Energy giant AGL says it has suspended operations at its pilot coal seam gas field in northern NSW after detecting traces of toxic BTEX chemicals in water from two of its four wells.
The chemicals – benzene, toluene, ethylbenzene and xylenes – were also found in an above-ground water storage tank.
The EPA (Environment Protection Agency) said AGL was aware of the elevated levels of BTEX chemicals on January 15 but did not make the results known to the EPA or the public until today.
“The EPA is very concerned at AGL’s lack of timeliness and transparency in informing us of these results and we will be conducting a full investigation," the EPA's chief environmental regulator Mark Gifford said.
“The EPA can confirm that fracking fluid additives used at the Waukivory operation were sampled and analysed by government environmental officers in November 2014 before fracking activities were allowed to commence.
“These samples were analysed for BTEX chemicals, which were not detected. Identifying the source of the elevated levels of BTEX chemicals found in AGL’s samples will be part of the EPA’s investigation.”
AGL said it could "categorically state" that none of the fluids used in the hydraulic fracturing – fracking – of the wells at the Waukivory project contained BTEX components.
"The BTEX detected in the samples is most likely to be naturally occurring, from within coal seams located at an average depth of approximately 600 metres and brought to the surface as part of the flowback of water from the hydraulic fracturing process," AGL said in a statementreleased on Tuesday.
However, Groundswell Gloucester, a community group opposed to CSG, said the detection of the chemicals should trigger a review of the whole project.
"This confirms our worst fears and demonstrates yet again that there are significant environmental problems with AGL's Gloucester Gas Project," John Watts, a spokesman for the group, said. "This disturbing disclosure comes on top of the detection of two fracking chemicals in the ground water and unexplained changes in the groundwater levels during and after fracking."
Energy Minister Anthony Roberts "now has 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", Mr Watts said.
A spokesman for Mr Roberts said the government supported AGL's decision, adding it had banned the use of BTEX chemicals in fracking in NSW.
Fairfax Media has also sought comment from the Environment Protection Authority.
Five samples included BTEX, 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 recent fracking of the wells.
A fifth sample, however, found a BTEX concentration of 555 ppb.
Michael Fraser, AGL's managing director, said: "Because of the community's concern about any detection of BTEX and in the interests of acting prudently, AGL has voluntarily suspended the Waukivory Pilot Project until a full review of the sample results has been completed."
AGL has also lately been criticised after its contractor Transpacific transported the water extracted during fracking – known as flowback water – to be discharged after treatment into Hunter Water's network. Hunter Water had advised both companies it would not accept the discharge.
Hunter Water said it had no comment about the BTEX findings.
"BTEX chemicals in the water are an absolute nightmare and the Greens want a permanent ban on coal seam gas and fracking in NSW," Jeremy Buckingham, Greens mining spokesman, said.
“AGL should pack up and leave the Gloucester Valley for good following this latest pollution incident before they do any more damage to either their battered corporate reputation or our precious water.
"How many more spills, leaks and accidents will it take before the government acts to ban coal seam gas?"