Got Gas? Is existing gas infrastructure cheaper than electrification?

The Intergovernmental Panel on Climate Change’s Sixth Assessment Report makes for some grim reading, with warnings that temperatures will climb even if emissions reductions are achieved quickly.

So it’s understandable that one might just feel a trifle incredulous when reading the latest media release put out by some of Australia’s largest energy infrastructure companies, which claimed that continuing to use gas infrastructure can reduce emissions at much lower cost to customers than electrifying the services provided by gas.

However, their claims smack of self interest. Particularly when one of the chief executives quoted in the release claimed that Victorians love natural gas.

Talking up gas is also very much in line with the Federal Government’s ‘gas-fired recovery plan’, which has yet to actually achieve its goals.

To be fair to the companies responsible for the release, they do call for the development of renewable gases such as hydrogen and biomethane to fully decarbonise the Victorian energy grid.

This includes upgrades to the state’s gas distribution network to reliably deliver said gases to customers once they are completed by the mid-2020s.

Presumably, that includes being able to better handle hydrogen given that the lightest element in the universe can make nasty things happen to the high-tensile steel that is used in high-pressure transmission pipelines.

Gas supply remains an issue

The reliance on natural gas may well be moot though.

In its latest report, ‘East Coast Gas Outlook to 2040, Balanced on the Edge’, EnergyQuest warned that the southern regions on Australia’s east coast are already having to contend with the decline of legacy gas-producing basins.

It noted that by 2030, Victorian gas production, which also supplies New South Wales, South Australia and Tasmania, would be 68% lower than in 2020.

To make matters worse, its calculations rely on significant gas production from the Narrabri gas project, which has yet to be sanctioned, in New South Wales by 2025.

This in itself calls to question the government’s gas-fired recovery plan as it implies that even if one of its central projects is developed, it still would not alleviate gas supply issues on the east coast, much less make the gas affordable.

But wait, you might say, what about the Beetaloo Basin in the Northern Territory?

There are certainly signs that it may have lots of gas, but it would certainly not be cheap (or affordable) gas either.

EnergyQuest notes that the Australian Energy Market Operator’s green hydrogen scenario does decrease east coast gas demand; however, this would still be equivalent to one of the proposed LNG import terminals.

Calls for the use of blue hydrogen produced from natural gas to accelerate the decarbonisation effort also run into the issue of declining natural gas supplies even if the carbon capture element succeeds.

So can existing gas infrastructure reduce emissions? Possibly, if it is upgraded to handle renewable gas.

Would it be cheaper than electrifying services? Perhaps, but that is due in part to it already being in place while there is arguably a need to electrify services… even if hydrogen starts to make an impact.