MEDIA RESPONSE THE WHITSUNDAY COAST GUARDIAN

Transcription

1 Tuesday, 15 July 2008 MEDIA RESPONSE THE WHITSUNDAY COAST GUARDIAN Please attribute the below responses to QER Director of Corporate Affairs Simon Eldridge Questions re Proserpine Shale Oil 1) What exactly is the proposed project? QER is in the concept/pre-feasibility stage for the potential development of the McFarlane oil shale resource located approximately kms south of Proserpine, in Central Queensland. The McFarlane oil shale resource is one of Australia s largest and most strategically important resources, with the potential to supply in excess of 1.6 billion barrels of oil over the next 40 years. It also has the potential to bring thousands of jobs and billions of dollars in investment to the region, as well as making a substantial contribution to redressing Australia s oil import bill which, by 2015, is forecast to be $25 billion annually. As the custodians of this resource, QER takes this role very seriously, and is extensively monitoring the deposit s biophysical environment, and evaluating environmental, social and economic information. At this stage, QER has not made a decision whether to proceed with the project. Pending the findings of the concept/pre-feasibility investigations, QER will be in a position to decide whether to proceed with the project by the end of 2008/early Key project details: Mining: Open cut mining using truck and shovel up to 165 million tonnes per annum of ore, interburden and overburden. Processing: The processing plant will produce up to 115,000 barrels (18.3 ML) of oil per day using the Paraho II retorting technology.

2 Infrastructure: An on-site power station; an off-site fuel export terminal; an off-site by-products storage facility; product, gas and water pipelines; power transmission lines; a pre-assembled modules facility; transport infrastructure and residential accommodation. However, QER has already set a number of parameters for any development should the project proceed: Any mining and processing of the resource will only take place west of the current Bruce Highway in an area that has been used mostly for cattle grazing and sugar cane for more than 50 years; Sustainability principles will underpin every aspect of any development; and QER will engage early and often with all landowners likely to be either directly or indirectly affected by any development of the resource. 2) What will the project look like from the air? The McFarlane project will be a typical open cut mine, similar to a coal mine and/or an iron ore mine typical in Queensland and Western Australia. However, it will differ in that it will be progressively backfilled and rehabilitated as mining proceeds with an out of pit emplacement area also being utilised. The mine will be undertaken to the highest environmental standards, and will meet every environmental standard required by the Australian and Queensland governments. The plant will look like a large oil refinery. 3) What would you see if you were driving down the Bruce Highway? QER will take every step to ensure the appropriate bunding and visual amenity facilities are in place so the mining operations will not be visually intrusive. 4) What are the dimensions as in size and depth of the mine? As mentioned, QER is currently in concept phase and has not yet made a decision whether to develop the resource. Should the project proceed, the likely development area will be detailed in the Environmental Impact Statement the company will be required to produce. But we have already made it clear that any mining and processing of the resource will only take place west of the current Bruce Highway.

3 5) How much oil is expected to come from the McFarlane deposit? The McFarlane oil shale resource is one of Australia s largest and most strategically important resources, with the potential to supply in excess of 1.6 billion barrels of oil over the next 40 years at 115,000 barrels of oil per day. To put this in context, Bass Strait currently produces around 70,000 barrels per day. 6) How long is it anticipated the McFarlane deposit would supply oil for? As part of the country s overall energy mix, at 115,000 bbls per day, the development of the McFarlane oil shale resource could supply oil over the next 40 years, providing a long-term, secure supply of transportation fuels. This equates to approximately one third of Australia s current daily oil imports. Australia is facing an energy crisis. Australia currently produces approximately 565,000 barrels of oil a day, compared to the demand of approximately 908,000 barrels of oil a day. This is a deficit of 343,000 barrels a day, or the equivalent to 125 million barrels of oil each year that Australia needs to import. By 2012, Australia s deficit in oil is forecast to be up to 416,000 barrels a day, or almost 152 million barrels a year. [A barrel of oil contains 159 litres.] 7) Will the oil be sold on the world market or in Australia? All Australian refineries are capable of accepting the output from the McFarlane plant. The sale of the resultant fuel will be decided by the refinery and dependent on market requirements at the time. 8) If it goes ahead, how soon could a processing plant be set up? We are in the very early stages of the process and, as mentioned, have not yet made a decision to proceed with the project. If we do go ahead, it will take at least two to four years for the Queensland Government and the Commonwealth Government to assess the environmental, economic and social impacts of the project. We envisage we could commence the first stage of production by around 2016, if the project is approved and proceeds.

4 9) Where would a processing plant be located in reference to Proserpine? No decision has yet been made and we are evaluating a number of possible locations. But the plant will be located well away from Proserpine. 10) How is the Paraho technology different to that used in Gladstone? Since 2005, QER has undertaken a pilot plant program to test the Paraho II technology. This pilot program found the technology has the potential to achieve commercial levels of shale oil production, while also meeting stringent environmental conditions. QER evaluated more than 60 technologies for developing shale oil and subsequently selected the Paraho process because it is robust, cleaner, reliable, and has the best environmental performance of these technologies. The Paraho technology offers several advantages over ATP, including: It is a vertical shaft, refractory lined kiln that is simpler and safer to operate It processes larger lump size feed making ore handling easier It is stable and controllable in situations where process interruptions could occur (for example, a power blackout) It is robust, reliable and able to handle variations in feed properties (for example, grade and moisture variations). 11) Where has the Paraho technology been tested? In 2005, QER in association with the technology owners, recommissioned the Colorado-based pilot plant facility in the United States, to test representative samples of Queensland oil shales, using the innovative Paraho II process. Specifically, the key results from the pilot plant program were: 8,000 tonnes of oil shale was processed over 5,140 operational hours allocated specifically for the collection of process and environmental data The Paraho process proved to be simple and safe to operate The Paraho process proved to be robust, reliable and forgiving of variations in feed properties Stable, controllable operations were achieved on all of the Australian shale types Yields and throughput rates, in excess of those assumed in the business case, were achieved.

5 A technology similar to the Paraho technology is used on a non-commercial scale by Petrosix in Brazil. 12) How would QER ensure there are no similar impacts to those in Gladstone i.e complaints of emissions, smell and illness? As a good corporate member of the community, QER simply would not operate a plant or mine that had adverse health impacts. The environmental standards we would meet would preclude it, the community would not allow it and we simply would not operate a facility with any such impacts. It is worth pointing out that there were no established links between the operation of the mine or plant at Gladstone and health impacts on nearby residents. In any event, QER shut down the Gladstone plant because it did not meet its environmental or operating standards, and we re now selling the assets of the old SPP plant. As mentioned, QER has selected the Paraho II technology that is far superior both environmentally and operationally for processing Australian oil shale. The technology is proven to be robust, cleaner, reliable, and has the best environmental performance of these technologies. 13) What is in the emissions? Emission types and levels will be detailed comprehensively in any EIS and at this stage it is too early to quantify those. 14) Who will monitor any emissions in terms of content? As with any industrial facility, including the Proserpine Sugar Mill, emissions will be monitored by the relevant regulatory bodies, the operators (in this case QER) and any member of the public who cares to monitor emission levels off-site. Comprehensive studies and assessments into the project s potential emissions would form a major part of the EIS. We are also required to develop strategies and actions to mitigate or eliminate any potentially negative impacts identified during the EIS studies. If the project proceeds, its CO2_e emissions will be within the cap mandated by the Australian Federal Government under the proposed cap and trade Emissions Trading Scheme (ETS). Under the proposed ETS, by design, the project cannot cause any increase in Australia s CO2_e emissions, as the total emission for the country will be capped and the project s emissions will be within that cap.

6 15) What is the size of the workforce during construction? Initial planning and investigations suggest the McFarlane project has the potential to generate around 3,000 construction jobs, as well as 3,000 permanent operational jobs. The project will also generate indirect employment in the regional, state and national economies. 16) What is the size of the workforce during general operations? During general operations, it is likely the project could generate 3,000 permanent jobs, as well as many indirect employment opportunities in the regional, state and national economies. Additionally, initial planning suggests a workforce of more than 3,000 people would generate more than $250 million in wages, which will be injected into the local economy in wages alone every year for the next 40 years. 17) Where would the workforce reside? (are you planning on establishing workers camps) Current project planning sees the construction workforce being accommodated relatively close to the site in a state of the art construction village. Permanent operations staff would be housed in integrated residential precincts within the region. Investigations examining various options are currently underway as part of the overall project infrastructure planning. Comprehensive studies and assessments into the project s potential social impacts, including options for residential and construction accommodation, would form a major part of the EIS. QER will also be required to develop strategies and actions to mitigate or eliminate any potentially negative impacts identified during the EIS studies. 18) How would flooding in the vicinity of the mine and processing plant be mitigated? QER would be required to develop strategies and actions to mitigate or eliminate any potentially negative impacts identified during the EIS studies. We are currently modelling 1 in a century and 1 in a millennium flood events.

7 19) What is in the water that has been used for processing? Up until now we have been focusing on baseline monitoring to understand the environmental and social values of the area. We are also now seeking feedback from the community on key aspects of the proposed project. Until this step and the concept engineering work for the processing facility are complete, it is too early to define the processing plant water quality. If QER decides to seek approval for the project, a detailed water quality impact assessment will be conducted as part of the EIS process which will involve extensive community consultation and provide many opportunities for comment. 20) What would be done with the used water after processing? Design work on the McFarlane commercial plant is still at an early conceptual level. The QER Environment Policy states that We will minimise the production of wastes, ensure their safe treatment and disposal, encourage efficient use of resources, maximise reuse and implement recycling initiatives. In line with this, QER will aim to treat any water captured on the processing plant (either from process discharge or runoff) to a level suitable for reuse within the process or discharge to the natural environment in accordance with approved licence limits. 21) Where will water for the plant come from and how much? Should the project proceed, QER will not be using any water currently allocated for domestic, agricultural or other industrial use. It is proposed the fully commercial plant would source water from the Burdekin Dam. 22) What impact do you believe a shale oil mine and processing plant would have on Proserpine and the Whitsundays? Initial investigations suggest the project would significantly boost the economic growth of the Proserpine and Whitsundays regions and provide a significant incentive to small business and to the tourism and agricultural industries. We appreciate this would be a large and complex project and we are taking a careful approach to understand the project and its environment. The mining operation, if the project proceeds, would meet all relevant Australian environmental standards. It would be a typical open cut operation similar to any of the open cut coal mines or iron ore mines currently licensed to operate in Australia.

8 The development of this resource, if it goes ahead, will be subject to preparation of the Environmental Impact Statements, and a full and comprehensive assessment by the Queensland and Australian Governments of the development s environmental, economic and social impacts. 23) There is concern that QER is not meeting with Save Our Foreshore or the Mackay Conservation group prior to August when it is rumoured QER will apply for its development licence. Are there plans for QER to meet with SOF and the MCG prior to this date? Firstly, we are not applying for any development licence related to the commercial scale project in August. Secondly, on a number of documented occasions, we have contacted the Mackay Conservation Group and offered to brief them on our concept plans for the McFarlane project. Despite accepting in principle via on 26 May, they are yet to offer any possible time. Most recently we have extended an invitation to Save Our Foreshore to attend and participate in our community workshops but, to date, have received no response. In the near future, QER intends to conduct briefing workshops in Mackay, similar to those taking place in Proserpine. Once a date has been fixed, it is QER s intention to extend a further invitation to the Mackay Conservation Group Coordinator Patricia Julien to attend that event. 24) SOF is extending an invitation to QER to attend this weekend s visit by the Esperanza, will a representative attend? QER is unaware of any such offer and as at noon on Tuesday, 15 July, had received no such invitation. 25) How will the site be rehabilitated and what will it look like in 50 years time? Oil shale mining is a typical cut and fill operation, similar to methods already used in most of the coal mines of central Queensland. Mining takes place in a single pit commencing with the relocation of topsoil and subsoils to stockpiles for post-mining landform rehabilitation. Following processing, the spent shale can be transported either back to the mine, where it is returned into the open cut, or to an out-of-pit site where it is piled and ultimately rehabilitated. The community, through the EIS phase, will have a very significant input into the final rehabilitated landscape design and purpose.

9 26) Re the Community Liaison Committee how do people go about getting on this group, will SOF or the MCG be invited to be part of it? The Community Liaison Committee is an important step to make sure that the community fully understands what we are proposing to do, and we fully understand what the community is interested in regarding the project. It will be a forum providing a free exchange of information with our stakeholders, and it will no doubt make recommendations that will be useful and practical and help us as a company make better decisions for the region. We anticipate calling for expressions of interest in joining the CLC via public notices in the media in the near future. As previously mentioned, we have on a number of occasions attempted to arrange meetings with leaders from both the Save Our Foreshore Group and the Mackay Conservation Group. However, they are yet to respond to us. 27) Any further message for the Whitsunday community? Separate issue and article - The airport Members of this community maintain that should the proposed shale oil mine go ahead, QER would be required to move the airport at QER s expense. This is not practical and QER cannot afford to outlay such a capital cost up-front. There is a deep-seated belief that the shale oil debate is part of the reason the Queensland Government is still deciding on a site and preferred operator for the airport. That is a question for the Queensland Government not QER. How much shale oil is under the airport? The Proserpine (Whitsunday Coast) Airport overlays part of the McFarlane resource in the north-west. However, I do not at this stage have an estimated number of barrels that may lie in the area underneath the airport.

10 Can the airport still be mined without shifting the facility? Can we proceed with the development without relocating the airport? For at least the first decade of operation, QER could possibly operate with the airport in its current location. Is it feasible for QER to shift the airport at its own cost, and how much would that likely be? QER would not do so up front. QER would, however, be prepared to consider contributing as appropriate. What involvement has QER had in the airport debate thus far? QER is an interested party and has made the Queensland government aware that the current airport overlays part of the McFarlane resource. What does QER recommend an ideal situation would be to resolve the airport issue? The Queensland Government is currently assessing the future of the airport, however, has not indicated it will be relocated at this stage. Two existing options are to upgrade the current facility or to utilise the partly developed airport at Laguna Quays. It is a matter for the Queensland Government and the community to resolve. ENDS For further information please contact: Simon Eldridge Director Corporate Affairs ph (07) fax (07) seldridge@qer.com.au