AGL ENERGY has started a coal seam gas pilot project in New South Wales after receiving approval from the state government – but the move already has protestors up in arms.

The company applied to fracture stimulate and flow test four existing wells, known as the Waukivory Pilot Project, within Petroleum Exploration Licence (PEL) area 285 in September last year.

The NSW Office of Coal Seam Gas (OCSG), under the state’s Department of Resources and Energy, has approved AGL’s Fracture Stimulation Management Plan and with it granted an activity approval to the company.

AGL managing director Michael Fraser has welcomed the approval for the project, located near Stratford, about 100 kilometres north of Newcastle.

“At present NSW produces less than five per cent of its own gas and imports the rest from interstate,” he said.

“However if the Gloucester Gas Project proceeds, we have the potential to bolster that locally produced gas figure to around 20%.”

“All of the natural gas produced from the Gloucester Gas Project is for NSW customers and will not be exported,” said Mr Fraser.

Speaking about the approval, NSW Resources Minister Anthony Roberts said the AGL application had included a review of environmental factors, an agricultural impact statement and a fracture stimulation management plan.

“A Groundwater Modelling and Monitoring Plan, as well as a Produced Water Management Plan must be completed,” he said.

“AGL must comply with the NSW Government’s Code of Practice for Coal Seam Gas Fracture Stimulation Activities and Code of Practice for Coal Seam Gas Well Integrity.”

The OCSG had obtained advice from the Environment Protection Authority, the Office of Environment, and Heritage, the NSW Office of Water, the Department of Primary Industries and an independent expert before deciding to grant its approval, he added.

The OCSG also considered submissions from the Gloucester Groundswell community group, a media release from Mr Roberts’ office said, while AGL said it had been consulting with the community since 2009.

But the group, in concert with other campaigners, has continued to vocalise its opposition to the project, calling on AGL to commit to not conducting any coal seam gas activity within two kilometres of homes.

The NSW Government has imposed a two kilometre exclusion zone from homes on AGL’s coal seam gas operations near Camden, in Sydney’s southwest.

Members of the group refused a meeting in August with Land and Water Commissioner Jock Laurie, along with the Environment Protection Authority, the Office of Coal Seam Gas and other parties to talk at the Gloucester council chambers.

A statement released by the group said the purpose of the meeting was unclear – saying it wanted to communicate in a frank and timely manner.

“Recently we have seen the advent of the Gloucester Dialogue that purports to do this but it is merely a disguised attempt to aid AGL in buying a social licence for their project,” the group said.

“Previous meetings with OCSG have been marred by vagueness, lack of commitment to real communication and undertakings that were not kept.”