Regulation & Environment: Australia’s coalseam-to-LNG companies stand up - The Barrel (platts)

Posted - By News Desk | May 20, 2013 12:01 AM- The Barrel (platts)

Companies looking to turn Australian coalseam gas into LNG for export are facing increasing resistance from environmental groups. In this week’s Regulation & Environment column in Oilgram News, Christine Forster discusses how producers are pushing back.
——————————–
Some of the companies building massive new coalseam gas-to-LNG projects in the eastern Australian state of Queensland have gone on the front foot to counter what they describe as anti-development activism.
BG subsidiary QGC has been particularly vocal among the players, who are fighting back against criticism in social and traditional media of the rapidly expanding industry’s environmental footprint.
QGC is building the $20.4 billion Queensland Curtis LNG project on Curtis Island in Gladstone. The 8.5 million mt/year facility will be the world’s first CSG-based LNG plant when it starts up in 2014.
Two other LNG plants are being constructed on Curtis Island. All three will be fed with CSG from thousands of wells in Queensland’s Bowen and Surat basins.
Origin Energy and ConocoPhillips are developing the $24.7 billion Australia Pacific LNG project, with a capacity of 9 million mt/year, and a Santos-led group is working on the 7.8 million mt/year Gladstone LNG plant. Those two facilities will start up over 2015-2016.
In recent weeks, QGC has railed against federal government plans to regulate CSG projects which impact water resources, and to monitor fugitive emissions from CSG wells.
BG Group Australia Chairman Catherine Tanna, at a recent speech to the American Chamber of Commerce in Australia, criticized increasing regulation of the industry, pointing at the federal government’s planned changes to its Environment Protection and Biodiversity Conservation Act to include a so-called “water trigger.”
That move took the industry by surprise, coming as an additional layer of regulation on top of the requirements of the state governments.
The EPBC Act amendments, proposed by the Labor government of Prime Minister Julia Gillard, were debated in the Senate on May 14 and look set to be passed with support from the Green party and unaligned parliamentarians. The opposition Liberal National Party Coalition opposes the bill.
“The gas industry has been criticized on many fronts,” Tanna told the AmCham event. “Very occasionally that criticism is warranted and the industry has been quick to remediate. A lot of what is said, though, is highly questionable, and propagated without challenge to the point where activism determines public policy; where the tail wags the dog.”
Tanna argued that rather than “poisoning” aquifers, and “alienating” farm land, the CSG industry reduced the pressure on stressed aquifers by purifying salty coalseam water and providing it to farmers and local towns.
“It is water that otherwise would not be available for any use,” she said. “If these proposals were, therefore, designed to protect Australia’s water resources, they fail on this logic alone. They were clearly not introduced to deal with an environmental problem. They were introduced to appease activists.”
QCLNG will add $32 billion to the Queensland economy in its first 10 years. “That is a measure of what is at stake when we have decision making on this basis; when green activists and their supporters deliberately misinform; and when motives and charges go unquestioned and unchallenged,” Tanna said. “Just as it is right that our industry be scrutinized and held to account, so, too, should our critics.”
QGC has also hit out at proposed federal regulations to measure fugitive emissions of CSG from gas production, saying the costs of implementation outweigh any environmental or revenue gain. The regulations, to be introduced from July 2013, have been applied after nearly a year of public consultation during which the government received only 17 submissions, with gas companies given just a month to comment, QGC said.
Santos has also pitched into the debate, running newspaper advertisements last month in response to a critical report on high-profile Australian Broadcasting Corporation television program 4 Corners.
“The Santos GLNG project in Queensland was subject to an extremely comprehensive environmental approval process,” CEO David Knox said in the advertisement. “Rather than being rushed, as claimed by 4 Corners, this process took over four years to complete between 2007 and 2010, involved 20,000 pages of environmental submission and resulted in 1,200 specific environmental conditions.”
The upstream peak industry body is also campaigning hard, releasing a steady stream of statements refuting the environmental lobby’s claims, including its “shameful scare campaign” on the human health impacts of the CSG industry.
But the industry might soon get its wish, with a return to a streamlined approvals process concentrated in the hands of the states. That is the system backed by the federal LNP opposition, widely tipped to oust the minority Gillard government in a general election scheduled for September 14 this year.  
–Christine Forster in Sydney

Post to be  found At:
http://blogs.platts.com/2013/05/20/coal-lng/