LNG: Busting the 'clean fuel' myth

Piers Verstegen http://ccwa.org.au/users/piersverstegen For those who have been watching the climate debate in Australian politics for the last few years, there is a familiar sense of déjà-vu in the air. Australia's biggest polluters are recycling the very same press-releases and PR strategies that they used to undermine Kevin Rudd's Carbon Pollution Reduction Scheme. And of course the media are re-printing the same stories - fear campaigns based on claims of job losses and economic Armageddon not only sell papers, but curry favour with the powerful elite in Australia's business world. One of the most powerful industry critics of a price on pollution is the LNG industry. Led by Wodside's CEO Don Voelte, the industry repeatedly claims that LNG is a clean energy source that should be exempt from any policies to put a price on carbon pollution. Of course coal exports account for Australia's greatest contribution to global carbon pollution, but because the majority of Australia's coal is burned in other countries, Australia is not responsible for this pollution under UN climate change convention. The story for LNG is quite different. Like coal, the majority of Australia's LNG is exported, however the processing of the gas here in Australia is a massive (and rapidly growing) source of domestic carbon pollution. So great is the carbon pollution from LNG processing, that this industry will almost certainly be the single greatest driver of growth in Australia's carbon pollution over the next decade. One of the planned LNG projects here in Western Australia, Woodside's plan to establish an LNG processing hub in the Kimberley, would add a staggering 39 Million tonnes of carbon pollution to the atmosphere each year, and this does not include the additional carbon pollution from transporting the LNG or burning it as a fuel source. This one project alone would blow Australia's carbon pollution budget - adding an additional 5% to Australia's total carbon pollution at a time when we have bipartisan commitment to reduce Australia's carbon pollution the same amount. Given this, it is very difficult to fathom how Woodside can get away with claims that LNG is a clean fuel. The industry's claims that Australian LNG should be considered part of the solution to global climate change rest entirely on the unsubstantiated assumption that LNG use will result in less coal being burned in countries like China and India. Lifecycle analysis suggests that when the massive emissions from LNG processing are factored in, LNG is only marginally cleaner than coal.  This comparison almost totally irrelevant however, given that the LNG industry have never been able to produce a shred of credible evidence that Australia's  LNG exports ever have, or ever will result in a single tonne less coal being burned. Rather, the dynamics of global energy markets would suggest that substantial new sources of LNG do not result in other energy sources being displaced, but instead fuel further rapid growth in energy intensive industries that emerge to fill the demand for LNG. In assessing Shell's recent Prelude floating LNG proposal, the Commonwealth Department of the Environment dismissed claims that LNG from the facility would reduce global carbon pollution by displacing coal burning in export destinations. In its report on the project, the Department noted that "Shell has not proposed to replace any emitters currently using more carbon intensive fuels, and as such, operation of the FLNG facility will add to Australia's total GHG emissions." Part of the reason for the scepticism about claims that LNG would displace coal burning is that the markets and uses of for the two fuel sources are actually quite different, and substitution between the fuels is rarely a straightforward exercise. While coal is mostly used for base-load power, the more expensive LNG tends to be used for specialised generators that can be brought online quickly to supply peaks in electricity demand or in other industrial applications where a direct source of heat and steam is required. So the realistic best-case scenario is that Australian LNG will not simply add to global energy demand, but will displace other sources of LNG produced somewhere else in the world. In documents submitted to the Environmental Protection Authority, the WA Department of State Development compared the carbon pollution intensity of nine different LNG projects operating around the world (click to view image). Woodside's proposed Browse facility would be the most polluting of any of those assessed, producing 0.65 tonnes of carbon pollution per tonne of LNG produced.   On one hand Woodside's CEO Don Voelte claims that Australian LNG is a climate change solution and that the industry should be exempted from carbon pricing. On the other hand, the LNG industry is projected to be the single most significant driver of growth in Australia's carbon pollution, and Woodside are behind plans to build the most polluting LNG processing facility in the world on an area being considered for National Heritage Listing due to its outstanding cultural and environmental values. Something is not adding up here and Australia's gas industry is starting to look a bit smelly. < Prev   Next >