05/03/2017

'Clean Coal', CCS And CSG Will Not Save Fossil Fuels – Their Game Is Up

The Guardian - Ian Dunlop

As the Finkel review submission deadline arrives it’s time to accept the inevitable and fix the shambles that is our energy policy
Energy prices will rise but they will rise less with renewables than with coal. Photograph: Sam Panthaky/AFP/Getty Images
Every few years the fossil fuel industry pressures politicians to force “clean coal”, carbon capture and storage (CCS) and more recently coal seam gas (CSG) on an increasingly sceptical community to justify its continued expansion.
This cycle started with the promotion of Adani’s massive Carmichael coalmine in Queensland, for coal export to India. The South Australian blackout followed last September when violent storms blew down transmission towers, prompting instant federal government accusations that excessive reliance on renewable energy was the cause, despite clear advice to the contrary. This also prompted a review of the energy system, led by Dr Alan Finkel, with final submissions due on Friday.
Then, when the long-overdue closure of the Hazelwood brown-coal power station was announced in November, energy security became a political battleground. In passing, Adani was to be offered a $1bn subsidy to construct the Carmichael rail line, and then a further subsidy for a new domestic coal-fired power plant at the mine was mooted to assist the development of northern Australia.
The prime minister’s National Press Club speech in January emphasised the need for “affordable, reliable and secure energy”, denounced the states for their “unrealistic” renewable targets, encouraged energy storage – and then took an evangelical swing back to coal, straight from the fossil fuel industry hymn book. Priority would be given to “clean coal, and carbon capture and storage (CCS and onshore gas (CSG)”, implying that renewables were neither affordable or reliable.
He continued: “The next incarnation of our energy policy should be technology-agnostic – it’s security and cost that matter, not how you deliver it. Policy should be ‘all of the above technologies’ working together to meet the trifecta of secure and affordable power while meeting our substantial emission reduction commitments.”
So what could possibly be wrong with such a sweeping vision? Well, pretty much everything.
Firstly, the speech skirted around the biggest risk facing Australia, namely accelerating climate change. While Australia ratified the Paris climate agreement, our emission reduction commitments are not “substantial”. They are laughable, both in comparison with our peers globally and to have any chance of making a fair contribution to the Paris objectives of holding global temperatures “well below 2C above pre-industrial conditions and to pursue efforts to limit the increase to 1.5C”.
Then, to have a realistic chance, say 90%, of meeting the Paris objectives, the world should no longer emit any carbon to the atmosphere. We still emit record amounts today and need some fossil fuels to build the new low-carbon economy, so that is not going to happen. But emissions must peak and decline rapidly. There is no space for any new fossil fuel projects – coal, oil or gas.
“Clean coal” is neither new nor clean. These technologies can reduce emissions by up to 40% relative to conventional practice but that does not solve our problem when the global carbon budget has already been exhausted. Furthermore, costs are increased by up to 30%, rendering coal even less competitive with renewables.
Years of research have failed to establish the basis for CCS expansion at scale. CCS works where emissions are stored in depleted oil and gas reservoirs, which the oil industry has practised for decades. Storage in other types of geological structures is far harder. The few commercial operations in the world today are in the former category. The substantial additional costs of CCS again reduce coal’s competitiveness, particularly if you refuse to price carbon, as the government is doing. CCS will be useful at the margin but it will not save fossil fuels from their inevitable demise.
Additionally, energy prices rose largely because our flawed regulatory framework allowed power companies to invest in unnecessary infrastructure on which they were guaranteed a return. Gas prices rose because the east coast was opened up to the higher-priced international gas market with the construction of export facilities at Gladstone. The unseemly rush into CSG resulted in substantial processing overcapacity, with economic pressure increasing as CSG production was constrained by community objection to the damage caused to arable land and water. Furthermore, high methane leakage rates result in CSG having a greater warming effect than using coal, thereby negating its supposed benefit.
Finally, there is nothing “agnostic” about choosing energy sources when the fossil fuel industry continues to enjoy a massive subsidy, far greater than renewables, through the lack of carbon pricing – a subsidy the IMF estimates to be about 60% of coal’s market price. And this is the nub of the problem. Our climate and energy policies are a disconnected and dysfunctional shambles, brought about by years of denial and inaction from federal governments of both persuasions who do not accept that climate change is happening.
But that game is up. Climate change has moved from the twilight phase of much talk and relatively limited impact. It is now turning nasty. Events are moving faster than expected as irreversible climate tipping points are crossed. The economic and social costs of inaction can no longer be swept under the carpet, with regulators here and overseas demanding action to head off a climate-induced financial crisis.
The only way we can avoid catastrophic climate impact now is to initiate emergency action, akin to being on a war footing. That will be accepted shortly as impacts bite and low-carbon technology undermines the fossil fuel industry. In the meantime the damage created by political ideologues must be minimised, so no Adani, no coal-fired power, no CSG.
Our antiquated electricity grids are undoubtedly in need of overhaul but 100% renewable energy grids are being constructed around the world in only a few years, providing genuine energy security and making traditional concepts of baseload power irrelevant. This is innovation at its best.
As for affordability, energy prices will rise, given the extent and speed of change. But they will rise less with renewables than with coal, with greater prospects of cost reduction as technology improves.
We need a new narrative, built around our potential to prosper as a low-carbon society. We have the world’s best renewable resources, the science, technology and engineering expertise to seize what is the biggest investment and job-creation opportunity this country has ever seen.
In addition, we need a taskforce which will pull together the resources and expertise required to initiate emergency action, led by statesmen and women from businesses with a concern to create a genuinely sustainable Australia. It is their future which is being thrown away by fossil fuel industry pressure forcing government to remain firmly entrenched in the 20th century.

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