2.3.4.1 Developing the coal resource development pathway


The coal resource development pathway (CRDP) is informed by companion product 1.2 for the Clarence-Moreton bioregion (Raiber et al., 2014) and based on the judgment of the Assessment team. The Assessment team used all publicly available evidence and followed the approach outlined in companion submethodology M04 (as listed in Table 1) for developing a coal resource development pathway (Lewis, 2014) to evaluate the potential for each coal resource development to proceed to future commercial production. The CRDP is based on information available as of July 2015 and was finalised after feedback provided at two CRDP workshops held in December 2014 in Brisbane and Sydney. Representatives from the Commonwealth Office of Water Science, state government departments and agencies and industry attended the workshop.

In BAs, the CRDP includes all baseline coal resource development (baseline) plus any additional coal resource development (ACRD) continuing into the future. Baseline is defined as a future that includes all coal mines and CSG fields that are commercially producing as of December 2012. The CRDP is defined as all coal mines and coal seam gas (CSG) fields, including expansions of baseline operations that are expected to begin commercial production after December 2012. Groundwater modelling for the Clarence-Moreton bioregion is described in more detail in companion product 2.6.2 (Cui et al., 2016).

A detailed overview of the existing coal or CSG exploration programmes in the Clarence-Moreton bioregion is given in the companion product 1.2 for the Clarence‑Moreton bioregion (Raiber et al., 2014).

Some of the key points of product 1.2 include:

  • There is currently only one operational coal mine in the Clarence-Moreton bioregion (Jeebropilly Mine, west of Ipswich); coal production at the Jeebropilly Mine will continue until 2017, followed by rehabilitation and closure.
  • There are several coal mines west of Ipswich that have been closed recently, and which are currently undergoing revegetation and rehabilitation. In particular, the New Oakleigh Coal Mine closed in 2013 after many decades of operation. As commercial coal production had effectively ceased by December 2012, and the main focus of operations in 2013 was rehabilitation and revegetation as per their mine closure plan, the New Oakleigh Coal Mine was not included in the baseline for the Clarence-Moreton Bioregional Assessment.
  • There has been no previous commercial CSG development within the Clarence-Moreton bioregion.
  • There are several conventional gas exploration programmes within the Clarence-Moreton bioregion (out of scope for BAs).
  • There are multiple CSG exploration programmes in the Clarence-Moreton bioregion. Two companies have conducted pilot testing in Queensland (Arrow Energy Pty Ltd) and NSW (Metgasco). After consideration of the current stage of exploration or appraisal and discussion with the relevant CSG companies, it was decided that the only potential CSG development that may proceed to a production stage within the foreseeable future in the Clarence-Moreton bioregion is Metgasco’s potential development near Casino in the Richmond river basin of NSW.

A recent decision by Metgasco (16 December 2015) to sell back their petroleum exploration licenses (PELs) and petroleum production license application (PPLA) to the NSW Government effectively means that future development of any CSG resources in the Clarence-Moreton bioregion is highly uncertain. However, it is important to state that, as per the companion submethodology M04 (as listed in Table 1) for developing a CRDP (Lewis, 2014), once the CRDP is determined, it is not changed for BA purposes, even in cases such as this where Metgasco have now discontinued their operations in the Clarence-Moreton bioregion.

As highlighted above, there are no existing CSG developments within the Clarence-Moreton bioregion. The only operating coal mine within the Clarence-Moreton bioregion (Jeebropilly Mine) is located more than 120 km away from the potential CSG development area near Casino. This coal mine is included in the baseline. The three-dimensional geological model of the Clarence-Moreton bioregion confirms that there is no hydraulic connection between the Bremer river basin (where the only operating coal mine is located) and the Richmond river basin, as there are multiple regional-scale basement highs (e.g. Mt. Barney basement high and South Moreton Anticline; Figure 35) that separate the hydrostratigraphic units in these depositional centres (Section 2.3.2.2.3). This lack of hydraulic connection between the Bremer and Richmond river basins led the Assessment team to focus only on modelling impacts for the West Casino Gas Project, and not include the Jeebropilly Mine in the groundwater model development.

2.3.4.1.1 West Casino Gas Project

Metgasco has carried out an exploration programme covering an area of about 4550 km2, which included drilling of wells to evaluate both conventional (out of scope for BAs) and unconventional gas resources and assessing various drilling techniques in the Walloon Coal Measures and other stratigraphic units in NSW in PEL 13, PEL 16 and PEL 426 (Table 16; companion product 1.2 for the Clarence-Moreton bioregion (Raiber et al., 2014)). Most of the exploration programme carried out by Metgasco has focused on the upper Richmond Seam, which is the shallowest coal seam of the Walloon Coal Measures in areas where the thickest accumulation of Walloon Coal Measures has been observed in the Casino Trough, west of Casino. The focus on this area is attributable to the combination of highly gas-saturated coal seams, which also have a relatively high permeability, ensuring gas flow without significant early water production compared to other CSG operations (Raiber et al., 2014). CSG extraction from the Walloon Coal Measures in the Casino Trough was initially expected from depths of approximately 500 to 700 m (Metgasco, 2007), but exploration along the western side of the Casino Trough has revealed that high levels of gas saturation occur at depths as shallow as 250 m.

The Metgasco project near Casino is the only ACRD defined in the CRDP for the Clarence-Moreton bioregion.

2.3.4.1.2 Timeline of developments

2.3.4.1.2.1 West Casino Gas Project

If CSG development in the Richmond river basin proceeds, it will initially likely focus on the Richmond Seam (shallowest and thickest coal seam) in the most prospective exploration areas west and north-west and south of Casino. At a later stage, CSG from deeper coal seams in this area may also be developed. As described in companion product 1.2 for the Clarence-Moreton bioregion (Raiber et al., 2014), in 2012, Metgasco commenced plans to apply for a petroleum assessment lease (PAL), which would have allowed the development of up to five wells, and for a larger petroleum production lease (PPL) north-west of Casino (Table 16). However, the work on this ‘West Casino Gas Project’ was put on hold due to the uncertainties related to CSG development in the Richmond river basin.

In 2013, Metgasco commissioned Parsons Brinkerhoff to conduct a groundwater modelling study to evaluate potential impacts of depressurisation of the Walloon Coal Measures in the area west of Casino. Due to uncertainties with regards to the potential development of CSG resources in the Richmond river basin, it is presently not possible to specify potential well locations. The assumptions underpinning the groundwater model developed as part of the BA for the Clarence-Moreton bioregion are therefore based on a report by Parsons Brinkerhoff (2013), which outlines some assumptions on a base-case development concept for the potential West Casino Gas Project, and shows the hypothetical locations of wells within this potential CSG development area.

Some of these assumptions are:

  • The potential gasfield will have a 20-year project life.
  • The potential gasfield will consist of 90 wells located within the PPL, with at least 1 km between adjoining wells.
  • Development would occur in different stages over a 19-year time period.
  • Each wellhead will source two lateral wells within the Richmond Seam of the Walloon Coal Measures.

In its report to Metgasco, Parsons Brinkerhoff (2013) noted that the final development concept may differ, for example, with regards to the staging of the wells and the orientation of the lateral wells. The extent of the potential gas development area west of Casino assumed by Parsons Brinkerhoff (2013) for the development of the groundwater model is shown in Figure 35 . Due to the uncertainty associated with potential CSG development in the Richmond river basin, it is difficult to predict timelines of future development. For the purpose of developing the groundwater model for the Clarence-Moreton bioregion, it was assumed that development would commence in 2018.

As outlined in companion product 1.2 for the Clarence-Moreton bioregion (Raiber et al., 2014), discussions with Metgasco suggested that the area west of Casino has been identified as the most prospective exploration area.

However, in addition, as of July 2015, there is a pending PPLA, PPLA 9, south of Casino (Figure 35). PPLA 9 is partly located within the 2 km residential exclusion zone (Figure 35). No further details are known about the staging or number of wells of this potential development. However, due to the focus of potential development on the gas resources west of Casino, it was assumed that PPLA 9 would only be a small development with up to five wells. As for the area west of Casino, in the absence of more specific knowledge, it was assumed that the development would commence in 2018; hypothetical well locations close to the existing exploration wells were chosen for the purpose of groundwater modeling for the bioregional assessment.

As stated previously, in December 2015 Metgasco decided to discontinue its proposed development of the West Casino Gas Project. However, as per the companion submethodology (as listed in Table 1) for developing a CRDP (Lewis, 2014), once the CRDP is determined, it is not changed for BA purposes. This means that the timeline described will continue to form the basis for the groundwater modelling.

Table 16 Existing operations and proposed developments in the baseline coal resource development and coal resource development pathway for the Clarence-Moreton bioregion as of 01 July 2015

The primary activity in bioregional assessments (BAs) is the comparison of two potential futures: (i) the baseline coal resource development (baseline), a future that includes all coal mines and coal seam gas (CSG) fields that are commercially producing as of December 2012; and (ii) the coal resource development pathway (CRDP), a future that includes all coal mines and CSG fields that are in the baseline as well as those that are expected to begin commercial production after December 2012. The difference in results between CRDP and baseline is the change that is primarily reported in a BA. This change is due to the additional coal resource development (ACRD) – all coal mines and CSG fields, including expansions of baseline operations, that are expected to begin production after December 2012.


Name of existing operation or proposed development

Coal mine or coal seam gas operation

Company

Included in baseline?

Included in coal resource development pathway (CRDP)?

Start of mining operations or estimated project start

Projected mine life or estimated project life

Tenement(s)

Total coal resources (Mt)b (for coal mining)or 2Pc gas reserves (for CSG) (PJ)

Comments

West Casino Gas Project

CSG

Metgasco Pty Ltd

No

Yes - model

Unknown, assumed to be 2018 for the purpose of groundwater modelling

20 years

PEL13, 16 and PPLA 9

338a

As of mid-2015, planning in advanced stage; commissioning of a modelling study in preparation for EIS (Parsons Brinckerhoff, 2013); as of mid-2015, existing application for a petroleum production license (PPLA 9).

In September 2014, Metgasco has announced that its gas reserves and resources have been downgraded from those reported in 2013, with all reserves moved to the resource category (Metgasco, 2014).

On the 16 Dec 2015, Metgasco has decided to sell back their petroleum exploration licenses (PELs) and petroleum production license application (PPLA) to the NSW Government.

Jeebropilly Mine

Coal mine

New Hope Group

Yes – not modelled

Yes

1982

Over 25 years (mining operations will cease in 2017 followed by rehabilitation and closure)

NA

131b

The assessment of geology and hydrogeology (Section 2.3.2 of this product) showed that there is no hydraulic connection between the Richmond river basin and the Bremer river basin (where the Jeebropilly Mine is located).

This lack of hydraulic connection led the Assessment team to focus only on modelling potential impacts in the ACRD (West Casino Gas project), and not include the Jeebropilly Mine in the groundwater model development.

aThis number corresponds to the total 2P gas reserves reported by Metgasco. However, in September 2014, Metgasco announced that it has reclassified its gas reserves as resources (Metgasco, 2014).

bIndicates the different resource classes that may combine to form the total resource tonnage – typically these are reported in accordance with the Joint Ore Reserves Committee (JORC) Code. For example, the different JORC resource classes of measured, indicated and inferred resources could be shown (or whichever combination of resource classes is applicable for each project).

cproved plus probable reserves

NA indicates that data are not available to the authors

PEL = petroleum exploration lease, PPLA = petroleum production license application

Figure 35

Figure 35 Maximum extent of the additional coal resource development (ACRD) in the Richmond river basin

The extent of the coal resource developments in the coal resource development pathway (CRDP) is the union of the extents in the baseline and in the additional coal resource development (ACRD).

Data: NSW Department of Trade and Investment, Minerals Resources, Petroleum Geoscience (Dataset 1); Bioregional Assessment Programme (Dataset 2, Dataset 3 and Dataset 4)

Last updated:
11 July 2017
Thumbnail images of the Clarence-Moreton bioregion

Product Finalisation date

19 January 2017