APPEA: LNG Delivers Greenhouse Benefit (Australia)

The Australian Petroleum Production & Exploration Association (APPEA) has used the opening of its largest ever conference and exhibition to release an independent study outlining the potential global greenhouse gas benefits associated with Australia expanding its liquefied natural gas (LNG) industry.

Produced by the global engineering consultancy WorleyParsons, Greenhouse Gas Emissions Study of Australian CSG to LNG compares the amount of greenhouse gas emissions associated with Chinese power generators using Australian LNG derived from coal seam gas (CSG), and those using imported black coal.

This independent analysis concluded:

• For every tonne of CO2 emissions associated with the CSG-LNG production and use, up to 4.3 tonnes of emissions are avoided when the gas is used instead of imported coal by Chinese power generators;

• A CSG-LNG project exporting 10 million tonnes of LNG per annum to China could avoid more than 32 million tonnes of global CO2 emissions each year;

• Over a 30-year project life, such a project could avoid 968 million tonnes of CO2; almost double Australia’s total annual greenhouse gas emissions.

APPEA Chief Executive Belinda Robinson said the study’s findings have profound implications for climate policy deliberations and she again called for Australian gas exporters not to be disadvantaged by a policy that is unmatched in competitor countries

“Recent polling shows many Australians are unconvinced that an Australian carbon price will make any difference to reducing global emissions,” she said. “If a cost is imposed on Australia’s LNG industry, global emissions will increase as a consequence of there being less natural gas available to replace more greenhouse-intensive fuels.

“Around 80 per cent of Chinese electricity comes from coal, using Australian gas to substitute for just some of that will make a material difference to global emissions.

“It’s widely accepted that gas-fired electricity can produce up to 70% fewer emissions than conventional sources in Australia and that climate change policy should encourage the expansion of the domestic gas industry.

“But this report shows the Government cannot lose sight of the fact global warming is a global problem.

“We need to see Australia’s vast gas resources used to bring down global emissions – not just Australia’s.

“Selling our gas to the world is the most meaningful thing Australia can do to reduce global emissions and any policy that puts the brakes on Australia’s LNG potential will only deny the rest of the world a cleaner form of energy – at a time when demand has never been greater – and have the perverse effect of actually increasing global emissions.”

Greenhouse Gas Emissions Study of Australian CSG to LNG follows a 2008 Worley Parson report on Australia’s North West Shelf LNG project that found that for every tonne of greenhouse gas emissions associated with the export of conventional Australian LNG to China, up to nine and a half tonnes could be avoided when substituted for coal in power generation. Both reports analysed full life-cycle greenhouse gas emissions including those associated with extraction and processing in Australia right through to combustion in Chinese power generation.

Australia’s future climate policy will be one of a number of issues discussed at APPEA 2011; APPEA’s 51st and largest ever conference.

Ms Robinson said: “We have more than 3,000 people attending this week in Perth and this clearly reflects the high level of activity within the industry; the growth in investment; and the increasing importance of Australia in the international petroleum sector.

“Last year saw more than $3.5 billion spent in Australian onshore and offshore exploration and there have been several major new Australian gas discoveries made.

“CSG exploration, appraisal and development activity has greatly expanded and positive final investment decisions worth $31 billion have been taken in recent months on two pioneering CSG-LNG projects in Queensland.

“This means Australia now has $88 billion-worth of LNG projects under construction and at least another $130 billion-worth under consideration.

“APPEA 2011 will showcase why this is such a remarkable period for Australia’s oil and gas industry.”

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Source: APPEA, April 10, 2011;