A COMPANY with a trial oil shale plant in Gladstone was given a boost on Wednesday, with the State Government announcing the lifting of a ban on oil shale mining.
Queensland Energy Resources has constructed a small-scale technology demonstration plant in Gladstone, with the company considering the Stuart site of the Yarwun oil shale resource to be an important source of oil for the future.
The lifting of the ban has the potential to create thousands of jobs and provide the State Government with a new revenue stream.
Natural Resources and Mines Minister Andrew Cripps and Environment and Heritage Protection Minister Andrew Powell visited Gladstone to make the announcement - one that isn't expected to be well received by environmentalists.
The oil shale industry has been in limbo since 2008 after a 20-year moratorium was placed over a major deposit in north Queensland.
The industry was told it must prove its technology before the government would give the green light to proceed.
Oil shale is a completely different industry and extraction process to shale gas or shale oil.
The decision will allow Queensland Energy Resources to progress its trial plant and seek approval for a full commercial operation.
Mr Powell has stressed strict environmental controls would apply to any proposal to mine and process oil shale.
"To date, there has been extremely limited commercial application of oil shale in Australia and overseas," he said.
"That's why any proposed oil shale development will be subject to detailed environmental assessments on a project-by-project basis.
"We will consider these proposals on their merits and require a trial stage to determine the feasibility and environmental performance of any unproven technologies."
He said the QER pilot plant had successfully demonstrated the viability of its processing technology.
"Under the new policy, existing operator Queensland Energy Resources Ltd will be able to proceed directly to commercial production, but new entrants to the industry will need to prove their oil shale extraction technologies through trials.
"The report into the QER plant demonstrated it operated well within the environmental performance requirements of its environmental authority issued by my department," Mr Powell said.
Mr Cripps said as the world supply of conventional crude oil diminished, there were strong prospects for oil shale to become the next major source of liquid fuel supplies in Australia.
"Queensland is well placed to lead that charge," he said.
"The industry has the potential to create thousands of new jobs in the construction phase alone, and provide royalties and other economic benefits for our regional communities and the broader economy, which is great news for Queensland."
The industry has the potential to create thousands of new jobs in the construction phase alone, and provide royalties and other economic benefits for our regional communities
Lock the Gate Alliance president Drew Hutton slammed the decision as "dangerous", Brisbane Times reported.
"This is nothing more than a desperate attempt to prolong the life of the fossil fuel era using dangerous technologies rather than adopt alternative, cleaner and available technologies,'' he said.
"Shale oil is a dirty, bottom-end technology and by giving it the go-ahead, the Newman government is taking Queensland on a course toward making us the Dirty State - certainly not the Smart State.''
In 2010, QER operations manager Chris Anderson told an industry conference oil shale would be a successful technology.
"The technology works well and you get good oil out of it," Mr Anderson said.
"We need to establish the technology through a pilot plant which is a mini version of a full-scale plant. It will be a very small capacity plant that will produce 47 barrels a day.
"We are not about production and we won't make money from it. The reality is that oil is declining, with Australian oil reserves expected to be only 20 per cent by 2030."
QER is an integrated resources and energy company that holds mining and other tenement rights to several of the largest and potentially most productive oil shale deposits in Australia.
Sometimes known as 'the rock that burns', oil shale is an organic-rich sedimentary rock containing kerogen, an organic chemical compound that when heated can produce oil.
It is a completely different industry and extraction process to shale gas or shale oil.
Hydrocarbons are derived from oil shale that has been mined and then heated in a processing plant. This process produces vapours which are condensed and converted into synthetic crude oil, and then refined to produce ultra-low sulphur transport fuels.
Oil shale deposits vary considerably in nature and yield around the world. In Australia, the largest deposits are in Queensland, and were formed about 40 million years ago in a freshwater lakes environment.
Total oil reserves in Queensland oil shale deposits total more than 20 billion barrels, while global estimates of oil shale reserves are around three trillion barrels.
When oil shale deposits formed in Central Queensland, sea levels were about 150m lower than present, with the Gladstone region more elevated and about 200km south-west of the coastline as it was then.