Australia’s LNG industry takes a risky gamble on carbon capture: Russell

Links to breadcrumbs

PMN Business

Author of the article:

Publication date:

May 18, 2022 • 27 minutes ago • 3 minutes read • Join the conversation

Article content

BRISBANE — Australia’s vast liquefied natural gas (LNG) sector is setting its future on carbon capture and storage (CCS), a technology it believes is vital for decarbonisation and has been proven.

It will be difficult to convince everyone else, especially since the only large-scale project of its kind so far has not been a resounding success.

Decarbonisation and achieving net-zero emissions by 2050 was the main theme of this year’s meeting of the companies making Australia the world’s largest LNG exporter at the Australian Petroleum Production and Exploration Association conference this week.

Advertisement 2

This ad hasn’t loaded yet, but your article continues below.

Article content

CCS has a bad public image, mainly because it is seen as a company that doesn’t deliver on its promise, and it is an expensive solution to a problem that environmental and renewable energy advocates believe could be better solved through the use of eliminate fossil fuels.

Much of the observed failure stems from the inability of CCS to remove carbon when fossil fuels are burned, especially in the case of coal-fired electricity generation.

For years, the coal mining industry and lobby touted CCS as a solution that would allow them to operate in the long run.

That promise was never delivered and it would be a huge challenge to find a serious player or analyst in the energy sector who sees a future in CCS for coal-fired power plants.

Advertisement 3

This ad hasn’t loaded yet, but your article continues below.

Article content

But the Australian LNG industry, which rivals Qatar and increasingly the United States as the world’s largest exporter, sees CCS as a viable path to carbonization in the upstream sector.

The plan is both simple and comprehensive.

LNG producers would drastically reduce their Scope 1 and 2 emissions by capturing the carbon emissions produced in the extraction and liquefaction processes and injecting them back into depleted natural gas and oil reservoirs.

Proponents of the use of CCS in industry repeatedly refer to the process as “proven technology” ready to be deployed on a large enough scale to make a difference to global emissions.

While it is true that there are several CCS projects at upstream oil and gas companies, it is worth saying that this is a technology that is ready to be deployed on a large scale at an economically justifiable price.

Advertisement 4

This ad hasn’t loaded yet, but your article continues below.

Article content

Much is being made of the world’s largest CCS project at the Chevron-operated Gorgon LNG plant in Western Australia.

This project aims to capture and store 4 million tons of carbon emissions each year, but it only performed slightly better than half of that in 2021, with a storage of about 2.1 million tons.

To Chevron’s credit, in an industry that has a reputation for keeping things quiet, the company has acknowledged the problems with Gorgon and has actually said it is on a steep learning curve and is striving to achieve its goals.


The point with Chevron’s struggle at Gorgon isn’t to prove that CCS isn’t viable on upstream oil and gas projects, it’s that there are technical challenges that make it difficult, and the technology is still in its infancy when it comes to implementation on a significant scale.

Advertisement 5

This ad hasn’t loaded yet, but your article continues below.

Article content

Another major CCS project in Australia is being carried out by the country’s second largest oil and gas producer, Santos, which is building a 1.7 million tons per year CCS facility at Moomba, a gas hub in the remote center of Australia. the country.

Santos Chief Executive Kevin Gallagher told the APPEA event that below the International Energy Agency’s net-zero trajectory, CCS will need to store about 7.6 billion tons of carbon dioxide each year, a staggering 200 times what is currently achieved.

This nicely reflects the scale of the challenge, but it also raises the question of what it will cost to achieve this goal.

In fact, the LNG industry will need to be able to generate carbon credits to justify CCS investments.

This could be seen as a sensible way of perpetuating fossil fuels in a world with carbon constraints, or as just another taxpayers’ alms to the fossil fuel industry.

But perhaps the biggest challenge facing Australian LNG producers is overcoming the horde of public skepticism about CCS, both its cost and effectiveness.

To do this, the industry will need to demonstrate that the technology can be deployed at scale and speed, without despising the taxpayer, and can make a real contribution to net-zero targets.

For the Australian LNG industry, putting CCS at the center of their social license to operate is a huge risk, but it also appears that it is largely in their own hands to make it work.

(Edited by Christian Schmollinger)

Share this article in your social network


This ad hasn’t loaded yet, but your article continues below.

By clicking the sign up button, you agree to receive the above newsletter from Postmedia Network Inc. receive. You can unsubscribe at any time by clicking the unsubscribe link at the bottom of our emails. Postmedia Network Inc. † 365 Bloor Street East, Toronto, Ontario, M4W 3L4 | 416-383-2300


Postmedia is committed to maintaining a lively yet civilized discussion forum and encourages all readers to share their thoughts on our articles. It can take up to an hour for comments to be moderated before appearing on the site. We ask that you keep your comments relevant and respectful. We’ve enabled email notifications – you’ll now receive an email when you get a reply to your comment, there’s an update to a comment thread you’re following, or a user follows comments. Visit our Community Guidelines for more information and details about customizing your email settings.

This post Australia’s LNG industry takes a risky gamble on carbon capture: Russell

was original published at “”


Amanda Peterson: Amanda is an economist turned blogger who provides readers with an in-depth look at macroeconomic trends and their impact on businesses.

Learn More →