The state of fracking in 2015

There is no doubt that fracking is a divisive process – a point on which technical industry experts and anti-fracking campaigners appear to fleetingly agree. Whilst the technocrats focus is on fracking’s application, such as forcing open fissures and extracting oil and gas, the campaigners are more likely to refer to the broader social division that is polarising viewpoint and opinion on its use in the unconventional gas industry.

‘Fracking’ has found its way into hundreds of thousands of Australian households as a discussion topic of interest thanks to continued media attention focusing on raised concerns about the health and environmental risks that the practice has been linked to.

Science and technical understanding of the process of fracking appears to be an unnecessary pre-requisite to having a strong opinion on the issue. The term ‘fracking’ has become disassociated with its meaning and instead regularly embodies the whole of the unconventional gas industry as it grabs the headlines in the public domain.

Voices of reason are few and far between in the media. Those who try to speak up and rationalise the process are being drowned out by a powerful and growing lobby of ‘anti-frackers’, intent on raising their profile and empowering their own political agendas.

It is difficult to recall a more pressing issue and one that continues to threaten the future potential of the pipeline and gas industries to deliver low-cost energy to Australia and the world.

At a time when the onshore petroleum and gas industry needs reassurance to invest in the development of unconventional plays from Government and its regulators, a political division is emerging between the States and Territories.

On the day that Dr Allan Hawke released the highly anticipated ‘Report of the Inquiry into Hydraulic Fracturing in the Northern Territory’, the Tasmanian Government released its own ‘Review of Hydraulic Fracturing in Tasmania’

Whilst the Northern Territory report concluded with the message that “hydraulic fracturing could be managed effectively, subject to the creation of a robust regulatory regime,” the Tasmanian report cited 17 key issues to justify the announcement of a five-year moratorium on the process.

To have two opposing outcomes on the same topic released on the same day by different States and Territories is symptomatic of the broader public debate and epitomises how public conjecture is taking precedence over technical advice when it comes to political decision-making relatively to unconventional gas development.

New South Wales (NSW) is having its own internal struggle with coal seam gas (CSG) potential within the State. On one hand, the state appears broadly supportive of the industry through the 2013 CSG Review, whilst on the other hand (in more recent times), it has taken action to isolate, suspend and buy back CSG exploration tenements.

The level of uncertainty surrounding the CSG industry in NSW is complex. A stalemate exists, with any new proposed exploration development largely on hold within the State –predominantly due to regulatory indecision and uncertainty driving a lack of appetite for investors.

In the current climate, the future of the unconventional gas industry in Australia will not be driven by traditional values, such as the volume of the resource, cost of extraction or market demand, but instead by the rigors of the regulatory framework, the prevailing attitude of the Government and the public appetite for such a development.

Growing energy demand will necessitate a need for unconventional gas to continue to play its role in supplying Australian and international markets, but what is clear is that foreign or domestic demand alone will not be enough to gain maximum development from the industry.

There needs to be a willingness from those across the industry to reinforce the quality of its safeguards and confirm its scientific rationale in a broader forum and on a greater stage.

Good news stories need to be brought to light, amplified and broadcast in a way that reaches our decision makers and changes public scepticism and opinion.

The public need to hear loud and clear that the industry has a social licence to operate based on environmentally sound practices, a safe working environment and a demonstrated public equity.

Future projects depend on it.

Position on fracking - Australian states and territories

New South Wales
Independent review of CSG activities in NSW released September 2014.

Regulatory framework has been established but is in its early stages and governance is readily open to the influence of a sensitive political climate.

Northern Territory
Report of the Inquiry into Hydraulic Fracturing in the Northern Territory released February 2015.

Hydraulic fracturing is acceptable provided a robust regulatory regime is in place. The legislative framework is in its infancy in NT.

Robust CSG industry and accompanying regulatory framework.

South Australia
Parliamentary enquiry into unconventional gas (fracking) is currently underway. More than 750 petroleum wells have already been fracture stimulated in the Cooper Basin to date.

Review of hydraulic fracturing in Tasmania released February 2015. Previous 12-month moratorium superseded by a five-year moratorium.

Western Australia
Inquiry into the Implications for Western Australia of Hydraulic Fracturing for Unconventional Gas ongoing.

Moratorium in place as at January 2015 until December 2016 on all exploration activity pending a new parliamentary inquiry into Victoria’s unconventional gas industry (TBA).

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