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I think we all know that Australia is blessed with
many natural resources, it doesn't matter whether
it's aquifers and soils to support agriculture,
mineral resources to support the mining
industry, or petroleum resources which are the
underpinners for the oil production and,
in fact, the natural gas production which is very
much a part of the energy mix that we have here in Australia.
And the challenge and it's almost--it's almost like
banal to say--the challenge for us is,
how do we choose to use those resources that we've
been gifted as a part of Australia,
what's the right priority?
And how do we as a society make those decisions,
get the balance right, so that when we look at our
children and grandchildren we can look them in the
eye and say with the knowledge we knew at the
time we made the best possible solution,
and we thought about not today but also what the
impact of that's going to be for future generations.
So I think this topic that we're talking about today,
about the social license to operate,
is one that, yes, is drawing a lot of headlines
for coal seam gas but is actually a very important
one for consideration of a conference such as the
ABARES Outlook Conference, about how we as
Australians want to take use of those resources but
also do it in the right context.
So what I'd like to do is talk a little bit more
focussed, of course, on natural gas and explore
what that means in terms of footprint on the
regional areas where we're very active and also the
social context that goes with that.
Now of course coal seam gas and I'm surprised I
actually have to repeat this many times,
but is in fact--natural gas comes from four types of rocks.
It comes from sandstone.
It comes from carbonites.
It comes from coal and it comes from shale.
And it's all the same when it comes basically to the
surface, it's methane molecules.
And the marketing genius who decided to call it
natural gas I'm forever grateful for that because
it was wonderful, wonderful branding but it
is methane at the surface that we burn,
and is one of the lowest carbon footprint energy
fossil fuels that we can use today.
So we just need to talk about how this all works
with the regional areas.
Keep in mind natural gas production in Australia
has been going on for just over half a century so
it's not a new surprise.
Gas wells on a farm are things that have been
there for a very, very long time.
So key messages today: really,
you know, coal seam gas it is already transforming Australia.
It's not something in the future.
It is here now and you saw some of the slides from
Peter of what that means.
Just to give you an idea, just think,
the coal seam gas to LNG piece, is investing right now
$30,000 a minute in capital investment that's
coming into Australia.
And a very large proportion,
almost a half of that, is in the regional areas of Australia.
It's not a large Korean built platform that's
sitting over the horizon.
It's actual investment in wells in regional areas.
And it's not a case of just 10 wells and we all go home.
It's wells that will be drilled,
monitored, remediated, moved on,
that will go on for decades and decades.
So there is long-term employment that goes on in
that place.
In fact, this is the largest regional
investment by the petroleum industry,
the largest onshore investment ever in
Australia's history and that's why it's important
for us to be fully switched on as to the
implication of what that means.
It's a 21st century technology and there's a
number of aspects to that.
One is environmentally.
It is the lowest cost way that we can reduce our
carbon footprint.
It's to increase the use of gas-fired electricity.
It runs at about 53% of the carbon emissions from
a coal fired plant.
It's here today ready now to be utilised.
And it fits into, I think, a very important energy mix
that we have in Australia.
It's one part of the solution.
It is not the only solution.
And yet in terms of a 21st century resource,
when you look at the resource,
it's multiple uses of the same resource.
And I think in the 21st century that's an
important thing for us to do.
You do get water from coal seam gas and we are not
the end users so we make it available for
irrigation, we reinject it,
we make it available to towns to use that water.
So it's a utilisation of that resource.
Of course we get the gas and then you still have
the coal for future use for the next generations
to come along.
And I think in the world of the 21st century
multiple uses of single assets is the theme that
we need to pursue.
And then of course when it's all over you take
away the wells and you go back to whatever the
original use of the land was,
whatever the agricultural or community use of that
land was.
So it very much fits well with the 21st century.
And of course none of this is achievable without the
support of the community that we need to keep them
switched on with.
So a little bit about, well,
what's all the fuss about?
And we saw some numbers from Peter but this is
just the east coast of Australia that I'm talking
to and you can see already today 85% of the natural
gas in Eastern Australia is in coal seam gas and by
far the largest proportion of that is in Queensland
with still the New South Wales side of it to
properly reach exploration and the development phase of that.
The other interesting thing is to look at the
gas production and it is a little over the third of
the natural gas in Eastern Australia is already
coming from coal seam gas, so you're probably burning
methane molecules, natural gas,
in Canberra that have come from coals as they work
their way through the pipe system.
Queensland is already an exporter of gas to the
southern states and territories such as here
in Canberra and New South Wales.
So it's a very, very important industry as of today.
But what about the scorecard,
because it's not as simple as just reserves and production.
And I kind of collected some data and just put it
altogether on one page and it covers a number of
different areas.
We've talked about it being one third of
Australia's natural gas.
Today we're adding about 13 jobs a day into coal
seam gas and that's a mix between regional and the
engineering, that's going on out on the LNG side of
things but about 13 per day being added.
Capital investment I've spoke about,
but the other interesting thing is well,
you know, what about--what about,
you know, the community meetings?
What are you doing in the local communities and I'm
going to talk more about it later but in 2011 there
were 543 community meetings held.
I think I went to almost all of them.
No, that's not true, but there is a lot of
engagement going on and I'm always impressed with
how many you have to have before you actually start
to move the needle but we are very much in this.
Every two days, three community meetings will
have been held to explain what we're doing in these areas.
I know I've shared the podium with Ray in Dolby
on water forums and we had probably a hundred people
in the room and talked about the aquifer impacts
and how we're monitoring that and measuring it.
The contributions, it's a $1 million a week to local communities.
That's not a spend, that's not the taxes,
that is the sponsorships of rugby teams,
it is the foundations put in there,
the charitable donations, the 100+ hours of
helicopter time that's donated to communities for
the use of medical evacuations,
or indeed things like the floods that are going on
in parts where the coal seam gas people are active.
So we understand as an industry that's an
important part of what we're about.
We've all done that with the production in 2011 of
the princely amount of gas--of water of 16
gigalitres and that's about equivalent of a few
thousand hectares of cotton farms that you
would use on that area.
So for me that is well--a very small and very
manageable figure as of 2011 to produce one third
of Eastern Australia's gas.
That number will go up, yes it will,
but just to put it in context.
And to produce 16 gigalitres of water we
have in place and monitor 686 water bores.
We have to monitor every spring within 70 km of our
activities in Queensland and report back on a
quarterly basis to the governments to make sure
we understand what's going on in the aquifers,
what the impact is and so forth.
And I think we have state of the art,
there's a water portal for one of the CSG operators
where you can click on the water bore and actually
see what are the measurements of the
quality, what's the level on the bore,
how much has changed over the last,
and some of them go out for 10 years.
That's unprecedented transparency in
Australia's history in terms of bore by bore,
well by well, quality of water that's being produced.
And that's part of the transparency that we must
have as an industry.
And we sign--people talk about the farmers and
you've seen the pressure and lock the gates--
we're signing about four access agreements a day
with farmers who have sat down,
and landholders, who have sat down and talked to the
coal seam gas companies and said "Yes,
here's the compensation, this is how it works,"
and they've signed up.
And to date, no one has wound up in a court.
We don't like that as the right answer.
It's a negotiation that goes on and the
compensation packages are very comparable to what
you see in Canada.
They're very comparable to what you see in the U.S.