Gas fracking: Who forgot the oil?

2615 gas 1 OK

 

2615 Tim Forcey

By TIM FORCEY (pictured)

 

For years gas fracking has been the topic of official inquiries and much discussion in the Northern Territory. But somewhere along the line, they forgot to tell us about the oil.

 

The fact is that the Gunner Government’s permission to frack for gas amounts equally to permission to frack for oil – enhancing the production of oil and giving access to Northern Territory oil not available without fracking.

 

The frackers didn’t forget to alert their investors. Origin Energy announces the first order of business in the Beetaloo basin is to target the “liquids-rich” Kyalla and Velkerri shales. Falcon Oil and Gas adds that the Hayfield sandstone is “anticipated to have the highest liquid yields”. Federal Minister Canavan hopes the Beetaloo will produce more oil than the Bass Strait.

 

Normally an oil and gas company loves to shout from the rooftops about the prospects for oil. As a liquid, oil is easier to deal with and worth ten times as much as gas, molecule for molecule.

 

Gas, on the other hand, is a problem.  It needs to find a market, sometimes as far away as Queensland or even China.

 

Getting it there takes pipelines thousands of kilometres long, or multi-billion dollar liquefaction plants, LNG ships, and then LNG import terminals, regasification facilities, and more pipelines. For what, billions of dollars of asset write-downs and the opportunity not to pay any tax?

 

BHP lost billions of dollars in the USA shales hoping to find oil but found only gas. Today some US fracked gas is so worthless they are flaring it off, venting it, or paying people to take it.

 

By comparison oil is easy. Get it out of the ground, put it in a tank, “weather off” the benzene-containing light ends, put it in a truck and now someone will pay you fifty US dollars per barrel for it, or more.

 

So why all the talk in the NT about gas, and so much silence about oil? Because although gas isn’t so easy to sell to a distant customer, it can be easier to try and sell it to the Australian public.

 

After all gas is a “clean green fuel” isn’t it – but only if you compare it to coal, and if you ignore all the “fugitive” greenhouse gases released into our air.

 

And we have a gas shortage crisis in Australia don’t we – even though we are the largest gas exporter with 81% of our gas slated to leave the country.

 

And people down south need gas in winter to keep warm don’t they – only if you don’t know that it’s far cheaper these days to heat your home with a modern reverse-cycle air conditioner.

 

Cooking with gas? With gas, one thing you can definitely cook up is a case for fracking it.

 

Whereas it’s harder to argue that NT oil would satisfy some greater good. With so many oil spill disasters around the world and electric vehicles on the way, no company suggests oil is a clean-green fuel. Nor would they even hint that NT oil is going to reduce the price you pay for petrol by even one cent.

 

So the miners went silent on the real prize, oil, and also silent about its risks. Oil was explicitly left out of the Terms of Reference for the NT Fracking Inquiry. There has been no review into the threats oil poses to our air, water, land, and health – even though cancer-causing oil components have been widely found to cause harm in the fracked lands of the USA.

 

It’s time the oil and gas companies were honest with Territorians about their real plans, and about the problems fracking for both oil and gas will bring to the NT.

 

Tim Forcey worked for forty years as an engineer and manager in the petrochemical, oil, and gas industries in the US and Australia. More recently he has published energy research with the University of Melbourne.

 

[The Alice Springs News Online is inviting comment from Mr Gunner and seeking an answer to the question: Why was oil not included in the terms of reference for the Pepper enquiry?]

 

 

 

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2 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. Richard Bentley
    Posted February 28, 2019 at 9:16 pm

    Gas and oil are good for a generation, if we last that long.
    Renewable technologies are good for ever.
    There is no reason why we should not be 100% renewable with solar generated electricity and electric transport inside a decade.
    These technologies als provide jobs everywhere, not just on the gas field.

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  2. Tony
    Posted February 27, 2019 at 3:57 pm

    Oil will still be part of the energy mix until huge uptake of electric cars, buses, bikes replaces it. Lithium extraction, and financing is currently difficult, even with 20% year on year demand growth. Saudi Arabia is planning and implementing an exit strategy from oil exports by going high tech as an export nation over the next 25 years. Many European countries won’t ban new ICE cars and trucks until 2040, some by 2030.
    The Northern Territory can export their gas and oil to Asia, Europe, and the USA until then, while employing more people, increasing their tax base substantially, and develop more industries such as Lithium battery manufacturing.
    Mining also employs, and trains, many Aboriginal kids with no other choices towards their futures. These developments need engineers, builders, contractors, food and beverage facilities, and many other skilled staff. I don’t see any other industry putting up their hands to give young people skills and a future in large numbers in these remote areas.
    I personally ride an electric motorbike with a lithium iron phosphate battery that costs next to nothing to run and I can park anywhere.
    Toorak Tractor driving wankers that never go off-road should have to pay a congestion tax in the cities.

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