Santos takes aim at CCS critics
Oil and gas heavyweight Santos hits back at critics of the government’s decision to expand funding to carbon capture and storage (CCS) projects.
Oil and gas heavyweight Santos has hit back at critics of the government’s decision to expand funding to carbon capture and storage (CCS) projects, arguing that the technology is already close to making significant inroads into Australia’s emissions.
Santos is just months away from sanctioning what could be one of the world’s biggest CCS projects in South Australia’s Cooper Basin, and has welcomed the government’s move this week to broaden the investment mandates of the Australian Renewable Energy Agency and Clean Energy Finance Corporation.
The government’s push for the agencies to consider CCS technologies has drawn criticism from some quarters, with the Clean Energy Council branding it a “disappointing distraction” and former CEFC head Jillian Broadbent questioning whether the method would ever be financially viable.
But Santos chief executive Kevin Gallagher said in a statement to The Weekend Australian that CCS could become a key part of clean energy in Australia.
“What we’re seeing now is the real agenda of those people who are out there criticising CCS — they are not interested in making gas zero emissions, they want all hydrocarbon fuels out of the energy mix,” he said.
Santos is scheduled to make a final investment decision on its Moomba CCS project in the Cooper Basin by the end of the year. The project will involve capturing 1.7 million tonnes a year of carbon dioxide from the gas it produces in the basin, dehydrating and compressing the CO2, and then injecting it into depleted underground reservoirs across the region.
The government announced this week the Clean Energy Regulator would take over the methodology development that would enable CCS to generate carbon credits, a move that has been embraced by Santos.
“Carbon capture and storage has the potential to make Moomba a vital supplier of cleaner energy for Australia for another 50 years, supporting and sustaining thousands of skilled, secure, well-paying jobs now and into the future and decarbonising energy at its source,” Mr Gallagher said.
Santos’s existing infrastructure in the basin means the company expects it will be the second-largest CCS project in the world.
“This is by far the lowest-cost CCS project in the world,” Santos executive vice-president Brett Woods told the Weekend Australian. “This is one of the first steps in what is a fantastic opportunity for Australia to be a world leader in carbon storage.”
The government’s latest energy policies also drew support from the CEO of SIMEC Energy Australia, the renewable energy arm of Sanjeev Gupta’s Australian business empire.
SIMEC boss Marc Barrington said carbon capture and storage could be important in offsetting sources of emissions that cannot be easily replaced by solar or wind.
While SIMEC is not considering CCS for its plans to help Mr Gupta’s GFG Alliance produce “green steel” at the Whyalla steel works in SA, Mr Barrington said the process could be useful to other intensive industries.
“Some of my renewables brethren might get upset about this, but if we are to exceed our Paris targets in a positive way, then there’s going to have to be some very large carbon absorption or mitigation measures put in place. And that’s going to have to be beyond what we can do in the renewables side,” Mr Barrington said.
The shift in the investment mandates of ARENA and the CEFC in part reflected what Scott Morrison said was the commercial viability of both solar and wind compared to traditional fossil fuel-based energy sources.
But speaking on ABC’s Radio National on Friday, Ms Broadbent said she did not believe the economics of CCS would ever pass the Clean Energy Finance Corporation’s financial hurdles, adding that the lack of a carbon price in Australia meant she did not see how CCS could be economic under current national policies.