Expanded seabed puts pressure on national security assessment
The recent UN decision confirming Australia's jurisdiction over the resources within an additional 2.5 million square kilometres of seabed will have a major impact on Australia's national energy security assessment, as Ernie Davitt writes.
The UN decision will also require a fresh look at the Defence and civilian maritime patrol resources at Australia's disposal to protect not only what we have now but also the new seabed areas which are equal to 10 times the size of New Zealand.
Australia has been given the green light to appropriate the rights to what exists on and under the seabed, including oil, gas and biological resources, such as micro-organisms which could be used in medicines.
Given the almost insatiable appetite of global economies for natural resources, particularly for energy production purposes, the new seabed territories have given Australia not only extensive new riches but also enormous challenges in terms of securing an area equal to the landmass of Western Australia.
The Government moved quickly to proclaim the outer limits of the Australian continental shelf into law on the basis of the UN recommendations.
Federal Resources and Energy Minister, Martin Ferguson, says the national energy security assessment, which will include the future liquid fuels outlook, will provide the basis for a new energy white paper before the end of the year.
Mr Ferguson maintains that although Australia was "oil challenged," it was also a world-class natural gas province.
He quotes figures which show Australia has about 10 years' worth of oil supplies at current production levels without any further discoveries. The country also will have to deal with a $25 billion trade deficit in petroleum products by 2015.
Australia should continue to diversify its energy resources and encourage exploration in frontier basins as well as pushing for research and development of alternative fuel industries, including the potential to convert some of our vast gas resources to synthetic fuels.
“We have been finding gas faster than we produce it for a quarter of a century and we have well over 110 years' worth of remaining resources at today's production rates,” he said.
“In fact, there is significantly more if we include the vast potential of coal seam methane where Queensland is leading the world in production technology.”
Mr Ferguson emphasised the need to create partnerships between governments and industry to get more major projects off the ground.
This was an enormous challenge in an escalating cost and tightening investment and labour environment.
“But the rapidly growing LNG market in the Asia Pacific—and the Indian rim—will not wait for us,” he said.
LNG project proposals in the pipeline could result in Australia's LNG exports reaching 60 million tonnes a year by 2015, making us the world's third-largest LNG exporter behind Qatar and Nigeria.
Mr Ferguson said the UN decision demonstrated that Australia's effective engagement in law of the sea matters delivered results.
“The Government will move quickly to proclaim the outer limits of the Australian continental shelf into law on the basis of the recommendations of the Commission.”
The expansion of Australia's seabed territory meant a larger canvas on which the current generation of Australians could paint their resource and energy future, according to the Chief Executive of the Australian Petroleum Production and Exploration Association (APPEA), Ms Belinda Robinson
“With more area to explore for new oil and gas reserves comes more promise,” Ms Robinson said.
“We really know very little about the petroleum prospectivity of these areas and increasing that knowledge will be challenging as will encouraging explorers into these areas, but it is a very exciting prospect.”
Extensions of Australia's continental shelf taking in the Wallaby and Exmouth plateaus, the Great Australian Bight and the Lord Howe Rise encompassed areas considered by Geoscience Australia to hold petroleum promise.
Ms Robinson said the search for petroleum resources was in Australia's interests given energy security was a high priority.
“Australia's crude oil and condensate production has declined from nearly 100 per cent of Australia's needs in 2000 to just over 60 per cent today and an anticipated 32 per cent by 2017,” she said.
“This translates into a decline in the petroleum and petroleum products (excluding LNG) trade balance from a surplus of $0.9 billion in 2000, to a deficit of $13.7 billion today and projected at $28 billion in 2017.”