Aussie farmers and coal miners take on gas

If CSG is made uneconomic by a lower-cost gas supplier it won't happen

Farmers and coal miners have the opportunity to profit in three ways from the doubling of natural gas prices expected to arrive by 2015 (SANTOS is confident Australia's east coast gas prices will rise to two or three times current prices). Failing to take this opportunity means accepting a double blow to profits with this doubling of energy costs and a steep rises in fertiliser prices.

A preview of the impact of natural gas prices was reported by ABC Rural - after extreme cold weather in the U.S. pushed natural gas prices to a five-year high:

"A $40 a tonne increase in the US in December has led Australian farmers paying up to $200 a tonne more for DAP. [diammonium phosphate (DAP). Natural gas is a major feedstock in ammonia production.]" (Read more ...)

Methane produced from crop residues, coal and coal waste - at a price below coal seam gas - means:

• More revenue for farmers and more jobs for coal miners.
• Cheaper fertiliser at stable prices for farmers by selling methane to fertiliser manufacturers.
• No coal seam gas wells. 

Pentair Haffmans’ biogas upgrading technology according to the company outperforms conventional techniques by providing two additional advantages. Biogas primarily consists of a mixture of methane and CO2. The technique used makes it possible to recover 100 % of the methane, thus eliminating the environmentally harmful ‘methane slip’. In addition, the CO2 by-product is recovered for use in a variety of applications, including greenhouse growing.

Use these three steps:

• Convert crop residues and coal into a methane and carbon dioxide mixture.
• Separate the methane and sell it as synthetic natural gas to fertiliser manufacturers and LNG exporters.
• Sell the remaining carbon dioxide to algae farms to produce edible oil, bio-diesel and livestock feed. Researchers feeding marine algae to lambs have increased the level of healthy omega-3 fatty acids in their meat by almost three times. (Read more ...)

Source: Science creates possibilities - farming energy and food

It should be a crime to have CSG on this land

FARMERS have declared they are ready for war as the CSG industry eyes their land for mining.

A meeting of 500 landowners and protesters yesterday issued a message of defiance to Arrow Energy, which is seeking approval to sink gas wells at Cecil Plains on the Darling Downs.

A large part of Arrow's gas lies under the best cereal and cotton farming land in Queensland.

Source: Arrow takes aim at Darling Downs farmers for coal seam gas mining

The coal sector has its troubles - thin margins, job losses

Falling commodity prices and rising operating costs is wreaking havoc on Australia’s coal sector with one industry association saying over 9000 jobs have gone in the last 15 months.

The lower-priced thermal coal is selling at about $US87 a tonne and according to a Wood Mackenzie report more than 40 of the 71 thermal mines surveyed had cash operating costs above this level. Painting an even bleaker picture, some traders have reported recent thermal coal sales as low as $US72 a tonne.

Source: Thin margins, job losses: Coal sector troubles

Concerns mounting over soaring gas prices and a looming domestic supply shortage.

The Government Minister for Resources Mr Gray's position was echoed by his opposition counterpart Ian Macfarlane, who said any move to mandatory domestic gas reservation would be a "bad signal to investment in Australia" and would not resolve the issue.

Natural gas was essential to farming, making up 15 to 40 per cent of the cost base of common products like fertiliser.

Source: Canberra to probe domestic gas market

Fertiliser manufacturer Incitec Pivot that uses huge amounts of gas is livid

Coal seam gas (CSG) would go for export as liquefied natural gas (LNG), shipped out of Gladstone to Asian markets. LNG plants producing millions of tonnes per annum are hungry beasts – nowhere else in the world had they been hooked up to thousands of CSG wells. 20,000-30,000 wells are to be drilled across the Darling Downs over the next two decades.

Domestic gas prices on the east coast are expected to double by around 2015, as they reach ‘export parity’. In simple terms, for the first time Australian gas users – commercial and residential – in the eastern states are competing for gas with energy-hungry Asian nations like Japan, Korea and China.

Source: Campbell Newman and his flying pig economics