A Convergence Of Interests ?

SP at TOD ANZ has an interesting conspiracy hypothesis about the Chinese purchase of Cubbie Station cotton farm and the massive need for water the booming coal seam gas industry has (invoking the ghost of Russ Hinze along the way) - Sinogetically stuffing the basins?.

Pulling a few strands months apart together, is there a link between Paul Sheehans story (below) about how the expansion of Coal Seam Gas production is going to impact water availability for downstream food producers with last years agreement to sell Cubbie station to a Chinese consortium (now completed).

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Gas industry rattled by findings of triple normal levels of methane emissions

ReNew Economy has a report on research that may result in a massive tax bill for the coal seam gas industry - Gas industry rattled by findings of triple normal levels of methane.

LEVELS of the potent greenhouse gas methane have been recorded at more than three times their normal background levels at coal seam gas fields in Australia, raising questions about the true climate change impact of the booming industry.

The findings, which have been submitted both for peer review and to the Federal Department of Climate Change, also raise doubts about how much the export-driven coal seam gas (CSG) industry should pay under the country’s carbon price laws.

Southern Cross University (SCU) researchers Dr Isaac Santos and Dr Damien Maher used a hi-tech measuring device attached to a vehicle to compare levels of methane in the air at different locations in southern Queensland and northern New South Wales. The gas industry was quick to attack their findings and the scientists themselves.

The Queensland government has already approved several major multi-billion dollar CSG projects worth more than $60 billion, all of which are focussed on converting the gas to export-friendly liquefied natural gas (LNG).

More than 30,000 gas wells will be drilled in the state in the coming decades and the industry has estimated between 10 per cent and 40 per cent of the wells will undergo hydraulic fracturing.

The industry and state and federal ministers have claimed that electricity derived from coal seam gas will help slow growth in carbon emissions but, so far, no comprehensive independent lifecycle assessment of emissions has been carried out.

Last August, a Right to Information request submitted by me and reported in the Brisbane Times revealed that the state’s government was prepared to rely on industry-funded research when it came to understanding the industry’s carbon footprint.

A later report from the Australian Petroleum Production and Exploration Association, which looked at emissions from CSG when burned for electricity in China, was produced by Worley Parsons, a company which had won a $580 million contract to work on a major CSG-to-LNG project in the state.

The Federal Energy Minister Martin Ferguson has also waved away suggestions that the government should commission its own independent research into CSG emissions, and was reported as saying such a study was “unnecessary”.

The work at Southern Cross University is arguably the first attempt to independently measure levels of methane coming from gasfield areas.

Dr Santos said in a university release: “The current discussions on CSG are often based on anecdotal evidence, old observations not designed to assess CSG or data obtained overseas. We believe universities are independent institutions that should provide hard data to inform this discussion. The lack of site-specific baseline data is staggering.”

In an interview with the Australian Broadcasting Corporation, Dr Maher said while it was not possible yet to say “definitively” that the raised levels of methane were due to leaks from the CSG facilities, “we have multiple lines of evidence to suggest that that is what is causing it”. He said the initial findings pointed to the CSG operations as a likely source of the raised methane levels – in particular, from “fugitive emissions.

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$100b of Australian LNG projects imperiled by African gas rush ?

The SMH has an article speculating that east african may be the next frontier for the gas age, imperiling new Australian coal seam gas projects - $100b LNG projects imperiled by African gas rush.

The discovery along Africa's east coast of the world's biggest gas finds in a decade threatens to undo investment plans on the other side of the Indian Ocean. Royal Dutch Shell, BG Group of the UK and France's Total may scale back projects to build liquefied natural gas export plants in Australia and switch to Tanzania and Mozambique, where the new prospects lie and will cost about half as much, according to Jefferies International.

The LNG boom in Australia, where $180 billion of planned investment was set to make gas the country's fastest-growing export over the next five years, risks losing strength as labor and material shortages force up building costs. As energy companies consider the next $100 billion of projects, a switch to East Africa would hold back Australia's market share in China and India, where energy consumption is forecast to rise more than 60 percent by 2030.

“Because of the volume that's been discovered in East Africa, the economics look to be able to challenge Australian LNG projects, given the cost inflation they have experienced,” said Peter Hutton, an RBC Capital Markets analyst in London. “All companies will have that on their radar.”

The Asian market for LNG, gas that's chilled to a liquid for shipment by tanker, accounts for about two-thirds of global demand and will grow by 6 percent a year this decade, according to Sanford C. Bernstein & Co. Among six Australian projects scheduled to reach investment decisions in 2013, few will be approved because of climbing costs, Neil Beveridge, a Hong Kong- based analyst at Bernstein, said in a report this month.

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Overstretching the Australian LNG Industry

Paddy Manning has an article on the SMH on the Australian LNG boom (starting the gas age) - Too much too soon has left LNG industry overstretched.

The proponents of Australia's massive liquefied natural gas boom are doing the hard yards.

Seven enormous projects worth more than $US172 billion ($165 billion) combined are under construction all at once. Already this year two operators - BG Group and Santos - have announced cost blowouts, of $US5 billion and $US2.5 billion, at their respective coal seam gas projects - Queensland Curtis LNG and Gladstone LNG.

Santos's efforts to window-dress the announcement, as a pull-forward of upstream capital expenditure scheduled for post-2015, fell flat.

In the last fortnight, in quarterly earnings calls, Chevron admitted it faced rising costs on its $US43 billion Gorgon project on Barrow Island, and its budget and schedule were under review, and Shell flagged it could delay Australian LNG projects worth $US17 billion.

The head of global gas for energy analyst Wood Mackenzie, the Edinburgh-based Noel Tomnay, says Australia will be ''one big bad news story for the next couple of years, with delays to projects and cost over-runs. It seems inevitable.''

Australia's strong dollar, rising labour and compliance costs are being blamed for the pressures, and competition from lower-cost countries is causing investors to think twice about Australian LNG.

Tomnay says this year's cost blowouts are unlikely to be the last announcements. ''With that in mind, it would be a brave board that went out to investors right now with an investment decision on another Australian LNG project,'' he says. ''Would the market reward another announcement? Probably not. It would be more pragmatic to announce a breather. 'Annual capital expenditure on Australian LNG is going from $US10 billion to $US40 billion, which is highly inflationary. There has to be a hiatus.''

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Australia's Gas Pains

The Wall Street Journal reports that entry into the gas age is not without pain fopr would be exporters of Australian natural gas - Australia's Gas Pains.

Seven LNG projects now under construction in Australia are expected to cost 140 billion Australian dollars (US$144 billion). By 2020, Australia could produce as much as one quarter of the world's LNG—up from less than a tenth today—making it one of the world's top two producers alongside Qatar.

The price of such rapid growth will be high. Resource workers are expensive and will become more so as the market for labor remains tight. Woodside Petroleum has already seen cost overruns of US$3 billion at its giant Pluto LNG project in Western Australia, partly because of labor shortages.

The soaring Australian dollar, up 65% against the U.S. dollar since the worst of the financial crisis, is also pushing up the cost of business for resources companies.

Australia-listed Oil Search said last month the dollar's rise has pushed up the budget on its Papua New Guinea project, operated by Exxon Mobil, by US$700 million, or nearly 5%.

BernsteinResearch says the cost per ton of Australian LNG could average as much as US$4,000, compared with about US$1,000 at Apache's Kitimat project in western Canada.

For Australia's LNG projects, politics are an unwelcome obstacle. There are moves at federal and state levels that could limit gas extraction on vast tracts of land deemed critical to the country's agricultural production. That shouldn't affect existing projects, though it could temper expansion—which actually could help Australia avoid the worst labor shortages.

Meanwhile, pressure is building to get the Australian projects up and running soon. Qatar—which produces some of the world's lowest-cost LNG—has a moratorium on further development of its gigantic North field in order to preserve its longevity. But the self-imposed ban ends in 2013.

The ABC reports that Inpex are optimistic about their project going ahead - Inpex LNG venture tipped to attract investors.

A senior economist says he expects Inpex will have no trouble in securing investors for its planned multi-billion dollar gas project in Darwin. The Japanese company announced yesterday that it had already sold its total projected liquefied natural gas output from the proposed operation.

A final investment decision on the project, to pump gas from the Timor Sea to Darwin via a 900 kilometre pipeline, is yet to be announced. But it is believed Inpex hopes initial construction work will begin in March.

Macquarie Bank senior economist Brian Redican says investors are likely to view the project as a low-risk venture. He says a surge in oil prices in recent years means Inpex is in a strong position to secure investors. "Because petrol prices and energy prices are so high, they are actually extraordinarily profitable at the moment," he said.

The Australian has yet another report on the prospect of the US exporting LNG from shale gas - US to enter LNG export market amid domestic supply glut. It will interesting to see the reaction in the US if local gas prices converge with those in Asian export markets (the same unpleasant adjustment that is beginning in Australia already).

AUSTRALIAN gas exporters had better watch out - there's a new kid on the block. The US could emerge as a major competitor to Australia’s burgeoning gas-export market, challenging the viability or expansion plans of close to a dozen Australian liquefied natural gas projects, according to Noel Tomnay, the head of global gas at UK-based energy consultancy Wood Mackenzie.

Traditionally an importer of gas, the US is experiencing a domestic supply glut owing to heavy investment in the production of shale gas in states like Texas. That’s depressing US gas prices and prompting some companies to investigate the potential of terminals on the US coast geared for export to take advantage of higher prices abroad.

Cheniere Energy recently signed two long-term gas supply deals with offtakers, including with BG Group, as it presses ahead with plans to build the first LNG export terminal in the US. Last month, Cheniere said it has enough supply locked into long-term contracts to start construction of a proposed LNG export terminal in Sabine Pass, Louisiana, in 2012.

Tomnay told Deal Journal Australia: "We’re of the view that North America will have 20 million tonnes of LNG capacity maybe as early as 2018. Consequently, that will remove potential market share for Australian LNG projects."

Investment totalling more than $140 billion has been earmarked for new Australian LNG terminals focused mainly on Asia since 2007, which could catapult Australia ahead of Qatar as the world’s largest LNG exporter within a decade. In the latest development yesterday, Japan’s Inpex signed 15-year deals to supply five Japanese utilities with $US70 billion ($68.3bn) worth of LNG from its proposed Ichthys project in the Northern Territory.

The other risk facing would be LNG exporters to Asia is China taking its first steps towards producing shale gas - Chinese shale gas find may cut LNG demand
.

ROYAL Dutch Shell has found shale gas in China, prompting fears that the country could develop enough domestic supply to limit imports of liquefied natural gas. An official at PetroChina, Shell's partner in the region, told Reuters that results from two wells had been positive.

In less than a decade shale gas has transformed the US from gas shortage to a point where companies are planning to export LNG, fundamentally altering the dynamics of the international gas market. Existing LNG producers had hoped that higher demand from China would offset the decline in imports to the US.

Shale gas is obtained by hydraulically fracturing rock, which requires large quantities of water and chemicals. There is concern among environmentalists that the process can contaminate groundwater supplies.

Analysts have predicted shale gas could supply up to half the natural gas produced in North America by the end of this decade.

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Coal Seam Gas - By The Numbers

The ABC has a look at the coal seam gas industry - Water, salt and carbon in the coal seam gas future.

An ABC investigative report into coal seam gas extraction, suggests the industry will bring about a 'massive redirection of the water system in Australia.'

The ABC has launched Coal Seam Gas: By the Numbers, a website that maps the coal seam gas industry and explores its impact on water resources into the future.

The project calculates the amount of water which will be drawn from the ground as a result of gas extraction from the coal seam, considers waste materials collected and approaches to managing that waste.

ABC investigative reporters have used data and information from many sources, including environmental impact studies commissioned by mining companies at the request of Governments.

Investigative reporter Wendy Carlisle says "the research shows a large number of coal seam gas leases coincide with major underground water supplies used by farmers."

"What it shows is in broad terms coal seam gas will engineer a massive redirection of the water system in Australia.

"Landholders and governments don't yet know the impact this will have. It is the great coal seam gas experiment."

There will be as many as 40,000 gas wells in Australia in less than 20 years.

The article refers to this background piece -Coal Seam Gas - By The Numbers.

Coal seam gas has emerged as a major industry in Australia in little more than a decade.

The scale and speed of its growth has been nothing short of astonishing: billions of dollars have poured into regional areas; new jobs have been created; state and national coffers have swelled; export contracts have been signed and sealed; massive liquefied natural gas facilities have been approved for construction at regional ports.

Farmers fear they are losing control of their land. Miners and some politicians say coal seam gas offers a much greener energy choice. Environmentalists and other politicians have cast doubt on those claims.

The ABC's data journalism project has pulled together information from dozens of sources to provide an insight into the promise and the dangers inherent in the coal seam gas rush.

Did you know:

- it is estimated there will be at least 40,000 coal seam gas wells in Australia by 2030?
- conservative estimates suggest coal seam gas wells could draw 300 gigalitres of water from the ground each year?
- the industry could produce as much greenhouse gas as all the cars on the road in Australia?
- modelling suggests the industry could produce 31 million tonnes of waste salt over the next 30 years? ...

Over the next 20 years coal seam gas operations are expected to continue expanding.

The Queensland Government has approved up to 40,000 wells, and as more gas is discovered it is likely that number will rise. ...



How much water will the CSG industry use?

Australia's Great Artesian Basin and its underground aquifers are a vital source of water; farmers and other bore users are given allocations for their use.

By 2014, the Commonwealth will have spent nearly $150 million under the Great Artesian Basin Sustainability Initiative, capping bores and fixing pipes to conserve water.

The coal seam gas industry is entitled to remove massive amounts of water from groundwater systems.

The Queensland Government says that if CSG mining causes groundwater levels to drop below specified "trigger" points then companies must "make good" to affected water users. The trigger points are:

- a five-metre drop in the level of agriculture bores; and
- a 0.2 of a metre drop in the water table surrounding naturally occurring springs, creeks and rivers.

The make-good arrangements have not yet been fully spelt out by government.

In addition to these provisions, the forthcoming Murray Basin Plan will set limits on groundwater extraction, including by the CSG industry. The states must enact these limits by 2019.

There is a fierce debate about the amount of water the coal seam gas industry will extract from underground, and what impact it may have on the sustainability of the Great Artesian Basin.

The industry suggests it will pull out somewhere between 126 gigalitres and 280 gigalitres a year, while the National Water Commission puts the figure above 300 gigalitres a year. Others, including the Water Group advising the Federal Government, suggest it is higher still.

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Origin Seeking at Least One More Buyer to Expand Coal Seam Gas LNG Project

Bloomberg reports that origin is looking to expand its APLNG coal seam gas export project - Origin Seeking at Least One More Buyer to Expand LNG Project.

Origin Energy Ltd., ConocoPhillips’s partner in a $20 billion Australian liquefied natural gas venture, said it aims to sell more than half the fuel from the project’s second phase before committing to an expansion.

The project in Queensland state will likely need to sell 50 percent to 75 percent of the LNG from the second stage before the partners make an investment decision, Karen Moses, executive director of finance and strategy at Sydney-based Origin, said today in a telephone interview, adding that no final decision had been made.

Origin and Conoco, the third-largest U.S. oil company, are among energy companies in Australia planning more than A$200 billion ($200 billion) of LNG projects to tap rising Asian demand for the cleaner-burning alternative to coal. The venture yesterday agreed to supply Japan’s Kansai Electric Power Co. with 1 million metric tons of LNG a year, or almost 25 percent of the capacity from the second unit, or train.

Origin and Conoco are pursuing “at least one more” buyer for the coal seam gas-to-LNG venture, with customer interest increasing since the nuclear crisis in Japan caused by the March 11 earthquake and tsunami, she said.

The partners approved the first stage of their Australia Pacific LNG development in July, targeting first exports in mid-2015.

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Radio National: Coal Seam Gas Report 'Suppressed'

RAdio National has a segment featuring Matthew Wright of Beyond Zero Emissions, who is accusing Worley Parsons of suppressing a report into greenhouse emissions from coal seam gas - Radio National: Coal Seam Gas Report 'Suppressed'.

Fran Kelly- It’s been hailed as the low carbon fuel to help us transition to a clean energy future, but in recent months, some have started to question the climate credentials of the so called ‘unconventional gas’; coal seam gas and shale gas.

Greens leader, Bob Brown says ‘the jury is out’ on whether gas will actually deliver greenhouse gas emission savings.

So back in June, a renewable energy think tank called Beyond Zero Emissions, tried to get to the bottom of the matter, commissioning a report designed to compare whole of life cycle emissions from coal seam gas and shale gas, with other energy sources - resources including shale, coal, and renewables.

Now Beyond Zero Emissions claims that consultants Worley Parsons are refusing to hand over that report, as our environment editor Gregg Borschmann reports, Worley Parsons rejects that claim.

Gregg Borschmann- In the Australian policy response to climate change, it’s hard to overestimate the importance of gas. Gas is going to helpcut Australia’s greenhouse emissions.

Martin Ferguson- This is a major long-term benefit to Australia. Gas is clean energy, it is about the transition to a lower emissions economy.

Gregg Borschmann - That was Federal Resources Minister Martin Ferguson speaking on Breakfast two weeks ago. But as the new coal seam gas industry booms, and shale gas looms, what if these unconventional sources of gas, turn out to be little better then digging up and burning coal.

Matthew Wright- The upper management or the board has actually stopped us from receiving the report and we believe that’s on the basis that the report has some pretty explosive detail.

Gregg Borschmann - That was Matthew Wright, Executive Director of the climate research and advocacy group Beyond Zero Emissions. The report he’s talking about was commissioned in June this year. It was contracted to be a major new report on the climate credentials of both conventional gas and unconventional sources like coal seam and shale gas.

These were to be compared with other forms of energy, from coal to renewables. And most significantly it was to carry the brand of Worley Parsons, one of the world’s biggest engineering companies consulting to the resources sector. Curiously, earlier this year, Worley Parsons had completed a similar report for APPEA, The Australian Petroleum Production and Exploration Association. So why two reports?

Matthew Wright again:

Matthew Wright- The first one was basically being misrepresented, so we went to Worley and said ‘(you’ll) will you be able to do the same sort of thing for us’, and we even increased the scope beyond that to capture a whole lot of other emissions and other displacement scenarios that APPEA has obviously, deliberately, left out of their scope.

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Coal Seam Gas and The Great Artesian Basin

The SMH says "Protecting the water wealth of the Great Artesian Basin is the latest challenge for the coal seam gas industry" - Grappling with science and sceptics.

Beneath the bone-dry surface of inland Australia, west of the Great Dividing Range, a vast body of water is slowly flowing towards the sea.

If the Great Artesian Basin could somehow be sucked up from underground and put in one place, it would form a water cube of 40 kilometres, holding more than 100,000 times as much water as Sydney Harbour.

As it is, the water is squashed between thick layers of sandstone into an interlinked network of aquifers that stretch from Dubbo in NSW, through most of Queensland and parts of the Northern Territory and South Australia. It ''flows'' through pores in the rock at the glacial pace of a few metres per year.

The basin has existed in its current form for millions of years, but one of the biggest tests to its existence will come in the next decade. Beneath the layers of water lie some of the world's most extensive coal seams. Just as the sandstone aquifers contain water, so the coal seams contain methane.

To get the methane to the surface so it can be burned as a fuel, tens of thousands of shafts, most of them only about 10 centimetres wide, will be threaded through the aquifer layers. In most cases, water, sand and chemicals will then be forced down the shafts at high pressure, to fracture the coal seams and get to the gas. Large amounts of underground water will also have to be pumped out. After a few years, the wells will have to be sealed so that no gas or water leaks out, ever.

This will all have to be done without turning the fragile Great Artesian Basin into a continent-sized pin cushion.

It is probably one of the greatest engineering challenges undertaken in Australia, and the companies planning the operation exude confidence that the technical problems can be overcome. About $50 billion in investment, not to mention the long-term integrity of Australia's groundwater, is riding on them being right. Their optimism rests on several decades of collective experience in drilling through and around aquifers, mostly without known adverse effects. For the past five years, an elite corps of hydrologists, geologists and engineers, many of them Australian but with a large international contingent drawn here by the mining boom, has been grappling with the specific problems posed by drilling through the basin without wrecking it and managing the water that will be pumped out.

Philippa Kassianos, the leader of the water studies section at the resources company Santos, estimated this week that its gas drilling project on the eastern edge of the basin would bring 344 billion litres of water to the surface over the next 30 years, about one-tenth of the amount of water needed to restore the health of the Murray-Darling river system.

Most of it would be brackish and unsuitable for agriculture, but the company is planning to build water treatment plants that mean 90 per cent of the water can be sold to farmers or injected back underground. The remaining 34 billion litres of salty brine will stay on the surface in storage ponds until a use can be found for it. The process is not new - Santos has been extracting coal seam gas for 15 years in Queensland - but the scale is unprecedented. ''Santos needs to be as good at handling CSG water as we are at handling gas,'' Kassianos said.

The coal seam gas industry as a whole could extract 300 billion litres per year over the next 25 years, most of it from the Great Artesian Basin, according to federal government estimates. As farmers are grappling to do more with less and adapt to a more stringent licensing system, the water being sucked up from the basin as a by-product of coal seam gas extraction will see the total volume brought to the surface rise by 60 per cent.

Queensland's Department of Environment and Resource Management is the main agency on the spot, and it has issued a flurry of edicts designed to curb some of the more cavalier elements of the gas industry, including a ban on some fracking chemicals and tighter drilling regulations.

It is completing a detailed study of the expected impacts of the new gas fields on the eastern artesian basin, but has already expressed its desire for as much water as possible to be injected back into underground aquifers. ''It's a period of epic growth across the industry,'' said the department's director-general, Jim Reeves. ''We, as a department, are dealing with changes we have not faced before.''

Even before drilling on a large scale is under way, there have been mistakes and some isolated pollution incidents. In 2009, near Dalby, a well operated by the Queensland Gas Company undergoing hydraulic fracturing ''unintentionally provided a route for water in the aquifer'', the company said. Upwards of 100 litres of fracking fluid mingled with underground water, but this was not reported to authorities for 13 months. ''QGC believes the risk to human health or to water supply, or to both, have been negligible,'' the company said.

But the real impact on the basin is likely to come from the cumulative, long-term effects of large-scale drilling and pumping. The National Water Commission says the potential water impacts of the coal seam gas boom are not well understood, but are likely to have adverse effects on other water users.

''Extracting large volumes of low-quality water will impact on connected surface and groundwater systems, some of which may already be fully or over-allocated, including the Great Artesian Basin and Murray-Darling Basin,'' its latest advice on the matter says.

Drilling of the 40,000 planned wells could have a series of consequences, it says. These include changing pressures in underground aquifers so that potable water mingles with unusable water, fouling bores, reduced flows in rivers and land could subside ''over large areas, affecting surface water systems, ecosystems, irrigation and grazing lands.''

The water commission, a government agency, is reluctant to be seen as partisan in the coal seam gas debate, but last month it expressed doubt about the long-term effects of the gas boom.

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Gas prices to double in 20 years as demand explodes, Santos predicts

Santos is tipping much higher natural gas prices for Australian consumers and a boom in unconventional gas - Gas prices to double in 20 years as demand explodes, Santos predicts.

The only way to meet a tripling in natural gas demand in eastern Australia is by allowing unconventional gas projects, such as coal seam gas, oil and gas producer Santos says.

Santos's eastern Australia vice-president James Baulderstone told a conference that he expected gas prices to more than double within two decades, driven by demand and linking it to oil prices. Soaring global demand for liquefied natural gas is expected to contribute to Australia's wealth and make it one of the world's biggest exporters of the commodity. ...

''The five LNG trains already sanctioned, with more planned, represent a quantum change in eastern Australian natural gas demand,'' Mr Baulderstone told the Opportunities and Challenges for Australian Gas conference yesterday. ''Provided natural gas development activity is allowed to proceed at the right pace, and the market is willing to pay the increased cost of extraction, there is sufficient gas in eastern Australia to meet this demand.'' But he added that it was not viable to develop much of the gas reserves to meet the new demand at current Australian gas prices of about $4 a gigajoule.

Australian gas prices were some of the cheapest in the developed world, Mr Baulderstone said. He predicted prices would move to $6 to $9 a gigajoule.

The Australian (now beginning to paywall itself into oblivion) reports that AGL are already seeing much higher prices - AGL secures east coast's most expensive gas deal.

AGL Energy has snared the east coast's most expensive domestic gas sales contract in what is thought to be a 50 per cent price jump forced by the expected demand from Queensland's coal-seam gas export plants. AGL is believed to have secured a price of about $6 a gigajoule for gas that will be used to supply miner Xstrata's Mount Isa operations for 10 years from 2013.

The SMh reports that fracking for coal seam gas now has a new cause for concern - earthquakes - Fracking shock reignites concern.

DEBATE over the safety of ''fracking'' in Australia has reignited after a gas project in Britain was named as the likely cause of 50 tremors this year.

A panel of seismic experts has found it ''highly probable'' that fracking conducted by Cuadrilla Resources - 41 per cent-owned by Australian drilling company AJ Lucas - was the cause of two significant tremors and 48 aftershocks near the British town of Blackpool in April and May. The findings come after the independent MP Tony Windsor told the federal government this week he would not support its mining tax unless more was done to investigate the safety of fracking in Australia.

Fracking, or hydraulic fracturing, is a controversial gas extraction technique that uses high pressure solutions to fracture rocks deep underground. The process is used in both coal seam gas and shale gas extraction and, if poorly executed, can contaminate groundwater and trigger seismic activity.

Fracking is most common in the United States but is fast spreading to other nations like Australia and Britain, where Cuadrilla hoped to develop a gas source near Blackpool. The company was forced to launch an investigation after tremors of magnitude 2.3 and 1.5 appeared to follow a series of fracks.

The report - commissioned by Cuadrilla - confirmed the fracking was ''most likely'' to have caused the tremors but said the region had ''rare'' geological factors that were one of ''many factors'' which ''coincided to induce these seismic events''.

AJ Lucas services the main coal and coal seam gas basins in Queensland and NSW, including in the Hunter Valley, Bowen Basin and Surat Basin.

The Cuadrilla revelations are not the first time fracking has been linked to tremors, with regulators in the US state of Arkansas expressing concern that two shale wells - now owned by BHP Billiton - were responsible for causing earthquakes.

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Origin and Sasol to look for coal seam gas in Botswana

Upstream Online reports that Origin and Sasol are teaming up to look for coal seam gas in Botswana - Duo to explore Botswana CBM.

Australia’s Origin Energy and South Africa’s Sasol have partnered up to explore for coalbed methane (CBM) in the central province of Botswana.

The 50:50 joint venture, named Kubu Energy Resources, has already signed an agreement with local exploration company Sekaname to acquire three prospecting licences – PL143/2010, PL135/2010 and PL136/2010 – covering an area of about 3000 square kilometres. ...

“Establishment of the Kubu joint venture is consistent with Origin’s strategy to target Greenfield resources close to markets at low entry prices,” Origin chief executive Grant King said. “The delineation of a large [CBM] resource in Botswana could be used for power gene

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Santos expands CSG interest by buying Eastern Star Gas

The ABC reports on some more consolidation of he Australian coal seam gas industry - Santos expands by buying another CSG company.

Coal seam gas company Eastern Star Gas has been sold to resources firm Santos, the same company that's currently being blockaded by farmers on the NSW Liverpool Plains. Former Deputy Prime Minister and Eastern Star Gas chairman, John Anderson, was previously the Federal Member for Gwydir, which covers the Liverpool Plains region.

He says coal seam gas is essential to solving a looming energy crisis. "No one has contradicted me on this yet, but gas is actually going to be very important for agriculture, because it's the obvious extender of hydrocarbons, i.e. oil, as we run out of oil and as oil becomes incredibly expensive," he said. "We've got to find a sensible way to do this in the very interest of food security."

Mr Anderson says there needs to be a rational debate, and that mining and agriculture can co-exist. "I'm not confident as a farmer that there are no risks in some things that farmers do," he said.

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