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Engineering Energy: Unconventional Gas Production Engineering Energy: Unconventional Gas Production A study of shale gas in Australia. FINAL REPORT PROJECT AUSTRALIAN ACADEMY OF THE HUMANITIES AUSTRALIAN ACADEMY OF SCIENCE ACADEMY OF THE SOCIAL SCIENCES IN AUSTRALIA AUSTRALIAN ACADEMY OF TECHNOLOGICAL SCIENCES AND ENGINEERING SECURING EXPERT AUSTRALIA’S WORKING FUTURE GROUP – PROJECT 6 A three-year research Professor Peter Cook CBE, FTSE (Chair) program funded by the Dr Vaughan Beck FTSE (Deputy Chair) Australian Research Professor David Brereton Council and conducted Professor Robert Clark AO, FAA, FRSN Dr Brian Fisher AO, PSM, FASSA by the four Learned Professor Sandra Kentish Academies through Mr John Toomey FTSE the Australian Council Dr John Williams FTSE of Learned Academies for PMSEIC, through AUTHORS the Office of the Chief Professor Peter Cook CBE, FTSE Scientist. Securing Dr Vaughan Beck FTSE Australia’s Future delivers Professor David Brereton research-based evidence Professor Robert Clark AO, FAA, FRSN and findings to support Dr Brian Fisher AO, PSM, FASSA policy development in Professor Sandra Kentish areas of importance to Mr John Toomey FTSE Australia’s future. Dr John Williams FTSE © Australian Council of Learned Academies (ACOLA) ISBN 978 0 9875798 1 2 This work is copyright. Apart from any use permitted under the Copyright Act 1968, no part of it may be reproduced by any process without written permission from the publisher. Requests and inquiries concerning reproduction rights should be directed to the publisher. DATE OF PUBLICATION May 2013 PUBLISHER Australian Council of Learned Academies Level 1, 1 Bowen Crescent Melbourne Victoria 3004 Australia Telephone: +61 (0)3 98640923 www.acola.org.au SUGGESTED CITATION Cook, P, Beck, V, Brereton, D, Clark, R, Fisher, B, Kentish, S, Toomey, J and Williams, J (2013). Engineering energy: unconventional gas production. Report for the Australian Council of Learned Academies, www.acola.org.au. REPORT DESIGN Lyrebird [email protected] 2 Engineering Energy: Unconventional Gas Production A study of shale gas in Australia. ACOLA is the interface of the four Learned Academies: Australian Academy of the Humanities Australian Academy of Science Academy of the Social Sciences in Australia Australian Academy of Technological Sciences and Engineering 3 Australia’s Learned Academies Australian Academy of the Humanities Australian Academy of Science The Australian Academy of the Humanities The Australian Academy of Science is a private advances knowledge of, and the pursuit of organisation established by Royal Charter in excellence in, the humanities in Australia. 1954. It comprises ~450 of Australia’s leading Established by Royal Charter in 1969, the scientists, elected for outstanding contributions Academy is an independent organisation of to the life sciences and physical sciences. The more than 500 elected scholars who are leaders Academy recognises and fosters science excellence and experts in the humanities disciplines. through awards to established and early career The Academy promotes the contribution of researchers, provides evidence-based advice the humanities disciplines for public good to assist public policy development, organises and to the national research and innovation scientific conferences, and publishes scientific system, including their critical role in the books and journals. The Academy represents interdisciplinary collaboration required to Australian science internationally, through its address societal challenges and opportunities. National Committees for Science, and fosters The Academy supports the next generation international scientific relations through of humanities researchers and teachers exchanges, events and meetings. The Academy through its grants programme, and provides promotes public awareness of science and its authoritative and independent advice to school education programs support and inspire governments, industry, the media and the primary and secondary teachers to bring inquiry- public on matters concerning the humanities. based science into classrooms around Australia. www.humanities.org.au www.science.org.au Working Together – ACOLA The Australian Council of Learned Academies (ACOLA) combines the strengths of the four Australian Learned Academies: Australian Academy of the Humanities, Australian Academy of Science, Academy of Social Sciences in Australia, and Australian Academy of Technological Sciences and Engineering. 4 Academy of Social Sciences in Australia Australian Academy of Technological The Academy of the Social Sciences in Australia Sciences and Engineering (ASSA) promotes excellence in the social sciences in ATSE advocates for a future in which technological Australia and in their contribution to public policy. sciences and engineering and innovation contribute It coordinates the promotion of research, teaching significantly to Australia’s social, economic and advice in the social sciences, promote national and environmental wellbeing. The Academy is and international scholarly cooperation across empowered in its mission by some 800 Fellows disciplines and sectors, comment on national needs drawn from industry, academia, research institutes and priorities in the social sciences and provide advice and government, who represent the brightest to government on issues of national importance. and the best in technological sciences and Established in 1971, replacing its parent engineering in Australia. Through engagement body the Social Science Research Council of by our Fellows, the Academy provides robust, Australia, itself founded in 1942, the academy independent and trusted evidence-based advice is an independent, interdisciplinary body of on technological issues of national importance. We elected Fellows. The Fellows are elected by their do this via activities including policy submissions, peers for their distinguished achievements workshops, symposia, conferences parliamentary and exceptional contributions made to the briefings, international exchanges and visits and social sciences across 18 disciplines. the publication of scientific and technical reports. It is an autonomous, non-governmental The Academy promotes science, and maths organisation, devoted to the advancement education via programs focusing on enquiry- of knowledge and research in the based learning, teaching quality and career various social sciences. promotion. ATSE fosters national and international collaboration and encourages technology transfer www.assa.edu.au for economic, social and environmental benefit. www.atse.org.au By providing a forum that brings together great minds, broad perspectives and knowledge, ACOLA is the nexus for true interdisciplinary cooperation to develop integrated problem solving and cutting edge thinking on key issues for the benefit of Australia. ACOLA receives Australian Government funding from the Australian Research Council and the Department of Industry, Innovation, Science, Research and Tertiary Education. www.acola.org.au 5 Summary Many Australian sedimentary basins are prospective for unconventional gas and the undiscovered resource base is very large. The technology (such as horizontal wells, multi-well pads and hydraulic fracturing) is available to produce shale gas (and shale oil and tight gas) in Australia, but production costs are likely to be significantly higher than those in North America and the lack of infrastructure will further add to costs. Shale gas will not be cheap gas in Australia, but it is likely to be plentiful and it has the potential to be an economically very important additional energy source. Increased use of shale gas (and other gas) for electricity generation could significantly decrease Australia’s greenhouse gas emissions based on gas replacing coal. Because of the manner in which shale gas is produced it has the potential to impact on the landscape, on ecosystems, on surface and groundwater, on the atmosphere, on communities, and rarely may result in minor induced seismicity. It will be vital for industry and government to recognise the complexity of the challenges posed by these possible impacts. However, most can be minimised where an effective regulatory system and best monitoring practice are in place and can be remediated where they do occur. If the shale gas industry is to earn and retain the social licence to operate, it is a matter of some urgency to have such a transparent, adaptive and effective regulatory system in place and implemented, backed by best practice monitoring in addition to credible and high quality baseline surveys. Research into Australia’s deep sedimentary basins and related landscapes, water resources and ecosystems, and how they can be monitored, will be essential to ensure that any shale gas production is effectively managed and the impacts minimised. 6 Contents List of tables 8 List of figures 10 Project aims 12 Executive summary 14 Key findings 20 Introduction 30 Global supply and demand economics of natural gas 36 Shale gas resources and reserves 40 Technology and engineering 52 Infrastructure considerations 74 Financial analysis of shale gas in Australia 86 Landscape and biodiversity 98 Water resources and aquatic ecosystems 112 Induced seismicity 132 Greenhouse gas emissions 138 Community 152 Monitoring, governance and regulation 168 Knowledge needs 178 Glossary of terms 184 Scientific and Engineering Units and Conversions 192 References 194 Expert Working Group 206 Acknowledgements 208 Evidence gathering 210 Review Panel 214 Appendix 1: Unconventional hydrocarbon resources in Australian sedimentary
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