Wednesday, March 5, 2014

Call for caution amid fracking uncertainty | Herald Sun

Call for caution amid fracking uncertainty | Herald Sun

AUSTRALIA should view the relatively new practice of fracking for gas with as much caution as the introduction of a new drug, says an essay in the latest issue of the Medical Journal of Australia.
"The uncertainty over the health implications is greater than that surrounding any other energy choice, write Dr Alicia Coram and her colleagues.
"The absence of concrete evidence of harm does not equate to evidence of its absence."
They say the current evidence does not provide a clear picture, which is a good reason to put the brakes on.
They say the biggest public concerns include contamination of drinking and irrigation water.
However, wastewater and community disruption are also major issues.
"Natural contaminants present in wastewater can include heavy metals and radioactive materials, which have serious and well known health effects."
Fracking involves injecting large quantities of water and chemicals into gas reservoirs. Materials like sand are pumped in to keep the fractures open and allow the gas to flow.
The authors argue that it is incorrect to compare the process with the environmental impact of coal, because the damage caused by coal makes it a poor benchmark.
The comparison also obscures renewable energy options like solar and wind energy.
The uncertainties, including doubts about the greenhouse profile, weigh heavily against proceeding with proposed future developments, they write.
"Additionally, the burden of potential health hazards from gas extraction would fall on the most vulnerable children, the elderly, the poor, those living in rural, agricultural and indigenous communities, and future generations."


  1. Activity the key

    Noel Dyson
    Wednesday, 26 February 2014

    BEING active, building relationships and being a little bit aggressive is the way forward for Key Petroleum as it switches its focus from unconventional gas to shallow oil in the Canning Basin.

    The company added cornerstone investor ASF Group in January, which paid almost $1.5 million through two placements to take a 19.9% stake in the junior.

    As part of that deal, ASF chairwoman Min Yang has become a member of the Key board.

    This investment poses interesting questions given Yang became chairwoman of fellow Canning Basin explorer Rey Resources in a controversial boardroom coup.

    At the time, Rey had been touting a coal project in the Western Australian Kimberley region but switched its focus to gas not long after Yang took the chair.

    While Key managing director Kane Marshall is aware of the possibilities, he is more interested in what ASF can bring to Key, which is mainly links to partners and possible financiers.

    One thing Key is looking for is farm-in partners to help it drill up to three wells this year and the same next year.

    Marshall is not waiting for those partners to appear though.

    He has already started work on sourcing a rig and beginning the discussions with traditional owners of the Canning Basin land Key wants to drill.

    The reason for this activity is simple – the eye is attracted to movement.

    Marshall believes being active will help Key secure some farm-in partners.

    The company’s focus has also changed a bit from its early days as an unconventional gas hunter.

    Unconventional gas is still in its thinking but at the moment shallow oil prospects are much more front of mind.

    That is the result of some geochemical analysis the company did last year that found some big, shallow, conventional oil prospects in both the Perth and Canning basins.

    These prospects in the Canning Basin are about four to five hours off the bitumen.

    Given what Buru has been able to do with shipping its Ungani oil out of Wyndham, that makes for a fairly attractive proposition.

    Should Key be able to find commercial quantities of oil it will cut a road from the bitumen to its wells making the trucking of the oil easier.

    That oil can then be trucked to Wyndham or, if there is space available, Broome for shipping to either Kwinana or Singapore for processing.

  2. Activity the key

    The Perth Basin oil is an even easier option. That prospect is about five to six hours drive from Kwinana.

    The plan is to drill one well in the Perth Basin and then move the rig to the Canning Basin to drill two more this year.

    These oil prospects have the potential to be a game changer for Key because of the immediate revenue they will bring.

    All the company needs is a farm-in partner or partners to make it happen.

    Marshall said the company had the capabilities to be the operator of these wells.

    He said it could also do the drilling much cheaper than some of the larger companies operating in the region.

    To do this, Marshall said, the company would use smaller rigs and tap smaller contractors in the region.

    Some of the drilling managers with these contractors have 30-40 years’ experience in the region, which is a big plus considering how harsh and remote the country is.

    Dorothy McKellar could well have had the Canning Basin in mind when she wrote My Country because it is hot and dry through much of the year and prone to flooding in the wet season.

    These contractors also often have relationships with the towns in the Canning Basin.

    “Our advantage is we’ll being using the people who’ve done it all before and seen all the screw ups,” Marshall said.

    “It’s not necessarily having all the best tools and access to the best logs. It’s about getting the well delivered and getting a definitive result.”

    Should the oil play pay, it can then clear the way for the company to start looking at the higher cost unconventional gas opportunities it has.

    Those unconventional prospects are quite challenging given they are much deeper than the oil prospects it is looking at and are about 10 hours off the bitumen in the Great Sandy Desert.

  3. Stop it before someone gets hurt

    Tuesday, 4 March 2014

    THAT is the message from the Minerals Council of Australia and the Australian Petroleum Production & Exploration Association. The bodies have called on the Greens and the Lock The Gate Alliance to denounce civil disobedience action at Australian worksites before someone is seriously injured.

    In response, Lock the Gate says the civil disobedience has been used only as a last resort.

    APPEA and MCA say they recognise there is legitimate interest among landholders and communities on how resources are produced, but insist those issues are best addressed through open and transparent dialogue based on facts rather than fear and threatening behaviour.

    “In recent weeks we’ve witnessed protesters chain themselves to vehicles, dangle from machinery dressed as bats, lie in the path of vehicles and intimidate landholders who are happy to have exploration take place on their properties,” the groups said in a statement.

    “In Bentley, in the Richmond Valley of northern New South Wales, there are reports today that anti-gas activists have installed steel spikes at the entrance to a dairy farmer’s property and on previous occasions have welded his entrance gate shut.

    “Yet the Greens continue to openly endorse civil disobedience classes as part of an untruthful campaign that claims to protect the rights of farmers.

    “Apart from dangers to life and property, such campaigns prevent workers from getting to jobs that support their families and drain police resources from where they’re needed most.”

    The groups say the Greens have the opportunity to show leadership and debate policy on fact, not emotion, and stop civil disobedience.

    Meanwhile, Lock the Gate has brought an unusual alliance of farmers, traditional owners, tourism operators and conservationists from across Australia together in Canberra to highlight what it says are the health, social, cultural and environmental threats posed by coal mining and unconventional gas extraction.

    National Lock the Gate coordinator Phil Laird said titles for gas and coal exploration covered more than 54% of Australia’s land mass, or 437 million hectares and communities nationwide were worried at the potential impacts from mining on their land, water and country.

    “Australians have supported the mining industry for generations, but current plans for a vast unconventional gas industry and a massive expansion in coal mining are threatening our land and water like never before and putting communities at risk,” Laird said.

    The delegation plans to meet with more than 30 ministers and members of parliament over the next three days.

    “Rural Australians are locking their gates to the unconventional gas industry in ever growing numbers and, as a last resort, have been forced to use their bodies as barriers to drilling rigs,” Laird said.

    “Just yesterday a 58 year old farmer from Coonamble locked himself to a rig truck in the Pilliga forest in a desperate attempt to prevent coal seam gas operations from going ahead in northwest NSW.”

    Laird said some of Australia’s most prized agricultural land and much of its precious groundwater was under threat from unconventional gas extraction.

    He called the unconventional gas industry a “short-term destructive industry” that could contaminate land and water for generations.

    1. Narrabri farmer goes in to bat for coalmine protesters

      Local council is trying to evict activists camping on Clifford Wallace’s land, who says ‘it’s a kick in the guts’

      Long-time resident of the Narrabri shire, farmer Clifford Wallace, 63, said he was “only doing the right thing” by allowing activists protesting at the nearby Boggabri coalmine to camp on his property. Now the local council is telling him to boot them out.

      “It’s a kick in the guts. I’m a model citizen,” Wallace said. “I wasn’t expecting to see that. But I was expecting to see some form of retaliation for supporting these fellas.”

      These fellas are a ragtag group of environmentalists, calling themselves Front Line Action on Coal, bent on disrupting work on a coalmine located deep in the Leard state forest, run by mining giant Idemitsu Resources. In February, three members of the group made headlines by breaking into the mine dressed as bats and hanging upside down from coal loaders.

      “In 2014, it is outrageous that these senseless coalmines are allowed unrestricted licence to destroy public forest, irrespective of their ecological value. Idemitsu’s expansion, together with Whitehaven Coal’s new Maules Creek mine, will see more than half the Leard state forest turned into a barren wasteland,” Helen War, one of the costumed activists, said at the time.


      At least 30 people have been arrested trying to stop the Boggabri mine, as well as Whitehaven’s nearby Maules Creek mine. One activist was taken into custody on Wednesday morning for suspending himself from a tripod while playing a saxophone, blocking the gates to a Whitehaven coal loader in Gunnedah.

      Wallace, who has lived in Narrabri for more than 28 years, allowed the protesters to camp on his land after they were evicted from their last encampment on Road reserve. But on Monday the Narrabri shire council issued him with a “notice of intention to issue an order” to have the activists removed.

      “Council has received numerous complaints from residents in relation to the increase in traffic, dust and noise as a consequence of the camp at its new site,” it said in a statement. It has found that camping is prohibited on Wallace’s property because the land is zoned for “primary production”, and unless Wallace issues an objection, an order to evict the protesters is expected to be issued Friday.

      “It’s extraordinary that the council is apparently responding to complaints about noise and traffic, yet we’re fighting a massive open cut coalmine that will dump 18,000 tonnes of dust over the community, with 24-7 truck movements and blasting in a quiet rural area,” Jonathan Moylan, one of the protesters at the camp, said.

      He questioned the environmental value of the offsets made by Idemitsu, which might be one of many offset programs examined by a Senate inquiry into green offsets for mining projects, expected to be set up by Labor and the Greens.

      “As far as we’re concerned, there shouldn’t be bulldozers working on state forests while there are serious probity concerns,” Moylan said.

      Moylan is currently awaiting trial for allegedly sending out a fake ANZ bank press release in January 2013, claiming the bank had pulled finance for Whitehaven’s open-cut coalmine. The mining company’s share price is alleged to have dropped by $314m as a result of the hoax.

      Wallace said, so far, “I haven’t seen any letter at all from the council”, though he knows he has registered post waiting for him at the post office in town, which he says he “might” get somebody to collect for him.

      And if ordered to, will he evict the activists? “Not that I can see at the moment,” he said. “I’ll stick by my word to them: they can stay as long as they want.”

  4. Norway spurs rethink on fossil fuel companies

    By Pilita Clark in London

    Norway’s decision to set up an expert group to see if its $840bn oil fund should stop investing in fossil fuel companies has triggered a wave of speculation since it was announced last week.

    If the world’s largest sovereign wealth fund were to ditch such investments, it might not immediately affect Royal Dutch Shell or BP, both among the fund’s top 10 holdings, nor the other oil and gas companies that together account for 8.4 per cent of the fund’s equity investments.

    But it would galvanise a gathering campaign to persuade investors that fossil fuel companies are an increasingly risky bet as regulatory efforts to combat air pollution and climate change intensify, and the costs of alternative energy sources tumble.

    “It would change the terms of the debate quite profoundly,” says Ben Caldecott, head of the stranded assets programme at Oxford University’s Smith School of Enterprise and the Environment.

    The idea of stranded assets, or holdings that suffer from an unanticipated loss in value, is a newer, more sophisticated weapon in the armoury of fossil fuel opponents, who often argue the imperatives of climate change alone require an end to fossil fuels.

    That case is easily ignored by investors, at least in the short term, because oil companies are one of the largest sources of dividends and fiduciary duty rules have long compelled big funds to put financial returns above environmental or other concerns.

    “To my mind, these assets are not stranded,” says oil and gas analyst Oswald Clint of Bernstein Research, pointing out oil demand still looks healthy and even though some oil and gas majors have shelved offshore projects recently, it is likely they are doing so to squeeze better prices from services companies.

    He doubts Norway would have an immediate effect on investor sentiment, even if it did decide its oil fund should abandon the sector.

    “The upside is simply too great,” he says, adding the North American shale oil and gas boom has seen share prices of companies exposed to that industry soar 30 per cent in the last year. “That’s where investors are focusing a lot of their attention,” he said.

    This is why the divestment movement has barely dented the investment landscape to date, even in the US where a vigorous grassroots divestment campaign has been targeting pension funds and university endowments for the last two years.

    The small number of groups that has moved out of fossil fuels, such as Norwegian insurer and pension fund Storebrand, which has around $80bn assets under management, are minnows compared with those that have not, such as Calstrs, the $176bn pension fund for Californian teachers.

    Calstrs, like many of its peers, says it prefers to engage companies in constructive dialogue about the risk of fossil fuels, rather than dumping their stock.

  5. Norway spurs rethink on fossil fuel companies

    Harvard University has been even more blunter as it resists pressure from students to stop its $32.7bn endowment, the largest of its type, from investing in fossil fuel companies.

    “We maintain a strong presumption against divesting investment assets for reasons unrelated to the endowment’s financial strength,” the university’s president, Drew Faust, said late last year.

    Still, Norway could undermine that argument, depending on the grounds used for any potential divestment in fossil fuels, say some investors.

    If the country cites purely ethical or environmental reasons for such a move, it will probably be seen as a symbolic gesture with little impact on investors, much like the Church of England shunning shares in arms companies.

    “It doesn’t change things,” says Craig Mackenzie, investment director at Scottish Widows Investment Partnership, a European group with £147bn of assets under management that has already sold out of pure-play coal groups – along with many others – because of concerns about US environmental regulations and competition from shale gas.

    But it would be a very different situation if Norway were to sell out of all types of fossil fuels, including oil and gas, because it believed there was a genuine investment case for doing so.

    “That will be influential because it will help catalyse the debate about the risks facing the fossil fuel sector,” adds Mr Mackenzie.

    Even so, Norway’s oil fund is in a somewhat special position. As it gets all its inflows from the country’s oil and gas revenues, there are plenty of voices that say it makes sense for it not to be invested in fossil fuel-related companies to counter the risks to the Norwegian economy.

    There is also a broader picture to consider.

    Of the $12tn assets under management among university endowments and public pension funds, oil and gas company equities account for a maximum of $600bn, or 5 per cent, with debt making up about half that amount, according to research by Oxford’s Smith School.

    That is a tiny figure considering the market capitalisation of ExxonMobil alone is more than $400bn.

    The research confirms the fossil fuel divestment campaign, like older movements targeting tobacco and South Africa’s apartheid system of racial segregation, is unlikely to have much initial impact on company share prices, but could lead to stigmatising effects that can cost billions, especially if stigmatisation causes legislation.

    And it is that process of demonisation that divestment campaigners are already seizing on as Norway’s inquiry gets under way.

    “It’s important,” says Bill McKibben, an American environmentalist spearheading the US push against fossil fuels. “The world is waking up, more quickly than I dared expect, to the understanding that if you have far more carbon in oil and gas reserves than the scientists say is safe to burn, you better not burn it.”

    Other influential voices in the divestment movement, such as Jeremy Leggett, chairman of the London-based Carbon Tracker think-tank that has done influential work on stranded assets, says investors are already pressing big oil and gas companies to stem capital expenditure and hand it back as dividends.

    “A year from now the Norwegian state pension fund may have fast declining desire to invest in fossil fuels anyway,” he says.

    When UN climate negotiators meet in Paris at the end of 2015 to seal a global climate deal, he adds, “they might find they are in a sense playing catch-up to the markets that are already cutting emissions for them by default”.