The world is increasingly taking interest in the potential for a shale gas revolution. Australia is no exception to this trend. The key question for Federal, State and Local Government is, assuming a shale gas revolution is seen as desirable, what policy measures maybe taken in order to achieve this end and what should any debate over shale gas policy be focusing upon? This brief paper sets the context of the shale gas revolution. It then outlines the characteristics present in the USA that generated their shale gas revolution. In the context of Australia, there are a great many barriers to reproducing these characteristics. The paper considers what policy options are available to reduce such barriers and lead to an Australian shale gas revolution.
2. THE “SHALE GAS REVOLUTION” IN THE USA
a. A BRIEF HISTORY
The shale gas revolution in the USA is based upon the application of two main technologies – horizontal drilling and hydraulic fracturing (frack ing). Neither is new technology. Horizontal drilling was developed in the 1930s and the first well was fracced in the USA in 1947. The revolution has been reflected in the dramatic increase in the production of shale gas. In 2000 shale accounted for less than 1 percent of US domestic gas production. In 2007 it was 8 percent and only four years later, in 2011, it was 30 percent. However, a key point is that this American “revolution” in reality happened over a long period of time – well over 20 years in the making, although it is only in the last five years or so that the share of shale gas in domestic production has increased significantly. Furthermore, this growing role of shale gas is expected to continue. The EIA suggests shale gas will supply 42 percent o...
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...ns manufacturer invested on coal seam gas in the Southern Cooper basin with Strike energy with a long term gas supply contract of 0.15 tcf over 20 years . Such developments are really helpful to ensure the long term gas supply for the major manufacturing industries particularly due to the uncertainty of gas supply with increasing LNG commitments. In USA, Shale gas has provided the much needed recovery for the manufacturing industry with a major resource boost they required in order to make their products cheaper and competitive in the overseas markets. This will not be straight forward in terms of the Australian shale. However, long term perspective should be to establish shale as a prominent energy source at a competitive price level to cater the baseload demand. Shale gas developments would definitely add more security to the baseload energy generation potential.
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