NSW Methane Gas Problems

Founded in 1954, the South Australia and Northern Territory Oil Services (Santos) has now been in operation in Australia for 69 years.  

For any Oil and Gas company to exist in the Australia for this long is a huge effort when you consider that the Australian Oil & Gas Industry is by far the most heavily regulated industry in the world.

Back on the 17th of November 2011 Santos announced it had acquired 100% of Eastern Star Gas, they previously had a 20% stake in the company. 

It was huge news at the time with Santos spending AUD $924 Million dollars on the sale.  More importantly, it now meant that a very well respected Oil and Gas operator would now be able to apply its quality way of doing things in an area this is rather sensitive (1000 hectares of the Pilliga State Forest and adjoining grazing land).

I’ve never really understood why Santos got picked on some much by extremist groups and I often wonder if Woodside or Shell has purchased 100% of Easter Star Gas, if they would have received equally severe treatment.

Prior to this particular business transaction, I had never heard of Santos ever being referred to in a negative manner.    Why was there never negative press or comments about Eastern Star Gas in the past? 

If you were going to place the sensitive task of operating in a state forest to an Oil and Gas company, I think you’d probably want someone like Santos, Woodside or Shell in charge of that task.

In any event, we now had a very highly respected Australian Oil and Gas company with at the time 57 years of experience operating in the most heavily regulated industry in the world now about to start supplying around 65% of NSW gas needs for at least 35 years.   I would have thought this to be a situation that should be celebrated, not frowned upon.

At the time I remember reading in the Sydney Morning Herald that Santos expected to spend an additional AUD $500 Million on this new purchase.

This made sense because Santos specifications would have to be met. Existing wells would have to be evaluated for compliance. Non-compliant wells would most likely be plugged, and any new wells required would be installed in accordance with their specifications. 

Water storage costs, Wilga Park Power Station updates, and whatever else is required to get the big Santos stamp of approval. This made complete sense, and I wished them well.

Fast forward 12 years and Santos has now spent over AUD $1.5 billion dollars on top of the AUD $924 million they shelled out on the purchase.

I heard on the radio recently that they are still getting hurdles place in front of them by the NSW Government.   

This whole process must be weighing heavily on Santos and I hope one day soon they get the opportunity to do what they do best and not have to put up with the BS that’s been thrown their way.

I wonder if the people that have been complaining about Santos and their Narrabri Operations actually have any idea about how clean and tidy this type of operation is.   At each well, there typically is a wellhead water separation skid, not much bigger than a Fiat 500.   

There’ll some valves on there, monitoring instruments and filters but essentially these skids are just provide dry clean gas that can be sent down a pipe.   

The gas will get compressed at some point to increase the pressure of the gas in pipework and that’s what gets it to our gas stoves and heaters etc.

The annoying pretend greenies out there with no tertiary level education in environmental engineering or science and without any experience in the Oil & Gas Industry need to pull their heads in.   

They need someone to explain to them that this is Australia, not some other country that they’ve read horror stories about whilst sipping on their skinny latte at some café in Sydney’s eastern suburbs.  

I get especially annoyed when they carry on about methane gas leaking all over the place and people choking methane filled air all around where you have wells.   Methane is lighter than air, having a specific gravity of 0.554, Methane weighs 0.042 pounds per cubic foot while air is 0.076.   

So when it comes to the gas in the ground at Narrabri which is 99% pure, any gas that might ever leak would go straight up.

You have to understand that companies like Santos are extremely greedy and love money. They make money by extracting gas and transporting it via pipeline to their customers. So why would they want their valuable product (methane gas) to leak anywhere? That would be bad business.

If a leak occurs in the above-ground portion of the process or along a pipeline distributing their highly valued product, you can be assured that it will be repaired as soon as possible.

Mission statements for companies like Santos will almost certainly revolve around ensuring that every joule of gas extracted from the ground via their wells ends up flowing through a metered pipeline at a rate of around 3 metres per second.

Another common misconception about the Australian oil and gas industry that fake greenies spread on Social Media is that every Coal Seam Gas well involves hydraulic fracturing (fracking).

That could not be further from the truth and I think they are mostly confusing Coal Seam Gas (CSG) extraction with Shale reservoir gas extraction.

With CSG, the flow of gas out of a seam only needs to be encouraged once in a blue moon, in most cases if the pressure in the seam is high enough, once they reach the desired depth/formation, via either vertical or horizontal drilling, the coal seam naturally depressurises as the water is extracted.

Prior to the drillers hitting their mark, CSG has been accumulating in that seam for millions of years as has been adhering to the surface of coal particles. 

The coal seams are normally filled with water, and the pressure of the water keeps the gas as a thin film on the coal’s surface.

The first step is to extract water from the coal seam in order to reduce pressure and release gas from the coal. 

If the pressure within the seam is high enough (which is usually the case), the gas may flow to the surface wellhead unaided. If the pressure is too low or drops off over time, they will lower pumps down inside the well to the bottom of the casing on steel tubing and pump the gas to the surface. The water in the gas is separated when CSG reaches the surface.

Only in very rare cases will they bother with hydraulic fracturing of the well to encourage flow out of the seam with CSG. 

When they do this, they pump up/pressurize the seam with something that looks like toothpaste (in Australia), and when the pressure reaches the desired level, the seam opens up, allowing the flow to proceed at the desired rate.

I couldn’t find it online today, but Santos used to openly list all of the ingredients in their fracking fluid. Again, the Australian Oil and Gas Industry is heavily regulated; this is not any other country; this is Australia, and seriously, if you believe the O&G industry in Australia is allowed to do all the garbage you read about in other countries, you should take a break from stirring the pot on environmental issues.

As you can see, the CSG process is fairly benign; there are no terrifying monsters to be found, and it provides us with much-needed natural gas.

However, according to some of these very strange and confused people who appear to wake up every morning with the sole purpose of annoying the world, they’ve read everything they need to know about the Gas industry on social media, which naturally qualifies them as experts, allowing them to make as much negative noise as they want about an essential service.

The sad part about these people and their irrational comments is that they are most likely being paid by Australian taxpayers, either through jobseeker payments or government jobs, and they sometimes even work for political parties.

There is no other country on this planet with as much gas in the ground as Australia, yet in NSW we are paying the highest prices for gas in the world.

If only the NSW Labor Party had followed the lead of the WA Labor Party around 23 years ago, there would be no gas supply issues.

Very roughly, the then Western Australian Premier told the oil and gas companies that they could go as hard as they wanted and extract as much gas as they needed, but they had to set aside around 15% of what they extracted and sell it to the good people of Western Australia at dirt cheap prices.

This is still the case today, and Western Australia has the cheapest natural gas in the world.  

Honestly, why couldn’t the NSW Government and/or the Australian Federal Government reach an agreement with Santos a long time ago?  This BS has been dragging on for 13 years and enough is enough.