Reasoning with the gas cartel is like arguing with a Great White Shark. It knows only one way and is dedicated to only one thing. Eating you alive.
More propaganda from the AFR today:
Federal Resources Minister Madeleine King has emphatically backed carbon capture and storage as the best way for the resources industry to reach net zero emissions, but stopped short of reversing a freeze on project funding to accelerate the roll-out of the technology.
Ms King will instead back the line from Energy and Climate Change Minister Chris Bowen that the government is better to remove regulatory barriers for CCS than back individual projects, when she speaks at the gas industry annual conference on Tuesday.
Sector leaders, however, said Australia risked missing an opportunity to tap natural advantages in carbon storage and secure its multibillion-dollar commodity export revenue if it failed to back a technology that is central to reaching net zero emissions. There is also widespread concern that Australia will be outgunned by US President Joe Biden and others ploughing billions into CCS projects.
The Biden Administration has not “ploughed billions into CCS projects”. It has mooted new regulatory standards for power plants to be deployed by 2040 which will necessitate that they account for their emissions.
This might result in some CCS or it might result in closures and renewable replacements.
There are some new tax breaks for CCS as well but the whole box and dice will face Supreme Court challenges before anything happens. US law stipulates that the price of power is a factor in regulatory changes.
In Australia’s case, ask yourself why we have not yet produced any functional CCS? Gorgon tried it and would rather pay the fine for failing as the cost of not doing business.
Fossil fuels firms are rent-seekers, the technology is still expensive and very circumstance dependent, and we scrapped the carbon price.
Here is the LCOE with 90% CCS for coal-fired power:
With time it would become more competitive and we will need CCS for all sorts of industries.
However, there is one gigantic problem with this discussion in Australia and it is this:
In barren country near the top right-hand corner of South Australia, 960 kilometres north of Adelaide between the Strzelecki Desert and Innamincka, Santos’ ambitious Moomba gasfield carbon capture and storage project is barrelling ahead.
Three-fifths built and on target for startup early next year, the $US165 million ($250 million) Moomba CCS project is the hope of the side for the controversial technology to dispel the scepticism – bordering on ridicule – drawn by Chevron’s chronic misadventures with its ambitious attempt to store carbon dioxide deep below the Indian Ocean at its giant Gorgon project.
Moomba CCS is also the hope of Australian gas producers. In their optimistic moments they see demand for their commodity stretching out for many years – if not decades.
The debate is being driven by the gas cartel. Why on earth would the public subsidise any technology that perpetuates that unholy entity given:
- It has gouged the east coast economy since 2014.
- It is a war profiteer.
- It is currently breaking the law by violating price caps.
The cartel has torn up its social license to operate. Now it wants public subsidy to extend its baleful role in driving east coast electricity prices to the moon.
As things stand, we would be much better off explicitly returning to coal-fired power with CCS and locking the gas cartel out of the technology.
Or we could break the cartel and the energy transition would become a cakewalk.
