Peter Ker and Philip WenNovember 4, 2011 - 5:01PMControversy...

Peter Ker and Philip Wen
November 4, 2011 - 5:01PM
Controversy over ''fracking'' is set to reignite in Australia, after a British report found the contentious mining tactic was likely to have caused seismic activity in the UK earlier this year.

A team of European seismic experts have concluded it was ''highly probable'' that two tremors and series of aftershocks that hit the British town of Blackpool earlier this year were caused by nearby fracking.

Fracking - otherwise known as hydraulic fracturing - is a method of extracting gas from deep underground which has concerned environmentalists for its potential to contaminate acquifers.

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Australia is in the midst of a fracking boom, particularly in New South Wales and Queensland.

The Blackpool incident occurred after fracking was conducted by Cuadrilla Resources - a British company that is 42 per cent owned by Australian drilling services company AJ Lucas.

The tremors in April and May, of magnitude 2.3 and 1.5, near the seaside resort of Blackpool, did not cause any damage.

The report said the cause was an "extremely rare" combination of factors including a pre-existing fault in the rocks, and that it was unlikely to occur at other sites in the area.

The report concluded that any seismic event would be limited to around magnitude 3 on the Richter scale as a worst-case scenario.

Cuadrilla has not conducted any further fracking in the region around Blackpool since the second tremor in May.

AJ Lucas services the major coal and coal seam gas basins in Queensland and NSW including in the Hunter Valley, Bowen Basin and Surat Basin. It is also a building and construction contractor.

The fracking of deeply buried shale beds for gas is in its infancy in Britain, with the Cuadrilla well the first for the country. It is also in its infancy in Australia, but it is integral to the $50 billion coal seam gas industry being developed in Queensland.

Fracking techniques are also being used at another coal seam gas operation, at Camden, south of Sydney.

It is run jointly by AGL and Sydney Gas, which holds many other petroleum exploration licences around the edges of the city.

Australia's peak body for oil and gas, APPEA, has long defended fracking as a safe way to develop new forms of energy.

Responding to the British report, APPEA's chief operating officer for Eastern Australia, Rick wilkinson said; "Our view that fracking is a well-understood and heavily regulated technology in Australia is unchanged".

But the Lock the Gate Alliance, which has mounted a vocal and high-profile campaign against coal seam gas in NSW and Queensland, said that concerns about shale gas fracking and seismic activity had existed for some time and should have been considered before exploration permits were granted.

President Drew Hutton said he was was ‘‘just as opposed’’ to shale gas as coal seam gas, saying the risk of seismic activity was ‘‘only one of a whole raft of problems that shale gas has’’.

‘‘The reason it hasn’t become an issue up until now is because it hasn’t had the land owner issues,’’ he said. ‘‘If [shale gas companies] start moving in and entering people’s properties we will lock the gate on them as well.’’

AJ Lucas's shares have been suspended from trading on the Australian stock exchange since May as it worked on a recapitalisation plan.

Hong Kong-based Kerogen Capital announced in September it would take a 15 per cent stake in the group through a $13.4 million share placement.