March 1, 2016
Farmers know a thing or two about volatile commodity prices, the need to make tough decisions and plan for the future.
Good seasons don’t necessarily mean good returns.
A drop in commodity prices can put the squeeze on farms, their suppliers and the communities in which they operate.
Similarly the oil and gas industry is familiar with the swings and roundabouts of supply and demand cycles.
The current oil price shock which is in turn impacting on gas prices across the globe, requires sometimes quite significant adjustments to work plans.
However, like the agricultural industry, successful players in oil and gas operate over the long term, taking into account a wide range of possible price, economic, the environment and other policy developments.
Because of this, the Surat Basin’s future should not be shaken by current gas prices.
More than 7000 wells are hooked up to pipelines and are producing natural gas.
Three LNG plants on Curtis Island (Gladstone) are now operating and more than 80 LNG cargoes have departed since first shipment in January 2015.
Demand for these cargoes will grow. Global natural gas production is tipped to increase by 40 per cent by 2040. Most of this supply growth will come from developing unconventional sources like coal seam and shale gas.
The Surat Basin has a strong operational gas workforce that will remain in place for decades to come.
Gas companies continue to spend on local procurement.
One company alone spent $4.5 billion in Queensland last year with 700 suppliers in eight regional local government areas. The Western Downs Regional Council and Toowoomba Regional Council areas attracted the biggest share.
Substantial gas infrastructure is in place to take advantage of the next upswing.
Surat Basin community leaders, agricultural representatives, business and community groups have worked hard with gas companies on projects which many thought unachievable seven years ago.
As a result the Surat’s future remains bright.
First published in the Surat Basin News on 25 February.