Chapter 1: What is the Taroom Trough and why is it important?
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With the war in the Middle East putting pressure on global fuel supplies, a lot of questions are being asked about why we've let our production lapse here in Australia. And with that in mind, there's now a heap of attention on sites being explored to build that back up again so that we're covered when there are disruptions overseas.
One of those is Queensland's Taroom Trough, a source of crude oil and natural gas that the Queensland government wants to fast-track mining approvals for. So in this Squish Shortcut, we'll get you across what's involved in mining it, where things stand and what the issues are. Squish Shortcuts is the backstory to the big news stories. I'm Alice Dempster.
And I'm Andrew Williams.
Andrew, we were saying in our team meeting at the start of the week that we've never thought or known so much about oil before this year, things like where it comes from, how it's processed and why it costs what it does.
Yeah, we've caught up quickly, though. It's been a long time since we've been so focused on it. And you'll know if you listen regularly that we've looked into our oil supply chain in a previous Squiz Shortcut. In that one, we covered how Australia is down to two working oil refineries, Ampol's facility in Brisbane and and the Viva Energy Refinery in Geelong, Victoria.
That was the one that caught fire last week in a case of terrible timing while the country tries to keep our fuel supply steady.
Yeah, and that's because there's a lot less fuel to go around since the US and Israel began fighting with Iran in late February. As we know, it stopped oil and gas shipments from getting through the Strait of Hormuz.
Never been quite so focused on that area of the world either. The Strait of Hormuz has become a household name very quickly as well. So as we covered in that oil supply chain shortcut, we import around 90% of our oil, which we buy from big refineries in Asia. And being at the end of a supply chain, we've been left vulnerable to global disruptions.
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Chapter 2: How does the Taroom Trough compare to other oil sources in Australia?
It's trapped by natural pressure. And so when a hole is drilled, it flows up easily. Reports put it at 10 US dollars per barrel to extract. But getting the oil out of the Taroom trough here in Australia is a very different story.
And that's because it's trapped in tiny spaces between grains of rock. So the process to get it out is a lot more complex and expensive at around $40 to $90 per barrel US because of that. But bear in mind, it's a high quality product, which factors into things because it requires less to refine. So it's a bit of a push-pull situation. Back to the extraction.
This is where we get into something that's become pretty controversial over the years. To access that oil, companies will need to drill deep underground and then across before using hydraulic fracturing or, as we might know it, fracking to actually release it.
So we're talking about drilling four kilometres underground, then horizontally for as much as two kilometres through the rock layer. Once that's done, small explosive charges are used to create initial cracks and then a mixture of water, sand and chemicals is pumped in at high pressure to widen those cracks so the oil and gas can flow.
That's essentially what fracking is, and while it's been used extensively overseas, particularly in the US, it's also been linked to a bunch of environmental concerns. It not only requires a lot of water, but there's a risk of contamination to the area's waterways, and then there are questions about how it will impact the land that's surrounding the area.
And in this case, there's an extra layer of concern because the Taroom trough sits beneath the Great Artesian Basin. It's one of the largest underground freshwater systems in the world. And it's hugely important because it supports farming communities right across inland Australia.
So if you're talking about drilling and fracking underneath it, you can understand why people want to be absolutely sure that this is all being done safely. To that end, the Queensland government says protecting it is a priority.
And there are regulations in place, but then critics say the scale of what's being proposed, potentially thousands of oil wells if this all goes ahead, means that the risks need to be really carefully assessed.
And also not rushed, which is an issue in this current climate when bolstering our fuel supplies is top of mind for the government. But aside from that underground water source, there's also the question of the land above it.
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