AGL voluntarily suspended operations at its Waukivory Pilot project in late January after benzene, toluene, ethylbenzene and xylene (BTEX) were found in samples of flowback water.
BTEX chemicals are banned in New South Wales for use in hydraulic fracturing, but can occur naturally in coal seams.
The NSW Environment Protection Authority (EPA) criticised AGL’s delay in informing the authority of the results of testing.
The EPA required AGL pump flowback water from four Waukivory wells in order to allow both it and the NSW Department of Resources and Energy to investigate AGL’s Gloucester’s operations.
In a statement, AGL said a total of five samples from three locations had been taken and four of the samples found BTEX concentrations in the range of 12-70 parts per billion, with the fifth sample having a BTEX concentration of 555 parts per billion.
The chemicals were found in baseline groundwater tests carried out before the commencement of the Waukivory pilot.
“None of the hydraulic fracturing fluids used at Waukivory contained any of the BTEX components,” the company said.
“The BTEX detected in the samples is most likely to be naturally occurring from within coal seams located at an average depth of approximately 600 metres and brought to the surface as part of the flowback of water from the hydraulic fracturing process.”
EPA chief environmental regulator Mark Gifford said identifying the source of the BTEX chemicals found in AGL’s samples would be part of the EPA’s investigation.
The EPA requested AGL provide it with a report outlining the results of the analysis undertaken on samples collected on 16 and 29 December 2014 and 12 January 2015 and an analysis of the scientific rigour of the sampling and analysis processes.
“The legal notice directs AGL to provide sampling results and quality assurance/quality control reports and all records relating to results of sampling that show a detection of BTEX,” Mr Gifford said.
In response to the EPA’s investigation, AGL said “After receiving the water monitoring results, AGL assessed whether the BTEX concentrations could harm the environment or affect human health, and concluded that no such harm arose.”
“Because of the community’s concern about any detection of BTEX and in the interests of acting prudently, AGL has voluntarily suspended the Waukivory pilot project until a full review of the sample results has been completed,” AGL managing director Michael Fraser said.