Oil shale is a very old sedimentary rock composed of clay minerals, silica and a solid hydrocarbon. This rock is commonly called Kerogen. Kerogen was formed during the deposition of organic sediments in ancient lake environments. Over time, with pressure and high temperature, this mixture of organic-rich sediments were transformed into oil shales. Shale oil is the common name for oil produced from this rock, but fuels produced from this product could also be described as shale to liquids.
Australia has significant reserves of oil-bearing shale, the largest known deposits are found in Queensland. Total oil reserves associated with oil shales are estimated to be approximately 20 billion barrels of crude oil equivalent.
The Australian Government is aware of interest amongst industry and the investor community to develop an economically viable and environmentally sustainable shale oil industry in Australia.
In relation to specific shale oil projects, relevant State/Territory governments have primary responsibility for issuing mineral exploration permits and undertaking environmental impact assessments according to their own legislation.
Under the Federal Environment Protection and Biodiversity Conservation Act 1999, approval of the Commonwealth Environment Minister is required for any action that is likely to have a significant impact on a matter of national environmental significance. Any company proposing to develop an oil shale industry will be required to undertake a full and comprehensive assessment of the environmental impact of the project in order to obtain approval to proceed with a shale oil mining and processing project in Australia.
The potential for shale oil as an alternative fuel is dependent upon the price of oil. As oil prices increase, it becomes more economic to produce shale oil.
Advances in technology are still required to develop commercial oil shale projects in Australia that meet appropriate environmental and community standards. For that reason, the Queensland State Government has decided to place a 20 year moratorium on new oil shale development in the Whitsunday region until further advancements in the technology are proven. This decision, however, will not stop the development of a planned demonstration plant at Gladstone using a new oil shale processing technology. The purpose of the demonstration plant is to prove to the Government and the wider community that the new shale oil production technology stacks up economically, technologically and environmentally.
While the Australian Government is committed to investigating a range of alternative transport fuels, it is critical that any proposals which may impact on the environment, sensitive ecosystems and the community are rigorously assessed at all levels of Government.