Article – Unlocking the gate on gas

9 July 2014
Vernon Graham
Farm Weekly
NATURAL gas has the potential to transform the Australian economy including cutting farm fertilisers costs, a major development summit in Townsville was told.
A number of energy and mining heavyweights spoke at the recent Northern Development Summit and all had much the same message: get out of the way of Australia’s natural gas industry so it can get on with the job of powering the nation’s future.
And several of them implored the mining and agricultural industries to combine to ensure that noisy and politically-savvy green activists never achieve their aim of getting rid of the off-road diesel fuel rebate now worth 38.1 cents a litre to on-farm users.
Green lobbies were seeking to convince the public that the off-road diesel rebate scheme was a taxpayer subsidy to rich miners, Brendan Pearson, chief executive of the Minerals Council of Australia, told the summit.
This ignored the fact Federal Treasury had publicly said the rebate wasn’t a subsidy, he said, and that its removal would punish individuals, businesses and communities who relied on diesel to generate electricity.
Among this group were many remote indigenous communities who were already among the nation’s most disadvantaged citizens.
Alliance needed to support industry
Mr Pearson said parts of the the Australian mining sector were now under severe pressure because of high costs and if the off-road diesel rebate had been scrapped in the recent federal budget (equivalent to applying a $147 a tonne carbon tax on off-road fuel users) it would have closed some coal mines in NSW and Queensland.
“It would have been a ‘super tax’ on growth in northern Australia and other remote areas,” he said.
“We can’t lose this debate. We need an alliance among miners, agriculture, tourism and fishing industry (to keep the rebate).”
Joining the call to arms was Martin Ferguson, a former federal Labor Minister for Resources and Energy, who said “people in southern Australia” didn’t support the mining industry.
After 24 years straight of economic growth, many had forgotten who was generating Australia’s wealth, he said.
Some of the mining industry’s most active opponents were being funded by overseas groups.
“It’s time to defend our industry,” he said.
Adam Giles, the Northern Territory’s chief minister, said the NT had enough natural gas reserves to power Australia for the next 200 years.
He said the NT could “fix NSW’s gas crisis” if the Alice Springs to Darwin pipeline was connected to the Moomba pipeline network in central Australia which feeds gas to a number of States.
Tim Langmead, director of external relations for Fortescue Metals Group (FMG), said natural gas had the potential to transform the economy as well as being a major export earner.
“We have enough reserves to do both,” he said.
FMG, one of Australia’s biggest iron ore miners, was looking at the onsite conversion of natural gas into liquefied natural gas (LNG) to power heavy mining machinery including big trucks, he said.
Natural gas was also a major potential source of nitrogen, agriculture’s biggest crop fertiliser, Mr Langmead said.
Australia could follow the lead set by the United States which had reduced nitrogen fertiliser costs by a large-scale switch to production from natural gas.
Mr Langmead said Queensland was working hard to maximise the potential of its natural gas reserves but NSW and Victoria needed to “unlock the gate” on gas development to increase supply and put more downward pressure on prices.
Fracking not always necessary
John Cotter – a farmer and chairman of Gasfields Commission Queensland, an independent statutory body set up to manage and improve co-existence between farmers, regional communities and the onshore natural gas industry – said the gas industry had made an extremely poor job of explaining its operations to the farm and wider communities.
For example, 90 per cent of the natural gas industry in Queensland’s Surat basin was done without fracking while the Cooper basin’s deep wells were below the Great Artesian Basin, Mr Cotter, a delegate to the summit, said.
Texas was a third the size of Qld, he said, and had 243,000 gas wells and thriving agricultural industries.
Courtesy of Farm Weekly