Support for fossil fuels is a theme in this election campaign, but you sometimes have to look closely to find the details.
Ten days in, the Coalition has announced or confirmed more than $800m in funding for fossil fuel developments. The biggest commitment was tied up in an “energy and emissions reduction agreement” between the federal Coalition and the Northern Territory Labor government, signed shortly before the government went into caretaker mode and revealed after the campaign began.
The announcement focuses on plans to start fracking in the Beetaloo Basin, a vast undeveloped gas region that analysts have said could contain enough fossil fuels to increase Australia’s greenhouse gas emissions by 13% if fully developed.
The Morrison government has promised $660m as part of the agreement, including continuing to carve up $226m of public funding “to accelerate the development of the Beetaloo Basin through the stategic basin plan”. The deal also includes $300m for fossil fuel development in Darwin. It will go to supporting the production of liquefied natural gas for export and “clean” hydrogen (read: made with gas), and carbon capture use and storage infrastructure (CCS).
Smaller sums in the deal are promised for renewable energy technology, including up to $45m in joint funding for a large battery and $15m to deploy microgrids in remote Indigenous communities.
But the promise of more gas was the headline. In his statement, Scott Morrison said the deal would “unlock more local gas and create jobs and economic development in the Northern Territory, all while helping Australia to lower emissions and achieve our target of net zero [emissions] by 2050”.
This is a persistent claim by the Morrison government, some Labor MPs and the influential gas industry lobby group, the Australian Petroleum Production and Exploration Association: that extracting and burning more fossil fuels can help cut emissions and eventually get us to net zero.
Logic would suggest adding new fossil fuel infrastructure that is meant to last decades is a strange way to eradicate the stuff from our economy in that timeframe. Gas proponents argue otherwise – that the fossil fuel is pushing out coal, which has higher emissions when burned, and that gas-fired power is needed to support renewable energy. They also suggest CCS – which usually involves burying emissions underground, and so far remains economically unviable in most cases despite billions of dollars of public support – could provide a future.
Neither the government nor the industry have presented evidence that Australian gas is mostly replacing coal. About three-quarters of gas extracted here is exported to Asia. Obviously enough, the driving motive for the companies involved is profit, not addressing the climate crisis.
Government reports have previously noted that in Japan, Australian gas was competing with zero emissions nuclear and renewable energy. In some places it is competing for new energy demand that could be met in a range of ways, including cleaner sources – if there was the political and corporate will to act in line with the temperature targets set at UN climate summits. The agreement between the federal and NT governments is subsidising efforts to pull in the opposite direction.
In terms of the gas needed for some manufacturing industries and power generation in Australia, several studies have found it could be met without opening up new basins. The demand from Australia’s gas power plants is small – there aren’t many of them and, because gas power in the eastern states is expensive, they only run when absolutely needed. The Australian Energy Market Operator (Aemo) doesn’t forecast a huge change in that as more coal plants shut and solar and wind farms are built.
No conversation about gas should ignore the evidence that it is a significant and growing part of the climate problem. While it is often described as having about half the carbon dioxide emissions of coal when burned, the impact on global heating is higher once methane leaks during extraction and transport are factored in.
The head of the International Energy Agency, traditionally seen as relatively bullish on fossil fuels, is among those to have warned the world should not open new oil and gas fields if it is serious about efforts to limit heating to 1.5C, a goal that is quickly slipping from grasp. But here we are.
The Beetaloo is not the only fossil fuel project to get support during the campaign. Morrison also announced $67m for CCS projects in Western Australia, including $40m that will go to a development by energy giant Woodside on the Burrup Peninsula.
And he pledged $250m for Australia’s two remaining oil refineries, in the name of improving fuel quality and the country’s diminishing fuel security. The possibility of accelerating Australia’s adoption of electric vehicles to start reducing the country’s reliance on imported, highly polluting oil was not mentioned.
Campaign non-shock: bipartisan support for coal exports
On coal, the Coalition and Labor were in lockstep on the future of the industry.
Following reports that three coal mega-mines in Queensland’s massive Galilee Basin could be up for approval, Anthony Albanese said Labor’s position was clear – any proposals would be assessed by officials following national environment law (which does not consider the climate impact in any significant way), and if they stacked up, they could go ahead.
Whether they were commercially viable would be a decision for the companies. “Labor would welcome any jobs that would be created from that,” Albanese said.
Given Labor’s need to win seats in Queensland, and the belief that in 2019, north of Brisbane, support waned due to confusion over whether the party supported fossil fuel developments, there was nothing surprising in this stance. Both parties argue there is no need to stem coal exports until international demand dries up.
These decisions can have obvious ramifications for the climate, but it is worth noting it is also disputed that they make short-term economic sense. A recent report by the Intergovernmental Panel on Climate Change suggests that pushing fossil fuels overseas in the name of helping developing countries grow just locks in polluting energy sources that are increasingly more expensive than renewables.
A new study from the Australian National University suggests MPs may have to confront the issue of declining coal demand sooner than they expect, at least from China. It forecast demand could fall by at least a quarter from 2019 to 2025.
Electricity price scares v future planning
We have written elsewhere on the Coalition and News Corp’s attempts to reignite the climate wars through front page stories claiming Labor’s policy of bringing forward transmission connections to renewable energy zones could add nearly 50% to electricity prices over a decade.
The Clean Energy Council, an industry body and lobby group, has done its own factcheck of the claim, backed with references. It’s worth a look.
Its key point is that a blueprint for a future optimal grid by Aemo found reaching the bipartisan goal of net zero emissions by 2050 could require a nine-fold increase in large-scale renewable energy, a five-fold rise in rooftop solar and a trebling in “firming” support from batteries, hydro, virtual power plants and gas. Putting that together could require more than 10,000 kilometres of new transmission infrastructure.
It also suggested about 14 gigawatts of the ageing coal power fleet – more than half the total – could shut by 2030. That could demand significantly more transmission to connect the renewable energy needed to replace it.
In its integrated system plan, Aemo found the transmission projects it outlined could deliver net economic benefits worth about $29bn. That’s more than twice the expected cost.
There are arguments to be had about what is the best – and cheapest – way to build the power grid of the future. It’s an incredibly complicated question, and smart people acting in good faith differ on the answer. But the bottom line is that this inevitable change is coming, quite possibly faster than MPs acknowledge, and needs to be managed.
