Mining companies insist they are not looking for more oil in the Northern Territory.
But if they happen to find it as they restart their search for gas deposits, then happy days.
They already expect to find a huge reservoir of shale gas in the Beetaloo Basin, south of Katherine, enough for Australia’s needs for centuries, according to some.
But oil is not the chief target, despite the howls of protest from many anti-fracking groups these past few weeks.
The anti-frackers say the mining industry has been untruthful all along about its intentions to search for gas, when it was oil it wanted.
The long Pepper inquiry which convinced the NT Government to drop its ban on the gas search should have been focused on oil instead, they say.
The miners counter by saying it is a misinterpretation of their words – saying they hope to find “liquids-rich gas” in the Beetaloo.
Liquids-rich gas is a long way removed from oil, but more about that later.
The fly in this sticky subject is Federal Resources Minister Matt Canavan who last week said he hoped the miners found oil in the NT.
Senator Canavan said the Beetaloo was the nation’s best prospect for oil, not just gas.
His comments have only inflamed the debate over oil versus gas.
There is oil in the NT, just that no-one knows how much.
The Mereenie oil and gas fields just south of Alice Springs have been production since 1984.
A bullish NT Government push for investors states:
“In addition to known reserves, unproven resources exceeding 200 trillion cubic feet (tcf) of gas and 20 billion barrels of oil and condensate in unconventional (shale) plays.
“These deposits, located primarily in the Beetaloo sub-Basin, are still being explored. Appraisal of these resources are expected to recommence in 2019 following the decision to lift the moratorium on hydraulic fracturing. Production from these fields may be expected to commence around 2023.”
The Pepper inquiry also discussed the prospect for oil.
“Although there are some potential oil and/or condensate resources in the NT, the panel focussed its assessment on onshore shale gas, and not other forms of petroleum that could derive from shale, such as shale liquids (oil) and condensate.
“The reason for this is, first, because the Terms of Reference limit the scope of the inquiry to onshore shale gas only, and second, because, to date, exploration has produced only dry (liquid free) gas in the Beetaloo Sub-basin.
“While there is known potential for liquids to be associated with a number of shale formations in the NT, to date the only declared contingent shale petroleum resource has been for dry gas from the Velkerri formation in the Beetaloo Sub-basin.
“All other potential liquids resources remain insufficiently explored and/or unlikely to be economically feasible as an oil development.Therefore, if there was shale liquids production it is likely to be primarily as a shale gas play with a small volumetric percentage of liquids also produced.”
The report goes on to say if oil was found it would not “materially affect the mitigated risk assessments” contained in this report.
Shale rocks, the type already discovered deep under the Beetaloo, are successfully fracked for oil right across the world, the US is a big oil fracker.
But at the moment the mining companies say it is gas they want, not oil.
Preferably liquids-rich gas, which they say has been misconstrued to mean oil.
Liquids-rich gas is a step up from dry gas, perhaps spiced up with propane similar to what’s in your barbecue gas bottle at home.
Origin Energy and Santos have begun exploratory programs again in the Beetaloo.
“Origin is not drilling or fracking for oil. There is no basis to these claims,” Origin senior external affairs manager Chris Zipf told us.
“Liquids rich gas’ is gas that presents in the form of a liquid as it comes to the surface as pressure and temp changes – not oil.
“The liquids are the next step up in the molecule chain - ethane and propane which is LPG or bottled gas; butane which is used as fuel in lighters or condensate.
“As the gas comes towards the surface the pressure and temperature changes. The heavier molecules above methane can either stay as gas or begin to form a liquid (hence the term ‘liquids rich natural gas’), which is clear and not black like oil.
“A simple analogy would be a hot shower, the steam (gas) condenses to water (liquids) as it cools.
“Gas being produced in off-shore fields and processed in the NT are liquids rich.”
Origin is not drilling or fracking for oil. There is no basis to these claims.Chris Zipf
The NT Government is not talking up the chances of an oil bonanza either.
“The inquiry found that the Beetaloo sub-basin has been insufficiently explored for oil and is unlikely to be economically feasible as an oil development,” a government spokeswoman said.
Despite all these claims about the continued intention to search for gas and not oil, the anti-fracking group Lock the Gate Alliance has produced footage showing the company has contradicted itself over whether it wants to frack for oil in the Northern Territory.
The short film shot from the Origin AGM on October 17, 2018 tells an entirely different story, the group says. In the video, a company's representative is called by the Chair to address the AGM and says:
"In the shale in the Northern Territory, if it were to be successful, then we would collect the oil and we'd truck that somewhere initially, or we'd pipe it somewhere. But we're not going to burn the oil in a production development. And we'll collect both the oil and the gas to be clear, the gas would go to market and the oil would go to market."
Jesse Hancock, part of the Lock the Gate Alliance network in Alice Springs said, "This footage directly contradicts Origin's statement and makes it clear that they do plan to drill and frack for oil in the NT.”
It remains clear, the mining companies intend to search for the gas riches supposed to lie beneath the Beetaloo, but the prospect for an oil discovery is not far from many people’s minds.
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