Your editor continues to gently pound the table in favour of an Australian energy revolution. Technological advances have made enhanced oil and gas extraction possible all over the world. In practical terms, it means countries that don't have a lot of high-quality easy-to-produce hydrocarbons can still become more energy self-sufficient, if they're willing to embrace the technology.

But some people fear oil and gas as much as they fear change and technology, or spiders and heights. Whether Australia gets lower energy prices in the next twenty years is now a political issue. Geologically speaking, there's no doubt the oil and gas is there. Australia may have ten times as much recoverable gas as previously thought, according to a new study from the US Department of Energy.

The report says Australia could have as much as 437 trillion cubic feet (tcf) of recoverable shale gas, if you include some of the more remote and unexplored oil and gas basins. The current estimate of 47 tcf is based on established oil and gas producing regions like the Cooper Basin (pictured below). Even more intriguing, the report reckons Australia could have a shale oil resource of 17.5 billion barrels versus the current estimate of 1.4 billion.

Source: US Department of Energy

The energy propaganda arm of the American hegemon concluded its hyperbolic advocacy of further hydrocarbon exploitation with the statement that, 'With geologic and industry conditions resembling those of the US and Canada, Australia has the potential to be one of the next countries with commercially viable shale gas and shale oil production.' Doubtless this is simply a ruse backed by the major oil companies to gain a foothold in Australia in order to trash the environment for fun and profit.

Or, it could be a simple statement of fact. If Australia endures high electricity and petrol prices, it's a political choice, not a geological inevitability. If Australia becomes more reliant on imports of refined fuel, that too is a choice. Maybe in the lead up to the Federal election there will be some genuine discussion over the economic wisdom of this choice. Or maybe not.

Either way, the US DOE says that the first cab off the rank for oil shale and shale production is the Cooper Basin, where oil and gas have been extracted for forty years. The picture above shows the Cooper in terms of wet gas (condensate), dry gas (natural gas), and oil. The three companies your editor has recommended are all based in the Cooper Basin. All produce oil. And all stand to benefit from wet and dry gas extracted from shale formations.

But you can always buy call options on Fast Retailing Co. Ltd. as well.

Regards,
Dan Denning
for The Daily Reckoning Australia