Anti-fossil fuel activist group Lock the Gate Alliance has taken aim at companies exploring for natural gas in the Northern Territory’s Beetaloo Basin based on a misunderstanding about chemistry, geology and the composition of natural gas.
The activist group has criticised the integrity and robustness of The Scientific Inquiry into Hydraulic Fracturing in the Northern Territory, led by the Honourable Justice Rachel Pepper, and its Final Report claiming:
“The scope of the Pepper Inquiry, used by the NT Government to justify removing the fracking moratorium last year, did not specifically include what’s being described by companies as ‘liquids rich gas’.”
And that: “This is a case of resource companies and the NT Gunner Government pulling the wool over the eyes of NT residents.”
The fact is that virtually all gas deposits around the world contain, to varying quantities, liquid. Many of these liquids are actually a gas in normal atmospheric conditions, such as propane or butane, until they reach a temperature or pressure point (referred to as the Dew Point) in which they turn into a liquid. Propane you use in your BBQ is considered a liquid when stored in a gas bottle. In fact, according to the U.S. Energy Information Administration:
“Natural gas liquids (NGLs) are hydrocarbons—in the same family of molecules as natural gas and crude oil, composed exclusively of carbon and hydrogen. Ethane, propane, butane, isobutane, and pentane are all NGLs.”
In other words, if an operator is targeting natural gas from shale formations, then the formation is more than likely to contain a percentage of liquids rich gas and that the extracted resource therefore doesn’t result in a material difference to the risk profile associated with exploration or managing once at surface.
The Inquiry’s report noted that if there were shale liquids production “it is likely to be primarily as a shale gas play with a small volumetric percentage of liquids also produced”.
“If this occurred this would not materially affect the mitigated risk assessments contained in this report,” it added.
“Origin Energy [an operator in the Beetaloo Basin] said it is not drilling for oil, but that it expects to produce ‘ethane and propane which is LPG or bottled gas, butane which is used as fuel in lighters, or condensate’.
‘The rigorous processes and controls we have in place — including those being applied following the Pepper inquiry — are also no different whether the source is predominantly natural gas or ‘dry gas’ — or liquid rich,’ a spokesman for the company said.”
Put simply, the risk profile associated with producing a resource from a shale formation does not materially change the risk profile if the natural gas being extracted has a higher or lower liquids component.
Reflecting on the experience in Australia to date, states like South Australia provide a robust example of our experience, technical expertise and proven capability to manage the production of a resource. For example, fracking has been safely used in South Australia since 1969 with over 900 wells fracked and no negative impacts identified.
In fact, a portion of that resource, natural gas liquids, is recovered via a refrigeration process in the Moomba plant and sent together with stabilised crude oil and condensate via pipeline to the Port Bonython Processing Facility near Whyalla, South Australia.
The facility accepts liquid hydrocarbons (from a mixture of condensate, crude oil, propane and butane) in a mixed stream of products sent from Moomba.
The activist group is attempting to discredit the inquiry by suggesting there is a cover-up or a hidden agenda at play. In reality, they have conflated gas plays with oil ones and misunderstood the phrase ‘liquids rich gas’ or the ways in which gas and liquids are formed.
Unfortunately, this isn’t the only time that the activist group has been caught out in this manner and is similar to the “scandalous allegations” made by Lock the Gate when they accused the industry, and the Northern Territory government of a conspiracy and ‘cover up’ over a casing diagram in 2018. An allegation which was proven by the inquiry to be “wholly incorrect” and for which Lock the Gate had to be forced to apologise.
In 2011, Lock the Gate was also forced to apologise after being caught falsifying claims by US researchers in submissions and therefore misleading official inquiries.
If Lock the Gate has genuine questions around the development of liquids or gas in shale gas deposits they should ask, rather than make wild allegations of cover-ups or conspiracies.
*Natural gas from coal seam gas (CSG) operations is a majority dry well containing a non-toxic mixture of a number of gases mostly made up of methane, generally 95-97 per cent pure methane, and has been part of Australia’s energy mix since it was first produced in Queensland in 1997.