By Nick Toscano and Mike Foley
Resources Minister Madeleine King will invite oil and gas companies to suggest new areas to bury greenhouse gas emissions, putting the government on a collision course with the Greens who argue carbon capture technology will prolong the use of harmful fossil fuels and is yet to work effectively.
In a speech to be delivered at a gas industry conference in Adelaide on Tuesday, King will declare the government emphatically supports the controversial carbon capture and storage technology, describing it as possibly the “single biggest opportunity” to bring down emissions in the energy resources sector.
Santos says four non-binding deals will underpin its Bayu-Undan carbon capture and storage project.
She points to the International Energy Agency’s assessment that carbon capture will be a necessary and vital plank of global decarbonisation efforts, and vows to work with the industry to help expand the technology.
“Carbon capture and storage represents an opportunity for Australia if we get it right,” King will tell the Australian Petroleum Production and Exploration Association conference. “The will is there. The know-how is there.”
Carbon capture and storage – which traps carbon dioxide emissions produced by gas-processing plants, factories or power stations before they are emitted into the atmosphere and injects them underground – has been a divisive area of climate policy.
Supporters argue it is a necessary and unavoidable component of the world’s decarbonisation goals to avoid the worst and most immediate impacts of global warming.
However, the technology is strongly opposed by the Greens and many climate advocates, who argue it diverts focus from shifting the economy to cleaner energy, and fear it could be used to prolong the consumption of harmful fossil fuels.
Questions also remain about the technology functioning at scale, given the continued underperformance of Chevron’s Gorgon carbon capture and storage plant in Western Australia – the world’s biggest commercial-scale project.
The government unveiled a $2 billion fund to promote hydrogen development, but limited it to green hydrogen, which is made via a process powered by renewable energy. The funding program will not be open to “blue hydrogen”, which is made from coal or gas paired with carbon capture to trap and bury the emissions before they are released into the atmosphere.
King on Tuesday will say the government recognises the need to “scale up carbon capture and storage” and will commence a new round of consultations to release more greenhouse gas storage acreage in Australian waters.
“We want to work with industry to progress new projects, whilst ensuring they are effectively regulated to meet community expectations,” she says.
Last week’s federal budget allocated $12 million to review regulation of the offshore gas industry, focusing on carbon capture and storage projects.
Meg O’Neill, chief executive of oil and gas producer Woodside Energy, will tell Tuesday’s conference that Australia is lagging other countries on the deployment of carbon capture projects.
“Almost two-thirds of planned carbon capture, utilisation and storage investments globally are in the United States, Canada and Europe,” says O’Neill, who is also the chair of the Australian Petroleum Production and Exploration Association.
“They are supported by mechanisms such as the United States $US394 billion ($589 billion) Inflation Reduction Act and the UK’s £20 billion ($37 billion) investment.”
O’Neill says oil and gas producers want to work with the federal government on a national strategy to position the country as a regional carbon dioxide storage leader as countries with limited storage potential, such as Japan and South Korea, search for partners to help meet their net zero emissions targets.
“In Australia, I believe this is a technology that may have been judged too soon,” she says.
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