Western Australia: Opportunities for Shale Gas
Executive Director, Petroleum, Department of Mines and Petroleum, WA, Bill Tinapple, told delegates at the Shale Gas World Australia 2011 conference in Adelaide about opportunities for shale gas production in his state.
At the Stamford Plaza in Adelaide, Tinapple said there were opportunities in shale and tight gas. “The problem that we have is that our domestic gas continues to grow,” he said. “We are the heaviest consuming state in Australia.
“We have consumed just over a 1000 kilojoules a day. The gas consumption is growing about four percent per year.
“The problem that we have is that there’s a conflict between do we keep the LNG plants full, does the industry not the government, does the industry keep the LNG plants full or does the industry put it into the domestic market. Of course it’s a price-driven decision by the companies and we’re struggling with that.”
Tinapple said it was a real challenge to ensure there will be enough gas available. “There is some new gas coming into the market, but even with that there is still projected out for the next five years a shortfall in gas.”
Tinapple made the point that the easy offshore gas had already been developed.
He also said another eight LNG projects were under consideration on the drawing board. “Some all the way from drawing boards too actually under construction,” he said.
“So there are large commitments for the gas that’s there. Such that in a relatively short time, by around 2018, we can see that the gas production, the supply into the system, will have moved up from 1.2 TCF a year to about 4. That means that the 142TCF that we have is not going to last for a long time.
“In 30 or 40 years time particularly, the LNG plants will need topping up.”
Tinapple also made the observation there was a need for the state to diversify supplies. “Studies and evaluations have shown that the state should diversify its gas supply and we are trying to bring in some incentives to do that,” he said. “As far as shale gas and tight gas, it looks like we are very prospective for those.”
Tinapple said unfortunately for CSG there had not been any demonstrated sources but there were a couple of companies doing exploration. “But all together, given the prospectivity, a potential for a good gas price, the situation in our state looking for future supply and demand – it really builds a business case in our minds.”
A slide then showed the growth of unconventional gas in the US. “It’s a huge revolution some people say, it’s changed the whole outlook for the US and we think it will happen here in Australia,” he said.
Tinapple later displayed a slide to highlight some new initiatives in WA for gas exploration. “The government is trying to assist this in happening,” he said “We would rather see supply from shale gas and tight gas starting in the next few years, in five years, rather than waiting for 20 years. We think it will happen – there’s no question about that.”
The slide listed the new initiatives in progress or completed as an Exploration Incentive Scheme (EIS), tight gas royalty relief, mobilization of drilling rigs and fracturing equipment, and facilitation of land access.
Tinapple noted the problem in Australia, particularly WA, of a shortage of deep drilling rigs and fraccing equipment. “So the government is trying to do something about that,” he said.
“We are also trying to facilitate land access. We do that with native title and with the environment.”
Tinapple added that the department was also considering other initiatives including getting more infrastructure into remote areas, and looking at current legislation, which was developed in the 60s and reflected more traditional kinds of drilling and production. “The legislation does not reflect the build-up of production that would happen under unconventional gas,” he said.
A slide was shown depicting the sedimentary basins of WA to highlight prospects for shale gas in the state. Tinapple said it was starting to happen. “However, we are still at the first few steps of the journey and that’s good and it’s bad,” he explained.
“It’s good because it means there are a lot of opportunities out there for companies to chase. But it’s bad then that we don’t have the infrastructure and the equipment.”
Tinapple then showed a slide showing activities targeting shale and tight gas resources regarding the Perth Basin and Canning Basin. “All together over the last 10 years there has really only been 11 unconventional shale and tight gas wells that have been drilled,” he said.
“That’s where we are at currently, starting this journey. We think it’s going to get very active.”
Tinapple also talked about hydraulic fracturing with a slide listing several key points including that the practice had been used in one million wells in the United States, and in 2004 the US EPA and Ground Water Protection Council found no direct link between hydraulic fracturing and ground water impacts. “The US EPA is doing another study now,” he said.
The list went on to state average fraccing per well in the US is 15 stages and fraccing has been used for 60 years in the US and 40 years in WA. “There is this public perception that it’s a real hazard to health,” Tinapple said.
“It’s something we are trying to educate the public about. We are putting information on our website. We are preparing publications trying to get information out there to the public.
“We are likely to carry out localized workshops around the state, just trying to get the public to understand what’s involved and what protections are there.”
Tinapple then showed a slide to demonstrate that in WA the targets for shale gas are much isolated from fresh water aquifers, followed by another slide to make the point that proper well construction provides groundwater protection.
Tinapple also showed an interesting slide regarding water usage for fraccing. One of the most interesting points was that many sources and types of water can be used including saline, industrial and bore water.
Reported by Simon Trayhorn