Keeping the roof on the pub

Barry Goldstein has a mission: “Let’s entice the investment as best we can in a way that is clearly trustworthy in regard to protecting social, natural and economic environments."

Goldstein is South Australia's top oill and gas bureaucrat. Officially, he is the Executive Director, Energy Resources Division in the Resources and Energy Groupin the Departebt of Manufaturing, Innovation, Trade, Resources and Energy. He's DMITRE's oil, gas and geothermal man.

A former exploration manager and chief geologist at Santos, Goldstein is also the current chair of the Coal Seam Gas Steering Group which advises the Council of Australian Governemnts (COAG).

He talks a lot about trust. "How do we get the public to know that we have their back, how do we get industry and investors to know that we have got their back, and how do we actually get welcomed, efficient investment for unconventional gas?

“We do that by having good conversations with people way earlier than land access is needed. . . . we can have an almost academic discussion about risks to social, natural and economic environments with poeple, because it isn't personal yet, it is not about a particular location or a particular time . . . so we don't have people locking their arms and being dead set against it because they didn't have enough information, or myths were perpetrated without a rebuttal in place.

“Let’s call a spade a spade, and if in fact shallow gas means low pressure and low pressure means low rate, and low rate means lots of wells to get to a marketable volume, and if we are talking about a high density of shallow wells in an area where the land is already used for other purposes, and if in fact that means lots of roads, then at the very least – forget for the moment anything about water – you are already coming into a challenging planning scenario.

“So maybe we should be looking at our deep gas. That’s an important narrative to get out there, because with deep gas you can drill several wells from a single pad and then deviate them. The footprint of deep unconventional gas is not much different from conventional gas.

“We can demonstrate cases like the Otway Basin (in the south-east of the state) where we have decades of experience of conventional gas being a real benefit, providing security of supply and supply-side competition, which are truly enjoyed by agriculture and everything else down in the south-east.”

In South Australia there are at least 640 wells and more than 1,000 stages that have been fracced. In a long reach well you might have as many as 50 stages. Here we are starting with 10 or 12.

A couple of wells were stimulated recently in the Officer Basin out west, and the rest were in the Cooper Basin, with no adverse effects, he says.

“We’re talking about deep gas, 2,500 metres and deeper.

“Just think about trying to lift two kilometres of rock. There is no way that the kind of pressure you are going to put in a bore hole is going to lift that. Those cartoons of fractures coming back up to the surface – that breaks the laws of physics.”

The “massive” fracture stimulation of Geodynamics’ Habenero gethermal well “didn’t bring the Innamincka pub down”.

The same story at Paralana with Petratherm.

So far as the Great Artesian Basin is concerned – and it underlies most of central Australia including the Cooper and Euromanga basins – “we are separated by at least hundreds of metres of rock from the Great Artesian Basin.

“And where people are drawing from the Great Artesian Basin is nowhere near where people are drilling. The GAB goes from relatively shallow down to about 2,500 metres. Nobody is drilling 2,500 metres to get water, for agriculture or something like that. And that water at that depth, as a function of its temperature, is saltier than the surface water.

“The risk mitigation strategies of cement, pipe, more pipe, more pipe, you actually have something like n+3 redundancy in terms of protecting water.

“But you still have to monitor. In other words you still need to monitor to make sure that nothing was going wrong so that you could catch it before it actually meant anything. And our regulations require that.”

“You can know what the water looked like before oil and gas production started. You can also require companies to sample water, shallowish, and measure, and you can set up a traffic light so that if you begin to see any chemistry change either in terms of total dissolved solids or in terms of abundance of other constituents, that you think are coming in from oil or gas production, you can shut people down before it is too late.”

“What we do is we require the companies to actually sample. We probe not just that they are doing what they say, but we probe their management systems.

“the best way to reduce risk is to prevent risk.

"Companies’ best practice for drilling a well will involve cementing pipe in place. If you have put the cement between the pipe and the hole you have drilled sot that there is a bond, you run certain measurements to ensure that the cement bond is good and you run pressure tests to make sure that it is stable.

“We will actually go out and make sure that they are testing the way they say they are, and they don’t know when we are probing it. When we are probing management systems, everyone is on their toes not to take any shortcuts, and that is preventative, rather than trying to fix it up later.”

“On pipelines we will probe the way periodic non-destructive testing of pipe wall thickness is undertaken, and not just that it was undertaken, but that it was undertaken in the way that was planned, without shortcuts.

"And all of this becomes a matter of public knowledge. Our compliance reporting is public, and the standards for reducing risks are also public.

“The worst thing that a company wants to find itself in is the area of public ire. And we do deploy the shaming principle by saying that if we catch you not living up to standard practices, that’s just as bad as you having an incident.”

Adelaide Independent Reporter 2013