WA fracking inquiry edging towards completion

August 27th, 2015

Western Australia is not unfamiliar with the exploration and development of natural resources; and has in fact been a participant and driving force behind the development of onshore natural gas resources since the 1960s, when gas was first discovered in the onshore Perth Basin.

The fact that the State has some of the largest untapped shale and tight gas resources in Australia has facilitated a resurgence in the exploration of natural gas in areas such as the Perth and Canning Basins which were previously deemed uneconomic due to the porosity, permeability and depth of the target formations.

In July 2013, the State Government commenced the Inquiry into the Implications for Western Australia of Hydraulic Fracturing for Unconventional Gas, and after more than two years of investigation is close to submitting its findings and recommendations to Parliament.

This week, the Inquiry held its final round of hearings with the State regulators, the Department of Mines and Petroleum (DMP) asked to clarify a number of final issues for the Inquiry members.

The key topics of questioning by Inquiry members included land access arrangements, chemical disclosure (Western Australian has mandatory chemical disclosure and transparency), on-site incident reporting, the costs associated with drilling and hydraulic fracturing a well and the number of wells required for field development.

Of particular note, Inquiry members sought to clarify some of the more outlandish figures provided to the Inquiry by activist groups regarding the number of wells likely to be needed to develop the onshore natural gas resources in Western Australia.

The DMP was quick to correct the misnomer that hundreds of thousands of wells were required. Instead, the Department said, it is more likely to be in the tens of wells for each economically viable project. Part of the Department’s explanation included an overview of resource economics, the use of multiple pad wells and directional drilling.

A similar theme was noted at The Nationals West Australian State Conference in Kalgoorlie last week where the party called on the State Government to consider three key points, including baseline ground water sampling, full transparency of chemicals and the implementation of a Landowner Access Code.

While the Nationals WA recognised that full transparency and chemical disclosure is already in effect, party members were most concerned in enacting legislative change for land access arrangements for freehold land owners.

While the majority of operators already engage in best practise for land access negotiations and arrangements, the topic is a clear driver for The Nationals who would prefer an independent body or tribunal which sits outside of the Government, similar to the GasFields Commission Queensland, to manage the negotiations process.

Whether or not this idea is likely to become a recommendation in the Inquiry’s report to Parliament, only time will tell.

But considering one of the Inquiry members is also a National WA party member, it seems probable that the issue of land access will be a key focal point.

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