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Tuesday 20 September 2011

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WA shale revolution faces community pressure

Wednesday, 7 September 2011 James McGrath

WESTERN Australian Department of Mines and Petroleum director Bill Tinapple has admitted that shale development in WA faces uncertainty due to public concerns over fraccing.
Speaking yesterday at the 2011 Good Oils Conference in Fremantle, Tinapple said the department was caught offside by the level of community concern over fraccing in the state. It actually caught us by surprise the level of public concern and push back which we have seen in Western Australia, he said. Were trying to go through a process of making information available to the public on our website and running community workshops. Were trying to educate the public because there are a lot of myths out there about how fracturing has been used in wells in the US.
Drilling the Arrowsmith-2 well, courtesy AWE

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He hinted that the fresh wave of community concern about hydraulic fracturing stemmed from the Eastern States, where the coal seam gas industry has faced political heat on the issue. Theres no evidence that [fraccing] activity has caused pollution, so at the moment were working on a public discussion to let people know that the targets were talking about here in WA are not those like in NSW or Queensland these are deep targets, he said. Tinapple added that WAs regulatory system was quite strong and had stood the test of fraccing done in the state in the past. In Western Australia its quite interesting that weve actually had fraccing here for 40 years and 750 frac jobs have been done, which is a surprise to many people, he said. A lot of the frac jobs have been done on Barrow Island trying to increase the oil there but there have been 40 in the Perth Basin too. However, he added that the system currently in place would need to be tested as shale exploration and associated fraccing activity started to ramp up. Currently the DMP requires detailed information to be submitted to determine whether a fracture program can be carried out, including the scale of the program; distances from the nearest aquifer/s; all chemical additives used in operation; volumes, management and disposal of water; integrity of well casings; fracture modelling and monitoring of fraccing; and long-term monitoring to determine whether chemical contamination is an issue. The DMP will refer a proposal to the states Environmental Protection Agency if an activity is proposed or within 500m of an environmentally sensitive area and liaise with the agency if a proposed activity is within 2km of a town site or coastline or likely to impact a water resource area. Yesterday Norwest Energy received the all-clear to start a fracture stimulation of the Arrowsmith-2 well in the Perth Basin, although the EPA said the activity was on a small scale and unlikely to have a significant impact on the environment. We think we have a pretty good system but it needs to be tested and demonstrated, Tinapple said. We [the industry] need to do a good job in cleaning up after ourselves and making sure we dont use improper materials rather than just being seen to be doing that. He admitted the higher cost of shale gas exploration in Australia and the lack of

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EnergyNewsBulletin.net - WA shale revolution faces community pressure

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equipment capable of fraccing in the state would act as prohibitors to development. However, he said the effect of higher gas prices in the state would make the economics of development more attractive. The current situation is fairly unique in WA in that despite all this offshore gas, we do have a tightness in our domestic gas supply and thats causing the gas price in WA to be about $10-$12 [per gigajoule] which is different from the east coast, Tinapple said. Some people would say, and its probably true at the early stages, that to drill a well and frac in Australia costs three times as much as it does in the US, where theres a huge amount of infrastructure. We see that changing as we get to the critical mass and get over that hump and as we add infrastructure, but right now it is true that the $10-$12 we believe [will] support exploration and demonstration. He said the state was keen to welcome shale explorers with open arms, as most of the states offshore gas assets had been developed and the sheer potential for a US-style shale frenzy meant the government was keen to provide incentives, including assisting in the formation of drilling clubs and the building of infrastructure in key shale areas including the Canning and Perth basins.

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