The CSG Industry

• Figure 1 - US CSG Production
• Figure 2 - Queensland CSG Production
• Figure 3 - Gas Sales Trends
• Figure 4 - Gas Production by State

Australia is a growing nation with increasing energy needs. This need, however, exists in an increasingly “green” political and public expectation environment. Australia’s resources sector continues to grow with coal seam gas expected to replace coal for Australia’s domestic energy needs. Conventional natural gas availability is in decline but Australia is rich in gassy coal seams which offer an important source of gas. Conventional natural gas and coal seam gas is acknowledged as a cleaner source of energy than coal but it is seen as an interim measure with a need for sustainable energy production to prevail (DECCW, 2006). Hydroelectric power is becoming less acceptable due to environmental effects but wind and solar are not capable of meeting Australia’s immediate needs.

CSG is an important growth industry for Australia and Asia, particularly China, India, and Indonesia. It has the potential to underpin significant economic growth in the Asia-Pacific region and contribute to global energy security. In the past decade, CSG has emerged as a flexible, clean and competitive source of energy in the search for lower emission fuels. CSG is predominantly methane (chemical formula CH₄) with lesser amounts of carbon dioxide and other trace gases. It is also known as coal bed methane. As another source of natural gas, CSG can be used in the same way as gas from conventional gas wells to power water heaters, stoves and space heaters in both domestic and business settings. CSG can be used as a direct source of power for industry and as a fuel for electricity generation.

From a global environmental sustainability perspective, CSG can help the community transition to a low greenhouse gas emissions future. Greenhouse gas emissions from gas-fired power generation are significantly lower than those from coal-fired power generation, so the expansion of gas-fired power generation in place of coal can help slow global emissions growth and act as a bridge between traditional power generation and renewable technologies.

Commercial production of coal seam gas (CSG) in Australia is only a decade old, but it has experienced immense growth in recent times, with new companies making their mark on the industry and with CSG production reaching new heights.

CSG production reached 76.2 Bcf (80 PJ) in 2006, an increase of 31.4 per cent, in response to Australia’s growing gas consumption needs, which rose 3.4 per cent to 864.8 Bcf (908 PJ).

In 2009, CSG production was 185.7 Bcf (195 PJ), which is a 41% increase on the 2008 production of 129 Bcf (138.5 PJ). Queensland produced 180 Bcf (189 PJ) or 97% of Australia’s total. 111.4 Bcf (117 PJ) from the Bowen Basin and 68.6 Bcf (72 PJ) from the Surat Basin. In New South Wales, 5.5 Bcf (5.8 PJ) was produced, 5.3 Bcf (5.6 PJ) from the Sydney Basin and 0.19 Bcf (0.2 PJ) from the Gunnedah Basin. Note that coal mine methane (CMM) is not counted in CSG production statistics. NSW however is currently in a rapid growth phase. Figure 3 shows Australian gas sales trends.