The NSW government is prosecuting the gas company Santos, which manages the Pilliga drilling sites in north-west NSW, over a spill of contaminated water and failures to lodge environmental management reports.
The allegations date back to 2010 and 2011, when Santos was a shareholder in Eastern Star gas, which was then the main operator at the site. Santos took over in November 2011.
Former deputy prime minister and Nationals MP John Anderson - who was the chairman of Eastern Star Gas - won’t be prosecuted, nor will the company’s directors.
“I am advised that action is not possible by the department against Eastern Star Gas or their directors, given the sale of the company to Santos in November 2011,” the Minister for Resources and Energy, Chris Hartcher, said in a statement.
“It is for this reason that proceedings have commenced against Santos. Amendments to the act currently before Parliament will enable the prosecution of directors in any future cases.”
The Pilliga site is an area of bushland and scrubland near Narrabri, mostly devoted to grazing and conservation. It makes up the biggest remaining temperate woodland in eastern Australia. Santos plans to develop several hundred gas wells there, to be serviced by hundreds of kilometres of pipes and roadways.
The company distanced itself from Eastern Star, saying it had been working to clean up the site and had spent $17 million improving work practices.
“Since acquiring Eastern Star, Santos has worked closely with NSW regulators to identify and correct Eastern Star’s previous practices and reporting processes,” a statement issued by the company said.
“On 22 February last year, Santos submitted a detailed report arising from its review of Eastern Star’s operations to the NSW Government. That report highlighted the previous owner’s failures in reporting.”
The company’s report outlined a litany of poor work practices under Eastern Star’s management.
There were 16 spills or leaks of contaminated water from the series of about 30 “test wells” drilled in the Pilliga.
The pollution ranged from serious spills of saline water into woodland and a creek, to more minor lapses, such as kangaroos drowning in a water storage area and not being reported.
The water treatment system “suffered from multiple leaks and incidents”, but the extent of environmental damage was unknown because records were lost, and some incidents were not recorded in log books.
The opposition environment spokesman, Luke Foley, said that the prosecution showed that the government should not have renewed Santos’ exploration license to drill last year.
“It is extraordinary the O’Farrell government renewed coal seam gas operation licences in the Pilliga Forest when investigations into serious breaches were not complete, and have now led to prosecutions,” Mr Foley said.
“The fact we now have the government initiating prosecutions against Santos, despite the minister renewing these licences only last year, confirms the O’Farrell Government was never serious about protecting our land and water from coal seam gas activity.”
It is unclear whether the leaks in a water storage dam have been fixed, or if they present an ongoing problem.
Santos told Fairfax Media last week that the problem was old, but that more monitoring devices were being installed.
But correspondence from the NSW Environment Protection Authority to the company on May 22 warned of a “suspected leak at the main holding pond at Bibblewindi”.
The company has applied to drill eight new pilot wells on the site, and said a completely new water treatment system will be built to service them and treat the saline water that will be brought up when the gas is extracted.
“Santos has always made clear that the rehabilitation of small impacted areas of the Pilliga Forest will be addressed prior to our investment in a safe, sustainable project that could deliver in excess of 25 per cent of NSW’s gas needs,” the company said in its statement.
The Wilderness Society called for drilling at the site to be stopped until the prosecutions were complete and any subsequent leaks were investigated.
“Given their track record, Santos plans for 400 wells in the Pilliga Forest could turn the region into the biggest environmental disaster zone NSW has seen,” said a spokeswoman, Naomi Hogan. “Santos has not shown they can fix the past damage, let alone start drilling and spilling again on a larger scale.”
