Sinclair Knight Merz (SKM), an engineering and project delivery firm, says an upfront investment in environmentally and socially sensitive design is likely to pay dividends for the coal seam gas (CSG) sector. SKM: “CSG is an important growth industry for Australia and Asia, particularly China, India, and Indonesia. It has the potential to underpin significant economic growth in the Asia-Pacific region and contribute to global energy security. Conversely, failure to recognise and address the potential environmental and social impacts may undermine the success of individual projects and possibly even the industry as a whole.”

In the past decade, CSG has emerged as a flexible, clean and competitive source of energy in the search for lower emission fuels. It is predominantly methane (chemical formula CH4) with lesser amounts of carbon dioxide and other trace gases and is also known as coal bed methane. As another source of natural gas, CSG can be used in the same way as gas from conventional gas wells to power water heaters, stoves and space heaters in both domestic and business settings. It can be used as a direct source of power for industry and as a fuel for electricity generation.

SKM: “From a global environmental sustainability perspective, CSG can help the community transition to a low greenhouse gas emissions future. Greenhouse gas emissions from gas-fired power generation are significantly lower than those from coal-fired power generation, so the expansion of gas-fired power generation in place of coal can help slow global emissions growth and act as a bridge between traditional power generation and renewable technologies.

“While the CSG industry has the potential to deliver global benefits, it could also impose significant environmental and social costs on those living in and around projects. These developments will be undertaken over vast geographic areas, with infrastructure distributed across areas of up to several thousand square kilometres.

“Every existing land use within a project area will be affected, including grazing, agriculture, nature conservation and other areas of environmental or social/cultural significance. As such, the CSG industry has the potential to cause significant changes to existing landscapes.”

The potential environmental impacts associated with this transformation include:

• Increased habitat fragmentation
• Increased weeds and invasive species
• Land and water contamination due to improper treatment and disposal of ancillary water
• Nuisance environmental impacts such as increased noise and dust
• Loss of visual amenity associated with current landscapes
• The social impacts associated with the CSG industry may also be extensive.

Communities in or surrounding project areas will derive economic benefits as a result of job and business creation. However, there could be negative impacts as well. Large-scale resource developments in regional areas can result in:

• Increased pressure on housing resulting in rapid growth in house prices and rents
• Increased pressure on education and health services
• Reduced road safety due to the increased movement of heavy vehicles
• Gender imbalances due to an influx of male workers.

SKM: “Local environmental and social impacts are critical risk factors that should not be taken lightly. An adverse community reaction may result in protracted disputes and delays with real financial impacts on the success of projects, as well as damage to corporate reputation and a diminished social licence to operate.

“Where multiple projects are being undertaken in adjacent areas, the risks associated with environmental and community impacts may be magnified. The community as a whole may not distinguish between the activities and impacts of one project and those of another. As such, failure to adequately address these issues may have a significant impact on public perception of the industry as a whole, with implications for all.”

CSG projects will require significant capital expenditure due to the amount of infrastructure required to undertake gas extraction over large geographic areas. As such, minimising capex is critical, but should not come at the expense of environmental or social considerations.

SKM: “Large capital and infrastructure projects do not always pay sufficient attention to the risks associated with the external environmental and social impacts. Indeed, there are many examples of projects that have gone awry as a result of a hostile community reaction.

“Proper project planning and an evaluation of risks will assist companies to justify appropriate investments in sustainable design and other forms of community investment. Ultimately, this should result in lower life cycle costs and improved financial returns.

“Sustainability in large capital projects requires environmental and social issues to be systematically integrated as central considerations to be addressed through project planning and design. However, this is more easily said than done.

“True integration requires a number of key elements:

• A project proponent with a corporate commitment to sustainability
• The proponent’s project manager requires clear incentives to deliver on corporate sustainability commitments through project planning, design and execution
• Where consulting engineers are involved, they need:
  • A corporate commitment to sustainability
  • A project manager who understands the importance of sustainability and is willing to push their team to deliver more sustainable outcomes
  • A project team that is open to new ideas and prepared to push beyond ‘business-as-usual’ practice
  • An appropriately trained and skilled sustainability champion within the project team to drive the sustainability agenda and provide analytical support.”

The company says that with these elements in place, it is possible to develop a more complete set of constraints around which to formulate project objectives and identify and implement practical initiatives for achieving those objectives.