The testing is being conducted as part of a joint investigation by the EPA and DRE into AGL’s operations after the company informed the agencies last week that BTEX chemicals were found in water samples from one of its wells.

AGL suspended its operations last Tuesday and had its operating licence suspended by the State government a day later after announcing the discovery of the hazardous chemicals.

BTEX is a group of chemicals known as benzene, toluene, ethylbenzene and xylene that can occur naturally in coal seams. 

AGL said five samples from its Gloucester site had contained evidence of BTEX chemicals, 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 fracking of the wells in November.

A fifth sample, however, found a BTEX concentration of 555 ppb.

Both the EPA and DRE have said AGL will not be permitted to recommence any activities in Gloucester until their concerns have been addressed.

“We expect the pumping operations to start early this week and to be complete within a few days. 

“The pumped flowback water will be stored in an above ground tank on site,” EPA chief environmental regulator Mark Gifford said.

“Following the sampling by the EPA and DRE, AGL will then be required to once again cease all operations at its Waukivory Pilot until the investigation has progressed and the results of the sampling are known.

“The work this week is a necessary part of the investigation, but the EPA will not permit AGL to resume its Waukivory operations until it is satisfied this pilot can be conducted in a manner that does not pose a risk to the environment.”

The government has banned the use of BTEX in fracking and the chemicals are prohibited in environment protection licences issued by the EPA.

The EPA also slammed AGL for its “lack of timeliness and transparency” in informing the authority about the discovery of the BTEX chemicals.

AGL revealed it first learned of the presence of BTEX in two of its four test wells and an above-ground water storage tank on January 15 but did not inform the EPA until January 27, 12 days later.

“The BTEX detected in the samples is most likely to be naturally occurring from within coal seams located at an average depth of approximately 600m and brought to the surface as part of the flowback of water from the hydraulic fracturing process,” an AGL spokeswoman said.

“After receiving the water monitoring results, AGL assessed whether the BTEX concentrations could harm the environment or affect human health, and concluded that no such harm arose.

“AGL then sought expert advice which confirmed its assessment that the BTEX concentrations found did not harm the environment or affect human health.

“AGL proceeded to verify the water sampling procedures including any potential contamination of the samples, review historical data, conduct site inspections, check water monitoring points and also ensure the integrity of our flowback water management system.

“Following these review processes, in the interests of acting prudently and because of the community’s concern about BTEX, AGL then determined a full review of the sampling results was needed and voluntarily suspended operations. 

“The relevant authorities - the EPA, the Office of Coal Seam Gas and the NSW Office of Water - were informed shortly after that decision was made.”

Opponents of AGL’s Gloucester operations have said the company should not be allowed to return to the site until an inquiry has taken place. 

Energy Minister Anthony Roberts had “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”, Groundswell Gloucester’s John Watts said.

His comments were backed up by NSW Opposition Leader Luke Foley.

“Given its chequered record, the Baird government must allow its own actions to be scrutinised in that inquiry,” Mr Foley said.

“This woebegone episode is a perfect demonstration why NSW needs an urgent moratorium on coal seam gas activity - including Gloucester. Only Labor will implement that moratorium.

“AGL has been allowed to wander off the reservation because of lax Baird government oversight. 

“Clearly, the company’s disclosures have been less than forthcoming - but the regulator has gone missing when it should have been nipping at its heels.”

Mr Gifford said identifying the source of the elevated levels of BTEX chemicals found in AGL’s samples was part of the EPA and DRE investigation.

He said, once the investigation was complete, the EPA and DRE would inform the public of the outcomes.

He did not give a time frame for how long the investigation was likely to take.