Government relaxes gas leak reporting requirements for coal seam gas industry

By Johanna Evans

The requirement for coal seam gas operators like Santos to report significant wellhead leaks has been dismantled by the NSW Government with a quiet update of the Code of Practice for Coal Seam Gas Well Integrity which has been replaced by a newer code that combines Well Integrity with the Fracture Stimulation Code. Released in February 2023 just weeks before the NSW State Election, it is now called the “NSW code of practice for construction, operation and decommissioning of petroleum wells”.

The new Code ceases to require reporting to the Resources Regulator significant leaks of methane. It is a step backwards at a time when the industry intends to step forward. The Code now simply states “titleholders must monitor wellheads for leaks in accordance with their well integrity management system and Leak detection and Repair program (LDAR).”

The previous Code stated, “gas leaks (‘wellhead reportable leaks’) must be reported to the department”. A Wellhead Reportable Leak was previously defined as “An emission due to an unplanned release from a well site facility that, at a measurement distance of 150mm immediately above (and downwind) and surrounding the leak source in an open-air environment above ground position; gives a sustained Lower Flammable Level (LFL) reading greater than 10% of LFL for a 15 second duration.”

NSW’s reliance on such a degree of self-regulation is not in the public interest, is likely to skew fugitive emissions factors and corrupt greenhouse gas offset arrangements for projects like Santos’ Narrabri Gas Project.

Leaks detected by EPA’s own LDAR program went unreported

In 2019 several Santos wells in the Pilliga Forest were discovered by the NSW EPA, as part of their internal Leak Detection and Repair Program (LDAR), to be emitting reportable amounts of methane. These leaks were reported to the operator but not to the Department, the Primary EPA Officer in charge of the LDAR program is now employed by Santos. Only the company was notified by the EPA and it is not clear how long the leaks had been occurring.

Leaking from gas fields is a serious issue from a climate, pollution and health and safety perspective, particularly in a fire-prone forest such as The Pilliga. Leaking infrastructure can increase emissions in the atmosphere and is mostly unaccounted for in greenhouse gas emissions audit reports.

The EPA previously determined the following three leak categories based on methane gas concentration:

Category 1: 1,000 to 9,999ppm (less than 1% of air) – minor
Category 2: 10,000 to 49,999ppm (1% to less than 5%) – serious
Category 3: 50,000ppm or greater (5% or greater of air) – significant

What is “FLIR” – Forward Looking Infrared Thermography (FLIR – OGI)?

Optical Gas Imaging (OGI) is thermal imaging technology that utilises high sensitivity infrared cameras for detecting fugitive emissions of industrial gases such as methane. Gas leak detection cameras enable the safe detection and visualisation of fugitive emissions leaks.

They give both a quantitative (using associated software) and qualitative analysis and if used correctly can calculate volumetric flows and provide video. OGI cameras measures in grams per hour and newer cameras parts per million (PPM).

North West Protection Advocacy obtained thermography (FLIR) footage and reports on four of the leaks via Government Information Public Access (GIPA EPA 833). We have made the reports available here. Three of these wells were leaking at Category 3 which is 4 times above the Lower Explosive Limit or Lower Flammable Level. These leaks came from a component known as an L2 Controller. The fourth well was leaking below the casing tubing hanger and required workover. This well will need to be plugged and abandoned.

The EPA failed to quantify the emissions rate using the thermography software. Instead, they used an Eagle “Gas Sniffer” which has too low a limit of reporting and “maxed out” on several occasions, the emissions rate being greater than the equipment was capable of measuring. The EPA claims they have training to use the thermography technology but when questioned were unaware that software could quantify the leaks.

At the NSW Parliamentary Inquiry into The implementation of the recommendations contained in the NSW Chief Scientist’s Independent Review of Coal Seam Gas Activities in New South Wales, held in 2019, the EPA’s CEO at the time, Mrs Tracey Mackey, reported:

“There was a total of nine reportable leaks detected during EPA leak detection and repair inspections in 2018-2019. All leaks were detected at well surface infrastructure; eight at the Narrabri Gas Project and one at the Camden Gas Project.

Of the eight leaks identified at Narrabri, six were identified as occurring as a function of the L2 Controller, a component of the well surface infrastructure. The EPA is currently working to determine whether this release of gas is an acceptable practice for this component of the well surface infrastructure, or if these gas releases should be classified as leaks and further action taken. The two remaining identified leaks at Narrabri were repaired within 24 hours by Santos.”

EPA misleads Parliament during CSG Inquiry

Despite it being known to the EPA that some of the leaks were serious or significant and thus reportable at the time, Mr Cowan (EPA Program Manager) said, when questioned by the Parliamentary Committee:

“As part of our Leak Detection and Repair program (LDAR), we identified some releases from those particular components. Santos explained that they were designed in that particular manner, so we went through a process over a number of months monitoring that equipment and following up and doing our due diligence just to find out whether that was, in fact, the case. We have just recently confirmed that those particular components were actually releasing as they were designed to do, with small amounts of gas being released as part of their operation.”

Justin Field MLC challenged the EPA official during the Parliamentary Inquiry.

Mr JUSTIN FIELD: But there was enough gas for you to identify.

Mr COWAN: Largely because we now have innovative new technologies to be able to identify these leaks. They are very minor.

Mr JUSTIN FIELD: So how much gas would you be talking about?

Mr COWAN: I would not be able to give you the specifics but it would be very small.

In fact the leaks were not “minor” as stated by Mr. Cowan. The leaks were well above the Lower Explosive Limits. The statements from Mr. Cowan are misleading. They posed a danger to community, the EPA, RFS, Forestry and Santos’ own employees. Video footage obtained by NWPA under Government Information Public Access legislation shows serious Work Health and Safety process risks being undertaken by EPA personnel and the EPA’s own Toolbox Take Five fails to mention the risks from wellhead leaks.

Leaks are a systemic in-built problem in gas harvesting

Liquid and gas level controllers, a component of the separation process, are designed to separate gas from water. They create displacement via a float type sensor to detect where the interface is between liquid and gas. They apply spring-loaded downward pressure to prevent the float from rising above the gas/water interface inside the separator and are meant to release liquid once the level gets too high. They are prone to ‘gas breakthrough’ if they aren’t tuned correctly, or if the float gets stuck (not uncommon). They can be better managed by Santos.

The L2 components on separators are problematic, they need consistent monitoring by the operator. Across a large gasfield this would be time-consuming. Correct calibration of this equipment is a constant of efficient wellhead pollution control and is essential to maintaining least-polluting scenarios. Gas wells do operate by “leaking”. The leaks are embedded in the system, and a feature of their operation, as leaks are across the entire CSG production system.

The LDAR Program, up for review this year, could improve the management of leaks from wellhead equipment. The EPA would be right to institute a three-monthly reportable audit system for any components of wellheads that are likely to leak including Linear Rod Pumps, Fieldvue and L2 Controllers. We call on the EPA to increase the frequency and breadth of audits, reflected in increased licensing fees, until fewer leaks are demonstrated on a consistent basis.

Now that the Code of Practice for Coal Seam Gas Well Integrity has been replaced and the requirement to report significant leaks removed (other than retrospectively) there are questions as to exactly what influence Santos brought to bear on the regulator to reduce leak monitoring and reporting so severely at the very time that public concern about fugitive emissions has escalated.

New EPA Licence condition reduces frequency of leak monitoring

Yet another revision made in favour of Santos is the change to their environmental protection licence reducing the frequency of leak checks from 6-monthly to 12-monthly.

Condition O6.8 previously stated: “2. All gas process plant and equipment must be checked for leaks at an interval not exceeding six (6) months, unless otherwise approved in writing by the EPA.”

It now states (unannounced in the EPL introductory text as per normal with variations) “2. All gas process plant and equipment must be checked for leaks at an interval not exceeding twelve (12) months unless otherwise approved in writing by the EPA.”

Wellhead equipment such as the L2 Controllers detailed above require checking more than once a year to ensure they are not releasing significant volumes of methane.

Santos now employs an ex-EPA Primary Officer who worked in Gas Regulation for several years and was responsible for numerous changes to the Environment Protection Licence that benefited the company, including removing the requirement to report groundwater data on numerous bores and allowing Santos to incorporate residual drilling material into the topsoil on the forest floor.

Changes made at the recommendation of the former EPA officer have manifestly weakened the ability of the EPA to regulate gas leaks and groundwater impacts. With new EPA Chief Executive Officer Tony Chappell in charge, and a new Minister for the Environment Penny Sharpe MLC, we hope to see some serious reflection about whether this trajectory is consistent with the EPA’s statutory objectives to prevent harm to the environment.