Late last year Transpacific Industries, one of the nation’s largest wastewater management firms, was fined $30,000 by Hunter Water for releasing treated flowback water from the Gloucester Gas Project into the region’s sewer network.

Transpacific had been contracted by AGL to dispose of thousands of litres of flowback water produced during the company’s fracking operations in Gloucester.

Flowback water produced from coal seam gas extraction often contains a range of fracking and drilling chemicals and heavy metals including arsenic, mercury, lead and cadmium.

It is also typically highly saline.

As part of its investigation into the disposal of the flowback water, the NSW Environment Protection Authority (EPA) required AGL, Transpacific Industries and Hunter Water to provide information to respond to the allegations of a breach by Monday, January 19.

“The EPA has no evidence that there was any breach of environmental legislation or environment protection licence conditions from the release of the treated waste water to the sewerage system,” EPA Hunter Manager Adam Gilligan said.

“It is evident that AGL contracted Transpacific to transport and treat the flowback water from its Gloucester operations.

"Transpacific treated the flowback water and then discharged it, as trade waste water, from its Kooragang Island treatment facility to Hunter Water’s sewerage system.

“Hunter Water controls the materials that are discharged into its sewerage system. This is specified in the Trade Waste Agreement between Hunter Water and Transpacific.” 

Trade Waste Agreements are used by water utilities to set the conditions for discharging trade waste into their sewerage system.

AGL has welcomed the decision releasing a statement stating "the investigation confirms AGL has had, and continues to have, proper arrangements in place for the lawful treatment and disposal of flowback water from the Waukivory Pilot Project near Gloucester".

But NSW Opposition Leader Luke Foley told Fairfax Media the EPA's response not to pursue either company was "a weak and insipid decision that should send a shiver down the spine of every local community seeking to protect the sanctity of their waterways".

Hunter Water says it still has concerns that Transpacific may have breached the terms of its trade wastewater agreement, a contract that sits outside the authority of the EPA.

In a statement to Fairfax Media, Hunter Water said it had given the waste disposal company a deadline of tomorrow (Friday) to disclose sampling data that will reveal what substances were released into its sewer network.

"The EPA has no authority to enforce a trade wastewater agreement, and so has not investigated whether any breach of this agreement has occurred," Hunter Water said.

"Hunter Water has issued Transpacific with a default notice citing four breaches of its trade wastewater agreement. 

"These include but are not restricted to, Transpacific’s admission that it discharged treated flow-back water to Hunter Water’s sewer network.

"Hunter Water’s refusal to accept flow-back water from the AGL site was based on the chemicals AGL nominated as contained in its ground water. 

"Before making its decision, Hunter Water requested in writing additional information from AGL, however this information was not forthcoming."

The EPA has reminded AGL and Transpacific that any liquid waste must be discharged lawfully and in accordance with any directions from the receiver of the waste.

“The EPA is aware that AGL has since contracted Worth Recycling to lawfully transport, treat and dispose of the flowback water,” Mr Gilligan said.

Worth Recycling holds an environment protection licence for wastewater treatment and is believed to be disposing of the flowback water at a plant in Windsor.

“AGL’s flowback water will be appropriately treated and beneficially reused by industry,” Mr Gilligan said.