Gas the “glittering prize” but fracking worries some

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By ERWIN CHLANDA

 

Resource development, especially gas and oil, will play a key role in elevating the Territory from being sustained by the “rust bucket states” of NSW, Victoria and Queensland, to becoming an economic “powerhouse” in its own right.

 

p2222-Dave-Tollner-1This was the upbeat message of Treasurer and Mining Minister Dave Tollner (at left) to 220 delegates of the AGES2015 Geoscience Exploration Seminar in Alice Springs this morning.

 

Fears of adverse consequences of fracking persists but the new CEO of the Mines Department, Ron Kelly, a former aide of Mr Tollner’s, is proposing that there are no problems for the practice to continue although the Hawke report says “environmental risks can be managed effectively subject to the creation of a robust regulatory regime”.

 

Mr Tollner says the price of energy has a great impact on investment decisions: For example, European firms are relocating to the USA because fuel is cheaper there.

 

“We see the glittering prize” in the Territory.

 

Mr Tollner says the NT still relies heavily on government services and support, with 16,000 Federal and 22,000 NT public servants, and “retirees, school kids and people on welfare support” making up a big slice of the population.

 

And “we’re 200 years behind the rest of country in development and infrastructure”.

 

That’s notwithstanding that “we’re getting $5.50 for every dollar we’re paying in GST,” he said. “WA gets 50 cents.”

 

Mr Tollner says oil and gas will be “one of the major drivers” although the onshore quantity of gas is still very much a guessing game.

 

The industry estimate is 260 trillion cubic feet of “gas interpreted to be in place” in onshore NT.

 

The actual figure is likely to be a lot lower, “but even if it is 10% it is still a very large resource,” says Ian Scrimgeour, executive director of the NT Geological Survey, which is part of the NT Department of Mines and Energy.

 

INPEX is dealing with a deposit of just eleven trillion cubic feet.

 

The price of 1000 cubic feet of gas is between $3 and $10. That puts the price of one trillion cubic feet at between three and ten billion dollars.

 

After referring to a group of anti-fracking protesters outside the convention centre (very disciplined, inside a taped enclosure, and under the watchful eye of two bouncers) Mr Tollner said the government needs to seek “social licence” to proceed with fracking.

 

Michael Liddle, who delivered the Welcome to Country, also made that point with respect to Aboriginal people, but Mr Tollner extended the need to consult to non-Aboriginal land holders as well: “Let’s not kill the goose that lays the golden egg,” he said.

 

He referred to the “great outdoors, one of the world’s great playgrounds.

 

“There must be no wildcatting in gas production.”

 

He said his government is committed to exploration “but we will take the public with us on this journey. We have to work with the people, all 230,000 of us.”

 

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Mr Scrimgeour (at left) said the extractive business currently “is tale of two industries”: a tough year for minerals which are “almost at a record low”, while petroleum is “forging ahead” although prices there, too, have dropped.

 

The NT’s mineral exploration expenditure has more than halved since the peak of 2011, dropping from $228m to $108m in 2014.

 

But in The Centre the Tanami – north west of Alice Springs – is experiencing a new exploration boom.

 

The known copper deposits in the Jervois area – north-east of Alice Springs – are increasing in “size and scale” with high grades being discovered, says Mr. Scrimgeour.

 

There are an estimated 4.5 billion tonnes of salt in the Chandler deposit, held by Tellus, about 100 kms south of Alice Springs.

 

Meanwhile Mr Kelly says, “there are robust regulations for fracking in place now” – although this isn’t how Victoria Jackson from the Department of Mines and Energy explained the situation to the Town Council last night.

 

The method has been in use in Central Australia for “40 odd years”.

 

“What we are doing with the Hawke report is making sure we have to world’s best regime in place before we embark on an expanded drilling program,” he says.

 

Coming late to the method “we have the luxury of looking at all of the good measures around the world.”

 

NEWS: In the USA there is a lot of discontent about fracking.

 

KELLY: There are certainly complaints. Some of these, when investigated, are – I won’t say dubious but there are some extrapolations from some concerns and failures in the early days of the process. Not all of them have a lot of substance behind them.

 

NEWS: What does Dr Hawke mean when he says robust measures need to be in place?

 

KELLY: He means we put in place the measures and the regulatory regime that ensures that we have a safe, sustainable industry.

 

NEWS: So we don’t have that kind of regime now?

 

KELLY: We do have it now because we’ve been doing it for a long time. What he said is when we are moving from a small number of operations to a larger one that we have a regulatory regime in place that allows Territorians to have confidence and that gives certainty to industry and government can manage that on a wider scope than we have now.

 

NEWS: So, are you saying that when the industry is bigger the regulations need to be different?

 

KELLY: No, the regulations will be improved where we can.

 

NEWS: Do you need to improve them?

 

KELLY: Yes, we need to. If we find there are areas that are a little bit cumbersome … [we need to] make sure that Territorians have confidence.

 

NEWS: The question seems to be, are there adequate regulations in place now. Hawke says we need them.

 

KELLY: We have those regulations in place now. What we need to do is make sure that we have, going forward, the best set of regulations. We can always get better, striving for best practice, as we learn more. I am not saying what we have now is not good. They are great.

 

Mr Kelly rejected assertions that water use by the mining industry is not regulated: “Water management on any mine site would be one of the most highly regulated operations, through the Environmental Protection Authority.”

 

Asked about the knowledge of water resources and underground water basin recharge – information crucial to fracking – Mr Kelly said: “Yes, in some areas we need to do more research and science to know just how much water is there and how much can be allocated … and what their recharge rate is.”

 

Mr Kelly took on notice our questions about how much is known about water supplies and how much more exploration needs to be done.

 

 

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6 Comments (starting with the most recent)

NB: If you want to reply to a previous comment, start your comment with this notation: @n where n is the number of the comment you want to reply to.
  1. Ian Rennie
    Posted April 8, 2015 at 10:06 am

    Towns In Oklahoma USA are feeling the affects of CSG exploration. Earth quakes and health problems are affecting the residents there. This could easily occur in Australia without government intervention.

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  2. Pagan
    Posted March 23, 2015 at 11:21 am

    Cracking open the ground beneath us, where our priceless resource is, WATER, and saying it will not affect the water table? Water will find a way out and contamination will enter the water source, regardless how careful you are. You are not under the ground to fix the problem once it has happened.
    We are so easily convinced by so called experts about how this will not happen till it does, and then no one wants to know about it.
    Look at the nuclear energy disasters.

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  3. Harold Hamm
    Posted March 21, 2015 at 3:24 pm

    The only thing that will save this Territory is to dig absolutely anything and everything out of the ground.
    The place is only full of misfits etc.
    The sooner the better, NT to be known as Australia’s dumping ground. Hasn’t hurt WA.

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  4. Phil Walcott
    Posted March 18, 2015 at 11:48 am

    Mr Kelly was parachuted into this role due to his close political affiliation and personal friendship with both the Chief Minister and the Mines Minister.
    Pure political appointments that fly directly in the face of the “separation of powers” between the legislators (politicians) and the executive (public service).
    Kelly’s predecessor was a very approachable and measured person who was sacked (despite the spin that he left the public service to pursue a career in the private sector). What did THAT pay out cost the NT taxpayers, Chief Minister?
    The agenda of this incumbent government is to purely satisfy the greed of their mining mates. Hydraulic fracturing has the potential to put the lives, livelihoods and environments of Northern Territorians at risk with scant regard for our safety.
    The Chief Minister and Mines Minister might be naive enough to believe the carefully woven untruths and misinformation supplied by the unconventional mining industry but the evidence otherwise is very compelling.
    Tasmania has placed a moratorium on the practice, it’s been banned in France, New York State and Germany for very good reasons.
    Thinking Territorians are not as naive and will not tolerate the current administration riding rough shod over our home. It’s not all about money, Dave. You’ll reap what you sow.

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  5. Charmaine roth
    Posted March 18, 2015 at 9:24 am

    I hold no confidence in any person or department who can not (or are unwilling to) distinguish between conventional and unconventional oil and gas extraction methods.
    Hydraulic fracturing in sandstone pockets is vastly different with less associated risk than the horizontally drilled, high volume slickwater, multistage fracturing that is needed for shale extraction.
    It is comparing apples to oranges … though in this case it is more like comparing a strawberry to a deadly nightshade berry.

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  6. Jason Quin
    Posted March 17, 2015 at 2:31 pm

    It is very encouraging to hear the head of the Mines Department believes we should “do more science”.
    Though I might suggest concerns, and “science”, should be directed at the risks of contamination, as well as extravagant private use of a common resource.
    However, I find it deeply concerning that faced with an ever growing number of jurisdictions raising the thresholds for this form of extractive industry, Mr Kelly has signalled his belief that evidence and experience from other regions is suspect.
    When we assess risks and consequences for the future, we should draw on evidence and “science”, rather than PR to “reassure” the public.

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