My story on Lock the Gate Alliance’s Drew Hutton’s tour of Victoria took a big cut this morning in the paper, so here is what didn’t make it (in fact not much did expect Hutton).

Despite Hutton’s tour it is pretty clear coal-seam gas development is an unlikely prospect for Victoria, at least in the short—term.

First there are only seven current coal-seam gas exploration licences or applications for licences in the state. Here they are:

Tenement No Owner Application Date Grant Date Expiry Date Status Municipality Status

EL5274 ECI International 31/03/2010 Application Sth Gippsland Application

EL5275 ECI International 31/03/2010 Application Wellington Shire Application

EL5276 ECI International 31/03/2010 7/07/2010 6/07/2015 Current Sth Gippsland Shire Current

EL5277 ECI International 31/03/2010 16/12/2010 15/12/2015 Current Colac Otway Shire Current

EL5320 ECI International 5/11/2010 7/04/2011 6/04/2016 Current Baw Baw Shire Current

EL5321 ECI International 5/11/2010 7/04/2011 6/04/2016 Current Baw Baw Shire Current

EL5322 ECI International 5/11/2010 Application Sth Gippsland Shire Application

These licences grant exploration for coal-seam gas only. When you count exploration licenses that include coal-seam gas among several commodities the number rises to around 30.

It is also important to note that the major gas players — Santos, Origin etc — are not in Victoria. That leaves what activity there is to minor players who are nowhere near big enough to develop projects on their own and are probably just speculators.

The coal-seam specific licenses are held by Exhaust Control Industries, a firm that to date specialises in air pollution control. ECI is working with a group called CFT Holdings, which works in gas liquefaction products. There seems to be some crossover between the two companies in terms of directors.

CFT co-director Robert Pertich sent this information sheet to me yesterday about the technology they say might be used, and the state of their Australian projects – 021011 – CBM in Victoria

Key is this line:

‘‘ECI/CFT are in the process of deciding if the Colac area is suitable in the first instance, but the project needs to be viable before proceeding to exploration. The coals are generally very thin and not extensive, so considerable doubt exists at present.’’

Pertich later told me it was unlikely the group was unlikely to push on with its Colac license after a review of publicly available data, but would make a final decision this week. They will now move on to assess their Gippsland licenses.

Beyond this Dr Gavin Mudd, a groundwater expert from Monash University who has been following coal-seam development issues, told me that generally brown coal — the significant majority of Victoria’s coal resources — doesn’t tend to hold much methane because it is too geological young, thus not suitable for coal-seam gas.

There are some black coal reserves around Wonthaggi but whether they are big enough to generate commercially viable amounts of methane remains to be seen.

Also this is from the Victorian Department of Primary Industries on the regulations that are in place to protect groundwater assets:

”It is important to remember that there is currently no production of coal seam methane in Victoria and nor are there any applications to begin production. In the case of the exploration licences that have been granted, no work plans have yet been submitted laying out proposed exploration programs.

Victoria has strict regulations that provide strong protection of groundwater from pollution. The State Environment Protection Policy (Groundwaters of Victoria), under the Environment Protection Act 1970, does not allow discharge that will pollute groundwater. Impacts on ground water are also regulated by regional water corporations, under the Water Act 1989.

Under Victoria’s Mineral Resources (Sustainable Development) Act 1990 (MRSDA), a company would need to submit a work plan for approval by DPI before they could begin significant exploration works. That plan would need to identify any potential environmental risks and detail how they would be mitigated. It is standard practice for DPI to refer such plans to other relevant agencies for their advice and input on technical matters on a case by case basis. The assessment of such proposals is then able to be informed by the best advice from expert agencies so that Victoria’s water resources are not put at risk.

The standard conditions of all exploration licences include conditions specific to aquifer interception and protection. These issues are also dealt with in more detail in the code of practice for mineral exploration under the MRSDA.”