The Australia Institute Releases New Report on CSG

The Australia Institute Releases New Report on  CSG

Australia risks underestimating its contribution to climate change if it fails to adequately measure fugitive emissions from coal seam gas wellheads, a new report by The Australia Institute warns.

While concerns have been raised about the environmental impact of coal seam gas, in particular the impact of the fracking process on the water supply, very little research has been done into the broader effects of CSG extraction.

Measuring Fugitive Emissions: Is coal seam gas a viable bridging fuel by The Australia Institute’s Senior Economist Matt Grudnoff finds that Australia is likely to be significantly underestimating coal seam gas fugitive emissions by around 62 million tonnes over three years.

“Gas is increasingly being seen by some as a ‘bridging fuel’ in the fight against climate change, yet because we don’t accurately measure the amount of leakage at wellheads we have no way of knowing if we’re actually reducing our emissions by switching from coal to coal seam gas,” said Mr Grudnoff.

“What’s worse is that we could inadvertently be making it harder for the world to limit the warming effect of climate change below the environmental tipping point of two degrees.”

The report recommends allocating funding from the $200 million the government has put aside from the Minerals Resource Rent Tax towards measuring fugitive emissions.

Another consequence of underestimating fugitive emissions from CSG is that it blunts the impact of the carbon price as firms will not be paying the tax on all of their emissions. An extra 62 million tonnes over three years is equivalent to giving CSG companies more than $1.5 billion.

“If emissions from coal seam gas are significantly lower than actual emissions then there is no incentive for CSG producers to introduce world’s best practice. This means Australian taxpayers are effectively subsidising this industry to be inefficient,” said Mr Grudnoff.

“Before we jump into the golden age of gas, it is essential that the federal government commits to finding a way to better measure the effects of coal seam gas extraction,” concluded Mr Grudnoff.

Source: Australia Institute, August 15, 2012