APPEA Says Fraccing Moratorium Bad News for NSW (Australia)

The NSW Government’s continuation of its fraccing moratorium is a bad decision for the state says the peak body representing Australia’s oil and gas industry.

The Australian Petroleum Production & Exploration Association’s Chief Operating Officer – Eastern Australia, Rick Wilkinson, said: “Not only is this a moratorium on economic growth at a time of significant economic uncertainty, it is a moratorium on investor confidence in a state stuck in the slow lane of Australia’s two-speed economy.

“Fraccing is a well-established and tightly-regulated technology that has been used safely in Australia since the 1970s and globally since 1948.

“Fraccing has been used for more than six decades in two million wells, so it is unfortunate to see the current debate surrounding this technology getting so heavy on ideology and so light on facts.”

In coal seam gas (CSG) production, hydraulic fracturing (or fraccing) is sometimes used to improve gas flow by pumping fluid down a well at high pressure. The volume of fluid used is typically less than half a swimming pool (1 megalitre). Proppants such as sand or tiny ceramic beads are used to hold the fissures open and improve the flow of gas. The fluid used is typically more than 99% water and sand with a very small amount of chemicals included; chemicals that are commonly found in household products such as toothpaste and cleaning products.

APPEA supports the disclosure of fraccing fluid ingredients, including on a site-specific basis and is keen to work with the NSW Government to develop a comprehensive and workable disclosure policy to help allay public concerns and increase public confidence in the safety of this process.

NSW uses coal to generate around 90% of its electricity, yet demand for cleaner energy (gas is up to 70% cleaner than traditional sources) will see more gas used in NSW in the years ahead. NSW today imports around 95% of its gas supply and ACIL Tasman’s recent report: Economic significance of coal seam gas in New South Wales shows that imposing a moratorium on the NSW CSG industry, rather than letting it grow to supply domestic and export markets, would cause:

• Wholesale gas prices in Sydney to rise $1.48/GJ or 21% on average over 2025 to 2035;

• Emissions of CO2 from power generation to rise by 6 million tonnes per year by 2030;

• NSW wholesale electricity prices to be 8.35% higher on average between 2020 and 2030;

• Real income in NSW to fall $73 billion on aggregate over the period to 2035;

• NSW employment to fall by an average of 5362 annual full-time equivalent positions; and

• NSW Government receipts from CSG royalties and payroll tax over the period to 2035 to fall by $4.7 billion on aggregate.

[mappress]
LNG World News Staff, December 5, 2011; Image: APPEA