Got Gas: Natural gas pipeline move a sign of the apocalypse?
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Much has been said about the impact of renewable energy on fossil fuels, but it’s the most recent move by the owners of Australia’s longest natural gas pipeline, the 1,600km Dampier-to-Bunbury natural gas pipeline (DBNGP) that really highlights this shift.
The ABC noted that in its submission to Western Australia’s economic watchdog, the Australian Gas Infrastructure Group outright noted that increased competition from renewable energy and potential policies aimed at reducing carbon output meant the pipeline’s current economic life is too long.
As such it is seeking to bring forward its effective end-of-life from 2090 to 2063, meaning that the pipeline operator believes that natural gas (at least from the state’s offshore gas fields to the north) would cease to be part of the state’s energy mix in a little more than 40 years.
While there is little doubt that a shorter depreciation schedule would boost AGIG’s profits in the short term, it also puts out a bit of a timeline for the natural gas industry.
It is also likely to be repeated elsewhere in Australia as you can be sure that other gas infrastructure companies will look to do something similar.
But as with almost anything, there’s a caveat.
Forty years is still a pretty long time, more than long enough for a natural gas project to be found, developed and produced from until its end of life.
Natural gas still accounts for a sizeable 38 per cent of Western Australia’s energy mix and has remained so even as renewable energy whittles away at coal’s share of the pie.
And gas is likely to maintain this share for some time to come before the growth of renewables completes its dismembering of coal and turns towards gas.
This means quite simply that there is still a future for domestic gas projects, particularly those in the Perth Basin, to meet the state’s natural gas demand and possibly replace supply from the northern offshore gas fields.
There’s another point to consider in regards to why the days of gas infrastructure are numbered.
Hydrogen, the clean replacement that Australian governments are hoping will be the next big export product, is generally unable to use existing gas infrastructure.
While between 10 per cent to 15 per cent hydrogen can be blended into the natural gas stream without issue, pure hydrogen is a different beast entirely as it can cause steel pipelines to become brittle.
Additionally, while natural gas can only be found in certain reservoirs that have all the right ingredients – hence the need for the DBNGP in the first place, green hydrogen production requires a source of renewable energy and water.
It is entirely possible for one to produce hydrogen at home if you have maybe a million dollars to throw at it and a desire to look more like a stereotypical movie villain.
More realistically, it means that hydrogen production can be positioned much closer to export locations. All you need is the energy – a simple preposition in Australia given the amount of sunlight we get – and a source of water.
This can come with its own, hydrogen specific infrastructure. Simple, ain’t it?
Maybe, maybe not, but that’s a story for another time.