Gasfield south of Chinchilla, Qld.
The Morrison government established the National Covid-19 Coordination Commission to provide a business perspective to Government on Australia’s economic recovery. There were concerns about member connections to the fossil fuel industry, in particular Chairman Nev Power and adviser Andrew Liveris. On 15 September 2020, Prime Minister Scott Morrison announced what he called a ‘gas-fired recovery’ for the COVID-19 recession. He said it would “reset the east coast gas market and create a more competitive and transparent Australian Gas Hub by unlocking gas supply, delivering an efficient pipeline and transportation market, and empowering gas customers.” The announcement included unlocking five key gas basins starting with the Beetaloo Basin in the NT and the North Bowen and Galilee Basin in Queensland.
He also said the Australian Government would pay to build a gas-fired power plant in the Hunter Valley (through the government-owned Snowy Hydro company) if the industry did not back new “dispatchable” electricity generation – a source that can be called on when required to support conditions-dependent renewable energy – by April next year. The government estimated that 1,000 megawatts of new dispatchable power was needed to replace AGL’s Liddell coal-fired plant, which is due to shut by early 2023.
Prior to the the PM’s announcement, the Chief Scientist Alan Finkel, in his address to the National Press Club on 12 February 2020, said. “In the short-term, as the Prime Minister and Minister Angus Taylor have previously stated, natural gas will play that critical [transition] role. In fact, natural gas is already making it possible for nations to transition to a reliable, and relatively low emissions, electricity supply.” He went on to describe the role gas can play in hydrogen generation.
The Australian Energy Market Operator’s 2020 Integrated System Plan, which presents various scenarios for the Australian grid for the coming decades, assigns only a minor role to gas. Even AEMO’s “central scenario”, representing business-as-usual and neutral assumptions, sees no substantial increase in gas consumption over the coming decades.
Open letter from scientists
Trying to head off the PM’s announcement, 25 eminent scientists wrote an open letter to the Chief Scientist disagreeing with his stance on the role of gas.
24 August 2020
We are writing to you as Chief Scientist with our concerns about your strategy for dealing with climate change, and to offer any scientific advice that you might find useful on climate change issues.
With the Black Summer bushfires and yet another mass bleaching of the Great Barrier Reef fresh in our minds, meeting the climate change challenge is more urgent and daunting than ever. The Paris Climate Agreement, to which Australia is a signatory, provides the global framework for addressing this challenge. It calls for nations to take action to keep global temperature rise to ‘well below 2°C and to pursue efforts to limit the temperature increase to 1.5°C’.
In your February speech to the National Press Club entitled “The Orderly Transition to the Electric Planet”, and in other publications and presentations, you have emphasised the importance of transitioning to renewables such as solar and wind, and that they should become the backbone of a 21st century clean economy. We strongly support this approach, and agree that renewables firmed by batteries and pumped hydro comprise a very effective approach to tackling the emissions reduction challenge.
Our concern, however, relates to the scale and speed of the decarbonisation challenge required to meet the Paris Agreement, and, in particular, your support for the use of gas as a transition fuel over ‘many decades’. Unfortunately, that approach is not consistent with a safe climate nor, more specifically, with the Paris Agreement. There is no role for an expansion of the gas industry.
There are multiple lines of evidence to support our position on gas:
- We are already committed to a temperature rise of 1.3°C or 1.4°C from past greenhouse gas emissions, primarily from the combustion of coal, oil and gas. At this point it would take a global social, political and technological miracle to keep the world under 1.5°C.
- Exceeding even 1.5°C will have escalating impacts on Australia.
- The combustion of natural gas is now the fastest growing source of carbon dioxide to the atmosphere, the most important greenhouse gas driving climate change.
- Global methane emissions from fossil fuel sources and from agriculture are accelerating. On a decadal timeframe, methane is a far more potent greenhouse gas than carbon dioxide. In Australia, the rapid rise in methane emissions is due to the expansion of the natural gas industry. The rate of methane leakage from the full gas economy, from exploration through to end use, has far exceeded earlier estimates.
- Existing and planned fossil fuel infrastructure is more than sufficient to push the world past 2°C, pushing even the upper bounds of the Paris Agreement’s temperature goals well out of reach.12
- To meet the upper Paris goal (‘well below 2°C’), we must achieve net zero emissions by 2040-2050. This requires a rapid phase-out of existing fossil fuel infrastructure, leaving no room for expansion of the gas industry.
- While in principle CCS (Carbon Capture and Storage) could extend the life of fossil fuels – for example, for use in the production of hydrogen – CCS technology is still far from being technologically and economically viable. The renewable energy-based alternatives are already technologically ready, less expensive, and more widespread, capable of delivering economic and employment benefits across regional and rural Australia.
The undeniable conclusion from this analysis is that the time has passed for any new fossil fuel infrastructure, including the proposed expansion of the gas industry in Australia. All types of fossil fuels, including gas, contribute to climate change and all must be phased out as quickly as possible to meet the Paris Agreement targets, helping to keep Australians safe now and into the future.
We reiterate that we very much appreciate your efforts and leadership in facilitating the rapid expansion of the renewable energy sector. This is a major step forward. But we must now make urgent progress towards a prosperous net-zero emissions economy by 2040-2050.
As always, we stand ready to provide advice on the science of climate change and to support your efforts to expand and accelerate the actions needed to do our part in the global effort to meet the goals of the Paris Agreement.
Professor Nerilie Abram, Australian National University; Professor Nathan Bindoff, University of Tasmania; Professor John Church FAA FTSE, University of New South Wales; Professor Matthew England FAA, University of New South Wales; Professor Jason Evans, University of New South Wales; Honorary Professor John Finnigan FAA, Australian National University; Dr Joelle Gergis, Australian National University; Adjunct Professor Dave Griggs, Monash University; Professor Clive Hamilton AM, Charles Sturt University; Emeritus Professor Ann Henderson-Sellers, Macquarie University; Professor Ove Hoegh-Guldberg FAA, University of Queensland; Professor Mark Howden, Australian National University; Professor Lesley Hughes, Macquarie University; Professor Terry Hughes FAA, James Cook University; Dr Sarah Perkins-Kirkpatrick, University of New South Wales; Professor Trevor McDougall AC FRS FAA, University of New South Wales; Professor Jean Palutikof, Griffith University; Professor Graeme Pearman FAA FTSE, University of Melbourne; Professor Peter Rayner, University of Melbourne; Honorary Associate Professor Hugh Saddler, Australian National University; Dr Mark Stafford Smith, Co-Chair, Future Earth Australia Steering Committee; Professor Steven Sherwood, University of New South Wales; Emeritus Professor Will Steffen, Australian National University; Honorary Professor Brian Walker AO FAA FTSE, Australian National University; Professor John Wiseman, University of Melbourne.
Lighter Footprints’ response
In September, the Lighter Footprints Energy Transition Committee called on Treasurer and Federal Member for Kooyong, Hon. Josh Frydenberg to oppose the “gas-fired recovery” and implement renewable solutions. Two letters were sent, the first on 1 September, the second on 17 September. Meetings were requested in each letter. Several others in the LF community also wrote individual letters. The text of the two letters follow:
The Hon Josh Frydenberg
Federal Treasurer and Member for Kooyong
Dear Mr Frydenberg
It has been some time since we have been in touch with you. Thank you for your service to the people of Australia and Kooyong through this difficult time. JobKeeper and JobSeeker and other programs have been of great support to many businesses and employees.
On another matter, however, we are concerned – for a range of reasons.
The National COVID-19 Commission Advisory Board (NCC) is proposing that funds are steered into new gas infrastructure and production. This would be for 30-40 years, the life of the projects. We believe that these proposals have the potential to cause significant long-term economic and environmental damage to Australia and are not good value-for money.
Our economic concerns
The risk is high. We are concerned that under the NCC proposal that government takes all the risk. That is the government is the buyer of the gas at a fixed price under a long-term contract, on-sells it to smaller customers, who would then be responsible for transporting the gas to their destination of use. This is an undesirable model used in countries such as Indonesia, Venezuela and China.
It appears to us that the NCC is proposing that the Australian government underwrite volumes in gas pipelines to ensure fixed returns to pipeline companies. If this proposal is accepted, the gas industrywould be ‘protected’ at a huge cost to the Australian economy.
With bankruptcies, poor profitability and write-downs the gas industry does not warrant underwriting with the money of Australian taxpayers. The gas industry typically pays no tax andoffers few royalties to state governments.
Current regulation is inadequate
To keep gas prices low, what is needed is appropriate government regulation. Because of insufficient regulation, gas companies have been allowed to set the price for gas on the east coast of Australia. Since 2014, domestic gas prices have tripled while gas companies have exported ever increasing quantities of Australian gas, at costs cheaper to consumers overseas. For example, in the first half of this year, the gas companies exported 18 cargoes of LNG at prices below domestic prices according to the ACCC.
We don’t need new gas projects as proposed by the NCC. We need the supply we already have to be made available to Australian consumers at reasonable prices. The supply should be regulated by government using a policy which reserves gas for local consumers, as on the west coast of Australia. The use of gas for Gas Powered Generation (GPG) in electricity production is less than 4% of total gas annual consumption (AEMO forecast 2020). For example, GPG is 3.5% in 2022 declining to 2.4% in 2025. Beyond 2025, gas for electricity generation looks set to decline further due in large part to cost of grid-scale batteries.
Our environmental concerns
Producing and consuming more gas is not aligned with emissions reduction. So-called fugitive methane emissions from all gas fields (Conventional and CSG) along the supply chain are high. Satellite camera technology is now increasingly being deployed in the USA and Australia to measure pre-development base-line emissions – and then measure methane emissions during production. As well, gas when burned in peaking plants and used for export, are no better for the climate than coal. In households, using gas for heating hot water and space-heating has higher emissions than electric. If the NCC’s proposals are agreed to, the government will be subsidising an energy intensive high emitting industry at the very time we need to strive for net zero emissions by 2050 at the very latest. We cannot achieve this target by producing and consuming more fossil gas.
We ask you to reject the NCC’s gas-fired proposals. Taxpayer subsidies must not be used for subsidizing a loss-making industry for the next 30-40 years. Manufacturing and industry will achieve greater gains by moving to electrification. This would make Australia’s economy and industries more sustainable, both economically and environmentally. Gas is being abandoned by investors and assets are being written down. Electrification is the right path to a safe return to the taxpayer, government, the economy and the environment. We know what pressures you are working under. We also know the importance of this decision which is about to set our direction towards a so-called ‘gas-led recovery’. The comments in this letter may well need further clarification and discussion. We request that you might find a slot in the next two weeks for us to connect with you on Zoom. It has been a long time since we have been able to meet with you and we would so much appreciate that.
Convenor Lighter Footprints
15 Faversham Rd, Canterbury 3126
Convenor Energy Group
3 Newby ST, East Kew 3102
This is a link to Lighter Footprint’s 2nd Letter to J Frydenberg Gas2 – Sept 20
At the time of writing this report, no response from Minister Frydenberg had been received, however we do acknowledge the release of the budget is imminent. We look forward to meeting with the Treasurer in the near future to discuss his response.
Narrabri gas project received “phased approval”
On 30 September, despite receiving almost 23,000 submissions, including at least 18,000 objections, the NSW Independent Planning Commission determined “phased approval” of the Santos Narrabri gas project. It imposed 134 conditions and did not approve some elements of the proposal, including the construction of a gas-fired power station at Leewood, a workers’ accommodation building and some infrastructure that would allow gas flaring. Most of the 850 wells will be drilled in the Pillaga forest.
If developed in full, it would involve up to 850 coal seam gas wells being drilled on 1,000 hectares of a 95,000-hectare site that includes Pilliga forest and nearby grazing land. Santos says it could provide up to 200 terajoules of gas a day for domestic use for 20 years, equivalent to 50% of NSW demand.
AGL Gas Crib Point and Pipeline project
The proposal includes two components:
- Gas Import Jetty Works comprising a floating storage and regasification unit (FSRU) at Crib Point Jetty, in Westernport Bay, a Ramsar wetland, jetty infrastructure including marine loading arms and gas piping on the jetty, and the Crib Point Receiving Facility on land adjacent to the jetty.
- Pipeline Works consisting of an underground gas transmission pipeline approximately 57 kilometres long to transport gas from the Crib Point Receiving Facility to the Victorian Transmission System
Lighter Footprints campaigned with Environment Victoria against this ridiculous proposal. Our page and submissions can be found here. The public hearing will commence on 10 October and run for 10 weeks. The report is due 30 days later early 2021.