Fracking could open the door to 10 years of gas supply but is there a risk?

Tony Beck opposes the lifting of the fracking moratorium on SA's Limestone Coast. (ABC South East: Liz Rymill) The SA government says it believes a decade's worth of state gas supply sits below the Limestone Coast as it tries to remove a ban on fracking in the region. A gas market analyst isn't sure companies will be willing to take on the financial risk of exploring for unconventional gas in the region. A bill to lift the ban has been tabled in parliament, but is expected to be defeated in the upper house. Link copiedShareShare articleSouth Australia's energy minister says gas reserves under the Limestone Coast may be enough to meet the state's demand for a decade, but an analyst foreshadows companies may not want to explore for it. The South Australian government this week introduced a bill to lift a 10-year moratorium on fracking in the state's south-east two years early, though it is expected to be defeated in the upper house. Energy and Mining Minister Tom Koutsantonis said his department "conservatively estimates" about 200 petajoules of known gas reserves in the onshore Otway Basin in SA. "That's about 10 years' worth of the strategic gas supply that the state government procured [from Santos]," he said. Tony Beck wants a permanent ban on fracking. (ABC South East: Liz Rymill) "If you were able to get 20 petajoules a year out of the ground for 10 years, that's the equivalent of every house and business and commercial operation in the state just from one region. The proposal has been met with significant opposition from locals. Tony Beck, whose family had farmed in the region since the 1950s near Mount Gambier, said farmers in the region were not willing to accept any risk to groundwater. "I know the engineering, I know the geology, I know what fails and why," he said. The moratorium is set to expire in late 2028. (Supplied: Beach Energy) "That experience is precisely what tells me that deep fracking here is a different order of risk [to other parts of the state] entirely. "Our knowledge of what the risks are and what's being put at risk way outweighs any engineering solutions and the regulatory framework Tom Koutsantonis is relying on." Mr Beck said he would like to see the moratorium replaced with a more permanent solution. "Someone should have the courage to bring forward a bill to ban fracking in the south-east permanently," he said. Mr Koutsantonis said the government would not permit any projects to put the underground aquifers at risk. Tom Koutsantonis says the government won't put the south east's groundwater at risk. (ABC News: Lincoln Rothall) "We want those [industries] to survive and succeed, and we would do nothing to hurt the reputation of the manufacturers down there and the raw materials they use to make those goods." Josh Runciman, lead Australian gas analyst at the Institute for Energy Economics and Financial Analysis, said he was surprised by the move, given the federal government's announcement of a national reservation policy. "That reservation policy, if properly designed, should address those supply concerns," he said. "Lifting the fracking ban may not actually lead to any new gas supply in South Australia anytime soon anyway. "Geological surveys certainly do suggest there could be gas that could be accessed with fracking. "But a really important part of the process of identifying commercially recoverable gas reserves is you need to drill to understand how much gas is there and how hard it is to extract." Josh Runciman says exploring for unconventional gas can cost tens of millions of dollars. (Supplied: IEEFA) Mr Runciman said it was not unusual for exploration wells in areas that had never been fracked before to cost as much as $20 to $40 million. "Fracking is fairly expensive, even more so when you're just starting out," he said. Beyond money, Mr Runciman said the time taken to explore and gain approvals to bring gas to the market would also be a factor. "When we look at eastern Australian gas demand, we see that demand is falling quite quickly," he said. "There is that longer-term question, then, about the financial incentives for companies to undertake this analysis and try to frack in the south-east. "Given that east coast gas demand is falling and has fallen quite a bit over the past decade and is likely to continue to fall, I think there are real questions about whether the south-east will be fracked at all." Deakin University natural resources law academic Samantha Hepburn said she believed the desire to remove the moratorium had several motivations. Samantha Hepburn says the factors that led to the moratorium have not changed over the past eight years. (ABC News: Kyle Harley) "Of course, [it's] securing future domestic gas supply, it's going to generate royalties and it's attractive financially for governments," Professor Hepburn said. "That will, of course, attract regional investment and it's likely to align South Australia with th

Fracking could open the door to 10 years of gas supply but is there a risk?

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Fracking could open the door to 10 years of gas supply but is there a risk?

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