The government’s recent surrender to the fossil fuel industry, the Future Gas Strategy, comes with some neat wording about carbon capture and storage — or “carbon management and geological storage” as the government prefers to call it, perhaps aware that the CCS branding is these days rather tainted.
“Australia’s geological carbon management market needs to grow to support a least-cost energy transition and grow our economy,” the document avers, without evidence, outlining an array of funding and the intention to overhaul regulation to accommodate it. The elephant in the room, so to speak, is the Gorgon project run by Chevron at Barrow Island in Western Australia, which is not just “the world’s largest commercial CCS project”, as the strategy says, but the world’s largest failed CCS project.
As Crikey has previously noted, Gorgon is the simplest and most straightforward form of CCS, and it has kept on failing. It’s the poster child for the fact that CCS is bullshit.
In the amusingly named “analytical report” accompanying the strategy, the authors at least acknowledge there’s a perception issue. “Public perceptions of CCUS in Australia have been affected by CCUS’ historical links with the oil and gas industry and its use for enhanced oil recovery (that is, the way fossil fuel companies pump CO2 into the ground to force more oil and gas out). More recently, public perception has been affected by some of the technical issues associated with Australia’s only operational CCUS project, the Gorgon CCS project. Despite these issues, Gorgon is still one of the most successful CCUS projects globally…”
The gas strategy effectively promises the fossil fuel industry that regulatory impediments to CCS will be removed. “Australia and future exporting and importing destinations of CO2 must adopt further regulatory processes before any CO2 trade can occur.” This includes “ensuring our regulatory systems remain fit for purpose, including through the government’s review of relevant regulation.”
Apart from Labor viewing “fit for purpose” primarily through the lens of what its fossil fuel donors want (for example, its changes to sea dumping laws last year to benefit its donor Santos), how do you have a “fit for purpose” regulatory framework for a practice that purports to securely store carbon dioxide underground for hundreds and thousands of years to come? CCS must necessarily be very long-term — CO2 seeping out of its storage in 80 or 100 years is simply a continuation of our current approach of dumping the problem on our children and grandchildren.
The most obvious problem is who gets regulated in 80 or 100 years. The current approach is for the government to indemnify fossil fuel companies engaged in CCS. Chevron is indemnified under Commonwealth and Western Australian legislation against long-term future damages brought by third parties in relation to Gorgon later this century — the Gorgon indemnity is buried deep in the contingent liabilities of every federal budget, has been for years, and will be, probably, for the rest of the century.
But future CCS projects of the kind Labor wants to encourage will be indemnified under the Offshore Petroleum and Greenhouse Gas Storage Act 2006, which requires the Commonwealth to indemnify a fossil fuel company establishing a CCS facility if, fifteen years after the company has ceased pumping CO2 in, everything looks stable and secure and the gas isn’t going anywhere. If the company then ceases to exist, the Commonwealth simply assumes the liability. Thank you, taxpayers.
Proponents of CCS insist that the fossil fuel industry won’t undertake it without this sort of indemnity, which means fossil fuel companies effectively transfer long-term responsibility for the buried CO2 to us.
In its defence, the government points to changes made by the Morrison government in the wake of the Northern Endeavour debacle in 2022, when it gave itself the power to go after the previous owners of offshore petroleum infrastructure and force them to pay the costs associated with it. The implication is, there might still be a previous owner around to pursue for damages.
But in this complete reliance of fossil fuel companies on taxpayers to bear the long-term cost of their CCS fantasy, we have an echo of the crucial role governments will be expected to play if nuclear power is ever to be even remotely viable — in a heavily subsidised way — in Australia.
Not merely will the funding of the construction of a nuclear power plant likely require either direct government equity, extensive loans, or some form of government guarantee to lenders, governments will need to cover the liability of power plant operators for any damage they cause. Insurance companies will be highly unlikely to offer insurance against nuclear incidents (the US has a compulsory indemnity scheme for which plant operators are required to contribute). Moreover, a Chernobyl-scale disaster is likely to overwhelm the finances of any corporation, leaving taxpayers with the damage and compensation bill.
At least with nuclear power, many decades of operation in other countries gives us an understanding of the risks and likely scale of damages any indemnity or government insurance scheme will need to be based upon. No such data exists for CCS, and the potential damages from failed geological sequestration are of a similar scale to those of a nuclear accident, given they would cause a permanent increase in global CO2 levels.
That applies more broadly to CCS as well. At least we know nuclear power, whatever its costs and flaws, works, even if it’s not commercially viable in Australia. CCS hasn’t worked and doesn’t work. Labor is peddling an energy fantasy even more ridiculous than Peter Dutton — and taxpayers will have to wear the cost.
