With gas supplies rapidly running out, the Sth Australian govt decides to build a gas powered station to address failing electricity supply. The power supply is failing because of the State Premiere’s insane obsession with renewables, and the mad myth of global warming.
Now he’s going to fix the problem with gas, when anti-fossil fuel govts have for years done so much to put gas explorers and producers out of business.
People need to understand why there’s a shortage of gas. Here’s an abbreviated explanation.
There are two prime sources of gas, and it is important to appreciate that both have entirely different methods of exploration and extraction, and also an entirely different set of risk factors. You cannot conflate these different risk factors into one industry.
- Coal seam gas, or methane, (sometimes called unconventional) is accessed by means of shallow wells (average about 500 metres) intercepting coal seams. There needs to be a network of wells over a relatively small area to make the extraction economically feasible.
- Petroleum Gas (or conventional gas) is accessed by deep drilling into hydrocarbon reservoirs thousands of metres below the surface. It does not require a network of wells. If more wells are needed, they are generally drilled by “kicking off” from the first well. About 95% of Australia’s production is petroleum gas.
These two sources of gas have widely differing means of discovery and extraction. Methane gas is low pressure. It has leaked into the atmosphere by natural means (swamps, exposed coal deposits and underground caverns) for centuries. It still leaks to the surface today by those means.
Petroleum Gas very rarely escapes naturally due to its depth. It needs to be confined, or in an underground geological trap, under pressure, to be utilised.
Methane gas wells sometimes leak to surface, but as with natural emissions, there is no danger to these leaks apart from the extremely remote risk of a low intensity fire or flame. The leaks can be repaired relatively easily by resealing the wells. It is important to understand that the danger from these wells, even if they leak, is so minimal as to be almost non-existent.
Do methane gas wells effect water supplies? Extraction frequently requires the removal of large quantities of water. Removal of groundwater lowers the pressure on the gas and allows it to seep through the coal and into the wells. This water is contaminated by coal and not drinkable. Does its extraction affect local water wells. It shouldn’t but if either the water wells or the gas wells are constructed incorrectly, it may.
Govt agencies regulate the construction of coal seam gas wells and water wells. These regulations are designed to geologically isolate one type of well from the other, and if they are followed, there should be no connection between the two, and therefore no problem.
The bottom line is that there is no good rational reason to ban methane gas drilling for “safety” reasons.
Disputes with landowners concerning land use and access are a matter for the gas companies and farmers and should be negotiated until an agreement satisfying both parties is reached.
State governments reacting to campaigns by anti-capitalist groups have banned or severely limited methane gas extraction in New South Wales, Victoria and Northern Territory, with baseless scare campaigns against fracking being the main driver of these bans. Exploration is under severe pressure in other states.
Baseless fears around fracking are also used to ban petroleum gas drilling. It doesn’t blow out unless of rare catastrophic events, and no water wells are contaminated because the gas is much much deeper than the aquifers that contain the groundwater. Victoria has inexplicably banned methane gas exploration and petroleum gas exploration.
Consequent to the unfriendly actions of governments captured by environmental scaremongerers, gas exploration has dwindled to almost zero. Its just too hard, and too risky an investment.
Gas company Metgasco accepted a $25 million compensation package to cease methane gas exploration in NSW. Lakes Oil was stopped by the State govt from exercising its petroleum exploration options in Victoria. It is now pursuing a$2.7 billion claim in the courts.
In view of the above scenarios it is laughable that Malcom Turnbull now threatens government intervention to deal with a shortage of gas in Australian markets.
The gas market too is distorted by taxation and international regulations to an extent that is far too complex to explain here.
Government is not the solution to gas shortages it is the problem. Malcolm Turnbull with his empty threats to current gas suppliers achieves nothing but to make himself look like a blustering fool. As usual.
Here is the bottom line. Both methane gas and petroleum gas wells are drilled by the thousands in the US and bring employment and wealth to the regions where the drilling takes place. The US produces about 2 trillion cubic ft of methane gas per annum. There are around 2 million producing wells. (conventional and methane) There is around 90 billion cubic feet of petroleum gas produced per day! The downside is negligible.
There is no shortage of gas in the United States, so why is there one in Australia? Govt intervention is the primary answer.
Shortages of gas and price inequities are first of all addressed by removing unnecessary regulations that prevent or hinder drilling and exploration. Once this has taken place, then the problems of pricing can be addressed.