CLIMATE SPECTATOR: Scaling a CSG mystery

Climate Spectator

Australia's coal seam gas industry likes to claim it is one of the bridges between today's heavy dependence on coal-fired power and tomorrow's zero-emissions energy supply. New research by The Climate Institute finds that industry and government need to lift their game if gas is to contribute to a clean energy future.

It's true that carbon pollution from gas combustion is roughly half that from burning coal. On the other hand, concerns about the emissions from CSG production have led some to claim that the gas is as bad if not worse than coal.

The point of contention is the degree of methane leakage during CSG's pre-combustion life cycle. The industry claims leakage is negligible; opponents argue it is far higher than current estimates. As methane is 25 times more potent than CO2 over a 100-year period, the amount of methane emitted to the atmosphere substantially influences the gas's emissions profile.

The problem is that both sides are making their arguments on inadequate information. The industry's estimates are based on methods designed in the 1990s for conventional gas in the United States. These are out of date and inappropriate, given the substantial differences in geology and extraction techniques. There is a shortage of publicly available information by which the community and policy makers might gauge the accuracy of producers' estimates.

On the other hand critics tend to rely on recent research into American shale gas, applying the results wholesale to Australian CSG despite the limited data on which the study was based and the differences – again, substantial – in geology, regulation, equipment and financial incentives.

Research by The Climate Institute finds that claims that CSG power is more polluting than coal are exaggerated. Indeed, even under a high estimate of methane leakage CSG remains comparable to onshore conventional gas (at least that from the Cooper Basin, which has a high proportion of CO2). However, significant questions remain about whether emissions from the production process are being properly accounted for.

Why does this matter? If all committed and probable gas projects in Australia go ahead, CSG production could increase nine-fold by 2020, and associated emissions could increase between 12 to 23 Mt CO2e. A trustworthy study of CSG's actual life-cycle emissions is long overdue.

Once we know the true emissions profile of CSG production, carbon pricing can help. It provides a financial incentive for producers to minimise their emissions and enables Australia to meet its target despite the increase in gas (and coal) production. But it's not enough on its own.

Until carbon prices reflect the value of reducing emissions in the longer term, complementary measures are required. For CSG production, this includes nationally consistent regulation for best practice across the industry.

Crossing the bridge to a clean energy future means we must also address the emissions from gas combustion. Stringent emissions performance standards for new power generators are necessary to avoid the construction of power plants that could undermine national climate change mitigation goals and/or lead to stranded assets and higher costs in future.

The federal government dropped its plans for emissions performance standards when it brought in the carbon price, but the failure of the Contracts for Closure negotiations underlines the importance of a clear framework for long-term emissions reduction.

The CSG industry has several incentives to support more accurate emissions accounting. Methane has a financial value; minimising emissions helps maximise revenue. Moreover, the industry's credibility is damaged. APPEA recently shot itself in the foot by playing fast and loose with CSIRO's research into the impacts of CSG on groundwater.

If the gas industry wants to be part of the clean energy future it needs to earn its place. Supporting a more rigorously evidence-based emissions regime would be a start.

Olivia Kember is the National Policy and Research Manager at The Climate Institute.