Boston consultancy Lux Research in a recent report predicted that Australia will experience large-scale hydraulic fracturing, or fracking, sooner than in China, even though China's shale resources are estimated to be twice that of the United States.
"Existing infrastructure, low population density in resource-rich regions and a welcoming government position Australia at the forefront of shale development," Lux analyst Daniel Choi was quoted as saying by The Australian newspaper.
China by contrast, is fraught with technical challenges caused by depth and geology, Choi says, in addition to the country's poor infrastructure and local turf wars.
The U.S. Energy Information Administration says Australia has an estimated 437 trillion cubic feet of technically recoverable shale gas reserves, ranking the country the sixth highest in the world. The reserves are dispersed throughout the country: in the inland Cooper Basin, the eastern Maryborough Basin, the offshore southwestern Perth Basin and the northwestern Canning Basin.
The West Australian newspaper reported last week that US fracking giant Schlumberger had unveiled plans for a $12.5 million supply base in Broome in the Kimberley region of Western Australia, likely to service fracking activity in the Canning Basin.
Schlumberger would not comment on the Broome proposal, which is subject to regulatory approval.
Kip Ferguson, head of exploration for Houston-based shale producer Magnum Hunter Resources, said he expects interest in Australia from American players to grow, noting that "companies with broader thinking need to look abroad" to find unconventional resources as North American shale becomes highly saturated and opportunities become more scarce.
"I think it will pick up and we are trying to be ahead of the game and be the leader of the pack," he told the newspaper.
"The unconventional potential in Australia is phenomenal. We like other places, but Australia has the most potential because of other things like a marketplace, deals and acreage."
But some environmentalists have opposed fracking, fearing the possibility of water contamination or overuse, as well as earthquakes from the underground activity.
"Australia is the driest inhabited continent on the Earth, and water is a huge issue for us here," Naomi Hogan, campaign manager in the Newcastle, Australia, office of the Wilderness Society was quoted as saying by the New York Times. Hogan said she is concerned about "any industry that puts that at risk and is a pollution threat across large tracts of land."
Australian Petroleum Production & Exploration Association in a statement this week denounced "exaggerated claims" by some anti-fracking groups in the Kimberley region of Western Australia State, which has rich shale-gas reserves.
The association argues that fracking has been used successfully in Western Australia since the 1950s on approximately 780 wells.