Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
 Download PDFDownload PDF   View Parlview VideoWatch ParlView Video

Previous Fragment    Next Fragment
Economics Legislation Committee
21/11/2013
Estimates
INDUSTRY PORTFOLIO
Geoscience Australia

Geoscience Australia

[17:49]

CHAIR: Welcome, Dr Pigram. At this stage I would invite you to make an opening statement. If you have none, we will move straight into questions.

Dr Pigram : Thank you. I do not have an opening statement.

Senator PRATT: I would like to begin by asking Dr Pigram whether Geoscience Australia has as yet received any directives or communications in relation to staffing since the election, particularly in relation to whether it has been directed to renew or not renew any non-ongoing or temporary contracts.

Dr Pigram : We have received the same instruction that the rest of the public service has received from the Commissioner and we are acting accordingly.

Senator PRATT: How many non-ongoing and temporary staff does Geoscience Australia employ, and what proportion of your staff are they?

Dr Pigram : Let me just find the statistics for you. Here: the total staff of the agency is currently 738, of which 92 are non-ongoing.

Senator PRATT: Can you tell me what roles those 92 are performing—whether they are in critical, central roles?

Dr Pigram : They are in a range of roles. Some of them are key skills. Some of them are in more administrative areas. They spread across the entire capability of the agency. To give that some context, one-third of the agency's income is from other parts of government—we partner with other departments to provide our capability and services to them. Some of these people are funded through that section 31 mechanism, on a fee-for-service basis. Some of them are working in our core appropriation funded areas. They cover the entire spectrum of our capability.

Senator PRATT: So if, for example, those staff are working in fee-for-service areas how do you sustain that fee-for-service if you are without those staff?

Dr Pigram : Clearly we would not. At the moment the people who are in the fee-for-service area who are non-ongoing are tied directly to the duration of the funding. If that funding ceases, they will leave; if that funding continues, there will be an opportunity for them to continue. Under the rules that exist for the APS, I am unauthorised to make those decisions in relation to fee-for-service staff.

Senator KIM CARR: Can you refresh my memory: what was the percentage of total staff on short-term contracts?

Dr Pigram : Ninety-two out of 738, which is around 12½ per cent.

Senator KIM CARR: And of that 92, do all their contracts expire this year or will some expire this year and some over the next—

Dr Pigram : No. Some will expire by the end of December; some will expire by the end of the financial year; and there is a small percentage who will actually go beyond the end of the financial year.

Senator KIM CARR: Can you give us the breakdown of that?

Dr Pigram : I can take it on notice and provide it to you.

Senator KIM CARR: Thank you. What levels are those persons?

Dr Pigram : I will provide that on notice as well.

Senator PRATT: Are you likely to not renew the contracts of temporary and non-ongoing staff, even if they are in those fee-for-service roles, if you cannot meet the staff cuts expected of you? Will you therefore be moving permanent staff into those roles?

Dr Pigram : That is a hypothetical. My job is to manage the budget of the agency and meet the demands of our partners. That will change depending on the financial pressures on the agency, so I cannot give you a specific answer in relation to that. That will depend on the circumstances at the time.

Senator PRATT: Can you remind me, then, what the terms are that the government has set in terms of communications from the federal government? What I am trying to work out is how you work through whether you reach the threshold mark—whether you have enough efficiencies in Geoscience Australia or not.

Dr Pigram : We have opportunities to scale a lot of the activities we undertake. We can manage the savings that we have to manage either through the loss of non-ongoing staff or through changing our operational environment. That goes to data acquisition. The precise mix depends on the government priorities at the time and the relationships we have with those partners. Again, clearly it is my responsibility to deliver a budget that balances the agency's resources and we will do that to a variety of mechanisms.

Senator PRATT: Okay. Do you have a sense which programs Geoscience Australia delivers, and which partners you work with, are likely to be impacted by these cuts?

Dr Pigram : I do not, because we are working through that at the moment. In terms of non-ongoing staff we are in the process of advising those who are going to have to leave by the end of December whether or not they have an extension or whether they will have to leave and similarly for the people who finish at the end of this financial year. As I have said, a lot of those are related to our section 31 income so that is part of the decision making process. Again, it is quite a complex matrix in terms of what the impacts will be and how we will manage them.

Senator PRATT: Clearly you will have to move permanent staff, if you have to prioritise your projects and your tasks and which may or may not be where your permanent staff are currently attached.

Dr Pigram : All of that is possible, yes.

Senator PRATT: When do you expect you will know which programs are likely to be impacted? I would imagine by the next estimates you will have a clearer sense of what that looks like.

Dr Pigram : I would hope so, yes.

Senator PRATT: Your annual report from 2012-13 mentions the outcomes of a comprehensive stakeholder survey. I would be interested to know the key findings from that survey. I note that in the main the results were pretty satisfactory.

Dr Pigram : It sounds a little bit self-interested, Senator, but I would say they were outstanding.

Senator PRATT: Good. Which were the key areas that stakeholders rated you highly on?

Dr Pigram : I do not have it in front of me but Tony might be able to find it for me so I can give you the specifics. We approached over 400 stakeholders with the view of getting some feedback on the agency. In the four categories we sought specific feedback on—which related to the quality of the work we did, the timeliness of the work, whether or not we met the needs of our customers and there is one other that escapes me at the moment—we were ranked at better than 84 per cent in all four categories. The only area of critique where people thought we could improve was in our online presence—

Senator PRATT: Right.

Dr Pigram : and we are working on that. Essentially, our online presence was restricted to a desktop-style interface and clearly we are very much in a mobile device world and we need to adjust to that.

Senator PRATT: We are all in Google maps these days.

Dr Pigram : We are into the small devices and iPads and so forth. Our current website does not work well on those devices so we are completely re-engineering the back of it.

Senator PRATT: I am interested in that. That is particularly important, considering people who use geosciences resources could be out in the field anywhere, really, couldn't they?

Dr Pigram : Exactly.

Senator PRATT: I understand one of your key functions is providing precompetitive data that is used for acreage release and offshore petroleum exploration. What is the value of that exploration in recent years?

Dr Pigram : I am pleased you asked. I will answer that question through an anecdote, if I may. In the late 1990s—1998—we started working in the Great Australian Bight and this was an area that we had identified through some of our work on Law of the Sea that there was a lot of potential in deep water. We had identified a Cretaceous delta, a big delta system, in about 1,000 to 2,000 metres of water. We had a team in GA map that system and it led to what currently is $1.2 billion worth of exploration activity in that region through some major companies. The net GA investment in that was in the order of $7 million and we have leveraged $1.2 billion worth of exploration activity. There are other stories that I could tell you that have gone to final investment decisions—the Ichthys project in the Browse Basin was again triggered by work done by Geoscience Australia back in the mid-1990s

Part of the reason for telling the stories is the leverage is enormous and very effective, but also the lead times are quite substantial. The outcomes we get from the activity do not occur within a 12-month time frame. They often take a considerable period to develop. The Ichthys project was a $2 million investment by us in 1996. We promoted it to Japan. Japan invested in INPEX. INPEX made an FID decision two years ago, at $32 billion, to develop that project, so from a national interest point of view the provision of precompetitive information offshore is very significant.

Senator PRATT: I also note that Geoscience Australia does a lot of work on groundwater, including impacts from coal seam gas development. I am interested to know if you have been asked by the new government to do any work, or provide any advice, on its policy on coal seam gas development.

Dr Pigram : One of our clients that I talked about earlier is the Department of Environment, and we work with the Office of Water Science to provide advice on a very regular basis to coal seam gas developments but we are also involved, at their invitation, in conducting studies on the geological framework in collaboration with our colleagues at the CSIRO and the Bureau of Meteorology. We are involved in the bioregional assessments. As a consequence of your government introducing a water trigger, we are providing advice to the department on almost a daily basis in relation to water triggers that arise.

Senator PRATT: Will Geoscience Australia be contributing to the stakeholder group to be convened by Minister Macfarlane in New South Wales for CSG?

Dr Pigram : I am not sure. We have not been invited at this point, but that may happen in the future.

Senator PRATT: Clearly, climate change is of significant interest to Geoscience Australia. Can you tell us what kind of influence that will have on the priorities of your organisation? I would imagine that you are doing a lot of work on geosequestration as well.

Dr Pigram : We are working on potential storage sites for geosequestration. The future of that program is not clear at this time. It is up to the government to decide whether or not it wishes to continue that program. That is a policy decision. At this stage, we are awaiting the government developing a view and providing some guidance as to whether or not they wish to continue with that work.

Senator PRATT: What is the current quota of your budget that is dedicated to the work on—

Dr Pigram : I will need to take that on notice. I do not have the precise figure with me. It is not huge, but it is significant, in that those funds come from the portfolio and we are really dependent on the portfolio's view of the future as to whether that will continue.

Senator PRATT: In terms of Geoscience Australia's work on that question, are there some particular regions that you focused on? What are they?

Dr Pigram : The main area that we have been active in is offshore. We have done some work in north-west Australia in the Bonaparte and Browse basins off the north-west shelf. We worked with Victoria in Bass Strait. We have a proposed program in Bass Strait for next year, which may or may not proceed. We were planning to do some work offshore from Perth. That has not proceeded, mainly because of environmental issues. There was some onshore work done to the south of Perth.

Senator PRATT: I thought so—in the Harvey Ridge region.

Dr Pigram : Correct.

Senator PRATT: What is the status of that particular work?

Dr Johnson : The main activity to date in the Harvey work has been the successful drilling of a well down to a depth that I would have to provide on notice. Essentially, that was a well to a potential reservoir. The reservoir rocks were deemed to be suitable. There has also been some seismic work done. But if you want an outcome in terms of the prospect for long-term storage, I would have to take that on notice.

Senator PRATT: That would be terrific. I have watched that over some time and I would be interested to know where it has got up to. Have there been any changes to Geoscience Australia's budget since the federal election? Have any future changes been flagged? Has there been any planned rephasing of Geoscience Australia's budget to ensure that it can continue with functions that may be scrapped?

Dr Pigram : No, no and no.

Senator PRATT: Good. I am pleased to know that that is the case.

CHAIR: It was remiss of me to fail to thank you for rearranging your schedules and coming in early. That is much appreciated.

Dr Pigram : It is our pleasure, Chair. It is earlier than it might have been.

CHAIR: Usually people do not complain too much when they are on the late shift and they are brought in a bit earlier.

Senator WATERS: I have some questions about your work on the effects of hydraulic fracturing in the coal seam gas industry. At a breakfast function that you hosted here quite a few months ago now I asked some questions. I am not too sure if we ever got the answers, so I will follow them up with you now. Given that tremors have been associated with fracking for unconventional gas exploration in other jurisdictions, are you investigating or monitoring the potential for earth tremors related to fracking here in Australia?

Dr Pigram : We operate the national seismological network, which is designed to measure earthquakes. Its threshold is a Richter magnitude of three. We have not and we do not expect that we will record anything related to fracking, because fracking, if it is going to generate an earthquake, will generate earthquakes of magnitude 1, 1.5 or 2. Earthquakes at that scale will not cause any damage to any built infrastructure. Indeed, if you were standing at the well site you might be aware of it but in some instances you probably would not. Frankly, the potential for problems from fracking in the context of an earthquake are minimal if non-existent.

Senator WATERS: Okay. Are there any sorts of other impacts that tremors can have on the soil structure or—

Dr Pigram : The tremors from fracking?

Senator WATERS: Yes. What can tremors of that smaller scale that you have identified do?

Dr Pigram : To understand what happens with fracking, you are breaking the rock at considerable depths—between 600 metres and 800 metres. Essentially, what you are attempting to do is complete millimetre or smaller fractures in the rock, which are then propped up by the sand that is pumped in with the water that is used to fracture the rock. There are no other impacts that you will notice on the surface. Nothing else will happen. The tremors are not of a sufficient scale to create any surface damage. There are no other potential impacts that I am aware of that could have a surface impact as a consequence of the fracking.

Senator WATERS: Okay. Would you still feel the same if that was being done in, say, an urban area?

Dr Pigram : I would, actually. It genuinely is not a problem for built infrastructure. Part of the mythology around this stems from much deeper fracking that occurred in geothermal sites at three or four kilometres, where obviously the rocks have a lot more rock on top of them and so the lithostatic pressure, as we call it, is much greater. To lift that, you do create larger earthquakes. There was a particular event in Switzerland where a 3.5 magnitude was created in an urban area, and you do not want 3.5 magnitude earthquakes happening under your built environment. But you do not get and you cannot get 3.5 scale earthquakes from fracking at the depths that we are operating at in Australia.

Senator WATERS: How about for shale gas, which is obviously much deeper than coal seam gas?

Dr Pigram : Shale gas can be deeper. But a typical break for a fracture is at about 300 metres for a hydro frack, and that will not create earthquakes of a scale that will create damage to any built infrastructure.

Senator WATERS: How would you describe the likely Richter measurement of a tremor from shale fracking? What would be the parameters of that?

Dr Pigram : It is going to be in the same order: 1½ to two.

Senator WATERS: Thank you. It has been a long day. That is all I can think of.

Dr Pigram : I am glad that you ran out of puff before I did.

Senator WATERS: If there is anything else that you would like to tell me around those issues, that would be good. Actually, you have triggered a train of thought now. Are you charged with looking at the water impacts of CSG extraction?

Dr Pigram : No. That is the department of environment. But we do provide advice, as I mentioned to Senator Pratt, on those issues. That is one of our relationships with other parts of government. We provide advice on groundwater to the department of environment.

Senator WATERS: Can you tell me a bit more about your role in that?

Dr Pigram : We provide the geological framework in the bioregional assessments. As you would be aware, there is a program of bioregional assessments for all of the east coast basins that may be subjected to coal seam gas development or proposed developments. The issue there is to develop the geological knowledge to an appropriate level for that scale of activity so that we can provide well-founded advice on the impacts of the activity.

Senator WATERS: So we do not have that information base already.

Dr Pigram : We have framework information at the moment. But, as you would be aware, the nature of the activity is a little more intense than it has been for historical gas exploration.

Senator WATERS: What is the level of risk versus the level of information that we have at the minute?

Dr Pigram : It depends which basin we are talking about and which area. I would say that in terms of groundwater we need to better understand the system so that we understand the long-term cumulative impacts of the potential activities. But the initial approval process that was put in place by the previous government for the major developments in Queensland—as you are probably aware—have 1,700 requirements. A lot of that came from the advice that we provided and a lot of it is based around monitoring and ensuring that the correct information is collected so that we can understand what the impacts are as we progress.

Senator WATERS: Do you do any work on the ability to rehabilitate, say, a depleted bore or a pressure change in an aquifer once those parameters of a permit—

Dr Pigram : A lot of it is around detecting those changes before they get to the point where they are not manageable. You would not want to get the pressure to a point where it is having an adverse impact on the aquifer.

Senator WATERS: No, you certainly would not. If you do get to that stage, would your agency play a role in advising how the hell you can fix it, if you even can?

Dr Pigram : Potentially, yes.

Senator WATERS: Has it gotten to that stage yet?

Dr Pigram : No, there is nowhere where that is the issue. The major issues with groundwater in Australia are overallocation and use in the shallow aquifers in the agricultural areas. Indeed, some of the production of water from coal seam gas when cleaned up—and it is always cleaned up before it is put into the environment—could be used to rehabilitate those overallocated aquifers through a process called managed aquifer recharge. So it is possible. It is not happening at the moment, but it would be possible. The deeper aquifers are not exclusively but many of them are contained, so the impacts will be restricted to the areas that are being developed. They are not going to have surface connections and they are not going to be linked to overlying or underlying systems.

Senator WATERS: Depending on whether the bore casings hold.

Dr Pigram : The bore casings that are being used for coal seam gas are vastly superior to the many bore casings that exist for the groundwater that the farmers are using.

Senator WATERS: Yes, but there are also far more coal seam gas wells than there have been—

Dr Pigram : No, there are not actually. There are far more farm wells than there are bore wells. There are far more domestic and stock wells. I think in Queensland the numbers currently are 21,000 registered stock and domestic bores—that is without all the ones that are not registered—and 8,000 coal seam gas wells.

Senator WATERS: The depth is obviously a point of difference there as well as—

Dr Pigram : The depth is a point of difference.

Senator WATERS: I might think further on the sorts of issues I will quiz you on and pop some questions on notice. Thanks for your time.

CHAIR: In terms of your program, is there any interest in the Sorell Basin off Tasmania?

Dr Pigram : I thought you might ask me that. It was released some time ago and I am not sure what the response has been. Can I take it on notice?

CHAIR: Yes, that is fine; take it on notice. We had a discussion at estimates two or three times ago on coal seam gas and shale gas. We discussed how most of the shale gas reserves are in more remote parts of Australia where there is less likely to be land use conflict. I also made a statement at the time, which you said was wrong, that the fracking used to access the shale gas would still have similar consequences for watertables and so on. What was the answer that you gave me? Why was I wrong?

Dr Pigram : What you do to produce the coal seam gas is lower the water pressure within the coal seam because the gas is absorbed onto the coal and it is held in place by the water pressure. So the water is produced and that lowers the pressure and allows the gas to flow. In shale gas the shales are made up of much finer particles—they are made up of the mud essentially of the system—and the gas is trapped within the pores between the mud, so effectively they are dry systems and there is no water in those so you do not have to produce water to release them but you do have to frack them and the fracking process requires water. So what you would be doing in the shale gas areas of Australia, which are mainly in remote areas, would be looking for groundwater resources most likely—and they do not have to be potable; they can be nonpotable—and that water would be used for the fracking process. So they are kind of the opposite sides of the coin: one produces water to release the gas and the other requires water to frack to release the gas.

CHAIR: But with the shale gas there is less risk of contaminating existing water supplies because they are not actually in water; is that right?

Dr Pigram : That is correct; they are not in an aquifer.

CHAIR: Not necessarily.

Senator WATERS: But they would have to go through the aquifer—

Dr Pigram : You do have to go through the overlying aquifers. and you do in both systems.

Senator WATERS: Yes, so the risk is the same in terms of creating connections if your bore casings crack.

Dr Pigram : If the bore casings fail, yes.

CHAIR: Thank you for that and thank you for your attendance. Before you go, at risk of offending people: do we have a bit of Movember action happening here?

Senator WATERS: I think we do.

Dr Johnson : These are $6,000 moustaches.

CHAIR: Congratulations. Well done. I did it myself a couple years ago.

Dr Pigram : Senator, thank you for raising it because as a consequence this gentleman has to make a substantial donation.

CHAIR: Thank you.

Proceedings suspended from 16:15 to 16:27