CEDA Unconventional Energy Options
3 September 2012
Challenges and Opportunities for
Unconventional Gas
Professor Quentin Grafton
Bureau of Resources and Energy Economics
bree.gov.au
Global Gas Resources and
Production
bree.gov.au
Global Gas Resources
bree.gov.au
Projected Gas Production 2035
Conventional
Russia
United States
Unconventional
China
Iran
Qatar
Canada
Algeria
Australia
Saudi Arabia
Turkmenistan
0
200
400
600
800
1 000
bcm
Unconventional gas could represent 40% of total gas supplied
Source: IEA 2011
bree.gov.au
Mtoe
Projected Primary World Energy Demand
5 000
Additional
to 2035
4 000
2010
3 000
2 000
1 000
0
Oil
Coal
Gas
Renewables
Nuclear
gas & renewables meet more than 60% of incremental energy demand
Source: IEA 2011
bree.gov.au
Australian Resources and
Production
bree.gov.au
Australia’s Gas Resources
3.50
3.00
2.50
2.00
1.50
1.00
0.50
tcm
0.00
1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
conventional gas
Source: Geoscience Australia2011
coal seam gas
bree.gov.au
Australian Gas Production
60
50
40
30
20
10
0
bcm
1973-74
1977-78
1981-82
1985-86
Natural gas
1989-90
1993-94
1997-98
2001-02
2005-06
2009-10
Coal seam gas
bree.gov.au
LNG Exports (Volume & Value)
25
12
LNG exports
Values
10
20
8
15
Mt
6
10
4
5
0
1989-90
2 A$b
($2011-12)
1992-93
1995-96
1998-99
2001-02
2004-05
2007-08
0
2010-11
bree.gov.au
Queensland LNG Projects
Under
Constructio
n
QCLNG
Investment Train
(US$b)
s
Start Mt
Date
20
2
2014
8.5
GLNG
19
2
2015
7.8
APLNG
23
2
2016
9
Total
62
6
25.3
bree.gov.au
Unconventional Gas production
bree.gov.au
Unconventional Gas
bree.gov.au
Coal Seam Gas
Source: Williams and Pittock 2012
bree.gov.au
Risks that Require Monitoring
• Well-bores and their integrity
• Water injection (hydraulic fracturing),
extraction and storage
• Air quality and noise levels
• Traffic of vehicles
bree.gov.au
Better Practices
• Full community engagement over local
concerns (land access protocolos,
disclosure, etc.)
• Effective risk management (venting of gas,
water management, etc.)
• International Energy Agency (IEA)
estimates that adopting Best Practices
would increase costs of production by only
about 10%
bree.gov.au
Gas as a Transitional Fuel
bree.gov.au
CO2 Emissions during Electricity
Generation (grams per kWh)
Natural Gas
CO2 emissions
Crude Oil
Coal
0
200
400
600
800
1000
Source: IGU 2012
bree.gov.au
Reductions in CO2 Emissions
• IEA estimates that with ‘Golden Rules’ in terms of
unconventional gas production with adequate
environmental practices in place global CO2 emissions
would be 1.3% less in 2035.
• Globally, substitution of coal and oil by gas would
projected to reduce global CO2 emissions by 740 Mt in
2035
• In Australia, if gas substituted one-for-one for reductions
in coal-fired electricity generation and based on BREE’s
long-term energy projections by 2035 would have 15%
less CO2 emissions in electricity generation sector.
bree.gov.au
Thank you
Quentin.grafton@bree.gov.au
bree.gov.au