Shale Gas Law and Policy in Australia

Summary

INTRODUCTION

Australia has been producing gas from conventional reservoirs for commercial purposes for over fift y years. This activity has been primarily (although not exclusively) confined to the extraction of conventional gas in the Cooper Basin in South Australia and the Amadeus Basin in the Northern Territory. The giant Moomba field in the Cooper Basin, operated by Santos, has been a constant and voluminous supplier of petroleum, especially gas, to the densely populated eastern states via a series of pipelines. Conversely, conventional petroleum production from Western Australia has been small to date. With the exception of the giant Moomba field in the Cooper Basin, onshore conventional petroleum resources have been relatively unspectacular, and have contributed a minor amount of petroleum to Australia's energy supply.

More recently, gas extraction in Australia has extended to the extraction of unconventional petroleum resources. To date, only coal seam gas (CSG) in eastern Australia has been extracted on a commercial basis. As such, many of the Commonwealth (national) level regulatory and policy reforms have been focused toward CSG, with little attention at Commonwealth level paid to the vast shale gas resources that Australia possesses. Unconventional gas resources (UGR) (shale gas and CSG) are developed in Australia as part of an overall strategy for developing gas resources for one of two markets: the domestic gas market or the international market (export market). For domestic consumption, the gas is extracted as UGR, and then supplied into local pipelines to feed into the domestic gas and electricity markets.

This chapter will provide an assessment of Australia's shale gas resources, and the regulation of these resources. It will, out of necessity, consider CSG where required, since CSG development has driven and shaped the laws and policies related to shale gas development in Australia. However, it is important to note that many of the issues surrounding CSG development, particularly wastewater from the dewatering of coal measures, water draw-down in aquifers due to dewatering in shallow coal measures, and the processing and disposal of large quantities of salty waste arising from coal seam dewatering are confined to CSG development, and are not as relevant for shale gas development. However, much of the legal and policy regime for shale gas in Australia is adapted from CSG, and not particularly relevant to the development of shale gas resource.