The Bligh government has warned that poison seepage into groundwater from a coal gasification site could shut down the fledgling sector.
The Cougar Energy pilot plant at Kingaroy, 300km northwest of Brisbane, was closed down last week after traces of the cancer-causing compounds benzene and toluene were found in bores near the plant.
But a preliminary Queensland government investigation found the benzene level was 0.7 parts per billion, while the Australian Drinking Water Guideline standard was 1ppb, and the maximum level of toluene detected was 4.3ppb at the Cougar plant compared to the ADW guideline standard of 800ppb.
Cougar managing director Len Walker met Queensland government officials yesterday to try to get the ban lifted, his company arguing that the poison levels were well within acceptable guidelines. But the government has indicated the preliminary investigation is not sufficient to give confidence to those people living near the plant about the integrity of their drinking
But the Bligh government also widened its inquiry to look at the entire UCG sector, with Resources Minister Stephen Robertson claiming that Cougar's problems have raised concerns for the whole sector.
Besides Cougar Energy, the Queensland government has also licensed Linc Energy and Carbon Energy to undertake underground coal gasification trials, and Linc Energy chief Peter Bond told The Australian that his company's processes were completely different to those used by Cougar and he resented being put in the same category.
But Mr Robertson told representatives of all three companies, plus the Queensland Resources Council, that while the circumstances of each project would be evaluated individually, Cougar Energy's contamination incidents raised concerns for the whole sector.
"Today, I made it clear that each company needs to understand we will take no risks when it comes to environmental performance and this will be the key factor in determining the future of Underground Coal Gasification in Queensland," he said.
The three projects are due to be formally evaluated at the end of a supervised trial in 2012.
Just outside Kingaroy, cattle farmer Damien O'Sullivan, whose property is within 2km of the UCG plant, is among several who have been advised to stop drinking ground water.
When visited by The Australian yesterday, he was concerned his family had been exposed to dangerous chemicals since the first traces of benzene were detected in April.
"When this started, they told us it could be safe. Now we feel betrayed," he said.
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