Thursday, August 22, 2013

Committee Details: Inquiry into the Implications for Western Australia of Hydraulic Fracturing for Unconventional Gas

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

Date Commenced:08/07/2013
Inquiry Status:Current

Committee Name:

Environment and Public Affairs Committee

House:Legislative Council
Members Conducting Inquiry
Members:Hon. Simon O'Brien MLC
Hon. Stephen Noel Dawson MLC
Hon. Brian Charles Ellis MLC
Hon. Paul John Brown MLC
Hon. Samantha Helen Rowe MLC

Media Statements:

Staff Members:Ms Irina Lobeto-Ortega, LLB, BA, GradDipLP (Advisory Officer (Legal))
Ms Amanda Gillingham, BA (Hons) (Research Officer)
Ms Margaret Liveris, Dip Pub Admin (Committee Clerk)

Contact Details

Phone No:9222 7229
Fax No:9222 7805
Email:Click here to send an email to this Committee

Terms of Reference:On 7 August 2013, the Committee resolved to inquire into and report on the implications for Western Australia of hydraulic fracturing for unconventional gas, including:

a) how hydraulic fracturing may impact on current and future uses of land;

b) the regulation of chemicals used in the hydraulic fracturing process;

c) the use of ground water in the hydraulic fracturing process and the potential for recycling of produced water; and

d) the reclamation (rehabilitation) of land that has been hydraulically fractured.

Important Information

Legislative Council Guide to Making Submissions to a Parliamentary Committee

Deadline for Submissions:


  1. Barnaby says he'll sell CSG properties

    Former Nationals Senate leader Barnaby Joyce says he'll do the right thing and relinquish two properties near the heart of NSW's coal seam gas country.

    According to Fairfax Media, Mr Joyce has conceded he'll have to put out the For Sale sign in order to avoid "any viewed conflict of interest".

    Expected to replace Warren Truss as Nationals leader and enter the House of Representatives at the September 7 federal election, Mr Joyce is tip-toeing between supporting pro-mining interests inside the coalition and anti-CSG farmers in his chosen electorate of New England, the Sydney Morning Herald says.

    The paper reports that he purchased land in the middle of the remote Pilliga scrub in 2006 and made a second purchase two years later.
    The holdings, at Gwabegar between Coonabarabran and Narrabri, are 971 hectares in total.


    EPA slammed for failing to protect koala habitats

    The NSW Environment Protection Authority has been accused of being ''extremely shoddy, unprofessional and incompetent'' in its oversight of logging in the state's far north.

    The Royal Camp State Forest, south-west of Casino, has been identified as a habitat for two threatened and vulnerable species, the koala and the yellow-bellied glider possum.

    The North East Forest Alliance has written to the EPA chief regulator, Mark Gifford, complaining that the EPA had misrepresented evidence and refused to investigate key complaints about the state-owned NSW Forestry Corporation.

    Dailan Pugh, of the NEFA, was responding to the release of an EPA investigation into the actions of the Forestry Corporation, which was issued with three $300 fines for logging in koala high-use areas and a letter of caution for its activities at the Royal Camp State Forest in the northern rivers region.


    Mr Pugh said his group complained that the Forestry Corporation had refused to thoroughly search for koala scats (faecal pellets) to identify koala high-use areas and protect them from logging, and also that it had felled trees that showed clear signs that the glider possum, which is protected in NSW, had been feeding on sap from those trees.

    The EPA has admitted in budget estimates that a mandatory survey of the koala habitats, which is required before timber logging, was not ''thorough'' enough.

    The EPA investigation had said it could not ''determine beyond reasonable doubt'' whether incisions made on a tree were from possums.

    But the tree had been inspected by the wildlife ecologist David Milledge, who verified the markings as those made by the possums. Mr Milledge said it was ''inconceivable that the EPA was unable to positively identify'' the incisions that had been made by the glider possum.

    Mr Gifford responded by saying that the EPA uses a variety of approaches when investigating any potential environmental impacts. ''There are a number of checks and balances,'' Mr Gifford said.

  2. Qld pressures parties to back flood plans

    The Queensland government has called on both sides of federal politics to financially support an unprecedented plan to help flood-proof the state.

    Community Recovery Minister David Crisafulli says the state government will spend $50 million but more money is needed for big ticket infrastructure projects, such as major flood levees.

    "I'm not saying if we don't get money from the federal government then it's game over and nothing is going to happen," Mr Crisafulli told reporters in Brisbane.

    "There will still be some great projects unfold.

    "But some real big ticket items ... will be best achieved in a timely fashion if the feds come on board."

    Mr Crisafulli says pressure is on both Labor and the coalition to pledge support for the state's ambitious flood mitigation program.

    "I think if there was a commitment in the next two weeks from either side of politics, I think it would make eminent sense. It would be good politics on their behalf," he said.

    "But if it doesn't occur until after the election I think it would also be good governance and that's what it should be about."

    Mr Crisafulli says the state government will use existing grant programs to fund the $50 million plan.

    Two flood projects had already received funding, while announcements regarding other funding allocations would be made in the coming week, he said.

    Mr Crisafulli says while it is impossible to totally flood-proof Queensland, he expects the projects will go a long way in protecting communities against major inundation.

    He anticipates they will drive down insurance premiums across Queensland.

    "If there is better mitigation in place, there is less likelihood people will have to claim and therefore we would like to see premiums head in the other direction," he said.

    Mr Crisafulli said the flood program would also save the government money in the long run.

    The state had spent $4 billion on flood recovery this year alone, he said.

    "It will pay for itself 100 times over financially and emotionally," he said.
    "Surely government is about looking beyond the end of your nose ... not just looking at election cycles but infrastructure that will last generations."

  3. Fast-moving fire rages through Yosemite National Park in California

    A largely out-of-control wildfire is sweeping through California's Yosemite National Park and threatening thousands of homes and power lines that provide electricity to San Francisco.

    The blaze has forced scores of tourists to flee and residents of two towns have been advised to leave.

    California governor Jerry Brown has declared a state of emergency in Tuolumne County.

    The fire has damaged the electrical infrastructure serving the city, and forced the San Francisco Public Utilities Commission to shut down power lines, the governor said in his declaration.

    There were no reports of blackouts in the city, which is about 320 kilometres west of the park.

    The blaze was about six kilometres west of Hetch Hetchy Reservoir, park spokeswoman Kari Cobb said.

    The reservoir provides water to 2.6 million customers in the San Francisco area.

    The city's water supply could be affected should the blaze affect the reservoir, Mr Brown said in his declaration.

    Local journalist Mike Rosenberg says firefighters are struggling to access the area.

    "They've gone in on foot with hoses that have stretched back to their trucks and just hope that the work can be done be aircraft because there are very few roads out there," he said.

    "It's a small rural community (with) only a couple of developed towns in that area of Yosemite.

    "(It) is not really near the sort of touristy type places where all the amenities are."

    Local resident Doug Edward says the fire is "pretty surreal and a little bit spooky".


    The so-called Rim Fire, which started last Saturday, has blackened 44,000 acres at the north-eastern corner of Yosemite as of Friday afternoon after exploding in size, Ms Cobb said.

    The blaze burning in the western Sierra Nevada mountains is now the fastest-moving of 50 large wildfires raging across the drought-parched US west that have strained resources and prompted fire managers to open talks with Pentagon commanders and Canadian officials about possible reinforcements.

    The blaze was also threatening 4,500 homes near the burn zone, up from 2,500 on Thursday, and an undisclosed number of homes were ordered to evacuate on Friday, adding to earlier evacuations.

    So far, the flames edging into scenic Yosemite have reached as far as Lake Eleanor, a remote area of the park which is normally accessible for fishing and hiking but was closed earlier this week along with several other areas after the fire broke out.

    The blaze, which has now charred a total of 427 square kilometres of forest land, mostly outside of Yosemite, was about 32 kilometres from Yosemite Valley, the park's main tourist centre, Ms Cobb said.

    "We're not anywhere near closing the (entire) park," she said.


    The Rim Fire, named for a Stanislaus National Forest lookout point called Rim of the World, has so far destroyed four homes and 12 outbuildings and was only 2 per cent contained as of Friday.


    US under pressure to deal with raging fires

    Highway 120, one of four access routes to a park known for its waterfalls, giant sequoia groves and other scenic wonders, was temporarily closed.

    The highway leads to the west side of the 300,000-hectare park.


    The so-called Beaver Creek fire, now 67 per cent contained, at its peak forced out occupants of 2,250 houses in upscale neighbourhoods outside Sun Valley and destroyed one home and seven other buildings in a resort area in central Idaho where land and properties are valued at up to $10 billion.

    The fire, sparked by lightning on August 7, has charred 111,000 acres of sagebrush, grasslands and pine forests in the Sawtooth Mountains at the height of a summer tourist season that draws thousands.


    The 2013 fire season has already drained US Forest Service fire suppression and emergency funds, causing the agency to redirect $600 million meant for other projects like campground and trail maintenance and thinning of trees to reduce wildfire risks, agency spokesman Mike Ferris said.


  4. Friday, August 23rd, 2013

    Des Headland on fracking

    Palmer United Party candidate Des Headland has made a strong statement against hydraulic fracturing.

    “The fracking process is dirty, dangerous and presents a high risk of contamination to both the ground water and surface water supplies over a period of time,” Mr Headland said.

    “You can’t just clean this contamination up when it happens. Any fracking spill will be entirely irreversible and the pollution will be there forever.

    You can read his media release here:

    Media release

    Gas fracking must stop, says Palmer United candidate

    The Palmer United Party candidate for Durack, Des Headland, says gas fracking in Western Australia is a disgrace and has to stop.

    Mr Headland says studies must take place to establish exactly what the environmental and health risks are before any more fracking is allowed to take place.

    “The fracking process is dirty, dangerous and presents a high risk of contamination to both the ground water and surface water supplies over a period of time,” Mr Headland said.

    “You can’t just clean this contamination up when it happens. Any fracking spill will be entirely irreversible and the pollution will be there forever.

    “The areas being developed and threatened by gas fracking companies are beautiful and delicate. Parts of the Kimberley and also Ningaloo Reef are at risk due to this very dangerous process and we must do everything we can to protect these vital areas.

    “Let’s not let them destroy any more of our wonderful country or tamper with indigenous cultural sites that have over 50,000 years of history behind them.

    “The Palmer United Party will fight hard to put a stop to this until more is known about the process and the inherent risks,” he said. - See more at:

    - See more at:

    1. August 21, 2013

      Van Styn says no to fracking in Durack

      The Nationals WA candidate for Durack, Shane Van Styn has today reaffirmed his strong stance against fracking in Durack.

      Mr Van Styn said if elected to Federal Parliament he would stand up against fracking, or hydraulic fracturing, in Durack.

      “I’ve held a long-standing position against fracking, due to the risks it may pose to ground water and fresh water and also the potential environmental damage fracking may cause.”

      Mr Van Styn has travelled extensively across the electorate since being endorsed as the candidate for Durack, and said the issue was widely raised.

      “From the Kimberley to the Mid West, people are saying they are not comfortable with fracking, and I share their concerns.”

      Mr Van Styn said he was disappointed the views of the Liberal and Labor candidates didn’t reflect the views of the majority of Durack residents.

      “As someone who lives in the Mid West, I rely on the groundwater here for drinking. I don’t want to risk contaminating that water as a result of fracking.

      “It’s easy to say you support fracking in the region when you don’t live here and you won’t be exposed to the risks.”

      Mr Van Styn is attending community forums on fracking in Geraldton and Dongara this week to discuss issues around fracking.

      “If I am elected as the Member for Durack, it will be my job to take these concerns to Canberra.”

      Mr Van Styn said he was pleased to see the WA State Parliament’s Environment and Public Affairs Committee conducting an inquiry into fracking, with The Nationals WA Member for the Agricultural Region, Paul Brown MLC, as a committee member.

      “I will be following this Legislative Council inquiry closely, and I look forward to working with my State and Federal colleagues on this issue.”

      Web Link: Durack Candidates speak about fracking to local news site Everything Geraldton:
      - See more at:

  5. Fishery bounce back informs on seagrass importance

    INSIGHTS into the impact of cyclones on tiger prawn habitats in north Western Australia has demonstrated the resilience of the species, as well as underscored the importance of protecting seagrass for fisheries production and marine biodiversity.

    In 1999, a team of researchers began evaluating tiger prawn (Penaeus esculentus) stock in Exmouth Gulf but later expanded their research to assess the impact of Cyclone Vance when it struck before research began.

    Murdoch University’s Neill Loneragan says tiger prawns are highly dependent on beds of seagrass and algae at the juvenile stage, and the destruction caused by Cyclone Vance gave them the opportunity to assess the impact on species when seagrass cover is lost.

    “Our first survey was in June 1999, three months after the cyclone hit,” Professor Loneragan says.

    “The whole system had been devastated by Vance, there was a 40 per cent loss of mangroves, the sediment had been overturned and there was virtually no seagrass or algae present in the system.

    “We recorded the cover of seagrass and algae across the eastern and southern Exmouth Gulf, in relatively shallow waters less than 5m deep.

    “Seagrass is most abundant in those areas and it’s also where the postlarvae and juvenile stages are found.”

    The cyclone caused major disruption and loss of seagrass and macroalgal beds, the critical prawn nursery habitat, and mangroves in the shallow inshore waters.

    As a result, prawn landings and recruitment to the fishery were markedly lower in the two years immediately afterwards, before rising again as the cover of macrophytes increased to over 40 per cent in 2003.

    “In the year [2000] the prawn catch was extremely low, it had dropped to 80 tonnes and in fact, the Department of Fisheries closed the fishery early to conserve the prawn stocks,” Prof Loneragan says.

    “Seagrass can take a long time to recover depending on the species, but in this case within three years it increased its cover up from around two per cent immediately after Cyclone Vance to 30–40 per cent.”

    Prof Loneragan says the huge loss of seagrass and macroalgae reduced the settling habitat for post-larvae and the nursery habitat for juvenile tiger prawns, which likely lead to the lower recruitment to the fishery in subsequent years.

    “This study demonstrates three things. Firstly, we were quite surprised to observe the resilience of both seagrass and the prawns after suffering the impacts of the cyclone,” he says.

    “Secondly, it highlights the value of monitoring and adaptive management to conserve fish stocks.

    “Lastly, it illustrates the importance of seagrass and macroalgae as habitats for fisheries and biodiversity.”


    The research, Impact of cyclones and macrophytes on the recruitment and landings of tiger prawns, Penaeus esculentus, in Exmouth Gulf Western Australia was recently published in Estuarine, Coastal and Shelf Science.

  6. Halliburton obviously don't rate Syria high on their "must have oil and gas countries."


    As Syria war escalates, Americans cool to U.S. intervention - Reuters/Ipsos poll

    WASHINGTON (Reuters) - Americans strongly oppose U.S. intervention in Syria's civil war and believe Washington should stay out of the conflict even if reports that Syria's government used deadly chemicals to attack civilians are confirmed, a Reuters/Ipsos poll says.

    About 60 percent of Americans surveyed said the United States should not intervene in Syria's civil war, while just 9 percent thought President Barack Obama should act.

    More Americans would back intervention if it is established that chemical weapons have been used, but even that support has dipped in recent days - just as Syria's civil war has escalated and the images of hundreds of civilians allegedly killed by chemicals appeared on television screens and the Internet.

    The Reuters/Ipsos poll, taken August 19-23, found that 25 percent of Americans would support U.S. intervention if Syrian President Bashar al-Assad's forces used chemicals to attack civilians, while 46 percent would oppose it. That represented a decline in backing for U.S. action since August 13, when Reuters/Ipsos tracking polls found that 30.2 percent of Americans supported intervention in Syria if chemicals had been used, while 41.6 percent did not.

    Taken together, the polls suggest that so far, the growing crisis in Syria, and the emotionally wrenching pictures from an alleged chemical attack in a Damascus suburb this week, may actually be hardening many Americans' resolve not to get involved in another conflict in the Middle East.

    The results - and Reuters/Ipsos polling on the use-of-chemicals question since early June - suggest that if Obama decides to undertake military action against Assad's regime, he will do so in the face of steady opposition from an American public wary after more than a decade of war in Iraq and Afghanistan.

    Some foreign and U.S. officials - notably Republican Senator John McCain, whom Obama defeated for the presidency in 2008 - have called Obama too hesitant in deciding whether to act in Syria. But several Americans surveyed in this week's poll, including Charles Kohls, 68, a former U.S. military officer from Maryland, praised Obama's caution.

    "The United States has become too much of the world's policeman and we have become involved in too many places that should be a United Nations realm, not ours," Kohls said in an interview. "I don't think we ought to" intervene in Syria.

    Kohls said the possibility of a chemical attack did not alter his belief that the United States should stay out of Syria, or any war for that matter.

  7. BARNETT'S WOES ....cont....

    Opposition seizes on government dispute

    West Australian Labor Leader Mark McGowan is capitalising on the latest dispute within the state government over a budget commitment.

    Several National Party MPs have expressed concern over the decision to force 457 visa workers to pay thousands of dollars for their children's education.

    The Nationals say businesses in communities outside of Perth will lose workers.

    Opposition Leader Mark McGowan has suggested the wheels are falling off.

    "This was a decision made by the Cabinet, made up of Liberal, and National members and now you find them unravelling. It was a poor decision," he said.

    "The government is in disarray, the Nats and Libs are fighting, I think that they're falling apart, quite frankly."


    WA teachers meet to consider strike


    Large number of WA Health Department staff referred to Corruption and Crime Commission


    WA Premier Colin Barnett confused as to why the AMA is lobbying against funding to train more doctors


    Concerns over school fees for foreign workers

    Nationals MP Wendy Duncan has joined calls for the State Government to overturn a school fee hike for 457 visa holders.


    State Government accused of breaking election promise to repair damaged wall of the Swan River

    The State Government has been accused of breaking another election promise, with no money in the Budget to repair severely damaged river bank walls on the South Perth foreshore.

    Liberal MP John McGrath, the member for South Perth, says he is disappointed the $1.35 million pledged during the election campaign is not in this year's budget.

    High tides and storms are forcing the concrete walls to crumble, with the situation so dangerous near the Mends Street jetty that safety fences have been erected.

    Mr McGrath says as well as the safety issues, it has left parts of the popular picnic and tourist destination looking unsightly.

    "I'm disappointed because I made this commitment to the people of South Perth as an election promise, my government said that we would inject $16 million dollars into the Swan River," he said.

    The Environment Minister Albert Jacob denies it is a broken promise, saying funding for the project will be considered in future budgets.

  8. BARNETT'S WOES ....cont....


    On top of the CA bungles where Grylls has been forced to go back through all the CA's to find other mistakes ( all the files are still on a paper system - not computer )- NOW here comes the EPA bungles thanks to Richard Hunter & The Wilderness Society.


    23 August 2013

    James Price Point environmental approval knocked out - what does this mean for other proposals?

    Monday's WA Supreme Court decision overturning the environmental approvals for one of Western Australia's most controversial development proposals – the Browse LNG Precinct at James Price Point north of Broome – raises fundamental questions about Western Australia's environmental assessment process and may mean:

    proposals currently before the Environmental Protection Authority could be delayed (as the EPA assesses the implications of the decision);

    a possible re-start for some proposals currently before the EPA (if they are found to suffer the same defect as the Browse approval);

    recently approved proposals might need to be re-assessed (again, if they suffer the same defect); and

    proponents will have to actively engage with the EPA to ensure proper conflict of interest procedures are maintained in any future assessments (including exploring the EPA's power to institute independent public inquiries).

    In short, proponents will need to assess the validity of the EPA assessment of existing, current and future proposals as a result of The Wilderness Society of WA (Inc) v Minister for Environment [2013] WASC 307.

    The James Price Point proposal

    In order to assist development of the Browse Basin gas fields, the Government of Western Australia resolved to create an onshore LNG industrial processing precinct. Having narrowed down site selection to James Price Point, on 25 March 2008 the Minister for State Development referred the precinct, as a strategic proposal, to the EPA under the Environmental Protection Act 1986 (WA).

    The precinct proposal assessment took four years. On 16 July 2012 the EPA Chairman presented the EPA's report to the Minister for Environment recommending approval. The Minister for Environment approved the precinct on 19 November 2012.

    Woodside Energy Ltd, on behalf of the Browse Joint Venture, then sought and obtained EPA approval of the Browse LNG facility, as a derived proposal.

    The Wilderness Society and local indigenous Law Boss, Richard Hunter, challenged the assessment and the authorisations.

    The problem

    The Environmental Protection Act requires EPA members who have a "direct or indirect pecuniary interest in a matter that is before a meeting of the Authority" to disclose that interest, and consequently they must not take part in consideration of or voting on that matter.

    The Court (a single judge, the Chief Justice Wayne Martin) held that conflicts arose from the following indirect pecuniary interests:
    shareholdings in Woodside by two members of the EPA (personally, by spouses and through self-managed superannuation funds); and
    a third member being employed by a BP company (a subsidiary of BP Plc, which held, through another subsidiary, an interest in the Browse Joint Venture) and having shareholdings in BP Plc (through an employee share scheme).

    Given the magnitude of the proposal, the court found that the market price of Woodside and BP Plc shares were likely to be affected by the outcome of the assessment.


  9. BARNETT'S WOES ....cont....

    The EPA's policy on conflicts of interest

    When in September 2009 the potential conflict of interest was first brought to the EPA Chairman's attention, he determined that there was no conflict and that the members could "participate fully in the meeting". This was on the basis that the State, not Woodside, was the proponent of the precinct. He maintained this position until March 2012, when subsequently the Chairman alone took responsibility pursuant to an EPA delegation.

    The Chief Justice noted that Woodside was involved in providing information to the EPA on the strategic assessment proposal; Woodside's parent company had a "very significant commercial interest in the approval of the Browse LNG Precinct Proposal"; the EPA was aware that Woodside was running a parallel process in developing its development proposal (for which status as a derived proposal would be sought); and Woodside was recognised as the foundation proponent for the development of the precinct.

    After cataloguing an extensive list of EPA meetings in which the conflicted members participated in the strategic proposal's assessment, the Chief Justice held that:

    the EPA's policies on conflicts "did not accord with the structure and operation" of the EP Act; and

    the Chairman misconstrued the matter under consideration. Specifically, the Chairman was wrong in viewing Woodside's interests as not being part of the strategic assessment.

    An invalid assessment

    The Chief Justice concluded that there was no valid assessment of the proposal because "the assessment was undertaken following a process which was directed and controlled by a number of decisions purportedly taken by the EPA, but which were invalid because they were taken at meetings at which a number, often a majority, and on one significant occasion, all of those participating in the decision-making were disqualified from participation by reason of their pecuniary interest in the Proposal."

    The Court found, "As a consequence of their pecuniary interest, the affected members of the EPA were not merely disentitled from participation on the relevant portions of the meetings of the EPA, pursuant to s 12 [of the EP Act] they were expressly prohibited from being present or participating in those portions of the meetings." Yet the EPA Chairman, "adopted, in substance, a report which had been prepared during the course of the assessment process which was vitiated by the participation of the disqualified members".

    Consequently the EPA's assessment report was invalidated by "an inextricable connection between the actions of the Chairman [in making assessment findings] on 16 July 2012, and the purported actions of the EPA prior to 1 March 2012".

    The report being invalid, both the Minister's authorisation of the strategic proposal and Woodside's derived proposal were also invalid.

    The consequences of the James Price Point decision on other projects

    This case puts a spot light on past, present and future assessment practices and raises questions about the certainty of decision-making in Western Australia.

    For the Browse LNG Precinct (if this is to be further pursued by the State, given the Premier's recent statement apologising for the Precinct's failure), it's back to square one. The EPA will have to completely reassess the proposal (without the involvement of the conflicted members and arguably without the involvement of the Chairman).


  10. BARNETT'S WOES ....cont....

    For the EPA, it's back to basics. This decision may trigger a wholesale review of EPA practices (not just those in respect to conflict of interest).

    As a result, proponents who have proposals in the pipeline may find the process delayed as the EPA sorts itself out. Even those proponents with a fresh approval in their hands might find that they are subject to challenge. Either way, they will need to be prepared for what might turn out to be lengthy and expensive delays in their approval process, and be more vigilant to ensure similar mistakes don't vitiate any future approvals.

    1. WOE is he....

      Grylls dismisses colleagues concerns over 457 education fees


      Government ends financial assistance scheme for needy families


      Education assistants consider striking over job cuts


      School boards angry by education cuts


      Opposition to Perth mall rail plan mounts



      Hook, line, sinker, Abbott lands anglers

      Opposition Leader Tony Abbott dropped a line and immediately got a bite.

      Visiting the Australian Fishing Trade Show on the Gold Coast on Monday, Mr Abbott said a coalition government would "suspend marine protected areas" for the sake of future generations wanting to cast a line.

      The commitment closed a smooth day on the campaign trail for the opposition leader who also worked to promote coalition policy pitched at apprentices and dementia sufferers.

      Promising to maintain the "highest possible environmental standards" Mr Abbott told a small crowd at the Gold Coast convention and exhibition centre of plans to review marine park recreational fishing limits.

      "We will suspend the marine protected areas that this (Labor) government has recently declared," Mr Abbott said.

      "We do not want to lock up our oceans."

      It prompted applause in the hall where walls were covered in stickers carrying slogans such as "I fish, I boat, I vote".

      Mr Abbott has "cherished" memories of fishing on the Gold Coast with his grandfather when he was a boy and wants future generations to be able to enjoy the same privilege.

      "C'arn Tony," came cries from the crowd as Mr Abbott left the trade show, having clearly won over the initially cautious crowd.

  11. Their coverage of the JPP protests was no better.


    Murdoch's election coverage 'insult to Australians'

    Even now, Tom Watson routinely memorises the number plates of unfamiliar cars outside his house.

    ''To be targeted like I was - to be followed by covert surveillance specialists, to have someone try to destroy your character - is very threatening,'' says the British Labour MP who helped blow the whistle on News of the World's phone hacking scheme.

    In 2011, it was revealed Mr Watson had been stalked by the paper's private investigators as payback for his dogged investigation of its affairs. News International's executive chairman James Murdoch apologised ''unreservedly''.

    But Mr Watson was not placated. Dubbed Rupert Murdoch's ''tormentor-in-chief'' by the British press, he has since devoted himself to the public scrutiny of the 82-year-old's global media empire. He is in Australia to discuss News Corp's coverage of the federal election: an unabashed anti-Labor crusade, he believes, driven by Mr Murdoch and his New York Post editor-in-chief, Col Allan.


    ''It insults Australians when they produce content like that,'' Watson says, referring to the recent front pages depicting Labor politicians as clowns and Nazis and demands to ''KICK THIS MOB OUT''.

    A fortnight ago, the ABC's Media Watch analysed one week's political coverage in Mr Murdoch's Daily Telegraph. Of the 80 election stories it printed, the program deemed half negative to Labor but none negative to the Coalition.

    ''Can the Telegraph editors seriously claim they're balanced?'' Mr Watson asks.

    What about the argument that a free press can cover an election however it likes?

    ''Of course,'' Mr Watson says. ''But has Rupert actually learnt anything from the Leveson inquiry [into UK press ethics, sparked by the hacking scandal]? Leveson looked at how papers blur news and editorial and it's hard for readers to distinguish. If Murdoch's papers are doing that, we should call him out.''

    As for the suggestion that Mr Murdoch's editors enjoy editorial independence: ''All 175 of his newspapers supported the invasion of Iraq. Are you telling me that all 175 of his editors independently reached the same decision?''

    While Mr Watson's Australian media tour - including ABC1's Q&A on Monday night - is sponsored entirely by activist group Avaaz, he is open in his support of Kevin Rudd. Yet he believes Mr Murdoch's desire to unseat the Prime Minister could succeed.

    ''I have absolutely no doubt he could swing this election,'' he said.

  12. Government spending to be slashed

    THE Coalition has set out ambitious aspirations for the budget with huge commitments in defence and health requiring an additional $40 billion in outlays, while promising lower government spending overall.

    Tony Abbott's biggest single commitment in yesterday's policy launch was that within a decade he would return defence spending to 2 per cent of GDP from the current level of 1.59 per cent, the lowest since 1938-39.

    An analysis by the Australian Strategic Policy Institute shows this would require defence spending to rise at an annual rate of 5.3 per cent plus inflation for 10 years, or more than double the current rate.

    This year's federal budget included a six-year forecast of defence spending, which showed an annual average rise of 2.5 per cent after inflation.

    "With defence spending growing at 2.5 per cent and the economy growing somewhere between 2.7 per cent and 3 per cent, the defence share of GDP will decline slowly over the decade ahead," the institute said.

    "If the government wanted to smoothly transition by linear increments to a level of defence spending corresponding to 2 per cent of GDP in a decade's time, an additional $35.5bn would need to be found."


    Change needs a conservative: Noel Pearson

    INDIGENOUS leader Noel Pearson has intervened in the election campaign to laud Tony Abbott's pledge to put indigenous recognition at the centre of his first-term agenda, claiming that only a highly conservative leader can deliver the change.

    The Opposition Leader used his campaign launch yesterday to promise that from next year he would devote his efforts to recognising indigenous Australians in the Constitution.

    "I've always been of the view that on this issue of (a) constitutional recognition referendum, Nixon's got to go to China," Mr Pearson told The Australian.

    "I think the fact that he has made it a central part of his first-term agenda is a very good sign.

    "I have always thought the nature of our Constitution means you need John Howard - and if not John Howard, then a facsimile of him - to deliver the change.

    "The most conservative end of Australia, rural and regional Australia, needs to trust the change and only a highly conservative leader can carry a referendum."


    Mr Abbott has thrown his support behind a radical plan devised by Mr Pearson to empower Aboriginal communities to ensure that money spent in indigenous affairs delivers real gains on the ground.

    Warren Mundine, the man Mr Abbott handpicked to head a new indigenous advisory council if he wins government, said yesterday that making the commitment during the launch was significant.

    "It shows Tony Abbott's passion and commitment to indigenous people and indigenous affairs," the former ALP president said.

    "Tony Abbott is determined to create a new paradigm for indigenous people. Tony Abbott is going to change Australia through its relationship with its first people. Tony Abbott is going to be the leader that brings full participation of indigenous people in Australian society that retains their culture and language."

    There is bipartisan support for constitutional change but Kevin Rudd, who delivered the national apology to the Stolen Generations in 2008, has not announced any indigenous policy on his own. Instead, he has left that to his Indigenous Affairs Minister, Jenny Macklin, who is well-respected among indigenous leaders.


    1. Date set for court fight over Muckaty nuclear waste dump

      A date has been set in the Federal Court case of Aboriginal traditional owners fighting plans to use their land as a nuclear waste dump.

      The site on Muckaty Station near Tennant Creek in the Northern Territory is the Federal Government's preferred site for Australia's first radioactive waste facility.

      Beyond Nuclear Initiative spokeswoman Natalie Wasley says the month-long trial has been listed for June 2014.

      "After eight years that's a big relief for traditional owners and the community who have had this nuclear cloud hanging over their heads," she said.

      She says submissions being made this week will determine whether pre-trial evidence needs to be taken.

      Ms Wasley says those involved are hoping the trial would be held near the proposed site.

      "It's very important for people that they give the best evidence possible, and of course that it's close to the site that's being discussed," she said.

  13. Middle East row a boon for Woodside


    POLITICAL tension between Israel and Turkey may help Woodside Petroleum's potential $1.3 billion entry into the giant Leviathan gasfield off the coast of Israel, by limiting the prospect of pipeline exports.

    Woodside chief Peter Coleman says he does not think a pipeline to Turkey is likely, because ship-borne LNG allowed for destination flexibility -- a considerable advantage in the long term.

    LNG would be exported by Woodside, and a pipeline could raise the price it needs to pay to get into the project.

    Mr Coleman says Leviathan's Houston-based operator, Noble Energy, shares this view.

    "We see pipeline exports to Turkey as unlikely," Mr Coleman told The Australian.

    "It is difficult to see an investment case that would underpin the upstream investment to put a pipeline into Turkey."

    This goes against Tel Aviv market talk earlier this month that the Leviathan partners -- Noble and Israel's Delek Group -- were favouring the Turkish option and wanted to extract more from Woodside for it join the project.

    But the comments came as relations between Istanbul and Jerusalem cooled after the Turkish prime minister accused Israel of being involved in Egyptian regime change.

    Mr Coleman, who did not specifically refer to regional tensions, said that while LNG was more expensive up-front, its flexibility over the 20 to 30-year life of the project in the volatile Middle East was important.

    "The disadvantage of a pipeline is you have no destination flexibility -- if the relationship with the customer changes or the security situation changes, then you've put your investment at risk," he said.

    Woodside in December signed a non-binding agreement to join Leviathan.

    This has not been confirmed, with the first two milestone payments of $US896m withheld because of a High Court challenge over whether the Israeli government's recently formed gas export policy needs to clear the parliament.

    Reports from Israel in recent months have said Delek is not happy with the deal's terms, especially if pipeline exports take away from the proportion of the project under the control of Woodside, which will operate any LNG component.

    Mr Coleman said market talk that Noble was strongly backing pipeline exports to Turkey contradicted his view of the situation.

    "I can't speak specifically for the potential Israeli partners but I believe the operator shares the same view as us," he said.

    "These things come and go and then reality sets in."

    The concerns over pipeline risks were underscored this week when Bloomberg reported Turkish Prime Minister Recep Tayyip Erdogan had linked Israel to the overthrow of Egypt's Islamist former president Mohammed Morsi.

    Mr Coleman said pipeline exports to Jordan could come from the Leviathan field, although that was still not clear.

    The Israeli export policy, which allows 50 per cent of Leviathan's volumes to be exported, is due to be considered in the High Court from September 17.

    "We don't have a read on how long it will take the court to make a decision . . . I expect weeks, not months," Mr Coleman said.

    "If it has to go to the Knesset (Israeli parliament), it could be still a few months but we don't get any sense the Knesset would overturn the decision."

  14. As Obama Visits Upstate New York, the Fracking Debate Takes Center Stage

    While the President might want to talk education on his visit to upstate New York, there will be no escaping the war over fracking

    President Obama is planning to tout his education plan when he visits upstate New York this week, beginning with an appearance in Buffalo today—but much of his audience is likely to be interested in only one subject: fracking. Obama has, for the most part, been in favor of using fracking—more properly known as hydraulic fracturing—to exploit the country’s huge resources of shale natural gas. In his 2012 State of the Union speech, Obama pledged to “take every possible action to safely develop” natural gas, promising that shale gas would add hundreds of thousands of jobs to the economy. And he’s been true to his word—the U.S. produced in 2012 8.13 trillion cubic ft. of natural gas from shale deposits, which requires fracking, nearly double the total from 2010, and the Energy Information Administration projects that by 2030 that figure could pass 14 trillion cubic ft. While the Environmental Protection Agency and the Interior Department are working on possibly stronger new national regulations of fracking, for the most part the natural gas industry has had its way under Obama. He may not have intended it when he entered the White House in 2009, but Obama really has been America’s “driller-in-chief.“

    That’s exactly why protesters are likely to be out in force tomorrow in Buffalo, and even more so when Obama continues his visit to Binghamton, NY. Fracking remains controversial throughout the U.S., thanks to concerns over potential water contamination and pollution from wells, as well as fears that the new supplies of natural gas will bind the country more permanently to carbon-heavy fossil fuels. Ground zero for that emotional debate is New York state, which has both a massive potential reserve of shale gas and a determined community of environmentalists and activists working to ensure that fracking never happens in the Empire State. “We’re going to be present in Binghamton by the hundreds, if not the thousands,” Walter Hang, the head of Ithaca-based Toxic Targeting, told WNYC.


    Approving fracking could well hurt Cuomo in 2014 and in a Democratic presidential primary in 2016, where there will be added pressure on candidates to take strong stands on climate change and the environment. But denying it could be harmful in a general election—as Obama has shown, even a Democratic President usually needs to be seen supporting domestic energy, including oil and natural gas

    So maybe it’s not surprising that Cuomo seems to be taking the maximum amount of time to make up his mind—he could lose politically no matter what he does. Obama can relate—his decision-making process on the controversial Keystone XL oil sands pipeline has been drawn out for much the same reason. Still, while Cuomo might be able to dodge the fracking debate this week, he’ll have to make a decision eventually. And no matter what Cuomo decides, he’s going to have to deal with some very unhappy New Yorkers.

  15. Pennsylvania Fracking Study Preliminary Results Released

    PITTSBURGH (AP) — A project examining the local health impacts from natural gas drilling is providing some of the first preliminary numbers about people who may be affected, and the results challenge the industry position that no one suffers but also suggest the problems may not be as widespread as some critics claim.

    The Southwest Pennsylvania Environmental Health Project has been trying to help people who feel they've been sickened by natural gas drilling or processing for about 18 months in one county south of Pittsburgh.

    The work is potentially important because it's one of the first long-term attempts to monitor drilling-related health impacts, and it could help other groups identify possible symptoms.

    The project found 27 cases where people in Washington County believe they were hurt by nearby drilling — seven cases of skin rashes, four of eye irritation, 13 of breathing problems and three of headaches and dizziness. The skin exposures were from water and the other cases were from air. The numbers don't represent a full survey of the area, just cases so far with plausible exposures.

    The EHP group is trying to help those who have been exposed to drilling-related air or water pollution, toxicologist David Brown told The Associated Press, adding that they're finding "an array of symptoms" in some people who live close to either wells or processing stations.

    There are some surprises: Air pollution seems to be more of a threat than water pollution, and the huge processing stations that push gas into national pipelines may be more of a problem than the drilling sites themselves. The processing stations can handle large volumes of gas from hundreds of wells.

    Washington County has a population of about 200,000, and about 700 natural gas wells have been drilled there in the past six years. It's also home to large gas processing operations.


    The work is preliminary, but there are other independent signs of problems related to the gas industry in Washington County.

    John Poister, spokesman for the Departmental of Environmental Protection, said last week that the agency has ordered natural gas company MarkWest Energy Partners to submit a pollution control plan for one plant and would like to see the improvements "sooner rather than later."

    MarkWest environmental manager Nathan Wheldon said that protecting the environment of communities is a top priority and that the company operations meet or exceed all applicable state and federal regulations.

    MarkWest, based in Denver, operates large natural gas facilities. A previous DEP report found some of the state's highest levels of gas drilling air pollution in Washington County, including toxic compounds such as benzene, toluene and formaldehyde. Other gas drilling firms and companies operate in the area, too.

    Long-term exposure to benzene can affect the immune system and cause cancer, while toluene can cause excessive sleepiness, confusion and, with long-term exposure, brain damage.

    Patrick Creighton, a spokesman for the Marcellus Shale Coalition, an energy industry group, said, "Air quality across our region, and the nation, is sharply improving thanks to expanded natural gas use."

    Brown said one of the most worrying findings was the extremely high levels of air pollution found inside two homes that are about 1,000 feet from a gas processing station. Western Pennsylvania tends to have high levels of air pollution, but the levels found in the two homes were up to four times higher than the local average.

    Brown said the group is collecting more data and pushing ahead to refine ways to advise people who are worried about nearby natural gas activity

  16. Liberal Democrats blast environmental damage caused by fracking

    Poll shows strong public opposition to fracking as Lib Dems speak out against Tories' push to drill for shale gas

    Nick Clegg's Liberal Democrats have poured scorn on George Osborne's push for a shale gas revolution in the UK, saying the process of fracking has caused extensive environmental damage and water pollution in the US.

    The comments, in official policy papers, come as a new Opinium/Observer poll shows strong public opposition to fracking, with resistance particularly strong among women.

    Asked if they would like to see various alternative types of energy projects in their area, 60% of people said they would be happy to have windfarms or turbines. By contrast, only 23% are happy for fracking to take place in their area.

    While views were split fairly evenly among men, with 38% against fracking and 32% in favour, among women the proportion was 51% against and 15% in favour.

    The papers to the Lib Dems' annual conference in Glasgow next month expose again the gulf between the two coalition parties over drilling for shale gas, with the Lib Dems insisting there will never be a "shale gas revolution" in this country.

    Such views are at odds with those of Osborne and other Tories, who believe shale gas is the answer to the UK's energy needs and that the extraction process will create thousands of jobs.

    They will anger the pro-fracking lobby, which contests claims that serious environmental damage has been caused by pumping water underground at high pressure to release trapped gas.

    The Lib Dems say they take a "very different approach to that advocated by the chancellor, which would increase the UK's reliance on gas, and particularly on unconventional sources, ie shale gas".

    They add: "In recent years, shale gas production has transformed the energy market in the US, though at the cost of significant local environmental damage and pollution of water tables.

    "However, UK geology is much less favourable than that of the US (the shale contains a much higher proportion of clay, rendering hydraulic fracturing, or 'fracking', techniques, much less viable), and, also unlike in the US, the benefits of production will accrue to the government, not to the landowner – thus increasing the likelihood of local opposition. There is no realistic prospect, therefore, of a 'shale gas revolution' in the UK."

    The Lib Dem energy secretary Ed Davey allowed the process of fracking to resume last December – though under strict conditions – after an initial project caused tremors in Lancashire in 2011.

    Recently protests have flared in Balcombe, West Sussex, where test drilling has taken place.

  17. Rising levels of acids in seas may endanger marine life, says study

    Experts claim current rate of change is likely to be more than 10 times faster than it has ever been in Earth's history

    Rapidly rising carbon dioxide levels in the atmosphere are causing a potential catastrophe in our oceans as they become more acidic, scientists have warned.

    Hans Poertner, professor of marine biology at the Alfred Wegener Institute in Germany, and co-author of a new study of the phenomenon, told the Guardian: "The current rate of change is likely to be more than 10 times faster than it has been in any of the evolutionary crises in the earth's history."

    Seawater is naturally slightly alkaline, but as oceans absorb CO2 from the air, their pH level falls gradually. Under the rapid escalation of greenhouse gas emissions, ocean acidification is gathering pace and many forms of marine life – especially species that build calcium-based shells – are under threat.

    Poertner said that if emissions continue to rise at "business as usual" rates, this would be potentially catastrophic for some species. Acidification is just one of a broader range of the problems facing the oceans and the combination of different effects is increasing the threat. Poertner said: "We are already seeing warm water coral reefs on a downslide due to a combination of various stressors, including [rising] temperature. Ocean acidification is still early in the process [but] it will exacerbate these effects as it develops and we will see more calcifying species suffering."

    However, the process of acidification takes decades and the worst effects on some species could still be avoided if emissions are urgently reduced. "The ocean is changing already, mostly due to temperature – acidification will exacerbate those effects," Poertner said.

    Evidence from prehistoric ocean life provides a comparison. "The [effects observed] among invertebrates resembles those seen during the Permian Triassic extinctions 250m years ago, when carbon dioxide was also involved. The carbon dioxide range at which we see this sensitivity [to acidification] kicking in are the ones expected for the later part of this century and beyond."

    Oceans are one of the biggest areas of focus for current climate change research. The gradual warming of the deep oceans, as warmer water from the surface circulates gradually to lower depths, is thought to be a significant factor in the earth's climate. New science suggests that the absorption of heat by the oceans is probably one of the reasons that the observed warming in the last 15 years has been at a slightly slower pace than previously, and this is likely to form an important part of next month's Intergovernmental Panel on Climate Change (IPCC) report.

    The IPCC report, the first since 2007, will provide a comprehensive picture of our knowledge of climate change. It is expected to show that scientists are at least 95% certain that global warming is happening and caused by human activity, but that some uncertainties remain over the exact degree of the planet's sensitivity to greenhouse gas increases.

    The new study, entitled Inhospitable Oceans, published on Monday in the peer-review journal Nature Climate Change, was based on examinations of five key components of ocean eco-systems: corals, echinoderms, molluscs, crustaceans and fish. All were found to be adversely affected by acidification: crustaceans were more resilient, while corals, molluscs and echinoderms were worst affected. The direct effects on fish were less clear.

    Astrid Wittmann, co-author of the paper, said species with low resilience could be outcompeted by those that were more vulnerable to acidification, and that further studies were needed, particularly on plants and plankton, which were left out of this research.

  18. Race to save Ecuador's Yasuní national park from oil lobby

    Green groups campaign for a petition to force a national referendum to block president's unilateral sanction for drilling

    The fate of one of the hotspots of global diversity is hanging by a thread as conservation and indigenous groups in Ecuador race to raise a petition of over half a million names which would force a national referendum on whether foreign oil companies be allowed into the Yasuní national park.

    President Rafael Correa of Ecuador appeared to sign the death warrant of the park last week when he unilaterally dissolved a radical conservation plan which guaranteed that the 840m barrels of oil thought to lie below one area of the park would remain unexploited if the international community raised $3.6bn (£2.3bn) over 13 years. Although $336m had been pledged by governments, local authorities, charities and individuals around the world, only $13m is said to have been deposited in the two trust funds administered by the UN.

    Correa's decision to allow oil companies to drill below one of the most biodiverse places on the planet, where at least one tribe lives in voluntary isolation, was met by demonstrations in Quito and condemnation by international conservation organisations.

    The only chance of stopping the companies now is to raise a petition of 5% of the country's 10m voters to force a referendum. If the names can be collected, Correa is likely to be defeated because recent polls suggest a large majority of Ecuadoreans remain in favour of the Yasuní-ITT initiative. This week marches were being planned in cities including Quito, Machala, Cuenca, Puyo and Guayaquil.

    "The government doesn't have the right to dissolve the Yasuní-ITT initiative because this doesn't belong to them," said Esperanza Martinez, the president of the Acción Ecológica environmental group, which is part of the coalition. "The initiative was a proposal that came from civil society."

    Correa has gone on the offensive, accusing ecologists and his critics of being naive, and saying poverty destroys nature faster than the oil industry. "The real dilemma is this: do we protect 100% of the Yasuní and have no resources to meet the urgent needs of our people, or do we save 99% of it and have $18bn to defeat poverty?" he said. "There are groups that are politicising the Yasuní-ITT issue to finally 'beat' the government, and especially to manipulate young folk."


    ....And the protests that greeted the announcement is a sign that the people of Ecuador are clear about the fact that the decision to allow the assault on Yasuní is not with the consent of the people."

    Uncertainty surrounds the money that has already been contributed. The Ecuadorian government created both an international and a national trust which together collected about $13m. According to one source in government, deposits below $ 50,000 will not be returned.

    Correa's abandonment of the Yasuní initiative is a blow to both global climate change and biodiversity. It is estimated that protection of the park would have avoided 407m metric tons of CO2 emissions and 800m metric tons of CO2 from avoided deforestation.

  19. U.S. Overhauls Process for Recognizing Indian Tribes

    The rules floated by the Bureau of Indian Affairs, intended to streamline the approval process, are seen by some as lowering the bar through changes such as one requiring that tribes demonstrate political continuity since 1934 and not "first contact" with European settlers.


    (KENT, Conn.) — His tribe once controlled huge swaths of what is now New York and Connecticut, but the shrunken reservation presided over by Alan Russell today hosts little more than four mostly dilapidated homes and a pair of rattlesnake dens.

    The Schaghticoke Indian Tribe leader believes its fortunes may soon be improving. As the U.S. Interior Department overhauls its rules for recognizing American Indian tribes, a nod from the federal government appears within reach, potentially bolstering its claims to surrounding land and opening the door to a tribal-owned casino.

    “It’s the future generations we’re fighting for,” Russell said.

    The rules floated by the Bureau of Indian Affairs, intended to streamline the approval process, are seen by some as lowering the bar through changes such as one requiring that tribes demonstrate political continuity since 1934 and not “first contact” with European settlers. Across the country, the push is setting up battles with host communities and already recognized tribes who fear upheaval.


    Federal recognition, which has been granted to 566 American tribes, is coveted because it brings increased health and education benefits to tribal members in addition to land protections and opportunities for commercial development.

    Tribes have been pushing for years for Congress or the Interior Department to revise the process.


    The new rules will create tensions for host communities and some recognized tribes, according to Richard Monette, a law professor and expert on American Indian tribes at the University of Wisconsin. Tribes along the Columbia River in Washington state, for instance, will be wary of a new tribe at the river’s mouth gaining recognition and cutting into their take of salmon. Tribes elsewhere fear encroachment on casino gaming markets.

    “This is a big issue throughout the whole country,” Monette said.


    In Connecticut, recognition has meant an entry into lucrative gaming markets. Russell, 67, said his 100-member tribe wants its own casino but not on its 400-acre reservation ringed by the Appalachian Trail. A business consultant for the tribe, Bill Buchanan, said it has spoken with potential investors and, assuming it wins recognition, would like to swap some land, team up with one of Connecticut’s bigger cities and perhaps build a casino along a highway.

    A rival faction of the tribe, the Schaghticoke Tribal Nation, is hoping the new rules breathe life into its own parallel bid for recognition. The larger STN had the backing of Subway founder Fred DeLuca, who was interested in building a casino in Bridgeport, and it won recognition in 2004. But that decision was reversed after state officials argued the tribe had gaps in evidence related to its historical continuity.

    U.S. Sen. Richard Blumenthal said Connecticut’s congressional delegation is united against changes that he said would have far-reaching ramifications for several towns and the entire state.


    The Schaghticoke reservation dates to the mid-1700s, but it has been carved up to a tenth of its original size. As recently as 1960, Russell said, the town fire department would come out to burn down homes on the reservation when tribal members died to prevent others from occupying them.

    When Russell’s own house burned down in 1998, however, the townspeople from across the Housatonic River helped him to rebuild. Russell, who grew up hunting and fishing on the reservation, said if the tribe wins recognition it can work something out with the town on the land claims.

    “That’s what I want them to understand,” he said. “We’re not the enemy.”



    Body of last remaining victim recovered from Shetland crash site as Super Puma helicopter flights to oil rigs are suspended

    •Super Puma helicopter hit the water off Fitful Head at 6.20pm on Friday
    •14 oil workers rescued from water after RNLI lifeboats rushed to scene
    •AS332 L2 aircraft grounded as final missing body is found at sea today


    Helicopter operator CHC said it has grounded the AS332 L2 aircraft which ditched without warning into the North Sea off Shetland while carrying 18 workers on Friday evening, killing four people.

    The company has also suspended all UK commercial flights of three other Super Puma models following a recommendation from an aviation safety association.


    Rescuers have now recovered the final body from the site of the crash around two miles west of Sumburgh Airport. The cause of the accident is not yet known.

    Those who died have been named as Duncan Munro, 46, from Bishop Auckland, County Durham; George Allison, 57, from Winchester, Hampshire; Sarah Darnley, 45, from Elgin in the Highlands and 59-year-old Gary McCrossan, from Inverness.

    The helicopter was being operated by CHC for oil company Total and was transporting workers from the Borgsten Dolphin platform when it is believed to have experienced a ‘catastrophic’ loss of power as it approached the airport on the southern tip of Shetland's main island.

    The HSSG is made up of representatives from oil and gas firms, contractors, helicopter operators, offshore unions, the Health and Safety Executive (HSE) and the Civil Aviation Authority (CAA).

    The group met in Aberdeen yesterday and recommended the temporary suspension of all Super Puma commercial passenger flights to and from the UK's oil and gas installations. This includes the AS332 L, L1, L2 and EC225 models.

    CHC said it was ‘devastated’ by the accident and would follow the recommendation, which allows for the operation of emergency rescue flights.

    Fellow operators Bond Offshore Helicopters and Bristow have also enforced a temporary suspension of Super Puma flights.

    Bristow said three flights scheduled for today had been cancelled and further updates would be issued in due course.

    The HSSG will meet again on Wednesday to review the suspension unless ‘any significant information come to light before this date’.

    Industry body Oil & Gas UK has meanwhile arranged a meeting of operators and major contractors tomorrow to discuss ways of minimising the impact of the grounding of flights on the offshore workforce.


    There have been five North Sea incidents involving Super Pumas since 2009. In April that year an AS332 L2, this time operated by Bond, went down north east of Peterhead on its return from a BP Platform, killing all 14 passengers and two crew on board.

    Pat Rafferty, Scottish secretary of the Unite union, said: ‘This is the fifth major incident in the last four years involving Super Puma helicopters in the UK offshore industry and the second resulting in fatalities. It's unacceptable and it can't go on.’

    Super Puma manufacturers Eurocopter said the company was ‘supporting CHC and relevant authorities with their investigations’.


    One cannot imagine the turmoil that families and loved ones of those who died must be going through, and they are at the forefront of our minds at this very distressing time.’

    Representatives from the oil and gas industry have set up a fundraising page in aid of the RNLI following its rescue effort on Friday.

    The crash happened on Friday night two miles off Shetland, when the aircraft ‘fell like a stone’ into stormy seas while approaching the airport.

    The helicopter flipped upside down after hitting the water, but 14 of those on board were able to free themselves from the wreckage.

    1. Bristow Southeast Asia Operations

      Bristow Helicopters Australia Super Puma
      Bristow Southeast Asia Operations consists of Bristow Helicopters Australia Pty Ltd., formerly Mayne Helicopters then Mayne-Bristow Helicopters, based in Redcliffe, Western Australia.

      Also operates Whirl-Wide Helicopters in New Zealand and Pacific Helicopters in Papua New Guinea.


      Bristow operates a large fleet of 490 helicopters and aircraft, includes unconsolidated affiliates and joint venture partners


      Incidents[edit source]
      5N-ABQ, a Scottish Aviation Twin Pioneer Srs1, crashed on 4 April 1967 in Nigeria during a single engine approach.
      G-ASWI North Sea ditching - On 13 August 1981 a Westland Wessex 60 helicopter lost power to the main rotor gearbox, going out of control during the ensuing autorotation. The flight was carrying 11 gas workers from the Leman gas field to Bacton, Norfolk. All people on board were lost.[14][15]
      G-BJJR a Bell 212 that crashed with the loss of two crew on approach to the Cecil Provine in 1984.
      VR-BIG Aerospatiale SA-330J Puma 5 December 1991 in Mermaid Sound, Dampier, Western Australia, after a pick-up from departing LNG tanker in night VFR conditions, entered vortex ring state and ditched. Stayed afloat for over 2 hrs.
      G-TIGH on 14 March 1992 at 1950 a Bristow's Tiger (Super Puma) ferrying passengers from the Cormorant Alpha to the flotel Safe Supporter, lost altitude and crashed. Of the two crew and 14 passengers on board, one crew member and ten passengers were lost.
      G-TIGK on Bristow Flight 56C between Aberdeen and oil rigs in the North Sea. On 19 January 1995 the AS 332L Super Puma helicopter was struck by lightning. The flight was carrying 16 oil workers from Aberdeen to an oil platform at the Brae oilfield. All people on board survived.
      G-BJVX North Sea Crash - G-BJVX, a commercial Sikorsky S-76A helicopter operated by Norwich-based Bristow Helicopters, crashed in the evening of 16 July 2002 in the southern North Sea while it was making a ten-minute flight between the gas production platform Clipper and the drilling rig Global Santa Fe Monarch, after which it was to return to Norwich Airport. The 22-year old helicopter was flying at an altitude of about 320 ft (98 m) when workers on the Global Santa Fe Monarch heard "a loud bang". No witnesses were actually watching the aircraft at the time, but some saw it dive steeply into the sea. A witness also reported seeing the helicopter's rotor head with rotor blades attached falling into the sea after the body of the helicopter had impacted. The accident caused the death of all those on board (two crew members and nine Shell workers as passengers). The body of the eleventh man has never been recovered.
      G-JSAR Eurocopter Super Puma SAR - ditched in the North Sea on 22 November 2006. G-JSAR was operated from Den Helder Airport in the Netherlands on behalf of oil companies, all on board survived unhurt.

      [16] On 4 July 1983, Bristow Helicopters AS332L Super Puma (G-TIGD) crashed on landing at Aberdeen. During the approach to Aberdeen from the North Hutton platform, a loud bang was heard, followed by severe vibration. A PAN call was made to ATC by the crew. Shortly before landing control was lost and the helicopter struck the runway heavily on its side. 10 of 16 passengers received serious injuries. A tail boom panel had become detached in flight and damaged all five tail rotor blades. The resulting imbalance to the tail rotor assembly led to the separation of this unit and subsequent loss of control.


    North Sea Crash: 4 Dead, AS332-L2 Super Puma Grounded

    Offshore transport services firm CHC Helicopter reported Saturday that it has temporarily suspended all of its AS332-L2 Super Puma helicopters worldwide after Friday's crash in the North Sea that left four people dead.

    Sixteen passengers and two crew members were on board the aircraft, said CHC. The firm added that 17 people, including three of the dead, have been accounted for, while one remains missing.

    The helicopter, carrying oil and gas workers, was on approach to Sumburgh Airport on the Shetland Islands when it lost contact with air traffic control. According to CHC, it landed in the water approximately two nautical miles west of Sumburgh.

    The Maritime Coastguard Helicopter from Sumburgh along with other rescue services promptly responded to the scene, CHC said.

    The AS332-L2 Super Puma had travelled from Aberdeen to the North Alwyn platform and then on to the Borgsten Dolphin (mid-water semisub) rig before heading towards Sumburgh.

    Total E&P UK issued a statement confirming that one of its employees was among the passengers and that other passengers represented 12 separate contractor organizations. The statement said that nine injured people were taken to hospital in Lerwick, Shetland, for treatment and that none of these is believed to be seriously injured.

    Total said in addition to its emergency response, crisis management and relative response teams being mobilized Friday evening, "all necessary resources have been made available to provide every possible support and assistance to those who had been on board the flight and their families".

    CHC Regional Director for the western North Sea Mark Abbey said at a press conference Saturday:

    "CHC will not enter into any speculation as to what caused the incident but rest assured a full investigation will be carried out in which we will co-operate fully with all the regulatory bodies and share any learnings with the industry."

    In a separate statement issued by trade body Oil & Gas UK, Chief Executive Malcolm Webb said:

    "Oil & Gas UK expresses its profound sorrow at the news of the deaths and injuries resulting from yesterday's helicopter ditching off Shetland. Our thoughts are first and foremost with all who were on this flight, their families and their friends and we send our deepest condolences to the loved ones of all of those who have so tragically lost their lives.

    "We also wish to thank and acknowledge all those persons involved in the, still continuing, search and rescue operation. Their prompt, professional action no doubt saved many lives and for that we are sincerely thankful."

    Oil & Gas UK added that the Helicopter Safety Steering Group met Saturday afternoon to discuss the accident and has taken the precautionary measure of recommending temporary suspension of all Super Puma commercial passenger flights to and from offshore oil and gas installations in the UK.

    The incident occurred just two weeks after a different variant of the Super Puma, the EC225, returned to service after problems with the helicopter’s main vertical gear shaft caused two ditchings last year.

  22. Shell Says It's Containing Oil Spill in Nigeria's Delta

    YENAGOA, Nigeria, Aug 23 (Reuters) - Royal Dutch Shell's Nigerian unit is containing an oil spill in the Niger Delta, the company said on Friday, after the military reported liquid "jetting" out of a pipeline.

    Massive oil theft, sabotage of infrastructure and leaks from ageing pipelines are all cutting into the profits of oil majors operating in Nigeria, as well as damaging the public finances of Africa's second-largest economy.

    The hundreds of spills a year in the Niger Delta have also done serious environmental damage, destroying fishing communities and poisoning water used for drinking and bathing.

    The military joint task force (JTF) operating in Nigeria said it discovered a leak on a pipeline near Adamakiri in Rivers State while looking for illegal oil refiners.

    "An assessment of the spot revealed that a brownish liquid substance was observed jetting out from an opening on the pipeline," a statement from the JTF said.

    "The Commanding Officer ... attributed the leakage to corrosion on the pipeline."

    A spokesman for Shell's Nigeria unit said on Friday that "oil spill containment" had been put in place after the leak was found but it was too early to determine the cause.

    The Anglo-Dutch firm says the majority of spills are due to gangs tapping pipelines to steal oil but local communities say the company is responsible for more spills than it admits to.

    Shell is facing legal action in a UK court on behalf of 11,000 members of the Niger Delta Bodo community, who say the company is responsible for spilling 500,000 barrels in 2008. Shell has admitted liability for two spills in the Bodo region but estimates the volume is far lower.

    Operational problems in Nigeria cost Shell $250 million in the second quarter of this year, the firm says.

    Nigeria's government revenues slumped 42 percent in July due to production outages, it said on Friday.

  23. Technip to Lay World's Deepest Gas Pipeline

    Technip reported Friday that it has been awarded a contract by Shell Offshore Inc. to lay the world's deepest gas pipeline at the Stones field in the US Gulf of Mexico.

    Technip said it has been awarded an engineering, procurement and installation contract for the development of subsea infrastructure for the field, which is located in the Walker Ridge area as a water depth of approximately 9,500 feet.

    The development will host the deepest floating, production, storage and offloading unit in the world and will be Shell's first FPSO in the Gulf of Mexico.


    Chart Ferox Secures Petronas FLNG Deal, Malaysia

    Chart Ferox, a.s., a member of the Chart Industries, announced that its European Distribution & Storage (D&S) business has been awarded a contract by PETRONAS Floating LNG 1 Ltd (PFLNG 1) to provide the Liquid Nitrogen Storage Package for the PFLNG 1 production facility, which will be located in Malaysia.

    The unit is expected to be the world’s first floating LNG facility in operation, when completed by the end 2015.


    Norwegian operator Hoegh overhauls management to tackle four FLNG projects

    Monday, 26 August 2013

    Norway's Hoegh LNG has added two senior executives and reshuffled its business organisation as it seeks further expansion in the Floating LNG sector.


    IP Gas Pipeline to Be Extended to China

    Pakistan is looking at the possibility of extending gas pipeline to China as part of a planned economic corridor.

    Pakistani and Chinese officials will discuss the laying of the gas pipeline from Gwadar to western China in a meeting, Iran’s SHANA news agency reported.

    They will also take up a proposal about constructing an oil pipeline between the two countries.

    The two sides will sign a memorandum of understanding (MoU) on the economic corridor, which had already been approved by the cabinet.


    Palmer Petroleum Strikes Gas Offshore PNG

    The chairman of Palmer Petroleum Clive Palmer today announced 3D seismic surveys have identified a potential $US35 billion gas region off the coast of Papua New Guinea to rival Western Australia’s North West Shelf.

    Mr Palmer said what could be one of the world’s largest offshore gas fields had been confirmed following extensive exploration by Palmer Petroleum, the oil and gas arm of Mineralogy Group.

    He said Palmer Petroleum, formerly Chinampa Exploration Pty Ltd, had spent more than $50 million on the exploration of its tenements in the Gulf of Papua, west of Port Moresby.

    “This is an exciting development for the Papua New Guinea economy and the region,” Mr Palmer said.

    “The asset could be worth in excess of $US35 billion and is potentially one of the world’s largest gas fields.

    “The results of the studies are extremely favourable and show this new Papua New Guinea gas region could possibly be as significant a resource area as the North West Shelf in WA.

    “The new region is located on the northern end of the Gulf of Papua and is close to Exxon Mobil’s LNG project in Papua New Guinea.”

  24. RIL, BP Find Gas Off India

    Reliance Industries Limited (RIL) and BP today announced a new gas condensate discovery off the east coast of India in the Cauvery basin.

    The discovery, in the deepwater block CY-DWN-2001/2 (CYD5), is situated 62 kilometers from the coast in the Cauvery Basin and is the second gas discovery in the block. RIL is the operator with 70% equity and BP has a 30% share. Well CYIIID5-S1 was drilled in a water depth of 1,743 meters, to a total depth of 5,731 meters, with the primary objective of exploring Mesozoic-aged reservoirs.

    Preliminary evaluation of well data and fluid samples indicated presence of gas condensate in the reservoir interval with a gross column of 143 meters. The well reached its total depth in early August and RIL, as operator, has conducted drill stem test (DST) to evaluate the potential of the discovery.

    The well which had the initial reservoir pressure of 8000 psi flowed gas at the rate of 35.2 million standard cubic feet per day with condensate at the rate of 413 barrels per day through 52/64” choke during DST. Well flow rates during such tests are limited by the rig and well test equipment configuration.

    The Government of India (GoI) and Directorate General of Hydrocarbons have been notified of the discovery, named D-56.


    Brookings Revises Policy Recommendations on U.S. LNG Exports

    In may 2011, the Brookings Institution Energy Security Initiative (Esi) assembled a task Force of independent natural-gas experts, whose expertise and insights provided inform its research on various issues regarding the u.s. natural gas sector.

    In may 2012, Brookings released its first report, analyzing the case and prospects for exports of liquefied natural gas from the United States. The task Force now continues to meet periodically to discuss important issues facing the sector. With input from the task Force, Brookings will release periodic issue briefs for policymakers.

    In this natural gas briefing document, the second in a series of briefings by the Energy Security Initiative at Brookings (ESI) on developments in the natural gas market, the authors offer policy recommendations for the Department of Energy to reform the existing rules surrounding the LNG export approval process.

    “Applications for liquefied natural gas (LNG) exports to countries that do not have a free trade agreement with the U.S. are currently only denied if deemed not in the “public interest” by the Department of Energy. This vague definer has raised calls from both supporters and opponents of LNG exports for added clarity in the process. Good policies must offer greater certainty by reflecting the cost of constructing export facilities and be regularly updated to follow changes in the gas market,” report says.

  25. Baker Botts Reviews Impact of Shale Gas Development in Latin America

    Posted on Aug 23rd, 2013

    Baker Botts partner Hannah Longley reviewed the growing impact Latin American countries are having and could have in the future on the development of shale gas.

    America’s energy consumption is forecast to grow significantly with natural gas use at 7.6 trillion ft3/d in 2012 and forecast to reach 16 trillion ft3/d in 2040.

    The US Energy Information Administration (EIA) shale resource report issued in June 2013 focused attention on Latin America and contains additional data and refined estimates. Whilst the updated EIA report may not be as ground breaking as the 2011 report, it highlights the potential significant role of shale development in Latin America.

    Shale potential

    Argentina, Brazil and Venezuela were identified as countries holding the largest promise.


    Argentina rose to second in the world for shale gas with technically recoverable resources of 802 trillion ft3 of gas (and fourth in shale oil with 27 billion boe). There has been recent shale activity in Argentina and in July 2013 national oil company YPF announced a joint venture with Chevron, promising an initial investment of US$ 1.24 billion in the prominent Vaca Muerta formation.


    In Brazil, the EIA report suggests that large opportunities exist in shale notwithstanding the focus on offshore pre-salt resources.

    Brazil was ranked tenth globally for shale gas reserves with 245 trillion ft3 of gas, as compared with 226 trillion ft3 of gas in the previous report (and having 5.4 boe of shale oil). The biggest upside may be six other basins identified by the EIA with shale potential but having insufficient geological information to quantify reserves.


    One of the most notable victors in the report is Venezuela. It is anticipated to have 167 trillion ft3 of gas up from an estimated 11 trillion ft3 of gas in 2011 and it is also ranked sixth in the world for shale oil. The EIA report was only able to evaluate the Maracaibo basin in western Venezuela and shale potential in the eastern part of the country is as yet unknown.

    Other countries identified in the region with shale potential are Mexico (ranked sixth globally with 545 trillion ft3 gas and seventh with 13.1 billion boe), Columbia (55 trillion ft3 gas and 6.8 billion boe oil), Uruguay (down from 21 to 2 trillion ft3 gas and 600 million boe oil), Bolivia (36 trillion ft3 gas and 600 million boe oil), Chile (49 trillion ft3 gas and 2.4 billion boe oil and Paraguay (75 trillion ft3 gas and 3.7 billion boe oil).


  26. Baker Botts Reviews Impact of Shale Gas Development in Latin America....cont....

    Challenges to shale gas development in Latin America


    The development of shale gas in Argentina is undoubtedly complex, costly and challenging. Significant levels of investment are required for the number of wells, hydraulic fracturing capacity, sourcing of water and disposal of wastewater, logistics, transportation and infrastructure.

    Just over a year ago the nationalisation of YPF prompted claims from Repsol which highlighted key concerns for investors. Political and economic factors coupled with inflation, exchange rate restrictions and general regulatory uncertainty means Argentina is not an easy place to develop and produce unconventional reserves.


    PDVSA, the Venezuelan state-owned oil and natural gas company, has historically dominated the country’s oil and gas industry. Venezuela has significant resources, which are yet to be developed to their full potential as a result of restrictive government policies bringing high costs and high risks for investors.

    The future of the Venezuelan oil industry, and of Venezuela itself, is uncertain but Nicolas Maduro is expected to continue Hugo Chavez’s policies of government involvement in PDVSA resulting in challenges for outside investors in the context of shale gas development.


    On 5th August, 2013, Brazil’s energy policy council (CNPE) authorised oil and gas regulator Agência Nacional do Petróleo, Gás Natural e Biocombustíveis (ANP) to conduct the country’s 12th bid round, which will include 240 onshore blocks in seven different basins – Acre, Paraná, Parecis, Parnaíba, Recôncavo, São Francisco, and Sergipe-Alagoas.

    Brazil’s 12th bid round is scheduled to occur on 28 – 29th November, 2013. Whilst Brazil is not new to unconventional oil and gas production, tight oil production is negligible and as yet there is no commercial shale gas production.

    Environmentalists have expressed concerns over potential damage and in addition to addressing environmental issues developers will also need to satisfy local content requirements. The unknown potential of shale gas deposits coupled with the need to overcome technological challenges indicates that Brazil is likely a number of years away from first shale gas production.


    Notwithstanding the challenges, shale gas development in Latin America has been inspired by the shale boom in the US. Countries such as Argentina, Brazil and Venezuela will undoubtedly pursue opportunities to make shale production a viable and competitive option in the future to meet increasing demand for natural gas.

  27. Japan ups ante on gas push

    JAPAN has ratcheted up its attack on high Australian LNG prices -- hailing US shale gas exports as a game changer that could slash prices by up to 30 per cent -- and is inviting industry players to Tokyo next month as it looks to break the traditional LNG pricing model and encourage new supply.

    An official from the industry ministry said yesterday buying US shale gas was like purchasing from a "supermarket" at true market prices. He said shale gas exports coupled with a coming "boom" in supply had the potential to turn LNG pricing in Asia on its head.


    Japan calls for LNG overhaul

    Japan expects US shale gas exports and a boom in supply to slash prices by up to 30 per cent, as suppliers there attempt to break the traditional pricing model that has buoyed Australian producers, the Australian reports.

    Japanese suppliers - the biggest gas buyers in the world - have been vocal in their opposition to Australia's current oil price-linked sales regime.

    Shinichi Kihara, an official from Japan's industry ministry, said buying US shale gas was like purchasing from a "supermarket" at true market prices, according to the Australian.

    "The price in the US is $US4. You add liquefication and transport - that's $US3 each - and when in comes to Japan it's going to be $US11 or $US12. That's still 30 per cent cheaper than what we are paying now."

    He also said shale gas exports coupled with a coming "boom" in supply had the potential to turn LNG pricing in Asia on its head.

    Japanese suppliers will meet in Tokyo next month to discuss pricing, along with potential new suppliers from Africa, the newspaper says.




      Major Projects: Energy, Mining & Infrastructure

      Client Alert
      November 2012

      Impact of U.S. Shale Gas on Existing LNG SPAs
      Current top concern to Asia's LNG buyers and sellers

      The main issue exercising the minds of Asia's LNG sellers and buyers is what will happen to their current LNG sale and purchase agreements (SPAs), which are priced based upon the Japan Crude Cocktail (JCC), as cheaper (Henry Hub-linked) shale gas imports start to flow into the region from North America.

      Buyers will be under pressure to "close the gap." At the same time sellers are concerned to maintain the prices based on which they made the decision to develop their LNG projects.

      SPAs differ, depending upon the LNG SPA model preferred by the seller - in effect the operator of the project. However, most SPAs contain two provisions of relevance to the current issue.

      Price review clauses

      The existing Asian SPAs are usually for terms of between 10 and 20 years. While prices are invariably linked to the JCC, the contracts often reduce price volatility by building floors and caps (or "s-curves") into the pricing mechanism.

      The contracts also usually (but not inevitably1) contain a price review provision, which may consist of several elements.

      Where the buyer is a foundation buyer, the review clause will often contain a "most favored customer clause" such as:
      The price paid by the buyer shall not be materially higher than that paid by other buyers from the project.

      Such a clause is often accompanied by a most favored supplier clause:
      The price paid by the buyer shall not be materially less than the price paid to the buyer's other suppliers.
      These clauses would not give relief to the buyer when cheaper North American shale cargoes become available.
      Of more relevance is the market parity clause, which seeks to ensure that the price will not be out of line with a particular market.

      The price shall be based on the pricing of similar sales [into Japan][into
      the North Asian market].


      The answer to the latter point depends upon the wording of the contract. Some
      contracts provide the matter will be decided by arbitration. Some make it clear
      that if no agreement is reached there will be no change. Often, however, the
      review clause is such a sensitive matter in negotiations that the parties,
      consciously or unconsciously, leave the question open. In this case the wording
      of the disputes clause becomes key. For example does it cover disputes only or
      also failure to agree?
      Asian SPAs are almost always governed by either English or New York law.
      English courts in particular tend towards interpreting contracts literally and
      avoiding allowing the court to fill the gaps, and arbitral tribunals are supposed to
      apply the governing law. On the other hand, courts and tribunals also tend to take
      account of the fact that in entering the contract one party may have relied upon a
      particular set of circumstances that were known to both parties. It will be
      interesting to see how these factors play out in the Asian LNG SPA context.
      Hardship clauses
      Most long-term SPAs also contain some kind of hardship clause. Hardship
      clauses differ from review clauses in a number of respects.
      Rather than being triggered at a specific point in time, as is often the case with
      price review clauses, hardship clauses can be triggered at any time if a specific
      test is met, such as:
      Upon a substantial change in circumstances resulting in one party
      suffering substantial hardship.

  28. Farmers fear effects of CSG on their water

    IRRIGATORS and cotton producers have warned that development of coal-seam gas mining in NSW must not be rushed or its risks could be catastrophic to local food and farm production.

    NSW Irrigators Council chief executive Andrew Gregson said a five-day study tour of Colorado - one of the few places where oil and gas mining is conducted near irrigated farms - had raised more concerns than it had allayed: excess water and its quality.

    Mr Gregson yesterday said that while debate about CSG mining in Colorado was less polarised than in Australia, many US farmers remained concerned about the long-term impacts on their land, soil and water.

    He said two key issues had emerged from the joint trip undertaken by Cotton Australia, irrigators and Namoi Water - all concerned about impending CSG exploration on the rich Moree and Liverpool Plains - neither of which he had anticipated.

    Mr Gregson said the need for in-advance baseline soil and water testing at proposed sites and downstream of them was essential because the biggest threat to farmers were the risks proposed by the excess water extracted from coal-gas seams.

    "The issue of these large quantities of produced water that comes out of the coal beds was the key issue for all of us after our visit; in Colorado it's reasonably high quality and goes straight into the river systems," Mr Gregson said.

    "Some irrigators like it because it adds to water availability and increases the regularity of water flow that can be used, but over the long term, more farmers are becoming concerned about its chemical composition and the changes they are noticing in their soils after they have used this produced water for irrigation."

    Mr Gregson said it was not the minute amounts of chemical extraction fluids used in the CSG fracking process that were the problem, but water produced from the coal seams naturally had higher amounts of salt and methyl compounds than river water.

    Some US farmers are finding after 10 years of irrigating with water mixed with the CSG produced water that the sodium composition of their soils has changed, altering its fertility, clay content and friability and making it more prone to deep cracking.

    Mr Gregson said he understood from mining companies that water to be produced from CSG mining in northern NSW would be of lower quality and more saline than in Colorado, making it less likely to be put directly into river and irrigation systems.

    Instead, it is proposed to be stored in holding ponds, before being purified using osmosis, and then used for irrigation.

    "But those ponds will be incredibly toxic and there will be a great deal of produced water across the number of wells proposed. What happens if there are floods, seepage or pond walls failure?" he said.

    "I know the risks are reasonably remote but the consequences would be catastrophic for farming; that's why we are saying we must have good baseline data to start with so if we see any changes in soil composition or water quality we can immediately identify the source and, if necessary, stop the practice."

    Mr Gregson said he believed it was imperative CSG development not be rushed if fertile productive farmland across NSW was to be preserved and protected.

  29. Has Australia built a $200 billion white elephant?

    For the past 12 months I have argued that Australia’s LNG boom is looking rather like a bubble, built on unrealistic extrapolations of demand, overly cheap finance, wildly inflating costs, a stampede for supply all adding up to wildly inflated asset values and, ultimately, poor returns on bubble pricing. It is now facing off with a giant pin:

    JAPAN has ratcheted up its attack on high Australian LNG prices — hailing US shale gas exports as a game changer that could slash prices by up to 30 per cent — and is inviting industry players to Tokyo next month as it looks to break the traditional LNG pricing model and encourage new supply.

    An official from the industry ministry said yesterday buying US shale gas was like purchasing from a “supermarket” at true market prices. He said shale gas exports coupled with a coming “boom” in supply had the potential to turn LNG pricing in Asia on its head.

    …Success by Japan, the world’s biggest LNG buyer, in pushing the changes to the LNG pricing structure could put a severe dent in Australia’s national income.

    …”The price in the US is $US4. You add liquefication and transport — that’s $US3 each — and when in comes to Japan it’s going to be $US11 or $US12. That’s still 30 per cent cheaper than what we are paying now.”

    Japan has been buoyed by the Obama administration’s decision to issue an export permit for shale gas from the Freeport LNG project in the US.

    The Japanese government is confident this will soon be followed by permits for two other projects that Japan is involved in — Cameron and Cove Point — in bringing exports to 15 million tonnes per annum.

    “That’s going to change the game,” Mr Kihara said.

    “The first gas priced directly (in proportion to the US Henry Hub price) has already happened. Kansai Electric has already struck a deal with BP Singapore. Also, with US gas exports some utilities have already announced they will purchase by gas-linked pricing. Also, worldwide, there is going to be a boom in production — this will change the entire market situation.”

    Australia’s LNG cost curve shows that a pricing shift anywhere near $11-12 will be calamitous for the Australian LNG boom:


    There are mitigating factors. Japan is clearly ramping the rhetoric ahead of its big conference and some significant portion of the LNG underpinning these projects has been forward sold on oil-linked contracts that should hold up. Most have price flexibility provisions but only in the 5-10% range not 30%.

    Even so, contracts fall through. Chevron is still, for instance, looking for buyers for the output of Gorgon, which will be finished in early 2015.

    Also, the Japanese have a different history to that of the Chinese and iron ore. They have traditionally taken a long term view of the market and have recognised the mutual benefits in exchanging price for security of supply across different commodities. Having said that, Australia also had a history of behaving honorably in North Asia and not gouging customers, until the past ten years of exuberance.

    Another, less reassuring, way of looking at is that the Japanese are very well-informed clients, and would not be embarking on this course lightly.

    I don’t think we’ll see any of the big local projects fall over and, in the very long run US shale gas volumes will likely disappoint expectations, so returns for Australian projects should recover. But in the medium to long term I see pain.

    At best we’re looking at more sharp terms of trade falls for the nation and deteriorating returns for the hasty companies involved. Expect a great deal more pressure in the form of internal devaluation as managements seek to bail out their rashness, and no new projects as this process plays out.

    Fiscal stabilisation mechanism in the form of a big fat mining tax and SWF anyone?

    1. Korea’s massive Australian LNG boom

      ".....How we model Browse FLNG – key assumptions
      We have assumed that each FLNG vessel and subsea equipment (wellheads, wells, umbilicals etc) will cost approximately $13bn. Woodside mentioned on the conference call that the costs for subsea equipment and installation would be shared amongst each FLNG vessel. This is important as we had been assuming that the first FLNG would have to carry a disproportionate share of the capex for the subsea and subsurface capex, which would therefore impact the economics and investment decision on FLNG-1.

      $39 billion over three years for LNG equipped ships built in Korea. For perspective, this one project represents about 60% of a year’s worth of housing investment, but of course, it keeps on giving.

      With Prelude underway and BHP looking at multiple ships for Scarborough, Inpex looking at Abadi and many other projects around the world, FLNG ships are a boom in the making."

  30. Chevron wants a pin for its LNG bubble

    So, it’s suddenly a little more clear why Chevron has become an election football:

    As Chevron’s $52 billion Gorgon project became embroiled in the ­election campaign, trade union officials accused Chevron of seeking to dodge responsibility for poor labour productivity and high costs.

    The union’s demands for employees working for 19 offshore oil and gas contractors around Australia include a 26 per cent raise over four years, no foreign labour without consultation, union control of hiring and four weeks holiday for every four weeks work.

    Federal Energy Minister Gary Gray, who is under pressure in his Western Australia seat of Brand, said oil and gas companies were failing to control the costs of their staff and contractors.

    “We do need our companies to get better in managing their productivity issues,” he said.

    In Monday’s Australian Financial Review, Chevron Australia managing director Roy Krzywosinski said Australia has a two-year window to get ­policy settings right and fix industrial relations and productivity or risk losing out on billions of further investment in liquefied natural gas projects.

    …The Coalition has already started taking steps to re-establish the ­Australian Building and Construction Commission, which could be used by the new federal government to help companies like Chevron overcome resistance from the union movement while they build expensive projects…Opposition resources spokesman Ian Macfarlane said the commission would be the “cop on the beat” of big projects.

    …Paul Howes, national secretary of the Australian Workers’ Union, said: “I don’t see Chevron struggling to make a profit. I do not have a lot of sympathy in what is a supply-demand situation for the workforce. When there is a shortage of labour the labour is more expensive.”

    My view is that both sides have a point. The investment surge in LNG – often favourably compared with the Apollo moon program in its magnitude – is in some ways a bubble. Firms have rushed in, extrapolated an endless supply/demand imbalance for their product, ignored global competition, over-paid for assets and developed with little thought to what others were doing, grossly inflating input costs in the process. As a result Gorgon and every other project can’t land gas into north Asia for much less than $12 mmbtu. Compare that with yesteryear’s NW Shelf:

    see graph @


    There other signs of an investment bubble too. According to Paul O’Malley, CEO of Blue Scope Steel:

    “Very quickly after the election, we need the policymakers to get all the facts so they can look at the pros and cons of whether there’s reservation or no reservation, whether there should be improved ease of exploration and supply, whether there’s new pipelines needed,” he said.

    …”If you look at energy costs (for BlueScope), the big factor is going to be gas and just the fact that natural gas prices are increasing,” the BlueScope boss said.

    “We’re a bit challenged by that and we’re a bit challenged by the fact that LNG (producers) probably overestimated the amount of gas they’d be able to access and now they are taking it from residential and commercial-industrial users in Australia.”

    This fallout is typical of the “built it and they will come” attitude that seized energy and mining executives in the final stages of the “commodity super cycle” boom. A similar story, with different dynamics, is playing out in coal and next year in iron ore.

    The unions are largely not to blame for the cost blowouts even if they are a party to them. They are, after all, unions. What does capital think will happen if it hands them such a card to play?

    I support the LNP’s move to reinstate the Australian Building and Construction Commission, and no doubt it can take some of the froth off the labour bubble that management has created. But there’s not much it will be able to do about genuine supply and demand imbalance. Only falling investment will do that.

  31. RBA pumps gas propaganda into your pipes


    The world’s biggest energy companies have launched a multimillion-dollar advertising blitz warning that high costs could jeopardise the $150 billion gas boom, in a campaign reminiscent of the mining tax fight.

    The Australian Petroleum Production and Exploration Association (APPEA) campaign warns approval delays, rising labour costs and “anti-gas misinformation” will jeopardise 150,000 new jobs and $40 billion in annual exports. “For too long, vocal minorities have dictated public policy – the tail has wagged the dog,” BG Australia chairman and Reserve Bank of Australia board member Catherine Tanna told The Australian Financial Review. “The gas industry is too im­portant to Australians’ well-being, jobs and economic future to be treated like a political rag doll.”

    The industry points to examples such as the approval of QGC’s liquefied ­natural gas plant on Queensland’s Curtis Island, which took two years, 4000 meetings and a 1200-page, 65-kilogram report that needed a wheelbarrow to deliver it.

    Labor and the Coalition have ­promised to simplify environmental assessments and cut red tape, yet ­Parliament recently increased the regulation of water for coal seam gas projects. Parliament passed the laws with opposition only from the greens – which wanted to strengthen it.

    …The campaign seeks to make the gas boom an election issue by asking the public to sign up via a website that sends their views to local MPs.

    Let’s start at the top. What is an RBA board member doing involved in a political campaign by a vested interest? I have supported having a few of these folk on the board given its good track record but this is ridiculous. The RBA’s brand is now being deployed in the service of vested interest propaganda. It compromises the Bank’s independence. It compromises its integrity. It compromises its role as a setter of ethical normatives.

    Now, let’s take a look at the objectivity of the claims made by APPEA (and the RBA).

    So, Australia comes in at number one, the best place to do mining in the world. OK, it’s not gas specific, but there are broad areas of cross-over. Does it really stack up to say that Australia is lagging other countries so much when it currently hosts seven of the world’s twelve LNG plants under construction and is set to become the world’s largest LNG exporter by 2017?

    Referring again to the Behre Dolbear report, Australia comes in at first or second on every category: economic and political system, social issues, permit delays and corruption and currency stability. It ranks much further down the list for its tax regime but is stable and very obviously offset by other factors.

    Next, let’s ask if this campaign is itself a useful idea for the gas sector. Is gas the kind of visceral household issue that could swing votes? Electricity prices perhaps but not gas, surely. And the link between the two isn’t obvious enough to make it stick. Moreover, what exactly is the campaign’s goal? It’s not targeting one specific issue so lacks focus (“costs” is too vague). Perhaps it’s aimed peripherally at the increasingly loud manufacturing campaign for gas reservation? But again, that’s not going to swing votes. Nor is it aimed at one government or policy (though the timing makes it pretty obviously it’s directed at federal Labor).

    None of this is to argue that Australia does not have high costs. It most assuredly does. Wages are sky high for LNG producers and so is the currency. But if the industry is going to build seven LNG plants simultaneously in remote areas, including massive duplication in places like Gladstone, then what does it think is going to happen? The truth is Australia’s gas regime has proven to be so generous that the mad rush to develop has created a cost bubble. This is the contradiction at the heart of the propaganda.

  32. Fracking blockages

    (long article - full report @

    A recent note from Citi gives a good round-up of the barriers to expanded gas and oil fracking in Australia as presented at recent conference.

    Investor “ESG” Perspectives
    We have focused this note on issues relevant to clients (fund managers and superannuation funds) who are looking at the unconventional gas industry from an “ESG” (Environmental, Social and Governance) perspective.

    In Australia, various investor collaborations are underway, considering their approach to the unconventional gas industry from an ESG risk perspective. Some investor ESG-related considerations include:

    The potential for project delays or higher costs due to environmental / social issues;
    Whether investee companies are broadly adopting “best practice’ or whether companies might strengthen their approach to managing “ESG” issues;
    Whether investee companies might incur a longer term liability to “clean up” environmental impacts, including on aquifers;
    The role of gas in a transition to a carbon constrained world, including the lifecycle emissions performance of CSG/LNG, including consideration of fugitive methane emissions.

    In addition, some investors with an “ethical” mandate take an “ethical” approach to their deliberations of these issues.

    Our Key Takeaways
    Coexistence – CSG and Agriculture
    In general, the agricultural industry representatives who presented appeared to accept that coexistence was inevitable, so the focus should be on best practice and minimising impacts. However, they acknowledged that some of their members strongly oppose the CSG industry.

    A wide range of well recognized issues was raised. These included water concerns, reduced landowner autonomy over their land and farming activities, fragmentation, and introduction of weeds. Some landowners feared lower property values as a result of CSG, though others pointed to very limited transactional or valuation data on this.


    Water Remains a Key Concern
    Water appeared to be the major concern expressed – both contamination and drawdown.

    Agricultural representatives noted that water contamination is very difficult or impossible to “make good” after the event, so concerns remain. Speakers indicated a need for greater comfort that aquifer contamination would not occur. Several speakers suggested that contamination risk would be avoided by well integrity measures, and avoiding surface spills. Mobilization of contaminants from coal seams into aquifers was another expressed concern.

    One speaker was most concerned about the potential for salt extracted from produced water to be stored in such a way that it might get back into groundwater.....


    ......Risk must be assessed based on likelihood and significance. Significant risks then need to be avoided. But risks can tend to be over-emphasized, generating an emotional response. What level of confidence is required? One speaker commented that industry tends to dismiss concerns first, and then may investigate the facts afterwards, which can engender suspicion. Companies may claim “no impact” without monitoring and providing data to substantiate that assertion. Examples were given. A speaker suggested radon should be investigated, with elevated levels reportedly observed near Tara in QLD.

  33. The hot air under US shale gas

    (long article - full @ )


    Cross-posted from Kate Mackenzie at FTAlphaville.

    The US shale gas production boom took everyone by surprise — apparently thatincludes George Mitchell himself, who was credited for sparking the shale gas production surge on his death last month.

    Yet the variety of output from different shale gas plays is also taking some by surprise. Like Shell, for example, whose Q2 results were grim with a sharp fall in profits and a $2.1bn writedown, mostly of North American shale assets.

    John Kemp argues that the misadventures of Shell, BG, BHP Billiton etc are just the sign of joining the shale asset-buying cycle too late, and “(n)ot that the shale revolution set off by new technology is stuttering”.


    The cratering of the US natgas price is good in that it means supply is abundant, something which has great societal value, if not seen that way by markets and investors. And perhaps the abundance can be counted on for many years to come – another good thing, arguably. The problem is where and how this argument is applied. If one is going to look decades into the future, for example, and consider the public good rather than at just a few years of investment returns, the shale gas boom may not be a good thing at all.

    Moving away from these thorny questions and back to supply and pricing — how reliable is the production outlook, anyway?

    The picture is confusing. As the FT’s Greg Meyer reports:

    Supply from Marcellus states such as Pennsylvania and West Virginia has been climbing even as production from other shale fields has levelled off. Gross production is up 45 per cent so far this year from the same period in 2012, according to Bentek Energy. In the Haynesville shale straddling Louisiana and Texas, production is down 21 per cent year on year.

    So there’s resilient output from Marcellus which is currently more than offsettingdeclines in other plays. As Greg points out, this abundant supply means gas is trading for as little as $1 per mBTU in Pennsylvania – less than a third of the Henry Hub benchmark.

    That, too, is taking many by surprise, as Barclays’ Biliana Pehlivanova and Shiyang Wang wrote last week, while upgrading their forecasts for Marcellus output:

    Pipeline flow reports suggest that output from the Marcellus has risen 2.1 Bcf/d in the first six months of this year, compared with a 1.5 Bcf/d gain in the first six months of 2012 – a 40% acceleration. Earlier this year, we had projected that the play will match last year’s rate of growth (Gas and Power Kaleidoscope: Marcellus: Promised land, March 5, 2013). Many market participants we speak with had anticipated even slower increases, limited by a slower pace of infrastructure additions and a moderation of drilling.

    The Marcellus story seems to be that both the resources are better than expected, and drilling itself is improving, because increase in Marcellus output is happening despite a downturn in overall drilling activity. Yet this hasn’t translated to the other shale gas plays.

    It also underlines how fickle shale resources are — one play is not going to be like another. Projections are difficult. And energy forecasts are difficult enough as it is, even without geological variations.

    Both the surprises over increased production and the fickleness can be seen in US shale oil.

    A June note by Barclays’ Kevin Norrish points out that most oil forecasters, including Barclays’, have raised their forecasts of US oil production numerous times in the past 18 months.

    EIA forecasts of US oil liquids production have raced to keep up with actual output:


  34. Greens label heritage listed mining request a joke

    A Perth company's request to mine on national heritage listed land in the Pilbara has been labelled a 'joke' by a Greens MP.

    Burrup Materials has filed a request with the Department of Mines and Petroleum to gain three prospecting licenses and a mining lease on the Burrup Peninsula.

    A significant portion of the proposed tenement is on national heritage listed land.

    Rio Tinto, which operates a port nearby, has lodged an objection to the proposal in the WA Mining Warden's Court.

    Greens MP Robin Chapple says the area has rich Indigenous history and he is astonished the proposal was lodged in the first place.

    "It's not only a joke that it has got this far, but it shows a complete lack of sensitivity or even basic analysis by the proponent in this case that they could consider going here," Mr Chapple said.

    "It is abject nonsense that some turkey could come along and actually put in an application to mine what is one of the most significant areas on the Burrup, when it's covered by the national heritage listing."

    The ABC has tried unsuccessfully to contact Burrup Materials.

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