What the Frack?: Everything You Need to Know About Coal Seam Gas

By Paddy Manning

Australia has a new $50 billion industry; it carries unprecedented environmental risks, but could be the path to energy salvation: cleaner than coal, safer than nuclear, a complement to renewables. While big oil and gas companies believe Australia could be the biggest liquid natural gas exporter in the world, farmers and environmentalists are united in their opposition to coal seam gas extraction from the nation's most fertile agricultural lands. Will interfering with thousands of coal seam gas wells poison food resources? Will coal seam gas really aid in tackling climate change? Where will there be drilling next? Visiting drill sites, boardrooms, pipelines, parliamentary offices and angry farm gate protests, this book demonstrates how coal seam gas extraction may be one boom that is happening too fast.

• Language: English
• Publisher: NewSouth
• Release date: Nov 1, 2012
• ISBN: 9781742241272

Paddy Manning

Paddy Manning is contributing editor (politics) for The Monthly magazine and author of four books including Inside the Greens, Born to Rule: The Unauthorised Biography of Malcolm Turnbull. Over a 20-year career in journalism he has worked for the ABC, Crikey, SMH/The Age, AFR, The Australian and was founding editor and publisher of Ethical Investor magazine. 

Book preview

http://www.abc.net.au/news/specials/coal-seam-gas-by-the-numbers/

CHAPTER 1

A golden age of gas?

Chinchilla magistrate Matthew McLaughlin was clearly sympathetic. In a tight little courtroom on Queensland’s Darling Downs, with camera crews waiting outside, he told the three defendants he was well aware of the debate about coal seam gas and had his own personal views about it.

I’ve done some reading recently in a National Geographic, if I remember, that raised great concerns with me personally about what’s happening. It was talking about what’s already happened in the United States … My own personal opinion though is irrelevant, of course. I’m simply here to enforce the rules that the government makes … So, if you want to make a speech to me about the unfairness of it all, you can but I can’t do anything about it … You’re probably preaching to the converted.¹

Elizabeth Conners, Bob Irwin and Thomas Brookes proceeded to plead guilty to the charge of contravening a direction by a police officer on 12 April 2011, outside the Queensland Gas Company office at Wieambilla, to move off the roadway immediately where they were blocking traffic. They had been protesting against the company’s installation of a pipeline connecting coal seam gas wells on the rural estates at Tara, where a residents’ blockade had been under way for weeks.

Bob Irwin, father of late conservationist Steve, had prepared a short two-minute speech and he took the opportunity to read it to the court, thanking the police officers for the way they handled the situation.

As to why I committed the offence, I have devoted most of my life to the protection of Australia’s wildlife and the environment by both direct action and by raising people’s awareness and that’s the important part, your Honour, is people’s awareness.

I have felt very strongly about a number of issues affecting wildlife in the past but never so strongly as to make me consider breaking the law, in order to get people to sit up and take notice. However, I believe that the coal seam gas industry will be so devastating to Australia’s environment and the people that I had no other choice.

In the USA, as your Honour’s aware, this industry has resulted in poisoned water supplies and not just to individuals but to entire towns. Governments here and overseas are blinded by the short-term financial gain and do not see the misery and the destruction that is taking place. The possible contamination of the Great Artesian Basin by the toxic chemicals used in this process is totally unacceptable to all Australians and I would say, your Honour, I will continue to fight for a safe and healthy environment and those are the reasons that I got arrested, your Honour.

Brookes gave an equally rousing speech, warning he had lived in the US and that what the coal seam gas industry was doing ‘here in Tara and the rest of Australia was an exact repeat of what’s gone on over there. One set of rules for them and one set of rules for everybody else and this industry makes people sick literally.’

Your Honour, I was told by Ross Dunn who is the coal seam gas industry director of [peak lobby group] APPEA [the Australian Petroleum Production and Exploration Association], at a forum recently that the coal seam gas industry can’t guarantee not to poison the Great Artesian Basin and this was also said outside this morning by one of the officials of QGC. I asked him straight, the same question, ‘Can you guarantee not to poison the Great Artesian Basin?’ and he said, ‘No, they can’t guarantee that’. But your Honour, this is insanity.

After commenting that the defendants had spoken passionately, and were law-abiding, mature citizens – not grandstanding, but with a genuine grievance – the magistrate advised them to set up a political party and offered each one a $200 bond, if they promised to be of good behaviour for a year. Were they prepared to sign it?

DEFENDANT IRWIN: No, your Honour.

BENCH: You’re not?

DEFENDANT IRWIN: I can’t accept that, your Honour.

BENCH: Would you prefer to get a fine?

DEFENDANT IRWIN: Yes, your Honour.

He was fined $300. That night Channel Nine news covered the ‘remarkable scenes’, telling how the 72-year-old ‘wildlife warrior’ knocked back the offer of a bond because he couldn’t promise the court he wouldn’t be part of more protests against the coal seam gas industry. Irwin told the cameras his late son would have been there shoulder to shoulder with him: ‘Steve’s left me with a responsibility now and it’s up to me to carry on the good work. Any government that supports this corrupt greedy disgusting industry has got questions to answer.’²

On the counter of a quiet service station in Harwood, just out of Grafton in northern NSW, was a curious little box of home-made CDs, each wrapped in a photocopied leaflet: ‘Coal Seam Gas Rigwatch’. Under pictures of drill rigs, seismic trucks and a well site, the leaflet told readers to report sightings immediately to a list of contact numbers: ‘Describe exactly what you see, where it was seen, what direction it was travelling, follow it if possible and report progress along the way’. On one disc, almost certainly bootleg copies of the award-winning US documentaries Gasland and Split Estate, coal seam gas investigations by Australia’s ‘Four Corners’ and ‘60 Minutes’, and two locally made activist videos ‘Stop CSG Now’ and ‘The Tara Blockade of QGC’. On the second disc, Bimblebox, a documentary on the rapid expansion of the coal and coal seam gas industries in Australia. The little package was both a call to arms and a primer on the global energy revolution that has gripped Australia: the unconventional gas boom.

As conventional oil and gas fields decline and prices rise, the energy industry has turned to exploit expensive and hard-to-get-at resources – in deep water offshore, in oil shales, tar sands, coal seam gas (or coal bed methane as it is known in the US) and shale gas. These so-called ‘unconventional’ resources are often found in places that are new for the oil and gas industry, adding to the potential for conflict with landowners and the general public – particularly in pristine or remote areas like the Arctic and the Kimberley.

In Australia, where coal seam gas has taken off in the space of a decade, the land is the battleground: grazing country, cropping country, state forest, water catchment areas, rural–residential and even urban areas. Nowhere appears to be off-limits for this new industry that has coined a new vernacular: ‘gas mining’.

Two key technological breakthroughs in America have opened up huge new possibilities in unconventional gas extraction: horizontal drilling and hydraulic fracturing, often shortened to ‘hydro-fracking’ or just ‘fracking’. Where conventional oil and gas wells were traditionally drilled vertically – straight down into the hydrocarbon reservoir – horizontal or directional drilling using downhole motors can turn the drill bit, through ninety degrees and push hundreds of metres laterally into coal seams or fine-grained shale rocks, trailing lengths of steel pipe known as drill strings. Drilling into such unconventional targets is one thing, getting the gas to flow back up the pipe is another. That is where fracking technology comes in: a mixture of water, sand and chemicals is injected down a well to force it to release gas. The sand and fracking chemicals are used as ‘propping agents’ (i.e. they prop open the fracture to keep the gas flowing). Fracture stimulation is often repeated multiple times on a well.

Fracking was commercialised by Texan oil services giant Halliburton in 1949 and used to increase production from oil and gas wells. Halliburton is no stranger to controversy. Headed by Dick Cheney between 1995 and 2000, when he became US vice-president under George W. Bush, the company has been accused of profiteering on defence contracts in Iraq. Oil wells cemented poorly by Halliburton were partly blamed for the infamous oil spills at the Montara rig off Western Australia in late 2009 and the Deepwater Horizon rig in the Gulf of Mexico in early 2010.

In 2005, the Bush/Cheney Energy Policy Act exempted natural gas drilling from the Safe Drinking Water Act via a provision known as the ‘Halliburton Loophole’, which sidelined the US Environmental Protection Agency (EPA) and meant the chemicals used during fracking did not need to be disclosed.

A combination of rising gas prices, technological advances and favourable regulation has led to an explosion in shale gas extraction. In 2005 it comprised just 4 per cent of US natural gas production. By 2010 it supplied 23 per cent of the US market. That share is projected to rise to 49 per cent by 2035. Roughly half a million gas wells are now active in the US and the Energy Information Administration calculates another 410,722 may be needed to extract all the country’s technically recoverable shale gas resources.³

The surge in gas supply has been called the ‘shale gale’ and it has transformed world energy markets, tantalising the US with the prospect of energy independence, and sending US gas prices so low that electric power stations have begun switching from coal to gas – in the process, helping to lower America’s greenhouse gas emissions, which fell by 1.7 per cent in 2011.⁴

The unconventional boom caught some of the world’s biggest energy players by surprise. As recently as 2007 BHP Billiton was planning to export Australian liquefied natural gas (LNG) to California – proposing a controversial terminal off the coast of Malibu, which was knocked back by then Governor Arnold Schwarzenegger. Just five years later the US is emerging as a likely LNG exporter, competing with Australia. In 2011 BHP spent $US20 billion on takeover targets in the US, seeking a prime position on the Haynesville shale play, the country’s second largest gas field, only to incur a $US2.8 billion writedown a year later as the gas glut devalued the assets.

Worldwide demand for gas is growing – especially after the 2011 meltdown of the Fukushima Daiichi reactor following Japan’s earthquake and tsunami put the longhyped ‘nuclear renaissance’ under a cloud. Japan will now close all its reactors by 2040, the biggest shutdown of nuclear power in history. In 2011 the International Energy Agency (IEA) forecast gas would be the world’s fastest-growing energy sector, alongside renewables, with coal use expected gradually to decline (in relative, not absolute terms). The IEA predicted global demand for gas would double by 2050, lifting its share of the world energy market from 20 to 30 per cent. Were we entering a ‘golden age of gas’, the IEA pondered? Answering its own question a year later, the IEA proposed a dozen ‘golden rules’ that would determine whether this unconventional gas would experience rapid growth, adhering to best practice and enjoying a social licence to operate, or would struggle for market share as pitched battles were fought over its environmental impacts.⁵

For as unconventional gas extraction first started in the US, so did a powerful backlash. The 2009 documentary Split Estate told the story of families in Colorado and New Mexico suffering tumours and other illnesses caused by shale gas drilling right near their homes. The film’s title highlighted the common law doctrine that holds that the rights to mineral resources underground – whether held by the state or by private companies – prevail over the rights of landowners on the surface. The same law applies in Australia.

The following year came Gasland, by filmmaker Josh Fox, which showed sensational footage of tap water aflame in homes in Weld County, Colorado, and Dimock, Pennsylvania, which the residents blamed on nearby shale gas drilling. Gasland has prompted fracking moratoriums in parts of North America such as Vermont and Quebec. New York Governor Mario Cuomo is due to rule on whether fracking will be allowed upstate – including in New York’s water catchment – after a yearlong investigation. In Europe, shale-rich France has banned fracking altogether and Bulgaria’s parliament recently u-turned after a public outcry, disallowing a Chevron exploration program.

Shale gas hasn’t taken off in Australia – yet – but coal seam gas extraction also relies on fracking and the US debate resonates here. ‘Have you seen Gasland?’ is still the question most asked, whenever coal seam gas is discussed. In broad terms, coal seam gas is generally shallower, found at depths between 300 and 1000 metres, while shale gas occurs below 1 kilometre and as deep as 3 kilometres. Coal seam gas wells do not always require fracking and, when they do, the pressure is less intense. But coal seam gas wells also produce more water, which is why BHP chief Marius Kloppers, for example, has argued shale gas presents fewer environmental issues than coal seam gas.

It is often said that Gasland is not relevant in Australia because it relates to shale gas drilling, not coal seam gas. This is wrong. Gasland covers both, and some of the key stories are of communities affected by coal seam gas mining, including in Pavilion, Wyoming, where the Locker family watched their water well turn black and the where the Meeks’ water well exploded with gas for three days. America’s oil and gas industry fiercely attacked the film over claimed inaccuracies, via an anonymous blog ‘Debunking Gasland’ and launching a short 34-minute movie, Truthland.

Josh Fox responded to this film in detail on his movie’s website and, far from being deterred, is about to release Gasland 2, funded by HBO (a preview, ‘The Sky is Pink’, is already on YouTube). A key debate centred on methane contamination of drinking water wells in Dimock, Pennsylvania – one of the places where Gasland showed people igniting their gas-contaminated tap water. What is not contested is that the Cabot Oil and Gas company paid $US4.1 million to settle with 15 families who launched a class action in 2009, after the state’s environmental regulator found the contamination was caused by excessive pressure during reinjection of wastewater and ‘insufficient or improper cemented casings that allow gas to vent between various cemented casings and/or from behind the surface casing’. Cabot was fined $US120,000 and had to deliver fresh drinking water to the affected homes. In dispute was whether the methane was ‘biogenic’ (i.e. naturally occurring gas from the shallower coal seams,