queensland’s petroleum & gas industry snapshot · understanding about the petroleum and gas...
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DisclaimerThis Queensland Petroleum and Gas Industry Snapshot is distributed by the GasFields Commission Queensland as an information source only. It provides general information which, to the best of our knowledge, is correct as at the time of publishing. The information contained herein is subject to change without notice. The GasFields Commission Queensland shall not be liable for technical or other errors or omissions contained herein. The reader accepts all risks and responsibility for losses, damages, costs and other consequences resulting directly or indirectly from using this information. The information contained in this document does not constitute advice and should not be relied on as such. While every care has been taken in preparing this document, the GasFields Commission Queensland accepts no responsibility for decisions or actions taken as a result of any data, information, statement or advice, expressed or implied, contained within. Where appropriate, independent legal advice should be sought.
© 2018 GasFields Commission Queensland
One of the key functions of the GasFields Commission Queensland is to obtain and publish information that can assist in improving knowledge and understanding about the petroleum and gas industry, including its interactions with rural landholders and regional communities.
This snapshot reports on the current state of the petroleum and gas industry in Queensland, illustrating industry development trends, groundwater management and the economic contributions to regional communities and the state of Queensland.
SCOPE OF THIS SNAPSHOT
Industry fast facts
Agricultural industries• Queensland has the highest proportion of land area in Australia dedicated
to agriculture with about 144 million hectares, or 83%.• Queensland is Australia’s largest producer and exporter of beef and one of
the largest producers of pork in the country.• The major vegetable crops grown in Queensland include tomatoes,
capsicums, beans, mushrooms, sweet potatoes and lettuce.• Cotton is a valuable part of Queensland’s agriculture with major growing
areas in the Darling Downs (60,000 ha), Macintyre Valley (55,000 ha), Central Highlands (19,000 ha), St George (13,000 ha) and Dirranbandi (3,000 ha).
• Agricultural industries contribute more than $10 billion to the state’s economy each year.
• In 2015/16, exports of primary products comprised 19% of the state’s overseas commodity exports.
(DAF 2017)
QUEENSLAND’S RURAL INDUSTRIES
Petroleum and gas industry• Queensland’s first gas field was discovered in Roma in 1900.• Australia’s first gas pipeline was built in 1969, connecting the Roma gas
fields to Brisbane.• Gas is a vital part of Queensland’s energy mix and is used to generate
electricty as well as manufacture glass, steel, aluminium, nickel, fertiliser and plastics.
• Conventional gas is produced from reservoirs with other petroleum products such as oil.
• Coal seam gas (CSG) is produced from coal seams and is primarily made up of methane.
• The rapid growth in CSG production over the past 15 years has been driven by the development of Queensland’s liquefied natural gas (LNG) export industry.
• More than $70 billion has been invested into Queensland’s CSG to LNG industry (QRC 2018).
Working together• The surface footprint of Queensland’s petroleum and gas industry covers 0.1% of the state’s land mass
(QRC 2017). • There has been an adjustment phase as regional communities adapt to petroleum and gas industry activity.• The agricultural and petroleum and gas industries are an integral part of Queensland’s regional economy.• The continued success of these industries requires best practice business-to-business relationships.
TENURE
...as at 31 March 2018
Total land area in Queensland = 173 million hectares
The petroleum and gas industry’s surface footprint = 0.1% of Queensland’s land mass
2.8 million hectares is under Petroleum Lease
12,803 km
(QRC 2017)
(QSpatial 2018)
Petroleum Exploration and Production Tenure
of licensedpipelines
24.6 million hectares is under Authority to Prospect
27.4 million hectares is under sub-surface
petroleum and gas tenure
EXPLORATION
Future petroleum and gas exploration and development• 454 km2 of tenure has been awarded in the Surat and Bowen basins for the domestic gas market only.• 15,195 km2 of land has been released for tender in the Eromanga and Adavale basins to explore conventional oil and gas
reserves.• 2,236 km2 of land has been released for tender in the Surat and Bowen basins to explore conventional oil and gas reserves.
(DNRM 2017)
Exploration expenditure in Queensland
= $4.3 billion since 2007
(ABS 2017)
$155 million
exploration expenditure in
2016/17
• conducting seismic surveys• drilling exploration wells• analysing core samples
Expl
orat
ion
expe
nditu
re ($
M)
LANDHOLDERS
A landholder and gas company may enter into a Conduct and Compensation Agreement (CCA), which is a legal document negotiated and agreed upon by both parties. It generally details:
1. how authorised activities will be conducted on the property by the gas company2. the compensation payable to the landholder for the effects of the authorised
activities (compensatable effects).
Examples of compensatable effects:
decrease in land value caused by authorised activities carried out on the property
decrease in land value due to areas being taken up by infrastructure such as wells, aboveground pipelines, vents and access roads
severed land that has depreciated in value or can no longer be used due to its division or separation by the location of new infrastructure or activities
indirect losses such as loss of profits, soil erosion, damages to fences or gates, biosecurity outbreaks
cost, damage or loss caused by:• noise, dust and light from the
construction of infrastructure • relocation of livestock or
personal property
5,711 Conduct and
Compensation Agreements have been
entered into as at 30 June 2017
Numerous agreements can be signed by a single
landholder
$387 million in
compensation has been paid to landholders as
at 30 June 2017
(APPEA 2017)
decrease in land value due to restrictions to land use, for example, resulting from buried pipelines
(Land Court 2018)
Compensation may be monetary or non-monetary. Examples of non-monetary compensation might include the building or repair of fences or the installation of new gates and grids.
76%
12%
12%
WELLS
76% of active wells are in the Surat and southern Bowen basins
(Surat Cumulative Management Area)
12% of active wells are in the northern
Bowen Basin
Cooper Basin
Active Petroleum and Gas Wells in Queensland
There have been approximately 11,000 CSG wells and
3,450 conventional wells drilled in Queensland to date
(OGIA 2017, DNRME 2018D)
12% of active wells are in the
Cooper and Eromanga basins
74%
17%
6% 3%
Surat BasinBowen BasinEromanga BasinCooper Basin
Surat and southern Bowen basins (Surat CMA)northern Bowen BasinCooper and Eromanga basins
Surat Cumulative Management Area
boundary
Approximately 13% of these CSG wells and 55% of these conventional wells have since been converted to water
bores, or decommissioned and the well sites rehabilitated
(DNRME 2018B)
0
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000
Met
ric T
onne
s
Financial Year
LPG Cooper-Eromanga BasinLPG Bowen-Surat Basin
-
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
Milli
on B
arre
ls (M
Mbb
l)
Oil Cooper-Eromanga Basin Oil Bowen-Surat BasinCondensate Cooper-Eromanga Basin Condensate Bowen-Surat Basin
PRODUCTION
2.4 million barrels of oil was produced in Queensland in 2016/17
Queensland’s Oil and Condensate Production
0
100
200
300
400
500
600
700
800
Jun-05 Dec-05 Jun-06 Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17
Gas
Pro
duct
ion
(PJ)
Queensland's Natural Gas Production (conventional and unconventional)
Total Gas Produced (Cooper-Eromanga) Total Gas Production (Bowen-Surat) (DNRMEA 2018)
96% of gas
produced in 2016/17 was
from coal seams
1,413 petajoulesof gas was produced in
Queensland in 2016/17
Queensland’s Gas Production
LPG is used for barbeques, stoves and hot water
Condensate is used to produce blended petrol, cosmetics, detergents, synthetic fabrics, bitumen, plastics and rubber
Queensland’s Liquid Petroleum Gas (LPG) Production
(DNRMEA 2018)
LPG - Cooper and Eromanga basinsLPG - Bowen and Surat basins
Total gas produced - Cooper & Eromanga basins Total gas produced - Bowen & Surat basins
Oil - Bowen & Surat basinsCondensate - Bowen & Surat basins
-
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
Milli
on B
arre
ls (M
Mbb
l)
Oil Cooper-Eromanga Basin Oil Bowen-Surat BasinCondensate Cooper-Eromanga Basin Condensate Bowen-Surat BasinOil - Cooper & Eromanga basinsCondensate - Cooper & Eromanga basins
(DNRMEA 2018)
Milli
on b
arre
ls
Met
ric to
nnes
Gas
pro
duct
ion
(pet
ajou
les)
GROUNDWATER MANAGEMENT & MONITORING
In areas of intensive petroleum and gas development, i.e. the Surat Cumulative Management Area (Surat CMA), the Office of Groundwater Impact Assessment (OGIA) is reponsible for:• regional groundwater modelling• assessing cumulative impacts on groundwater levels• developing an Underground Water Impact Report (UWIR)
Outside of intensive areas of development, individual petroleum and gas companies must prepare a UWIR.
(OGIA 2016)
The UWIR for the Surat CMA identifies where groundwater levels in aquifers, bores and springs are predicted to be affected.
There are approximately 22,500 groundwater bores within the Surat CMA.
OGIA predicts 2% of these bores will experience a groundwater level decline over the life of the petroleum and gas industry.
Gas companies are required to ‘make good’ on any groundwater level decline in private bores by providing landholders with monetary compensation or alternative water supplies.
This may include drilling new bores or supplying treated water to the affected properties.
Groundwater Online is a network
of 73 continuously monitored bores across the Surat
CMA
(DNRM 2018C)
More than 600 monitoring points have been established as part of the
UWIR for the Surat CMA
Groundwater Net is a network
of 292 private water bores monitored by
landholders
Surat Cumulative Management Area
Map source: www.business.qld.gov.au
Many other groundwater monitoring points also exist:
Groundwater monitoring data and predictions can be viewed online via the
Queensland Globe
(OGIA 2016)
GROUNDWATER TAKE
Estimated Annual Groundwater Take in the Surat CMA
More than 200,000 megalitres of
groundwater is being extracted by
non-petroleum and gas users every year
Almost all of this water is treated to meet strict water quality standards
and beneficially used for:
agriculture
industry
managed aquifer recharge
(OGIA 2016)
In 2016,
groundwater take associated
with petroleum and gas production was
approximately
55,000 megalitres
149,145
11,524
55,000
25,92616,497
(OGIA 2017)
(APPEA 2018)
The majority of this is taken from shallow groundwater sources
(OGIA 2016 & 2017)
Gro
undw
ater
take
(meg
alitr
es)
MAKE GOOD AGREEMENTS
(OGIA 2017)
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
55,000
60,000
65,000
70,000Ja
n-19
95
Jan-
1996
Jan-
1997
Jan-
1998
Jan-
1999
Jan-
2000
Jan-
2001
Jan-
2002
Jan-
2003
Jan-
2004
Jan-
2005
Jan-
2006
Jan-
2007
Jan-
2008
Jan-
2009
Jan-
2010
Jan-
2011
Jan-
2012
Jan-
2013
Jan-
2014
Jan-
2015
Jan-
2016
P&G
Wat
er E
xtra
ctio
n (M
L/ye
ar)
Coal Seam Gas (Surat Basin)Annual Groundwater Take by Petroleum and Gas Operations
Coal seam gas (Surat Basin)
Coal seam gas (Bowen Basin)
Conventional petroleum and gas (Surat & Bowen basins)
Of the 22,500 bores within the Surat CMA, 459
are predicted to have impaired capacity due to declining
groundwater levels over the life of the petroleum
and gas industry
This includes 127 bores that are predicted to have impaired capacity due to declining
groundwater levels by 2019
73 bores are under
make good agreements with landholders
A baseline assessment collects information about the bore including water level, water quality, bore construction and associated infrastructure to benchmark bores prior to petroleum and gas development
About 4,100 baseline assessments have been completed
and reported back to OGIA (DES 2018)
(OGIA 2017)
(OGIA 2018)
(OGIA 2016)
(OGIA 2018)
Gro
undw
ater
take
(meg
alitr
es)
GROUNDWATER REGULATION & COMPLIANCE
Regulatory frameworkGroundwater take associated with petroleum and gas production is highly regulated in Queensland:
Groundwater audits and inspectionsThe Queensland Department of Natural Resources, Mines and Energy conducts audits and inspections of the petroleum and gas industry.
The Department’s auditing program reviews company standard operating procedures as well as processes in the field. The audits cover activities such as:• groundwater sampling• water level monitoring• the integrity of groundwater monitoring bore construction• associated activities.
The aim of these audits is to:• ensure processes are followed• establish credibility of the data collected• ensure that work is undertaken in accordance with national
and international best practice standards.
The Department also makes recommendations for improvement to industry systems and processes.
The Petroleum and Gas (Production and Safety) Act 2004 and the Petroleum Act 1923 authorise companies to take groundwater associated with the production of petroleum and gas. The Water Act 2000 imposes requirements to monitor and assess groundwater, and make good on any bores that are impaired as a result of petroleum and gas activities.
The Environmental Protection Act 1994 imposes requirements on the management of groundwater taken during the production of CSG including conditions for its treatment, storage and use.
The Waste Reduction and Recycling Act 2011 enables CSG water to be approved for use as a resource if it is deemed to have a beneficial use.
1
2
3
4
10.8%
19.9%
20.7%
37.4%
7.7%
0.4%3.1%
NSW
VIC
Qld
NT
WA
SATas (0.4%)
10.8%
19.9% 20.7%
37.4%
7.7%
0.4%3.1%
0.0%
5.0%
10.0%
15.0%
20.0%
25.0%
30.0%
35.0%
40.0%
New South WalesVictoriaQueenslandWestern AustraliaSouth AustraliaTasmaniaNorthern Territory
24 PJ
8 PJ7 PJ
1 PJ0
5
10
15
20
25
30
Electricitygeneration
Aluminiumproduction
Fertiliserproduction
Retail andcommercial
Con
sum
ptio
n (p
etaj
oule
s)
CONSUMPTION
Queensland Domestic Gas Use Jan-Mar 2017
(EQ 2017)
1,431 petajoules
of gas was consumed in Australia in 2014/15
Gas accounted for 24% of Australia’s total energy consumption in 2014/15 366 million
barrelsof oil was consumed
in Australia in 2014/15Oil, LPG and condensate accounted for the
largest share of Australian energy consumption in 2014/15 at 38%
(DIIS 2016)
(DIIS 2016)
Australian Gas Consumption by State/Territory 2014/15
LNG EXPORTS
China (11,592,370 tonnes)
South Korea (3,973,147 tonnes)
Japan (2,731,617 tonnes)
Singapore (648,501 tonnes)
Malaysia (629,427 tonnes)
India (388,735 tonnes)
Thailand (135,739 tonnes)
Hong Kong (71,996 tonnes)
Philippines (63,010 tonnes)
Queensland exported 20.2 million tonnes
of LNG in 2017
That’s 310 shiploads
Queensland’s LNG Exports in 2017
Australia has now become the
2nd largest LNG exporter in the world
(GPC 2018)
Queensland has 29% of Australia’s
LNG production
capacity(DIIS 2018)
Philippines
Hong KongThailandIndia
South Korea
China
MalaysiaSingapore
Japan
COMMUNITY SPEND
PETROLEUM AND GAS SPEND IN REGIONAL QUEENSLAND COMMUNITIES
Petroleum and Gas Royalties Paid to the State = $418 million since 2010
(OSR 2018)
(QRC 2011-2017)
$1.4B direct economic contributions to
regional Queensland communities in
2016/17
1,380 regional
businesses directly supported by the
petroleum and gas industry in
2016/17
131 regional community
organisations directly supported by the petrolem and gas
industry in 2016/17
Emergency Services
Roads
Healthcare
Education
Cum
ulat
ive
dire
ct e
xpen
ditu
re ($
B)
Financial year
Contributions to:• regional jobs• local business purchases• community contributions• local government payments
EMPLOYMENT
Direct Employment in Queensland’s Petroleum & Gas Industry
(QRC 2011-2017)
DIR
ECT
EMPL
OYM
ENT
(FTE
)
More than 4,000 people were directly employed in the petroleum and gas industry in 2016/17
Region Unemployment rateMaranoa 3.4%Toowoomba 5.3%Western Downs 5.6%Queensland average 6.1%
Regional areas with
petroleum and gas development have
lower unemployment rates than the state average
(DJSB 2017)
• APPEA 2017, Unconventional Gas in Australia; Report to the COAG Energy Council, November 2017,
Canberra
• APPEA 2018, Water volume, (https://www.appea.com.au/industry-in-depth/technical-information/water/
water-volume/) accessed 13 April 2018
• Australian Bureau of Statistics (ABS) 2017, 8412.0 - Mineral and Petroleum Exploration, Australian
Government, Canberra (http://abs.gov.au/AUSSTATS/[email protected]/DetailsPage/8412.0Jun%20
2017?OpenDocument) accessed 15 March 2018
• Department of Agriculture and Fisheries (DAF) 2017, Queensland AgTrends 2017-18. Forecasts and
trends in Queensland agricultural, fisheries and forestry production, Queensland Government, Brisbane
• Department of Environment and Science (DES) 2018, Personal communication
• Department of Industry, Innovation and Science (DIIS) 2016, Australian Energy Statistics, Australian
Goverment, Canberra (https://industry.gov.au/Office-of-the-Chief-Economist/Publications/Pages/
Australian-energy-statistics.aspx) accessed 15 March 2018
• Department of Industry, Innovation and Science (DIIS) 2018, Resources and Energy Quarterly. March
2018, Australian Government, Canberra
• Department of Jobs and Small Business (DJSB) 2017, ABS Labour Force Region - SA4 Data, Australian
Government, Canberra (http://lmip.gov.au/default.aspx?LMIP/Downloads/ABSLabourForceRegion)
accessed 31 December 2017
• Department of Natural Resources and Mines (DNRM) 2017, Annual exploration program 2017-18,
Queensland Government, Brisbane
• Department of Natural Resources, Mines and Energy (DNRME) 2018A, Petroleum and gas production
and reserve statistics, Queensland Government, Brisbane (https://data.qld.gov.au/dataset/petroleum-gas-
production-and-reserve-statistics) accessed 19 March 2018
• Department of Natural Resources, Mines and Energy (DNRME) 2018B, Direct correspondence
• Department of Natural Resources, Mines and Energy (DNRME) 2018C, Water Monitoring Information
Portal, Queensland Government, Brisbane (https://water-monitoring.information.qld.gov.au/) accessed 13
April 2018
• Department of Natural Resources, Mines and Energy (DNRME) 2018D, Queensland borehole series,
Queensland Government, Brisbane (https://data.qld.gov.au/dataset/queensland-borehole-series)
accessed 19 April 2018
• EnergyQuest (EQ) 2017, Personal communication
• Gladstone Ports Corporation (GPC) 2018, Origin and destination of cargoes. Totals for calendar
year 2017 (Gladstone), (https://content1.gpcl.com.au/ViewContent/CargoComparisonsSelection/
CargoOriginDestination.aspx?View=G&Durat=C&Key=2017) accessed 11 April 2018
REFERENCES• Land Court of Queensland (Land Court) 2018, Personal communication
• Office of Groundwater Impact Asessement (OGIA) 2016, Underground Water Impact Report for the
Surat Cumulative Management Area, Department of Natural Resources, Mines and Energy, Queensland
Government, Brisbane
• Office of Groundwater Impact Assessement (OGIA) 2017, Annual Report 2017 for the Surat
Underground Water Impact Report, Department of Natural Resources and Mines, Queensland
Government, Brisbane
• Office of Groundwater Impact Assessment (OGIA) 2018, Personal communication
• Office of State Revenue (OSR) 2018, Royalty Statistics, Queensland Government, Brisbane (https://
publications.qld.gov.au/dataset/royalty-statistics/resource/bb666798-73e0-4b6c-b935-6589df17ecae)
accessed 15 March 2018
• Queensland Resources Council (QRC) 2011, Economic Impact of Resources Sector on the Queensland
Economy 2010/11, Lawrence Consulting, Brisbane
• Queensland Resources Council (QRC) 2012, Economic Impact of Resources Sector on the Queensland
Economy 2011/12, Lawrence Consulting, Brisbane
• Queensland Resources Council (QRC) 2013, Economic Impact of Resources Sector on the Queensland
Economy 2012/13, Lawrence Consulting, Brisbane
• Queensland Resources Council (QRC) 2014, Economic Impact of Resources Sector on the Queensland
Economy 2013/14, Lawrence Consulting, Brisbane
• Queensland Resources Council (QRC) 2015, Economic Impact of Resources Sector on the Queensland
Economy 2014/15, Lawrence Consulting, Brisbane
• Queensland Resources Council (QRC) 2016, Economic Impact of Resources Sector on the Queensland
Economy 2015/16, Lawrence Consulting, Brisbane
• Queensland Resources Council (QRC) 2017, Economic Impact of Resources Sector on the Queensland
Economy 2016/17, Lawrence Consulting, Brisbane
• Queensland Resources Council (QRC) 2018, Resourcing Innovation: Shiploads of Queensland LNG
Exports, (http://www.resourcinginnovation.com.au/education/shiploads-of-queensland-lng-exports/)
accessed 11 April 2018
• QSpatial 2018, Queensland Spatial Catalogue, Queensland Government, Brisbane (http://qldspatial.
information.qld.gov.au/catalogue/custom/index.page) accessed 29 March 2018
GasFields Commission QueenslandPO Box 15266, CITY EAST, QLD 4002
07 3067 9400
gasfieldscommissionqld.org.au
The GasFields Commission Queensland (the Commission) is an independent statutory body established to educate, engage and inform the community about all aspects of Queensland’s petroleum and gas industry.
The Commission supports respectful and balanced relationships among rural landholders, regional communities and the petroleum and gas industry by:• helping regional communities adapt to the introduction of petroleum and gas development• providing tools to enable informed decision making• facilitating connections across the petroleum and gas industry, agricultural industry, businesses,
communities and government• promoting best practice business-to-business relationships• providing a first point of contact for anything to do with petroleum and gas in Queensland• compiling and distributing information about the onshore petroleum and gas industry.
THE GASFIELDS COMMISSION