Australia sitting on potential shale gas jackpot, but more regulation needed: study
Australian researchers say the country is sitting on a potential shale gas bonanza but more environmental assessment and proper regulation are needed to develop the industry.
Australia is estimated to have vast resources of the natural gas which is released by fracturing shale rock thousands of metres below the earth's surface.
The process known as hydraulic fracking is the same procedure used in coal seam gas extraction.
A report from the Australian Council of Learned Academies (ACOLA) says it is a matter of urgency to develop robust regulation in Australia to allow the safe and transparent development of the unconventional gas industry in Australia.
The report, Engineering Energy: Unconventional Gas Production, says Australia's shale gas resources are plentiful but will be more expensive to develop than in the United States.
Report co-author, Professor Peter Cook, from Melbourne University says the jury is still out on whether Australia should develop its shale gas deposits.
"What we have concluded is that there is a lot of shale gas resources and the issue is to turn that into reserves, in other words to turn them into economic deposits," he said.
"That's going to take more work, more capital and also ensuring the right regulatory regime is in place."
The report says Australia's shale gas industry is small compared to North America but more than $500 million is expected to be spent on exploration in the next one to two years.
Australia's "technically recoverable" shale gas resources are estimated to be 396 trillion cubic feet by the US Energy Information Administration.
The research is based on only four shale gas basins: Perth, Canning, Cooper and Maryborough and the true undiscovered amount could be more than 1,000 trillion cubic feet.
Western Australia is estimated to have the fifth largest shale gas reserves in the world.
The report says while production costs are likely to be significantly higher than in North America, shale gas has the potential to be an important source of energy.
Australia faces a potential gas shortage in 2015 when long term deals with Asian customers start.
Farmers, residents and environmentalists in Australia have protested against the development of the coal seam gas industry amid concerns about the contamination of water and the environment.
Victoria has a moratorium on hydraulic fracking and New South Wales has prohibited new coal seam gas exploration and production within two kilometres of residential areas.
The report on shale gas says more research is needed on the industry and effective regulation was required.
It notes that there is no Australian data on the risk to human health.
"Because of the manner in which shale gas is produced it has the potential to impact on the landscape, ecosystems, on surface and groundwater, on the atmosphere, on communities, and rarely may result in minor induced seismicity," the report said.
Professor Cook says the environmental impact needs to be managed.
"There is no inherent reason why shale gas production should be deeply damaging to the environment," he said.
The first commercial shale gas operation began in the Cooper Basin in South Australia last year.