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Legislative Council - Fifty-First Parliament, Third Session (51-3)
2008-10-29 Daily Xml
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FOSSIL FUEL RESERVES

The Hon. D.G.E. HOOD (15:06): I seek leave to make a brief explanation before asking the Minister for Mineral Resources Development a question about South Australia's fossil fuel reserves.

Leave granted.

The Hon. D.G.E. HOOD: My office and the parliamentary library recently spent approximately half a day trying to track down good data on South Australia's fossil fuel reserves and the sale contracts that currently exist for such reserves. There is no public register, but we understand that the state of play is very close to the following: that is, approximately 350 mega-tonnes of coal readily remaining (predominantly at Leigh Creek) which equates to some 100 years of production remaining. So, there are plenty of resources there.

Secondly, only about 9,490 megalitres (or approximately eight years' supply) of crude oil remains in the South Australian side of the Cooper Basin. Thirdly, some 2,550 megalitres (or approximately 11 year's supply) of condensate remains at the same location. Fourthly, some 4,300 megalitres (or only about eight year's supply) of LPG remains. We are selling off these final reserves at a rapid rate. I have also been advised that South Australia sold some $250 million worth of its petroleum last year, along with $76 million worth of LPG. My questions are:

1. Are these figures approximately correct (and I understand the minister may need to take this question on notice) and, if so, is the minister concerned that South Australia may very well be a state with very limited supplies of fossil fuel remaining in a short number of years (eight years in some cases)?

2. If so, what contingencies has the government put in place for that eventuality? What will be the economic impact and implications for the state if this is correct?

3. Given the strategic nature of our fossil fuels, will the government commit to setting up a public register of our known reserves and production data in order to provide transparency in relation to our reserves as they stand?

The Hon. P. HOLLOWAY (Minister for Mineral Resources Development, Minister for Urban Development and Planning, Minister for Small Business) (15:08): This state is blessed with huge quantities of coal resources, but a lot of those resources have not necessarily been proved up and may not be, if one is looking at the JORC standards (the standards used in proving resources). For example, I know there are potentially billions of tonnes of coal in the Arckaringa Basin, which is somewhere north of Coober Pedy. There are also a number of other sites around the state where there are significant coal resources; for example, in the Mid North, near Lochiel, Balaclava and Sedan. There are also coal resources at Kingston, where companies are currently looking at how those resources might be exploited, and there is another coal resource near Lake Phillipson, which is south-west of Coober Pedy. I think there are also significant coal resources over at Lock, on Eyre Peninsula.

So, this state has significant resources. Of course, what future role coal might play in a carbon-challenged world remains to be seen. There are, in fact, potentially massive coal resources in this state, but they are generally located in remote locations and their quality can vary. The figures one sees for crude oil and other fossil fuels really apply to those fields that are currently producing. Naturally enough, producers in those fields really drill only enough to establish reserves sufficient to meet their production requirements for the period ahead. There is not much point in drilling and opening up new fields if you are not going to develop them for 10 or 20 years; it is simply not a viable proposition.

However, although I expect that significant exploration for petroleum fuels will continue with some success in the Cooper Basin, as I have indicated in answer to a number of questions over the past year or so, we have great hopes for exploration now being undertaken in the Officer Basin. This is the area west of Coober Pedy and the Stuart Highway, between Coober Pedy and Glendambo. It is probably one of the last great unexplored onshore basins in the country.

Also, of course, the government has been releasing petroleum blocks in our part of the Otway Basin which is a significant gas producer in the south of Victoria. Our part of the Otway Basin holds potential, as indeed do areas of the Great Australian Bight, which, of course, is a fairly hostile environment but does have the potential for crude oil discoveries.

One of the things that has changed the hydrocarbon map in this country in recent years has been the discovery of coal seam methane which is associated with coal. That has added significantly to gas supplies, particularly in Queensland, and there is some opportunity for such discoveries to be made in the Arckaringa and Officer basins within this state.

I will see what information can be provided to the honourable member but, if he is looking for figures such as Leigh Creek, which is 350 megatonnes, as he mentioned, I think it would be a relatively minor amount compared to some of the coal reserves potentially held in other basins. Of course, Leigh Creek is a producing field and that is why those reserves would be well and truly JORC compliant.

If there is any other information that I can obtain for the honourable member I am happy to do so. I will conclude with the point that I think this state is very fortunate in its energy resources. Although the Cooper Basin, which has been producing for some 40 years, is on the decline as a basin, nevertheless, this state, potentially, not only has enormous coal reserves that can be explored at some stage in the future but also, of course, we have developed significant renewable energy such as 50 per cent or so of the country's wind power, significant points of solar power and also geothermal. We have, potentially, some of the best hot rocks that are closer to the surface than anywhere in the world and, therefore, the geothermal potential is enormous. I will see what information I can supply to the honourable member in relation to some of the estimated hydrocarbon reserves that we have in this state, which are significant.

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