The AGL coal seam gas drilling site near Gloucester. Credit:Ryan Osland Fairfax Media has copies of two such letters to AGL in February and September 30 last year, the latter of which told AGL that "Hunter Water is not to be approached as a potential disposal source for groundwater from the Gloucester Gas Project". The agency said it also told AGL as standard policy it does not accept any wastewater from outside its region, regardless of how it was treated. Hunter Water was alerted to the discharge by reports in the Newcastle Herald last month. Anti-CSG activists were also a trigger after vigilant protesters followed two Transpacific tankers from Gloucester all the way to Newcastle in early December. Katrina Pearson said she trailed the first convoy, often driving at high-speed on country roads to keep up.

Chase: Protesters followed two Transpacific tankers from Gloucester all the way to Newcastle in early December. Credit:Katrina Pearson "I was absolutely flat out," the former business analyst and Taree resident said. "I had my ears pinned back keeping up as they were doing over 100km/h in places." As part of its probe, Hunter Water demanded Transpacific reveal all its discharges for last year and part of 2013. The data was handed over on Thursday. "Hunter Water will meet with Transpacific once its investigation is concluded and retains its right to suspend or terminate the trade waste agreement should Transpacific be unable to commit to the conditions attached to it," Jeremy Bath, group manager for public affairs, said. The NSW EPA has also asked Hunter Water to forward the data by January 19 as part of its own investigations into Transpacific for an alleged breach. It is yet to start regulatory action against AGL or Transpacific over the flowback water.

"The NSW EPA has written to AGL to express its concerns and ask for confirmation that the company has appropriate arrangements in place to ensure its flowback water is disposed of lawfully," an EPA spokeswoman said. "If either company is found to have acted illegally the EPA will consider regulatory action." A spokesman for Transpacific said: "We consulted with Hunter Water prior to discharging and the circumstances around this are being reviewed." New Labor leader Luke Foley, who also handles the Opposition's environment portfolio, said AGL's plan to expand the pilot program to 110 wells should be halted. "Approvals should not be given for any expansion of this project until there's a plan for how to treat the flowback water," Mr Foley said. "All liquids discharged to the Hunter Water sewage system must be in accordance with a trade waste agreement between Hunter Water and Transpacific," a spokesman for Energy Minister Anthony Roberts said. "If this agreement is not being adhered to then this is very concerning and not acceptable."

AGL said the flowback water is now being sent to a plant near Windsor run by Worth Recycling. All of the water is recycled, with none of it discharged into the local sewer network. "The huge volume of waste containing heavy metals, hydrocarbons, salt and other chemicals is one of the biggest issues for the coal seam gas and one where the industry does not have a satisfactory solution," said Greens MP Jeremy Buckingham. "The Greens are concerned that processing the waste products in Windsor may lead to pollution of the Hawkesbury River and put at risk the horticulture, tourism and fishing industries that rely on the river."