A single mega-project exposes the Morrison government’s gas plan as staggering folly



Mick Tsikas/AAP

Bill Hare, Potsdam Institute for Climate Impact Research and Ursula Fuentes, Murdoch University

Every few years, the idea that gas will help Australia transition to a zero-emissions economy seems to re-emerge, as if no one had thought of it before. Federal energy minister Angus Taylor is the latest politician to jump on the gas bandwagon.

Taylor wants taxpayer money invested in fast-start gas projects to drive the post-pandemic recovery. His government plans to extend the emissions reduction fund to fossil fuel projects using carbon capture and storage.

The government’s “technology investment roadmap”, released last week, said gas will help in “balancing” renewable energy sources. And manufacturers advising the National COVID-19 Coordination Commission want public money used to underwrite a huge domestic gas expansion.




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Amid all these gas plans, there is little talk of the damage this would wreak on the climate. We need only look to Woodside’s Burrup Hub proposal in Western Australia to find evidence of the staggering potential impact.

By the end of its life in 2070, the project and the gas it produces will emit about six billion tonnes of greenhouse gas. That’s about 1.5% of the 420 billion tonnes of CO2 world can emit between 2018 and 2100 if it wants to stay below 1.5℃ of global warming.

This project alone exposes as a furphy the claim that natural gas is a viable transition fuel.

Woodside chief executive Peter Coleman. The company wants to build a large gas hub in northern WA.
Richard Wainwirght/AAP

Undermining Paris

The Burrup Hub proposal involves creating a large regional hub for liquified natural gas (LNG) on the Burrup Peninsula in northern WA. It would process a huge volume of gas resources from the Scarborough, Browse and Pluto basins, as well as other sources.

We closely examined this proposal, and submitted our analysis to the WA Environmental Protection Authority and the federal environment department, which are assessing the proposal.




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The likely scale of domestic emissions from the Burrup Hub will significantly undermine Australia’s efforts under the Paris climate agreement. To meet the Paris goals, Australia’s energy and industry sector can emit 4.8-6.6 billion tonnes of carbon dioxide between 2018 and 2050. By 2050, the Burrup Hub would emit 7-10% of this.

Woodside’s investors are clearly concerned at the potential impact of the company’s emissions. On April 30 more than half its investors called on the company to set emission reduction targets aligned with the Paris agreement for both its domestic emissions and those that occur when the gas is burned overseas.

Woodside’s existing northwest shelf gas plant in WA.
Rebecca Le May/AAP

Not a climate saviour

Woodside has claimed the proposed Burrup Hub project would help the world meet the Paris goals by substituting natural gas for coal. This claim is often used to justify the continued expansion of the LNG industry.

But in several reports and analyses, we have shown the claim is incorrect.

If the Paris goals are to be met, the use of natural gas in Asia’s electricity sector – a major source of demand – would need to peak by around 2030 and then decline to almost zero between 2050 and 2060.

Globally (and without deployment of carbon capture and storage technology), demand for gas-fired electricity will have to peak before 2030 and be halved by 2040, based on 2010 levels.

Our analysis found that by 2050, gas can only form just a tiny part of global electricity demand if we are to meet the Paris goals.




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The electricity sector is the main source of global LNG demand at present. Emissions from gas-fired electricity production can be lowered by 80-90% by using carbon capture and storage (CCS), which traps emissions at the source and injects them underground. But this technology is increasingly unlikely to compete with renewable energy and storage, on either cost or environmental grounds.

As renewable energy and storage costs continue to fall, estimates of costs for CCS in gas power generation have increased, including in Australia. And the technology doesn’t capture all emissions, so expensive efforts to remove carbon dioxide from the atmosphere would be required if the Paris goals are to be met.

Beyond the Burrup proposal, Woodside says its broader LNG export projects will help bring global emissions towards zero by displacing coal. To justify this claim, Woodside cites the International Energy Agency’s Sustainable Development Scenario. However this scenario assumes a rate of coal and gas use incompatible with the Paris agreement.

This problem is even starker at the national level. We estimate LNG extraction and production creates about 9-10% of Australia’s greenhouse gas emissions. If we include exported LNG, the industry’s entire emissions would roughly equal 60% of Australia’s total emissions in 2017.

As renewables costs fall, CCS becomes less feasible.
Flickr

A big financial risk

If the world implements the Paris agreement, demand for gas-fired electricity will likely significantly drop off by 2030. Technology trends are already pointing in that direction.

This creates a major risk that gas assets will become redundant. Australia will be unprepared for the resulting job losses and economic dislocation. Both WA and the federal government have a responsibility to anticipate this risk, not ignore it.

The Reserve Bank of Australia has warned of the economic risks to financial institutions of stranded assets in a warming world, and the Burrup Hub is a prime example of this.

The economic stimulus response to COVID-19 presents a major opportunity for governments to direct investments towards low- and zero-carbon technologies. They must resist pressure from fossil fuel interests to do the opposite.


In response to the claims raised in this article, Woodside said in a statement:

We support the goal of the Paris Agreement to limit global temperature rises to well below 2℃, with the implicit target of global carbon neutrality by 2050. At Woodside, we want to be carbon neutral for our operations by 2050.

Independent expert analysis by ERM, critically reviewed by CSIRO, shows Woodside’s Browse and Scarborough projects could avoid 650 Mt of CO2 equivalent (CO2-e) emissions between 2026 and 2040 by replacing higher emission fuels in countries that need our energy.

This means every tonne of greenhousa gas emitted in Australia from our projects equates to about 4 tonnes in emissions reduced globally. To put that in context, a 650 Mt CO2-e reduction in greenhouse gas is equivalent to cancelling out all emissions from Western Australia for more than eight years.

To have reliable energy and lower emissions, natural gas is essential. As a readily dispatchable power source, gas-fired power is an ideal partner with renewables to provide the necessary system stability.

Woodside remains committed to realising our vision for the Burrup Hub, despite the delay to final investment decisions on the projects in response to the COVID-19 pandemic and rapid decline in oil prices. We believe these projects are cost-competitive and investable, with 80-90% of their gas reserves to be produced by 2050.

The Burrup Hub developments have the potential to make a significant contribution to the recovery of the West Australian and national economies when we emerge from the impact of COVID-19. They will provide thousands of jobs, opportunities for local suppliers and tax and royalty revenues to the state and Australia.The Conversation

Bill Hare, Director, Climate Analytics, Adjunct Professor, Murdoch University (Perth), Visiting scientist, Potsdam Institute for Climate Impact Research and Ursula Fuentes, , Murdoch University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

Climate explained: why countries don’t count emissions from goods they import



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Sarah McLaren, Massey University


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Climate Explained is a collaboration between The Conversation, Stuff and the New Zealand Science Media Centre to answer your questions about climate change.

If you have a question you’d like an expert to answer, please send it to climate.change@stuff.co.nz

I would like to know if New Zealand’s carbon emissions of 0.17% include emissions produced from products manufactured overseas and then imported for the New Zealand consumer?

The latest Ministry for the Environment report, published last month, shows New Zealand contributes 0.17% of the world’s total greenhouse gas emissions.

New Zealand’s population represents just 0.06% of the world’s population (New Zealand 5 million, global 7.8 billion), which means it has a disproportionately high share of emissions for its population size. This is sometimes represented as per capita emissions – and in 2017, New Zealand ranked sixth highest among developed and transitioning countries, at 17.2 tonnes of carbon dioxide equivalent emissions per person. This is almost three times the average per capita share.

The reason for this can be partly explained by the way countries account for their greenhouse gas emissions.




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Keeping track of emissions of traded goods

Countries generally use “production-based accounting” to quantify their greenhouse gas emissions. This approach counts emissions from all activities that happen within a country’s territory – which means goods manufactured elsewhere and then imported are not included.

It also means that if a country exports more goods and services than it imports, it will likely have disproportionately higher per capita emissions.

It can be argued that if a country can produce these goods more efficiently (with lower emissions) than other countries, this may be the preferred situation. This is the case for New Zealand’s agricultural production. Research shows New Zealand’s pasture-fed agricultural systems are efficient in producing meat and dairy products – per kilogram of meat or litre of milk, New Zealand emits less than many other countries.

Although most of these products are exported, the emissions from their production count towards New Zealand’s greenhouse gas inventory. In fact, almost half of New Zealand’s emissions in 2018 came from agriculture, and just under three-quarters of these agricultural emissions were methane from cows and sheep.

From a global perspective, climate policy needs to recognise the advantage of producing goods where they can be made with lower emissions. Otherwise there is a risk industries relocate to other (typically less developed) countries with less stringent climate change regulations, and global greenhouse gas emissions rise as a result. This is known as “carbon leakage”.

Patterns of consumption

But there is an important corollary to all of this: considering only the production-based emissions of countries is not enough to address the climate crisis. Even if New Zealand can produce agricultural goods more efficiently than other countries, should these be produced at the current volume – or at all?

Ultimately we need to consider patterns of consumption and assess whether they are in line with a sustainable future for the world.

In practical terms, this means that we should be accounting for both consumption and production-based emissions. An accounting system based on consumption would assess greenhouse gases emitted in the production of goods and services consumed by New Zealanders. This includes imported goods as well as everything that is produced and then consumed in New Zealand – and it excludes exported goods and services.

Two New Zealand studies (for 2011 and 2012) show the biggest contribution to consumption-based emissions comes from three sectors: construction, food and beverages, and education and health services. For food and beverages, animal protein and processed meat contributes 35% of the emissions associated with an average adult New Zealand diet.




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But accounting for emissions from consumption comes with challenges. It requires tracing the point of origin of imported products, often in countries with less stringent emission inventories. There are two types of modelling we can use to support consumption-based analysis. Life cycle assessment starts with a product – say an apple or packet of milk powder – and tracks the entire supply chain back through the retail, distribution and agricultural production. Other models integrate environmental and economic data across multiple regions.

Such data and the insights we glean from both production and consumption accounting could guide future climate policies to enable New Zealand to reduce emissions both within the country and internationally.The Conversation

Sarah McLaren, Professor of Life Cycle Management, Massey University

This article is republished from The Conversation under a Creative Commons license. Read the original article.