March 18, 2014
It appears that over the past decade Santos has decided to transform itself from a non-controversial domestic gas supplier into a global energy player focusing upon the high risk “unconventional gas” reserves unlocked through the highly controversial extraction process called “fracking”.
Santos is constructing a massive gas processing and export facility on Curtis Island near Gladstone in central Queensland and it needs a reliable, long-term sources of gas in place to supply both its domestic customers and its prospective international customers. It's in a pickle as Santos, in conjunction with its partners in the GLNG consortia, has signed onto contracts and invested billions of dollars to supply huge quantities of gas overseas, before it had confirmed it could access that amount of gas. It is struggling to find the additional supplies of gas needed. Hence the O’Farrell Government in NSW fast tracking the approval process for Coal Seam Gas mining.
The fossil fuel industry spin is that: that an expansion of CSG will create a large number of jobs; that without a big increase in CSG extraction, gas prices will rise dramatically; and that an expansion of CSG will reduce Australia’s greenhouse gas emissions. The spin downplays the risks to human and environmental health when mining in prime agricultural land. It is spin because it is close to myth making.
For example the claim that without a big increase in CSG extraction, gas prices will rise dramatically is misleading because, though gas prices in eastern Australia are going to rise substantially, this is due to an increase in demand in the world gas market. Australia's low domestic gas prices will rise (triple) because Australian gas producers will have the option to sell to the Japanese who are willing to pay $15 per gigajoule, instead of the domestic price of $3 to $4 per gigajoule.
At the moment Santo's search for reliable, long-term sources of gas involves coal seam gas in NSW with its risk of contamination of aquifers caused by water leaking from a retaining pond, with lead, aluminium, arsenic, barium, boron, nickel and uranium. This recently happened in the Pilliga Forest, near Narrabri, in the north west of the state of New South Wales.
The biggest concern to human health is he biggest risk to human health was from wastewater.Wastewater is water extracted from the coal seam that has returned to the surface and contains fracking and drilling chemicals among other materials. The water is stored in ponds but leaks and spills can occur and there are concerns this can contaminate drinking water.
So we have increasing tensions between energy and water. There is competition over water between different industries (agriculture and municipal water) and the prospect of tougher regulations on use of water. The actual volume of water recycling happening in fracking fields is relatively low.