Newman Government approves oil shale industry

The creation of new jobs and broad economic benefits are expected, following the Newman Government announcement that it will allow the development of a commercial oil shale industry in Queensland under strict environmental conditions.

Natural Resources and Mines Minister, Andrew Cripps, said the Government’s new oil shale policy sets rigorous environmental controls on the industry and will allow existing oil shale operator QER Limited to progress its trial plant at Gladstone to commercial stage.

“Queensland currently has around 90 per cent of Australia’s known oil shale resources, which are equivalent to approximately 22 billion barrels of oil,” Mr Cripps said.

“As the world supply of conventional crude oil diminishes, there are strong prospects for oil shale to become the next major source of liquid fuel supplies in Australia, and Queensland is well placed to lead that charge.

“The industry has the potential to create thousands of new jobs in the construction phase alone, and provide royalties and other economic benefits for our regional communities and the broader economy, which is great news for Queensland.”

Minister Cripps said the new oil shale policy would:

• recognise the strategic importance of oil shale to contribute to energy security, and encourage private sector investment in high quality oil shale extracting technologies
• ensure project proponents must first demonstrate their oil shale technology will meet high environmental standards and community expectations
• allow, in general, the consideration and development of other oil shale deposits in Queensland, pending thorough environmental assessment on a project by project basis
• continue the existing 20-year moratorium suspending development of the McFarlane oil shale deposit near Proserpine until 2028

Minister for Environment and Heritage Protection, Andrew Powell, emphasised that strict environmental controls would apply to any proposal to mine and process oil shale.

“To date, there has been extremely limited commercial application of oil shale in Australia and overseas,” Mr Powell said.

“That’s why any proposed oil shale development will be subject to detailed environmental assessments on a project-by-project basis. 

“We will consider these proposals on their merits and require a trial stage to determine the feasibility and environmental performance of any unproven technologies.

“The approval process for any oil shale development will demand that operators adopt best practice environmental management techniques and comprehensive monitoring of the process, its emissions, wastes and impact on the community and environmental settings.

“Under the new policy, existing operator Queensland Energy Resources Ltd (QER) will be able to proceed directly to commercial production, but new entrants to the industry will need to prove their oil shale extraction technologies through trials.

“Importantly, both existing and new operators in the oil shale industry will need to prepare full Environmental Impact Statements for their projects.”

Mr Powell said the QER pilot plant near Gladstone has successfully demonstrated the viability of its processing technology.

“The report into the QER plant demonstrated it operated well within the environmental performance requirements of its Environmental Authority issued by my department,” he said.

[ENDS] 13 February 2013

Media contacts:

Minister Cripps: Jane Paterson 0417 281 754

Minister Powell: Ken Vernon 0431 027 017

Further Information:

Oil shale is a fine grained sedimentary rock containing organic matter called kerogen. It is a completely different industry and extraction process to shale gas or shale oil.

Hydrocarbons are derived from oil shale that has been mined and then heated in a processing plant.  This process produces vapours which are condensed and converted into synthetic crude oil, and then refined to produce ultra-low sulphur transport fuels.