Australia has abundant supplies of natural gas, both offshore and onshore, enough for more than 50 years, based on current production. It is Australia’s third largest energy resource, after coal and uranium, and it is a crucial part of Australia’s energy mix, providing almost a quarter of the nation’s needs. It is also an essential feedstock for a wide range of industries and is the key to attaining the consistent high temperatures required in many sectors of the manufacturing and waste disposal industries (see No 2 in the About Gas series).
Outside the transport sector, natural gas is the largest provider of energy in Australia, providing 825 petajoules in 2013-14, which was more than the 790 petajoules provided by electricity. Natural gas’s share of the Australian energy mix is continuing to rise. Oil, which is mostly used in the transport sector, is the largest provider of energy in Australia with 2136 petajoules consumed in 2013-14.
Gas-fired power generators can be ramped up and ramped down more quickly than coal-fired generators which makes them ideal for meeting peak demand as well as
for providing baseload power. The facilities required for these generators use less land than that required for a coal-fired power plant of a similar energy output and they need less time for construction. Carbon emissions from gas-fired power generation are about 50 to 60 per cent lower than from coal-fired power.
In 2013-14, gas-fired generators provided 174 petajoules of electricity in Australia. The amount of electricity provided by gas-fired generation has been growing over recent
years, although this may not continue due to the low price of coal. A total of 22 per cent of Australia’s electricity was generated by natural gas in 2013-14. Natural gas is used to generate electricity in all States in Australia, and it produces most of the electricity to meet peak demand.
Use in households
Natural gas provides almost as much energy as electricity to Australian homes, but does so at a lower price. In 2013-14, natural gas and liquefied petroleum gas provided
households with 206 petajoules of energy at a total coat of $6.2 billion. For the same period, households used 216 petajoules of electricity with a substantially higher cost of $16.1 billion. More than 100,000 kilometres of transmission and distribution pipelines deliver natural gas safely and reliably to homes around the country which use the gas for heating their houses, their hot water and for cooking.
Providing energy in the region
Natural gas from Australia is exported to many countries in the region, mainly Japan, China, and South Korea, but also to Taiwan and India and other places via spot markets in the region. In 2013-14, Australia exported 24 million tonnes of liquefied natural gas (LNG) which earned $16.4 billion in revenue. Australia is the fourth largest LNG exporter in the world and when all the current LNG projects become fully operational in 2020 it s expected that it will become the world’s largest.
LNG can be made from natural gas from either conventional sources or from coal seam gas. The gas is cooled to minus 161°C so that it becomes a liquid and in that form it is neither flammable nor explosive. This reduces its volume more than 600 times, making it easier to transport in specially-built tankers. It is delivered to LNG receiving terminals where it is turned back into gas for transmission and distribution.
Natural gas from unconventional sources
The natural gas that comes from conventional and unconventional sources is the same gas — it’s just the extraction methods that differ. Until recently, natural gas in Australia has mostly been extracted from fairly permeable sandstone which means it is less difficult to produce. Over the past 20 years, gas from other sources has been
increasing its share of gas used in Australia. For example, coal seam gas (CSG) makes up around 30 per cent of the gas used in eastern Australia and up to 70 per cent of the gas used in Queensland.
There are three types of gas in Australia which require more sophisticated methods of extraction so are considered unconventional: CSG, shale gas and tight gas – from tight sandstones. CSG collects in underground coal seams and is trapped in fractures of the seams up to a kilometre below the surface by the pressure of the earth or water around it. Shale gas is trapped in the fine grained sedimentary rock of shale formations while tight gas is usually found at depths greater than 1000 metres in sandstone that has low permeability. Advances in extraction technology mean that gas in unconventional sources has become more economical to bring out of the ground.
Concern over the technology used to extract gas from unconventional sources has prompted governments in Australia to hold independent inquiries. These have all found that the risks can be managed provided there is a robust regulatory environment, that a rigorous monitoring program is put in place, and that high quality engineering
and technology practices are employed. This is no different from the requirements demanded of many other industries operating in Australia today.
Energy in Australia 2015, Office of the Chief Economist, Department of Industry and Science
Australian Energy Update 2015, Office of the Chief Economist, Department of Industry and Science
Energy Resource Information Centre