Monday, 4 February 2013

No longer such a gas - Part 1


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.

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.
 
Previous related discussion


 
Later published discussions
 

.

10 comments:

  1. yep it's adding to what I posted a couple of weeks ago about rising LNG costs, environmental woes and the threat of cheaper US exports.

    ReplyDelete
  2. Well there's a lot of gutsy stuff there. But personally, and no doubt not very popularly here, I think some of these views are pretty one sided. Or just biased, to be blunt.

    Elsewhere on this very site, and more widely in the MSM and the blogosphere at large, the plight of farmers at large to survive and beat off the debt dragon, letalone contribute to a (deservedly)good lifestyle for themselves, and to the national economy, is widely discused.

    So rusted - on opponents to the commercialisation of CSG, what do YOU see putting bread on Oz tables over the next 10 years? Farming? (Sadly in grave difficulty, see above); Manufacturing? Already killed off by factional self - interests, rampant union rubbish and the peculiarly Oz concept that "if we build a level playing field, others will follow"; Mining? The boom has already well and truly peaked, according to many experts; Prayer?? Well, perhaps some should try that.

    There was VAST opposition in the US to the exploitation of their shale gas and oil reserves, but that seems to have died down. Sure there are still cowboys and not nice people involved in some of these new energy developments, everywhere. Just as there are in real estate, banking, politics and the public service, ....... farming ....... Even squeaky - clean Canada tries to turn its back on the hugely ugly looking and hugely expansive Athbasca oil sands development, but it IS in the wilderness.

    So what REALLY do people want, and what are THEY prepared to contribute to national well being?
    Cheers al

    ReplyDelete
  3. Al, there is some in this report I disagree with as well especially the importance the author gives CSG as an issue in the upcomming Federal election.
    Sure there may be a biase in this report but I disagree that it is "pretty one sided".
    I take it when you write "putting bread on Oz tables over the next 10 years", you are refering to contributing to the economy. Farming is still making a good contribuation to the national economy, it just does so at the expence of farmers themselves. Manufacturing as you have written has been sadly neglected. Mining even with a boom over will still make a solid contribution to the economy.
    So do you see CSG as the means of keeping the standard of living in Oz high? It could well do so; but at what cost? Be carefull that in trying to keep the standard of living high for the next 10 years that we destroy our ability to place real bread on the table in the years beyond.
    There are problems with this industry; these problems need to be solved and then let us have a viable CSG industry.

    ReplyDelete
  4. It would be really positive, useful and interesting if other people started posting, wouldn't it?

    ReplyDelete
  5. Agree, Al. More would be good. But at least the few of us contributing can disagree in a friendly manner when that happens. There is no one on a soap box shouting 'I know I'm right, I read it on Wikipedia or found it on Google, the rest of you are dumb morons who should just bugger off" And that is good too.

    ReplyDelete
  6. One thing we might all agree on is that our government should be proactive in encouraging value adding the Gas industry here in Aus. They are always at primary producers to vertically integrate yet seem happy to see all(?) the raw material in this instance be exported. If it is possible to use it as a raw material ourselves and I genuinely don't have knowledge of this, then its time now to be putting pressure on TA and his team for undertakings in this regard. As an aside, I do wish the media would stop bleating about Turnbull. Who else wants him? Sorry John and Al Mikko just don't have time at the moment to be an active blogger but I do check your contributions regularly, thanks for my entertainment.

    ReplyDelete
  7. Hey Dixe the Brothers in Arms are not the only ones contributing :0) But you are right and I think I said something similar about Tony Abbot just recently. There certainly is scope for us to use much more of the gas - commercially, industrially and for transport. Meanwhile I just saw Tony Burke interviewed on News 24 about a bunfight he is having with NSW Premier Barry O'Farrell about CSG exploration rights encroaching in urban areas, particularly Western Sydney. Burke claims NSW is a maverick state in regards to CGS rules and he wants them to conform with other states where he claims CSG exploration does not happen near urban areas. People on the Darling Downs Tara Estate might dispute that.
    Anyway Burke said there is the real threat of gas extraction causing land to subside - a metre was mentioned -
    which would be disastrous in an urban area like Western Sydney.
    Of course there is an election coming up in September and Western Sydney is a key seat.

    ReplyDelete
  8. Subsidance of one metre would also be disastrous on precision farming areas.

    ReplyDelete
  9. Would be disastrous for buried gas pipelines too, I would imagine, Jo. Meanwhile I have done a more detailed article on the big 42 inch diameter CSG pipes which were washed away, bent and twisted in the floods near Mt Larcom. Should be published on Saturday in the Qld Telegraph.

    ReplyDelete

Welcome to a place that has a focus (but not exclusively) on regional and rural Australia open for anyone living anywhere to read, learn and interact. Please feel free to make a comment.

You can use some HTML codes such as, a for active; b for bold; i for italics

Active code - substitute a for @
<@ href="web address">linked words

[Click Here] for a link to another site where there is a very good simple explanation.