Coal seam gas first put geology into the limelight. The fight between developers and environmentalists is largely an argument over the geology of coal seam gas and whether aquifers will be damaged.

Now there is shale gas. A few years ago, it was unheard of in Australia. Only a handful of our smartest oilmen, led by Beach Energy’s Reg Nelson, understood shale gas or what it might mean for Australia.

Today, it is a bread-and-butter topic for the Australian media, helped along by BHP Billiton’s plunge into US shale gas.

Australians know shale gas could be the x-factor that restarts the US economy. The big question is do we have the right shales, and enough of them, for a similar revolution here, with the all the business investment and wealth it could bring?

It is hard to know for sure until exploration and development of unconventional hydrocarbons in Australia catches up with the US.

However, a good indication of Australia’s shale gas potential could come as early as next year thanks to a program by Geoscience Australia’s newly established Onshore Hydrocarbons section.

At present, there is no national, consistent approach to assessing unconventional hydrocarbon resources in Australia.

The GA program, which includes shale gas, tight gas and coal seam gas, will set the benchmark by applying the methodologies pioneered by the US Geological Survey to Australia’s unconventional resources.

The program also involves collaboration with private explorers, who in many cases are happy to give GA access to their drill core samples.

It is not entirely altruistic. They get the benefit of scientific expertise that is simply beyond the reach of many junior explorers.

GA is one of several national agencies being helped by the USGS. Australia and others are keen to adopt the USGS approach as they race to catch up with the explosion in activity and public interest in their unconventional resource potential.

The USGS has already had a high-level look at four Australian onshore basins as part of a study for the US Energy Information Administration.

The US agency last year released a study that concluded the Canning, Cooper, Perth and Maryborough Basins had a technically recoverable shale gas resource of 396 trillion cubic feet or 435,600 Petajoules.

This is still the best available public estimate.

GA Onshore Hydrocarbons section leader Andrew Stacey told a conference in Perth this week the USGS method was probablistic, rather than deterministic like many of the published estimates.

“The principle attraction of this methodology is that it combines geological assessments with producing wells – so the assessments are calibrated to actual production,” he said.

“This is achieved by using well productivity models.”

The method combines the decline curves to produce an estimated ultimate recovery or EUR distribution for all the wells in a play.

“These are then used to predict, in the case of producing fields the likely additions to reserves of new wells, or in the case of frontier basins, which is our situation, they are used as analogues to predict the undiscovered resource.”

Stacey said the USGS methodology offered significant advantages. It quantified the uncertainty around predicted resource volumes, it was based on a reproducible method and benchmarked against “real-world” production data from more than 100 plays in the US and Canada.

There are some limitations though.

The estimates are based on present production and therefore present technology, which means estimates will need to be updated as extraction technology advances.

North American production data may not be the best analogue for Australian basins either due to geological differences between the countries.

Stacey pointed out shale and tight gas/oil resources in Australia spanned a wider range of geological ages, were found in more types of depositional environment and were generally found in intracratonic basin settings, compared to foreland basin settings in the US.

One of the biggest differences is the thickness of shale gas resources.

For example, the Bakken shale in North America is about 50 metres thick and production is via horizontal wells. By contrast, the gas-saturated shales of the Cooper Basin are about 700 metres thick.

What this means will not be known until the assessments are complete, but clearly, there is potential for surprises.

The GA program will do much more than produce a neat set of potential resource figures.

Behind the scenes, a huge amount of scientific study is going on to understand the fine detail of Australia’s unconventional resources.

The results will be shared with industry to help them identify opportunities for oil and gas discoveries.

GA’s Dr Dianne Edwards also presented in Perth this week on how detailed geochemical studies are providing information on the shale oil/gas potential of frontier basins such as the onshore Bonaparte Basin, Beetaloo Basin and southern Georgina Basin.

These innovative studies are drawing on information from mineral exploration wells and GA’s knowledge of Australia’s family of oil systems.

The studies are filling big knowledge gaps on basins where there has been little or no drilling for oil and gas.

Stacey added a disadvantage of the USGS methodology was the amount of data and labour required.

Thankfully, GA is prepared to roll up its sleeves.

The agency aims to have initial assessments of Cooper, Georgina and Sydney-Gunnedah Basins completed by the middle of next year.

Assessments beyond 2013 are yet to be decided, however, potential candidates include the Canning, Perth, Bowen-Surat, Clarence-Moreton, Galilee-Eromanga and Gippsland basins.

The choice of initial assessments is interesting. The Cooper is an obvious candidate because it is home to Australia’s most advanced shale gas projects. The Georgina Basin is also no surprise because it was not part of the US EIA study, it has the potential to be a very large resource and exploration activity is racing ahead.

The Sydney-Gunnedah Basin is interesting because of the opposition to unconventional gas of all descriptions in New South Wales.

NSW is the weakest link in Australian gas production and there is increasing pressure from business, not just the energy industry, for the state to lift its game.

The debate is uninformed as long as there is no reliable estimate of how much gas is kept underground by current policies and attitudes.

This article first appeared in ILN's sister publication EnergyNewsBulletin.net.