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Explainer: coal seam gas, shale gas and fracking in Australia

Debate is intensifying over the extraction of coal seam gas, particularly in NSW and Queensland. Farmers are protesting over safety concerns and threats to the country’s food security. The Greens and the…

Gas wells are popping up across the country. AAP

Debate is intensifying over the extraction of coal seam gas, particularly in NSW and Queensland. Farmers are protesting over safety concerns and threats to the country’s food security.

The Greens and the Nationals have joined forces to restrict mining, and now Tony Abbott has spoken out against mining on farming land.

But what is coal seam gas? How dangerous is it? Will it reduce emissions? And what’s its relationship to shale gas?

What is coal seam gas?

Coal seam gas (CSG) and the gas that comes from shales are chemically very similar. They generate the same amount of heat and CO₂ when burned in your heater or at an electricity power plant. And both coal seam gas and shale gas produce about half the CO₂ of brown coal.

In North America today, about 20-25% of the total gas consumed comes from shale gas deposits. Just 15 years ago, shale gas supplies were non-existent, but recent drilling and fracture stimulation (fracking) innovations have revolutionised the natural gas market. The market has moved from tight gas supplies with huge price spikes during cold weather to low and stable prices, just because of the new supplies of shale gas.

Coal seam gas reservoirs are shallower (at least the ones that get developed) and have a higher concentration of gas than shale reservoirs. Shale reservoirs always require fracking, while perhaps only half of coal seam gas reservoirs require fracture stimulation.

CSG’s shallower depth, higher concentration of gas and less frequent need for fracture stimulation make it less expensive to produce than shale gas.

Eastern Australia has very large reserves of coal seam gas in high-permeability reservoirs that can deliver gas to the well-bores faster than coal reservoirs elsewhere.

Billions of dollars will be spent in Queensland over the next five years on coal seam gas wells, liquefied natural gas (LNG) plants and export facilities to exploit our world-class CSG reserves. The majority of that CSG-LNG gas is already contracted for sale to Asian customers.

What is shale gas?

Meanwhile, Australian shale gas reservoirs have only just entered an initial evaluation stage. The shale gas reservoirs under study are in more remote locations than the coal seam gas plays of Queensland and New South Wales. These more remote locations may mean less conflict over resource development for shale gas than coal seam gas.

There is a broad long-term pattern emerging where Australia is following North America in development of first coal seam gas and then shale gas.

Modern economies are incredibly dependent on inexpensive energy – and today that energy mostly comes from fossil fuels like conventional oil, gas and coal. But we are using up a limited supply of cheap fossil fuels.

As traditional oil and gas reservoirs become more expensive to find and produce, alternatives like CSG, shale gas, solar and wind power become more attractive.

At this point in time, without government incentives, CSG and shale gas (currently only available in North America) are cheaper than renewables. After coal and shale gas resources are exhausted, we will need to move entirely to renewables (solar and wind power) nuclear or some mix of the two.

But Australia and the world are not running out of coal. Coal is less expensive than all other energy sources, but coal generates more CO₂ than natural gas and renewables. Australia’s carbon tax is designed to change all of that.

Community concern about coal seam gas drilling is widespread. AAP

Do the same community concerns apply to both?

Community concerns are mitigated with shale reservoirs – but not entirely removed.

One concern is about fracture stimulation.

Fracture stimulation of coal and shale reservoirs, also known as fracking, consists of injecting a high-pressure mix of water, sand and chemicals into the reservoir.

The high-pressure water creates fractures in the reservoir. After the fracture is created, the injector pumps are shut off, the water flows back into the well, the sand stays in the fractures keeping them propped open and gas starts to flow via the fractures to the well bore.

Fractures created by this process are designed to grow tens of meters in height above the point in the well bore where they are initiated.

There is a slight risk that this fracture stimulation process can break out of the gas reservoir and grow into distant shallower aquifers. The oil and gas industry say that contamination of a shallow aquifer via fracture stimulation has never happened in the 1.5 million frac jobs that have been performed in the past 60 years.

However, the New York Times recently reported a case where this might have happened. Interestingly, the Times says an unusual conduit was required in the above case; the fracture stimulation did not leak directly into the aquifer, but to a nearby improperly abandoned standard well bore.

Shale reservoirs are deeper than CSG reservoirs, and are thus further away from the shallow surface aquifers on which many communities and rural properties rely. This mitigates risks associated with the fracture stimulation process.

A more realistic – but less sensational – community concern is over industrial activity. Drilling and fracture stimulating wells requires heavy equipment, which is brought in on several dozen large trucks.

Drilling and fracture stimulating a well can be a busy and noisy process that can last a few days for shallow coal seam gas wells to several weeks for the deepest shale wells. It can be quite disruptive to those living nearby.

The Australian shale gas reservoirs currently being evaluated are in remote South Australia, the Northern Territory and Western Australia. This remoteness tends to minimise the community impact.

Which chemicals are involved in fracture stimulation of shale, and are they dangerous?

Most state regulators now require full disclosure of the chemicals used in fracture stimulation. This was not always the case, and current fears about fracture stimulation started when the communities could not find out what chemicals were involved in fracture stimulation, and if they were likely to leak into community water supplies.

Fracture stimulation treatments are about 90% water, 9.5% sand – also called proppant – and 0.5% chemicals.

The range of chemicals that might be used in frac jobs is listed in the table below.

This table comes from an oil and gas industry web site and can be found at: http://www.energyindepth.org/frac-fluid.pdf

What is the energy benefit of extracting shale gas in Australia?

Shale gas might be arriving in Australia at a critical time.

Australia’s carbon tax and emissions trading scheme (ETS) will make coal-fired electricity increasingly more expensive. The intention of an ETS is to motivate major CO₂ producers to switch from coal to natural gas and/or renewables.

Natural gas sits between coal and renewables in terms of both price and amount of CO₂ produced – so it is a logical first step towards a cleaner energy future.

Are eastern Australia’s gas supplies sufficient to replace coal under ETS? If so, what will that natural gas cost?

The answer depends on the rate at which eastern Australia uses up its existing supplies of conventional gas and the still uncertain growth rates for coal seam gas supplies.

If planned CSG wells are not finished on time and ready to supply LNG export commitments, the LNG plant owners will need to buy gas on the open market. This scenario would be a “triple whammy” – shrinking conventional gas supplies, while gas demand expands due to both LNG contracts and ETS needs.

Shale gas in Australia – if it is proven to be there and can be produced economically – could save the consumer and Australian economy from this dilemma.

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17 Comments sorted by

  1. Jenny Robins

    Retired

    The land deeper than one metre doesn't belong to those who 'own the farm'.On this basis the miners are allowed onto the farms for exploration purposes. People in favour of this type of mining are telling us that this mining activity will be 'good for Australians'. Those who are concerned about this activity are expected to shut up when people say this. In this article the author says: "Billions of dollars will be spent in Queensland over the next five years on coal seam gas wells, liquefied natural gas (LNG) plants and export facilities to exploit our world-class CSG reserves. The majority of that CSG-LNG gas is already contracted for sale to Asian customers." Can you explain which companies are investing this money? Are they Australian or foreign owned? Is this argument that this mining activity is 'good for Australians" warranted? Which Australians? From what I've read about the activity itself, it's not those who own the top metre of dirt. Thanks.

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  2. Paul Richards
    Paul Richards is a Friend of The Conversation.

    Egypt and Indonesia reserve gas for use in their countries and nationally we hold no reserve but are exporting all our North West Shelf gas. Following the Western Australian governments recent lead, it would be appropriate to reserve 15% or more of these Nationally owned gas fields for Australia's future and current needs. Just 5% of these fields set aside would make the extraction of coal seam gas, particularly in NSW and Queensland marginally beneficial at best.

    We are releasing massive quantities of gas acquired cheaply and exporting it, while being sold a complex and a questionable extraction process for the NSW and Queensland by the Petroleum Industry.

    Given we have gas reserves that arguably may be the largest in the world. Focusing on small gas projects in other areas to contribute to local energy needs, is simply not in our National interest and transparent promotion by vested interests.

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  3. Alex Jay

    Forester

    Dennis, we rarely hear about UCG, which I understand to be an entirely different process that does not require underground fracture, chemicals, or large quantities of injection water. Can you explain why UCG is not being more widely used, and whether it entails any similar risks to shallow aquifers?

    Also I was quite suprirised to read that "contamination of a shallow aquifer via fracture stimulation has never happened in the 1.5 million frac jobs that have been performed in the past 60 years." Did the "Gasland" film totally invent it's story? Or is that the incidents shown there are simply not "proven" to have arisen from fraccing?

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  4. Tasio Sclavenitis

    Mr

    If I may begin with a quote: "Dennis Cooke owns shares in Santos".
    My compliments to the editorial team, for requiring disclosure statements from authors. It brings journalism to higher ethical standards.
    Mr Cooke, in his article carefully made a point that may or may not be true, which is that CSG fracking is mostly safe. Mr Cooke mislead the reader in presenting the gas mining company case, by failing to mention the massive risks associated with the produced water and its storage. Produced water…

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  5. jean maxwell

    concerned australian

    What happens to the frac water after it leaves the well? It contains chemicals etc. Does it get treated and reused? Believe some of the wells are quite deep and use a lot of frac water. The industry always claims that the frac water contains only 3% of chemicals Well 3% of 1ML is 30,000 litres. Considering the number of wells planned and the volumes of frac water that is going to be injected, this 3% is going to translate to a very large volume of chemicals.
    Also, Cooke fails to mention the landowners concerns regarding the brine that is produced at the CSG wells. Salt has already destroyed a large part of this country, so why bring more onto the surface. One of the CSG feasibility documents talks of bringing up to 500,000 tonnes of salt to the surface over the 20 year life of the project. Unless this is removed it will surely destroy good agricultural land.

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  6. wilma western

    logged in via email @bigpond.com

    It would be useful to understand which mining areas are under State regulation and which are referred to Tony Burke Fed Environment and Water minister ; the role of his expert panel of advisors and why it is ok for a huge gold rush ( sorry , gas rush) to be underway with all of it committed to Asian customers . Other environmental issues seem to be disposal of saline water , the claim that greenhouse gas emissions are very much understated because of alleged methane leaks from non-operative bores , also issues regarding piping of gas to ports for export and the effects of all this activity on high quality agricultural land as well as aquifers. If in the end gas replaces coal in Asia, and renewables are given a good kick along , the eventual global outcome might be significant reduction in GHG emissions but the case is still to be made - everyone is too busy grabbing the chance of big dollars it seems.

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  7. Julie G

    logged in via Twitter

    I'd be interested to know more about this claim that no contamination at all has happened in the last 60 years. It seems a) implausible and b) sourced from the same oil and gas companies who spilled oil at the Deepwater Horizon and Montara sites, as well as being sued for decades of oil and gas spill contamination in Nigeria, responsible for the Exxon Valdez incident, and for the ongoing coal seam fires in the USA. You'll excuse me if I don't take their word for it that environmental safety isn't in danger from their activities.

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  8. Julie G

    logged in via Twitter

    I'd also like to second Tasio's comment about the disclosures of authors' interests. It's a great practice that gives The Conversation more authority and trustworthiness. I hope more online and offline publications follow this excellent example.

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  9. Steve Foster

    Area Manager

    The largest public concern with CSG seems to revolve around the issue of fracture stimulation. My work has had me involved with various CSG interests in NSW for several years, and I am not aware of any producers who currently frack wells. The main technology is horizontal drilling which is cleaner, and more efficient.

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  10. Peter Kardashinsky

    Retired Engineer

    One of the major advantges that is being touted for CSG and LNG is that these fuels reduce the "greenhouse gas footprint" when they replace coal. Yet almost all studies neglect the impact of fugitive emissions of methane (itself a greehouse gas) which result during the extraction process. These has been one rather detailed recent study from Cornell U. in the USA which did look at the impact of fugitive emissions, and concluded that (when using current technologies) there is no reduction in the "footprint…

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  11. Ann Brown

    logged in via Facebook

    Julie G is right to suspect there may have been many cases of water contamination from shale gas extraction - an excerpt from the recent New York Times article says -

    -But there is in fact a documented case, and the E.P.A. report that discussed it suggests there may be more. Researchers, however, were unable to investigate many suspected cases because their details were sealed from the public when energy companies settled lawsuits with landowners.
    Current and former E.P.A. officials say this practice continues to prevent them from fully assessing the risks of certain types of gas drilling.
    “I still don’t understand why industry should be allowed to hide problems when public safety is at stake,” said Carla Greathouse, the author of the E.P.A. report that documents a case of drinking water contamination from
    fracking. “If it’s so safe, let the public review all the cases.”

    Tainted Water Well Challenges Claim of Fracking’s Safety - NYTimes.com 4/08/11

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  12. Ken Fabian

    Mr

    As far as being a real solution to rising emissions coal seam gas simply cannot deliver beyond the easy and inadequate early targets. Major investment in gas power plants will assure that we fail to reach the minimum necessary emissions reductions targets. Which will need to be shut down and replaced well ahead of their expected working life at considerable and predictable expense. Assuming we care enough about the impacts of climate change to actually do the minimum necessary to prevent it become dangerous climate change.

    I would note that a this point CSG is not being developed to replace coal; it's expanding use of gas on top of unrestrained growth of the use of coal.

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  13. Sandra Kwa

    Grad Cert Ethics and Legal Studies, CSU

    Fulfilling commercial contracts should not be a factor when considering the environmental impacts CSG. Companies that jump the gun by signing such contracts before all the impacts have been assessed and addressed are creating their own problem.

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  14. Catherine Simons

    Scientist

    The person writing this article should get their definitions right and keep up with the latest (at least a year old) data. First of all there are other gases besides CO2 that cause the greenhouse effect. Methane being a very important one, as much of this escapes to the atmosphere during the extraction and transport of CSG. The latest study referred to by the US EPA calculated that the global warming potential of methane compared to CO2 is a staggering 105 and 33 on a mass-to-mass basis for 20…

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  15. samuel Atwood

    Production Manager

    This was a pretty good article about the effects on our environment in Australia. It was a little difficult to follow. Wouldn't it be better to explain with an animated "explainer"video. Something like http://www.explanimation.com.au

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  16. Byron Smith
    Byron Smith is a Friend of The Conversation.

    PhD candidate in Christian Ethics at University of Edinburgh

    Every source of fossil fuels contributes to our climate crisis. A 2009 study used in the recent publication A Critical Decade points out that if we want to have a 75% chance of staying below 2ºC (itself already quite dangerous), then we need to leave the vast majority of existing fossil fuel reserves in the ground and cease further exploration. If that is true, then we simply cannot afford to exploit all existing known and economically recoverable resources. Extending our potential resources through the development of technologies like CSG only exacerbates the issue.

    A Critical Decade: A report from the Climate Commission
    http://climatecommission.gov.au/topics/the-critical-decade/

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