Australian deputy PM flags lifting gas drilling bans
SYDNEY (Reuters) -- Australia's deputy prime minister said he would support lifting bans on coal seam gas (CSG) drilling if landowners were given a bigger slice of royalties, a significant policy shift as the country scrambles to avoid a looming energy crisis.
Australia, with an abundance of natural riches, was supposed to be a world energy power on its way to becoming the largest global exporter of LNG, but the government instead finds itself battling to explain why the country is unable to keep the lights on at home. A series of massive blackouts in South Australia state has already caused major embarrassment and the national energy market operator has warned of a domestic gas crunch from 2019 that could trigger further broad power outages and industry supply cuts.
Deputy Prime Minister Barnaby Joyce's support to lift the CSG ban -- if landowners were granted royalties -- could be a game changer as his right-wing National Party has traditionally opposed such a move.
"By paying a royalty it means the value of a farmer's land increases as a result of gas extraction, rather than decreasing," said Joyce, who is also the agricultural minister, in comments confirmed by his office on Saturday.
Manufacturers have long complained of tight gas supplies and soaring prices as producers have focused on supplying gas to LNG plants that have locked in 20-year export contracts.
Restrictions on drilling CSG have added to supply constraints. Under pressure from green voters and farmers, the state of Victoria has banned onshore gas developments, including fracking, and New South Wales state has prevented developments.
Australia's power supply problems made international headlines last week when Tesla Inc boss Elon Musk offered to save South Australia, the country's most renewable-energy dependent state, from recurring blackouts by installing battery storage worth $25 million within 100 days.
Prime Minister Malcolm Turnbull also this week floated spending up to $1.5 billion to expand the Snowy Hydro power scheme and held crisis talks with major gas producers, including ExxonMobil Corp and Royal Dutch Shell, who have large export contracts.
Reporting by Harry Pearl; Editing by Jane Wardell and Tom Hogue
Indonesia, home to 260 MM people on 14,000 islands across a vast archipelago, is estimated to become the seventh-largest economy in the world by 2030, with such growth expected to boost the nation’s energy consumption by 80% from present levels.<sup>1</sup>
At October’s HPI Forecast Breakfast for our sister publication, <i>Hydrocarbon Processing</i>, I shared <i>Gas Processing</i>’s forecast on change in the LNG industry.
In one of the toughest markets in the history of gas compression, we are challenged to deliver more with less.
The New LNG Imperative
The shale gas boom established the US as the world’s leading natural gas producer and is responsible for billions of dollars of investments in the US gas processing industry. Since 2012, the US has witnessed unprecedented growth in new gas processing capacity and infrastructure. This rise is due to greater production of domestic shale gas, which is providing cheap, available feedstock to fuel the domestic gas processing, LNG and petrochemical industries. New gas processing projects include the construction of billions of cubic feet per day of new cryogenic and gas processing capacity, NGL fractionators, multi-billion-dollar pipeline infrastructure projects, and the development of millions of tons per year of new LNG export terminal construction. Attend this webcast to hear from Lee Nichols, Editor/Associate Publisher, Hydrocarbon Processing, Scott Allgood, Director-Data Services, Energy Web Atlas and Peregrine Bush, Senior Cartographic Editor, Petroleum Economist as they discuss the future of LNG and the application of Energy Web Atlas, a web-based GIS platform which allows users to track real-time information for every LNG project.
November 29, 2017 10am CST
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