Cheery Beetaloo gas prophesy needs second look

By ERWIN CHLANDA

The NT Government’s cheery propaganda about enormous gas reserves in Beetaloo poised to elevate the Territory to unimaginable wealth calls for a second look.

The future of the basin, about half-way between Alice and Darwin, is facing global issues of oversupply, uncompetitive gas prices, reserves being far from markets and opposition from nuclear and renewable electricity.

Kevin Morrison, from the Institute for Energy Economics and Financial Analysis (IEEFA), points to some troubling facts.

Australia is the world’s 15th position for reserves but is the third-biggest exporter, meaning that we deplete our reserves much faster than most.

And the LNG business is its own biggest customer: More than for any other purpose, gas is used to freeze gas for export.

Japan is selling gas it has bought from Australia on the global market because it has too much of it, is stuck with contracts of oversupply. It is further expanding the Kashiwazaki-Kariwa facility, the world’s largest nuclear plant, as the Fukushima disaster is becoming a distant memory.

Electricity supply for the Australian domestic market increasingly comes from rooftop solar.

Mr Morrison says the outrage about gas exports at the expense of consumers in Australia’s eastern states and the failure to put on guard rails are also now being seen in the light of a 50% increase in global LNG supplies.

Japanese companies have invested at least USD10.8 billion over the last two years in unconventional oil and gas production in the US.

China has stopped buying gas from the US and is now Russia’s biggest customer.

Not knowing who the end customer is going to be creates uncertainty for planners of a new field, such as Beetaloo.

If it is ever developed it will be mainly for export and not for domestic supplies.

Mr Morrison says so far it has no commercial proof of its reserves: “The work so far has been exploratory, potentially there could be gas, three kilometres below the surface.

“The proponents of Beetaloo gas have adopted a strategy of build and they will come at a time when there are more risks associated with the outlook for global gas demand.”

Beetaloo seems a long way from taking the $15 billion deficit off NT Treasurer Bill Yan’s shoulders.

PHOTO: Beetaloo gas, if it ever sees the light of day, will be mainly for export and not for domestic supplies.