What could a cleaner energy future look like?
South Australia is a place where all the building blocks for net zero are already taking shape and increasingly working together.
But what if it could be done better, both for the environment and the economy – and everyone worked together to effectively ‘carpool’ carbon emissions?
What if there were two new SA regional decarbonisation hubs – in the Adelaide-Port Augusta region and the Cooper Basin in the remote Outback?
The Net Zero Zones are among nine regions conceptualised in a new study by Australia’s oil and gas industry, with technical support from the CSIRO, examining how to accelerate to net zero through shared infrastructure and guide thinking and planning.
These regions cover 79% of the facilities and 92% of the greenhouse gas emissions identified under the Commonwealth Safeguard Mechanism.
Their higher emitting operations could be seen as challenges but, in fact, they are opportunities as well, both economic and environmental.
They can be magnets for investment, support for manufacturing and ultimately bring together natural gas, renewables, carbon capture, utilisation and storage (CCUS) technology and low-carbon hydrogen.
These are the building blocks of net zero – and they are areas this state knows well.
At such a critical time in Australia’s energy transformation, it’s fitting that Australia’s oil and gas industry gathers in Adelaide this week because so much of what this state is doing is on the agenda of the APPEA 2023 Conference & Exhibition.
SA is already building the key pillars of a cleaner energy future – renewables generating electricity backed up by natural gas, the kick-starting of low-carbon hydrogen production and progression of major CCUS emissions reduction projects.
Importantly, the state has a strong understanding of extracting the economic benefits from energy. We are keen to keep the positive momentum for investment that underpins thousands of jobs and other economic benefits here.
Our industry enables about $38 billion of SA economic activity annually, employing about 11,000 people along the supply chain at around 3,000 businesses.
While SA’s renewables delivered on average about 65% of electricity generation over the past 12 months, gas was there as an important back up for about 33% of generation.
In fact, there were times when gas delivered as much as 90% of electricity during peak periods in the evenings.
These are amazing figures when you consider Victoria is still regularly generating over 60% of its electricity from coal, emitting double the emissions of gas.
Natural gas is a natural ally of renewables, stabilising electricity generation when clouds hamper solar or the wind doesn’t blow.
The flexibility and adaptability of gas to input rapidly when required makes gas generation critical to the energy mix as coal is phased out.
Gas can also play a vital role in the growth of the CCUS industry, a technology enabling CO2 to be stored in former gas reservoirs or other underground geological formations to reduce emissions.
CCUS will be critical to emissions reductions of not just the gas industry but many other sectors of the economy including chemicals and cement production.
SA is at the forefront of the development of this technology in Australia at a place with a 50-year history of gas production.
The Moomba storage project in the Cooper Basin, a joint venture between Santos and Beach Energy, will store 1.7 million tonnes of CO2 per year – equal to taking 700,000 cars off the road.
The oil and gas industry is calling for a national CCUS strategy to provide clear policy direction, identify and progress priority hubs for low emissions projects and promote Australia as a regional carbon storage leader.
CCUS is also the fastest and most efficient route to South Australia’s hydrogen economy.
It is pleasing to see the SA Government focusing on low-carbon hydrogen and building relationships in Asia.
Under the IEA’s Net Zero by 2050 scenario, over a quarter of hydrogen in 2050 will come from natural gas utilising CCUS.
And our trading partners who purchase our LNG today are likely to be the same partners who will buy our hydrogen tomorrow.
All this underscores the widening role of gas in the future, supporting the key clean energy pillars of renewables, hydrogen and CCUS.
This is why the Net Zero Zones concept our industry is proposing seeks to collaborate rather than discriminate.
The energy transformation should not be a binary choice.
We need to debate ideas, and keeping all options on the table should be a key guiding factor in policy-making as we accelerate towards net zero.
Samantha McCulloch is Chief Executive for the Australian Petroleum Production & Exploration Association (APPEA)
