overview of possible impacts from coal seam gas
development in Northern Rivers, New South Wales
Project by Elfian Schieren, 2012
2.4 Coal seam gas development in
Australia is a fragile continent in terms
of ecology and economic development with limited water resources and capacity
for food production, possibly not yet realised yet due to a relatively small
Conservation and sustainable development
are considered essential to the future of Australia (Moffatt, 1992).
So far a small population size and large
mineral resources has allowed Australia to be a large exporter of goods
especially minerals but the future is uncertain for the ecological systems
underpinning the economy in Australia as the impacts of export industries and
high consumer demand begin to take toll (Moffatt, 1992).
CSG is considered a viable cleaner energy
source than coal and global demand from Asia and Europe have turned CSG into a
valuable export for Australia.
Rising global energy prices and increasing
domestic and overseas electricity demand are major drivers in the expansion of
CSG production (Australian Department of Resources, Energy and Tourism, 2011).
Australia has large reserves of coal seam
gas within the Surat and Bowen Basins in Queensland, the Clarence-Moreton,
Sydney, Gunnedah and Gloucester Basins in NSW and further exploration is
expected in other coal basins in Victoria and Western Australia.
Initial attempts to develop CSG in the
Bowen Basin in 1976 were unsuccessful due to a lack of understanding of regional
geology of targeted coal measures, lack of knowledge on importance of stress
regimes and their influence on coal permeability, and inappropriate well
completion techniques (Baker and Slater, 2008).
Coal seam gas is viewed as a vital
contribution to Australia’s economic growth and energy security, and an
efficient energy and exportable fuel source in a carbon conscious market
(Australian Department of Resources, Energy and Tourism, 2011).
There are now 1600 commercial production
gas wells and a further 1400 exploration wells in Queensland (Jones, 2011).
Figure 3. Australian LNG exports by
destination (Jacobs, 2011)
The Gladstone project in Queensland is the
world’s first CSG to LNG development that began as a joint venture between
Santos, Petronas, Total and Kogas in 2011.
Three more major CSG to LNG projects are
underway by Arrow Energy, Origin and ConocoPhillips and the BG Group (British
Gas) (Jacobs, 2011).
In 2009/10 coal seam gas (CSG) accounted
for 13% of total Australian gas production on the Eastern Gas Market produced in
Queensland, New South Wales, Victoria and South Australia(Rutovitz et al, 2011).
Assuming that all CSG produced is used in
Gas-to-Liquids (GTL) projects the high demand estimates suggest that CSG will
make up around 7% of total LNG exports (Fainstein et al., 2002).
However this figure is unlikely as around
half of CSG produced will be used in domestic energy production (Australian
Energy Regulator, 2011).
Australian LNG supplies the Asia-Pacific
market with most LNG going to Japan until 2005 when the market expanded to China
and in 2008 to include India (Figure 3).
Since 2003 the Australian gas exports have
increased two and a half fold (Figure 3) (Jacobs, 2011).
Using estimates of rates of consumption,
consumption increase and the proven and probable reserves of gas (Conventional =
8,000PJ, CSG = 28,000PJ) indicates that conventional gas will be viable for
another 9 years and CSG for another 27 years.
When including projected exports from the
Liquefied Natural Gas Project at Gladstone, approximately 1440PJ per year, the
lifetime of all Australian produced CSG reserves is reduced to 16 years (Rutovitz
et al, 2011) or maximum estimate 20 years (Australian Energy Regulator, 2011).
Queensland has the largest CSG reserves and
NSW the second largest (Figure 4).
Most of these reserves have not been
extracted yet as the industry is still relatively new and expected to undergo
massive expansion in near future (Figure 4) (Jones, 2011).
Companies involved in CSG exploration and
production in Australia include Queensland Gas Corporation (QGC) (owned by
British Gas), Arrow Energy (jointly owned by PetroChina and Royal Dutch Shell),
Metgasco, AGL, Origin, Linc Energy, Red Sky Energy, Santos, Conoco Phillips and
Australia Pacific LNG.
PetroChina, co owner of Arrow Energy, is a
subsidiary of the China National Petroleum Corporation, one of the world’s
largest oil companies (Arrow Energy Pty Ltd, 2012).
Figure 4. Australia’s conventional and coal
seam gas reserves (Jones, 2011)
The coal seam gas industry is only around
30 years old, relatively new compared to other mining industries, and there is
limited data on the potential impacts to the environment, the economy and
There have been several concerns brought to
public attention through anecdotal evidence from the United States and other CSG
development countries such as Australia.
These concerns centre mostly on the
potential impacts to groundwater quality and quantity, human and animal health,
greenhouse emissions, earthquakes and long term impacts to the economy.
Queensland | Western Australia |
South Australia |