Gas producers are backing a hotly contested technology to prolong their viability in a world committed to curbing climate change.
The industry’s annual conference in Perth begins on Tuesday with a keynote speech from Resources Minister Madeleine King on a “new energy economy” amid strong liquefied natural gas (LNG) exports and uncertainty for domestic gas supply.
The new Future Gas Strategy locks in the energy source to 2050, and beyond, and embraced carbon capture and storage (CCS) to reduce the nation’s carbon footprint while still selling gas to the world.
New sources of gas will be needed to meet demand during the energy transition, according to chair of the Australian Energy Producers organisation and Woodside Energy boss Meg O’Neill.
“Without action, the east coast of Australia faces projected shortfalls by 2028 and the west coast by 2030,” she will tell delegates.
She warns market volatility could increase and drive up prices for households and businesses already battling inflationary and cost of living pressures.
“The strategy will be measured by whether it delivers policy reforms that address the barriers to new gas supply and investment,” she will say.
Meanwhile a so-called safeguard mechanism will require steeper cuts in producers’ emissions every year to ensure Australia gets to net zero.
But environmentalists have called on Ms King to resign over the national gas strategy, and accused the federal government of “intentional deception” by justifying the expansion of gas with “offsetting and carbon pollution dumping”.
“Offset reporting is famously inaccurate whilst CCS is unproven, dangerous and very expensive,” campaigner Mitch Pope said.
Yet the Moomba CCS project in South Australia, set up by Santos and Beach Energy, aims to store 20 million tonnes of carbon dioxide per year.
Chevron Australia already uses CCS at its LNG operations beneath Barrow Island in Western Australia to bring down its overall carbon footprint, but not as much as originally promised.
The company admitted in 2023 rates of carbon storage were only about one third of where they would like them to be – not the promised four million tonnes a year.
Danny Woodall, director of operations, said they were focused on increasing injection rates “in a significant way” but gave no time frame for success.
Regardless, Aussie “learnings” will be exported to the US to help Chevron roll out more CCS, according to Houston-based Chris Powers, vice-president of carbon capture, utilisation and storage (CCUS) for Chevron New Energies.
American taxpayers will stump up $US85 per tonne as a tax credit – unmatched by Australia – for developers wanting to use the technology in the United States.
There is also keen interest in plans for Australia to ship in carbon emissions from trading partners and pump it deep under the sea floor.
The 2024/25 federal budget allocated $32.6 million over four years to establish regulations and bilateral agreements for future carbon management services to the Asia-Pacific region.
International carbon transfer services from Korea, Japan and Singapore could make Australia a carbon storage hub.
