Whilst Gloucester Gas Project’s project director Nigel Bean could not offer any clues about which way the decision would go with AGL’s board, he said that it would ultimately be solely a financial decision, for which “the numbers have to stack up.” Influencing factors include the geology, which dictates how fast and how much gas can be extracted; the price of gas which is driven by the collapsing price of oil; how efficiently the operation can be run; and how strategic it will be in its design.

“We’re pulling together the business case now,” he said, referring to the reports of data emerging from the Waukivory pilot wells.

AGL recently wrote down the value of the Gloucester operation by $200 million, having already spent $500 million to get it to where it is today. Mr Bean said that “looking forward there is still value in the project” but that the research currently being compiled will enable AGL’s investment in Gloucester to then be ranked against other investment opportunities elsewhere. He said such a long term investment of 25 to 30 years by AGL requires some security. 

AGL’s senior hydrogeologist John Ross also took questions and said that the water production rates emerging back out of the wells were smaller than expected, averaging at 10,000 litres per day across the four wells.

“We’re still planning to desalinate the water, and are still looking at irrigation and stock use of the water, but there just won’t be as much of it for reuse,” Mr Ross said.

He said the smaller amount of water indicated that the extraction was not having an impact on the ground water systems by sucking it out, and so the rivers would not be drying up anytime soon. He also said that they had dated the water emerging from deep within the wells and found the youngest sample was approximately 330,00 years old and the oldest was 490 000 years old. 

“This means that water is moving incredibly slowly... and that there is low permeability in the rocks. It’s not like Queensland,” Mr Ross said. 

He said that whilst small amounts of non-toxic BTEX had been found to be in the old salty groundwater “it’s coal seam gas for goodness sake, that’s where you’d expect hydrocarbons to come from.” He emphasised that no heavy metals had been detected through AGL suite of chemical analysis. Minor levels of chlorine had been detected in both pre-and post fracturing samples but Mr Ross said it was important to consider the broader trend, not isolated incidences. 

“We will always have the odd strange result which won’t be there a week later...Chlorine is really a non-issue... it’s part of the natural environment.”

He concluded that he was confident they could take it and turn it into something useful “if we get the economic go ahead.”

The data being compiled will direct AGL’s Gloucester Project planning, for which the final draft will be available in September before it goes to the Department of Planning for approval in December/January.

“They will let us know what we can and can’t build.”

Responding to a question about large scale solar farms, Mr Bean said that personally he was a supporter of the solar industry with a third set of domestic panels on his home. He said large scale solar farms in Nyngan and Broken Hill had had half of their costs funded by government without which large scale solar projects were not yet a financially viable option.