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Newcastle Herald

New gas sources needed to maintain price

Author: Mike Moraza
Date: 03/10/2013
Words: 471
Source: NCH
          Publication: Newcastle Herald
Section: News
Page: 11
The CSG industry can co-exist with agriculture, writes Mike Moraza.

COAL seam gas is literally just natural gas drawn directly from coal seams. This is made possible by new technologies and techniques in drilling that have been developed over the past two decades.

But the source of energy is still just the same old form of natural gas that millions of Australians use every day in their kitchens and bathrooms.

Australia is today criss-crossed by a network of natural gas pipes, which provide homes with heat, manufacturers with energy and even farmers with fertiliser.

We want natural gas because it is an accessible source of affordable energy.

New drilling techniques allow natural gas producers to drill wells that are around one kilometre deep, encased in continuous layers of steel and cement.

This design keeps the gas well isolated and ensures the surrounding layers of rock and the aquifers of water-saturated rock remain separated.

Importantly, the gas lies well below the accessible water zones that may be used by farmers and others as sources of water.

On the surface, a coal seam gas well head is no bigger than a four-wheel-drive.

The pipes that connect them are underground.

The coal seam natural gas industry can coexist alongside farming activities such as grazing, pasture and vineyards.

AGL has safely produced natural gas from coal seams at Camden, south of Sydney, for 13 years. Our Gloucester Gas Project is scheduled to produce natural gas from 2016 and our Hunter Gas Project is currently in an early exploration phase.

AGL customers in NSW need new sources of natural gas so this state becomes more self-sufficient, rather than having to rely on interstate sources for supply at a time when liquefied natural gas export markets are putting upward pressure on prices.

It is also true that liquefied natural gas is a growth industry in Australia.

Three major LNG projects involving capital expenditure of about $60 billion are being developed in Queensland and the Northern Territory to export huge volumes of natural gas.

This industry is providing great prosperity for Australia.

From 2016 onwards, as existing gas supply contracts come to an end, local markets will have to compete with export projects for supplies of this vital and familiar energy source.

This means that, unless alternative sources of natural gas supply are developed in NSW, local gas customers will face higher prices for natural gas.

It is imperative that the natural gas industry better addresses public concern about its impacts on the environment and health. The industry believes that a properly regulated natural gas project, operated to the highest industry standards, can exist without damage to the environment.

With new sources of natural gas production in NSW, all energy users will benefit by lower energy costs  the only alternative to this situation is paying more for what is an essential service.

Mike Moraza is group general

manager for upstream gas at AGL.

 
 

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