Linc Energy Stands Firm in Environmental Dispute with Queensland Government

Linc Energy Ltd, a company focused on conventional and unconventional petroleum production, reported Thursday that it believes the recent dispute with the Queensland Government in Australia is not material to the Company’s finances or operations and Linc Energy will staunchly defend allegations that it has caused unauthorized environmental harm at its Chinchilla Underground Coal Gasification (UCG) Research and Development Facility.

The complaint and summons served by the Queensland Department of Environment and Heritage Protection (DEHP) was not specific about what the nature of the alleged environmental harm, although the Government’s media statement did stress that there has been no impact on our neighbors around the Facility.

Peter Bond, managing director and CEO of Linc Energy said, “I do not see these allegations as being material to the Company or the future of UCG. They will not affect the normal operations of the Company in any way or the various expansion plans we have for UCG around the globe and the reality is it will take 2 years or more for this process to play out”.

The common thread of the allegations relates to issues in relation to older style technology. Linc Energy’s Generation 5 (G5) commercial UCG operational process developed in 2010 and onwards and which has been operating very successfully for the past few years and is now the definitive UCG technology and is being rolled out commercially into various sites around the world, is not mentioned nor affected by these allegations.

“It must be remembered and indeed put into context that Linc Energy has had an on-going dispute with DEHP for a number of years now, a rift that essentially is based around the DEHP’s lack of knowledge of UCG and their unwillingness to learn about the UCG process. This has led to issues of miscommunication and misunderstanding by some people within the Department and vice-versa, so I guess it’s no surprise that this dispute has occurred. The other key issue here is that this long running rift, that was originally a political issue where DEHP was involved with the CSG versus UCG dispute which commenced several years ago under the previous State Government. The actions of the Department has had the effect of causing great distrust and suspicion by Linc Energy and many of its stakeholders, subsequently undermining the opportunity to work in a collaborative manner. Because of the widespread belief that the DEHP has run an agenda against the UCG industry over several years now, operating a UCG site within the State of Queensland is now viewed as a sovereign risk issue, which is why Linc Energy decided to shift all its operations except its Head office out of Queensland some time ago.”

“I am obviously disappointed that the Department has not afforded Linc Energy the opportunity to formally respond to any allegations prior to this point in time. While we were aware that investigations were being undertaken, we assumed that we would get the opportunity to set the record straight,” Bond said.

“It is also worth noting that Linc Energy has monitored the groundwater at site to a degree that far exceeds our legal obligations under our Environmental license requirements to do so and we have always been within the License guidelines.”