Oil, Gas & the Environment

 oil gas env2-2

Exploration in the Great Australian Bight

Australia is on the cusp of discovering oil & gas off shore in the Great Australian Bight, which would deliver long term benefits to the South Australian economy and contribute to Australia's energy security requirements. The proposed drilling would be located closest to the regional centres of Ceduna and Port Lincoln, whose councils and fishery groups are positive about the benefits the program will bring (and is already bringing) to the regions – read more about this in Resourcing SA.

The exploration program, led by BP Australia, includes a comprehensive environmental impact investigation to ensure risks are appropriately managed. The Australian oil & gas petroleum industry has an excellent track record of safely extracting oil & gas under one of the best practice regulatory systems in the world. Oil & gas has been extracted from the Bass Strait for decades with no impact on nearby Victorian or Tasmanian tourism, agriculture or fisheries and no impact on the reputation of these states for clean produce and environments.

BP is also collaborating with the CSIRO, the South Australian Research and Development Institute, the University of Adelaide, and Flinders University to improve the understanding of the environmental, economic and social value of the Great Australian Bight. This is the largest whole-of ecosystem study ever undertaken in Australia – find out more about this program.  

Hydraulic fracturing  

Hydraulic fracturing (often referred to as fracking or fracture stimulation) has been used in the energy sector since the 1940s to access oil and gas resources. Although not required for all wells, it has been used in South Australia in the Cooper Basin since the late 1960s. This process unlocks the gas through which oil and/or gas trapped within the rock can escape towards the wellbore - achieved by injecting fluid under high pressure into the well.

Well integrity is the highest priority for both the regulator and operators, with a reliable barrier to rock layers and ground water necessary from both an environmental and production perspective. Strict regulations concerning drilling and well construction are enforced by the SA government.

Fracturing fluid is comprised mostly of water (at least 95%); ‘proppants’, to keep fractures propped open allowing trapped oil and gas to escape (usually sand or manufactured ceramic balls); and a small percentage of chemicals (less than 0.5%). The high proportion of water and sand in the fluid heavily dilutes the chemical additives, and once inside the geological formation, the natural water present provides further dilution. Regulatory requirements are stringent. These include groundwater sampling and reporting; hydraulic fracture fluid testing and geological risk assessments to ensure aquifer contamination is not possible.

Community concerns - primarily over well integrity, the fracturing process and de-watering - have arisen largely from increased exploration activity on agricultural land in South Australia, combined with increased shallow coal seam gas activity in QLD and NSW and issues encountered there giving rise to fresh concerns in South Australia, despite our petroleum activities successfully operating in agricultural regions without environmental impact for decades.

In South Australia, oil & gas resource characteristics are different to the Eastern States (where the focus has been on coal seam gas). Coal seam dewatering is used to remove water from a coal seam to reduce pressure and release any gas present. In South Australia the majority of oil & gas resources targetted for exploration are in the deep shales - shale gas. SA's deep coals do contain some high gas content, these have been naturally dewatered by burial compaction.  

Chemical use within the resources industry

The application of pesticides and chemical fertilisers in regional industries is necessary (such as for productivity and food supply) and their use is managed to minimise impact on the environment. Chemical use within the resources industry is also well managed and monitored with environmental legislation for resource companies far more stringent than it has ever been - and Australia is a world leader in this regard.

Often people are unaware that the chemicals used in fracture stimulation are far more benign and lower in concentration than many of those used freely in other regional industries. Many people are also unaware that South Australia has over 700 wells and more than 1000 instances of fracture stimulation – with not one leading to environmental damage. Any loss of well integrity, whist readily recoverable and having a localised environmental impact at worst, would be extremely bad for a company in terms of production loss and massive operating cost burden, not to mention huge legal, regulatory and shareholder impacts. The consequences of damaging the environment would likely be far worse for a petroleum company than for any other regional industry and there is every incentive to ensure proper well construction and integrity continues.

Read SACOME's fact sheet on well integrity and hydraulic fracturing

New South Australian website on fracture stimulation

It is essential that the South Australian community understands the science, processes and regulation behind oil & gas activities so they can be comfortable with these activities existing alongside other local regional industries, and be confident there will be no long term detrimental environmental impacts. Transparency, detail and respect for community concerns is the highest priority for the industry.

To assist in this understanding, the State Government launched a new website in May 2015, to answer questions often raised by the community The facts about fracture stimulation in South Australia

View or download The Facts guide

Roundtable for Oil & Gas - Working Group 8

The SA Government's Working Group 8's purpose is to provide factual information on the petroleum operations lifecycle to industry, academia and the public with the primary focus on issues in South Australia.

Read more.