Windfall seen in shale oil and gas Australia could reap a significant windfall from its shale oil and gas reserves, which could be as much as 10 times the existing known reserves, according to a US government report. The report, by the US Department of Energy, found there were sufficient shale oil and shale gas reserves globally to fuel demand for several years, at least, on present estimates. As much as one-third of all potential gas reserves globally could be recoverable from shale and around 10 per cent of oil, the report argued. For Australia, the prospect of significant oil to be tapped from shale reserves holds significant promise, amid dwindling domestic oil reserves, which has resulted in a surge in imports. The study found Australia has an estimated 437 trillion cubic feet of recoverable shale gas reserves, ranking behind Mexico, but ahead of South Africa. This is 10 times the existing identified natural gas reserves in Australia of 43 trillion cubic feet of gas. Perhaps more importantly, the report put Australia's reserves of shale oil at significantly higher than existing oil reserves, at a time when Australia's oil imports continue to rise. It estimated shale oil reserves at 17,500 million barrels, which is substantially higher than existing known reserves of 1433 million barrels. Australia's annual oil production is running at 192 million barrels, according to the report. Tapping Australia's reserves of coal seam gas has resulted in the development of several gas export projects in Queensland, although the emergence more recently of shale gas in particular has cut off some of the growth options of these projects. In this context, boosting reliance on oil produced from domestic shale reserves could have significant impact on the local economy, helping to boost Australia's energy security. The report noted Australia could be an early developer of its potential shale reserves. The actual level of economically recoverable shale oil and shale gas is likely to be smaller than the estimated recoverable reserves, since it depends on product prices and the cost of extraction and processing. Australia has several basins of potential shale oil and gas reserves, the largest being the Canning Basin in the north of Western Australia, the Georgina and Beetaloo basins in the Northern Territory and western Queensland, and the Cooper Basin in central Australia. Both the smaller Perth Basin and the Maryborough basin, on coastal Queensland, host potential reserves as well, although they have been less explored. Both are the nearest to population centres, although both occupy smaller areas. "Of the six assessed basins" in Australia, the report noted, "the Cooper Basin, Australia's main onshore gas-producing basin, with its existing gas processing facilities and transportation infrastructure, could be the first commercial source of shale hydrocarbons." Santos, Beach Energy and Senex Energy are testing the shale reservoirs in the Cooper Basin, with initial results from vertical production test wells providing encouragement for further delineation. The study estimates China has the largest shale gas reserves, at more than 1115 trillion cubic feet of recoverable gas, while for shale oil, Russia has the largest reserves at an estimated 75 billion barrels.