POTENTIALLY contaminated wastewater used to frack AGL's Gloucester coal seam gas project has been dumped unlawfully into the Hunter's sewer system by the private company hired to treat it.
Transpacific, one of the nation's largest wastewater management firms, has been fined $30,000 by Hunter Water for releasing treated "flow-back" fluid from the gas project into the region's sewer network.
It comes after AGL and Transpacific were both explicitly warned by the water regulator that releasing the flow-back fluid was a breach of its wastewater criteria.
Hunter Water asked Transpacific for a please explain after the Newcastle Herald revealed on Thursday that it was the company treating flow-back water for AGL.
Both AGL and Transpacific had refused to state what was happening to the water once it was treated, but when approached by Hunter Water, the company admitted to dumping the water into the sewer network.
Flow-back fluid produced from coal seam gas extraction often contains a range of fracking and drilling chemicals and heavy metals including arsenic, mercury, lead and cadmium. It is also typically highly saline.
The water being dumped into the sewer had already been treated by Transpacific and in a previous statement, the company said that process "includes removing any residual chemicals".
The company ignored specific questions put by the Herald, and in a one-line statement, a spokesman said it worked "with all parties to deliver safe and sustainable outcomes though the flowback water retrieval and treatment process".
But the Herald understands Transpacific had previously been refused a request to discharge extra water into the sewer network.
Hunter Water said it told Transpacific that "any further breach" would see the "immediate termination" of the commercial agreement that allows it to access its wastewater treatment plants, a move that would severely hamper its ability to operate in the region.
AGL has tried to distance itself from the breach, saying it places "the highest priority on minimising impacts from its operations and this includes the safe disposal of flow-back water".
"The decision about where the treated water goes is a decision made by contractor, Transpacific," a company spokesman said.
But the Herald has accessed correspondence from Hunter Water to the gas producer from as recently as September 30 this year explicitly requesting AGL to inform its contracted firms not to release the water into its system.
"Please communicate to all tanker companies engaged by AGL that Hunter Water is not to be approached as a potential disposal source for groundwater from the Gloucester Gas Project," the letter read.
"AGL has previously been advised that the groundwater from hydraulic stimulation activities does not meet Hunter Water's criteria for tankered waste water."
In a statement to the Herald, Hunter Water said it was "extremely disappointed" by AGL's "seeming inability to control flow-back water originating from its CSG mine".
"AGL has also previously committed to having measures in place to ensure that waste management companies would not attempt to discharge flow-back water into the Hunter Water sewer system," chief customer services officer Jeremy Bath said.
Jennifer O'Neill from Gloucester Groundswell said the revelations showed AGL was "either incompetent or deceitful or both".
"AGL is making a mockery of Minister Anthony Robert's claims that coal seam gas is being well regulated," she said. "Their blatant disregard for Hunter Water's directives show they're not a fit company to hold a CSG licence.
"The community has been asking about the destination of flow-back fluid for months and AGL has refused to give us answers."