21 June 2010

Dr Liam Wagner from The University of Queensland’s School of Economics is researching the future of the natural gas market in Queensland.

$20 billion is being invested in Queensland’s natural gas in coal seams by global energy companies, as Australia’s natural gas reserves are named as one of the planet’s biggest sources of gas.

“Australia is one of the top three natural gas producers in the world and global energy companies will spend billions more to secure their share,” energy analyst and researcher Dr Wagner said.

“Queensland’s gas market is attracting many other countries because of its geopolitical stability.

“Due to the overwhelming interest in our reserves from users overseas, energy companies will move very quickly to prove that our reserves are tangible and that they are able to sign long-term contracts."

Dr Wagner said to extract gas, energy companies first needed to show the bankability or viability of a project, whether they could sell it and whether it was a true 1P reserve.

“Gas companies then spike wells and show a flow of gas that they can send on a LNG train to Gladstone for export," he said.

“Increasing global consumption of electrical technology impacts heavily on our electricity demand and that electricity usage is growing very, very rapidly on the evening peak.

“Another way of showing the viability of a project for energy companies is to sell this gas to Queensland electricity generators but in the long run their main aim is to export."

Dr Wagner’s research has been presented internationally and focuses on the impact of gas prices and solutions for future energy consumption.

“To cope efficiently with our local evening peak, Queensland will have to invest more in distribution infrastructure and transmission infrastructure and peaking gas fired generation,” he said.

“We will see more of the natural gas fired generation being installed because it is far more efficient energy source over time: it has much lower emissions and uses less water.

"Then, older and dirtier power stations will be retired because they will become less competitive in the national market."

For the full interview, aired 20/6/2010, with Dr Wagner for the ABC’s Background Briefing, please click here.

Media: Louise West (louise.west@uq.edu.au, ph 07 3365 4482)