PERTH (miningweekly.com) - The Queensland Resources Council (QRC) welcomed the state government’s decision to allow the development of a commercial oil shale industry, saying it would help realise the state’s potential as a global energy hub.

Natural Resources and Mines Minister Andrew Cripps said on Wednesday that the new oil shale policy set rigorous environmental controls on the industry and would allow existing oil shale operator QER Limited to progress its trial plant at Gladstone to commercial stage.

“Queensland currently has around 90% of Australia’s known oil shale resources, which are equivalent to about 22-billion barrels of oil,” the Minister said.

“As the world supply of conventional crude oil diminishes, there are strong prospects for oil shale to become the next major source of liquid fuel supplies in Australia, and Queensland is well placed to lead that charge.

“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.”

Cripps said the new oil shale policy would work to recognise the strategic importance of oil shale to contribute to energy security, and encourage private sector investment in high-quality oil shale extraction technologies, while also ensuring project proponents demonstrated that their oil shale technology met high environmental standards and community expectations.

The policy would also allow, in general, the consideration and development of other oil shale deposits in Queensland, pending thorough environmental assessment on a project-by-project basis, but would continue the existing 20-year moratorium suspending development of the McFarlane oil shale deposit near Proserpine until 2028.

Minister for Environment and Heritage Protection Andrew Powell emphasised that 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.”

Responding to the state government’s announcement, QRC CEO Michael Roche said there were compelling reasons for Queensland and Australia to encourage new liquid fuel production concepts.

“The inherent value in being able to convert Queensland’s vast shale deposits into ultralow-sulphur liquid fuels can be weighed simply against forecasts that Australia will be importing A$30-billion worth of liquid fuels by 2015,” he said.

“Coupled with the potential of oil shale to contribute to the country’s long-term energy security, Queensland is fortunate in having other rapidly evolving technologies at our disposal, including coal to liquids and underground coal gasification.”

Roche noted that the comparative efficiency of the country’s transport systems also gave Australia a competitive advantage in the business of moving large amounts of heavy commodities over extremely long distances.

“This is a key underpinning for our leading export industries – resources and agriculture,” Roche added.