A NSW Government report said it suspects Arrow Energy of dumping chemically infused mud from CSG exploration at an undisclosed site on the Northern Rivers.
The report on a recent audit of 44 coal and petroleum exploration licences found Arrow Energy had created significant environmental risk through non-compliance of the conditions of its licence.
The report was released the day before the Easter break and said it suspected Arrow had dumped drilling muds.
Drilling muds (also called drilling fluids) are used in the rotary drilling process during the construction of gas wells and contain chemicals used to aid the process.
National Toxics Network chief advisor Dr Mariann Lloyd-Smith said drilling muds contained toxic chemicals including heavy metals.
She has called for a more thorough investigation.
The breach occurred at an exploratory drilling site in the area covered under petroleum extraction licence (PEL) 445, which roughly covers Kyogle, Keerrong, Bonalbo and Woodenbong
The specific site is not noted.
"Resources and Energy agree with the classification of the non-compliance to be of significant risk. Corrective action and improved procedures are to be sought from the licence holder and confirmed by Resources and Energy," the report said.
Arrow was also found to have four breaches in the less serious level two non-compliance category. Two related to a lack of evidence that demonstrated strata leak off tests were being undertaken and a lack of safety signs at well sites. The other two were listed in the report in the categories of petroleum geology and environment.
Two licences held by Metgasco, PEL 13 and PEL 16, were audited. PEL 16 was found to have three level two non-compliances in the category of environment.
PEL 479 held by Clarence Moreton Resources was in breach of one level two non-compliance in the category of environment.
Arrow is one of six companies found to have significant non-compliance with licence conditions.
Arrow Energy was contacted but because of the public holiday, no-one was available. A spokesperson said Arrow would respond today.
Go to dpi.nsw.gov.au/minerals and click Exploration licence audit.
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