Queensland Fracking Lesson: Renewables Depend on Natural Gas

shale gas outrages - Tom Shepstone ReportsTom Shepstone
Shepstone Management Company, Inc.



Queensland, Australia has, albeit belatedly, learned renewables cannot advance without clean baseload electric generation from natural gas; fracking that is.

Down under, there is a lesson taking place on how to do renewables successfully. It’s taking place in the state of Queensland, Australia where, yesterday, Reuters reported this from Melbourne:

Australia’s most solar-power dependent state, Queensland, said it would restart a gas-fired energy plant next year to help cap soaring electricity prices and make the grid more stable, a move that prompted an instant drop in power futures prices on Monday.

There’s a powerful (pun intended) lesson here: if you want to do renewables successfully you’ll need to do natural gas as well, which means fracking.


The word fracking is nowhere to be found in the Reuters piece. It wouldn’t be politically correct. Yet, that is undeniably the message of the story; you have to frack if you want renewables. Here are some more key excerpts from the story (emphasis added):

The step is part of a $1.16 billion plan by the state to beef up energy security to appease big energy users like global miners Rio Tinto Plc and Glencore Plc, which have suffered power cuts and a near trebling in electricity prices over the past year

The plan was unveiled ahead of recommendations from Australia’s chief scientist due this Friday on how to make the national electricity market more secure in a report commissioned last year following a state-wide blackout in wind-dependent South Australia.

Queensland said that in the first quarter of 2018, it would reopen state-owned Stanwell Corp’s 385-megawatt (MW) Swanbank E gas-fired power station, which was mothballed three years ago.

The move was a backdown for a state that has set a target to obtain 50 percent of its electricity from renewable sources.

However, it also said it would back 400 MW of new renewable energy projects, including 100 MW of energy storage.

Prices for the March quarter of 2018 for Queensland base load electricity futures fell 11 percent to A$105.50 following the announcement on Monday.

There isn’t a whole lot more to say, is there? Wherever politicians adopt unrealistic renewables policies (think not only Queensland, but also Germany and New York State) electric prices skyrocket. The attempted solution in Germany is to build more extremely dirty brown coal plants. New York’s version is to bury its head in the sand and subsidize grossly expensive nuclear energy. Queensland, though, is doing the smart thing; reimagining natural gas (to steal a line from our London buddy, Nick Grealy), making it the clean low-cost baseload generator of electricity to keep prices in line so more renewables are possible.


Swanbank Power Station

The Queensland strategy isn’t hard to figure out for reasonable people not blinded by ideology, but I can’t help but notice no mention is made of the implication; more fracking to come. Natural gas just doesn’t descend from the clouds and it’s no longer to be found by just sinking a well or two in hopes of finding some gas pocket. The only meaningful way, economically, to develop natural gas these days is through a combination of horizontal drilling and hydraulic fracturing (fracking). The big natural gas reserves are to be found in shale and the only way to get them out is to frack.

Fracking is, therefore, the key to renewables development unless we want more dirty brown coal use and more subsidization of nuclear. It’s a lesson learned by Queensland. When will Germany, New York and the rest of the politically correct world learn?


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