL's managing director, said: "Because of the community's concern about any detection of BTEX and in the interests of acting prudently, AGL has voluntarily suspended the Waukivory Pilot Project until a full review of the sample results has been completed."
AGL has also lately been criticised after its contractor Transpacific transported the water extracted during fracking – known as flowback water – to be discharged after treatment into Hunter Water's network. Hunter Water had advised both companies it would not accept the discharge.
"BTEX chemicals in the water are an absolute nightmare and the Greens want a permanent ban on coal seam gas and fracking in NSW," Jeremy Buckingham, Greens mining spokesman, said.
"How many more spills, leaks and accidents will it take before the government acts to ban coal seam gas?"
