‘Cents-less’ gas exploration risk

LOCK THE GATE: Penola-based anti-gas expansion activist Angus Ralton stands at the iconic Blue Lake in Mount Gambier, showing his support for the Limestone Coast Protection Alliance’s ongoing campaign.

NEW claims have emerged the State Government has only banked $11m in royalties from South East gas production over the past 70 years, which is “pittance” according to the regional anti-gas movement.

Prominent regional campaigner Tony Beck said the government had now given back $6m of the $11m to Beach Energy for its new Haselgrove-3 conventional gas exploration well south of Penola.

“The government will only be left with loose change,” Mr Beck told The Pennant.

“This is a pittance and they are giving $6m back straight away – the State Government will only be $5m up in 70 years despite all this angst and anxiety it is causing our community.”

The anti-gas expansion activist also claimed the amount of gas being targeted by Beach Energy was a “tiny amount”and was not worth the community anxiety being fuelled by the expansion in gas production.

“If they could get every drop of the targeted gas, it could run the state’s energy needs for about 34 weeks,” he said.

But he said historically the company was only able to access one-fifth of the targeted resource.

“This really puts it into perspective how much energy we are talking about – it’s a pittance, it is a worthless and futile exercise,” Mr Beck argued.

“If they only get one-fifth of the gas if they are successful, then that would mean it would provide the state’s energy needs for a couple of weeks.”

“It is a ridiculous concept – all of the wells over 70 years have produced 70b cubic feet of gas – that won’t run the state for even a year.

“This is not much energy in the scheme of things for the damage it does which lasts forever.”

But since 2010, Energy Minister Tom Koutsantonis said Beach Energy had paid more than $230m in royalties to the State Government from its operations across the state.

“Ultimately, however, the Plan for Accelerating Exploration PACE Gas program isn’t about raising revenue in terms of royalties,” the minister said.

Mr Koutsantonis’ office did not provide the royalty figures for the South East.

He said a gas shortage across the country was driving up power prices for households and businesses.

“PACE Gas is designed to increase the supply of affordable gas to South Australian electricity generators in order to put downward pressure on power prices for all South Australians,” he said.

According to Beach Energy spokesperson, the South East conventional gas exploration program aimed to bring new gas to the market within three years.

“It is hoped the project will eventually supply gas to power generators, local businesses, and broader residential and industrial markets,” the spokesperson said.

The well, Haselgrove-3, will be drilled around 8km from Penola, in Beach’s 100pc owned permit PPL 62.

“The well is targeting a 34Bcf prospect. The results of drilling this well will inform any future steps but if successful, Beach expects to pursue follow-up exploration prospects within the region, the well will not be fracture stimulated,” the spokesperson said.

“Beach pays all royalties that are due to government in relation to its activities.”