Will Buru Energy's plan to frack the Kimberleys cost Barnett the election?

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The iconic Kimberleys, now under threat from fracking, may be an election decider

WA Labor's pre-election commitment to a public inquiry on fracking is gathering support after the Barnett Government approved Buru Energy's fracking for gas in the iconic Kimberleys. ACF's Wade Freeman comments.

WITH WESTERN Australia’s state election less than a year away, fracking is shaping up as one of the major environmental issues distinguishing the major parties from each other. 

WA Labor has committed to freeze all operations and exploration using fracking until it holds a public inquiry to examine the practice’s effect on groundwater, public health and climate change.

Several National Party members are calling for stronger powers of veto for farmers to say no to extraction companies that want to conduct fracking on farmland.  

But the Barnett Government continues to approve fracking projects, such as Buru Energy’s plans to frack for gas in the Kimberley’s Canning Basin.

Hydraulic fracturing – or fracking – is the technique of injecting chemicals at high pressure into rocks deep underground to force open fissures and extract hard-to-access deposits of shale oil, coal seam gas and other types of "tight gas".

Regional communities across the world are fighting fracking projects because the practice carries the severe risk of contaminating precious underground water.

Fracking is deeply unpopular here in WA. A 2016 survey found 78% of respondents in Geraldton, 74% in Forrestfield and 73% in Perth’s western suburbs did not support fracking.

The Australian Conservation Foundation believes Buru Energy’s plans to frack for gas in the Canning Basin have the potential to cause serious damage to surface and underground water, local communities and the world famous nature of this area.

Buru’s plans would see fracking occurring within the area of the Broome aquifer – the source of Broome’s drinking water – and the wetlands and lakes that form part of the Roebuck Plains floodplain. We are concerned this presents a genuine threat to the health of the Fitzroy River and Roebuck Bay.

So we are letting potential investors in the project know about our concerns and the significant environmental – and financial risks – this proposal entails.

The Australian Conservation Foundation's (ACF) investor alert on Buru’s fracking plans for the Kimberley is being distributed to investment firms, fund managers and individual shareholders. The ACF alert also raises issues about community opposition to the plans, Buru Energy’s financial viability and the integrity of engineering at Buru’s operations.

ACF examines changes that have occurred since Buru’s fracking plan was approved in 2014 and looks at the many hurdles a greenfield fracking operation would face in the Kimberley. 

The price of oil is well under US$50 and has not topped US$100 since 2014. Most developing recourse extraction industries have suffered as a result. But Buru faces additional problems. 

This is just the wrong place to frack, being so close to the culturally rich and environmentally important Fitzroy River and Roebuck Bay — both of which are recognised for their unique National Heritage values. Roebuck Bay is also listed as an internationally important migratory bird habitat and is soon to become a Marine Park.

Our investor alert documents a litany of engineering, operational and Traditional Owner approval issues in this company’s back catalogue. There are questions of well integrity and documented examples of breaches of holding ponds during storms.

Alcoa has removed its gas supply contract and Mitsubishi, which after recording record losses is looking to write down underperforming options, hasn’t confirmed whether or not it will provide further support to Buru.

Shareholders are starting to ask questions about the future potential for Buru Energy, as the company has handed back exploration leases (acreage) to the State. 

Buru’s 30 June 2016 Quarterly Report shows the company’s estimated cash inflows for the next quarter are $9.5 million for the sale of a pastoral lease asset and $5.8 million from government tax concessions.

What is the future of an oil and gas company that relies on selling beef and drawing big tax concessions from the public purse in order to remain viable?

ACF’s investor alert is sobering reading for anybody looking to invest in the industry. It’s also a wakeup call about the unique biodiverse environment of the Kimberley and the strong cultural connections that are at risk of being lost forever if this area is industrialised. 

Why invest in short term, risky, fossil fuel industries when so many sustainable options based on the Kimberley’s unique cultural and environmental values are available?

ACF believes the Kimberley is not the place for yesterday’s dinosaur industries.  We hope our investor alert prompts important questions within the investor world and the Australian community more broadly. 

And WA’s politicians should keep in mind that fracking – along with uranium mining – could be one of the issues to bring about a change of government and a change of direction in the west.

Wade Freeman is the Australian Conservation Foundation’s Broome-based Kimberley Project Officer.

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Will Buru Energy's plan to frack the Kimberleys cost Barnett the election?

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