- Unconventional gas currently accounts for approximately 40% of Eastern Australian gas production.
- Currently 100% of produced unconventional gas is CSG, however shale gas is a potentially large future resource.
- Not all unconventional gas wells are fracked. In Australia, hydraulic fracturing is used in CSG production only 20-40 per cent of the time.
- CSG and shale gas have very different production techniques. Shale gas is deeper (much further below aquifers used by agriculture), all wells need fracturing and it produces less water to the surface. The infrastructure needs and potential impacts are therefore very different.
- In a world’s first, the three LNG projects under development in Queensland are using CSG as the supply source.
- The commercial production of CSG commenced in the USA in the 1970s.
- Exploration for CSG in Australia began in 1976 in Queensland's Bowen Basin.
- The first stand alone commercial production of CSG in Australia commenced in December 1996 at the Dawson Valley project (then owned by Conoco), adjoining the Moura coal mine.
What is it?
Unconventional gas is a term commonly used to describe coal seam gas, shale gas and tight gas. These are all forms of natural gas (primarily methane) but sourced from different geological formations. This gas is used in the same way as conventional natural gas is used for generating electricity or heating in homes.
- Coal Seam Gas
Found in coal seams, typically 300–600 meters underground. Coal Seam Gas (CSG) is held in place by water pressure and is extracted via wells drilled through the coal seams. When the water pressure is reduced, natural gas is released from the coal. The gas is then processed to remove water and piped to compression plants for transportation via gas transmission pipelines to power stations, industry and domestic gas customers.
- Shale gas
Refers to methane that is trapped within layers of shale rock of depths greater than 1500 metres below the surface. In Australia, the industry is largely in the exploration stage; that is, drilling vertical wells and using hydraulic fracturing (fracking) to determine whether gas production is likely to be economically viable.
- Tight gas
Gas is held in sandstones and limestones of low permeability and low porosity. Because of this low permeability, gas cannot migrate out of the rock and therefore, tight gas must be extracted through hydraulic fracturing.
The Australian Government’s position on Unconventional Gas Development
A key objective of the Australian Government’s energy policy is to maintain a secure and sustainable energy supply and facilitate competitive and productive industry sectors. Unconventional gas development is already central to this goal and an issue of national importance as it has the potential to impact Australia’s prosperity. Currently 40 per cent of the Eastern Australian domestic gas production is sourced from CSG and this production is expected to continue to grow to support domestic consumption and LNG exports from the East Coast.
The Australian Government takes an evidence-based and holistic approach to unconventional gas development with science at the centre of all decision making and regulation. This approach also includes careful consideration of economic, social, environmental factors and world leading-practices.
Domestic Gas Strategy
On 14 April 2015, the Minister for Industry and Science released the Government’s Domestic Gas Strategy.
The Domestic Gas Strategy outlines the Australian Government’s role, and expectations of the State and territory governments (the States) and industry, in facilitating the responsible development of unconventional gas resources. The Australian Government will contribute to the development of unconventional gas resources by:
- Improving gas markets to enable better access and price discovery for all market participants including customers
- Understanding and responding to potential social impacts to build confidence that community needs and expectations will be properly considered
- Understanding and communicating the science to build confidence in the community that risks and environmental impacts can be managed
- Attracting investment and encouraging steady and predictable supply through better regulation
- Tailoring production technologies for Australia to ensure we are making the most of our resources
- Establishing an Oil, Gas and Energy Resources Industry Growth Centre to accelerate advancements within the industry
- Improving access to geo-scientific precompetitive data to understand our resources and attract investment
- Demonstrating the macroeconomic benefits to build community confidence
- Learning from mistakes and successes of other jurisdictions through sharing knowledge.
The Domestic Gas Strategy will inform discussions with the States, who have the primary responsibility for onshore gas development, on ways to address unnecessary barriers to bringing on new gas supply.
A cross-portfolio steering committee is overseeing and guiding the Strategy’s implementation. The Minister for Industry and Science will report annually to the COAG Energy Council on the progress of implementation and continue to encourage jurisdictions to work together to facilitate the responsible development of coal seam, shale and tight gas resources for the benefit of Australians.
On 4 December 2015, the Council of Australian Government's Energy Council released its Gas Supply Strategy to improve social, economic and regulatory outcomes.
The Gas Supply Strategy is the Council's commitment to greater collaboration on:
- Improving information on gas reserves and production potential.
- Improving public availability and accessibility of rigorous science and factual information.
- Consideration of leading practice regulatory frameworks that effectively manage the risks and address issues for all conventional and unconventional gas resources.
- Supporting leading practices in industry to support responsible development.
These four opportunities for collaboration are intended to improve collective understanding of the issues associated with a rising reliance on gas from unconventional reservoirs, improve the information available to the community and regulators on development activities, and lead to refinements to existing Council frameworks.
A detailed implementation plan will be developed in the first half of 2016 in consultation with stakeholders. The Council will also communicate its expectations in those areas where it considers industry should be showing greater leadership, collaboration and consultation.
The COAG Energy Council Gas Supply Strategy and further information is available at the COAG Energy Council govspace.
The Australian Government’s role
Whilst primary responsibility for managing onshore resources falls to the States, it is in Australia’s national interest to ensure that the unconventional gas industry is developed responsibly and prudently. To this end, the Department of the Environment has oversight of the resource development approval process through the administration of Australia's national environmental law, the Environmental Protection and Biodiversity Conservation Act 1999 (EPBC Act).
The EPBC Act was amended in June 2013 to provide that water resources are a matter of national environmental significance, in relation to coal seam gas and large coal mining development (known as the 'water trigger'). The water trigger allows the impacts of proposed coal seam gas and large coal mining developments on water resources to be comprehensively assessed at the national level.
The Commonwealth regulator is assessing, or has already assessed, a number of coal seam gas developments in New South Wales and Queensland under the EPBC Act.
The Independent Expert Scientific Committee on Coal Seam Gas and Large Coal Mining Development (IESC) was established as a statutory committee in 2012 under the Environment Protection and Biodiversity Conservation Act 1999. A key role of the IESC is to provide to Australian government regulators advice in relation to proposed coal seam gas and large coal mining developments that are likely to have a significant impact on water resources. This ensures decisions are based on the best and available science.
State governments that have signed the National Partnership Agreement on Coal Seam Gas and Large Coal Mining Development, namely Queensland, New South Wales, Victoria and South Australia, are committed to seek advice from the IESC on coal seam gas or large coal mining developments that are likely to have a significant impact on water resources, and take account of that advice in a transparent manner.
Information about the IESC and the advice it provides on development proposals is available on the IESC website..
As the Chair of the Council of Australian Governments (COAG) Energy Council, the Australian Government plays an important leadership role in the gas market reform agenda. One way to do this is to maximise public access to the Australian Government's research infrastructure and resources. This includes our significant environment research capabilities, information on the potential national economic gains and the local impacts of unconventional gas development.
On 14 December 2012, the Standing Council on Energy and Resources - now the COAG Energy Council - comprising Australia’s Energy and Resources Ministers announced the beginning of the consultation phase of the Draft National Harmonised Regulatory Framework (the Framework) for natural gas from coal seams. The completed Framework was endorsed by the Council on 31 May 2013.
The Framework provides guidance and a reference tool for Australian government regulators for the CSG industry. Its purpose is to provide a suite of national and global leading practices to consider and implement in the assessment and ongoing regulation of proposed projects for CSG exploration and production. The Framework is not intended to be a static document. Effective inter-governmental cooperation and proactive international partnerships will continue its development. Consistent with this approach, the Framework also acts as a guide to industry on what leading practice regulation is, providing greater certainty and consistency for CSG operators.
The work program was selected to address issues of community concern regarding the following core areas:
- well integrity and aquifer protection
- water management and monitoring
- hydraulic fracturing
- chemical use.
The work program and public consultation information has been publicly released and is available on the COAG Energy Council website. View the presentation below which outlines the 18 leading practice principles that should be applied to CSG developments as well as the work program and expected timeline for the Framework.
Engage with us
The Australian Government is committed to working collaboratively with stakeholders to facilitate the responsible development of the unconventional gas industry. Please contact us if you cannot find what you are looking for and or if you have any questions.
Our email address is: UG@industry.gov.au.
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Cattle grazing at QGC’s Junbar property
A well situated in a paddock at Tharlane