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Victoria bans fracking, but leaves questions over gas supply
The Victorian government has announced it will permanently ban unconventional gas, often produced through the controversial process of hydraulic fracturing or “fracking”. Legislation to implement the ban will be introduced this year.
This ban follows a 2015 report on unconventional gas. Following extensive review, committee members were split over whether to implement a full ban or extend the moratorium on onshore gas development by five years.
The ban announced by the government won’t apply to offshore gas. The government will also legislate to extend a moratorium on onshore conventional gas until 2020. Any future decision to approve onshore conventional gas exploration and production will be subject to review by an expert panel.
So will the ban make a difference?
Where did the ban come from?The moratorium has been in place since 2012. It applies to all types of onshore gas (tight, shale, coal seam and conventional gas) and to any approval for fracking, exploration drilling activities and the use of chemicals us in fracking.
Last year the Victorian government examined the ban and consulted farmers and other landholders, environment and community groups, the gas industry, gas market analysts, hydrogeologists, manufacturers, tourism operators, local governments and the general public.
The final report was the product of more than 1,600 submissions over a six-month period, as well as the findings of the Victorian Auditor-General Report on Unconventional Gas.
The rationale for the ban comes from two core factors. The first is the significant degree of community concern about the social and environmental impacts of onshore unconventional gas, particularly those associated with hydraulic fracturing.
Secondly, the future economic benefits connected with unconventional gas development did not appear, from the findings of the reports, to outweigh those risks. Indeed, the final report found that it was unlikely that strong unconventional gas reserves were present in large commercial and extractable qualities in Victoria’s brown coal fields.
On the other hand, any development would be highly likely to have a dramatic effect on the region’s agriculture and tourism sectors.
Can fracking be permanently banned?The existing regulatory framework does not recognise any ban on onshore unconventional gas. Indeed, the provisions in the Mineral Resources Sustainable Development Act explicitly include exploration and mining licences for coal seam gas projects.
However, these regulatory frameworks are being completely overhauled. It is clear that the new provisions will introduce a permanent prohibition on unconventional exploration and development in Victoria. The scope and nature of the ban will depend upon the wording of these provisions.
Any law that is introduced cannot be overridden at the national level because the ownership and management of all onshore minerals and hydrocarbons, including gas, are vested in the state.
Pros and consThe ban will end the strong environmental concerns that continue to exist around unconventional gas production. It will also alleviate some of the emerging conflicts over land allocation and water usage that have emerged between regional food, tourism and energy sectors.
The ban will also ease climate concerns connected with the generation of energy from fossil fuels. In Australia, fugitive emissions from coal mining, oil and gas production account for approximately 8% of Australia’s greenhouse gas emissions.
Gas extraction, whether conventional or unconventional, can result in significant methane seepage. To date, very few baseline studies are available to compare seepage from drilling and fracking with natural methane seepage.
The ban is likely, however, to have a negative impact on supply, which may affect domestic gas pricing. This is particularly the case if the moratorium on onshore conventional gas production continues and no policy is implemented requiring gas producers to reserve a percentage of produced gas for domestic usage.
The 2015 Gas Market Report, released in March this year, showed that the nexus between international gas prices and east coast LNG production for export, domestic demand and domestic gas prices has become increasingly complex.
Theoretically, eastern Australia has enough reserves to supply the domestic and export markets for the next 20 years. But if the market is divided into the north (Queensland and Cooper Basin) and the south (Victoria and New South Wales) there is unlikely to be enough reserves in the south to meet forecast demand, particularly following the ban.
This will inevitably require the development of more gas reserves in other areas of the south, or imports from the north. If international gas prices and demand support more east coast LNG production, things will get worse as this supply will not be available in the north.
Victoria will, however, continue to utilise gas exploration and production in offshore gas wells in Bass Strait. There are 23 offshore platforms in the strait and ExxonMobil has held these titles for many years.
The offshore gas wells have traditionally supplied most of Victoria’s domestic gas market. Consequently, if the ban did apply to offshore gas exploration and production, it would have a profound effect on domestic gas supply.
Such a ban is, however, unlikely. First, it could not apply to offshore wells located beyond the territorial sea because these come under Commonwealth jurisdiction.
Second, a ban could not be applied retrospectively. Hence it would not affect established offshore title holders who have been supplying the domestic gas market for many years.
Samantha Hepburn does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond the academic appointment above.
Dear politicians, please don't endanger world-leading solar research by cutting ARENA
The following is an open letter to parliamentarians from 182 members of Australia’s solar research community.
Dear Members of Australia’s 45th Parliament,
The federal government is proposing to strip the Australian Renewable Energy Agency (ARENA) of most of its funding, and with it its ability to make grants. This is an existential threat to renewable energy research, innovation and education in Australia.
We call upon all political parties to support the retention of ARENA.
The solar photovoltaic (PV) industry now provides one quarter of all new generation capacity installed worldwide each year and is growing at 20-30% per year. Together, PV and wind energy constitute half of all new generation capacity installed worldwide, and all new generation capacity installed in Australia.
A renewable energy revolution is in progress and Australia is currently at the forefront. However, debilitation of ARENA directly threatens our leadership position.
For 30 years there has been an Australian renewable energy funding agency in one form or another. This has led to phenomenal success in generation of technology and provision of education. The worldwide PV industry owes its existence in large measure to Australians who were supported by grants from government renewable energy agencies.
Billions of dollars of benefits have accrued to Australia in the form of dramatically reduced costs of PV systems, rapidly growing renewable energy business activity in Australia, reduced greenhouse gas emissions, royalties, shares and international student fees. For example, the Australian-developed PERC solar cell has annual sales of $10 billion and will soon dominate the worldwide solar industry.
If ARENA is debilitated then hundreds of people would lose their jobs within a year or two. In the longer term, Australia’s leadership in solar energy would vanish. This would be completely at odds with the government’s innovation agenda and its commitment at the Paris climate conference to double clean energy R&D by 2020 under the international Mission Innovation program, and with the ALP’s Climate Change Action Plan launched in 2015 at UNSW Australia, and reinforced by Opposition Leader Bill Shorten at ANU also in 2015.
Support for research and innovation at universities lies at the heart of accelerated growth of the renewable energy industry. It supports later-stage commercialisation directly through technology development. Additionally, university research groups underpin education and training of engineers and scientists.
Echoing the words of another prime minister of a decade ago, Malcolm Turnbull has described budget repair (in which cuts to ARENA are lumped) as a “fundamental moral challenge” because debt should not be passed onto our children and grandchildren.
How ironic if parliament fails to appreciate the many costs to future generations of failing to address climate change now with solutions such as renewable energy.
Yours sincerely,
UNSW Australia: Benjamin Phua, Henner Kampwerth, Mark Keevers, Ziv Hameiri, Catherine Chan, Craig Johnson, Kyung Kim, Li Wang, Mark Silver, Trevor Young, Richard Corkish, Robert Patterson, Binesh Veettil, Christopher Whipp, Dirk Konig, Renate Egan, Bram Hoex, Joyce Ho, Simba Kuestler, Martin Green, David Payne, Robert Taylor, Shira Samocha, Supriya Pillai, Timothy Lee, Udo Romer, Belinda Lam, Natasha Hjerrild, Evatt Hawkes, David Jewkes, Thalia Arnott, Leslie Lay, Muriel Watt, Carlos Vargas, Nathan Thompson, Robert Dumbrell, Daniel Lambert, Nicholas Shaw, Nathan Chang, Anita Ho-Baillie, Ben Wilkensen, Ned Western, Yan Zhu, Lingfeng Wu, Stuart Wenham, Ran Chen, Thilini Ishwara, Steven Limpert, Rolando Vargas, Brett Hallam, Allen Barnett, Santosh Shrestha, Xiaowei Shen, Xiaojing Hao, Saratchandra Tejaswi, Fangzhao Gao, Zhongtian Li, Ivan Perez Wurfl, Qiangshan Ma, Alec Tan, Murad Tayebjee, Ya Zhou, Liam Parnell, Luke Marshall, Jack Colwell, Mable Fong, Alan Yee, Lawrence Soria, Kian Chin, Kamala Vairav, Nancy Sharopeam, Graeme Lennon, Zoe Hungedfold, Bernhard Vogal, Jill Lewis, Ya Zhou, Erny Tsao, Feng Qingge, Yin Li, Thorsten Trupke, Alison Wenham, Ashraf Uddin, Chang Yan, Kaiwen Sun, Yajie Jiang, Yuansim Liao, Marjorie Owens, Shujuan Huang, Sassan Vahdani, Jialiang Huang, Brianna Conrad, Zi Ouyang, Jae sun Yun, Alex Li, Kate Lindsay, Nitin Nampalli
Australian National University: Andrew Blakers, Tom White, Marco Ernst, Fiona Beck, Jie Cui, Andres Cuevas, Erin Crisp, Chris Samondsett, Yimao Wan, Hemant Halmodi, Moshen Goodarzi, Sienpheng Phang, The Duong, Yiliang Wu, Xiao Fu, Kylie Catchpole, Chong Barngkin, Daniel Macdonald, Andrew Thompson, Josephine McKeon, Chang Sun, Kristen Anderson, Anyao Liu, Bin Lu, Matthew Staks, Bruce Condon, Jun Fpeng, Thomas Ratcliff, Hang Sio, Shakir Rahman, Judith Harvey, Klaus Weber, Ingrid Haedrich, Di Yan, Rowena Menkedow, Dale Grant, William Logie, Teck Kong Chong, Hieu Nguyen, Daniel Walte, Sachin Surve, Mark Savvnoeas, Harry Qian, N. Kaines, Nandi Wu
Monash University: Yi-Bing Cheng, Yasmina Dkhissi, Niraj Lal, Jianfeng Lu, Liangcong Jiang, Shannon Bonke, Wei Li, Gaveshana Sepadage, Wemon Mao, Feng Li, Xiangfeng Lin, Udo Bach, Dison Hoogeveen, Iacopo Benesperi, Francsco Paglia, Bin Li, Jiansong Sun, Chanjie Wang, Chunkiu Ng, Maxime Fournier, Boex Tan, Kira Rundel, David Mayeuleg, Jacek Jasieniak, Rebeeca Milhuisen, Masrur Morshed, Kedar Deshmukh, Susaha Frier, Mathias Rothmann
University of Melbourne: Ken Ghiggino, Roger Dargaville, Yann Robiou du Pont, Alex Nauels, Kate Dooley, Malte Meinshausen, Martin Wainstein
Other: Alan Pears (RMIT), Nicola Ison (UTS), Rhett Evans (Solinno), Michelle McCann (PV Lab Australia), Keith McIntosh (PV Lighthouse)
Andrew Blakers works for the Australian National University, which receives research funding from ARENA.
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Continue reading...Victoria to ban fracking and CSG
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