The expansion of fracking in the Lake Eyre basin would be the “absolute height of folly” and its high cost, high emissions unconventional gas could rapidly create stranded assets, a report has found.
The basin – home to one of the world’s last major free-flowing desert river systems – sprawls over nearly one sixth of the Australian continent, covering parts of the Northern Territory, South Australia, New South Wales and Queensland.
Much of the unconventional gas reservoirs that are yet to be tapped lie in the sunshine state, where the Palaszczuk government is poised to make a final decision on whether fracking should be permitted in the flood plains of Lake Eyre.
Within the Lake Eyre basin, the Cooper basin is already home to a mature conventional gas industry and is considered highly prospective for unconventional gas, leading some fossil fuel companies to explore the possibility of fracking those reservoirs.
But economic analysis by Pegasus Economics’ Alistair Davey, released on Monday, contends carbon dioxide content from unconventional gas in the Cooper Basin averages about 30%, putting it at “a distinct competitive disadvantage” compared with other gas fields with much lower CO2 content of raw gas.
“Any requirement to offset emissions from the production of unconventional gas from the Cooper basin in the Lake Eyre basin will further erode its competitiveness given the high CO2 content of raw gas,” Davey states.
“Rather than pose the risk of becoming stranded assets, the commercial production of unconventional gas from the Lake Eyre Basin would be the absolute height of folly if it were ever to be commenced.”
Lock the Gate, which commissioned the independent analysis, said that aside from the social and environmental reasons to protect the Lake Eyre basin’s fragile flood plains, the report showed it was not commercially viable, making it “economically foolish to sacrifice” the basin to the fracking industry.
A spokesperson, Ellie Smith, said Origin Energy had probably arrived at similar conclusions when the company announced it was withdrawing from gas exploration in western Queensland’s channel country. She called on the Queensland government to prevent those permits being acquired by other companies.
“We now need the Palaszczuk government to extinguish Origin’s tenements and ban fracking on the flood plains so that smaller, less transparent or less experienced companies can’t go in, fail, and leave polluting, stranded assets for future generations of Queenslanders to clean up,” Smith said.
“This part of far western Queensland supports a sustainable beef industry and thousands of tourists flock here during flood events to witness the remarkable transformation of the landscape.”
Last week the Palaszczuk government left energy policy wonks aghast when it announced Queensland would end its reliance on coal-fired power by 2035 under a 10-year $62bn energy plan to create a clean “super-grid” of solar, wind and hydroelectric power.
In that historic announcement, the premier, Annastacia Palaszczuk, said a bold vision was needed to address the “climate emergency”. She committed an extra $4bn to transform the state’s energy system and said that by 2030 there would be at least 2,000 more wind turbines and 35m more solar panels in the state.
In January the Queensland academic Ian Lowe calculated the potential emissions that would be created if the Origin’s exploration permits in the channel country led to the Lake Eyre basin being opened up to fracking and found that would “blow out of the water” the Queensland government’s emission targets and make it more difficult for Australia to comply with its international obligations.