Power Up: Why NOT banning new fossil fuels makes sense... for now

It is the holy grail of the Greens, their raison d’etre (well one of them at least), and Prime Minister Anthony Albanese has put a stake right through it.

We are talking of course about the Greens calling for a moratorium on fossil fuel projects, which Albanese was quick to dismiss.

The Prime Minister said doing so would damage Australia’s economy and lead to our coal exports being replaced by lower quality coals from other countries which produce even more emissions.

His reasoning is unlikely to go down well with the crossbench party, whose support in the Senate is key to pass Labor’s desire to enshrine its (minimum) 43% emissions reduction target into legislation, though proposals to strengthen environmental regulations could still get them over the line.

So does the Prime Minister’s reasoning hold up?

Fossil fuels reducing emissions? Kinda?

The short answer is yes. The long answer comes off with Obi Wan-like ambiguity – that is to say, “from a certain point of view”.

Australian coal generally does have a higher calorific value than its competitors, that is to say it contains more energy for the same amount of weight, meaning that you need to burn less of it to generate the same amount of electricity.

This in turn should mean lower emissions by the simple virtue of burning less coal.

Our coal also has lower levels of polluting trace elements, which is always a good thing.

However, no concrete studies have been carried out into exactly how much greenhouse gases are produced from burning the same amount of coal.

This makes it difficult to quantify exactly how much emissions savings are achieved from burning Australian coal compared to coal from other companies.

LNG exports arguably also serve to – let’s not say reduce emissions, but rather make the emissions picture worse, as they displace coal that would otherwise be burnt in place of natural gas.

There’s little doubt that natural gas is significantly cleaner than coal but the picture is once again muddled by several factors.

Firstly, some gas reservoirs have large amounts of carbon dioxide – with Santo’s Barossa taking the cake with 18% CO2 – which will have to be either vented into the air and adding immediately to the project’s emissions, or captured and sequestered in the ground, bringing its own set of problems. Yes, looking at you Gorgon.

Secondly, natural gas is primarily methane and methane is greenhouse gas as well. In fact, it is more than 25 times more potent than CO2, so any escaping methane adds further to the project’s emissions, though this is admittedly hard to quantify.

Next up is the energy cost of super cooling the methane into LNG, which unless it is powered by renewables (hint, it isn’t) adds again to emissions. This is followed by transportation and regasification.

What it all means is that any emissions reduction is not the 50% bandied about by the natural gas industry, though it is unlikely to be the greater emissions that some green groups claim as well.

So some emissions… security here. But again, hard to quantify.

Economy and energy security

What is a far more solid part of the Prime Minister’s argument is that of protecting Australia’s economy.

Both coal and LNG are significant parts of Australia’s economy. Using the 2019-2020 figures from the Department of Foreign Affairs and Trade as a gauge, coal (including metallurgical coal that is not used for energy) accounted for 11.5% of all exports while LNG wasn’t far behind at 10%.

As such, the two sectors contribute a lot to our economy and employ a significant number of workers.

While a moratorium on new projects won’t hurt existing staff (save perhaps those tasked with making new discoveries and exploiting them) and exports, our gas fields especially are starting to decline and new sources of gas are needed to maintain these numbers.

There is one other point to be made and it’s about energy security.

Recent geopolitical tensions have really brought to the fore just how important it is to ensure sufficient energy supplies.

Until a critical level of renewable energy generation and energy storage is reached, fossil fuels remain essential for ensuring that the lights stay on.

Keeping energy costs under control is also essential for manufacturing and transportation though the later – reliant as it is on imported oil – is outside of our control.

Time to bring on more EVs and hydrogen fuel cell vehicles maybe?