A new report on unconventional gas development from the federal Department of Industry and Science has been released.
Its stated aim is “to ensure the responsible development of coal
seam, shale and tight gas resources for the benefit of Australians and
position Australia to remain an energy superpower”.
In order to achieve this, the report notes at the outset that state
governments, and Indigenous landowners will need to be dealt with –
though the report uses prettier words.
Currently, the report notes, Tasmania, Victoria and NSW have
moratoriums on various aspects of the unconventional gas extraction
process. Further, large areas of remote Australia, especially in the NT,
where industry is seeking to expand are on Aboriginal land.
The report includes goals such as “streamlining regulation across
governments” and notes that “community engagement is the responsibility
of industry, but the Australian Government can assist by providing
information”, suggesting the federal government will fill a PR
“Shale and tight gas will be the next wave of unconventional gas
resources to be developed” according to the report, underlining what we
already know about the industry's plans to open up vast new gas fields
in the NT, South Australia, Victoria and elsewhere.
The optimism and narrow fossil fuel mindset of the report is in the tradition of a long line of Energy White Papers from successive federal governments.
There are good reasons to be sceptical of this fossil fuel optimism. A November 2014 report from think-tank Beyond Zero Emissions highlighted the economic risk to Australia of focusing on fossil fuel exports. Their Fossil Economy
report suggests that official projections of coal, gas and iron ore
exports will fall short by $100 billion per year by 2030, due to the
climate change mitigation efforts of trading partners.
Climate change is one of the biggest reasons to abandon the growth in
unconventional gas. The energy used to compress and ship liquefied
natural gas (LNG) to international markets raises the greenhouse gas
footprint of LNG to something similar to coal.
But leaks in the production process – due to porous ground, or leaky
infrastructure – can very quickly add up to an even larger footprint for
the complete life cycle of unconventional gas, compared to combustion
“Unconventional” or onshore gas is typically obtained by drilling and
fracturing (“fracking”) gas-containing rock layers such as coal, shale
or sandstone (respectively known as coal-seam, shale and tight gas).
The process is not new, but its wide scale use has only happened
since traditional, large gas deposits began to run out. There is no
shortage of gas trapped in underground rocks: the only limitation is its
The depletion of conventional gas resources should logically signal
an exodus of investment from the gas industry. Yet with the support of
governments and investors, unconventional gas is instead expanding in
Australia to become a major export industry. What are the risks in this
Unconventional gas is a risky investment for the same reason as
natural gas: it carries a risk of contaminating aquifers and the surface
with toxic by-products or leaking gas. The strata of rock in which the
gas is trapped are not necessarily regular, consistent formations.
Test drilling at regular distances can give an estimate, but cannot
with absolute certainty predict the geologic conditions between drill
holes. Not only does this mean accidental leaks are likely, but also the
expected gas reserve may fall short.
This overestimating of the resource is more likely than not to
happen, because the industry has a clear financial interest in
exaggerating its supplies. Share prices are heavily influenced by
projections of the size of resource available to the company. Imagine a
10% profit is expected on a gasfield.
If the projected life of the wells is 10 years, but they run out on
average after only nine years, there goes a lot of profit. But as
unconventional gasfields are intended to roll on from one locality to
the next, sinking new wells as old ones dry up, it may be possible to
disguise previous underperformance amid promises of new reserves just
over the next hill. This dynamic has been described as the “gas Ponzi
In 2004, US journalist Ron Suskind related a conversation with an aide
to then president George W. Bush. ''We're an empire now, and when we
act, we create our own reality” the aide purportedly said.
A combination of corporate wealth and government power can “make
reality” for a time, long enough to make a few corporate high-fliers and
retired politicians very rich whether in rebuilding the devastation
inflicted on Iraq, or on a more mundane level, producing LNG for export.
As the descent of the US occupation of Iraq into chaos and the GFC’s
impact on the housing and banking sectors show, this kind of forced
march can only go on so long before it is overextended and
In the case of unconventional gas, the combination of an inherently
risky industry and growing competition from far more secure renewable
energy technology will almost inevitably cause a faltering if not a
crash in the unconventional gas industry at some point.
Modern capitalism could continue like this forever, in theory:
pumping up bubbles and state-industrial power plays before lurching back
into the basic state of crisis when they fall flat --while the culprits
make a quick getaway with as much loot as they can sequester in
offshore tax havens.
But whether humanity can endure much more of it, as climate
tipping-points are already being triggered by our atmosphere's rapidly
rising greenhouse gas concentrations, is another question. We could wait
for the unconventional gas industry to crash, but how much damage will
it do before then?
We are running out of time, and it is vital to do everything we can
to stop the unconventional gas boom dead in its tracks. Increasingly, it
seems, that will mean campaigns such as Lock the Gate will need to
fight on the federal front as well as the state for regulation of the