Scot MacDonald
Adjournment Debate on the Shale Oil & Gas Indsutry
8th Mar 2017


Mr SCOT MacDONALD ( 18:39 ): In mid-December 2016 I undertook a study tour to the United States of America and Canada sponsored by the New South Wales branch of the Commonwealth Parliamentary Association [CPA]. The aim of the visit was to see at first hand the shale oil and gas industry and its impact on regional economies, as well as testing the truth of assertions the industry had turned well sites into "industrial wastelands". I visited Dallas, Houston, Scranton in Pennsylvania, Dimock and surrounds, Washington, Ontario and New York. In Texas I met with representatives of the oil and gas industry and heard their perspective of the evolution of the shale oil and gas industry, particularly over the past decade. Whereas shale has been accessed for a century, it has been the technology developments of targeted fracking and horizontal drilling that fundamentally shifted the economics of available resource extraction.

These techniques led to the United States oil and gas rush that took off in 2008. Since then more than one million wells have been drilled and the energy outlook for North America has changed forever. The fracking and oil and gas companies I spoke to recognised the early rush had created problems in the communities in which they operated. The lack of understanding and transparency of the fracking and drilling process had alarmed many and been exploited by anti-shale industry activists. The sector and regulators had responded with standards for fracking and transparency with drilling inputs. The Center for Responsible Shale Development had been established. This centre brings together regulators, industry, scientists and community representatives to manage the process for shale oil and gas extraction.

Most of my time was spent in the Marcellus shale field. Basing myself in Scranton, Pennsylvania, I toured the shale "hotspots". I spoke to farmers and residents with shale wells on their properties. I had lunch with the Chamber of Commerce in the epicentre of the shale field. I watched a fracking and drilling operation. I visited many shale gas wells, including one on the grounds of an elementary and senior school. I was shown factories and industry in rural Pennsylvania utilising shale to bring jobs to the regions. I made a point of spending time in and around Dimock and visiting the site of the flaming faucet. The house where Josh Fox filmed Gaslands has been demolished.

Dimock is not an industrial wasteland. It is a beautiful functioning regional community. It is not experiencing contaminated water systems. There is no human health impact from the shale gas industry that I could discern. Many landholders are benefiting from income from producing wells while going about their daily lives, including the normal business of farming. The school I visited uses the gas from the well on its grounds to heat the buildings and take in a royalty. The gas well on Elk Lake School has been in operation for eight years. I continued on to Washington DC and had briefings from the US Department of Energy, the US Chamber of Commerce and the US National Association of Manufacturers. The common thread was that shale oil and gas had delivered energy security to the United States of America, brought down energy costs and made the country internationally competitive while reducing greenhouse gas emissions. The United States is transitioning from a gas importer to a net exporter and will soon be a global competitor for Australia in a limited number of markets close to its terminals.

As part of the CPA commitment, I visited Canada. I met with members of Parliament in the House of Commons, Ontario, and heard their views on the shale oil and gas industry. Clearly gas is important in that country, with its heavy reliance on gas for heating over its long winter. But it is fair to say the issue had polarised opinion, with regional representatives generally supportive and urban members of Parliament echoing their constituents' reservations. I recognise a relatively short visit to the United States and Canada cannot be comprehensive or make me an expert in shale oil and gas, and there are differences in the profile of the gas industries between countries and between conventional and unconventional gas. However, I can report to this Parliament that end‑of‑world prophesies by anti-gas activists and Greens here in Australia and overseas should be treated very sceptically. There have been significant benefits. Dimock is not an industrial wasteland. It is incumbent on us to fall back on the science and not social media posturing. The US Environmental Protection Agency [EPA] and  Chief Scientist and Engineer have come to very similar conclusions: The industry comes with risks, but they can be managed with sound practices and appropriate regulation.

As a regional member of Parliament this issue matters to me. It must not be hijacked by weak political leadership, as we have seen from both sides of politics in Victoria this week. Gas has an important role in our future energy mix. It is a bedrock of manufacturing in this country, with over 225,000 jobs heavily dependent on gas as a feedstock in the production process. The Australian Energy Regulator [AER] records more than 1.3 million small gas customers in New South Wales alone. As I saw in the United States of America, there is wide scope for regional development and jobs arising from our plentiful gas reserves. I thank the CPA, here and in Canada, for its assistance with my visit and I have lodged a tour report with the association and posted it on my website.