Fracking off the gas drillers

7211890-3x2-700x467This week’s announcement by Pangaea Resources that it is suspending its NT onshore gas exploration drilling program and laying off 140 workers, following the Labor Opposition’s indication that it will impose an indefinite moratorium on fracking, has provoked predictable responses from the Giles government and some mining industry types.

However you don’t need to be a one-eyed greenie to doubt the extent to which Pangaea’s announcement was actually caused by Michael Gunner’s fracking moratorium announcement. Only 6 out of a planned 25 onshore exploration wells were drilled throughout the Northern Territory during 2015, and oil and gas prices have fallen further since then.  Only a very naive person would fail to realise that rock bottom oil and gas prices are the dominant factor in Pangaea’s decision.  Nevertheless, Labor’s announcement may have been a subsidiary factor, if only in the timing of the announcement.  After all, Labor currently looks odds on to win government in the Territory come August’s election, so if you’re a resource company now is the time to exert political pressure.

Whether Labor should take any notice is another question.

On the one hand it appears that shale fracking is a lot less risky than coal seam gas (it’s an issue I’ve written about before).  However that hasn’t been enough to assuage widespread public concern.  The recent NT government-commissioned Hawke Report found that “the environmental risks associated with hydraulic fracturing can be managed effectively subject to the creation of a robust regulatory regime.” It’s that final bold text [my emphasis] qualification that creates the problem as far as I’m concerned.  The CLP government’s record for environmental regulation of the mining industry (and for that matter Labor’s) can hardly be described as “robust” and does nothing to inspire public confidence.  Nor does the practical enforcement record of the NT Department of Mines and Energy inspire any greater confidence.  Environmental disasters like the Montara oil spill and McArthur River Mine immediately spring to mind, not to mention running sores like the Ranger Uranium MineRedbank Copper Mine and numerous other examples.

Given Labor’s record in government of being just as gung ho about mining and just as lax about environmental protection as the CLP (e.g. it was the Martin Labor government that approved the disastrous move to open cut mining at McArthur River), a cynic would strongly suspect that Michael Gunner’s moratorium announcement is almost wholly electorally driven.  However even if that is the case, a period when very little exploration or production drilling is likely anyway (due to rock bottom prices) is an ideal time to examine the situation thoroughly and put in place a genuinely robust regulatory regime that will ensure fracking takes place safely.  Environmental groups will need to try to ensure that Labor does indeed implement a real review and regulatory/enforcement upgrade and doesn’t just use the moratorium as a cynical device to curry public favour and put off a decision to proceed on a “business as usual” basis until after the election.

That said, there will still be quite a few people who will continue to oppose shale fracking irrespective of the outcome of any review or the stringency of actions taken as a result.  My own view is that onshore shale gas extraction should be facilitated if it can be done safely. Converting Australia’s dirty coal-fired power stations (especially the brown coal stations in Victoria) to a cleaner fuel is an essential part of any plausible greenhouse gas reduction strategy. Until totally clean, renewable baseload energy sources are developed and commercialised, converting existing coal-fired stations to gas (which will reduce carbon emissions by 30-50%) is the only obvious transitional strategy for achieving major reductions in Australia’s greenhouse footprint.

About Ken Parish

Ken Parish is a legal academic at Charles Darwin University, with research areas in public law (constitutional and administrative law) and teaching & learning theory and practice. He has been a legal academic for almost 12 years. Before that he ran a legal practice in Darwin for 15 years and was a Member of the NT Legislative Assembly for almost 4 years in he early 1990s.
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9 Responses to Fracking off the gas drillers

  1. paul walter says:

    It’s good, realist stuff.

    In a similar vein, South Australians are watching how the BP proposition to drill off shore from SA for oil turns out..we do remember who was responsible for Deep Water Horizon in the Gulf of Mexico.

    Amazing how wealthy cooporations can be so generous on executive bonuses yet so parsimonious on enviro and OHS.

  2. paul frijters says:

    great title, Ken.

    We will have to agree to disagree on the value of fracking for our climate: from a long-term perspective, the more cheap oil and gas there is to dig up, the higher the temperature will get, pretty much irrespective of whether we burn the slightly less CO2-intensive stuff first or second. So the discovery of things to frack is bad news for anyone concerned with the temperature 200 years from now. Of course if you are concerned for the temperature the next, say, 30 years (our own lifetimes!), then pretty much nothing short of dramatic geo-engineering has any hope of changing the temperature trajectory anyway, given the very long time-lags involved in the stock of atmospheric greenhouse gasses being accumulated or reduced.

    If I were to construct a scenario in which your ‘fracking saves the planet’ argument would be relevant, it would have to be something like this: there are technological breakthroughs underway that would lead to massive adoption of non-emission energy systems and their adoption will be in the period 10-30 years from now (any earlier and fracking is too late to make much of a difference. Any later and we’ve gone through both the fracked stuff and the stuff we let in the ground a bit longer); and we are extremely interested in the temperature roughly 50 years from now. Then, fracking might make a marginal difference to the accumulated emissions (which determines the temperature increases) when we switch to the cleaner energy and stop emitting significant amounts. My guess is that fracking even then, at best, leads to 5% less total world greenhouse gas stocks 30 years from now, making a tiny difference in the temperature 50 years from now (maybe a whole 0.1 degrees?). I haven’t done the calculations so am extrapolating a bit from my memory of previous forays into this area, but I believe I am being generous here to your argument, ie that your choice to approve of fracking on environmental grounds at best has to do with 0.1 degree Celsius difference 50 years from now. And that is of course talking about fracking at the world level. The importance of fracking in the NT is a very small percentage of that world level.

    In the more realistic case that we simply burn through all the cheap fossil fuel till we switch to more expensive sun, nuclear, or what-have-you, all that the option of fracking then does is increase the eventual stocks of greenhouse gasses in the atmosphere. First fracking before digging up the other stuff then makes a very very tiny difference to just when and how fast the temperatures would increase: slightly less fast temperature increases in, say between 10 and 40 years from now, at the expense of both faster and eventually higher levels of temperatures later on. I would venture that a committed climate modeller would have a hard time coming up with a temperature prediction graph in which you’d notice the different trajectories for the next 100 years if you allowed for fracking or not.

    I might note that on this sort of thing, I am entirely in accord with the mainstream climate modelers. So no need to take my word for it at all: just look for the IPCC report writers’ stuff on this. See how far you get amongst that crowd with the argument that fracking will save the planet!

    • Ken Parish says:

      I’m not suggesting that fracking will save the planet, just that it seems to me it’s an obvious part of a transitional strategy towards something more sustainable. I accept your argument that this proposition only makes sense if there are likely to be clean, sustainable energy sources available and commercialised in 10-30 years or so. My (perhaps optimistic) assumption is that the combination of things like better and cheaper solar cells, better and cheaper storage technologies (batteries or other things) will continue coming down in price rapidly (as they are currently doing) to a point where market forces propel most of the changes needed within 30 years or so.

      We might even get a “left field” solution in that time (e.g. cold fusion). No doubt a bit far fetched, but my vague memories of the various conceivable geo-engineering technologies that you argued a few years ago might be feasible were that they were also fairly far fetched.

      I certainly agree with your deep skepticism about the prospects of success of any form of global greenhouse reduction treaty in the absence of compelling (in a market sense) technological change. The recent historical record since your geo-engineering posts would make it hard to argue otherwise (although I would like to be an optimist there too, if only reality permitted it).

      • conrad says:

        PF: “In the more realistic case that we simply burn through all the cheap fossil fuel till we switch to more expensive sun”

        KP: My (perhaps optimistic) assumption

        I find it hard to imagine that we will burn through cheap fossil fuel until it runs out, because I don’t see why alternative energy won’t become even cheaper and I don’t think you need to be optimistic about that for it to happen. In particular, we’re clearly not at the end point where there are very few efficiencies to be squeezed out of it (like most fossil fuels are now) and there is zillions to be made which will hence speed the development, so it is very hard to see why it they won’t become cheaper. If it doesn’t, its basically going against the common pattern for technological innovation and the move from small to mass-scale production.

        Apart from that, there are already good examples of energy being cheaper at the consumer level. I’m willing to bet, for example, that home battery/solar systems sell like hot-cakes (they are a no-brainer investment if you have a large house in Australia that uses a lot of energy. I personally will be buying one sooner or later not for green credentials, but to save money). Even non-consumer systems are cheaper in some cases. For example, a lot of people in 3rd world countries live in places where there are not good electricity grids already built, and so it is already probably cheaper in many cases not to connect them — a lot like happened with phones where land-lines have simply been skipped. Even in rich countries with remote communities like Australia it is probably cheaper — For example, there are huge solar/battery projects going up in way out places in Australia that do mining (Rio Tinto in Weipa for example), simply because it is cheaper even without subsidies. In these cases, small gas generators that can be used sporadically are probably the only alternative needed.

        • paul frijters says:

          sure, solar is cheaper for some applications. Similarly, hydro has been cheaper for a while, wind can be cheaper in the right circumstances, and even dung combustion is cheaper in some circumstances. But the world use of fossil has kept increasing despite these developments simply because the demand for what fossil can offer has grown: reliable cheap energy anywhere, anytime. For the main electricity grid, for instance, nothing yet comes close to beating fossil (apart from the odd bit of hydro but there’s limited numbers of those. nuclear can come close if you take short-cuts).

          The growth of demand and the relative advantages of fossil look set to continue for quite a while yet. So its the most realistic baseline scenario that we’ll go through the cheapest forms of fossil before we switch to the other stuff for a large part of our energy needs. Whether we switch for some needs before then is, essentially, irrelevant: from the point of view of the eventual temperature peak it hardly matters whether it takes us 20 years longer to go through all the fossil because we have substituted some of our fossil uses for other things.

          One of the reasons that you see so much nonsense in the climate debate is that people find it very hard to get their heads around the stock-flow aspects of the finite amount of fossil fuels and eventual temperatures. They tend to believe, and are sometimes encouraged to do so by people who know better, that switching a little has marked benefits very quickly or at least after some time. The reality is that unless you reduce world fossil use to a very very small percentage of what it is now, that you will still run through all the fossil reserves eventually and will see temperature increases on a very similar trajectory to if you just burnt through it quicker.

  3. conrad says:

    “The growth of demand and the relative advantages of fossil look set to continue for quite a while yet. So its the most realistic baseline scenario that we’ll go through the cheapest forms of fossil before we switch to the other stuff for a large part of our energy needs.”

    I still think this is far too pessimistic — and a lot of forecasts from even a few years back are not taking into account that it looks like energy storage won’t be too hard after all (just yesterday there was another announcement from one of the US government agencies saying they could do it on a large scale). For example, instead of thinking of forecasts (from what assumptions?), why not think about it at the individual level.

    Ok, a present, 20K can basically get you out of paying for energy forever. If I want a 10% return on that, I need to get 2K back. That would be hard for many people. Now how cheap will this stuff be in 10 years? Let’s say its half the price of now (I notice your workplace claiming they had a vastly cheaper solution for household systems last week). I don’t think this would surprise anyone. This means I only need 1K back to win. This is a good deal for most people in low-density cities where individuals can stick solar on things or buy into collectives. Now what happens if electric cars also end up similarly priced to petrol ones (seems likely too). I can now avoid paying 1.5K in fuel a year. So two fairly likely events will potentially turn hundreds of millions of high energy users into low usage ones.

    There are of course ultra-high density cities – like those on the Chinese coast, and energy use will undoubtedly keep growing there. However, some of this will be replaced by nuclear and a lot with gas. This will go on for perhaps a decade. Towards the end of that, I don’t see why large scale renewables won’t start cutting into fossil fuels either — it is already the policy of the Chinese government to close down highly polluting plants (I believe mainly for smog reasons), and I don’t see why these will get replaced by generators using imported gas if they can generate alternative power at a similar or cheaper cost.

    If all of this only buys 20 years of warming I think that’s fine — that’s another 20 years to come up with solutions, which is quite a decent amount of time for this type of technology.

    • paul frijters says:

      I am not sure you the get the point, conrad. Perhaps the ‘carbon budget’ literature might be more clear than I am? eg. http://www.theguardian.com/environment/2016/feb/25/fossil-fuel-use-must-fall-twice-fast-thought-contain-global-warming

      these guys are talking about amount of fossil fuels that mankind as a whole should EVER burn. The numbers they come up with currently are that we might have another 600 billion tonnes in that budget (based on trying to keep the temperature increase down to 1 degree from now). At current projections we will go through that ‘eternal’ budget in the next ten years (we’re burning around 50 billion tonnes per year now). They ask us to leave 75% of all known fossil reserves in the ground forever. And they might actually still be overly optimistic in terms of underestimating the temperature increasing effect of the stuff already in the atmosphere. Of course what they ask for is impossible, but they hopefully make it more clear that it hardly matters how quick we go through the reserves: without dramatic reductions and technology that finds substitutes for ALL the current large-scale uses of fossil fuel (such as airtravel, where batteries have a long way to go to be light and energetic enough for long flights), the outcome is very similar. So I just don’t share your optimism, but of course do have the same hope!

  4. john Walker says:

    Today’s SMH suggests that Chinas emissions may have already peaked, what’s your take on it?

  5. the engaged voter says:

    You hit the nail on the head in regard to the failure of NT governments to protect the environment from mining, oil & gas environmental failures thus far.

    The failure rate for top end mines (subject to the seasonal water containment challenge) must be close to 90%.
    Off the top of my head – lets start with Rum Jungle, then there’s Redbank, Mount Todd, various messes left around the Pine Creek area, multiple Ranger spills and leaks, now Macarthur Mine & as you mentioned Montara Well failure.
    Can an NT government be trusted with regulating & monitoring any type of fracturing ? Not based on the evidence so far !

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