A NINE month investigation into Linc Energy’s pilot underground coal gasification (UCG) plant near Chinchilla has culminated in the Queensland Department of Environment and Heritage Protection charging the formerly Australia-listed company with causing serious environmental harm.

Environment and Heritage Protection Andrew Powell said while the harm allegedly caused to the environment was considered serious, the information available to the department suggested there was no immediate risk to neighbouring landholder water bores.

Mr Powell said the government took these matters seriously, adding that there were severe penalties for companies or individuals that failed to meet the state’s high environmental standards.

“The Queensland Government encourages emerging industries to develop, however they must comply with the state’s strong environmental laws,” he said.

“The department is continuing its formal investigation into the activities of Linc Energy Limited,” Mr Powell said.

A spokesman for Mr Powell told Oil & Gas Australia the matter would now be subject to the normal legal process, with the first court hearing relating to the charges set for 28 May.

If Linc is found guilty, the company will face a maximum penalty of $2 million for each charge.

UCG involves converting coal to a synthesised (or non-natural) gas via enforced combustion.

News of the charges comes a few months after Linc announced it was shutting down its Gasifier 5” (G5) demonstration UCG plant, which had been operating continuously for two years, and turning its UCG focus on Asia.

The move spelled the end of the company’s 14-year long involvement in Queensland, with Linc partly blaming the decision on lack of local support and an uncertain regulatory environment.

Linc Energy, which recently secured a listing on the Singapore Stock Exchange, said it would staunchly defend the allegations.

The company went on the defensive, saying the complaint and the summons served by the department weren’t specific about the nature of the alleged environmental harm and stressed that the allegations were not being viewed as being material to the company.

“They will not affect the normal operations of the company in any way or the various expansion plans we have for UCG around the globe and the reality is it will take two years or more for this process to play out,” Linc managing director and chief executive Peter Bond said.

“The company does not believe it has caused environmental harm as alleged, nor have we unlawfully affected any ecosystems.”

According to the company, the common thread of the allegations applies to issues in relation to older style technology.

“It must be remembered and indeed put into context that Linc Energy has had an on-going dispute with DEHP for a number of years now, a rift that essentially is based around the DEHP’s lack of knowledge of UCG and their unwillingness to learn about the UCG process,” Mr Bond added.

“This has led to issues of miscommunication and misunderstanding by some people within the Department and vice-versa, so I guess it’s no surprise that this dispute has occurred.”

Mr Bond said he was disappointed the DHEP had not given Linc the opportunity to formally respond to any allegations prior to this point in time.

“While we were aware that investigations were being undertaken, we assumed that we would get the opportunity to set the record straight,” Mr Bond said.

“It is also worth noting that Linc Energy has monitored the groundwater at site to a degree that far exceeds our legal obligations under our environmental licence requirements to do so and we have always been within the licence guidelines.”

The company had decided to publish the past few years of water sampling data on its website in what Mr Bond said was a show of good faith.

Linc completed its research and development program at Chinchilla in late 2013 and is in the process of decommissioning the site.