Quite a difference

The contrast could hardly be greater.

On Monday, in front of most of the 2,600 delegates attending the Australian Petroleum Production & Exploration Association conference in Melbourne, the Victorian Treasurer, Tim Pallas, had star billing as a keynote speaker and managed to say very little to an audience full of investors — apart from encouraging the industry to engage with a Victorian parliamentary inquiry in to gas exploration and to understand that the extended¬† State moratorium is needed because the public is “confused and uncertain.”

On Tuesday, at a sidelines breakfast at the conference, with 70 people present, Pallas’s opposite number in South Australia, Tom Koutsantonis, who is also Minister for State Development and for Resources & Energy, spoke vigorously on what his State is doing to support investment by the upstream oil and gas industry and to “defend the future of the industry” while also pursuing high grade scrutiny of the quality of its activities.

“We have multi-billion dollar petroleum exploration programs onshore and offshore,” declared Koutsantonis. “We have long-term ambitions.”

The Cooper Basin, he pointed out, produced 17 per cent of Australia’s oil output in 2013-14 and the State’s far north has “enormous potential to produce gas from unconventional reservoirs for many decades to come.”

South Australia, he said, is “the epicentre of the (national) charge to develop natural gas from deep unconventional reservoirs.”

The State, as he proudly declaimed, has been independently assessed as having one of the world’s three best regulatory frameworks for these reservoirs.

One of the big challenges for the industry, he added, is fighting off “the forces that would put a moratorium on fracture stimulation and impose investment-killing policies such as gas reservation.”

South Australia’s Labor government, Koutsantonis promised, “will remain steadfast in defence of evidence-based policymaking and against those who peddle myths and untruths” to undermine the industry’s future.

The challenge for government and industry, Koutsantonis said, is to presents the facts about fraccing and other gas exploration and production activity in a way that counters its opponents’ adeptness in harnessing social media and other tools to promote negative imagery.

The South Australian government, he announced, is doing its share by publishing facts about natural gas and fracture stimulation in a readily comprehensible form for laymen. It aim, he said, is to tell the community how the technology works, its long record of success and how the risks can be safely managed.

A 16-page booklet the government has released at the conference notes that fracture stimulation has been used in South Australia in conventional and unconventional petroleum wells since 1969 and that more than 700 well have been fracced in the Cooper Basin with zero negative impacts identified.

The basin has delivered five trillion cubic feet of gas and 340 million barrels of oil and condensate over 45 years with a value in today’s money of $42 billion.

The government, Koutsantonis added, is doing its share to have independent evidence produced to allay community concerns.

It has commissioned research by the National Centre for Ground Water Research & Training on the impacts of oil and gas activities on aquifers and is in the process of also commissioning independent work by the University of Adelaide on best practice for cementing wells.

“We are committed,” Koutsantonis said, “to delivering the most conducive investment environment possible to support the resources and energy sector and the jobs and the prosperity it creates for South Australians.”

Part of this effort, targeting an industry obsessed by cost reductions in a volatile global oil price environment, is to phase in reductions totalling 35 per cent in South Australian retention licence fees over four years.

He pointed to other efforts the State government is making, including sponsoring a roundtable to help drive innovation through co-operation in the oil and gas sector.

In a political environment where governments in other southern States — the Coalition in New South Wales and Labor in Victoria (and before them the Coalition) — are continuously wriggling to cope with the media-fuelled forces fighting to stymie fossil fuels and gas development in particular, the South Australian stance is giving the petroleum industry heart.

The sector’s task is to persuade Victoria and NSW to act similarly to inform their communities and to set the ground for well-regulated activity¬† — rather than to walk firmly in the direction of away while throwing exhortations about “social licence” over their shoulders.

It hasn’t gone unnoticed at the APPEA conference that, for the first time since the association began running exhibitions in tandem with its annual forum, a Melbourne event has not included a Victorian government stand. The 220 booths in the exhibition include stands for the South Australian and Northern Territory governments — plus a substantial one provided by the New Zealand government, eager to attract investors away to their offshore geological basins.

Pallas used his opportunity in the conference spotlight to pretty poor effect, sounding less than convincing when assuring the APPEA delegates that his government is “pro-business” and “pro-jobs.”

I reckon he would have benefitted more from sitting in the audience and listening to a Koutsantonis address on how a government can take community concerns seriously in a practical way while chasing the economic benefits of a thriving energy sector.

Comments are closed.