Western Australia’s Canning Basin will soon be talked about as the next resources mining frontier. The James Price Point $40 billion gas hub proposal for all intents and purposes has been dumped but the State’s Premier, Colin Barnett, will pitch the extraction of natural gas from the Canning Basin as the way to go in the pursuit of State revenue. Most of the gas will be exported.
The shale gas deposits of the Canning Basin are among the richest in the world.
On Tuesday, Premier Barnett introduced a Parliamentary Bill seeking to develop the vast Canning resource. The Bill will formalise the agreement between the Government and the venture partners Buru Energy and Mitsubishi Corporation.
The Stringer has been following the potential of the Canning Basin shale gas development since February and on May 1 published ‘The Gas Wars’. The Stringer reported in The Gas Wars that despite Premier Barnett’s bent on the James Price Point gas hub proposal and its unlikelihood that “he is also bent on extracting every other resource in the region and from nearby regions.”
“He is not only bent on extracting every cubic foot of the 13 trillion cubic feet of natural gas estimated in the Browse Basin but also hundreds of trillions of cubic feet of gas from the wider Canning Basin.”
“A port at James Price Point has always been part of the dream, exporting the Kimberley’s processed resources to the world, particularly to nearby China. If a port is dredged up, it will quickly rival Australia’s busiest port, Port Hedland.”
“Where Browse Basin is estimated to have 13 trillion feet of gas it is believed the Canning Basin could have up to 20 times.”
Indeed the Canning Basin holds as much as 229 trillion cubic feet of gas or ten times as much as Chevron’s Gorgon project, according to the US Energy Information Agency. More importantly, the 229 trillion cubic feet of gas is more than one and a half times the State’s identified offshore reserves.
The financial incentives to the State are huge.
The Canning Basin has been studied for quite some time and has been recognised for its prospective oil and gas capacity. Hundreds of wells have been drilled but the Basin covers approximately 506,000 square kms.
Buru Energy has the biggest share of the Canning Basin tenements. It was also a strong performing company on the ASX in the past year.
Buru is planning a $500 million pipeline that will link its tenements with the domestic gas network in the Pilbara. This will call for more infrastructure building opportunities and herald demands on the Kimberley.
“This legislation will bring about continued exploration for natural gas in the remote Canning Basin, the development of a gas pipeline to the Pilbara and will ensure Western Australian consumers have first use of any gas discovered,” said Mr Barnett.
The joint venture partners subject to finding viable gas reserves to extract in the Basin by 2016 they will then be required to submit a plan to develop to a domestic gas hub which will need to include the pipeline to the Pilbara.
Premier Barnett pointed out, “This gas is located onshore, (therefore) it is also entirely owned by the State Government.”
He argued that Western Australia’s domestic gas supplies would be met before any exports.
But the Conservation Council of Western Australia (CCWA) alongside other environmental groups is concerned that shale gas may involve hydraulic fracturing (fracking) which has been shown to damage groundwater systems and pollute waters.
Mitsubishi and Buru are not alone in their interest in the Canning Basin and other multinationals are keen to get involved. In February PetroChina secured part of the Canning Basin.
The CCWA warned that the State Government could be repeating the mistakes it made with James Price Point by rushing into a major new industrial gas fracking project in the Kimberley that risks what it argued as irreversible damage to the region.
The CCWA said that despite all the serious concerns about gas fracking that legislation has been introduced to Parliament that commits the State “to becoming a proponent of major gas fracking developments in the Kimberley.”
CCWA Climate and Energy program manager Jamie Hanson said “this legislation is a red carpet welcome to industrialisation of some of the most precious parts of Western Australia.”
“Shale gas fracking is a highly risky technology in which chemical cocktails are pumped at high pressures into gas bearing rock in order to crack them and release trapped gas. The process comes with severe risk to human health, groundwater, and the environment.”
“A string of reports by leading international agencies have reiterated that the risks to water, health and environment of shale gas fracking are very high. Groundwater will be polluted as wells begin to fail – as they do.”
“Indeed, reports have shown that over half of gas wells fail inside 30 years, creating pathways for dangerous water pollution to contaminate groundwater.”
“The legislation will open precious places like Roebuck Plains and the Fitzroy River valley region to irreversible damage by thousands of gas fracking wells.”
“The introduction of this Bill preempts proper access and risks serious and ongoing conflict within both the Kimberley community, and more broadly in Western Australia,” said Mr Hanson.
“No environmental assessment of gas fracking in the Kimberley has been conducted.”
Without the assessments there is a risk that the Kimberley could be “turned into a polluted gas field.”
“We urge the State Government to follow due process, including at a minimum conducting detailed assessment of the environmental impacts of gas fracking in the Kimberley.”