Oil and gas lobby sprays the black stuff


By Leith van Onselen

The “voice of Australia’s oil and gas industry”, the Australian Petroleum Production & Exploration Association (APPEA), has issued a media release slamming The Australian Institute’s (TAI) release yesterday of a report entitled “Fracking the future”, which attempts to bust gas industry myths about coal seam gas (CSG), while at the same time highlighting the potential health and environmental risks:

The release of yet another Australia Institute political polemic styled as a ‘research paper’ adds little credible information to the debate surrounding how best to grow the economy and put downward pressure on energy costs, the Australian Petroleum Production & Exploration Association (APPEA) said.

At a time when most Australians are concerned with the economic challenges facing the economy and rising costs, the Greens-linked institute has released a compilation of recycled papers that rely heavily on media reports, internally commissioned surveys, and policy papers consistent with the group’s strategies to halt Australia’s coal and gas export industries.

It should be recognised that The Australia Institute (TAI) is part of a wider movement to stop coal and coal seam gas development in Australia – a movement that includes Greenpeace and Beyond Zero Emissions, so its motives are clear.

Perhaps not surprisingly, today’s report also turns a blind eye to the gas industry’s long track record of safely supplying energy to Australia and the world, while developing mutually-beneficial relationships with thousands of landholders across the country.

TAI’s claim that increasing east coast supply will do nothing to place downward pressure on gas prices displays a lack of understanding of supply and demand forces. Among others, detailed analysis by the Independent Prices and Regulatory Tribunal and the Australian Government Department of Industry has shown that increasing gas supply in the east coast will place downward pressure on gas prices. Further, the AGL Working Paper released earlier this week shows that increasing gas supply in NSW will place downward pressure on gas prices.

The US experience is also instructive. Rising gas prices (to more than $US10/MMBTU in 2008), delivered the incentive for a massive exploration boom. The success of this exploration and the scale of the US economy allowed rapid commercialisation of gas resources allowing gas prices to fall over time to around $US4/MMBTU. The outcomes were not driven by government interventions…

It is important to keep this issue in perspective. According to the Department of Environment National Greenhouse Gas Inventory, fugitive emissions in 2012 resulting from all oil and natural gas production represented just 2.3% of all greenhouse emissions in Australia (fugitive emissions from coal were 3.1%). For natural gas from coal seams, fugitive emissions were about 0.3%. By comparison, emissions from agriculture accounted for 15.9% of total Australian greenhouse gas emissions.

The industry is regulated by more than 150 statues and by more than 50 government agencies. Calls from The Australia Institute for more regulation do little more than underline how little it actually understands the industry it consistently tries to undermine.

With energy costs rising, now is the time to cut the red tape constricting the gas industry’s capacity to deliver new supplies – not increase it, as the Australia Institute suggests.

Australian Government will begin its “Repeal Day” process, with a Bill going to Parliament designed to reduce the volume of regulation and eliminate duplication between state and federal governments. The Australian oil and gas industry is encouraged by the Australian Government’s commitment to effective and efficient regulation and the reduction of unnecessary costs associated with doing business in Australia.

APPEA’s claims of TAI bias may or may not be true. It does have an orientation towards policy recommendations that are more commonly associated with the political Left but that does not necessarily mean bias. TAI is funded by Murdoch family interests, which is not a name one would associate with mad greenies, and let’s not forget that it is state Liberal Parties that are blocking CSG, not greens.

It’s also a little brazen for an oil and gas lobby, which obviously has a vested interest in advancing CSG,  to accuse others of bias.

So let’s leave aside APPEA’s ad hominem attacks on TAI and examine its main arguments in favour of CSG.

First, let’s look at the safety aspects, and the APPEA’s claim that TAI “turns a blind eye to the gas industry’s long track record of safely supplying energy to Australia and the world, while developing mutually-beneficial relationships with thousands of landholders across the country”.

The below video segment aired on 60 Minutes last year questions the APPEA’s claims. What it shows is lots of Australian farmers being forced to allow CSG mining against their will, along with several examples of gas leakage from wells and the possible poisoning of ground water. Queensland’s Mines Minister, Stephen Robertson, is also shown having absolutely no idea about the chemicals being pumped into the ground in the process of mining CSG.

Nor is evidence from the extraction of shale gas in the US encouraging. As highlighted in detail in the documentary Gaslands (below), many communities in the US have been adversely impacted by natural gas drilling and, specifically, hydraulic fracking (also used in CSG). The film is highly disturbing as it shows the destruction of dozens of US farming communities via poisoning of drinking water and the natural environment, often leading to severe health problems for its citizens.

There have also been a range of academic papers released highlighting the health and safety dangers of hydraulic fracking.

Second, the APPEA’s claim that CSG will significantly lower gas prices, as shale gas has done in the US, is also questionable.

As argued on Monday, comparisons with the US aren’t valid. The US is primarily a domestic market, whereas Australia’s gas market will soon become linked to the global market, requiring us to pay global prices (less the cost of liquefaction and shipping). In the US, unlike Australia, significant export restrictions on domestic gas exist. The Natural Gas Act 1938 requires anyone who wants to import or export natural gas, including LNG from or to a foreign country, to first obtain an authorisation from the Department of Energy. The granting of export licenses are only a recent phenomenon, so the US gas price is not yet linked to the world market (although this will gradually change as LNG export plants are built).

Accordingly, the huge positive supply shock from the shale gas boom has directly benefited domestic US gas users via lower prices, whereas if a similar coal seam gas (CGS) boom occurred in New South Wales or Victoria, chances are that much of the gas would be exported, therefore domestic gas prices would not be lowered to anywhere near the same extent as in the US in the absence of some kind of domestic reservation policy, which APPEA does not seem to want.

Overall, the APPEA’s claims on the benefits to Australians from CSG, along with its health and safety impacts, appear spurious. The benefits from lower gas prices appear overstated and big question marks remain over the safety of fracking, including the risks posed to ground water stored in Australia’s Artesian Basin and the agricultural industry more generally. Policy makers in New South Wales and Victoria, along with the Federal Government, would be wise to proceed with caution on CSG.

[email protected]


Leith van Onselen


  1. APPEA: ‘The industry is regulated by more than 150 statues and by more than 50 government agencies.’

    50 agencies!!! When everyone is responsible, then no one is responsible. The buck passing and blame shifting that such a diffuse regulatory framework enables is simply unworkable, and guaranteed to be ineffective.

    One federal regulator for all CSG activity is required, and required now.

    • Either that or leave it as a state responsibility, with each state putting full responsibility in the hands of one agency. Whichever way you went (federal or state) the single agency would be a far better prospect than what we have now.

    • Yes, recently it has done so. However, Santos doesn’t have a whole lot of choice, because its conventional reserves are running out and its exploration for more conventional reserves has been unsuccessful.

  2. ” therefore domestic gas prices would not be lowered to anywhere near the same extent as in the US in the absence of some kind of domestic reservation policy, which APPEA does not seem to want.”

    But they would be lowered? Good. So TAI is wrong.

    “Policy makers in New South Wales and Victoria, along with the Federal Government, would be wise to proceed with caution on CSG.”

    Heartily agree. But maybe I would emphasise the “proceed” (while agreeing that caution is wise) whereas others would emphasise the “caution” to the extent of denying any progress.

  3. bolstroodMEMBER

    Alex, all gas mined in Australia without a reservation policy will be sold at world parity prices.i.e. 2 or 3 times above present domestic price. TAI is not wrong.

    How to proceed with caution? First do INDEPENDENT base line testing of air & water quality. The industry/ Govt. has not done this nor do they show any inclination to do so. Instal monitoring wells, at the moment there are none in NSW. Even this is not going to give us the ability to repair Aquifers that will be damaged.
    Second do a thorough examination of current world wide scientific research on the effects of Unconventional gas mining on living organisms,aquifers,air quality.
    Thirdly research the social impacts. i.e. effects on pre-existing enterprises &industries, real estate values,local govt. services(roads, rates)
    Fourth , employ the Precautionary Principle. If you don’t know don’t do it.
    When all these criteria are met ,then drill your first well

    • TAI might still be wrong if east coast gas prices rise above world parity, which seems likely if no CSG is allowed in Vic and NSW. You need to use the proper basis for comparison, which is not the past but the alternative future.

      Don’t have any great issues with the rest of your post. State governments should be getting on with it instead of procrastinating.

      • You protest too much, Alex. TAI certainly appear to be far more “right” than the gas industry, whose claims seem to contain more spin than substance.

        I also find it interesting that you have attacked TAI’s position, but have not questioned the gas industry’s. Do you have a connection? Are you conflicted in any way?

      • bolstroodMEMBER

        “You need to use the proper basis for comparison , which is not the past but the alternative future.”

        Oh you mean renewables ? I can live with that.

        If we do that then gas is obselete & we don’t have a problem.

      • Don’t be daft. I’m a humble retiree with no direct interest in any oil or gas company. Conspiracy theorising is beneath you.

        TAI are not the unbiased saints you seem to think. Check Richard Denniss’s links with John Hepburn and Bob Burton, for a start. Then look at some of the other funding for the TIA – the Thomas Foundation, for example.

        • “TAI are not the unbiased saints you seem to think.”

          When have I claimed that they are “unbiased saints”? In the article I stated explicitly: “APPEA’s claims of TAI bias may or may not be true”.

          Again, it is hilarious that you question TAI’s motives but not those of the gas industry itself, which has a clear vested interest. How about taking your blinkers off?

      • Deleting my response to your baseless accusation is a pretty low blow, DE. How do you sleep at night?

        • I didn’t delete your response, it went to the spam filter for some reason. It has been restored. I sleep at night just fine, thanks for asking. I’m pretty tired after working 10-11-hour days.

      • Alex how did the self regulating financial sector+ thingy work out in the end?

        skippy… self interest vs society

      • @UE: I meant UE, not DE obviously. Apologies to DE.

        @bolstrood: I hope you don’t think that retort was clever.

        @skippy: I fail to see the relevance of your comment to either fracking, the oil and gas industry or any comment I have made on this thread. Care to elucidate?

      • To focus on price in light of the enormity of long term externalities [true costs] is obfuscation or down right pettifoggery. A common tactic applied by some to drag the debate away from more meaningful points of order. just saying…

        skippy… that I am not the only one to question your comment, should encourage you to check you cognitive bias.

      • @UE: Everybody knows the gas industry has a vested interest. I didn’t think it necessary to acknowledge the obvious. We know they are pushing their barrow. That is why I agreed with bolstrood’s suggestions re government doing the homework properly before proceeding.

        What I object to is TAI releasing reports without acknowledging their potential conflicts. It’s different with industry bodies. We know they are there to push their own interests. My other objection is with state governments procrastinating rather than getting on with doing the proper assessments. An issue relevant to the article cross-posted from The Conversation about politicians and infrastructure.

        Anyway, my apologies for suggesting you deleted my post. I did not realize that I could get an email saying my post had appeared when in fact it had been placed in the spam filter. (Maybe something to be looked at next time you do a site update? Not that I want to pile any more work on you personally – sounds like you could use a break, and well-earned too.)

      • dumb_non_economist

        No offence Alex, but i don’t recall you wanting potential conflicts noted in reports from the likes of IPA, CIS, Lowy/Syd Instit. etc.

      • @dne: but you do remember threads mentioning their reports on which I commented? You have an impressive (or should that be obsessive?) memory. I’m flattered.

  4. Hang on, I thought all the big companies were banging on about not needing to do any fracking, because the CSG is relatively close to the surface and can be extracted without needing to pump anything down there?

  5. Pretty weak response from APPEA, notice that there was no dealing with the industry’s claimed jobs contribution either. TAI orig piece using census data seemed to create plausible doubt re the claimed levels.

  6. TAI Biased? You betchya.

    Gasland was entertaining but error ridden – as the director said ‘I’m a theatre guy’ and the aim was not accuracy but debate (which should proceed on evidenced based data).

    Allowing fracking utilising best practice principles should pose few issues.

    It’ll happen anyway, just a matter of time.

    • I see it is still impossible to link to Catallx y

      An interesting piece on anti coal and gas activism – TAI doing its bit to help I assume.

      Worth a look.

      c a t a l l a x y f i l e s

      • Sorry, there is quite of lot of non industry study’s that can’t be lumped into the pro and anti / bi polar / polemic / binary / con reality some would like to pigeonhole the conversation into.

      • I’ve never denied a pro-resources stance.

        The resource sector is essential to near every facet of modern existence. I abhor the hypocrisy of greens and leftists who fail to comprehend this.

      • Popular mechanics… good grief… are the sky’s filled with cars yet?

        “All meaningful environmental oversight and regulation of the natural gas production was removed by the executive branch and Congress in the 2005 Federal Energy Appropriations Bill. Without restraints from the Clean Water Act, Safe Drinking Water Act, Clean Air Act, and CERCLA, the gas industry is steamrolling over vast land segments in the West. Exploitation is so rapid that in less than 6 months in one county, 10 new well pads were built on the banks of the Colorado River, the source of agricultural and drinking water for 25 million people downstream. Spacing has dropped from one well pad per 240 acres to one per 10 acres. From the air it appears as a spreading, cancer-like network of dirt roads over vast acreage, contributing to desertification.”


        skippy… BTW have the greens become the new commie in the wood pile, Russia brought back Eastern Orthodox, so there goes that meme.

      • See you can’t even engage in the material, only slur everything.

        BTW this is one area of my work i.e applied science wrt civil and industrial construction, experience and associates on a international level.

        “general audience”

        Coming from a commenter that links Popular Science is deliriously absurd in context.

        OK, so is this as good as Popular Science in your opinion?

        “Estrogen and Androgen Receptor Activities of Hydraulic Fracturing Chemicals and Surface and Ground Water in a Drilling-Dense Region
        Christopher D. Kassotis, Donald E. Tillitt, J. Wade Davis, Annette M. Hormann, and Susan C. Nagel
        DOI: http://dx.doi.org/10.1210/en.2013-1697
        Received: July 24, 2013
        Accepted: December 02, 2013
        Published Online: December 16, 2013


        The rapid rise in natural gas extraction using hydraulic fracturing increases the potential for contamination of surface and ground water from chemicals used throughout the process. Hundreds of products containing more than 750 chemicals and components are potentially used throughout the extraction process, including more than 100 known or suspected endocrine-disrupting chemicals. We hypothesized that a selected subset of chemicals used in natural gas drilling operations and also surface and ground water samples collected in a drilling-dense region of Garfield County, Colorado, would exhibit estrogen and androgen receptor activities. Water samples were collected, solid-phase extracted, and measured for estrogen and androgen receptor activities using reporter gene assays in human cell lines. Of the 39 unique water samples, 89%, 41%, 12%, and 46% exhibited estrogenic, antiestrogenic, androgenic, and antiandrogenic activities, respectively. Testing of a subset of natural gas drilling chemicals revealed novel antiestrogenic, novel antiandrogenic, and limited estrogenic activities. The Colorado River, the drainage basin for this region, exhibited moderate levels of estrogenic, antiestrogenic, and antiandrogenic activities, suggesting that higher localized activity at sites with known natural gas–related spills surrounding the river might be contributing to the multiple receptor activities observed in this water source. The majority of water samples collected from sites in a drilling-dense region of Colorado exhibited more estrogenic, antiestrogenic, or antiandrogenic activities than reference sites with limited nearby drilling operations. Our data suggest that natural gas drilling operations may result in elevated endocrine-disrupting chemical activity in surface and ground water.”


      • C’mon mate. Endocrine disruptors are to be found everywhere – byproduct of modern life and reliance on chemicals in all forms – from your humble plastic container, your anxiety medications, through to a large number of industrial processes.

        The ‘study’ is loosely suggestive at best. You can do better 😉

      • You still have provided zero evidence nor addressed the material 1d1k, your wave of the hand is insufficient. And speaks more about your ability and the need to keep from showing it more than having a constructive conversation,

        Eagle Ford

        According to an investigation into air quality and Eagle Ford oil/gas wells by the Center for Public Integrity:[21]

        there has been a 100-percent statewide increase in unplanned toxic air releases associated with oil and gas production in the region since 2009;
        only five permanent air monitors are installed in the 20,000-square-mile Eagle Ford region;
        drillers of thousands of wells are allowed to self-audit their emissions without reporting them to the state, and the Texas Commission on Environmental Quality (TCEQ) does not know some of the facilities exist. An internal agency document acknowledges that the rule allowing this practice “[c]annot be proven to be protective”;
        companies that break the law are rarely fined: of the 284 oil and gas industry-related complaints filed with the TCEQ by Eagle Ford residents between Jan. 1, 2010, and Nov. 19, 2013, only two resulted in fines despite 164 documented violations. The largest was just $14,250;
        the Texas legislature has cut the TCEQ’s budget by a third since the Eagle Ford boom began, from $555 million in 2008 to $372 million in 2014.

        Dish, TX

        By 2009, residents of DISH, Texas living near 11 natural gas compression stations became concerned about the odor, noise and health problems they were experiencing, including headaches and blackouts, as well as neurological defects and blindness in their horses. Their mayor reported the accounts to Texas regulators and eventually hired a private environmental consultant, who in 2009 found that air samples contained high levels of neurotoxins and carcinogens.[22]

        All one has to do is look at Texas

        For eight months, InsideClimate News, the Center for Public Integrity and The Weather Channel have examined what Texas, the nation’s biggest oil producer, has done to protect people in the Eagle Ford. What’s happening in Texas also matters in Pennsylvania, North Dakota and other states where hydraulic fracturing, or fracking, has made it profitable to extract energy from shale. Our investigation reveals a Texas system that protects industry more than the public:

        Air monitoring is so flawed that Texas knows little about pollution in the Eagle Ford, an area nearly twice the size of Massachusetts.
        Thousands of facilities are allowed to self-audit their emissions, so authorities have no idea how much pollution they release.
        Companies that break the law are rarely fined. Of 284 complaints Eagle Ford residents filed in a recent four-year period, only two resulted in fines despite 164 documented violations.
        Texas lawmakers have cut the state’s budget for environmental regulation since the Eagle Ford boom began, from $555 million in 2008 to $372 million in 2014.
        Since 2009, the number of unplanned toxic air releases associated with oil and gas production increased 100 percent statewide.


        Even the pro market media ran it.


        As I said this is my field, want to talk about compliance, its a fig leaf. From the inception of protocols to site application its full of forgery, diminishment, till the boxes get lost or thrown in the bin… floods, fires, changes of ownership, shit happens.

        Hell one of my sons football team mates father owns a old family drilling company, to them its just money, and anything that gets in the way is bad… en fin. Real nice guy too.

        “its everywhere’ so bend over and like it? Even if it kills indiscriminately? Modern life? Pasted on to future generations via compromised genetics? 3d1k I’ve probably got some 2 pack zinc primer in the shed, hows about I flick one little drop in your eye and see how you go.

        skippy… so far you have shown a complete lack of both knowledge nor experience in these matters save a short term market view point. Not very conducive to scientific matters imo, try harder.

    • @ spleenblatt

      Is your projection the best you have to offer this post or thread?

      So far the evidence I’ve linked to far out weighs the personal opinions of the detractors or attempts to vilify them by non sequitur or emotive rhetorical plea’s.

      Skippy… please refute the example of Texas, hay conservative red necks have little in common with greens… right? Aussie farmer to boot, get a grip.

      • I would suspect spleenblatt’s “Is that the best you can do after 30 minutes googling endocrine disruptors” is actually directed not towards you, but at 3″ d1k.

        This is quite peculiar how only yesterday I made a query about endocrine disruptors, probably the first time they’ve ever been mentioned on MB, then it dominates this thread.

        I agree with your quote yesterday about toxicology, for mind, nothing indicate the direction of your long term health than existing blood readings.

        I didn’t quite gauge your response yesterday btw, about household filtration.

        Did you suggest bleach?

        I’ve got the impression that reverse osmosis doesn’t remove endocrine disruptors despite their marketing, and solid carbon filters less than 100%, albeit they market themselves at 90% plus.

        So your advice…solid carbon filter candle in a ceramic urn, then add bleach to that runoff yeah?

      • yeah…

        Purifying Water During an Emergency

        The treatments described below work only to remove bacteria or viruses from water. If you suspect the water is unsafe because of chemicals, oils, poisonous substances, sewage or other contaminants, do not drink the water. Don’t drink water that is dark colored, has an odor or contains solid materials.


        Amends spleenblatt if that was the case.

        skippy…. Hell was trying to keep it simple, did not even get into VOC et al.

      • No, I’m talking beyond that. Scheme water even, as far as endocrine disruptors go. I know you can absorb endocrine disruptors through your skin via bathing, but more about what I drink out of the tap.

        I am most concerned about anti androgens, and I believe they are of increasing concentration, at least across the U.S.

        There isn’t much disclosure of it in Australia, but it’s not exactly a pro-androgen environment.

        I knew of VOC’s as well, again I think only solid carbon removes them yeah? Not even reverse osmosis works?

      • In the link I gave yesterday it points out that a glass of water left out for a few hours in an office building shows elevated concentrations. The stuff is even in the new snow in the ant – arctic, persistent and accumulative.

        “U.S. minority infants are born carrying hundreds of chemicals in their bodies, according to a report released today by an environmental group.

        The Environmental Working Group’s study commissioned five laboratories to examine the umbilical cord blood of 10 babies of African-American, Hispanic and Asian heritage and found more than 200 chemicals in each newborn.

        “We know the developing fetus is one of the most vulnerable populations, if not the most vulnerable, to environmental exposure,” said Anila Jacobs, EWG senior scientist. “Their organ systems aren’t mature and their detox methods are not in place, so cord blood gives us a good picture of exposure during this most vulnerable time of life.”

        Of particular concern to Jacobs: 21 newly detected contaminants, including the controversial plastics additive bisphenol A, or BPA, which mimics estrogen and has been shown to cause developmental problems and precancerous growth in animals. Last month, researchers reported that male Chinese factory workers exposed to high levels of the chemical experienced erectile dysfunction and other sexual problems.

        “BPA is a really important finding because people are really aware about its potential toxicity,” Jacobs told reporters. “This is the first study to find BPA in umbilical cord blood, and it correlates with national data on it.”

        Jacobs said the study focused on minority children to show that chemical exposure is ubiquitous, building on 2005 research on cord blood from 10 anonymous babies. That study found a similar body burden among the babies. This is the first study to look at chemicals in minority newborns.

        “Minority groups may have increased exposure to certain chemicals, but here we didn’t focus on those chemicals,” Jacobs said. “The sample size is too small to see major differences, but we want to increase awareness about chemical exposures.”

        Leo Trasande, co-director of the Children’s Environmental Health Center at the Mount Sinai School of Medicine, said the findings, while preliminary, show that minority communities are often disproportionately affected by chemical exposure. Trasande was not involved in the EWG study.

        “Presently, minority communities suffer from a host of chronic disorders, and disproportionate chemical exposures may contribute significantly to the origins of the disparities that exist,” Trasande said.

        Both he and Jacobs said the findings add momentum for the call to revamp the Toxic Substances Control Act, or TSCA, the law regulating the more than 80,000 chemicals on its database. They released the report on the same day that a Senate panel is scheduled to discuss the government’s strategy for managing the tens of thousands of chemicals in the marketplace with an eye toward overhauling TSCA.

        TSCA does not require most chemicals to be tested for safety before they are approved for widespread use. Because of this, Trasande said, less than half of the 3,000 high-production volume chemicals on the marketplace have toxicity data, and less than one-fifth have toxicity testing data on the effects on developing organs.”