Australia’s post-COVID recovery plan leans heavily on gas… but is it the wisest choice?
Australia’s recovery will be driven by gas, says the Prime Minister. A task force headed by Andrew Liveris, a business figure with a career doused in carbon, recommends subsidies to ramp up the industry.
But high hopes for gas are being tested in a way in which they would not dream: by satellites wheeling 600 kilometres above Earth, completing a circuit every two days.
They are mapping methane — effectively, gas — over every two square kilometres of the land surface of the planet.
As Peter Hannam reported in Wednesday’s Sydney Morning Herald and The Age, scientists are now alarmed at methane surging skyward from coal, oil and gas development. It’s tipping the planet to upper projections of warming.
Reuters reported last month that the EU’s fleet of Sentinel-5P satellites detected huge plumes of invisible methane gushing from the Yamal pipeline running from Siberia to Europe.
One of the leaks was spewing 93 tonnes of methane every hour. That’s equivalent to the carbon dioxide released by 15,000 cars a year.
The evidence is mounting that the gas industry has not been reporting the extent of methane it dumps in the upper atmosphere. In the Permian Basin, where the US extracts 30 per cent of its gas and oil, 3.7 per cent of total production is pluming skyward, according to a study by authors from Harvard University.
In fact, along all steps of the supply chain, the latest research is that gas leaks – it’s in its nature, but far more than assumed.
In February, Nature published a major new study showing methane emissions from fossil fuel production are 25 to 40 per cent higher than previously understood. The study’s lead author, Benjamin Hmiel, from the University of Rochester, said, “We’ve identified a gigantic discrepancy.” Other studies say underestimation has been as much as 60 per cent.
This undercuts the industry’s claim to provide a clean fuel. On a 20-year time frame, a molecule of methane is 86 times more effective at trapping heat in the atmosphere than a molecule of carbon. Put simply, if gas leaks at more than a rate of 3 per cent, it’s worse than coal. BP candidly reports 3.2 per cent of its gas leaks into the sky.
Critics of gas see this as the industry’s Volkswagen moment. From 2006, the German carmaker promoted its “clean diesel cars”. But in 2015 the US Environment Protection Agency exposed VW had used special software to fake emission levels. Emissions of nitrogen oxides were 40 per cent above legal limits. VW was hit with devastating fines and class actions.
Mapping of methane will be on the agenda of the UN climate summit planned for next year. It will feed evidence into the rolling update of the Paris Agreement. If Joe Biden wins, he’s promised a global climate summit within 100 days of his inauguration, likely to comprise G20 leaders — it will have to talk methane. European leaders will present readings from their satellites, Canadians and Japanese from theirs.
If the satellite evidence keeps firming, investors will class gas assets as risky. Big energy has been downgrading oil and gas assets, scared they will be stranded, and not just because of COVID-19 market conditions. This year, investors such as BlackRock and Allianz have dumped thermal coal from their portfolios; as the science mounts, gas will probably get the same attention, at first gradually, then with some speed.
The EU is moving to carbon tariffs and it’s an option popular in Washington because it forces stronger climate action in China and India.
All this means the new gas infrastructure Liveris wants the taxpayer to subsidise, like a continental pipeline, won’t draw private partners. Boardrooms will see them never making, over their life, an acceptable rate of return.
In Australia, gas use in our national electricity market over the past five years is down 60 per cent because renewables beat it on price. And the manager of our market, the Australian Energy Market Operator, sees a smaller role for gas in the future in a grid surging with renewables.
And that’s counting any gas peaking plants needed — along with batteries and more interstate transmission — to “firm up” wind and solar. Renewables are already at 23 per cent, gas is struggling at nine. There is only one project for new gas-powered generation and it will require a big subsidy.
Subsidies are the only way yesterday’s industry can even try to retard solar and wind. But the upper atmosphere hasn’t room for any more leaking methane. Ask the satellites.
Read more as published in The Sydney Morning Herald.
Bob Carr is the longest-serving premier of NSW and a former foreign affairs minister. He is the Industry Professor of Climate and Business at UTS.
