Gherang geothermal proposal

estimates

ECONOMICS LEGISLATION COMMITTEE - 10/02/2010 - Department of Resources, Energy and Tourism

Senator MILNE» -I would like to get on to carbon capture and storage as quickly as I can, but before I do I want to ask a question about geothermal development, in particular the grants that have been made according to a press release about state and federal Labor support for a geothermal development at Gherang in the Geelong area in Victoria.

Mr Morling-There was a grant recently announced for Greenearth Energy Limited in Geelong, Victoria. That was a $7 million grant under the geothermal drilling program. As we said, that was an announcement. We are now moving into the stage where we will negotiate a deed with that company for that grant.

Senator «MILNE»-Can you tell me what the grant is for-what the project is-and how that fits with community consultation bout the project, environmental approvals for the project and all those sorts of things? Why is the company being given a grant if it has not gone through those processes?

Mr Morling-To start with your first question, the project itself will aim to drill two wells into a hot sedimentary aquifer to a depth of up to four kilometres. The objective of doing that is to assist the company in working up its project to a proof-of-concept stage. In terms of other issues such as environmental approvals, it is early stages in the project and they are issues for the state government of Victoria.

Senator «MILNE»-What consultation, involvement or information has there been for the local community to let them know what is being proposed, what is going on and what the concept is that is being tested?

Mr Morling-In the case of the geothermal drilling program, it is not really possible to undertake consultation in advance of announcing the project, as a number of these companies are ASX listed companies. This is about providing money for the project to undertake the drilling. Those issues, such as environmental issues, to which you refer are really matters for the state government. I note that the energy minister in Victoria has stated today in the press that the project will be subject to the legislative requirements in Victoria and that consultation will be undertaken in each stage of the project.

Senator «MILNE» -Did this go to tender? Why did this company get this grant? How does it work?

Mr Morling-I will give broad outlines. Maybe one of the officers of the department can give you more detail. Essentially, this is a competitive grants program that was announced. The government then provided information to proponents about the eligibility and merit criteria. The proponents then put in proposals, which were considered by an independent geothermal drilling authority, which then made recommendations to the minister. They made recommendations for two rounds. In the first round two companies were chosen. In the second round five companies were chosen, including Greenearth.

Senator «MILNE» -And what is the time frame on proving the concept?

Mr Morling-I do not have an exact time frame. That will be part of the negotiations to settle the final details with the company and come to a finalised funding deed.

Senator «MILNE»-And whose responsibility is it to inform the community about what is going on? I have had quite a lot of correspondence saying that people have no idea what is going on. They are very concerned that the first they heard of it was a federal government grant to this company.

Mr Morling-It depends on the subject heading, but most of the issues around which the community has concerns would, I imagine, be dealt with either by the state government under its legislative requirements or by the company itself, which is seeking to progress the project in that community.

Senator «MILNE»-I understand the company has made the claim that the community has given its unanimous support to the project, and yet the community knows nothing about it and there has been no formal consultation. Minister, is it a matter of concern to you that the community is saying this is the first they have heard about it while the company is saying it has the unanimous support of the community?

Senator Carr-I think the officers have explained to you the relationship between the company, the stage government and the local community. There really is not much more that I can add to that. It is a matter of the way the Victorian government is approaching this matter.

Senator «MILNE» -Except it is federal government money that is making it all possible.

Senator Carr-The Commonwealth is providing support for this project, but specific questions that relate to the Victorian government's involvement in the project are matters for the Victorian government.

Senator «MILNE»-And is this an area that was determined to be highly prospective in the geothermal technology industry development framework and mapping and so on, and are those maps available to the community to know where in Australia they can expect this kind of exploration work?

Mr Morling-This sort of question would probably be better directed to Geoscience Australia. I have seen those maps put up at industry conferences. In terms of the prospectivity on this particular site, companies have to seek tenements over these particular sites so they would have made that judgement, and that would have been one of the considerations that the board that made the recommendation to the minister took into account when recommending that this company's project receive funding.

Senator «MILNE» -Who is on that board?

Mr Pierce-I am happy to take on notice the availability of those maps that you refer to and the geological information. If we are able to do so, will direct you to where that information can be found.

Senator «MILNE» -Okay-I just wanted to know who was on the board. Can you take that on notice.