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Environment and Communications References Committee
Oil and gas exploration and production in the Beetaloo Basin

BARRETT, Dr Damian, Research Director, CSIRO Energy Resources, Commonwealth Scientific and Industrial Research Organisation

MAYFIELD, Dr Peter, Executive Director, Environment, Energy and Resources, Commonwealth Scientific and Industrial Research Organisation [by video link]

ZIELKE, Ms Judi, Chief Operating Officer, Operations, Commonwealth Scientific and Industrial Research Organisation


CHAIR: I now welcome representatives from the GISERA and the CSIRO.

Ms Zielke : Chair, we might clarify that for you in a minute, if that's okay.

CHAIR: Okay. I understand information on parliamentary privilege and the protection of witnesses and evidence has been provided to you. Obviously, all of the usual rules apply to senators asking questions of agencies. Would you like to make an opening statement?

Dr Mayfield : Yes, thanks, Chair. For the committee's benefit, I did want to do an opening statement to set the context for GISERA, which is the Gas Industry Social and Environmental Research Alliance that CSIRO undertakes. My colleagues with me today are Ms Judi Zielke, who's our chief operating officer at CSIRO; and Dr Damian Barrett, who's the research director of the energy resources program for the CSIRO Energy Business Unit, and he's also the GISERA director.

The national science agency, CSIRO, is an impartial, authoritative and respected source of independent science-based information for the community and government. CSIRO works across many areas of high public interest, and our organisation is bound by the Science and Industry Research Act of 1949. As the national science agency our mandate is one of impartiality, scientific rigour, and accountability to the Australian public.

GISERA is a collaboration between the Commonwealth and state governments, industry and CSIRO, and was established to undertake publicly reported independent research. GISERA's role is to provide quality-assured scientific research and information to the communities living in the gas development regions, focusing on social and environmental topics. Research topics include groundwater and surface water, biodiversity, land management, greenhouse gas emissions, human health and socioeconomic impacts.

GISERA is funded by state and Commonwealth governments, CSIRO and the industry, as I indicated, and has in place strict governance arrangements that enable the independence of all researchers and the integrity of all the research projects undertaken. These arrangements also guarantee input from community and independent representatives that participate in GISERA's research advisory committees. These committees, which approve research proposals and funding, have a hardwired majority representation of independent and community members. All the scientific results are independent of industry and government. All GISERA research advisory committee meeting minutes, communiques, project proposals, reports and fact sheets are made available for public scrutiny on the GISERA website.

Like all research published by CSIRO, GISERA publications must clear CSIRO's peer review process and be published online on the GISERA website. This process has ensured CSIRO's independence for over a decade in GISERA and has delivered a significant body of publicly available scientific research. This comprises 70 research projects into various aspects of social and environmental impacts of onshore gas development, 50 of which are complete and 20 of which are still in progress.

CSIRO takes its statutory obligations under the FOI Act very seriously and has a dedicated FOI unit and processes for processing requests in accordance with the substantive requirements of the statutory requirements of the FOI Act.

We're very happy to answer the committee's questions today, especially as they relate to our work on oil and gas exploration.

CHAIR: Do either of you have anything to add or are you happy to take questions?

Ms Zielke : I just wanted to note, in response to your point at the start, that CSIRO is an independent government agency, as Dr Mayfield noted. GISERA is an alliance agreement. Under that agreement, CSIRO—Damian's position as director—manages that alliance arrangement. I just wanted to define the difference between the two.

CHAIR: Thank you. Where does the funding for GISERA come from?

Dr Barrett : The funding for GISERA comes from a range of sources. To date, we have received $54.5 million in funding, of which 45 per cent is from the Commonwealth government, 22 per cent is from CSIRO and 33 per cent is from industry.

CHAIR: Individual companies?

Dr Barrett : Members of the alliance agreement, which are natural gas companies operating on shore within Australia—APLNG, Origin Energy and Santos. We had Pangaea as a member but they are no longer a member. In total, those companies provide 33 per cent of the funding. In the Northern Territory, it breaks down a little differently—48 per cent of the $5 million in funds that has gone into the Northern Territory has come from the Commonwealth government, 13 per cent has come from the Northern Territory government, 22 per cent has from CSIRO and 15 per cent has come from the industry partners.

CHAIR: Is Empire Energy an industry partner?

Dr Barrett : Empire Energy is not an industry partner of GISERA.

CHAIR: So none of the work you do in terms of consultation and support would have been engaged by Empire Energy?

Dr Barrett : No. We have had no sign-on of Empire. We have spoken to Empire Energy. At this stage, they have decided not to join the CSIRO as part of GISERA. That may change in the future. We have introduced a two-tier system of contribution in order to bring more smaller companies into GISERA and for them to make a contribution. We expect that, over time, smaller companies such as Empire may wish to join.

CHAIR: We've heard from CSIRO, but what's the benefit to the partner companies and industry partners of signing up with you guys?

Dr Barrett : GISERA goes to the notion that those who benefit from the operation of the industry should make some contribution towards the potential environmental and social impacts of that industry, whether they be positive or negative. The basis on which the funding into GISERA happens is that those who have an interest or get some form of benefit should make a contribution towards understanding what those issues are and how those issues might be mitigated. Under that philosophy, we have contributions from state and territory governments, as well as the Commonwealth and industry. CSIRO has a role in terms of the national interest, as well as providing information into communities that is trusted, high-quality science and independent.

CHAIR: So, if a company wanted to show goodwill, participating in your alliance would be one way of doing it, wouldn't it?

Dr Barrett : I think it goes to the point of making a contribution, as I was just explaining. Making that contribution consists of essentially putting money into a pot, a pool of funds. Under the conditions of the alliance agreement, those who contribute to that pool of funds then take their hands off the control of those funds, and there are strict governance arrangements within the alliance agreement for all of the partners, be they government or industry, as to how those funds are distributed.

CHAIR: What types of projects or programs does that pot of money get spent on?

Dr Barrett : A range of research domains. Overall, we spend a bit over a third of our funds on water related research—groundwater in particular. In the Northern Territory, we've been spending about 50 per cent, a higher proportion, on our water—

CHAIR: Would you be able to take it on notice to provide a bit of a list of what you've spent money on in the Northern Territory, for us to have a bit of an understanding?

Dr Barrett : Absolutely.

CHAIR: I think that would be helpful.

Dr Barrett : Yes, we can take that on notice.

Ms Zielke : Chair, just so you're aware in the meantime, the annual report for GISERA is available on its website. I was actually just rereading it in preparation. The lists are all available in that, just in case you need it before we come back.

CHAIR: Great. I understand that you've done some work in relation to investigating offset options, programs or projects. Have you done some of that specifically for the Northern Territory, or is that general?

Dr Barrett : We have a project underway at the moment in the Northern Territory focusing on the Beetaloo, exploring options for offsetting greenhouse gas emissions, be they scope 1, 2 or 3 emissions. That project is underway at the moment. It's looking at options, for example, associated with environmental offsets or changes to bushfire management. Indeed, geosequestration options are being looked at. I'd characterise that study as a techno-economic assessment of options.

CHAIR: Does GISERA have a view on public money going to companies that are not members of your alliance?

Ms Zielke : We don't have a view in relation to government programs. That's not our role. Our role is to undertake research as CSIRO, the national science agency, that is of national benefit. In relation to this particular agreement, our role is to do it specifically in relation to what's agreed for GISERA.

CHAIR: The Commonwealth department obviously have a list of criteria by which they assess whether a company is appropriate for a particular grant. In this case, we're talking about a grant program worth $50 million, with a maximum of $21 million per company. What I'm wondering is why the criteria don't include companies needing to be signed up to a program where there is an obligation to give back.

Ms Zielke : That's an interesting point. That would be a question, I'm afraid, for the department of industry.

CHAIR: Fair enough.

Senator STERLE: A lot of my questions were answered by Dr Mayfield, in terms of the assertions of not being independent. We heard this when we had the last hearing, anyway. Have these assertions of GISERA not being independent popped up before, Dr Mayfield?

Dr Mayfield : GISERA has been in existence for just over 10 years. From time to time, those allegations have been made, and each time we've been able to show how GISERA actually operates and the governance mechanism. That's been the way we've tried to make sure we've got a good solid approach and response.

Senator STERLE: Yes. You were very clear in your opening statement. That's fine. In taking evidence from the traditional owners in the last couple of days, we have heard of the absolute fear of fracking amongst the communities. And we also remember Gasland and what was happening in America and all that. What do we have to fear about fracking here in Australia? What are the chemicals? What's going on? If it's that safe, why are we having so much fear throughout the community. You probably can't answer that. What are the chemicals?

Dr Barrett : There are a range of issues that are put forward by communities in relation to the chemicals being used in drilling muds and hydraulic fracturing fluids. Under GISERA, we have projects underway at the moment, and starting to get underway in the Beetaloo, that are looking at the fate of these chemicals in the environment. What happens, for instance, if these chemicals are spilled on the soil? How do they react, chemically and physically, with the soil? How is the microbiology of the soil impacted? How do those microbes in the soil metabolise the chemicals that are part of these drilling and hydraulic fracturing fluids?

We've undertaken some of this work elsewhere in Australia—in South Australia and Queensland—and some recent results we've had in the work that we've done have shown that many of these chemicals are readily broken down and metabolised by bacteria in the soil. Certain bacteria are able to consume and metabolise these chemicals; other bacteria are not, of course. Spilling these chemicals on the soil can lead to changes in the population of bacteria in the soil. So there are some effects. But between, say, spilling a hydraulic fracturing fluid on the surface and it getting into an aquifer that is important for agriculture or might be important for drinking water, there's a whole series of processes. Once this work is finished, which will be into the new year by the time the comprehensive study is done, we'll have a very good understanding of what might be the fate of some of these chemicals in the Beetaloo region, specifically for the Beetaloo, and we'll be able to convey that information to the local communities, including the traditional owner communities who live in that region.

Senator STERLE: So you don't have it there yet. Okay, point taken. That will be good. What about if these chemicals get into the water?

Dr Barrett : It's a similar process as I've been explaining for the soil. These types of bacteria do occur in groundwater. They tend to occur in lower numbers, and this is because there's not so much in the way of nutrients in the groundwater to sustain those microbes, those bacteria. So, generally, we've found elsewhere in Australia that the rates of breakdown of these chemicals are lower than the rate of breakdown in the soils. So the same sorts of reactions and metabolism do happen; it happens at a slower rate, as we found elsewhere. We're going to be conducting this work also for the waters of the Cambrian limestone aquifer in the Beetaloo, and, again, we'll be able to make a definitive statement along these lines in the coming 12 to 18 months.

Senator STERLE: So it's not the end of the year? I thought you said it was the end of the year in the first part of that. That's just the soil, is it?

Dr Barrett : Sorry, the project goes into the new year, so it will take 12 to 18 months for full completion of the project.

Senator STERLE: Will that information be out before the completion of the project?

Dr Barrett : There are a number of progress reports and points along the way. We report the progress of the work that we're doing. Where we have something definitive to say, we put that into our progress reports, and that goes on to the CSIRO GISERA website, which is available for public use and interrogation. But I can make a point of following this up for you if you would like.

Senator STERLE: If you could do that through the committee structure, that would be great, thank you. Of the chemicals that we do know are used in hydraulic fracturing now, are there any chemicals, if they did escape and did get into the aquifers, where there are red flags about the damage that could be done to the water supply?

Dr Barrett : There are certainly chemicals that are constituents of hydraulic fracturing fluid that we regard as posing a hazard—that is, they could potentially cause concern if they were to get into an aquifer in large amounts. What's required is to understand what the risk is, and this is what the study that I was just describing is getting to. In other words, if amounts of chemicals that we might expect to occur in a spill occur on the soil, what is the process and what is the risk that goes along with that process that may lead to the problems that you're talking about?

We've got to remember that the engineering and design of well pads—the bunding and so forth that goes on the surface coverings of those well pads—is all done to mitigate the risk of these chemicals getting into soils. So, in the regulatory environment, the best practice that happens during the construction of well pads and well drilling is all aimed at minimising the risks that I'm talking about.

Senator STERLE: I understand that, but things do happen. Things go wrong. Wherever there are people involved, unfortunately, we do have mistakes. That is why the fear of our traditional owners has, I believe, not even been addressed. I can understand that, and you'll provide all that. Will salt be a major by-product of fracking, as we've seen in Queensland? While we're having this blue about the Great Artesian Basin being destroyed, there were mountains and mountains of salt all hidden behind a bunch of trees, and no-one even wanted to talk about it. What about up there at Beetaloo?

Dr Barrett : The extraction and production of gas in the Beetaloo is from a shale formation in the order of two to 3½ kilometres below the earth's surface. The water produced from that formation in the production of gas is relatively low, particularly when you compare it to the coal seam gas operations of Queensland, where we're talking about a depth of around 700 metres or so for the source of the natural gas.

In the coal seam gas regions, the coal seams need to be depressurised. In other words, large amounts of water need to be removed in order to get the pressure low enough that the gas then begins to bubble out and come to the surface. This is not the situation in the Beetaloo. It's far lower. I can get the estimates for you on notice as to what we might expect to be the produced water. Flowback is another source of water from the formations, following hydraulic fracturing. Again, I can get estimates of what the amounts of flowback might be over the lifetime of projects in the Beetaloo Basin.

Senator STERLE: That'd be great. Thank you.

CHAIR: Senator McMahon.

Senator McMAHON: Thank you for appearing here today. Following on from Senator Sterle's questions: as to these chemicals or compounds that we're talking about, do you have any information on what, if any, are the harmful effects that they could cause to people or livestock?

Dr Barrett : There are a number of studies that we can refer to. There's work done by the Commonwealth government. We are undertaking, in GISERA, at the moment, a study in Queensland where we've rolled out a health impact framework and we've consulted with communities in Queensland in terms of what their concerns are around health impacts. We'll be completing that study with some work on, essentially, chemicals that have a hazard associated with them, so that CSIRO can come out and say something relatively definitive about those particular compounds. They're compounds or chemicals that are used in the manufacture of hydraulic fracturing fluids. When we consult with the communities in the Northern Territory, we expect to hear the same sorts of concerns. As a result of that consultation and the raising of those concerns, GISERA would then be in a position to undertake a study specifically for the Beetaloo Basin around concerns associated with the particular chemicals that are used under those conditions for hydraulic fracturing—emphasising once again that what we see in Queensland is coal seam gas development; it's quite different to the engineering and hydraulic fracturing associated with shale gas development.

Senator McMAHON: As to some of the chemicals that are being or would be likely to be used in the Northern Territory, do some of them have known adverse health impacts?

Dr Barrett : Certainly some of the chemicals, in high concentration and in close proximity, do have hazards associated with them, and what I'm referring to here is essentially workplace health and safety. Generally, the constituents of hydraulic fracturing fluid are transported on site and the hydraulic fracturing fluid is constructed there and mixed on site before it's pumped into the well. Those workers who are bringing those chemicals and those fluids together are potentially exposed to hazards, and they have health and safety procedures to mitigate those risks.

As to hydraulic fracturing fluid: the large majority of the fluid is water. Another constituent that goes into the fluid is essentially a soluble gum—often, guar is used—that adds to the viscosity of the water. The purpose of that gum is to carry what's called a proppant into the fractures that are generated by the hydraulic fracturing. The proppant that is most often used is a type of silica sand. The pH is adjusted, then, in the hydraulic fracturing fluid to break down that gel, in order to get the fluid back out of the well, and that's the flowback that I was referring to. Along with those main chemicals that comprise hydraulic fracturing fluid, there are a range of biocides and other chemicals that are used in smaller concentrations in order to avoid scale effects, in order to avoid fouling in the well and that sort of thing. At those sorts of concentrations, generally the chemicals that make up the fluid don't pose major hazards. In the flowback fluid, because it has been in the formation, 2½ to three or so kilometres below the earth's surface, it can bring back what are called geogenic compounds or compounds found in the formation water. Those compounds can potentially be radionuclides; they can have heavy metals and hydrocarbons and that sort of thing. Those chemicals need to be treated before the water can be released into the environment.

Senator McMAHON: Is the study that you are doing looking at what the effect would be if there were a worse-case scenario and some of the fluids got into the aquifer? I'm assuming that you drinking a litre of the fluid would be very different from 10 litres of fluid getting into an aquifer of how many thousand cubic metres of water.

Dr Barrett : That's right. There are dilution effects. There is breakdown in soils. There are sorption effects. There are chemical and physical effects that happen. Generally, what we do when we're looking at scenarios in our GISERA projects is attempt to look at what is likely or probable, but we may look at a high-limit scenario—in other words, what the worse case is. Mention was made before in relation to the offsets to greenhouse emissions and work that we're doing. That project is looking at a particular scenario that is a high-production scenario. In other words, it's asking the question: what is the highest value that we might expect in terms of greenhouse emissions?

Senator McMAHON: I will just go on to that question that you've just raised about the offsets. This was a question asked by the chair and Senator Sterle. My understanding is that these wells that we're talking about that the grants are going to are exploration wells. Is that correct?

Dr Barrett : I'm not aware of the program in detail. CSIRO receives no funding from that program. Indeed, we have not had any interactions with any of the companies around the drilling of those wells and what they're actually doing, so I'm not aware of all the detail.

Senator McMAHON: Is it true that we're in an exploration phase because we don't actually know what is likely to be extracted?

Dr Barrett : If those wells—and I understand that that is what they are; they're going towards drilling exploration wells. Exploration wells are drilled to get a better understanding of the nature of the source rock from which the natural gas is being extracted. That asks geophysical and geochemical questions around how the natural gas is generated and how best to get that methane, that natural gas, out of the rock. In other words, what has to be done to that shale rock to make an economic level of production of gas?

Senator McMAHON: If we're still exploring and we're not sure exactly what's down there and what we're going to get out of the basin, would it then be impossible to answer the senators' questions of exactly what offsets would be needed?

Dr Barrett : One of the aspects of the exploration is: what is the composition of the gas? In other words, how much impurity is in there? For example, what is the CO2 concentration of the gas that is coming to the surface? Deposits or reservoirs that have highly productive gas and are highly productive reservoirs have very low concentrations of CO2. My understanding is that the CO2 concentration and the contaminant concentration of the gas in the Velkerri formation in the Beetaloo is relatively low.

Senator McMAHON: But we would hope to have better information once more exploration is done.

Dr Barrett : That's right, yes.

CHAIR: I have a final question. Firstly, to follow up, you referred to this offset research that you're doing. When is that due? What's the time frame for that?

Dr Barrett : That's due to finish in December 2021.

CHAIR: So December this year? Great. Thank you. The Pepper report has been referenced a number of times in our inquiry, and I imagine that your group participated in it at some level. Did you put in submissions? Were you called to a hearing?

Dr Barrett : We were asked to provide scientific advice to the Pepper inquiry on a number of occasions. The exact number I can't recall.

CHAIR: That's okay.

Dr Barrett : That was on specific topics that they required scientific advice on. We provided that advice to the inquiry, yes.

CHAIR: Thank you. Does GISERA support the report and the final recommendations?

Dr Barrett : That advice provided to the Pepper inquiry was provided as CSIRO advice, and CSIRO supports the recommendations of the final—

Ms Zielke : I don't think that question has ever been put to GISERA, so the alliance hasn't considered that question.

CHAIR: But there are 130-odd very important recommendations in that report. I guess what I'm trying to understand is: as an organisation, do you support the recommendations and think they should be implemented?

Ms Zielke : That's a question you can ask of CSIRO, as Professor Barrett was just saying. I'm just saying that that question hasn't been put to GISERA. But I'm sorry; I interrupted your response on CSIRO.

Dr Barrett : The work that we do is cognisant of the recommendations. We look to addressing scientific issues and providing scientific advice with an eye on those recommendations in order to be able to inform the recommendations as they're rolled out. The information that we provide is a response of a type. We provide that to the Northern Territory government, who are responsible for responding to those recommendations in full.

CHAIR: Okay. Thank you all for your time today. We appreciate it. I understand we gave you very short notice to appear, so we appreciate your flexibility with that as well. Thank you. That concludes today's proceedings. I would like to thank all of the witnesses who have given evidence to the committee today. I thank Hansard, Broadcasting and the secretariat. We will be back at a date to be decided in the future.

Committee adjourned at 15:17