Page 6 - AsiaElec Week 18

AsiaElec COMMENTARY AsiaElec
Australia’s CBM sector enjoys good news
The oil and gas price collapse has undermined Australia’s upstream projects, but the CBM sector is bucking the bad news trend
AUSTRALIA
WHAT:
One major CBM project is underway, while another is likely to receive government approval
WHY:
The projects have remained viable despite the oil and gas price downturn
WHAT NEXT:
CSIRO’s new study will pave the way for future CBM investment, once the upstream recovers
THE Australian upstream has been battered by this year’s collapsing oil and gas prices, with developers big and small reviewing their capital expenditure and deferring projects until busi- ness conditions improve.
One corner of the sector has been the source of some unexpectedly upbeat news, however. The coal-bed methane (CBM) industry, known locally as coal-seam gas (CSG), has been under pressure for years – either from environmental campaigners or from the government worried that export-focused projects were siphoning supplies away from the local market. The tables appear to have been turned in a rather remarka- ble style over the last few weeks.
First came Arrow Energy’s unexpected decision to sign off on the Surat gas project in Queensland, then a study by the country’s lead- ing scientific body concluded that hydraulic fracturing had “little to no impact” on the sur- rounding environment.
Now New South Wales (NSW) will resume its consideration of Santos’ Narrabri CBM project following the introduction of new regulations that allow for the Independent Planning Com- mission (IPC) to conduct public hearing pro- cesses that conform to government-mandated social distancing measures.
Keep your distance
Santos welcomed the NSW government’s intro- duction of the regulation this week, with manag- ing director and CEO Kevin Gallagher saying on April 30 that a decision on Narrabri was “more important than ever”.
The new regulation allows the IPC to hold new project public hearings, which will inform its decision on whether or not to approve them.
The commission is supposed to decide on Narrabri’s fate within 12 weeks of receiving the NSW Department of Planning’s assessment report, which is still pending.
Gallagher said: “The only way to put down- ward pressure on gas prices for customers, including manufacturers, is to increase supply and competition. Santos has committed to pro- vide 100% of Narrabri gas to the domestic gas market and it will be the most competitively
priced gas for NSW customers in the coming years.”
Santos has said previously that the project could deliver 70 PJ (1.82bn cubic metres) per year of additional gas to end-users by 2023.
The executive added: “If we can develop Nar- rabri gas, it will be the most competitively priced gas for NSW customers, benefiting from our Queensland coal seam gas development expe- rience, where we have reduced connected well costs by a massive 84% over the last few years. I am confident Narrabri gas will be cheaper than LNG imports, especially when gas prices are high in Asia.”
Gallagher said the company had relied upon the “best science” to confirm that the Narrabri gas project could be developed safely and sus- tainably. His comments connecting science to the project’s environmental safety came just two days after the Commonwealth Scientific and Industrial Research Organisation (CSIRO) pub- lished the results from its three-year study into the environmental impact of fracking on coal seams in Queensland’s Surat Basin.
Nothing to see here
CSIRO’s Gas Industry Social and Environmental Research Alliance (GISERA) studied the drilling practice and found that “hydraulic fracturing in Queensland has found little to no impacts on air quality, soils, groundwater and waterways”.
The investigation also found that current water treatment technology used for water pro- duced from CBM wells was effective in remov- ing fracking chemicals within water quality guidelines.
The agency noted that its research objectives had been developed “in response to community concerns about the potential for chemicals used in hydraulic fracturing operations to affect air quality, soils and water resources”. To this end, the study analysed samples taken before, during and up to six months after fracking operations had been carried out at six Surat Basin wells.
GISERA director Damian Barrett said the research was an Australian first, providing unique insights into the impacts of domestic fracking. Barrett said: “Previously, the only
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w w w . N E W S B A S E . c o m Week 18 05•May•2020