Speech

Legislative Council

MATTERS OF INTEREST: Fossil Fuel Extraction Projects in SA

May 16th, 2018

The Hon. M.C. PARNELL: I rise today to draw attention to the government's irresponsible promotion of new fossil fuel extraction projects in the midst of a global climate emergency. As members know, the scientific consensus is that human-induced climate change is an existential threat to our planet and the imperative is to keep global warming to less than 2 degrees above pre-industrial levels.

Global warming cannot be stopped but it can be stabilised. We also know that global reliance on fossil fuels is the main culprit. If we are serious about meeting greenhouse gas reduction targets we need to transition rapidly away from fossil fuels and towards renewable energy and energy storage. That transition also involves leaving most remaining fossil fuels in the ground, not searching for and extracting new reserves.

Sadly, it seems that the state government has almost seamlessly picked up the fossil fuel baton from the previous government and is charging into the abyss regardless of the consequences for people and the planet. The particular issue I raise today is one that I have raised many times in parliament before: the dangerous and dirty process of extracting gas from underground coal seams known as underground coal gasification (UCG).

This industry is bad news for South Australia on many levels. As a fossil fuel project it will be responsible for substantial emissions as well as considerable likely fugitive emissions that will significantly add to global warming pressures. However, there are also local impacts to consider. Yesterday, Leigh Creek Energy Limited announced to the Stock Exchange that it was about to commence construction of a pilot gas plant at Leigh Creek in the state's north.

This announcement follows the approval last month by the Liberal government of the company's statement of environmental objectives. The announcement of commencement of the 'pre-commercial demonstration' stage involves moving buildings and equipment onto the site over the next eight weeks and then drilling three wells into the coal seam. For new members, UCG involves setting fire to coal under the ground and capturing the resulting gases that come to the surface. It is dirty, it is dangerous and it resulted in the biggest ever pollution incident in Queensland's history.

Members might think that the Leigh Creek project is only a trial, so what could possibly go wrong? Well, that is what they thought in Queensland; that was a trial as well. Linc Energy's Chinchilla trial resulted in the company being charged and now convicted of serious environmental damage. Charges against five executives are pending and expected to be heard in a few months. Members might have seen the article last week in the Financial Review which commences as follows:

Former rich lister Peter Bond's Linc Energy has been fined a record $4.5 million for serious environmental damage at its controversial underground coal gasification plant in the Darling Downs, west of Brisbane, but don't expect the fines to be paid. District Court Judge Michael Shanahan said Linc Energy was 'persistent and in clear breach' of its obligations at the UCG trial site at Chinchilla between 2007 and 2013, with toxic gas contaminating soil and groundwater which could take decades to fix. But with Linc in liquidation with debts of $320 million, the fines against Mr Bond's company are unlikely to be paid—a fact noted by Justice Shanahan when he was handing down his judgement in Brisbane on Friday.

The article continues:

'I am unsure of any of its assets or liabilities and capacity to pay fines,' he said. 'Linc was well aware of the damage being done and attempted to hide it from the regulator.' Justice Shanahan described Linc's behaviour as 'serious and extensive' saying the company was aware of the issue of leaking gas—with dangerous levels of carbon monoxide, hydrogen and hydrogen sulphide found at soils on the Chinchilla site…

One indication of the contempt with which Linc Energy and their management held the environment and their impact on it was in relation to substantial fugitive emissions. Often these are difficult to detect, unless of course it rains, and according to evidence provided to the Queensland court, there were 'tiny bubbles coming out of the ground everywhere' after rain at the Chinchilla site. However, whilst this should have sounded alarm bells for the company, it was laughed off by Linc managers as just a case of 'Mr Bubbles'.

My advice to the new state Liberal resources minister is to get on the phone to his Queensland counterpart, Liberal National Party opposition leader, Deb Frecklington, who had this to say last week. She said that the project should never have been approved in the first place, and the direct quote from her is:

I do support the court's decision but I would say that no amount of compensation can make up for the fact that this is a project that should never have been ticked off. That is why, years ago, the LNP talked about the fact that the UCG industry should be ruled out and in fact we went as far as moving legislation in that case.

So, we do not want to be trading off the environment for the economy. This industry absolutely must be banned in South Australia.

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