Submission to Australian Senate - Oil and gas exploration and production in the Beetaloo Basin

​Submission to Australian Senate - Oil and gas exploration and production in the Beetaloo Basin by Alec Roberts

​06/07/2021
Committee Secretary
Senate Standing Committees on Environment and Communications
PO Box 6100
Parliament House
Canberra ACT 2600
E: [email protected]
 
My concerns about the Oil and gas exploration and production in the Beetaloo Basin, with reference to the Industry Research and Development (Beetaloo Cooperative Drilling Program) Instrument 2021, which provides public money for oil and gas corporations.
 
Dear Senators,
Thank you for the opportunity to provide a submission into the Industry Research and Development (Beetaloo Cooperative Drilling Program) Instrument 2021 and taking the time to consider my submission.
 
I was lucky to travel through the Beetaloo Basin on an extended camping holiday with my partner, visiting the many beautiful places including Newcastle Waters, Daly Waters, and further north Mataranka. The natural beauty of the area is stunning, and it made a lasting impression on me. 
 
For the purposes of the Industry Research and Development Act 1986, the Industry Research and Development (Beetaloo Cooperative Drilling Program) Instrument 2021 provides a mechanism for funding for exploration activities to be undertaken in the Beetaloo sub-basin to facilitate gas exploration in the Beetaloo sub-basin and to support the development of the Northern Territory gas industry.  The development of Beetaloo Sub-basin to extract natural gas through fracking will have significant Groundwater impacts, Ecological impacts, Climate Change impacts, and the economics and energy security reasons behind the proposed program are flawed, and further government funding should be refused. 
 
Natural gas extraction from the Beetaloo Basin does not appear to be commercially viable either for the domestic or overseas markets.  Furthermore, if developed, would result in approximately 39 - 117 million tonnes of greenhouse gases per year (or 22% of Australia’s current emissions)[1], and cannot be permitted because its development would be inconsistent with the remaining carbon budget and the Paris Agreement climate target.  This is not consistent with Northern Territory’s climate change policy, the principle of inter-generational equity nor the public interest, as it clearly assumes failure to meet the Paris Agreement temperature goals and worsening climate change impacts for Northern Territory and Australia.
 
This submission is focused on commercial viability, economics, gas supply and demand, climate change impacts, gas as a transition fuel and alternative fuels to natural gas.  However, it would be remiss of me if I did not briefly mention some of the other potential impacts.
 
Groundwater and ecological impactsA recent CSIRO/GISERA study of stygofauna within aquifers of the Beetaloo Basin not only found species unique to this area but determined a high level of interconnectivity of ground water within the region.[2]  The report noted that water flowed very quickly through the aquifer and it was "at potential risk to possible contamination from surface spills from any source". Any potential groundwater contamination caused by developing a fracking industry in the area could spread widely throughout the cattle grazing and horticulture region. [3]
 
The area is classed as semi-arid with rainfall linked to the north Australian monsoon that almost exclusively occurs between December and March.[4]  As such, communities within the area such as Daly Waters, Larrimah, Newcastle Waters, Elliott, and Aboriginal land, pastoral leases, horticultural enterprises, cattle stations and remote Aboriginal communities rely on ground water for their livelihoods.  The aquifer is also linked in the north to well know tourist and bird watcher destinations of Katherine, Mataranka, Roper River at Elsey National Park and Red Lily/57 Mile Waterhole.4
 
Contamination of the aquifer through surface spills or well failure has the potential to significantly affect those living in the area and their livelihoods together with the unique flora and fauna of the region.
 

 
Economics 
Commercial viabilityNorthern Territory is a remote, high-cost location, with high pipeline transport costs, which will produce high-cost gas, with production costs of about $7.50/gigajoule ($6.39 - $9.17)23 at the well-head compared to around $5/gigajoule for coal seam gas (CSG) and around $3.40 for conventional gas.[5]  Add the cost of transportation to Tennant Creek, $3/gigajoule to get it from Tennant Creek, delivery to the east coast gas market will likely cost more than $11/gigajoule.[6]  However, wholesale gas prices for the east coast gas market in 2021 are estimated to be approximately $7-$8/gigajoule.[7]   Furthermore, recent AEMO forecasts23 for domestic gas consumption for both residential/commercial and industrial sectors see decreases in demand which in turn may keep gas prices down.  Without an increase in gas prices, gas from the Beetaloo Basin is predicted to be too expensive for the domestic market.
 
To export to Japan, Australia’s biggest gas customer, with LNG liquification costs of $4/gigajoule and shipping costs of $0.70/gigajoule, NT gas would cost over $16/gigajoule to deliver6, whereas the Japanese LNG import price is around $11-$12/gigajoule.[8]  Effectively the price delivered to the Australian export terminal will be higher than the price required to be delivered as LNG to Japan. Market trends for Japan’s LNG import have shown a continued softening of demand.[9] Therefore it likely that Japanese LNG import price will remain the same or even decrease over time.  Supporting this, recent AEMO forecasts23 of LNG export demand for Australia are flat (although LNG forecasts have a history of being overestimated). Without an increase in demand it is unlikely that prices would increase making NT gas too expensive to export.
 
Therefore, without a large increase in international gas prices the gas will be too expensive for either the international or domestic market.
 
Gas and the domestic marketGas supply on the east coast of Australia has tripled since 2014.  However, domestic gas prices have also tripled in the same period in response to a huge demand for gas for LNG production and export. LNG exporters in Gladstone were unable to supply enough gas from their CSG production wells, with reserves grossly overestimated compared to their supply capacity.  This resulted in existing low cost of production gas being redirected to the LNG export market increasing domestic gas prices.[10]
 
Domestic gas prices in Australia have remained at levels far in excess of international parity prices.  Whilst prices have fallen somewhat, they have not fallen by nearly as much as those in Asia or Europe.  Domestic prices have remained some 30-40% higher than ACCC calculated export parity prices (a.k.a. "netback" prices).[11]  This may be explained as there is a lack of competition in the supply and delivery in the domestic gas market with only 5 producers and 2 pipeline owners. This is compounded with a lack of transparency of gas prices (there is no wholesale gas market with most gas traded bilaterally via contracts) that puts domestic and industrial gas buyers at a disadvantage.10
 
Consequently, gas has become uncompetitive as a fuel source for power generation in Australia and demand for gas-powered generation has fallen by 59% since 2014.[12]  Subsequently, gas-powered generation has been running well below capacity.[13]  Not surprising that at present there are no committed new commercial investments in gas-fired power generation.[14]  Nevertheless, electricity prices for both households and businesses have been driven up by higher gas prices, because gas-fired power stations typically supply the electricity market during times of peak demand.11  Gas is effectively the price setter in the National Electricity Market; for every $1/GJ increase in the price of gas the price of electricity rises by $11/MWh.12
 
The CSIRO GenCost report[15] indicated that renewables (wind and solar photovoltaic) with storage (such as pumped hydro) were now cheaper than gas for electricity generation in Australia.  As such, it is expected that demand for gas for electricity generation will decline in the future.
 
One of the key competitive advantages Australian industry has enjoyed has been low energy prices.  Energy intensive industries and industries dependent on energy intensive inputs have become less competitive as prices for electricity and gas for combustion have increased.  This has forced the closure of some major manufacturing and chemical plants, lead to the offshoring of production and undermined the profitability and viability of other gas users.11  Gas use in manufacturing as a consequence of these prices has fallen by 12% since 2014.12 
 
AEMO forecasts further reductions in gas use as consumers fuel-switch away from gas appliances towards electrical devices, in particular for space conditioning. For example, the Commonwealth and NSW Government are exploring options to free-up gas demand through electrification, fuel switching and energy efficiency. [16]
 
Fuel switching from gas appliances towards electrical devices can often be more economic. A 2018 study of household fuel choice found that 98% of households with new solar financially favoured replacement of gas appliances with electric.  With existing/no solar 60-65% of households still favoured replacement of gas appliances with electric. [17] 
 
In the residential sector, for example, reverse-cycle air-conditioning is expected to reduce gas demand that could have arisen due to gas heating.[18] For those residents who cannot afford the capital costs of replacing gas appliances, these increased prices are leading to a worrying growth in energy poverty in the domestic residential sector. [19] 
 
AEMO in 2018[20] estimated that in industry accounts for 42% of domestic gas demand, gas powered generation accounts for 29% of demand and residences accounted for the remaining 29%.
 
It should be noted that demand for natural gas has declined over recent years. From 2014 to 2020, domestic annual consumption of natural gas fell by approximately 19 per cent, with the major contributor of this fall in consumption being the reduction in the use of gas for power generation.[21] 23  Whereas domestic demand for gas has fallen for use in manufacturing by 14%, it has dropped by a staggering 59% for power generation by since 2014.12
 
The AEMO 2020 Gas Statement of Opportunities report[22] stated that their 2020 gas consumption forecast was lower than all previous forecasts for 2023 onwards, largely reflecting a reduced outlook for the LNG sector, along with a muted outlook for gas-powered generation as new utility-scale renewable capacity forecasts were higher than previously forecast. AEMO, in their latest report[23],  predicted that domestic gas consumption was likely to decline, “as consumers invest in measures to increase energy efficiency, including switching away from gas consumption.”
 
Whereas AEMO has predicted no effective change to the level industrial gas use and residential and commercial gas use, demand for gas-powered generation is predicted to continue to fall by over 85% from 2019 levels by 2028.23 [24]
 
Economic recovery and jobs?It is dubious that projects such as the Beetaloo Basin gas will deliver the goods for an economic recovery.  ACIL Allen’s report “The economic impacts of a potential shale gas development in the Northern Territory”[25] noted that between 82 – 252 ongoing jobs (including indirect employment generated by the local spending of the industry) would be created due the capital-intensive nature of the shale gas industry.  Similarly, it would increase NT government revenues by only 0 - 29.1 million per year (<1% budget revenue).[26]  The industry is not a large employer and pays little or no tax.[27]  Analysis by The Australia Institute noted that the gas sector was one of the worst options to choose for mass job creation and that investment in other sectors would create many more jobs.[28]
 
Climate Change ImpactsThe impacts of climate change on the environment are significant and severe. The present scientific consensus is that the earth's climate is warming due to human activity (https://climate.nasa.gov/scientific-consensus/ ), and the negative impacts of increased greenhouse gas emissions are measurable globally and nationally.[29]
 
The seven hottest years globally have occurred in the last seven years, with the last decade warmer than any previous decade.[30]  Furthermore, nineteen of the hottest years on record occurred in the last twenty years. [31] [32]  The average global temperature now exceeds 1°C above pre-industrial (1850-1900) levels and is expected to exceed 1.5°C between 2030 and 2052.34
 
Australia has warmed faster than the global average and is on average 1.44 ± 0.24°C warmer than when national records began in 1910 with most of the warming occurring since 1950 with every decade since being warmer than the one before.[33]  If comparing to a pre-industrial (1850-1900) baseline, then by 2019 Australia had warmed by greater than 1.5°C.30
 
The government is responsible for the environment, the health and wellbeing of its citizens, and the financial security of the nation. As we see the impact of increased carbon emissions, we also find evidence of the impact on Australian native wildlife, the Australian people and the wealth of the nation as noted by the catastrophic Black Summer bushfires, crippling drought and more recently floods. 
 
To address the issue of dangerous climate change, Australia, along 196 other parties, is a signatory to the Paris Agreement, which entered into force on 4 November 2016. The Paris Agreement aims to strengthen the global response to the threat of climate change, by:
Holding the increase in the global average temperature to well below 2°C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels, recognizing that this would significantly reduce the risks and impacts of climate change.[34]
The draft climate change policy “Northern Territory Climate Change Response: Towards 2050”[35] details the NT Government’s objective to achieve net-zero emissions by 2050 and outlines NT governments approach to addressing climate risk and harnessing new opportunities, including building on “existing initiatives across the NT to reduce greenhouse gas emissions across all sectors”, in line with NT’s aspirational target of net zero emissions by 2050. It concedes that “all sectors in the Northern Territory need to be engaged to realise the benefits and that the transition to a low-carbon economy needs to be carefully managed to ensure ongoing economic investment in the Northern Territory.” 
 
The IPCC report[36] provides an estimate for a global remaining carbon budget of 580 GtCO2 (excluding permafrost feedbacks) based on a 50% probability of limiting warming to 1.5 degrees relative to 1850 to 1900 during and beyond this century and a remaining carbon budget of 420 GtCO2 for a 67% chance.
 
Committed emissions from existing and proposed energy infrastructure represent more than the entire carbon budget that remains if mean warming is to be limited to 1.5 °C and perhaps two-thirds of the remaining carbon budget if mean warming is to be limited to less than 2 °C.  Estimates suggest that little or no new CO2-emitting infrastructure can be commissioned, and that existing infrastructure may need to be retired early (or be retrofitted with carbon capture and storage technology) in order to meet the Paris Agreement climate goals.[37]
 
Australia’s remaining emission budget from Jan 2017 until 2050 for a 50% chance of warming to stay below 1.5C warming relative to pre-industrial levels was estimated to be 5.5 GTCO2e.36  Adding the GHG emissions expended in 2017[38], 2018[39], 2019[40] and 2020[41], this leaves just 3.3 Gt CO2e remaining as at December 2020.  This leaves 6 years left at present emission rates of the 2013-2050 emission budget to stay below 1.5°C.  Therefore, at current emissions rates, Australia will have exceeded its carbon budget for 2050 by 2026.
 
The International Energy Agency report “Net Zero by 2050: A Roadmap for the Global Energy Sector”[42] states that no new natural gas fields are needed for the world to reach net zero by 2050.  It therefore follows that no new fossil fuel infrastructure development in Australia that is not carbon neutral, including the Beetaloo Basin gas, that is estimated to result 39 - 117 million tonnes of greenhouse gases each year, can be permitted because its approval would be inconsistent with the remaining carbon budget and the Paris Agreement climate target.
 
This production of Beetaloo Basin natural gas is not consistent with NT’s climate change policy, the principle of inter-generational equity nor the public interest, as it clearly assumes failure to meet the Paris Agreement temperature goals and worsening climate change impacts for the NT.
 
Natural gas as a “transition fuel”? 
Natural gas has often been touted as the “transition fuel” for the electricity sector to replace coal’s greenhouse gas emissions and eventually paving the way for an emissions free future for Australia.  This concept is out of date and I believe incorrect. It is simply too expensive and too emissions intensive to be so. 
 
Fugitive EmissionsMethane leaks from natural gas production can make the process as carbon intensive as coal.  The CSIRO report “Fugitive Greenhouse Gas emissions from Coal Seam Gas Production in Australia”[43] noted that fugitive emissions for Natural Gas in Australia as a whole are estimated to be 1.5% of gas extracted.  However, they also noted that shale gas emissions were approximately 1.9% higher than conventional gas associated with water flow-back and ‘drill-out’ stages of gas production.
 
It should be noted that if fugitive emissions exceeded 3.1% then the emissions intensity of gas would match that of coal (due to the fact that methane is 86 times more powerful as a greenhouse gas than CO2 over 20 years and 34 times more powerful over a 100-year time period).14 Therefore based on estimates provided by CSIRO, the emissions intensity of shale gas as proposed for the Beetaloo basin would exceed those for coal and could not be considered a “transition fuel”.
 
Electricity Market moving away from gasAs noted above, the electricity market has already moved away from gas, with a 59% decline in usage in the National Electricity Market since 2014, whilst renewable energy has increased by 25% during the same period.14  Furthermore, flexible gas plants already in the grid are running well below capacity.13 AEMO forecast that increasing renewable generation developments in the NEM are expected to continue to drive down system normal demand for gas-powered generation. 22
 
The AEMO modelled the future electricity grid in its Integrated Systems Plan.[44] [45]  The results showed for all scenarios that the transition from coal to renewable energy would not be via gas.13  The role of gas would be reduced with a decline in gas generation through to 2040.14  The report notes that to firm up the inherently variable distributed and large-scale renewable generation, there will be needed new flexible, dispatchable resources such as: utility-scale pumped hydro and large-scale battery energy storage systems, distributed batteries participating as virtual power plants, and demand side management.44 45  It also noted that new, flexible gas generators such as gas peaking plants could play a greater role if gas prices materially reduced, with gas prices remaining low at $4 to 6 per GJ.45  However this is unlikely as gas prices have tripled over the past decade and expected domestic gas prices are over 60% more than this price.13 [46]  AEMO noted that the investment case for new gas-powered generation will critically depend on future gas prices, as gas-powered generation and batteries can both serve the daily peaking role that will be needed as variable renewable energy replaces coal-fired generation.  In their 2020 Gas Statement of Opportunities report, AEMO predicted that as more coal-fired generation retired in the long term, gas consumption for gas-powered generation in the National Electricity Market was forecast to grow again in the early 2030s, recovering to levels similar to those forecast for 2020.20  However, in a later report, AEMO determined that by the 2030s, when significant investment in new dispatchable capacity is needed, new batteries will be more cost-effective than gas-powered generation. 45  Furthermore, the commissioning of the Snowy 2.0 pumped hydro project in 2026 will result in less reliance on gas-powered generation as a source of firm supply.22
 
AEMO noted that stronger interconnection between regions reduces the reliance on gas-powered generation, as alternative resources can be shared more effectively. 45  The expansion network interconnection enables the growth of variable renewable energy without a significant reliance on local gas generation.[47]  Supporting this assertion, the AEMO announced a series of actionable transmission projects including interconnector upgrades and expansions and network augmentations supporting recently announced renewable energy zones.[48]  45  AEMO noted that as each of these new transmission projects is commissioned, the ability for national electricity market regions to share resources (particularly geographically diverse variable renewable energy) is increased, and therefore demand for gas-powered generation is forecast to decrease.22 The Marinus Link is forecast to be commissioned in 2036, with surplus renewable generation from Tasmania then being available to the mainland National Electricity Market, which would see further declines in gas-fired generation, despite continuing coal-fired generation retirements.22 
 
Gas-powered generation can provide the synchronous generation needed to balance variable renewable supply, and so is a potential complement to storage.  However, the current installation of synchronous condensers in South Australia and other eastern states to increase system strength and stabilise the electricity network will reduce the need for gas-fired generators acting in the role of synchronous generators as more renewables enter the grid.[49]  Ancillary services are likely to utilise battery storage and synchronous condensers in the future and no longer require the use of gas-powered generation.
 
Transitioning away from Gas 
The ACT is planning to go gas free by 2025.  This is expected to reduce their overall emissions by 22%.  As part of the ACT Climate Change Strategy 2019-2025, all government and public-school buildings will be completely powered by 100% renewable energy eliminating the need for natural gas.  The ACT has also removed the mandatory requirement for new homes built in the ACT to be connected to the mains gas network and will begin to introduce new policies to replace gas appliances with electric alternatives.  Some 14% of residents have already converted over to 100% electric. [50]
 
There are moves in other jurisdictions to remove the mandatory requirement for a gas connection in new developments such as in South Australia.
 
Alternatives to Natural Gas 
Several technologies new or new to Australia are expected to reduce the use of natural gas as the Australian economy transitions to a net zero emissions economy and would replace the need for new gas such as proposed for the Beetaloo Basin.  Please note that these technologies not only look to transition electricity generation away from natural gas but also for gas combustion for heat. These technologies could also address any gas supply shortfalls.
 
HydrogenHydrogen is a colourless, odourless, non-toxic gas that is an excellent carrier of energy and can be used for a broad range of energy applications including as a transport fuel, a substitute for natural gas and for electricity generation.[51] Hydrogen gas can be produced from water in a process known as electrolysis, and when powered by renewable energy, the hydrogen produced is free from carbon emissions, making it an attractive way to decarbonise transport, heating and electricity generation.51 
 
AEMO stated that, “Hydrogen has the exciting potential to become an alternative energy storage technology and a new export commodity for Australia” which could be used to help decarbonise the domestic heat, transport and the industrial and commercial sectors in Australia and noted that development of the hydrogen industry would potentially impact both natural gas and electric demands. 44 [52]
 
Several developments involving green / renewable hydrogen are either planned or underway in Australia.
 
AEMO highlighted the potential for green steel production in Australia due to abundant renewable resources and the increased demand for low emissions industrial commodities worldwide.52 ‘Green steel’ can be made via a direct reduction process which uses hydrogen (made from renewable energy) as the heat source and reducing agent to produce pig iron. The by-product of the iron reduction process using hydrogen is water, rather than carbon dioxide in conventional steel making. Renewable energy is then used by an electric arc furnace to produce low-emissions green steel.
 
The Arrowsmith Hydrogen Project, which will be built at a facility in the town of Dongara, located 320km north of Perth, will utilise dedicated onsite renewable energy 85MW of solar power, supplemented by 75MW of wind generation capacity to generate 25 tonnes of green hydrogen a day and will be operational in 2022.[53]
 
ATCO’s Clean Energy Innovation Hub, located in Jandakot in Western Australia, is being used to trial the production, storage and use of renewable hydrogen to power a commercial-scale microgrid, testing the use of hydrogen in different settings and applications including in household appliances.[54]  This includes optimising hydrogen storage solutions, blending hydrogen with natural gas and using hydrogen a direct use fuel.  Green hydrogen will be produced from on-site solar using electrolysis, fuelling a range of gas appliances and blending hydrogen into the natural gas pipeline.
 
The $3.3 million development project will evaluate the potential for renewable hydrogen to be generated, stored, and used at a larger scale. ATCO aims to assess the practicalities of replacing natural gas with hydrogen at a city-wide scale across a municipality.[55]
 
The new chair of the Australian Energy Regulator, Clare Savage recently stated:
“The national gas industry could also undergo significant change as some jurisdictions move towards a zero carbon emissions policy. This could have significant consequences for the future of gas pipeline networks. In response, the AER recently supported the future recovery of Jemena’s investment in trialling the production of hydrogen from renewable energy for injection into its Sydney network. If hydrogen trials such as Jemena’s prove successful, the natural gas networks could be re-purposed to distribute hydrogen. If not, the economic life of the assets could be limited.” [56]
 
Biogas and BiomethaneBiogas is produced by the bacterial degradation of organic waste under anaerobic conditions and is composed principally of methane (50%-75%) and CO2 (25%-50%), with small amounts of oxygen, water and trace amounts of sulphur.[57] After cleaning (desulfurization and drying), biogas can be used to generate electricity and heat in cogeneration units (combined heat power (CHP)) or burnt to produce heat.57 [58]  Biogas can also be upgraded (removal of CO2) to biomethane with approximately 98% methane which has similar properties as natural gas.57 58 Both Biogas and Biomethane are flexible renewable fuels that can be stored for later use, with Biomethane is suitable to be added to the natural gas grid.57
 
The development of Biogas and particularly Biomethane plants in Australia has been particularly slow compared to other countries, in particular Europe.[59] Below are a couple of recent developments in Australia:

• The Malabar Biomethane Project[60] is Australia’s first project to produce biomethane and inject it into the gas grid. The plant will be located at the Malabar Wastewater Treatment Plant in South Sydney and is expected to be completed in 2022.60
• Utilitas is planning to develop “bioHub’s” around Australia to redevelop infrastructure (such as wastewater treatment plants) with anaerobic digestors to produce biogas, biomethane and hydrogen.[61]  The first site is being developed in Bundaberg, Qld, with planned sites in the Hunter Valley, NSW and Dandenong, Victoria.61

 
Biogas and its industry offer many benefits:

• Biogas is a renewable energy source that assists the decarbonisation of the economy. A study of the replacement of natural gas by biomethane in France reduced GHG emissions by greater than 85%. 
• Biogas is a secure, continuous and dispatchable source of energy that can contribute to national energy supply.
• Biogas also provides an alternative route for waste treatment and, as such, can help divert waste from landfill.
• The biogas industry supports local economies and regional communities, creating jobs, and offering new income sources, particularly for farmers.
• Biogas transformed into biomethane is a renewable gas that can replace natural gas, and can be used in homes for cooking, heating, and hot-water, or as a fuel for gas vehicles. It can be injected into the gas grid or used directly on-site. As biomethane has similar characteristics to natural gas, its injection into the gas grid does not require any adaptation of the existing infrastructure (neither the gas grid nor customer equipment connected to it). This is an opportunity for the gas and transport sectors to further assist the energy transition. [62]

 
A landmark report commissioned by Bioenergy Australia last year identified the total estimated biogas potential to be 371PJ (103TWh) of available energy, which is enough to decarbonise industrial, commercial, and residential gas users currently supplied by distributed gas networks across Australia.[63]
 
Australian business, industry and utilities recently signed an open letter to the Commonwealth Government advocating for biomethane to be injected into the gas distribution networks to enable the lowest cost transition to a decarbonised energy market and address a number of challenges including:

• Provide complementary reliable and flexible renewable resources for variable renewable energy.
• Allow heavy industry dependent on process inputs and high-quality heat to decarbonise using existing gas connections.
• Provide a pathway for Heavy vehicle decarbonisation.
• Allow domestic gas customers to decarbonise their energy supply using existing networks and appliances.[64]

 
Power-to-GasA relatively new chemical energy storage technology that looks to provide medium to long-term storage is Power-to-Gas.  Power-to-Gas (P2G) offers the possibility of converting surplus renewable electricity into chemical energy storage that can be later reconverted to electrical power to cover peak demand periods.[65] 
 
The core element of a P2G plant is the electrolyser which converts otherwise unused or low value surplus electric energy generated by renewable energy sources into Hydrogen.[66] [67] P2G technology can take the form of power-to-hydrogen (P2H) utilising Hydrogen as the chemical storage fuel or further processed as power-to-methane (P2M) using methane as the chemical storage fuel.65 67  The produced gas as well as being used to reproduce electricity can be utilised by other sectors like transport or heating.[68]
 
The Hydrogen or methane is stored for later use.  Hydrogen fuel cells and hydrogen combustion turbines generate electricity from hydrogen when needed such as when demand exceeds supply.  The methane can also be used to create electricity later when needed using a gas turbine. These are flexible dispatchable technologies that will provide an important form of system flexibility under increasing levels of Variable Renewable Energy such as wind and solar.[69]
 
Both Renewable Hydrogen and Biogas/Biomethane can displace or replace natural gas as a fuel significantly reducing GHG emissions.  These technologies show promise in Australia with the resources available locally.  Once developed these would see assets such as the Beetaloo Basin Gas left stranded.
 
Summary 
In summary, further government funding for exploration activities to be undertaken in the Beetaloo sub-basin to facilitate gas exploration in the Beetaloo sub-basin and to support the development of the Northern Territory gas industry should be refused.
 
Natural gas extraction from the Beetaloo Basin does not appear to be commercially viable either for the domestic or overseas market and investment in natural gas infrastructure for this area will potentially result in stranded assets.
 
The development of the Beetaloo Basin shale gas is estimated to result in 39 - 117 million tonnes of greenhouse gases each year.  This cannot be permitted as there is insufficient carbon budget remaining for Australia to accommodate this project and would be inconsistent with NT’s own climate change policy and clearly assumes failure to meet the Paris Agreement temperature goals and worsening climate change impacts for the NT.
 
Natural gas is not a “transition fuel” for the electricity sector to replace coal’s greenhouse gas emissions and eventually paving the way for an emissions free future for Australia.  In particular, shale gas is simply too emissions intensive to be so. 
 
Several technologies new or new to Australia are expected to reduce the use of natural gas as the Australian economy transitions to a net zero emissions economy and would replace the need for new gas such as proposed for the Beetaloo Basin.  Both Renewable Hydrogen and Biogas/Biomethane can displace or replace natural gas as a fuel significantly reducing GHG emissions.  No new gas is needed.
 
Thank you for taking the time to read my submission.
 
Alec Roberts
 
 
 
 


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[2] Rees GN, Oberprieler S, Nielsen D, Watson G, Shackleton M, Davis JA (2020). Characterisation of the stygofauna and microbial assemblages of the Beetaloo Sub-basin, Northern Territory. CSIRO, Australia.
 

[3] Bardon, J. (2021, February 17). Discovery of tiny shrimp in Beetaloo Basin could stall fracking plans, scientists warn. Retrieved from https://www.abc.net.au/news/2021-02-17/betaloo-micro-organism-new-species-fracking/13159678
 

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[7] De Atholia, T. & Walker, A. (2021, March 18). Understanding the East Coast Gas Market. Reserve Bank of Australia, Retrieved from https://www.rba.gov.au/publications/bulletin/2021/mar/understanding-the-east-coast-gas-market.html
 

[8] YCharts (2021, May). Japan Liquefied Natural Gas Import Price. Retrieved from  https://ycharts.com/indicators/japan_liquefied_natural_gas_import_price
 

[9] International Trade Administration (2020, October 30). Japan – Country Commercial Guide. Liquified Natural Gas (LNG). Retrieved from https://www.trade.gov/knowledge-product/japan-liquefied-natural-gas-lng
 

[10] Rios, J. (2019, September 13). What’s next for Australia’s natural gas market? Retrieved from https://www.eecc.eu/blog/whats-next-for-australias-natural-gas-market
 

[11] Long, S. (2020, February 27). Gas giants misled governments and it is costing Australian jobs, ACCC boss says.  Retrieved from https://www.abc.net.au/news/2020-02-27/gas-giants-misled-governments-accc-boss-rod-sims-says/12004254
 

[12] Robertson, B. (2020, July 23). IEEFA update: Australia sponsors a failing gas industry. Retrieved from https://ieefa.org/ieefa-update-australia-sponsors-a-failing-gas-industry/
 

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