Gas has been seen as a transitional fuel and an opportunity to make money. We now know that it is a major contributor to the climate crisis and should be seen as a planet wrecker. This calls for a reset of climate policy.
I go the long way around (sorry, we have 3,500 words in this one) but context is the most important factor in this reset.
Early in August 2021, when the latest IPCC AR6 had just been released, UN Secretary-General António Guterres called ‘Code Red for Humanity’. We had to give up on and close coal and gas immediately:
- We need immediate action on energy. Without deep carbon pollution cuts now, the 1.5°C goal will fall quickly out of reach. This report must sound a death knell for coal and fossil fuels, before they destroy our planet. There must be no new coal plants built after 2021. OECD countries must phase out existing coal by 2030, with all others following suit by 2040. Countries should also end all new fossil fuel exploration and production, and shift fossil-fuel subsidies into renewable energy.
Prior to that back in May 2021 the International Energy Agency (IEA) issued a report Net Zero by 2050: A Roadmap for the Global Energy Sector saying there can be no new coal, oil or gas projects if the global energy sector is to reach net zero emissions by 2050 so that catastrophic climate change might be avoided. The Climate Council highlighted the fact that the report:
- outlines how the transition to net zero can create 14 million new jobs by 2030, almost three times more than the jobs that will be lost as fossil fuels decline.
The Council’s own report of April 2021 “Aim High, Go Fast: Why Emissions Need to Plummet this Decade”, is an excellent piece of science communication.
In summary, they say the climate is already dangerous as we experience more powerful storms, destructive marine and land heatwaves, and a new age of megafires, floods and droughts. Evidence strongly suggests that global average temperature rise will exceed 1.5°C during the early 2030s.
If temperatures spike above 1.5°C for a significant period of time, critical ecosystems on which we depend (such as the Great Barrier Reef) would be even more severely damaged, or destroyed.
2050 is far to late to reach net zero. They recommend a 75% reduction of emissions by 2030, and net zero by 2035, not as an ideal, but probably the best we can manage.
- The world achieving net zero by 2050 is at least a decade too late and carries a strong risk of irreversible global climate disruption at levels inconsistent with maintaining well-functioning human societies.
They pay full attention to paleo-climate science noting that the last time we had CO2 at over 400 ppm was in the mid-Pliocene, when sea levels were about 20 metres higher than now. In geological terms human induced climate change is seen as hitting with a force only matched by the asteroid strike 66 million years ago causing the Cretaceous–Paleogene extinction event when three quarters of all plant and animal species met their end. In all IPCC scenarios 1.5°C is only achieved with overshoot and drawdown.
The significance of 1.5°C is said to be that it gives us a good chance of avoiding tipping points, a critical threshold that, when exceeded, leads to large and often irreversible changes in the state of the system.
Will Steffen, a world class climate scientist who looks at climate from an ‘Earth systems’ perspective, and is a councillor at the Climate Council gave a talk in April 2020 Climate Change 2020: Why we are facing an emergency. Central is this statement:
I’ll just repeat that text:
- “If damaging tipping cascades can occur and a global tipping point cannot be ruled out, then this is an existential threat to civilization. No amount of economic cost-benefit analysis is going to help us.”
Steffen had first shown a slide from a 2018 paper with 15 tipping points, many of them interacting with each other, hence “cascading”:
He followed that with a slide showing that all 15 were actually in play, then covered it with his stern message above.
Looking at the budget for burnable carbon, he says that for a 1.5°C landing point, we had five years from January 2018. Effectively it’s gone, he says, but we might just limit heating to 2°C if we go hard and go early. He said that 50% of the Great Barrier Reef is already gone. The one that really scares him is the slowdown of the Thermohaline circulation. That would bring cold and stormy weather to Europe, increase sea level rise in the US and in Antarctica, disrupt the Indian monsoon, quicken the drying of Amazon, while promoting the melting of Antarctica.
Worst of all, our realistic reaction time to prevent the worst of these is slower than the time when we would reasonably expect to reach such tipping points.
Except that we don’t know. We may already have passed the tipping points.
Our problem is that we act in human, political time, not in geologic time. He graphs the last 2000 years of temperature rise, plus the IPCC scenarios to 2100 like this:
In Earth system terms we are slamming the ecology into a wall. On rates of change he says this:
There has been nothing like it in the history of the planet. He thinks it is worse than the asteroid strike of 66 million years ago.
Rectification requires similar rapid and urgent action. Delay is not an option. Steffen shows us a graph from Christiana Figueres 2017 article (with some impressive scientific firepower as co-authors) Three years to safeguard our climate:
(I’ve borrowed the image from this useful site.)
That was April 2020, when emissions continued to climb, and kept climbing, regardless of COVID. Steffen’s body language showed, I think, that for him hope was draining.
That leaves me with two issues from what he said. First, the offer of stabilisation at 1.5°C or at 2°C does not inspire confidence. The graphic presentation is as follows:
That image from the “Hothouse Earth” paper Trajectories of the Earth System in the Anthropocene leaves us teetering on a ledge which has no solid basis in science. The main thrust of the lecture is in fact that beyond 1°C the Earth System is inherently unstable.
Secondly, in a throw-away comment he tells us that he is only dealing with CO2. The assumption is that other greenhouse gases would be returned to pre-industrial levels.
Methane is worse than we thought
Traditionally CO2 was 80% of the Kyoto six GHGs, with methane accounting for most of the rest, making it responsible for about a fifth of the perverse GHG effect. The real relationship is complex as Gavin Schmidt’s The definitive CO2/CH4 comparison post last September revealed.
Methane as CH4 dissipates in the atmosphere to CO2 and H2O over 12 years. Initially, with indirect effects it is 125 times as potent as CO2. Traditionally the GWP (global warming potential) was calculated over 100 years. The IPCC now gives GWP-100 as 30 and GWP-20 as 83, the latter being highly relevant to decarbonisation in the context of the climate emergency, as the greenhouse impact of methane between now and the 2030 target date is huge.
The IPCC gives this graph to show the effect of methane on the climate since preindustrial times:
Roughly speaking if the temperature has risen by 1.25°C then 0.75°C was from CO2 and 0.5°C from methane. That makes methane up to 40% of the whole warming effect.
While CO2 has risen about 50% methane has tripled. Here’s how it is trending:
No attempt has been made in Schmidt’s post to distinguish between the sources of methane, and no comparison is made between burning coal vs methane for power generation. Many politicians believe gas is about half as damaging as coal. If we read the ABC RMIT factcheck Adam Bandt says gas is just as dirty as coal. Is he correct? we find the topic is complex.
Johnathon Mingle’s 2019 article The Methane Detectives: On the Trail of a Global Warming Mystery wrestles with the uncertainties about where the increased methane emissions are coming from and the astonishing lack of measurement of actual ‘fugitive emissions’ in the production and distribution of gas.
We know that a modern gas plant is about 60% as dirty as a modern coal plant. However, this has limited relevance because if fugitive emissions exceed 4% of gas produced it becomes dirtier than coal. The common range appears to be 3 to 7% but it can be as high as 30%.
Seems no-one is measuring leaks from pipelines.
For unconventional gas (coal seam and shale) I have not seen a thorough examination of the Scope 2 emissions involved in contributing operations, for example, establishing the infrastructure, fracking, cleaning and dealing with the contaminated slurry that brings up the gas. Then if exported the energy required to liquefy gas is considerable.
A new study has found satellite evidence of intermittent ultra-leakers from gas and oil production activities, not counted in the statistics.
Now it has also been found that gas in couplings and fittings leak 24/7 in homes, and that new gas stoves leak as much in lighting and burning as old ones do.
New gas is more expensive than renewables so I would agree with The Climate Council’s COVID recovery report when they say
- Gas has no role to play in building a prosperous, resilient economy for the future. It is volatile, dangerous and unnecessary.
Gas investments are likely to become expensive stranded assets.
- Emissions from the extraction, processing and export of gas have been the main driver behind Australia’s emissions staying so high. These emissions are likely underestimated.
See also their explainer Why is gas bad for climate change and energy prices?
Clearly we should be strenuously minimising the use of gas. Everything we do or don’t do in this regard matters.
So, what are we doing?
The Australian Government Chief Economist has put out a helpful report Resources and Energy Major Projects 2021 Report (pdf). Here’s the summary graphic, which I’ve divided into two parts to provide legibility. First the value of projects:
Second, the share of committed projects by commodity:
Table 1.2 tells us that there were 69 coal projects announced, being assessed for feasibility, committed or completed as at 31 October 2021 with a value of $72-82 billion. There were 45 gas, LNG or oil projects worth $187-205 billion.
Two weeks after the COP26 Glasgow Climate Pact to move away from fossil fuels, the Government released a plan to drastically scale up gas projects nation-wide. Consulting firm Allens has a helpful explainer for capitalists wanting to get in on the act.
This map shows the scale of the plan to build pipeline infrastructure:
- The science is very clear: to avoid a climate catastrophe, fossil fuels must stay in the ground.
Instead of getting out of gas ASAP, as agreed in Glasgow at COP 26, we are in fact going gangbusters for it.
Climate Councillor Greg Bourne added:
- “It is abundantly clear that the Morrison government’s net zero by 2050 commitment was designed to mislead and always included expansion of gas.
“The International Energy Agency has made it very clear that there can be no new coal, oil and gas fields if we are to limit temperature increases to below the critical threshold of 1.5 degrees.”(Emphasis added)
Prof Euan Nisbet in Methane in the atmosphere is at an all-time high – here’s what it means for climate change has just given a timely roundup of where we are with methane, pointing out that at COP 26 in Glasgow more than 100 nations signed the Global Methane Pledge, promising to cut methane emissions 30% by 2030.
Large emitters, including China, India, Russia, Qatar and Australia, did not join.
Much of the methane surge comes from biogenic sources – tropical swamps and wetlands, bogs in the tundra – rather than fossil fuels directly, but it looks like a case of feedback, ie. fossil warming causing more biogenic activity causing more warming.
Towards policy reset
All that being said, it is not for me to tell policymakers what they should do. The real world is complex, not susceptible to simplistic solutions. There is momentum in the system.
In August 2021 the ACCC released its latest gas report with the headline Looming gas supply shortfall for east coast market:
- A supply shortfall in Australia’s east coast gas market is increasingly likely, especially in the southern states, the ACCC’s latest gas report reveals.
The report, released today, reveals a finely balanced supply outlook for 2022. A shortfall of 2 PJ could arise across the entire east coast gas market next year, driven by a shortfall of up to 6 PJ in the southern states, if LNG producers export all of their surplus gas.
This forecast is dependent upon demand from gas powered generators decreasing to record lows, and a material volume of gas from currently undeveloped reserves being supplied.
The basic problem is that gas resources in the southeast of the continent are running down. New coal seam gas in Queensland has to go the long way, through the gas hubs of Wallumbilla near Roma and then Moomba in northern SA to get to Sydney. New large potential gas sources are further north in Queensland, and especially towards central Australia and the Beetaloo Basin 500km from Darwin.
The new grand National Gas Infrastructure Plan 2021 is meant to fix that with new and enlarged pipelines. The Gas Fired Recovery Plan was to unlock supply, provide efficient transportation and empower consumers, whatever that meant.
The new gas is all unconventional gas, disruptive of landscapes, problematic for aquifers, expensive at the well-head and more. Santos’ Narribri Project with capacity to provide half NSW consumption has been approved by the Independent Planning Commission in spite of objections from farmers and the Environmental Defenders Office. Clearly the NSW Government was opposed, and a legal appeal failed.
It seems Lock the Gate’s compelling new groundwater evidence arrived too late. Further approvals have to be obtained on groundwater, so I don’t know how that will go. The latest (21 January, 2022) is that Santos have a clear runway to proceed, although campaigners will not give up, and the pipeline to bring the gas to market is bitterly opposed.
That was from Angela MacDonald-Smith in the AFR, who tells us (25 January) that in 2022 oil and gas explorers are honing their bits. The world only discovered 4.7 billion barrels equivalent in 2021, after 12.5 billion the year before. They are expecting a ‘better’ year.
In Australia the main focus will be:
- EnergyQuest CEO Graeme Bethune said the onshore Perth Basin is also “about to get a second wind”, with companies including Mitsui, Mineral Resources and Strike Energy all planning wells.
“Key plays to watch include horizontal flow test results in the onshore Beetaloo, Dorado satellites Apus and Pavo offshore Carnarvon Basin, and several Perth basin wells including South Erregulla and Lockyer Deep,” Credit Suisse’s Mr Kavonic said.
In South Australia, Beach Energy is gearing up for its first oil exploration campaign in the Cooper Basin’s western flank since 2017, with 12 wells committed to start in February.
There was no mention of the Cooper Basin’s eastern flank, where Santos and Origin hold exploration tenements in the Channel Country. I understand that further specific environmental approvals would be necessary from the state government before any work could begin.
Of interest, (see Bumps in road towards Beetaloo gas) at Beetaloo two test wells have achieved normalised rates of 2.5 million and 2.6 million cubic feet per day. One study deemed 3 million cubic feet per day as the threshold for commercialisation. Drilling is being subsidised by the public purse, but infrastructure and markets will need to be lined up before companies make a decision to proceed.
For further context, here are some selected graphs from the official Australian Energy Update 2021, which cuts and chops the energy statistics every which way. First, the Australian natural gas flow for 2019-20 in petajoules:
Hard to read, but we exported 4,393PJ and consumed 1,647.
Power generation used 445PJ, less than the 453 used on LNG own plants. Manufacturing used 396 in all, and 175 went to residences, presumably for heating.
This table shows increases in energy production by fuel type:
Here’s a graph of the trend:
That frightened me. Some of us tend to live in that grey sliver representing renewable energy, unaware of what is going on around us.
This graph is from broker research on one of our listed gas majors:
Some of our mining majors have sold their ‘dirty’ operations, but they don’t sell to entities which will close them down, rather to entities that don’t have brand awareness. Or there is a new name created.
BHP have merged their oil and gas portfolio with Woodside, where under the Woodside brand they will own 52% of the business.
Santos’ $22 billion merger with Oil Search (last December) under the Santos banner, has Santos claiming climate respectability on two grounds. First, gas is cleaner than coal.
Second, they are promoting ‘carbon capture and storage’ capability on the basis of what they have done at Moomba to extract more gas. I think the plan is to capture CO2 from the air (expensive, but possible) and inject it into the space vacated by mining gas to offer carbon offsets on the market. We are talking trivial quantities of a few million tonnes per annum.
However, the merger makes them strong enough that they can probably finance new projects internally, without going to increasingly risk-averse markets.
Finally price. The Macdonald-Smith articles linked above say that Narrabri can deliver gas economically while the spot price for gas is $10 to $11 per gigajoule, which is was in January. It seems gas from Queensland is determined by export prices.
Currently world spot prices are an eye-popping “more than $US20 ($27.80) per gigajoule”. However, the price is expected to settle when politics in Europe settle because of the sheer volumes of gas expected to come onto the market. Indeed five different entities are hoping to develop LNG import terminals around the south-east coast amid warnings of shortages from the ACCC and AEMO, starting about mid-decade.
So what do we do?
Is anyone serious?
The EU is looking to deem gas “green” so that they can meet their climate commitments. On paper.
Biden in the US, four days after COP 26, auctioned off oil and gas drilling leases in Gulf of Mexico only to have them thrown out by a judge because of a “serious failing” and a “grave error”. The federal government agencies had not taken into account the effect on global heating and the climate. Nor had they considered what was happening in the rest of the world.
- administration was later forced into the sale after several drilling states successfully sued in federal court in Louisiana. They argued that U.S. law requires the federal government to hold auctions on a regular basis to enhance energy independence and generate revenue.
Biden, they say, had announced a suspension of all new lease sales pending a broad review of drilling’s impact on global warming after taking office. Probably it will end in the Supreme Court.
I wish the Biden administration luck. I think they’ll need it.
So here is what I would do, in general terms.
1. Defeat the current Coalsheviks who occupy the treasury benches. They will never give the climate crisis the proper priority.
2. On gaining office, conduct a broad review of the impact of our fossil fuel mining with respect to:
- (a) global heating and the climate crisis, and the need for social, economic and environmental sustainability
(b) the risk of stranded assets in existing and any new developments.
I don’t think we can continue to say that we will supply coal and gas while others say they need it, or leave the decisions to desist to boardrooms in foreign cities. We should only supply to counties and entities who are serious about mitigating the climate crisis.
On the way out, remembering the following, inter alia.
Sir David told us in February 2021 that dangerous climate change was here already and that what we do in the next few years will determine the future of humanity.
If we carry on as we are new research suggests that more than two-thirds of the planet’s oceans will be deprived of enough oxygen by 2080 as a result of warming temperatures. That lack of oxygen will decimate fish stocks worldwide, likely leading to food shortages in many parts of the world.
New research shows global warming of 1.5C will be catastrophic for almost all coral reefs worldwide, even sites scientists once thought of as refuges – none of which are known in Australia.
David Spratt has the bad news on tipping points. We have triggered five, he says, with more to come. He reminds us that burning fossil fuels produces sulfate aerosols, which hide up to one degree of warming. He thinks we need active drawdowns and will have to consider active cooling.
Paul Gilding has written a post Why The Climate Emergency is now The Methane Emergency. As Alan Kohler predicted, it’s time to panic on climate action. Gilding thinks we are going to very soon realise that we have to take large-scale immediate action to ensure our survival. He’s working on a longer paper to tell us what we need to do.
Angela Macdonald-Smith in the AFR tells us that the new Kurri Kurri gas generator will generate 520 grams of CO2 per kilowatt-hour of power generated, which is nearly double the new EU “taxonomy” which has a limit of 270g/kWh.
Kurri Kurri is a “peaker” which will run about 2% of the time over a year, not a “closed-cycle” more commonly found in the EU.
Here’s how our plants stack up:
Our average is 700g/kWh compared with a world average of 495g/kWh.