For years gas fracking has been the topic of official inquiries and much discussion in the Northern Territory. But somewhere along the line, they forgot to tell us about the oil.
The fact is that the Gunner Government’s permission to frack for gas amounts equally to permission to frack for oil – enhancing the production of oil and giving access to Northern Territory oil not available without fracking.
The frackers didn’t forget to alert their investors. Origin Energyannounces the first order of business in the Beetaloo basin is to target the “liquids-rich” Kyalla and Velkerri shales. Falcon Oil and Gas adds that the Hayfieldsandstone is “anticipated to have the highest liquid yields”. Federal Minister Canavanhopes the Beetaloo will produce more oil than the Bass Strait.
Normally an oil and gas company loves to shout from the rooftops about the prospects for oil. As a liquid, oil is easier to deal with and worth ten times as much as gas, molecule for molecule.
Gas, on the other hand, is a problem. It needs to find a market, sometimes as far away as Queensland or even China.
Getting it there takes pipelines thousands of kilometres long, or multi-billion dollar liquefaction plants, LNG ships, and then LNG import terminals, regasification facilities, and more pipelines. For what, billions of dollars of asset write-downs and the opportunity not to pay any tax?
By comparison oil is easy. Get it out of the ground, put it in a tank, “weather off” the benzene-containing light ends, put it in a truck and now someone will pay you fifty US dollars per barrel for it, or more.
Tim Forcey worked for forty years as an engineer and manager in the petrochemical, oil, and gas industries in the US and Australia. More recently he has published energy research with the University of Melbourne.
[The Alice Springs News Onlineis inviting comment from Mr Gunner and seeking an answer to the question: Why was oil not included in the terms of reference for the Pepper enquiry?]
