I’ve written a few Northern Territory posts recently. This is another one, but it has some significant national implications (I think). Tuesday’s announcement of Asian conglomerate Jemena as the preferred bidder to construct a gas pipeline connecting the Northern Territory to Queensland is a significant one for both the Territory and Australia.
Much of the talk since Tuesday’s announcement has emanated from opponents of shale gas fracking proposals in the Northern Territory. However, although it’s fairly prospective, it isn’t even known at this stage how much if any shale gas is actually present or commercially recoverable. Opponents paint the pipeline as an horrific prospect, providing the dastardly frackers a pathway to sell their evil products. Clearly dangers exist, and I’m anything but an expert, but it appears that shale fracking is a lot less risky than coal seam gas. Moreover, foreshadowed restrictions on areas for fracking appear reasonable and should reduce concerns except among hardline opponents:
Under measures announced by NT Chief Minister Adam Giles in Darwin on Wednesday, the government ruled out granting titles for oil and gas activities in residential areas and said it wouldn’t grant exploration permits or acreage in areas of intensive agriculture, or areas of high ecological or cultural significance.
In any event, you can see why the announcement has national implications from the above map.
The North East Gas Interconnector (NEGI), will link the NT’s Amadeus pipeline to Queensland’s Carpentaria pipeline between Tennant Creek and Mt Isa. Accordingly, as well as providing more and cheaper gas for the Mt Isa industrial and mining hub, the NEGI will allow supply of huge North Australia onshore and offshore natural gas reserves directly into the south eastern gas pipeline grid. Moreover, the offshore gas reserves are almost certainly far more significant than onshore shale gas. Offshore resources include several proven but undeveloped offshore gas fields in the Bonaparte Gulf to the west of Darwin; possible expanded future production from the $54 billion Inpex/Icthys project currently under construction; not to mention the huge Sunrise gas field between Australia and East Timor (if current disputes about it with our nearest neighbour can be resolved).
The really interesting thing about linking Australia’s huge northern natural gas reserves into the south-eastern network to create a truly national gas grid is its potential to provide a practical pathway towards achieving major reductions in the nation’s carbon emissions in the short to medium term. Conversion of existing coal-burning power stations to natural gas will reduce carbon emissions from that source by up to 50%, especially for Victoria’s dirty brown coal-burning power stations (the worst of which is Hazlewood). Most of them are currently planned to be phased out by 2050 anyway, but abundant and affordable gas would allow an interim conversion step that would achieve significant carbon emission reductions while maintaining adequate baseload electricity capability.
Even on optimistic assumptions about future developments in renewable energy technologies, it is almost certain that Australia will have significant continued reliance on fossil fuel energy sources through until at least 2050. Converting existing power stations from coal to gas can provide major carbon emission reductions in the meantime. Moreover, government interventions even on the Coalition’s dodgy Direct Action scheme can help to make it more viable for power utilities to tackle those conversions.
Added incentives could be built in through adoption of tighter regulation of toxic particulate emissions, like the US Mercury and Air Toxics Standards (MATS) introduced earlier this year. They are already leading to large scale carbon emissions reductions by power utilities who have decided to convert existing power stations immediately from coal to gas fuel. The NT government especially would be wise to start lobbying Prime Minister Turnbull to examine carefully the option of adopting an Australian version of MATS to create a more convincing set of policies aimed at achieving our ostensible carbon emissions reductions targets.