Salt occurs naturally in many of the rocks and soils of the Hunter Valley, some of which is leached into groundwater and nearby rivers. Human activities have impacted on this process. The clearing of vegetation for agriculture removed up to 99 per cent of the valley floor area and this, together with irrigation, caused the salty groundwater to flow to the surface and discharge into the Valley’s rivers and streams. Coal mining also contributed to this situation through the displacement of groundwater. Much of this water can be recycled for use in the mining process but the excess may need to be discharged.
Average conductivity (a measure for salinity) in the Hunter River increased markedly through the 1970s and 80s. Salinity levels were particularly high during periods of dry weather and low river flows. By 1992, a serious conflict over salinity levels had developed in the Upper Hunter between irrigators and coal mines. The government’s traditional licensing strategy of requiring industries to minimise discharges was failing to protect river water quality. Releases were impacting on the river and the viability of the primary producers who rely on it for irrigation supply.
In the mid 1990s, industry, regulators and the community took part in a closely monitored trial of an innovative scheme to restrict discharges from mines and power stations to those times when river flows were high and there was no demand for pumping from the river by irrigators. The Hunter River Salinity Trading Scheme (HRSTS) enabled mines and power stations to discharge surplus saline water only on the few days of the year when river flows were high or in flood. Furthermore, discharges could only occur under strictly controlled new licence conditions and by way of holding salinity credits that were tradeable amongst industry dischargers.
This successful trial demonstrated that Hunter River water quality could be maintained at acceptable levels during high flow discharge events, and that the impact on the water users and the environment could be minimised. The HRSTS was formalised into a regulation in 2003 and the salinity credits were reissued with limited lives. Now, every two years, 20 per cent of the total salinity credits expire and must be repurchased through a special auction process – an example of an economic environmental trading process.
During the history of the HRSTS, the Hunter River water quality goals for salinity due to industry discharges have never been exceeded. Recent studies show that the saline discharges from mines under the HRSTS amount to only three per cent of the salinity of the river, with the vast majority of salinity coming from traditional (diffuse) land uses and naturally occurring contributions. It is estimated that the current amount of saline water discharged to the Hunter River under the trading scheme could decrease by as much as 50 per cent in normal years and up to 90 per cent in dry years. The HRSTS has achieved international recognition as an innovative regulatory, co-operative scheme that has benefited industry, community water users, regulators, and the environment.