a whiteboard

A CONTROVERSIAL gas project at Kingaroy experienced an underground explosion that might have contaminated groundwater last year, a scientific report has found.

The panel of independent scientists commissioned by the Government also claimed the State Government and Cougar Energy were aware before the project started that the Kingaroy site was unsuitable and unable to contain contaminants.

The panel, including Professor Chris Moran, Professor Chris Cuff and Professor Joe da Costa, said there were environmental compromises and raised serious questions over the Government's handling and oversight of the trials of three underground coal gasification projects in Queensland.

Environmentalists said the report showed the Department of Environment and Resource Management didn't have a clue about the underground gasification technology, but the Government points to its actions in shutting down or restricting the projects as an indication of its tough stance

The scientific panel also said Cougar was limited in its expertise and relied on explaining their technology to it on a whiteboard. It said in the case of all three underground coal gasification trials, not enough was known about the surrounding ground and water table before the projects began.

Cougar's scheme was shut down late last year after potentially lethal hydrocarbons were found in bores surrounding the site. The State Government announced last week the project would be scrapped after receiving the report from the scientists.

"The fact that the possible existence of an explosion has yet to be confirmed or ruled out means that corrective measures have not been put in place to prevent the reoccurrence of this type of malfunction," the report said.

"It is unclear why the trial was not located in a more simple hydrogeological setting, which is available not too distant from the existing site."

It said the Government should alert the public of the cause of each of the UCG incidents, the "environmental compromises" and put this into the public domain as quickly as possible.

Sustainability Minister Kate Jones said the department was working through the recommendations, and monitoring on all three sites had been expanded.

Friends of the Earth spokesman Drew Hutton said it was clear DERM was incapable of providing adequate regulatory oversight of the three UCG projects and called for an independent inquiry into gas programs.

"DERM doesn't have the resources, the expertise or the guts to properly regulate industries of this complexity and potential environmental risk," Mr Hutton said. "We now need the same sort of independent, expert and transparent inquiry into coal seam gas projects which are even more complex and provide even greater environmental risk than UCG."

Greens spokeswoman Libby Connors said the reports proved that the department raced into a situation without due care and consideration for the local community or the environment.

Questions are now being asked about a second scheme, the Carbon Energy UCG project at Kogan, near Dalby.

The scheme is already under investigation because of a wastewater spill last year and a former employee, John Wedgwood, has made allegations to DERM about its operations. Mr Wedgwood is also involved in a separate legal dispute with the company.

Environment and Sustainability Minister Kate Jones said the department was working through the recommendations from the scientists' report.