A gas plant could wipe out a year's worth of Australia's solar power emissions savings
The combined greenhouse gas emissions saved by all of Australia’s solar panels in a year could be wiped out because of technical problems at a single oil and gas project in Western Australia.
It is just one example of a broader problem facing the nation as it tackles the massive challenge of meeting its Paris Agreement commitment to reduce 2005 emissions by 26-28 per cent by 2030.
Chevron began operating its $US54 billion ($73 billion) Gorgon gas plant in the state’s north-west in 2016.
Part of its environmental agreement was to capture and store underground 40 per cent of the plant’s emissions through a sophisticated process known as geosequestration or carbon capture and storage.
This involves capturing carbon dioxide (CO2), typically produced by large industrial plants, before it enters the atmosphere.
It is then compressed and injected deep into rock formations for permanent storage.
Chevron predicted that process would have seen between 5.5 and 8 million tonnes of CO2 injected into the ground during the plant’s first two years of production from the Gorgon field, making it one of the largest carbon abatement activities in the world.
Instead, technical problems with seals and corrosion issues in the infrastructure have delayed CO2 storage and the Federal Government, which contributed $60 million towards the green technology, is not expecting the problem to be rectified until March 2019 — about two years after production began from the Gorgon gas field.
By that point, experts including energy consultancy firm Energetics predict the additional CO2 emitted into the atmosphere will be roughly equivalent to the 6.2 million tonnes in emissions saved in a year by all the solar panels in the country combined — from small household rooftop systems to major commercial installations.
In the meantime, all those emissions supposed to be injected underground are being vented into the atmosphere.
Solar power gains wiped out
Almost 2 million Australian households have installed solar panels to cut their power bills while also doing their bit for the environment. Households account for most of the country’s total solar panel emission savings.
“The volume of pollution coming out of the Chevron project far outweighs the savings of carbon pollution from rooftop solar,” Climate Analytics chief executive Bill Hare said.
Dr Hare, a physicist and climate scientist of 30 years, founded Berlin-based research organisation Climate Analytics and has helped negotiate several international climate policies, including the Paris Agreement in 2015.
“Many people have proudly put solar panels on their roofs, not just to save on their power bills but to do something for the climate,” he said.
“I think that was a big promise, there’s a fair bit of public funding which has gone into supporting the company in developing this technology and deploying it.”
Chevron declined to comment on the comparison but reiterated it was committed to safe commissioning of the storage plant to achieve high injection rates over the life of the project.
“Our focus is on the safe commissioning and start-up of the carbon dioxide injection project and achieving a high percentage of injection over the 40-year life of the Gorgon project,” a company spokeswoman said.
“We have been keeping the relevant government agencies informed as to the progress of the commissioning of the Gorgon carbon dioxide injection project.”
Failure could cost Chevron tens of millions
Western Australia’s Environment Minister, Stephen Dawson, has ordered the state’s Environmental Protection Authority (EPA) to investigate the delay and determine whether the company can meet the key condition that at least 80 per cent of CO2 extracted from the project’s gas reservoirs is captured over a five-year rolling average.
“There’s different views between … government and industry about when it should start,” Mr Dawson said.
“So what I’ve sought from the EPA is for them to reassess the issue and give me some definitive advice about when the start date was so we can make sure that (the) proponent is doing what they’re supposed to do.”
But industry watchers believe the target is now unachievable.
“At the end of the first five years it will have failed the environmental conditions on the project”, said Simon Holmes a Court, senior adviser at the Energy Transition Hub at Melbourne University.
“Given they’re already a year behind and likely to be two years behind, at best they will be sequestering 60 per cent. So as things stand Chevron is already planning to be breach of the ministerial statement.”
If the company doesn’t meet the requirement it is meant to find alternative offsets, but experts are worried the goalposts will be moved.
Climate change consultant Greg Bourne, the former energy adviser to British prime minister Margaret Thatcher and regional president for BP Australasia, warned governments against backing off.
“These sorts of issues can set very, very dangerous precedents,” he said.
“They should be required to purchase [carbon] offsets equivalent to the same volume they were expected to inject over the first five-year period.
“Now that’s going to be expensive, but why would they be allowed to get off scot-free?”
If put in monetary terms, offsetting that much CO2 would costs tens of millions of dollars a year in carbon credits.
A review is also underway into the emissions conditions placed on Chevron’s other major north-west WA project — Wheatstone.
Conditions imposed on that project by the WA Government were waived by the previous government of Colin Barnett when the Clean Energy Act came into effect in 2011.
But given the Act was later repealed, the WA Government is re-examining if the company should be offsetting more of its greenhouse gases.
While no other major oil and gas company operating in Australia has tackled such a complex project like carbon capture and storage, other players in the market such as Woodside, INPEX and ConocoPhillips are reducing emissions from various projects with locally generated offsets.
Paris climate targets likely to be hit
Chevron is one of the nation’s largest corporate emitters, and experts say the carbon capture delay will make it much harder for Australia to meet the Paris Agreement emissions target.
But this is just one example of a broader problem facing the country.
The nation’s carbon emissions are rising and it doesn’t come down to a single oil and gas project.
Over the year to December 2017, greenhouse gas emissions jumped 1.5 per cent. That’s the third year in a row emissions have risen.
The Government has blamed the latest rise on a big jump in LNG production during 2017.
Exports forecast it to grow another 18 per cent this year.
And with that comes more emissions.
The LNG sector’s emissions are forecast to grow by another third by 2020, outweighing the offsets achieved by all the projects expected to be installed under the Renewable Energy Target (RET).
“If the RET is met and 33,000 gigawatt-hours of renewable electricity is generated in 2020, this would represent avoided emissions of about 26 million tonnes of CO2-e [a standard unit for measuring carbon footprints] per year,” Dr Hare said.
“These reductions in emissions from the power sector are unfortunately almost completely offset by the estimated increase emissions from the LNG sector.”
This is likely to have a major impact on Australia’s attempts to meet the Paris Agreement.
‘No way’ Australia can meet Paris target: experts
But it doesn’t just come down to the gas industry.
The electricity sector is the biggest contributor to emissions, followed by direct combustion which includes the mining, manufacturing and LNG sectors, while transport comes in third and is expected to continue rising due to population growth and increased numbers of heavy vehicles used for freight and agriculture.
Critics target the will of Australia’s political leaders to turn off fossil fuel generation in favour of renewable energy sources, but also argue the Government is failing to target all sectors.
Energetics WA regional manager Megan Born said achieving the Paris target required significant effort from across our economy, and any projects that didn’t meet their requirements would place extra pressure on other sectors.
Dr Hare and his team of researchers in Germany developed a tool to track emissions from countries around the globe in 2009. He said the numbers don’t look promising.
“There’s basically no way with present policy settings [that] Australia can meet the already weak target it has put forward,” he said.
“Emissions are continuing to increase and will do so into the foreseeable future until there’s a major change of policy.
“We’re about 35 per cent off the target. If you included land use change emissions and deforestation and reforestation, then we still would be a long way from the Paris Agreement.
“The most rapidly growing area in Australia is actually from fuel used in transport, notably diesel … and there’s very little on the table at the federal level in terms of improving the fuel efficiency of cars and trucks.”
We will meet our targets: Frydenberg
Despite the views of industry experts, Environment and Energy Minister Josh Frydenberg said Australia would meet its commitment.
“Australia has a strong suite of policies in place to meet our international targets, including the phase-down of hydrofluorocarbons (HFCs), the Emissions Reduction Fund, the Renewable Energy Target and the National Energy Productivity Plan to deliver a 40 per cent improvement by 2030,” Mr Frydenberg said in a statement to the ABC.
“In terms of Australia’s 2030 target, the required emissions reductions fell by 60 per cent over the last two years.
The WA Government expects the EPA inquiry into the Gorgon sequestration delay could take months.
In the meantime, it remains unclear if the company will face any penalty for failing to comply with what industry watchers say is a key plank of its licence to operate.