Revenue sharing will ignite gas production

A 2013 report by the US Energy Information Administration which looked at potential production from fracking in other countries pointed to a number of formations in Australia with just as much potential as those in the US and Canada. The most prospective to these, as judged by the EIA, included the Cooper basin well out in South West Queensland, partially in South Australia, which already has a lot of conventional oil and gas development.

Another huge area is the Canning basin which is North West Australia which has been assessed and drilled over many years without anyone starting production. It is very remote.

A more likely bet for development is the Perth basin north of Perth which has handy access to pipelines and the Maryborough basin on the coast North of Brisbane. However, the Perth basin pipes only connect to Perth and WA has enough gas for the moment. The big LNG plants that compress gas taken from CSG wells for shipment overseas are well to the North. As of last year, the Maryborough basin was rated as largely unexplored, but again there is no handy, existing infrastructure for moving the gas.

Even the conventional Browse offshore field is on the other side of the continent from most of the major population centres, and a long way even from the LNG trains of the North West shelf. The closest town of any size is Broome.

In early 2016, Woodside announced that it would shelve plans for a $40 billion floating LNG plant, due to cost pressures and poor commodity prices. An earlier plan for an onshore plant at James Price Point was scrapped due to cost problems and the ever present, activist opposition to development of any kind.

Despite continually protests and the cost issues of remote locations, the Queensland government is still releasing areas for exploration, albeit out in the west where activists are less likely to bother the explorers.

To ramp up production in Queensland, where most of the CSG action to date has occurred, and unlock gas development in NSW we need a game changer, which may mean letting farmers take a share of the revenue. Then watch production explode.