Markwell believes Australia’s mining sector needs to make better use of the natural gas resources it has literally next door in some cases.

After all, there has already been a lot of work making use of compressed natural gas on heavy vehicles such as buses.

The fuel source has also proved its worth in liquefied natural gas tankers. For years they have been burning the gas that boils off their LNG cargoes.

Markwell said reducing oil use by 1 million barrels per day would have a big effect on the oil price.

“That is the equivalent of 40 to 50 million tonnes per annum of LNG,” he said.

“Governments will want diesel to be substituted with LNG or CNG.

“The big target is mining fleets, the second is power and the third is heavy road transport.

“The focus to date has been on road transport.”

One of the problems appears to be access to cheap LNG, surprising though it may seem given the proximity of mining projects to LNG projects, particularly in Western Australia.

This is because the projects have either been world class or boutique.

Developers of the world class projects want to get the best price for their product, which means export.

Given the billions of dollars of dollars it costs to develop an LNG project that is understandable.

The boutique projects turn out less than 1Mtpa of LNG, which is not really enough to go for a full blown export solution.

Markwell said developing a natural gas market on the minesites would add more customers to these boutique operators.

These are companies such as EDL in Karratha and Energy Equity in Alice Springs.

The problem with the small plants is the amount of energy required to liquefy the gas – it uses about 8-15% of the energy coming in.

Markwell said there were ways to get around this.

He said if natural gas could be liquefied at minus 105C that would require half the power needed to get it to the normal minus 162C liquefaction point.

To get it to liquefy at minus 105C requires putting the gas under 20 Bar pressure.

“Daewoo has come up with a design for tanks and a mass production process for them so it can be kept under pressure called Cluster LNG,” Markwell said.

“Another option is barge mounted LNG. That is literally plug and play. A 200,000 tonne per annum capacity is quite easy.

“The DSME [Daewoo] Cluster technology is changing the paradigm of how we do things.”

Another problem that would need to be overcome is the reluctance of miners to have natural gas on their sites, fuelling large pieces of equipment.

There is an almost superstitious feeling about the fuel source.

It is a fire risk and, in its compressed form, potentially explosive but it has been used successfully in road transport and should, certainly in surface operations, be safe for use there too.