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

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:

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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