fracking – Michmutters

Queensland’s Surat Basin may be home to the state’s main coal seam gas region but it could be about to get a whole lot bigger.

Senex Energy, which is owned by Gina Rinehart’s Hancock Energy and South Korean steel maker Posco, has announced a $1 billion expansion of its natural gas developments in the Surat Basin, which includes hydraulic fracturing, or fracking.

The expansion, which still needs approval from federal Environment Minister Tanya Plibersek, will increase the company’s gas production to 60 petajoules (PJ) per year from the end of 2025.

Producing enough electricity to power more than 2.7 million homes each year, it is equivalent to more than 10 per cent of the east coast’s annual domestic gas requirements.

In a speech to industry leaders in Brisbane on Thursday, federal Resources Minister Madeleine King urged them to expand amid warnings a gas shortage could lead to higher prices.

“More supply of gas is a good thing in the domestic market and for the international markets,” Ms King said.

“We want to have a sustainable and ongoing system of gas supply for the domestic market, while also honoring the arrangements companies have in place and Australia has in place with our international partners.”

Filling domestic demand

According to the Australian Competition and Consumer Commission’s (ACCC) interim report of its inquiry into gas supply, there is a significant risk to the east coast’s energy security in 2023.

Two men walk through gas pipes — Resources Minister Madeleine King is encouraging gas production expansions.(Supplied: Senex Energy)

“The outlook for 2023 is very concerning and is likely to place further upward pressure on prices, which could result in some commercial and industrial users no longer being able to operate,” the report said.

“Liquified natural gas (LNG) exporters are expected to contribute to the shortfall in 2023 by withdrawing 58PJ more gas from the domestic market than they expect to supply into the market.”

An ‘obligation’ to Asia

Senex Energy chief executive Ian Davies said the supply would be mostly directed to the domestic market.

“[The] majority is absolutely domestic, but we do have an obligation, which we take quite seriously, [in] supporting our Asian neighbors to decarbonise and provide energy security,” he said.

“We have an [international] supply arrangement with Gladstone LNG for a minority of that 60PJ.

“We’re fundamentally a domestic company focused on a domestic supply.”

Two men sit at a table — Senex Energy CEO Ian Davies [R] says the project will create 50 ongoing jobs.(Supplied: Senex Energy)

Landowners ‘deeply concerned’

Senex said its expansion would create 200 jobs during construction at its Atlas and Roma North projects, and 50 ongoing roles, and inject $200 million into the region’s economies.

But property owners in Queensland’s south-west have already felt the impact of gas wells in their backyard.

Ellie Smith of the Lock the Gate Alliance said she was “deeply concerned” about the impact of Senex’s proposed expansion.

“We don’t believe that will have any impact on prices that Queenslanders are facing with this gas price crisis,” she said.

“We’re seeing gas exported overseas when we need it at home, and the only way that we can bring energy prices down is by supporting manufacturers and Australians to shift to renewables.

“What we need to see the federal government do is put in place the gas price caps and the gas trigger to keep more gas onshore to really combat this predatory behavior by the gas industry, so we can see prices come down and protect our farmland and not open new areas to gas fields.”

The ACCC’s interim report recommended the government consider intervening in the market by pulling what’s known as the “gas trigger” to ensure there was enough supply.

Filling a supply shortfall

Queensland Resources Council chief executive Ian Macfarlane said the proposed expansion would pick up the shortfall from Australia’s southern states.

A man stands at a lecture, with a screen behind him that reads the Hon Ian Macfarlane MP — Ian Macfarlane claims the expansion will pick up the shortfall from other states.(AAP: Lukas Coch)

“It is a significant step by Senex in terms of helping this shortage of supply in Victoria and New South Wales,” he said.

“The shortage has come about because Victoria does not explore for [unconventional] gas onshore and New South Wales as a gas industry has been tied up by red and green type.

He said it would set some “certainty about supply in the future”.

“Spot prices are spot prices, and the actual supply of gas today and tomorrow will continue to be affected by the fact that the Victorians and New South Welshmen have not developed their own supply and gas is short globally.”

Potential price drop

Mr Macfarlane said consumers could expect a price drop in coming years as certainty returned to the domestic market.

“there will be a continuation of higher prices in the short term, but with the hope and certainty of lower prices going forward,” he said.

“It’ll be very strong interest and coming from domestic buyers, both here in Queensland and also in southern states.

“Industries such as brickworks, glass making, but also of course, power generation — there’s a whole range of industry that relies on gas, and there’ll be very strong competition in the market for it.”

Almost 12 months after the Queensland government quietly granted oil and gas leases in the environmentally sensitive Channel Country they promised to protect, there are calls for the outcome of stakeholder meetings to be made public.

Last year the government granted 11 petroleum leases across more than 250,000 hectares of land in the Channel Country bioregion of the Lake Eyre Basin to gas company Origin Energy, which could allow unconventional gas production, known as fracking to occur, outraging locals who were not consulted .

Now, an advisory group made up of traditional owner groups, local government, landholders and other interested parties has met with the government for the last time, but the outcome of those meetings remains secret.

Managing director of one of the state’s largest organic beef producers, OBE Organic, Dalene Wray said the meetings should be more open to those, like her, who were not involved.

“I would have hoped that the Queensland government would perhaps be more transparent about the outcomes of these discussions,” Ms Wray said.

The Department of Environment and Science said in a statement last month that the government would use the information from the Lake Eyre Basin Stakeholder Advisory Group to prepare a Regulatory Impact Statement looking at the long-term sustainable management of the area.

A map showing the Lake Eyre drainage basin, including the major rivers. — Channel Country waterways are filling with Queensland floodwaters that will drain into Lake Eyre.(Supplied: Karl Musser)

In a separate statement to the ABC, a spokesperson for the department said the government was still committed to protecting the “long-term health and ecological integrity of the waterways and floodplains of the Lake Eyre Basin.”

The statement also said there will be further opportunities to consult with the government, during the consultation period of the Regulatory Impact Statement, which the government expects to be released later this year.

But Ms Wray said she had no further information about how the proposal would impact neighboring properties or production.

Organic status in jeopardy

Wangkanguru Yarluyandi woman Karen Monaghan has lived in Windorah her whole life and grew up swimming in the Cooper Creek, an experience she hoped to pass on to her grandchildren.

A close-up of an Aboriginal woman's face bathed in dappled sunlight as she stands under a tree in a backyard. — Karen Monaghan says fracking in the Channel Country is “not an option.”(ABC Western Queensland: Ellie Grounds)

She said she was worried about gas exploration and fracking would hurt her small community, the water, and the land around it.

“Wangkanguru Yarluyandi land is being mistreated,” Mrs Monaghan said.

“Our land is our mother… it is part of us and who we are.

“It’s embedded in us, our country. If we look after our land it will look after us … it’s not OK to mistreat our land.”

Despite a previous lack of consultation that had been frustrating, Mrs Monaghan was hopeful communication from the government would improve.

“I believe it’s never too late,” she said.

“Our government just has to step up and step out and reach out to us. It’s never too late.”

Aerial view of a dark web of rivulets between green and islands of red sand, Channel Country of Queensland — In 2019, the Queensland government was advised by environmental scientists that fracking in the Channel Country was “unacceptable”.(Supplied: Helen Commens)

She was also concerned about what the exploration would mean for beef operations in the area.

“The minute you frack you can’t call it organic beef,” Mrs Monaghan said.

“The Lake Eyre Basin is my home, so fracking is not an option for me. There is no way we want fracking.

“It’s going to set our land and our country back.”

‘Geographic masterpiece’ at risk

OBE Organic sources all its cattle from the Channel Country, marketing its products as being “seasoned by nature”, and works closely with traditional owners in the region.

A wide photo of green and brown landscape. — Floodwaters traveling down through the Lake Eyre Basin.(ABC News: Brendan Esposito)

Ms Wray said if fracking became a reality it would risk the organic status of the Basin, which is one of the last remaining free-flowing river systems in the world.

“From an organic producers perspective, if there is any resource activity, they’re [organic producers] going to be concerned,” she said.

A map of locations in the Channel Country have production licenses from Origin Energy — Origin Energy petroleum leases cover more than 250,000 hectares of land.(Supplied: Queensland government)

Ms Wray said she was not convinced the potential risks to the environment could be adequately mitigated, and she feared large mining operations would not understand the needs of organic operations to retain their certification.

“It’s a geographic masterpiece… It’s important that the government understands that any activity is likely to have significant consequences,” she said.

“What we know from experience is that typically, the resources industry doesn’t necessarily like going off script.

“They’ve got one script they like to use for all producers and they’d like all producers to accept that script and that’s just not how it works out here, certainly on organic properties.”

Broken environmental promise

Before the 2015 election, the government committed to restore protections to the wild rivers, which would limit gas exploration in the Channel Country.

It came after they slammed the Newman government’s 2013 decision to ditch the protection laws, which they labeled as “environmental vandalism.”

In the following elections, the government made similar promises, but Ms Wray said the protections had not come to fruition.

An aerial shot of cattle grazing in a green paddock in Western Queensland's Channel Country. — OBE Organic rely on the naturally organic landscapes in the Channel Country to source their cattle.(Supplied: OBE Organic)

“I don’t think there’s been too much evidence, other than the stakeholder meetings, that we are making any progress in meeting that election commitment,” she said.

“I understand that royalties are very important to the Queensland budget… I think everyone would be naive to think the resources industry doesn’t have a place in Queensland.

“I haven’t heard the government articulate how important the rivers in the Lake Eyre Basin are and how important it is to maintain the free-flowing nature of those rivers.

“However, unconventional gas does not have a place in the Lake Eyre Basin.”

Government ‘committed to sustainability’

A spokesperson from the Department of Resources said in a statement that the Queensland government was “committed to achieving a balance between economic prosperity and ecological sustainability in the Lake Eyre Basin”.

“Any resource project must stack up environmentally, socially and financially and assessed against strict criteria,” it read.

“Any application cannot be granted unless native title has been addressed properly.”

The ABC also sought responses from the Minister for Environment and the Office of the Great Barrier Reef, which declined to comment.

An Origin spokesperson said it was very early days with regard to any proposed exploration activity in the permit areas.

“In Queensland, there are strict regulations that must be met for any resource development application in an identified planning strategic environmental area such as the Channel Country,” they said.

“As is the case with all our operations, we put in place approved management plans, procedures and controls to protect the environment and waterways, as well as areas of cultural significance.

“We always look to establish positive relationships and reach agreements to access resources on good terms. We’re looking forward to engaging further about the positive contribution future exploration activity can have in these communities.

“Any new development would need to be consistent with our stated carbon commitments.”

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