This comprehensive report has been written by Sandi Keane available in its full length at independentaustralia and presented at this site in an abridged three parts.
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia License
RISING GAS PRICES, the pitched battle over CSG between farmers and miners, the US threat to LNG’s $13.2 billion export bonanza – are all set to spill over into the Federal election campaign. The Greens and Bob Katter are looking to capitalise.
The CSG industry’s hope of rivalling Qatar as the world’s biggest exporter of LNG could be snookered on a couple of fronts — the twin threat to Australia’s competitiveness in the face of a glut of natural gas from the US and the failure to overcome bitter resistance from farmers in key CSG tenements.
Thanks to world-leading extraction technology, oil and gas from the US’s massive shale reserves may see it regain its former “energy super power” title according to the Annual Energy Outlook for 2013.
After weighing up the economic impact on the domestic market, the US Department of Energy gave the green light on LNG exports to boost the flagging US economy.
Having warned that US shale production could be a game-changer two years ago, Deloittes now predicts U.S. LNG projects could displace Australian exports due to a surge in costs of constructing local LNG plants, The Australian reports.
Royal Dutch Shell’s Australian Chair, Ann Pickard, also weighed in on the threat to Australia’s competitiveness now that the US can deliver LNG to Tokyo Bay 20 per cent cheaper than Australia.
A spokesman for APPEA (the Australian Petroleum Production and Exploration Association) declined to comment when contacted by Independent Australia.
But the viability of the future LNG market is also threatened on the domestic front as farmers and (mostly) foreign-owned corporations go head to head in the competition for Australia’s riches: the $13.2 billion LNG export bonanza on the one hand, and Australia’s tightly-held food and fibre production regions on the other.
Both Arrow Energy (now owned by Royal Dutch Shell and PetroChina) and Santos Ltd (in partnership with Malaysian Petronas and French Total) are planning huge LNG facilities at Gladstone, Queensland.
So far, getting access to their major CSG reserves to fulfil feedstock requirements is proving a nightmare for the two energy giants
Delays due to concerns about fracking, toxic chemicals, depletion of water and loss of prime farmland are stalling progress and adding to costs.The Liverpool Plains’ Gunnedah Basin in New South Wales is a major CSG resource for Santos. It is also one of Australia’s major cereal, oilseed and cotton production regions. Its prized black vertisol soil delivers two crops a year, even during droughts
Likewise, Arrow’s Queensland CSG reserves are mostly concentrated on the Darling Downs’fertile cropping lands, in particular, Cecil Plains — whereas Origin and QGC acreage sits further west on marginal or grazing country. Livestock can easily move around wells so getting graziers on board with the prospect of additional farm income is possible — not so cropping land with its 30-foot harvesters, ploughs and fragile soil.
Like the Liverpool Plains, the black alluvial soil makes it one of the world’s most valuable producers of cereals, oilseed and cotton.
These two tightly held, iconic agricultural regions, along with the Hunter Valley, have emerged as flashpoints in the hostilities.
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