Mythbusting

Myth: All coal seam gas being developed will be exported.

The facts: Coal seam gas already provides about a third of domestic gas across eastern Australia and about 95% of gas used in Queensland. Coal seam gas projects being targeted for development in NSW have been earmarked specifically for that state’s domestic market.

Myth: Every gas-exporting country in the world – apart from Australia – reserves gas for domestic use, or provides some other form of subsidy for local users, and the US is about to do the same.

The facts: Countries such as the USA, Canada, the Netherlands, Norway and the UK do not have gas reservation policies or subsidies. They allow the market to set wholesale gas prices, just as we need to in Australia. Gas reservation reduces incentives for gas exploration, which eventually leads to a fall in supply. In June, an International Energy Agency report examining the effect of gas reservation in some non-OECD countries throughout the Middle East and North Africa, said: “Subsidies exacerbate demand and inevitably lead to shortages a decade later.”

Western Australia has a gas reservation policy, but in July 2014, that state’s independent economic advisor said the policy should be scrapped immediately. The inquiry, by Western Australia’s Economic Regulation Authority, concluded that gas reservation:

  • Discourages investment in gas projects, reducing the availability of gas for future use;
  • Perpetuates the existence of industries that may not have a comparative advantage in WA at the expense of investment in other industries;
  • Increases reliance on subsidised gas prices; and
  • Discourages efficiency and technological innovation.

Reservation doesn’t work. That’s why we don’t do it for any other commodity, such as iron ore, wine or beef.

Myth: No one understands hydraulic fracturing (fraccing) or knows the chemicals being used.

The facts: Industry and government have a detailed knowledge of the hydraulic fracturing process and of the chemicals being used. The process has been used for more than 65 years in more than 2 million wells around the world. Numerous studies have found that there have been no proven cases of contamination of aquifers. Water and sand comprise more than 99 per cent of the volume of fraccing fluid. Companies must identify the chemicals being used in any fraccing operation and detail any likely interactions with the water and rock formations in the area being fracced. For a list of chemicals used in Australian coal seam gas operations, see this link. There has been a lot of misinformation about the process and effects of fraccing. See how the film Gasland misrepresents fraccing.

Myth: Offshore seismic surveys harm whales and other marine life.

The facts: More than four decades of seismic surveying field experience and countless research projects has shown no evidence to suggest that sound from oil and gas exploration activities in normal operating circumstances has harmed any marine species. In fact, the sound from seismic surveying is comparable to many naturally occurring marine sounds – including those made by animals themselves. The industry also uses comprehensive protection controls (such as appointing marine observers to spot whales in the distance) to ensure that any potential disturbance to marine life is as low as reasonably possible. There have been many seismic surveys on the west coast of Australia and very few on the east coast, yet the growth of independent humpback whale populations on both coasts is very strong and almost identical.

Myth: Gas operations cause gas to migrate into waterbores and aquifers outside the gas-bearing rock formations.

The facts: Gas wells are constructed in a way that ensures there can be no migration of gas to neighbouring bores and aquifers. It is not in the gas companies’ interests to allow leakage of gas into aquifers. Such leaks would make it difficult to extract the gas and would reduce the amount of gas available for sale.

Myth: Oil and gas operations are harmful to human health

The facts: Properly regulated oil and gas operations are safe and the Australian oil and gas industry has a strong compliance record. The people with the highest exposure to oil and gas are workers in the industry and an independent epidemiology program linked with Monash University clearly shows that petroleum industry employees have better health than the general Australian community and are less likely to die of the diseases commonly causing death – including cancer, heart and respiratory conditions. For more information, see this webpage.

Myth: CSG is a new industry.

The facts: The CSG industry has been around for decades, and it has been a significant source of gas production in Queensland for more than 10 years.

Myth: Coal seam gas is not safe as gas leaks are common.

The facts: A 2011 wellhead safety report in Queensland surveyed more than 2700 wells. No explosion risks were found and only five leaks large enough to be flammable were found. None of these leaks posed any threat to human health but the companies were required to rectify them.

Myth: Coal seam gas production activity could cause the Great Artesian Basin to dry up, threatening farming activity.

The facts: The Great Artesian Basin holds about 65 million gigalitres (GL) of water and annual water recharge is estimated to be about 880GL. The actual average volume predicted to be extracted by CSG production is about 75GL. But there could be localised impacts on pressure in some waterbores. In cases where this happens, Queensland CSG producers are required to make good any loss of access to water, ensuring a continued reasonable supply of water to landholders. In NSW, the Namoi Water Study has found that development of the CSG industry in the Gunnedah Basin would not have a large impact on the region’s groundwater levels.