Open letter to the community - South West petroleum exploration

The Department of Mines and Petroleum has received a number of enquiries relating to information being circulated through mainstream and social media about petroleum exploration in the South West region.

The department has provided this open letter to help address some of the key issues where misleading information is creating confusion.

Land Access

Land access rights and the landowners’ inability to refuse access are being promoted strongly throughout the South West. Petroleum companies are legally required to obtain consent from private land owners and occupiers before approval to undertake any activities on their land is granted. This consent can include agreements concerning compensation.

A model land access agreement has been developed to streamline negotiations between oil and gas companies and farmers. The model agreement is accompanied by a ‘Farmers Guide to Land Access’, which provides easy-to-read information on how rural land owners can negotiate fair and equitable compensation for access to private land. If an agreement for compensation cannot be reached, the matter may be referred to the Magistrate’s Court where the amount of compensation will be set.

Hydraulic Fracture Stimulation (Fraccing)

Regulated petroleum activities have been occurring in Western Australia for the past 60 years without compromising health, safety or the environment. During that period, nearly 780 hydraulic fracture stimulation activities have been conducted without major incident. Hydraulic fracture stimulation associated with horizontal drilling is a relatively new development, within the past 20 years or so, which is making recovery of natural gas and oil trapped within shale and tight rocks elsewhere in the world more viable and has generated new interest in WA’s onshore petroleum potential.

The technique of hydraulic fracture stimulation (fraccing) has also been promoted by some groups as a major risk to the environment and public health. This is being fuelled by images and examples related to coal seam gas (CSG) extraction in Queensland and overseas. The dewatering process used for CSG, often located within hypersaline aquifers, is vastly different to the hydraulic fracture stimulation process which occurs 2–5 kilometres underground, well below the State’s potable aquifers, which are typically 500-1000 metres below ground.

Western Australia has some of the strictest regulations in the world relating to chemical use in petroleum activities, including during hydraulic fracture stimulation, and requires full chemical disclosure, which is made publicly available through the Department of Mines and Petroleum (DMP) website. The DMP’s assessment of chemicals during hydraulic fracture stimulation also ensures that only those with low toxicity and low concentrations are considered for use. Hydraulic fracture stimulation processes usually only last 3-4 days and fracture fluids are recycled as much as possible. Holding ponds for the fluids are evaporated after use and the lining material and any residues are properly disposed of through a licenced waste facility.

Jonah gas field, Wyoming, US

As the physical footprint of petroleum activities is relatively small, they can coexist with other land use activities, including farming. An unattributed image of the 10,000 hectare Jonah tight gas field in south west Wyoming which is being circulated on posters throughout the WA’s South West falsely claims the image is of abandoned shale gas wells. The Jonah gas field does not produce gas from shale and the field is still operating, as it has done since the 1970’s and has 1,700 producing wells.

This image of the Jonah field promotes the perception that a shale and tight gas industry in the State’s South West will be developed the same way. Western Australia does not have such extensive pipeline infrastructure developed as the United States. Western Australia’s regulatory framework for shale and tight gas would not permit a development with a similar surface impact. The framework also requires environment plans, safety cases, well and field management plans and facility closure plans to be submitted as part of the multi-agency approvals process. Disturbed areas caused by petroleum activities are required to be returned to farmland or natural bush once the resources have been extracted.

Well integrity

Well integrity and potential damage to underground aquifers is often highlighted as a high risk associated with fracture stimulation processes. Well integrity is a key priority for which WA has established the highest international standards, which include the modern principle of a multiple-barrier well design to ensure the effective prevention of fluid leaking from the well into the environment or from the environment into the well itself. References to ‘well failure’ do not mean all the barriers have failed, but may refer to a leak or crack in one barrier with the other barriers still maintaining integrity. The likelihood of multiple barriers failing within the aquifer zone is considered to be highly improbable. Legislation requires that integrity of wells is checked on a regular basis.

Exploration in WA’s South West

Development of this potential new industry for WA is still very much in its infancy, with any significant commercial production predicted to be at least five to ten years away. Within the State’s South West, between Pinjarra and Busselton, there are four petroleum exploration permits.

EP 480 is located south of Pinjarra and EP 416 extends south of that to Harvey. The current work program for these permits includes the interpretation of data from the Black Swan Airborne Geophysical survey, which will determine the location of a further 50 kilometres of 2D seismic survey. A drillable target has not been identified and is unlikely until 2D seismic has been acquired. The publicly available work program is of limited extent and step-by-step approach to exploration.

The proposed STP-EPA-0132 permit area, which has not been granted yet, includes 11 blocks extending across the shires of Capel, Dardanup and Donnybrook-Balingup, as well as parts of the City of Bunbury and slightly overlapping the City of Busselton. A number of studies have shown that hydraulic fracture stimulation would not be suitable in the particular geology of this area. There is currently no indication of any good quality shales in the area.

The preferred bidder, Bunbury Energy, is still progressing with its native title negotiations. Should the company receive permit approval, its two-year firm plan has proposed a 150 kilometre seismic survey, which the company plans to conduct along roadsides and other accessible areas as they do not intend to enter private land or sensitive areas.

The Whicher Range permit area, EP 408, which extends south of Busselton and Capel, is the only area within the South West where petroleum exploration drilling has recently been undertaken. The current approved work program does not include hydraulic fracture stimulation. Whicher Range South, in EP 381 located immediately south of EP 408, has a current approved work program consisting of a range of studies, such as geotechnical, engineering, marketing and commercial studies.

Responsible and sustainable development

The State Government has ensured that Western Australia’s legislation, regulations and guidelines are robust and in step with changing scientific and technological advances to ensure the onshore petroleum industry is developed safely and sustainably for the benefit of all Western Australians.

It is committed to provide WA with access to cleaner, affordable energy sources to sustain our economy and quality of life. The responsible development of natural gas onshore resources plays a significant part in achieving this goal and can provide significant benefits such as employment opportunities in the regions and energy security now and into the future.

DMP appreciates the level of concern some community members have in regard to the use of hydraulic fracture stimulation, which is why we are providing this information.

This information is incorporated in an extensive range of fact sheets and the comprehensive WA Regulatory Framework for Shale and Tight Gas, which are available for download and review on the DMP website at www.dmp.wa.gov.au

Jeff Haworth
Executive Director Petroleum
Department of Mines and Petroleum

21 June 2016