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Unconventional gas (coal seam gas, shale gas, coal gasification)

Traditionally the offshore parts of groundwater basins in Gippsland and to a lesser extent the Otways have provided gas resources while much of the onshore part of the Gippsland Basin contains a vast brown coal reserve with huge potential. Unconventional gas may exist within the coal reserves (coal seam gas) while shale gas may occur in the basement formations. Any unconventional gas project that extracts Groundwater requires licences from SRW to construct bore and extract the water. If it is intended to inject chemicals underground, approval is required from the Environment Protection Authority (EPA) and Southern Rural Water. To date, Southern Rural Water has received only one licence application. As groundwater entitlements are capped across most regions it is likely that applicants would need to trade water from another user.

Coal seam gas projects are regulated by the Department of Economic Development, Transport, Jobs and Resources. The State Government has placed a moratorium on the issue of new licences or permits for fracking until mid-2016. For more information please visit the Natural Gas Community information website.

You can also learn more through the factsheet about our role in coal seam gas regulation (PDF).   


Groundwater is commonly pumped (dewatered) from excavations and bores during and after the construction of foundations and structures (eg basements, car parks, tunnels), quarries and mines. Dewatering is also used to protect public assets and to mitigate salinity.

You need a licence for all dewatering activities. Download a licence application form (PDF).

Government agencies and local governments do not require a licence for dewatering if it is being used to abate a public nuisance and there is no commercial return. If the dewatering is for a commercial project normal licensing fees will apply.

Approval is also required to dispose of the water once it’s removed. You need to obtain permission from the authority responsible for the point of disposal – this could your local council, an urban water corporation, Melbourne Water or the EPA.

For more information or advice on your dewatering activities please contact us.

Geothermal development

Geothermal energy comes from heat that occurs naturally in basement rocks deep under the ground. The heat forms a temperature gradient in deep aquifers that decreases with height above the hot rocks.

In Victoria, the Geothermal Energy Resources Act 2005 regulates the exploration and extraction of geothermal energy resources. This applies to significant, commercial activities only where the energy resource is located more than one kilometre below the ground and at temperatures greater than 70°C. This Act overlaps the Water Act 1989.

The use of geothermal heat is regulated by Southern Rural Water and other rural water corporations. The licensing requirements are similar to groundwater licensing for purposes such as agribusiness.

Warm groundwater (about 50°C) from the lower aquifer on the Mornington Peninsula is used for hot springs. Warm or hot groundwater (30°C to 120°C) is used to heat buildings near Portland in the South West. In Gippsland warm groundwater from the lower aquifer is being investigated as an option for heating swimming pools. Another innovative use is occurring where warm groundwater is used to exchange heat by cycling it through buildings.

Managed Aquifer Recharge and Aquifer Storage & Recovery

The injection of water underground either through a bore or recharge bed for storage or disposal is known as Managed Aquifer Recharge (MAR). When it is subsequently pumped out it is known as Aquifer Storage & Recovery (ASR). The water used in this process is usually stormwater, recycled water or surplus river flow. ASR is a not a new water source.

This process works best in confined aquifers that have few other users or where there is limited use of the aquifer (eg where the water is naturally brackish).

Unlike dams, this process avoids losses due to evaporation. It is suited to urban areas because there are ready sources of stormwater and recycled water and it uses little land. The water injected into the aquifers for storage can be extracted from bores at multiple locations.

Water is best suited to non-drinking purposes such as toilet flushing, garden watering and irrigation. It can also be used for the direct benefit of the environment. Although aquifers naturally filter water and kill microbes, this is not an approved method of water treatment in Victoria.

Upfront investigation and infrastructure costs can be very high and projects normally involve a long trial and error phase. However, the MAR/ASR process is likely to be cheaper than alternatives such as large desalination plants or underground water storage tanks.

There are ten MAR schemes operating or under development in Southern Victoria.

Risks to the environment and human health need to be considered in accordance with the Victorian EPA and national guidelines. More information of the Victorian EPA can be found on this Guidelines for managed aquifer recharge (PDF). More information on the national guidelines can be found on the Department of Environment website.

Southern Rural Water regulates MAR schemes under The Water Act 1989 and State Environment Protection Policy (SEPP) (Groundwaters of Victoria) and is the authority responsible for licensing, risk assessments and management plans in Southern Victoria.

Integrated Water Cycle Management

Integrated water cycle management aims to reduce the need for costly transport of water supply and wastewater through pipes. It also aims to reduce the need for costly treatment by using water sources that are sourced locally and fit for purpose.

A basic example of integrated water cycle management is the capture of rainfall in domestic water tanks for use in toilet flushing or garden watering.

Groundwater can be used as an alternative to potable reticulated water supply for non-drinking purposes such as:

  • Garden watering, toilet flushing and household washing (through private D&S bores)
  • Irrigation of sporting fields, schools and parks
  • Operational needs of major infrastructure projects
  • Dust suppression in quarries, landfills and construction sites

Aquifers can also be used as an alternative storage solution to replace surface water dams and traditional piped stormwater systems through the MAR/ASR process (see section above) and Water Sensitive Urban Design (e.g rain gardens that stormwater run-off to seep into the groundwater).

Projected population growth in Victoria and associated urban growth highlights the need to further explore integrated water cycle management strategies and concepts.


Urbanisation has the potential to impact on groundwater recharge by reducing the amount of natural permeable surfaces such as grasslands and increasing non-permeable surfaces such as concrete and other paved surfaces. In densely populated urban areas there is also a higher risk of pollution from point and diffuse sources. For more information visit our What causes groundwater pollution page.

The risks associated with urbanisation highlight the need to explore and consider integrated water cycle management opportunities (see section above).

To better understand the impact of urbanisation on aquifers, Southern Rural Water in conjunction with RMIT University and Melbourne Water have initiated a research project that focuses on the middle aquifers around Koo Wee Rup. These aquifers are an important source of water for agribusinesses and it has been identified that planned urban growth may impact their recharge.

D&S use

Everyone has a right to use groundwater for D&S purposes on their own property. D&S use includes drinking water for livestock, household purposes and the watering of a kitchen garden. Groundwater use in this instance is not metered, however you need a licence to construct a bore or well.

The estimated water use of D&S bores in rural areas is approximately 1.3ML/yr. This figure is based on direct surveys undertaken by Southern Rural Water in the Glenelg and Condah regions and is thought to be an accurate estimate. In highly urbanised areas such as Melbourne and surrounding areas including the Mornington Peninsula a volume equal to the average household use of 0.2ML/yr is assumed.

Around 22,000 D&S bores have been registered in Southern Victoria since 1980. During the late 1960s, early 1980s and mid 2000s there was a spike in the number of D&S bores being drilled. This suggests that groundwater is seen as a backup supply in periods of drought. Groundwater bores have become increasingly popular in Melbourne’s eastern suburbs as an unrestricted, fit for purpose alternative to reticulated water.

Sea water or saline intrusion

Sea water or saline intrusion can occur in shallow aquifers connected to the ocean or other saline water bodies such as lakes. When too much freshwater is pumped out of an aquifer the water table drops. This decreases the pressure of fresh water against the sea water or saline water and allows it to move inland.

Sea water intrusion example

Diagram showing an example of sea water intrusion where a shallow aquifer is connected to the sea, causing a well to become contaminated with sea water.

Diagram: ©Spatial Vision Innovations Pty Ltd (2015)

Evidence of groundwater levels falling below sea or lake level together with rising salinity levels in bores is an indication the saline intrusion may be occurring. In areas where sea water or saline intrusion has been identified as an issue Southern Rural Water monitors salinity regularly. Restrictions can be placed on groundwater pumping to minimise the impact of sea water or saline intrusion on an aquifer.


Commercial plantations benefit if they are located above shallow water tables that provide a ready water supply (eg in the limestone region of South West Victoria). In areas where plantations are significant the volume of groundwater used may be greater than the amount extracted from bores.

Plantations are estimated to intercept about 20% of the flow in the Glenelg River. Combined with other pressures such as lower than average rainfall, plantations have caused some aquifers to decline. In the Hawkesdale GMU applications for new groundwater licences were rejected because the existing volume of licences combined with the estimated uptake by plants meant no more water could be allocated.

The state policy in the Western Region Sustainable Water Strategy (PDF) is for existing plantations to be recognised and accounted for in planning and decision making processes but for control to be placed on expansion in declared areas.

Southern Rural Water takes into account for the impact of plantations on groundwater when assessing all licence applications. 

Page last updated6th June 2016
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