In Midland, Texas, the centre of the Permian Basin, an energy revolution is unfolding. At regular intervals, truckloads of diesel pumps roar into life and pump water down wells rich with oil and gas.
Each of the three wells at the site extend for more than 3km in a horizontal direction. It would take you 30 minutes to walk the distance of a single well.
Fracking has been around for more than 50 years. It is horizontal drilling that has unlocked the shale revolution.
This revolution remains strangely unheard of by many commentators, who don’t seem to realise that the use of fossil fuels is skyrocketing to new heights even as the cost of alternative energy sources fall.
Those same commentators often argue that shale gas is bad news for the environment, even though it has allowed the US to cut its carbon dioxide emissions by more than almost any other country.
Countries have been trying to cut carbon dioxide emissions for 30 years. During that time three proven methods have emerged: have a recession, send manufacturing jobs to China or adopt new technology.
Australia should adopt these new technologies to lower our emissions rather than putting up the price of energy or increasing the tax load.
We have shale gas resources in Australia that remain untapped. In part this is because state and territory governments have ignored the science and slapped a ban on fracking.
In Victoria, all gas exploration remains banned at least until a moratorium ends in the middle of this year, yet Geoscience Australia estimates there are almost 27 trillion cubic feet of potentially recoverable resources of shale and tight gas onshore in the state — enough to meet 40 years of east coast domestic demand.
The Victorian government says it is waiting for a report from its chief scientist, even though there have been more than a dozen scientific reports into fracking in Australia. All have concluded that fracking can safely occur with appropriate regulation.
In NSW, Santos has been waiting almost a decade for approval of its Narrabri gas project. This project could supply up to half of NSW’s gas needs. Perhaps we need to send Bob Brown up to Narrabri to help the proposals get over the line and deliver jobs for the west of the state.
In the Northern Territory, there was a two-year holdup while an incoming Labor government imposed yet another moratorium. The Beetaloo Basin in the Territory is perhaps the most exciting of all as Australia’s most promising shale gas prospect. Its opening would potentially provide the territory — which has an excellent Asian-facing port — with the one thing it has lacked in trying to build more diverse industries: namely, affordable and assured energy. And affordable energy means more jobs.
While the federal government has been waiting for an outbreak of common sense among state and territory governments, we have not been sitting idle. Three years ago, the commonwealth established a gas export control regime. A recent review of that scheme found that it has helped cut spot gas prices by more than 40 per cent across three years.
Those price falls are starting to flow to households, too. The lower gas prices were among the biggest price falls in the most recent consumer price inflation index.
We are also looking at options for a nationwide gas reservation policy. We should ensure that Australian gas benefits Australian jobs and Australian industry first. We have enough gas to export to the world, but when the Beetaloo gas is developed it should support the creation of manufacturing jobs and industry in Darwin — not just in Beijing, Tokyo or Seoul.
This way, the development of Australian gas will help ordinary Australians get a high-paying job and provide for their families.
One of the pioneers of the US shale oil and gas revolution was Harold Hamm. Hamm grew up dirt-poor in Lexington, Oklahoma, the youngest of 13 children. He left school young and started his own water-hauling trucking business to serve the fledgling fracking crews of the 1960s. There he learned the oil business and saved up enough money to buy his own oil wells. He never went to college but bought himself a library full of books on geology. He is now worth more than $12bn.
In 2011, he was invited to the White House after donating the bulk of his wealth to the Giving Pledge. There he explained to then president Barack Obama that there was a revolution occurring in the oil and gas industry.
Apparently, the president was not impressed and argued that green energy was the future.
That revolution is transpiring regardless.
In Australia, we should develop our gas resources — partly because doing so can reduce our carbon dioxide emissions, but the main reason we should do it is because it gives people from poorer backgrounds — such as Hamm — a go.
Matt Canavan is a Nationals senator for Queensland and the former minister for resources and northern Australia.
