Analysis: New gas and coal undermines Labor’s climate target, regardless of whether it’s exported
We Can’t Have Our Cake and Eat It Too
Some in the new Labor Government, and the Coalition previously have claimed that Australia can reduce its emissions, while simultaneously approving new coal and gas mines. Sounds good in theory, but in practice fossil fuel extraction and processing is one of the biggest sources of emissions in Australia, even before the coal or gas is burned.
Under the international rules governing the reporting of greenhouse emissions, countries are not required to declare Scope 3 (extra-territorial) emissions from fossil fuels that are exported (and therefore consumed overseas).
Notwithstanding the immorality of this approach – emissions affect us globally, regardless of where they are generated – the claim that we can have our cake (reduce emissions) and eat it too (approve new fossil fuel projects) ignores the enormous domestic emissions associated with fossil fuel extraction and in-country transport and processing.
Indeed, of Australia’s largest 212 emitters – specific facilities covered by the Safeguards Mechanism because they emit more than 100,000 Tonnes of greenhouse gases per annum on site – fossil fuel extraction operations accounted for nearly half by number and well over half by emissions! This is shown in Figure 1.
Figure 1 - Source: Australian Clean Energy Regulator, 2020-21 Safeguard Facility Data
Takes Gas to Make Gas
A typical gas development that exports all its product still produces domestic emissions (scope 1 and 2, which are counted in Australia’s total) equivalent to between 12% and 15% of the emissions that are exported.
It’s easy to see this: the gas extraction industry is the largest industrial user of gas in Australia. Government data (see Figure 2) shows that it consumes another 10% of the gas it exports!
Figure 2 - Australian Fossil Gas (Methane) Flows (Petajoules), 2020-21. Attribution: Tim Baxter
Note the enormous LNG exports bar at the top right of Figure 2 - Australia exports 4,314 PJ of gas. That’s about 82 million tonnes* of gas, delivering 1,200 TWh of energy. For comparison, total electricity consumption in Australia during the same year was 266 TWh - just 22% of the equivalent energy content of the gas we export.
The next two bars on the right of Figure 2 represent use of gas by the gas exporters themselves to get their product out of a well and onto a ship: 433 PJ or a full 10% of the gas that is exported! You’ll note that is by far the largest use of gas in Australia - a whopping 28% of the domestic total and more than is used by gas in the electricity grid (390 PJ) or by all manufacturing uses (408 PJ).
Awash With Gas
In fact, domestic use of gas in Australia that is not related to the LNG export industry is equivalent to a mere 19% of all the gas we produce, which kind of demolishes the claim that we need more gas to bring local prices down. The fact that we import gas (as shown at the bottom left of Figure 1) and there are plans to build more import terminals is a national disgrace.
What we would actually need to reduce gas prices is an effective domestic reserve mechanism that would force the producers to sell gas to Australian consumers at a price that is more closely associated with its actual production costs, rather than whatever the global commodity price happens to be. On the other hand, Australian Parents for Climate Action aims to accelerate the transition to renewable energy and electrification of buildings. Notwithstanding the financial pain high gas prices are causing many families, globally it is spurring cost-of-living and energy-security driven policy shifts that are prompting investment in the clean energy transition that might otherwise not have occurred as quickly.
The Fugitive Problem
The other 2-5% of the 12-15% range (domestic emissions associated with gas exports) comes in emissions from purchased electricity and diesel, plus fugitive emissions from venting, flaring, and system-wide leaks. The gas industry contributes 7.5% of Australia’s domestic emissions and rising.
Meanwhile, coal mines produce domestic emissions during the extraction, washing and transport of the product to the port of export via use of diesel and electricity. They are also a significant source of fugitive emissions due to methane gas that is trapped within the coal seam.
For example, the government’s recent endorsement of Woodside’s Scarborough gas project implies additional domestic emissions of perhaps 15% of the headline 1.37 billion tonnes CO2-equivalent over its 30-odd year life, representing an increase of between 1 and 2% of Australia’s domestic emissions per annum.
An analysis by energy expert Ketan Joshi compared the potential impacts of projects awaiting approval against the Labor Government’s proposed emissions savings, finding that their cumulative domestic emissions (over the full project life) would equate to around four times the reduction budget implicit in its 43% 2030 target.
Some have supported the use of carbon capture and storage (CCS) to supposedly reduce gas extraction emissions. Sounds great, until you realise that $4 billion of public money has already subsidised over two decades worth of failed CCS experiments in Australia alone, culminating with the disastrous Chevron Gorgon project. To add insult to financial injury, CCS at a gas wellhead is mainly aimed at trapping fugitive carbon dioxide trapped in the gas seam. Even if it works there, it does nothing to limit fugitive methane emissions downstream, or trap emissions at the point of combustion of the gas.
In summary, achieving Australia’s domestic net zero targets becomes incrementally more difficult as each additional emissions intensive project is added, another reason why environmental assessments of projects must prioritise climate harm, as has been proposed via a Climate Trigger mechanism.
*According to The Physics Factbook, a kilogram of methane contains 50-55.5 megajoules of energy. A megajoule is a billionth of a petajoule. One petajoule = 278 million kiloWatt hours (kWh). In the old days of incandescent light bulbs, a typical bulb was 100 Watts, so 10 running continuously for one hour would use 1 kWh of energy. Interestingly, domestic gas uses other than electricity and the LNG industry (746 PJ) are equivalent to 207 TWh - nearly four fifths of the energy from electricity.Share Tweet