The federal government has commissioned a review into the measurement of greenhouse emissions from coal seam gas drilling, amid questions over precisely how much gas leaks during the drilling process.
The move could cost the industry millions of dollars in extra carbon costs, according to a paper produced by the think tank The Australia Institute.
The Department of Climate Change and Energy Efficiency said the measurement process had recently been updated, but the external review and a public consultation period would further refine the results.
''With a view to considering further improvements, the department has commissioned an independent consultancy to review international best practice in measurement methods for the estimation of greenhouse gas emissions from coal seam gas extraction,'' a departmental spokeswoman said.
The government's current estimates say an average of 1.2 per cent of gas from underground leaks away as methane - a potent greenhouse gas - during drilling and transportation.
But the US Environmental Protection Agency recently reassessed estimates for shale gas fields in the US to double the leakage rate. If the same method were applied across Australia's gas industry, the estimated carbon price paid by companies over the next two years would grow to $3 billion, from $1.5 billion.
North Queensland Register
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