Read these three articles on Chevron withdrawing from unconventional gas exploration in Cooper Basin.
Chevron pulls out of Aussie shale exploration
By Sara Stefanini
Posted 27 March 2015 13:16 GMT
Chevron has pulled out of Beach Energy’s unconventional gas acreage in central Australia, just two years after the United States major made a splash by joining the project in a $349 million deal.
Australian independent Beach Energy, which owns the majority stake in the acreage, announced on Friday that Chevron had chosen not to participate in the second stage of the Nappamerri Trough exploration programme in the Cooper Basin.
“Chevron informed us that extensive technical evaluation has confirmed a large gas resource and potential for further appraisal,” Beach said. “However, at this time the opportunity does not align itself strategically with Chevron’s global exploration and development portfolio.”
Chevron’s 30% stakes in petroleum exploration licences 33 to 49 in the South Australian (SA) section of the basin, and its 18% stake in authority to prospect licence 855 in the Queensland section, will therefore be returned to Beach. Beach will fully own the SA licences and share the Queensland permit with Icon Energy, which has a 35.1% share. Read more at http://interfaxenergy.com/gasdaily/article/15669/chevron-pulls-out-of-aussie-shale-exploration
Chevron exits Cooper basin unconventional gas project
MELBOURNE, Mar. 30 2015 By Rick Wilkinson
Chevron Corp. has pulled out of the Nappameri Trough unconventional gas project in the Cooper basin, leaving other joint venture partners Beach Energy Ltd. and Icon Energy Ltd. to go it alone.
Chevron’s move comes despite confirmation of a large gas resource strategically placed near the hub of the Australian east coast gas pipeline transmission network.
Chevron believes that the onshore Cooper basin no longer aligns strategically with the company’s global exploration and development portfolio, particularly as the exploration budget has been slashed for its worldwide operations.
There is some justification in that Chevron has access to trillions of cubic feet of natural gas offshore Western Australia in the North West Shelf, Gorgon-Jansz and Wheatstone projects from where it can easily target major international LNG buyers. The move comes hard on the heels of Chevron’s announcement to quit its 50% interest in the Caltex downstream holdings in Australia (OGJ Online, Mar. 27, 2015). The exit means that Beach and Icon now must find a new partner, or go it alone. In any event there is likely to be a slowdown of the Nappamerri Trough work program to a level that better matches current market conditions. Beach now reverts to 100% interest in PRL’s 33-49 in South Australia and 64.9% in ATP 855 in Queensland with Icon holding the balance of 35.1% in that block.
Chevron withdraws from ATP 855
Icon Energy Limited (ASX:ICN, “Icon”) wish to advise that Chevron Exploration Australia 1 Pty Ltd (“Chevron”) will not participate in Stage 2 in ATP 855 in Queensland.
The equity interests in ATP 855 following the Stage 2 decision will be, Icon 35.1% (unchanged) and Beach Energy 64.9% (Operator) (ASX:BPT, “Beach”).
Chevron advised Icon that extensive technical evaluation has confirmed a large gas resource and the potential for further appraisal and development, however, at this time the opportunity does not align strategically with Chevron’s global exploration and development portfolio. Stage 1 achieved all the exploration and technical objectives that were set by the Joint Venture partners.
Icon Energy Managing Director, Mr Ray James said, since the decline in oil prices the exploration industry has been operating in a capital constrained environment and I wish to thank Chevron and their unconventional natural gas group for their contribution to the Joint Venture in ATP 855.
Beach energy, DMITRE & the Minister for Mining have repeatedly assured the community that the drilling of the two exploration wells near Penola has been to “world’s best practice” and that the existing regulatory process would prevent groundwater contamination.
It now appears that the two containment ponds used to store the waste water and potentially toxic material from the drilling process are at risk of overflowing. Beach Energy revealed this in their recent application to Wattle Range Council to store this waste water at the Katnook Gas Plant on Argyle Road, Monbulla.
Beach Energy said “Due to time of year, the drill sump contents associated with some of these wells has not yet evaporated and given current and predicted rainfall rates, it was considered a risk to keep the drilling sump waste water in situ. To avoid overtopping, Beach energy acquired EPA Emergency Authorisation 45682 to enable Katnook (Gas Plant on Argyle Road) to receive and temporarily store up to 1ML (1 million litres) of drilling sump wastewater from the Bungallo-1 and Jolly-1 exploratory drilling well sumps.”
That the ponds would now appear inadequate within months of completion of drilling shows that no proper consideration was given to building these containment ponds. It is a relatively trivial process to model the required size of a containment pond using rainfall and evaporation data, of which at least 70 years is available for Mount Gambier.
Limestone Coast general practitioner Dr Catherine Pye, spokesperson for LCPA, says that the failure of Beach Energy to ensure that the containment ponds were adequate is a gross oversight that puts our soil and groundwater at risk of contamination by potentially highly salty water and potentially toxic chemicals. “Surely this casts huge doubt on the regulatory process itself, and on Beach Energy’s commitment to ensure its operations would not cause soil and ground water contamination” said Dr Pye.
“There are many unanswered questions about this whole process that raise concerns in the regulation process. I believe there should be a complete halt of any further drilling activities in the Limestone Coast until the apparent failure of process is subject of an independent enquiry. Otherwise the community can have zero confidence that our water and health are safe.”
Limestone Coast Protection Alliance are alarmed that Beach Energy are planning to use the drilling waste water from Bungaloo1 and Jolly1 wells to irrigate pasture. Analysis of this water shows it is half to two thirds the salinity of salt water, with high levels of sodium, potassium, heavy metals such as barium and copper, plus traces of hydrocarbons and phenol. Some of these hydrocarbons are polyaromatic hydrocarbons, a group of chemicals which are persistant with some causing cancer and deformities in developing babies.
LCPA are seeking more information from the EPA and the Dept of Water.
We have asked SELGA and the NRM Board if they will discuss at their next meetings in October.
MINING companies like to tar everyone objecting to proposed unconventional gas developments in the Lower and Mid South East as “greenies and professional activists”, according to chairman of the Limestone Coast Protection Alliance Will Legoe.
But the sheep and cattle producer and grapegrower says the membership of his organisation – which held its first meeting in November with 11 members – tells a different story.
“We now have 270 members, with 50 per cent of them farmers,” he said.
“And it’s growing every day, mainly through word-of-mouth, although we did attend the (SE) field days.”
Legoe says when people ring him, all he can do is point them to the relevant websites and documentaries.
“People in the region are mostly very conservative – but not on this issue,” he said.
“And they come from all walks of life – a big cross-section.
“They become more educated about the issues and build their knowledge, and this has added to the groundswell of support (for LCPA).”
Legoe had attended Beach Energy information sessions and others organised independently to discuss the possible impacts of unconventional gas mining.
He became concerned and decided to become active in the debate after assessing the ‘evidence’ presented and possible ramifications of developments.
“I have to shake my head when Beach Energy says we are ignoring the science – there is plenty of science saying the opposite (to the company),” Legoe said.
“The possibility of water contamination is a primary cause of concern, but there would be huge lifestyle and social pressures.”
If the March state election had been 12 to 18 months later, Legoe believes the notice of motions carried by SELGA calling for a moratorium on unconventional gas mining would have had more sway on politicians.
“I certainly hope we can still have some influence (on SE politicians) as our numbers grow,” he said.
* Full report in Stock Journal, July 3, 2014 issue.
PIP COURTNEY, PRESENTER: One issue that seems to polarise farming communities more than most others is coal seam gas. An economic saviour to some, others fear the long-term damage the industry could do to underground water supplies. The latest front in this ongoing battle is South Australia, with a proposal to drill exploration wells near prime agricultural land in the state’s south-east. More from Leah MacLennan.
LEAH MACLENNAN, REPORTER: Over the past five years, anti-coal seam gas demonstrations have mostly been restricted to Queensland and NSW.
But the protests are now spilling over the border into SA. These farmers and environmentalists are trying to stop gas exploration in the state’s south-east.
Beach Energy is putting down test drills near Penola. If it finds gas, the company may have to extract it using hydraulic fracturing – fracking – a technique that uses a pressurised mixture of sand, water and chemicals to tap into underground gas reserves.
REG NELSON, BEACH ENERGY: Well first of all fracking is a term we don’t use because it encompasses so many different things. It’s a process that’s been around since the 1890s, but, as I say, it covers so many things and it’s evolved in so many different ways. What we’re looking to do, possibly, is to apply very precise fracture stimulation to the deep rocks at probably four kilometres depth.
LEAH MACLENNAN: If this so-called unconventional gas extraction goes ahead, it will be the first time the technique has been used in an agricultural area in SA, and that’s angered some of the locals.
Over the last six years, Anne Daw has gone from south-east landowner to anti-mining lobbyist.
ANNE DAW, ANTI-MINING CAMPAIGNER: We only have 4.6 per cent agricultural prime land and cropping land left in the whole state outside of pastoral areas and that is not much to ask to be preserved and exempt from mining petroleum and unconventional gas.
LEAH MACLENNAN: The protest movement has drawn the attention of non-Government MPs in the South Australian Parliament, who are pushing for new laws to restrict fracking and mining in agricultural areas.
ROBERT BROKENSHIRE, SA FAMILY FIRST MP: And we need to address it before we lose our best agricultural land. Some say the Mining Act is balanced; I say that the Mining Act is in favour of mining and makes it difficult for farmers. I’m arguing that in the state’s interests, you know, we – Family First are not anti-mining, but we say there are places where you can mine and places where you should be able to unquestionably proceed with farming.
LEAH MACLENNAN: But the State Government isn’t interested. It argues there are sufficient safeguards overseen by the Environment, Resources and Development, or ERD, Court.
TOM KOUTSANTONIS, SA MINISTER FOR MINERAL RESOURCES: Prime agricultural land is exempt from the Mining Act, but people can, if they find resources, go to the ERD Court and have that, of course, overturned. And that’s right, and that’s the right thing to do because you can have multiple land use principles that do show that mining and farming can co-exist.
LEAH MACLENNAN: That’s of little comfort to people like Jack England, a third-generation farmer near Kingston, and he’s the vice-chair of Livestock SA.
JACK ENGLAND, LIVESTOCK SA: Some farmers will probably want to sell out and they’re quite pro-mining and there are others that are against it. So we have to be careful that we represent the interests of all farmers, make sure all the drilling, if it goes ahead, is Mickey Mouse and they do the right thing in terms of biosecurity, sort of equity for farms and that sort of thing.
LEAH MACLENNAN: The biggest concern for farmers is the potential impact of deep drilling, mining and hydraulic fracturing on aquifers.
JACK ENGLAND: The best thing about the south-east down here is we can drill a hole, dig a hole and we either have a well or into the sub-Artesian Basin and we’ve got water for our livestock and/or irrigation and the wine crops as well. So that’s the most stable resource that we’ve got down here and we certainly want to protect it as much as possible.
LEAH MACLENNAN: Any threat to aquifers is of great concern to the local wine industry.
DENNIS VICE, HIGHBANK WINES: We know for a fact that there are three aquifers. We’re actually standing just a matter of a few feet above the first aquifer and it’s a very unique situation in vineyard areas around the country.
LEAH MACLENNAN: Dennis Vice makes organic wine from his vineyards in Coonawarra and he’s deeply worried about Beach Energy’s exploration drills.
DENNIS VICE: Beach conducted a local meeting here and invited everyone to come along to kind of put their position forward, and I think from then on people began to realise that it was a reality, that they were really seriously going to do exploratory wells and put wells down through the aquifers, trying again to use the fracking technique to be able to extract gas from these wells that are tremendously deep.
LEAH MACLENNAN: Because the wells will go through aquifers, locals want to make sure there’s no leaking or contamination.
REG NELSON: What we will do, and this is part of our normal practice, is to drill and case those aquifers so that they’re entirely separated before we drill and possibly encounter any gas. Now I say this because people have drilled there and we have drilled there for so-called conventional gas and made gas discoveries and there’s been no detriment.
LEAH MACLENNAN: This is not the first time there’s been mineral exploration in the region.
Debbie Nulty’s farm adjoins Anne Daw’s property. In the early 1980s, Western Mining explored this area for brown coal. The pair say this old drill well is an example of what can go wrong.
DEBBIE NULTY, FARMER: We noticed that it was falling away from the side and we were concerned about the aquifer.
LEAH MACLENNAN: Beach Energy says it wouldn’t leave its wells in such a state, using this photo as an example of one of their rehabilitated drill holes.
REG NELSON: I’ve been farming most of my life in various areas, presently broadacre cropping. I’ve lived in rural communities, I empathise with rural communities. I believe in the Golden Rule, you know: do unto others as you would have done unto yourself.
LEAH MACLENNAN: Initially the Nultys were told they would have to rehabilitate the well themselves, and if they didn’t, they could face a $15,000 fine.
And how much would it have cost you to rehabilitate yourself?
DEBBIE NULTY: I’m not sure about the costs because in my mind it wasn’t my drill hole and I really hadn’t even thought that I was ever going to fix the drill hole. It would have been – I would have, yes, yelled from the treetops before I would have fixed it, basically.
LEAH MACLENNAN: After long negotiations, the Government agreed to fix the dilapidated well.
It’s a small victory for Debbie Nulty and for Anne Daw, but these two women are fighting a much longer battle: trying to stop mining on agricultural land altogether.
MEDIA RELEASE 18th February 2014
DONATIONS REVEALED FROM BEACH ENERGY AND SANTOS TO THE LIBERALS
Don Pegler, Independent M.P. for Mount Gambier, has accessed public records that show large donations from Beach Energy to the Liberal Party, over the past 3 years. Don Pegler has written to the Minerals and Resources Minister, Tom Koutsantonis, requesting for a moratorium on fracking unless proven safe. He has extended this to say that no petroleum, geothermal or mining projects should be allowed on prime agricultural land South of Goyder’s Line until it is proven safe and the community believes it is safe.
Mr. Pegler has revealed that mining and petroleum companies have given substantial donations to the Liberal Party including Beach Energy Ltd. who have donated $121,300 to the Liberal Party over the past 3 financial years. Santos has also donated $221,420 to the Liberal Party over the past 3 financial years. Labor have received donations also from mining/petroleum companies over the past 3 financial years.
This has been revealed today, in the footsteps of the Liberal Party stating that they will promise a Standing Committee of the Parliament for an inquiry into the sustainability of mining in the South East of South Australia, with the Liberal’s terms of reference.
People across the state, including lower Eyre Peninsula and Yorke Peninsula are concerned about the impacts of mining on their communities on prime cropping land. Now the Limestone Coast community are banding together to stop unconventional gas, which includes shale oil, shale gas and tight gas, as well as mining of coal and other minerals. Among their concerns are the impacts on the SE aquifers, contamination, tourism and health concerns. One shale exploration well near Penola has already commenced drilling.
Anne Daw, agricultural advocate and member of the Round Table of The Roadmap For Unconventional Gas Projects in South Australia has raised questions on how this Standing Committee will be formed. A bill is required for an enquiry to be passed by both parties to support the enquiry. A second bill needs to be passed to determine the committee.
The committee should be totally independent. Anne wants to have input to the terms of reference for any parliamentary inquiry, including reliable witnesses from various fields, to be included from across Australia. She will also be requesting that the committee visits areas of invasive gas fields in Queensland and also to visit affected areas of shale gas fields in the USA. Both coal and shale projects impact communities. The same environmental and health risks apply, whether it is shale or coal.
MEDIA CONTACTS Anne Daw mob. 0435 030 998
Don Pegler, MP. mob. 0417 851 466 ph. 08 8724 9944
Beach Energy prepares to start gas search – Articles in Penola Pennant 15th Jan 2014