Is there really untold oil wealth in Queensland’s Taroom Trough? Here’s why scepticism is warranted
- Written by Kevin Morrison, Industry Fellow, Institute for Sustainable Futures, University of Technology Sydney
As Australian leaders scramble to secure fuel supplies on the international market, Queensland Premier David Crisafulli has been quick to pitch a domestic option: begin extracting the “sea of oil” in the Taroom Trough, a geological formation near the town of Roma.
The state government is strongly backing extraction as a way to shore up fuel security. Federal Environment Minister Murray Watt has reportedly asked Queensland to give details “without delay”.
It seems like common sense – extract domestic oil to reduce dependence on oil imports. But scepticism is warranted. Exploration has just begun. Many challenges would need to be overcome. Extracting the oil would require fracking, a controversial technology with clear harms to human health.
From self-sufficient to dependent on imports
In 2000, Australia produced and refined more than 560,000 barrels of domestic oil a day, meeting 98% of its needs. Now, 26 years later, most Australian refineries have closed and major domestic oilfields are running out. The nation produces just 5.6% of the crude oil it consumes each day.
Australia now imports about 90% of its fuel needs, either as refined fuels or as crude oil for the two remaining refineries to turn into petrol, diesel or other fuels. This cost more than A$51 billion last year.
Why now?
The Taroom Trough isn’t a new discovery. Its potential has been known for decades.
What’s new is its location and the fuel crisis. It’s located in the much larger Bowen Basin, home to many coal mines. In recent years, this basin has become a gas hotspot. Oil and gas majors Shell (through a subsidiary), Origin Energy and Santos extract gas and export it through the Port of Gladstone.
But gas isn’t the main reason we’re hearing about the Taroom Trough. It’s oil.
Australian oil and gas company Beach Energy, and exploration companies such as Omega Oil and Gas and Elixir, are now exploring the area.
Shell is the most advanced, as its pilot project already supplies 200 barrels a day of oil to the tiny Eromanga refinery, 1,000km west of Brisbane, which can produce up to 1,250 barrels of diesel and other petroleum products.
Given Australia burns more than one million barrels a day, the Taroom Trough has a long way to go.
Would Taroom actually help?
Australia’s two remaining refineries produce 22% of the nation’s diesel, petrol, jet fuel and other petroleum products. Last week’s fire at the Geelong refinery will slightly alter this equation.
Backers believe the Taroom Trough could produce enough oil to meet the needs of these two refineries – around 176,000 barrels a day.
This would be significant, as it would be equivalent to Australia’s largest oil-producing field, Kingfish, in the largely depleted Gippsland Basin off the Victorian coast.
Is this plausible? Early exploration results indicate the Taroom Trough does hold gas and oil. If extraction is commercially viable, these products may find a market.
What’s less clear is whether Taroom’s type of oil – light crude – is the right type. Oil comes in many varieties, requiring different distillation techniques and producing different outputs.
When refined, light crude yields more petrol than diesel or jet fuel. It would likely do little to tackle Australia’s most pressing issue – a diesel shortage.
About 54% of the oil Australia consumes each day is diesel, followed by petrol (25%) and jet fuel (about 15%). Australia’s refineries produce 40% diesel, 32% diesel and 10% jet fuel. This means the refineries cover about 37% of the country’s petrol – but only 13% of its diesel.
There’s another challenge. Hydrocarbons in the Taroom Trough are trapped in rock 3-4km underground. These resources are known as tight gas or tight oil. Extraction requires hydraulic fracturing, commonly known as fracking.
Fracking uses large volumes of water, which companies would likely look to draw from the Great Artesian Basin and the nearby Dawson River, or use recycled water from the fracking process.
Either way, the region’s large agricultural sector may oppose oil and gas interests using water – especially given concerns around possible pollution of groundwater. Previous attempts to frack agricultural areas triggered strong resistance from groups such as Lock the Gate.
Backers may see this year’s fuel crisis as a way to fast-track to open up the Taroom Trough. But it’s not the only domestic option. The Dorado oil field was found off Western Australia’s coast in 2018. Its potential resources could almost double Australia’s commercial oil reserves. Despite interest, it has been deferred several times.
History repeating?
In 1964, oil began to flow from Australia’s first oil field, Queensland’s Moonie. This success drove significant interest in domestic oil and led to exploration of the Gippsland Basin, which has supplied more than 5 billion barrels of oil.
In 1973, an oil shock hit the world economy for the first time amid the Arab embargo. In Australia, the “Rundle Twins” – Southern Pacific Petroleum and Central Pacific Minerals – promised a solution: open up the Stuart field near Gladstone, which, they claimed, boasted 20 billion tonnes of shale oil – bigger than the enormous North Sea field. The two smaller companies drew oil giant Exxon to the project – only for it to walk away when the project didn’t stack up economically or environmentally.
Despite state government support, both companies went into receivership in 2003.
It’s too early to say whether the Taroom Trough will pan out. It could be another Moonie, leading to a renaissance of domestic oil. But it could easily be a long-lost Rundle sibling – heavily hyped but failing to deliver.
Authors: Kevin Morrison, Industry Fellow, Institute for Sustainable Futures, University of Technology Sydney
