Norwest Energy NL : WA govt dismisses frac concerns

Monday, 5 March 2012

The judgement from Marmion affirms the Environmental Protection Agency's original assessment to not
assess the fraccing proposal due to the small scale of the frac job to be undertaken at Arrowsmith-2.
However, both environmental and industry groups have cast the decision as a de facto decision on the future of fraccing in the state.
Australian Petroleum Production and Exploration Association chief operating officer for the Western Region, Stedman Ellis, said: "The minister's decision is based on sound science and it will provide effective environmental protection while reducing unnecessary delays.
"The gas industry has a 40-year history of successful production in Western Australia - including the use
of hydraulic fracturing," he said.
"Fraccing has been used internationally for more than 60 years in more than 2 million oil and gas wells. It is a well understood process that has been studied many times and in several countries. It has consistently been shown to be safe."
APPEA said it supported a robust, transparent and proportionate regulatory system backed by an industry code of operating practices for shale and tight gas hydraulic fracturing.
However, the Conservation Council of WA was less than pleased with the news.
"Gas fraccing in coal and shale deposits has caused serious groundwater contamination and even earthquakes elsewhere, yet the minister responsible for protecting Western Australia's environment and water resources has allowed this industry into WA with no environmental assessment by the EPA," CCWA director Piers Verstegen said.
"The minister has stated that environmental impacts and groundwater contamination can be adequately managed by the Department of Mines and Petroleum, however two independent reviews have found this agency is failing to monitor the conditions it places on existing mining projects."
In September last year a report by state auditor-general Colin Murphy found an inadequate amount of supervision of mining projects was being undertaken by the DMP.
Only half of the state's mining companies were found to have submitted their required annual
environmental reports to the DMP and those that did not were rarely followed up.
"Clearly the WA community cannot have confidence in the DMP's deeply flawed environmental regulations when it comes to assessing the environmental impacts of gas fraccing and protecting our most precious groundwater resources from this toxic industry," Verstegen said.
However, arguably the biggest impact will be on Norwest Energy and its partners on Arrowsmith-2, AWE Limited and Bharat PetroResources.
"This decision is critical in paving the way for Norwest to finally prove the shale gas potential at
Arrowsmith-2," Norwest chief executive Munachen said.
"Success will ultimately contribute to the development of what is expected to be a significant shale gas industry in Western Australia, generating economic benefits to local communities such as employment, training and associated business opportunities, as well as significant royalties."
The delay in regulatory approval for its fraccing program has led to delays in securing key fraccing equipment for the job, with a Haliburton frac spread currently tied up in the Cooper Basin until April.
It said barring further delays, the frac spread will be mobilised to the North Perth Basin in late April, with
Norwest currently hard at work preparing the site and procurement activities.
Norwest Energy's shares shot up on the Frankfurt Stock Exchange during the last day's trade, rising
48.39% to 4.6 euro cents as European investors digested the news.