Got Gas? Big week for gas as its future is questioned at APPEA conference

This week promises to be an interesting one for the gas industry given the checklist being ticked off. Australia’s biggest conference for the sector, APPEA, on in Perth: check. Climate protestors at said conference: check.

Twiggy mouthing off at gas: err.. check?

Actually, the last point might not be all that surprising when one considers that Australia’s second-richest person has been actively promoting green hydrogen.

So when the FMG founder took a spray at Woodside and Santos, Australia’s twin gas majors, as “fossils”, it’s really a natural response to Santos giving the green light to its Barossa gas development and Woodside widely expected to do the same for Scarborough.

The AFR quoted Andrew Forrest as saying that the two companies had a “disgraceful track record” with carbon emissions and that Barossa is one of the most polluting projects in the world.

Barossa has a carbon dioxide content of between 18 to 19 per cent, above the 14 per cent in the giant and oft criticised Gorgon field and significantly higher than the less than 5 per cent CO2 found in coal seam gas, which kind of illustrates his point.

He also took them to task for investing in hydrogen fuelled by natural gas, saying it did no good if the hydrogen was not created using renewables.

Self-interest?

Of course, the gas sector did not take Forrest’s comments lying down with APPEA chief executive Andrew McConville suggesting that self-interest was behind his comments as the billionaire is building a liquefied natural gas import terminal and associated power station at Port Kembla.

While FMG does intend to switch from LNG to green hydrogen, it seems to highlight McConville’s comments that gas represents a pathway to a large-scale hydrogen industry.

Santos managing director Kevin Gallagher also defended Barossa, noting that design changes it had made since acquiring the project would reduce emissions by 25 per cent.

He added that carbon capture and storage technology is essential for the gas sector to achieve carbon neutrality.

Climate protestors – not necessarily just those at the conference – were also pretty clear who they thought were motivated by self-interest.

Besides the usual comments that extracting more fossil fuels is not consistent with keeping global warming to a minimum, they also lashed out at the sector for backing the opening of new offshore exploration acreage just 5km from the Twelve Apostles.

“Not even a national icon like the Twelve Apostles will constrain the mindless release of acreage,” the Guardian quoted Wilderness Society national campaigner Jess Lerch as saying.

There is certainly some real concern about where this particular tenement is located, but it has to be said that any fears may be premature.

After all, not only will a winning bidder be needed, but there’s absolutely no guarantee that exploration will be successful.

Even successful exploration will require development and there are multiple options that might not even be noticeable from shore.

Facing the future

There is, however, one very telling takeaway from the APPEA conference.

While there was plenty of back patting about the continued future of the gas sector, there was also clear recognition about the need to be at the forefront of the energy transition or risk following in coal’s footsteps.

CCS appears to be the most immediate option on the table to reduce or eliminate emissions though it will also have to be applied at the point where gas is burnt in order to address Scope 3 emissions.

Hydrogen from natural gas with CCS to eliminate emissions may also be another option on the cards, though this runs afoul again of the issues of the CCS tech.

Meanwhile, at least one junior oil producer is considering the potential of using its existing platform as the centre of an offshore wind and onshore wind and solar project, an interesting prospect that involves the reuse of existing facilities.