Is CSG cleaner than coal?
Amid the incredible din of protest and controversy around coal seam gas, the industry finds itself dealing with issues on three separate fronts – the farm gate, underground aquifers and its emissions profile.
The farm-gate issue has erupted because of some pretty dumb community relations by a group of ambitious developers. The aquifer issue probably won’t be resolved until further investigation, although it has already attracted the attention of investors, as a report by JP Morgan earlier this year attested.
The question of emissions, however, is more delicate than it seems. And investors and financiers, as well as environmentalists and political parties, are keeping a close eye on this issue.
The basic comparison between gas and coal is not subject to dispute. As Origin Energy, which is heavily committed to the CSG industry, said on Thursday, there is no doubt that gas-fired power has much smaller greenhouse gas intensity than coal-fired power. Depending on the type of coal (black or brown) and the type of plant, and its use (baseload or peaking in the case of gas), the difference can be as high as a factor of 3.
But the CSG/LNG emissions profile is more complicated, because the proportion of emissions that occur outside the power plant are considerably higher – at between 33-37 per cent of the plant's emissions, compared to 6-7 per cent for coal. As Origin again noted, the evidence to assess the more specific question of how the “lifecycle” emissions of a baseload gas-fired plant fuelled by coal seam gas compare to the “lifecycle” emissions from a coal-fired plant is less readily available. “This is, in part, because interest in the issue has only arisen recently,” Origin said in a statement, “and in part because actual results will vary according to specific plants and equipment being used by different owners and operators along the supply chain.”
Origin pointed to an analysis from Citigroup that was released this week, which noted that emissions from different projects could vary considerably according to the individual factors, the extent of fugitive emissions and the type of plant.
Origin said it was clear that CSG has a significant advantage over coal on the “base case” assumptions, when like for like technology are compared. CSG also comes out well ahead when the most pessimistic assumptions are made. When the most pessimistic assumptions are made for the conversion for CSG to LNG, and the best possible assumptions are made for coal using cutting-edge ultra-supercritical coal, the emissions are about the same.
But Origin says this scenario is improbable in Australia, mostly because of the carbon price. “Given that nearly all the equipment used by the Australian CSG to LNG industry will be brand new, including processing plants and pipelines, it is almost inconceivable that actual emissions will be near the worst-case scenario,” Origin asserted. “Moreover (and unlike coal seam gas operators or shale gas operators in the US, for example) coal seam gas companies in Australia have a very clear incentive, in the form of the impending carbon price, for investing in and maintaining equipment that reduces GHG emissions.”
The Citi report, prepared by Elaine Prior, considers numerous analyses prepared by the industry. She says that assuming gas is burnt in a baseload CCGT power station, lifecycle emissions are estimated at between 0.48-0.58 tCO2/MWh. Coal numbers varied widely, but the base case for modern subcritical and supercritical coal plants was 0.83-1.03. She says that power station efficiency is the key variable. Emissions for ultra-supercritical coal plants, currently in demonstration mode in the US, was given as low as 0.58. Open cycle gas – used for peaking – can be as high as 0.79.
And Prior notes, as environment groups have also pointed out, that the CSG projects appear to assume that minimal quantities of methane gas escape as fugitive emissions. She says the carbon price would provide an incentive to minimise fugitive emissions, but they ultimately depend heavily on actual operating practices, including ship operations. “We are not yet convinced that all these are well understood,” she writes. “Even if fugitive emissions were just 1 per cent higher than the numbers in this report, this would add an estimated 6-7 per cent to life-cycle emission estimates.”
Prior says that a Cornell University report often cited by CSG opponents is actually focused on the shale gas industry in the US, and is not applicable to the Australian CSG industry. That paper claimed that gas from shale, mostly because of the scale of methane leakage, including during the process of fracking, and from old gas infrastructure, which Prior says has no relevance to CSG in Australia.
But Prior concludes on an intriguing note. “In the longer term,” she writes, “if there is a concerted move to a carbon constrained world, this analysis might become redundant. Instead, the appropriate comparison might be between gas and new-build renewable energy technologies.”
Gas is compared with coal under the assumption that it will displace coal in the transition to a carbon-constrained world. It is clearly seen as crucial for countries like Australia to reach even their relatively modest targets of reducing emissions by 5 per cent by 2020.
But, Prior notes, gas still has significant GHG emissions, and it appears unlikely that the 2°C global warming scenario – the one that politicians talk about but are not yet committed to – will be achieved unless electricity generation is largely decarbonised. The recent World Energy Outlook prepared by the OECD and the International Energy Agency, she reminds us, shows world gas demand peaking before 2030, and incremental gas generation capacity is largely associated with carbon capture and storage (CCS).
“Achieving global policies required for the 450 Scenario looks challenging,” Prior says. “However, in an increasingly carbon-constrained world, gas might be judged against lower emissions alternatives such as renewables, rather than being compared with coal.”
Given that developers and financiers investing in a gas plant would assume that it has a 20-30 year life, if not more, this is an important consideration. Or soon will be. Maybe.
Comments on this article
IEA doesn't think gas is the answer either
According to IEA executive director, Nobuo Tanaka: "While natural gas is the cleanest fossil fuel, it is still a fossil fuel. Its increased use could muscle out low-carbon fuels such as renewables and nuclear, particularly in the wake of Fukushima. An expansion of gas use alone is no panacea for climate change."
If gas, as is likely, makes up one-quarter of the world's enrgy supply by 2035 ( according to a recent IEA study ), this would lead the world to a global temperature increase of 3.5 deg. Clearly outside the range of safety.
The IEA is talking about Natural gas generally, not CSG or other unconventional gas which, on any analysis, has a higher GHG emissions footprint.
As such this industry appears inconsistent with achieving GHG emissions targets
Transitions
If, optimistically for example, CSG produced half the emissions of coal ( over its life cycle ) then we will need to displace twice as much coal with gas than we would Solar and Wind energy, which have a negligible carbon footprint, to achieve the same CO2e reduction.
But it seems more likely, as a result of fugitive emissions etc, that CSG will produce 2/3 - 3/4 of the equivalent emissions as coal does. Therefore we would need to replace 3 -4 times as much coal powered generation with gas than solar / wind for the same GHG reduction.
Plus we will still then need to make the transition to solar / wind from gas anyway.
And 2 transitions will be far more costly and disruptive than one.
HOW LONG THE GAS TRANSITION?
There is no overwhelming reason why the gas transition has to last for the potential life of a gas fired power plant. Provided the price is right sales that are equivalent to only 10 to 15 yrs should give price increases that are not all that much larger than those required for much longer life.
The gas transition can be justified in terms of reducing energy storage costs required to give renewable power reasonable reliability levels. I might also be justified in terms of providing more time for clean power, power useage flexibility \ and storage developments.
Who's scarier?
Wow! Hard to decide who is scarier group of people out there. The climate change deniers or the no fossil fuel evengelicals?
Even if you have "no fossil fuel" as end point objective, you are not going to get there within 20-30 years. If you think Oz, or the world is, then you are delusional. For goodness sake, even with the ALP in the gutter at the last NSW election the Greens barely nudged a few percentage points higher and we are left in the hands of the shooters and right wing Christians. So much for the "broad" appeal of the current Green's agenda.
Sooner or later the Greens have to realise that they are in politics and are not some form of populist Cult.
Anyone who seriously thinks Oz can stop coal and gas exports, at the same time as totally rebuilding its electricity network virtually overnight is living in economic cloud cuckoo land. You have to have an economically realistic transition strategy which can be sold to a majority of the Australian voting public.
What's the use of dreaming fairy tales if it just helps deliver us into the hands of the Tea Party type nutters?
Gas + around 50% renewables (wind + rooftop PV) can reduce Australia's current electricity GHC emissions by around 70%. And this is economically and technically feasible within 10-15 years. Why wouldn't you take this option instead of the unrealisable utopia of 100% renewables?
Re Industry has to say CSG is cleaner
Even the Senate submission referred to, http://dea.org.au/images/uploads/submissions/MDB_CSG_Senate_submission_June_2011.pdf, has a quote from a 2011 Cornell Study, "The study concluded that the total global warming potential of shale gas(including the processes involved in raw material acquisition, raw material transport and combustion) was 20-100% greater than coal on a 20 year horizon and comparable to coal on a 100 year horizon". But aren't we trying to reduce the global warming impact by using gas?
Is CSG cleaner than coal
Industry has to say CSG is cleaner, it has committed billions of dollars. For example
JAMES BAULDERSTONE (Santos) There are an enormous number of studies around the world that compare natural gas emissions to something like coal emissions. It's widely recognised that gas has approximately 50 per cent less emissions than coal...... I think a lot of parties in this debate have particular angles or barrows to push and they use various pieces of information to push those barrows. http://www.abc.net.au/pm/content/2011/s3296901.htm
In fact there are not an enormous number of studies saying it is cleaner on the basis of full life cycle analysis and when all other externalities are considered. We have considered these in our study http://dea.org.au/images/uploads/submissions/MDB_CSG_Senate_submission_June_2011.pdf
submitted to the Senate. It is likely to be cleaner but perhaps not by much. The other imperatives raised so well by Giles Parkinson suggest that humanity is making a grave mistake in adopting this fossil fuel. Unlike industry we have no conflict of interest in making our statements; we are concerned only with human health now and in the future. Readers can check our conclusions based on the references we quote in our submission (section 3 and appendix) and come to their own conclusions, which just happen to agree with those of Giles Parkinson though he does not quote his reference sources.
David Shearman
CSG and greenhouse effect
CSG is primarily methane. Methane has a greenhouse gas effect which is 72 times greater than CO2 over a twenty year period. See the font of all knowledge for more, that is to say wikipedia. It doesn't take much arithmetic to figure out that ANY fugitive emmissions would far outweigh any benefit from lower CO2 emmissions in combustion if the emmissions were at all significant. See CSG/LNG emissions profile above. If the emmissions profile is five times greater than CO2 then presumably most of this is methane. It's no wonder the greens want to bypass gas and I do too. These fugitive emmissions represent the elephant standing in the room as far as CSG goes. Australia has fantastic renewables to exploit such as geothermal so let's do it.
CSG as a transition - is it?
Giles thanks for a fantastic post. Australia is one of the biggest benificiaries of the Carbon economy. Consequently we are 14th largest CO2 emitting country and if one adds in our coal exports we about the 6th biggest (before our including LNG exports) - all this from the 55th largest country population.
As such a beneficiary from creating the CO2 problem, Australia is morally responsible to invest heavily in creating the solution.
In this context investing $300b - $400b over 10 years to move us toward Zero emissions, and creating a world leading clean industry in the process makes perfect sense, investing in 'transitional' solutions like CSG and propping up our existing Carbon intensive infrastructure is abrigating our responsibility and helping lock in a 500 ppm or greater world - what for?.. buying more plasma TVs?
We are one of the few countries that have the financial and renewable resources to undertake a zero emission program: why not use them to lead the world?
Renewables need gas
Even the likes of Mark Diesendorf still invoke gas as the backup needed for solar and wind generation systems.
Excellent Post
This is a fantastic post thanks Giles.
Gas a bridging fuel to renewables may make sense in the short-term, but as we know, power stations can kick-along for half a century or more.
I have always said that CSG is "unnatural gas" and until we get that evidence you allude to in the article, I think it should remain considered as such.
Cheers.
This is Important Issue
For Australia this issue of extracting gas or not is as important, or probably more important, than whether we have a carbon tax. The Citigroup paper was a good summary of the numbers and technologies.
The Greens in Australia originally saw gas as a transitional fuel. The Australian Greens policies said as much. However the NSW Greens in particular (the Greens pay lip service only to being a national party, they in fact have a wonderfully parochial State based structure, although transparently driven from the branch grass roots) have emerged as radically anti gas, especially anti CSG.
Prior picks up this "change" when she alludes to the comparison of gas with renewables cf. coal. Many in the Greens want a rapid shift to 100% renewables for electricity generation in Australia. The technology cited is wind + thermal solar with salt storage.The time line is 10 years with a $300b - $400b investment.
My view is that this is not economically (and thus politically) supportable in Oz. You must have a 20 -30 year transition pathway away from coal towards renewables and that must have gas (or nuclear!). Indeed gas + wind and rooftop PV go together like icecream + strawberry topping.
Very frustrating! But the CSG (+Woodside!) have themselves to blame. They have adopted the visceral anto Green mantra of the neo conservatives and failed to engage, including with the wider public.
Your article highlights the 3 main issues and they all need addressing, but being "anti CSG", or even "gas", as the Greens are, seems silly.