Australia’s Cougar Energy was granted a voluntary suspension of trading in the company’s shares by the Australian Securities Exchange (ASX) after it was advised an environmental protection order on its underground coal gasification (UCG) plant near Kingaroy would not be lifted until a full review was completed.
Queensland’s Department of Environment and Resource Management (DERM) ordered Cougar to close the plant last week after it received advice from the company that water quality tests detected carcinogenic chemicals, benzene and toluene, in groundwater monitoring bores close to the plant.
However, tests on eight bores in and around the plant only detected small trace levels of hydrocarbons, 95% lower than Australian drinking water guidelines, which DERM said did not represent a risk to human health.
The department said it would continue to sample the eight bores and expand its testing to a wider selection of bores over the next week as a precautionary measure.
As a result Cougar has been ordered to keep the plant closed until an environmental evaluation to provide detailed information about the company’s water quality monitoring is completed and reviewed.
Cougar said it had suspended trading on the ASX as its board of directors assessed the implications of the department’s decision to not lift the environmental protection order
It added that it would also have to review access to capital for new works required to be completed by DERM and for on-going operations.
DERM has said Queensland’s two other trial UCG sites located in Chinchilla, owned by Carbon Energy and Linc Energy, will also need to carry out environmental evaluations but have been allowed to continue their operations.
Once completed, an independent panel will assess the evaluation results and if it determines the plants cannot operate without environmental harm, the pilot projects will not be given approval to continue.