A new economic analysis reveals how giving companies the right to frack for unconventional gas in Queensland’s fragile Lake Eyre Basin would be the “absolute height of folly” due to the climate impacts and predicted high costs.
In its roadmap for the global energy sector to reach Net Zero Emissions by 2050, the International Energy Agency has suggested that nearly all LNG exports in 2050 will come from the lowest cost and lowest emissions producers.
However, the Pegasus Economics report, commissioned by Lock the Gate Alliance, shows any fracking projects in Qld’s Lake Eyre Basin would be high cost, high emissions, and likely to rapidly become stranded assets.
It demonstrates how carbon dioxide content from gas in the Cooper Basin averages around 30 percent - making this some of the highest carbon polluting gas in Australia.
The report’s findings come as the Palaszczuk Government is considering whether fracking projects should be permitted in the fragile floodplains of the Lake Eyre Basin following rounds of stakeholder consultation, and shortly after Origin Energy announced it would be exiting its fracking exploration tenements across the NT, WA, and Far Western QLD.
The report states that: “The high CO2 content of unconventional gas from the Cooper Basin puts it at a distinct competitive disadvantage compared to other gas fields where the CO2 content of the raw gas is much lower.
“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.”
The report also shows how the delivery cost of gas from the Cooper Basin is above $8.00/GJ, exceeding most projected wholesale prices predicted by the Australian Energy Market Operator.
The author concludes that any attempts by gas companies to mitigate these emissions with carbon capture and storage are likely to be insufficient, given “the majority of projects globally using CCS have had unique engineering challenges that have led to underperformance and cost blow-outs.”
Lock the Gate spokesperson Ellie Smith said, “On top of all the social and environmental reasons to protect the fragile floodplains of the Lake Eyre Basin in south-west Queensland, this report shows unconventional gas production in the region is not even commercially viable.
“It’s likely Origin Energy identified many of the same risks outlined in this report by Pegasus Economics, given its recent decision to withdraw from upstream gas exploration in the region.
“What makes this gas particularly uneconomic is the volume of carbon dioxide it contains. This is the dirtiest gas in Australia with 30% unusable CO2 which would be released directly into the atmosphere - contributing to climate change.
“We now need the Palaszczuk Government to extinguish Origin’s tenements and ban fracking on the floodplains.
“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.
“This report shows that it would be just as economically foolish as it would be environmentally dangerous to sacrifice the Channel Country rivers and floodplains of the Lake Eyre Basin to the fracking industry.”