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WA gives fracking the nod

Western Australia has opened the door to hydraulic fracturing (fracking), removing one of the last major barriers to further evaluating and commercialising tight- and shale-gas plays in the state

State environment minister Bill Marmion has upheld a decision by the Environmental Protection Authority (EPA) to not assess a fracking programme proposed by Perth-based Norwest Energy in the North Perth basin due the small size of the planned stimulation.

The decision will end frustration for the state’s gas drillers. Norwest now has permission to frack its Arrowsmith-2 well, which it drilled last June. Further work at the well has been on hold, pending the EPA review.

The decision also means the EPA will not assess Sydney-based AWE’s fracking programmes for the Woodada Deep-1 and Senecio-2 wells in the onshore Perth basin. Transerv Energy and Alcoa, which are evaluating the Warro gasfield, and Scottish independent Warrego Energy, seeking to tap the West Erregulla field, will also benefit from the decision. So too, will a string of ventures, including Buru Energy and Mitsubishi, as well as New Standard Energy and ConocoPhillips, that are hoping to tap shales in the Canning basin in north-western Australia.

The Perth advantage

A 2009 US Energy Information Administration (EIA) study estimated risked recoverable shale resources in the Perth basin stand at 59 trillion cf, while the Canning basin is believed to hold as much as 229 trillion cf. While the Perth basin is not the country’s largest shale-gas play, it is just 300 kms from Perth, putting the state capital’s market within easy reach. Moreover, unlike other shale-gas basins in more remote parts of the country, the Perth basin play is near existing pipelines and other infrastructure.

There is another advantage, too. Much of the Perth basin lies underneath Crown land, unlike the coal-bed methane plays on the east coast, which lie underneath prime agricultural land. Public resistance to drilling in Western Australia is likely to be muted.

Rig hunt

The Perth and Canning basins were singled out by the EIA as being marine in origin – such deposits are more brittle and respond better to horizontal fracking than non-marine based, which are more likely to contain sticky clay. Australian shale is generally thick and deep, both advantages when considering water content and gas pressure. But deep shales require very high-powered drilling rigs, and there are few suitable units in Australia.

The time taken to secure regulatory approval for the fracking programmes has meant Norwest will need to wait to secure fracking equipment for the Arrowsmith-2 job. A Halliburton frac spread is currently operating in the Copper basin until April. But, barring further delays, the unit should be mobilised to the North Perth basin in late April.

AWE, which is a partner in the Arrowsmith-2 well, says that, based on the current availability of equipment in Australia, fracking of all three holes will start during the second quarter.

The EPA’s move was welcomed by industry lobby group Australian Petroleum Production and Exploration Association (APPEA), saying the decision was based on sound science and provides effective environmental protection while reducing unnecessary delays.

However, the conservation council of Western Australia was less than pleased by the news. The council claims fracking in coal and shale deposits has led to serious ground water contamination and even earthquakes elsewhere, yet the environmental ministry has allowed the industry in with no environmental assessment. APPEA refutes this, saying fracking has been used internationally for more than 60 years in more than 2 million wells and has consistently been shown to be safe.

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