Australia needs to broaden its energy strategy, UQ professor says

A strategy that established renewable energy targets did not keep Australia from becoming as polarized—and paralyzed—as the US in the energy and climate-change debate, the director of the University of Queensland’s Energy Initiative told a Washington, DC, audience.

A combination of ideologically driven environmental activism and inadequate fossil fuel industry response has made electricity rates soar with little carbon emissions benefit, Chris Greig said at Johns Hopkins University’s School for Advanced International Studies.

“This environmental activism is particularly destructive because it’s ideological, it provides no solutions, and it doesn’t deal with the 2.7 billion people on the planet who don’t have enough energy,” he maintained.

“All of the noise is making us ignore bigger issues,” the professor said, adding, “In the press, we’re seeing increasing disagreements about whether climate change is real. This is crazy. Energy literacy is lacking in Australia, and the public has become apathetic.”

Climate change, which tied for first place in the 2007 national election, fell to fifth place in 2013, Greig added.

He said that when Kevin Rudd was elected prime minister in 2007, he tried to establish certainty for investors by establishing a renewable energy target with a goal of reducing greenhouse gas emissions by 80% before 2013. Julia Gillard, who succeeded Rudd in 2010, established a $23 (Aus.)/tonne carbon tax a year later as a vital economic reform to ensure Australia’s clean energy future and give investors certainty, Greig continued.

He said Tony Abbott, who was elected prime minister in 2013, said he wanted to replace the tax with a direct action plan and ordered preparation of a new energy white paper that reflects economic reality. Sydney’s residential power rates had jumped 140% in 8 years, due in part to massive national grid improvements as well as the carbon tax, Greig said.

What’s been learned

“It’s apparent that society won’t pay large premiums to reduce carbon emissions,” he said. “Rate increases, which economists felt were acceptable, weren’t. There’s also no gain in demonizing fossil fuels in a country which generates 80% of its electricity from nonrenewable resources. An alarmist, one-dimensional strategy that’s exclusively focused on climate change isn’t productive. We need to get more legitimate concerns which landowners have raised about water and socioeconomic concerns into the discussion. Moratoriums are not a solution.”

What’s needed is a coherent long-term, bipartisan energy and climate strategy that makes realistic strides toward carbon capture and storage, creates a grid which allows renewable sources to enter once they become feasible, and science and innovation to drive future costs down, Greig said.

Coal and LNG exports to China and other Asia-Pacific customers could contribute, he suggested. Australia’s coalbed methane production is growing to replace dwindling conventional production, but its shale gas resources—which are considerable—are located in the central part of the country where water is scarce and markets are far away, Greig said.

“A lot of people have thought we were going to follow the US with our own shale-gas boom,” he said. “But we have only 5-8 plays with 437 tcf of technically recoverable gas, 16-20 land rigs, and 5 hydraulic fracturing units. China faces similar problems. Consequently, the International Energy Agency’s whole ‘Golden Age of Gas’ scenario to drive carbon emissions lower is questionable.”

Government energy research and development in Australia has been almost entirely government-driven, while fossil fuel R&D has come from that industry with a heavy CBM focus, Greig said. “Chevron and other large companies are looking at our shale gas but haven’t spent significant money on it,” he observed. “Chevron also is building the world’s largest CCS project to separate carbon dioxide from gas it’s producing offshore starting next year. It’s a great start, but we need to do more.”

Contact Nick Snow at nicks@pennwell.com.

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