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Unconventional gas in Victoria: proceed with care

While New South Wales and Queensland have moved to exploit unconventional gas resources, Victoria maintains a ban on hydraulic fracturing (“fracking”) for onshore shale gas and coal seam gas (CSG). Those…

Unlike Queensland, it’s very unlikely there will be fracking for coal seam gas in Victoria. Simon Townsley, QGC AUSTRALIA

While New South Wales and Queensland have moved to exploit unconventional gas resources, Victoria maintains a ban on hydraulic fracturing (“fracking”) for onshore shale gas and coal seam gas (CSG).

Those against are concerned at the potential for adverse impacts on the environment; those in favour argue it will be a valuable new source of gas.

Recent moves in the Victorian government to prioritise mining suggest that unconventional gas could soon get the green light. But how much unconventional gas is in Victoria, and what might be the impacts?

A recent review from the Australian Council of Learned Academies sheds light on these questions.

How much unconventional gas in Victoria?

In the past Victoria has produced large quantities of conventional gas (gas trapped in deep, permeable sandstones). Most of this has been produced offshore in Bass Strait. Victoria has benefited greatly from this resource economically, but production is now decreasing. Victoria has also produced small amounts of conventional gas onshore in the Otway Basin.

We know there is some CSG, and it is likely there is also shale gas. Our report provides an estimate of reserves of 9 trillion cubic feet of shale gas resources in the Otway Basin. This is a lot of gas — sufficient to meet all of Victoria’s current gas needs for thirty years.

But there are great uncertainties attached to such numbers. It is only by drilling and carefully assessing the data that such uncertainties can be removed. So for the moment we really do not know if there any commercially significant shale gas (or CSG) deposits whatsoever in Victoria, but the rocks appear to be favourable.

What are the likely impacts?

There is no question that some early shale gas developments in the US extended over large and produced significant environmental impacts. These included surface disturbance, destruction and fragmentation, and loss of habitats and ecological communities.

But drilling technologies have greatly improved in recent years, and much of these impacts can be avoided.

Another concern for unconventional gas is groundwater. Producing shale gas and CSG have different impacts on water resources. In general, extraction of shale gas does not require extraction of large amounts of groundwater as is the case with many CSG deposits. But risks to groundwater can arise from drilling through aquifers, from spillage or injection of fracking fluids, or from well failures.

The ACOLA review suggest the risk of these accidents is small, and that the industry is very familiar with managing these risks. But Victoria will need an enforced regulatory regime.

What about fracking?

The word fracking appears to have become a highly emotive word for many people. But it is a process that has been used for many years by the oil and gas industry around the world, including in offshore Victorian basins, to stimulate oil or gas production from low permeability sands.

All shales have to be fracked to produce gas (or oil), which involves injecting fluids (primarily water and sand) at high pressure into “tight” rocks to produce fractures extending tens to hundreds of meters into the shale, so that the gas (or oil) can then flow into the production well.

Concerns include the potential for contamination of aquifers, or excessive use of water for fracking, or the potential for generating small seismic events (mini “earthquakes” that are too small to feel but which can be detected using sensitive instruments).

There are very few cases where seismicity can be related to fracking, despite the fact that there are thousands of fracks carried out every year, particularly in North America. Nonetheless we need clear protocols to be in place for hydraulic fracturing and for thorough investigations of any existing faults, before any fracking is carried out. This needs to be backed up by rules on monitoring, including the requirement to cease operations, if there is any evidence of increased microseismic events.

Our review did not consider CSG in any detail, so let me make some personal observations. The CSG deposits in Victoria are associated with geologically young brown coals. They are very different to the Queensland and NSW deposits and we do not really know how much CSG is present or can be extracted.

New approaches and perhaps new technologies will be needed if Victoria’s CSG deposits are to be commercially exploited and as in shale gas there will be a need for effective transparent regulations particularly on groundwater, but it is very unlikely indeed there will be any fracking of Victorian coals.

Unconventional gas developments in Victoria and elsewhere will require careful management of any impacts, an informed and supportive community and transparent and effective regulations so that the state, and Australia, can benefit from a new energy option.

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37 Comments sorted by

  1. John Newlands

    tree changer

    How times have changed. When Brumby was premier I recall that depleted conventional gas fields were to be used to store CO2 captured from brown coal fired power stations. Now those same geological formations are to expected to give not take. Victorian onshore gas also supplies South Australia. Offshore gas from Bass Strait supplies Tasmania, the underwater pipe being used as a navigation aid by fur seals. Getting any of that gas to the Queensland LNG hub appears to require flow reversals in…

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    1. Greg North

      Retired Engineer

      In reply to John Newlands

      I doubt we'll ever see CO2 capture/storage from power stations on a commercial scale John unless we're all to be paying electricity prices that will make recent years increases look like a Sunday picnic.
      Just too many technical/safety issues for like who is going to guarantee that it will be secure.
      I am not too sure the author is talking of fracking in already depleted gas fields.
      As for WA gas, it is always going to be about $$$$ and not just how much people are prepared to pay for consumption but what is prepared to be forked out for investment.
      When you have a market the size of Asia and the potential earnings there, you'll always find investment $$$ easier to come by whereas with Australia's population, the costs of development and a pipeline with a very limited market are the reverse.

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    2. In reply to Greg North

      Comment removed by moderator.

    3. John Newlands

      tree changer

      In reply to Greg North

      If I recall Brumby and entourage drove their CO2 spewing limos to a place called Boggy Creek which I believe is in the onshore Otway Basin. Lab grade CO2 was used in the injection test, a lot easier than getting it from a power station chimney.

      Suppose we export east coast LNG til 2030 then we have to import it from 2030 to the year dot. What will we use to pay foreigners for those imports? Probable answer...prime real estate.

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    4. Greg North

      Retired Engineer

      In reply to John Newlands

      " Suppose we export east coast LNG til 2030 then we have to import it from 2030 to the year dot. What will we use to pay foreigners for those imports? Probable answer...prime real estate. "
      The planet including Australia is likely to be a more interesting place by 2030 John and for the next 30 years afterwards environmentally, economically and life style wise.
      Like, it'll be what the price of oil will be for what's available if as many experts say we have passed peak oil.
      In Australia, we'll already have had to get answers for how we will power the nation and so take the two combined, perhaps we're already past peak lifestyle.

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  2. Roma Guerin

    Pensioner

    Victoria is a small state with a surprisingly large proportion of food-growing land. It worries me that insufficient weight is being given to future food security issues in this circular argument about fracking being "good" or "bad". I also worry that the exploration wells in other states have been left open and unmonitored, and no records kept by authorities who need to know. With our acknowledged history of bushfires, regulations would need to ensure that wells are closed off to prevent ignition of leaking gases in the fire season. Fire seasons are starting earlier and ending later, so this would need year-round oversight. Do we have strong enough legislators?

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  3. George Takacs

    Physicist

    Unfortunately, this article, like so many others about unconventional gas, ignores our finite carbon budget. If we are to have a 50% chance of limiting warming to 2 degrees, then the economically recoverable reserves of conventional gas plus most of the conventional oil exhaust our budget. Given that we are also still burning coal, the only reason for considering unconventional gas or oil is if one does not believe we need to limit ourselves to this carbon budget.

    For someone like me who as yet has found no reason to doubt the science of climate change, the possibility of aquifer interference is the least of my concerns when it comes to unconventional gas.

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    1. Michael Shand

      Software Tester

      In reply to George Takacs

      Exactly, this article completely glossed over the Greenhouse effect of using this fuel

      As if creating an industry around another fossil fuel is somehow a solution to our use of fossil fuel?

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    2. Greg North

      Retired Engineer

      In reply to George Takacs

      " the only reason for considering unconventional gas or oil is if one does not believe we need to limit ourselves to this carbon budget. "
      Burning gas is usually considered to result in far less CO2 emissions than coal George and so given that societies will still need power in some form to live as we do, it should at least be some help in meeting a budget as unachievable as it may be.

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    3. David Arthur

      resistance gnome

      In reply to Greg North

      "Burning gas is usually considered to result in far less CO2 emissions than coal ..."

      Would a CSG or shale gas producer be happy to shut his operation down after no more than a decade? This is what will be required to stay within budget.

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    4. George Takacs

      Physicist

      In reply to account deleted

      Mike,

      This budget is not a normal budget. Because the rate at which we pump CO2 into our atmosphere is much greater than the rate at which weathering of rocks scrubs it out again, you can pretty much set a fixed amount of CO2 as a constraint, regardless of whether you emit it over 5, 20, or 100 years.

      I don't have the figures at hand now, they are at work, but I recall that conventional gas reserves comprise around 60% of our carbon budget. The remainder would correspond to around half the conventional oil reserves. And by reserves I mean what the IEA regard as economically recoverable. So those who talk up unconventional gas because it is lower emissions than coal (ignoring fugitive emissions) are missing the whole point about the fixed carbon budget.

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    5. Greg North

      Retired Engineer

      In reply to David Arthur

      Rather than anything being shutdown David, I suspect the concern on any budgets will be just that as it is for CC now.

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    6. David Arthur

      resistance gnome

      In reply to Greg North

      Thankls Mr North. "... suspect the concern on any budgets will be just that as it is for CC now."

      Oh well, perhaps the penny will drop before the end of the decade. If nothing else, perhaps the dropping penny will be declining export markets as the rest of the world (ie all the nations outside the Murdochery) weans itself off fossil fuel.

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  4. Comment removed by moderator.

    1. Greg North

      Retired Engineer

      In reply to account deleted

      " I was unaware of the move in qld to head towards unconventional gas (fracking etc) as opposed to Coal seam gas "
      Fracking for CSG development in Queensland has only been occurring for a few years already Mike.
      The storage/loading facility on Curtis Island just off Gladstone will be operational IN 2014 and then there'll be a gigantic potential gas/liquid bomb there.
      You can get an idea of the CSG industry @ http://www.industry.qld.gov.au/lng/projects-queensland.html

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    2. Andy Saunders

      Consultant

      In reply to David Arthur

      "prospect" = "not done yet"

      Long way from any significant activity in the Maryborough Basin. Cooper is a different story.

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    3. David Arthur

      resistance gnome

      In reply to Andy Saunders

      There are exploration leases over substantial parts of the Maryborough Basin, and significant exploration activities.

      Just because there are no production wells as yet doesn't mean there is no progress toward shale gas. Perhaps that's the point on which Mr Quinlan is making comment?

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    4. Andy Saunders

      Consultant

      In reply to David Arthur

      4 wells drilled in the 50s, and another in 2002? Exactly zero oil/gas produced so far? Not exactly a boom (although to be fair, who knows what might happen in future.

      Various international authorities and petroleum/minerals departments put out forecasts of how much oil/gas is possible in various areas of the world, easy for them to say as they don't generally try and find the oil. Educated guesses, as they would themselves admit (just look at the range of their estimates).

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    5. David Arthur

      resistance gnome

      In reply to Andy Saunders

      Thanks Mr Saunders. My understanding is that since 2002, exploration leases have been let over >50% of the Maryborough Basin.

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    6. Andy Saunders

      Consultant

      In reply to David Arthur

      Sure, not uncommon. Most basins have close to 100% lease coverage... doesn't mean a great deal...

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    7. David Arthur

      resistance gnome

      In reply to Andy Saunders

      "Most basins have close to 100% lease coverage" err, not 10 years ago they didn't.

      That so many leases have suddenly been taken out means a great deal; it means someone is at least willing to form designs.

      For mine, Australia won't be getting much gas export market - in a decade or so, rates of clathrate sublimation and permafrost thaw will mean that huge quantities of methane will be released to the atmosphere, and the push will be on to convert that methane to relatively benign CO2 ASAP. This will most likely be conducted in fuel cells, to maximise power recovery.

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  5. Michael Shand

    Software Tester

    My main concern is large investment in fossil fuel means that investors need to burn enough of this stuff to return a profit

    AKA; if we head down this path....we are locked in for a significant period of time

    Considering we have to get emmissions down to zero by 2050 - what on earth are we doing trying to justify digging up more fossil fuels?

    Am I the crazy one?

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    1. Greg North

      Retired Engineer

      In reply to Michael Shand

      Are there not claims Mike that burning gas produces far less CO2 than coal.
      As for achieving zero emissions by 2050, that might be a target but I doubt we'll ever see anything like that anywhere on the planet not to mention what comes from within the earth naturally or by degassing as at Lake Nyos - http://www.pbs.org/wnet/savageplanet/01volcano/01/indexmid.html

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    2. In reply to Greg North

      Comment removed by moderator.

    3. Michael Shand

      Software Tester

      In reply to Greg North

      Sure, burning gas produces less CO2 than coal

      But did you know that wind turbines produce no CO2

      if you give points to gas for producing less CO2, then I can only imagine how enthuesed you are for wind and solar

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    4. Andy Saunders

      Consultant

      In reply to Michael Shand

      Michael, the answer is probably "both" (or rather, "all the above" including solar etc).

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    5. Michael Shand

      Software Tester

      In reply to Andy Saunders

      Did you know burning coal produces less CO2 than burning peat?

      So we could have a mixture of coal, gas, wind

      actually crude oil produces less CO2 than peat, so if we burn Crude oil and Coal it would produce less than burning Peat

      What a renewable energy mix that is, setup for a win for sure

      I mean after investing millions into gas or crude oil plants.....we will just walk away from them before 2050 right,,,,,,right

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    6. Andy Saunders

      Consultant

      In reply to Michael Shand

      Any plant (gas, coal etc) built soon will be at or beyond eol in 2050, so quite conceivable that we walk away from them.

      I suspect you are being mostly ironic, but I'll play it with a straight bat anyway. In a system sense, every MJ of gas produced will displace a chunk of coal (as of course will every MJ of wind/solar etc - I'm certainly not against those). Even if we somehow miraculously had a huge amount of renewables available (we currently don't...) I'd still be in favour of gas. Strange…

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    7. Michael Shand

      Software Tester

      In reply to Andy Saunders

      Yeah, I don't buy the argument.

      That is, cracking someones skull is not as bad as impaling it....it doesn't follow that we should do either.

      Gas is better than coal sure, and if you hold a gun to my head and ask me which one I choose....I would choose solar

      Look, your completely right here but I am concerned that industry and government will do what they always tend to do which is argue we need to do this temporarily and then once support is given they go full blast.

      Also, for how long…

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  6. Mike Pope

    logged in via email @hotmail.com

    Victoria has been referred to as The Garden State and justifiably so given that so much of its land produces quality food on which major towns and cities depend. But for how much longer is problematic, though we already know that global warming is likely to result in reduced rainfall for south eastern Australia. In coming years, Victoria will become increasing dependent on its aquifers and irrigation to maintain present levels of food production.

    Ground water is already becoming increasingly important for Victorian agriculture so it stands to reason that the State Government would wish to protect it from the effects of fracking. On the one hand, Victorian industrial energy needs must be provided in the cleanest way possible – ultimately from low or no carbon sources but on the other, the mere whiff of this being done at the expense of food production is unacceptable.

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  7. Greg North

    Retired Engineer

    " Unconventional gas developments in Victoria and elsewhere will require careful management of any impacts, an informed and supportive community and transparent and effective regulations so that the state, and Australia, can benefit from a new energy option. "
    Somehow I doubt there are ever going to be too many supportive communities other than those on the fringes getting income and employment or the FIFO communities.
    It used to be said it is the $$$ that makes the world tick over and whilst that is still true to some extent, it is the developments that create the $$$, power being one of them for without power from some form of fuel there'll not be too much ticking over of any kind and as with most developments there'll always be winners and losers.

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  8. Roma Guerin

    Pensioner

    Winners and losers Greg North? Is that enough to base the decision on, to proceed with the industry and take our food supply out of the equation?

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  9. Garry Baker

    researcher

    But...... Peter Reith has been paid $2000 a day to head up a taskforce on fracking in Victoria. The Gas Market Taskforce", they called it, and the finals are now in. Reith went to the trouble to interview a couple of farmers and landowners, but the study was heavily weighted towards mining. The model they used was the same as Kennett's back in the early/mid 1990's when he hocked the state electricity commission to private interests. The political process is most instructive to read - given the price of power today, and the extent of non Australian ownership.

    http://www.uow.edu.au/~sharonb/ProjVictoria.html

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