Multi-Billion Dollar Natural Gas Explosion in WA May Provide Opening for Uranium Industry

On June 3, 2008, Apache Energy’s Varanus Island gas production facility off the coast of Western Australia experienced an explosion and fire in one of two pipelines carrying gas from the large processing plant to the mainland. The fire spread and caused damage to the second pipeline. The accident removed 370 terrajoules per day from a market that normally consumes a bit more than 1000 terrajoules each day.

According to West Australia Restarts Collie to Ease Gas Shortage (Update2) the total cost of the disruption to businesses that have some dependence on the gas that Varanus Island supplies will reach approximately $6.7 billion (That is in Australian dollars, but the Australian dollar is almost at parity with the US dollar these days.)

The Oil Drum has a good story about the economic effects with some impressive photos at A gas supply disruption case study – the Varanus Island explosion

Interestingly enough, Western Australia will soon be playing host to the Australian Uranium Conference to be held in Perth on July 23-24. I would imagine that energy supply vulnerabilities will be discussed during the conference.

Perhaps the uranium miners might recognize that they have a timely opportunity to more forcefully market the benefits that their product can provide to energy intensive industries like aluminum mining. According to Heavies in power bid for nuclear they might have some receptive ears in high places who are getting more and more interested. Here is a quote from that article:

Australia’s biggest blue-collar union is also urging the Government to consider nuclear power as a means of cutting greenhouse gases.

The union has a powerful ally: respected business figure and Commonwealth Bank chairman John Schubert.

Mr Schubert, who also chairs the Great Barrier Reef Foundation, says Canberra should “definitely look at” nuclear power.

“It needs to be a real option . . . should absolutely be on the table,” Mr Schubert said.

AWU national secretary Paul Howes wants Australia to embrace nuclear power.

I just hope that while the uranium miners are in Perth that they are able to find enough clean sheets to allow for restful sleeping so they can enter their meeting with fresh and creative minds. I mention that in passing because one of the interesting effects of the gas/energy shortage in Western Australia is that many commercial laundries have had to restrict their operations, leading to a shortage of linens in the hospitality industry in Perth.