If you believe the hype from the government and from the fossil fuel industry, gas is poised to swoop in and heroically stimulate the economy, reduce energy prices and save Australia’s emissions trajectory.
According to the advertising, natural gas is clean, green and wonderful. If only those pesky Lock the Gate types would go away, and governments would lift fracking moratoriums, cut red tape and eradicate “green tape” everything would be fabulous.
However, according to the experts this is a big load of hot air.
Hugh Saddler, research associate with the Centre for Climate Economics and Policy, says that self reporting on gas emissions is where we can see the greatest potential for fudging the numbers.
Saddler, also an honour associate professor with ANU, told The Fifth Estate that some emissions are reported fairly comprehensively, such as those from the flaring and venting of conventional gas wells, which burns off carbon dioxide that needs to be removed from some natural gas wells so the methane – the actual saleable product – achieves pipeline quality.
So the emissions-generating gas is produced using a process that itself generates a load of atmospheric CO2.
For a project such as the Gorgon gas project in WA, where there is a high level of CO2 contamination, Saddler says it was a requirement of the approval that the proponent capture and sequester the CO2.
- See our story Gas in the firing line: here comes WA’s Adani fight
While the capture part is “fairly straight forward,” two years on the project has still not successfully sequestered the C02, citing “technical difficulties”.
Where the emissions reporting gets unreliable is in the coal seam gas or fracking operations. One of the reasons is CSG requires a lot of wells.
There are questions around how accurately the emissions from all these wells are being reported, although the government says it is probably not a problem.
But, there has been no decent research to independently quantify the emissions.
There needs to be “strict regulations around what should be measured.”
Part of the problem is that the regulatory system around gas is like those in the building industry – plenty of rules but no enforcement.
“The regulations are not there for [mandating] more reporting and measurement.”
Recent research by Cornell University shows how flawed self-reporting can be.
Researchers found emissions of ammonia plants producing fertiliser were around 100 times higher than what the manufacturers said.
The researchers’ found fertiliser industry emissions were likely to be greater than the entire industrial sector emissions calculated by the US EPA.
“We took one small industry that most people have never heard of and found that its methane emissions were three times higher than the EPA assumed was emitted by all industrial production in the United States,” John Albertson, co-author and Cornell professor of civil and environmental engineering says.
“It shows us that there’s a huge gap between a priori estimates and real-world measurements.”
- Read the full Cornell story here
Time to switch off the gas?
Saddler says part of the solution is to “move the built environment away from gas for heating and hot water.”
This trend is already under way. The 10-star Josh’s House project in WA, for example, in recent years detached from gas and moved to an all-electric operation supported by solar PV and battery storage.
Saddler says more suburban developments choose not to install gas, with homes relying on electric reverse cycle airconditioning for heating and electric systems for hot water and cooking.
“In my view suburban gas distribution networks are headed for a death spiral.”
He says many commercial buildings can also switch off from gas, and that the real challenge is in the high-temperature industrial sector such as cement and metals forging.
While biogas could theoretically be used instead of fossil fuel gas, Saddler says at this point there is not sufficient supply “in the right places” to make the swap.
However, there are opportunities to be found in the food industry. Combining hydrogen with other sources is also an option.
“There are a lot of chemical engineering opportunities,” he says.
ARENA fires up biogas
Chemically speaking, methane captured from piggery effluent or a rotting landfill is identical to methane produced via a CSG or conventional gas well. The difference is the footprint.
The former involves using emissions from waste which we need to prevent entering the atmosphere, the latter involves liberating emissions that otherwise were locked away underground.
There is also research showing that burning methane, while it generates CO2, does not have a net benefit in mitigating climate change, as methane is 84 times more potent than CO2 in warming potential for the first 20 years after it is emitted.
Stanford researcher Professor Rob Jackson has proposed a whole new industry of capturing methane and converting it into carbon dioxide.
Closer to home, ARENA released a report this month that estimated Australia could source almost 9 per cent of our total energy needs from biogas generated from waste sources including water treatment plants, agricultural processes and landfills. Currently, biogas provides only around 0.5 per cent of our total electricity generation.
Of the 242 biogas plants that were operating in 2017, only around half were using the gas to generate energy – the others were simply flaring aka burning the gas.
Which looks to us like essentially wasting a waste while cooking the planet a little more.
Shocked by your electricity bill? Blame gas
At 2.30pm yesterday [Wednesday 17 July], according to Open NEM, renewable energy sources including solar, wind and hydro were generating 27.6 per cent of the electricity flowing around the National Electricity Market.
But while the solar and wind component are generated at virtually nil marginal cost, the high price of electricity on any given day is set by gas-fired generation, according to Institute for Energy Economics and Financial Analysis gas analyst, Bruce Robertson.
He told The Fifth Estate that gas-fired generation is the highest priced electricity source on the market and is the “last one in” to the NEM.
A fact sheet released by IEEFA this month highlights the big red flags of our “staggering” gas prices.
We are the largest LNG exporter in the world, but east coast gas prices are way above global price parity. The east coast relies on imported gas to meet demand, and five new import terminals are proposed. Robertson says two of these are “well advanced” in their development.
Victoria and NSW, where the fracking industry claims more supply is needed to reduce prices already, produce enough gas to meet domestic demand even given the moratorium in Victoria on new onshore CSG projects and the strict limits on new CSG projects in NSW.
Fracking actually produces high-cost gas, despite industry claims it can produce cheap gas.
“The fracking industry has misjudged the costs, both in terms of capital – as it is very expensive to build and operate the plants – but also in terms of what the fields actually produce,” the fact sheet explains.
“Operators have discovered the wells decline more quickly than expected, and fields produce less gas and more water, increasing costs.”
The high price of gas has also seen demand decline both from industrial users and within the electricity sector.
Robertson says that there’s no genuine market for gas. It’s also a commodity that does not fit the standard supply and demand curve, because increasing supply has occurred while prices have continued to climb.
It’s contribution to the NEM is only a small part of the overall supply, although in South Australia it’s a substantial part of state- generation.
In NSW, Victoria and Queensland brown coal and black coal are still the dominant generation sources – including when NEM electricity is used to pump the water for “renewable” pumped hydro power.
In the longer term, Robertson says renewables will be the logical power source for pumped hydro, as solar and wind generation have almost zero marginal cost once the capital investment is made constructing and commissioning.
Gas meanwhile is “rapidly moving towards an import-only model” for the domestic supply.
The only sector where demand for this expensive fuel is not declining in Australia is the domestic sector because many households are still “locked in” to gas for heating. This is despite a general awareness that gas comes with a carbon footprint.
Robertson says recent gas industry marketing has positioned it as a low emissions option, however, it’s a “very emissions intensive fuel”.
To liquefy gas, for example, is an energy intensive process. The Gladstone LNG plants use the equivalent of 25 per cent of the entire east coast gas demand of 600 petajoules annually to process gas into LNG form for export.
The business case for the controversial Narrabri CSG project in New South Wales is also flawed.
Robertson says the proposition is essentially to produce very high cost gas to sell into the Australian market. This will then have the effect of embedding high energy prices into the Australian economy. The proponent argument that supply increases will reduce prices just isn’t observably true.
“It’s a bit like saying I’m going to bring down the price of cars in Australia by importing 100,000 Rolls-Royces and selling them to bring car prices down,” Robertson says.
“You can’t produce at a high price and bring down the price of a commodity.”
Because of the high prices, the fossil fuel gas industry could actually make the emergent biogas industry more viable.
Smokestack marketing and cancer sticks
The questions around the fossil fuel gas sector’s emissions reporting accuracy mean that more accurate measurements might show gas is actually “no better than coal”, even if it’s only underestimated its whole supply chain emissions by a small percentage.
Robertson compares gas to the cigarette industry. When the first health concerns about cigarettes started to emerge, the industry responded by marketing “light” cigarettes as a countermeasure that would be less risky for health.
“Gas is like that… we are still hooked on this fossil fuel.”