Gas mining planned for underground Sydney

SYDNEY, Nov. 15 (UPI) -- Mining for coal seam methane gas is set to begin underground in Sydney as early as next year.

Australia's Apollo Gas, via a subsidiary, Macquarie Energy, was granted a license in October 2008 to prospect across a region in Sydney covering 1,269 square miles, The Sydney Morning Herald reported Monday.

Apollo confirmed Monday that the plan calls for Macquarie to drill one exploration core hole in an industrial district in St. Peters, a suburb 4.7 miles from the center of Sydney. Core hole drilling, Apollo said, is a standard method of exploring for coal seam gas to gather crucial data. It doesn't produce gas or water.

While Macquarie was granted permission in March for drilling, the Sun-Herald newspaper reports that residents weren't informed and even the local council was unaware of the project.

Greens MP Cate Faehrmann called for the project to be halted to give the public an opportunity to assess it and comment on its impact.

''This approval demonstrates a serious lack of transparency around the approvals process,'' she said, the Herald reports. ''Inner-west residents will be horrified to learn that their suburb could be the subject of a full-scale gas extraction operation.

''Gas companies don't undertake exploration just for the sake of it. This could very well be the first step in Sydneysiders having to live with gas wells and drilling operations for some time.''

As for environmental concerns, Apollo Gas Managing Director Andrew Mayo denied that the company intends to use the controversial fracking technique in which water, injected with sand, salt and chemicals is used to fracture rock to force gas to the surface.

''Based on all of our geological knowledge to date, we would definitely not be using the fracking technique,'' Mayo said.

''It is very early days but, should we move into production, we would be using tried and tested surface-to-in-seam drilling technology, which does not require any fracking.''

The drilling announcement follows Arrow Energy's disclosure last week that monitoring tests had detected traces of benzene in three of 60 fluid samples taken from its gas wells in the northern Bowen Basin in central Queensland.

Sydney aims to switch from coal-fired electricity to gas to power the city, with a population of more than 5 million.

The International Energy Agency said last week that Australia is positioned to overtake Norway to become the third largest gas producer among the Organization for Economic Co-operation and Development countries by 2035.