Natural gas is the Queensland Government’s ‘key transitional fuel source’ under its ClimateQ: Towards a greener Queensland. This was a hot topic for the Premier’s department in early December when Brisbane hosted the Queensland International Gas Symposium.
As Queensland’s burgeoning coal seam gas (CSG) industry was being touted as an emerging ‘“golden age” of gas development’, the Government took all opportunities to rehash the social and economic benefits attributed to the CSG industry in its media statement ‘Queensland Centre of the World on CSG to LNG Issues’. Notably, the greenhouse gas (GHG) savings that would accrue from the expansion of this ‘clean’ energy industry didn’t receive a mention.
Public assurances from the Australian Petroleum Production and Exploration Association (APPEA), backed by the findings from an independent report released in April 2011, indicated that the footprint of gas-fired electricity is up to 70 per cent less than for coal. Why didn’t the Government jump at the opportunity to promote this? Perhaps it was far too aware of the battering that gas’s ‘golden’ image had received during the latter half of 2011.
The tarnishing commenced in June 2011 with the release of the International Energy Agency’s (IEA) report ‘Are We Entering a Golden Age of Gas?’ which investigated the impact of a massive expansion of natural gas consumption on global greenhouse gas (GHG) emissions. The report concluded that a ‘high gas scenario’ of a 50 per cent increase in global gas consumption from 2010 levels that would account for more than 25 per cent of global energy demand by 2035 would not sufficiently reduce GHG emissions to limit an increase in global temperature to two degrees Celsius.
Why did such a massive shift to a ‘clean’ fuel not translate to a low-risk warming scenario? As explained by the IEA Executive Director Nobuo Tanaka: ‘While natural gas is the “cleanest” fossil fuel, it is still a fossil fuel. Its increased use could muscle out low-carbon fuels, such as renewables and nuclear…an expansion of gas use alone is no panacea for climate change.’
A study published in August 2011 by a senior researcher of the US National Centre for Atmospheric Research echoed the findings of the IEA report. The study examined the impact of a 50 per cent reduction in global coal consumption and a corresponding increase in natural gas consumption on predicted global temperature rises. Focusing on the effects of leakage from natural gas production processes and reduced atmospheric particulates concentrations on warming rates, the study concluded that even under a range of gas leakage scenarios, the transition to gas did little to slow the increase in global average temperature over the 21st century.
Researchers from Cornell University also found reason to challenge gas’s ‘clean’ image in June 2011 when they published the results of their study on methane emissions from gas extraction processes for unconventional gas sources. The study focused on the carbon footprint of shale gas extracted through hydraulic fracturing and concluded that ‘compared to coal, the footprint of shale gas is at least 20 per cent greater and perhaps more than twice as great on the 20-year horizon and is comparable when compared over 100 years’.
The Australian gas industry is quick to point out that CSG extraction is different to that of shale gas. However, when the interim report from the recent Senate Inquiry into Australia’s CSG industry states that ‘some method of “flow enhancement” including hydraulic fracturing’ is required for 30 to 40 per cent of current CSG developments, one cannot but suspect that there is merit in the view that CSG is equal to or more GHG-intensive than coal.
The three final blows of 2011 to gas’s ‘green’ reputation were also dealt in the month of November, this time by Merrill Lynch, WorleyParsons and Delta Electricity.
Firstly, Merrill Lynch’s oil and gas analyst David Heard issued the six-page note to clients ‘Green gas debate: who is hiding the fugitives?’ in which he dissected the APPEA report and warned investors against assuming that CSG would have a low-carbon liability under the Gillard Government’s carbon tax.
Secondly, WorleyParsons refused to issue a Beyond Zero Emissions commissioned report into the carbon footprint of the CSG industry. This raised suspicions that the report most likely challenged the accuracy of the earlier APPEA report, which incidentally, WorleyParsons produced.
And then, Greg Everett, chief executive of one of the nation’s largest electricity suppliers, Delta Energy, pointed out that any competitive advantage that gas has over coal under the proposed $23/tonne carbon price will be eaten away by an anticipated rise in domestic gas prices driven by the opening of the CSG to LNG export market. Incidentally, coal-fired power will remain cheaper than gas-fired power under the proposed carbon price and there will be little price incentive to transition to the ‘transition’ fuel.
It is clear that beyond raising funds for the broke Queensland Government, the reasons behind the rapid expansion of Queensland’s CSG industry are becoming highly questionable. This is true not only from the perspective of climate change, but also, if the recommendations of the Senate’s interim report are anything to go by, environmentally and socially.
As the ‘Sunshine State’, Queensland is in the enviable position of being able to capitalise on a massive solar resource to provide our energy-hungry society with low-cost clean power. With the cost of renewable energy technologies rapidly decreasing, the State Government is running out of excuses not to base their climate change strategy on technologies that deliver real reductions in GHG emissions. It is not acceptable to use the challenge of climate change as a front for pushing revenue-generating industries that have the potential to deliver more environmental harm than good.
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