By Nick Toscano
Oil and gas giant Santos says the successful start-up of its carbon sequestration site in the South Australian desert has boosted its confidence the technology can work on a larger scale as it kicks off talks about importing and burying emissions from Japan.
Santos, one of Australia’s largest energy producers, has begun injecting carbon dioxide into depleted gas reservoirs at its Moomba carbon capture and storage (CCS) site in the Cooper Basin, about 800 kilometres north of Adelaide.
Santos’ Moomba carbon capture and storage project in South Australia.
CCS, which traps greenhouse gas emissions from polluting industries such as power stations or heavy manufacturers and injects them into underground rock formations, has been one of the most contentious solutions in the fight to arrest climate change, dismissed by its many detractors as too expensive and commercially unproven.
Long-running technical problems at Chevron’s giant carbon sequestration plant off the coast of Western Australia, the world’s biggest CCS operation, have added to doubts about the technology’s ability to function at scale. The Gorgon project has fallen considerably short of performance targets, and has been running at less than half of its intended capacity.
But the Moomba CCS project, since launching in October, had ramped up to full injection rates more quickly than anticipated and was meeting performance expectations, Santos chief executive Kevin Gallagher said. Its operation so far had given the company greater confidence that it could deliver on its promise of “large-scale, cost-competitive emissions-reduction”, he said.
“This is a game-changer for the technology and a game-changer for Santos,” Gallagher said.
Santos said it was already evaluating future expansion plans at Moomba after reaching a non-binding deal with Chubu Electric, a top Japanese power utility, to investigate the feasibility of shipping in cargoes of the emissions it generates and permanently storing them at the site.
Chubu said it would work with Santos to assess the “transportation of CO2 from Nagoya Port to the Moomba CCS project, including methods and costs”.
The potential role of CCS, however, remains a divisive issue globally. Supporters of the technology, including the oil and gas industry and the federal government, insist it must be a critical part of efforts to curb planet-warming emissions and arrest climate change, especially in polluting parts of the economy that cannot readily switch to cleaner processes, such as steel or cement manufacturing.
The Greens and many environmental campaigners, on the other hand, view CCS with great scepticism, arguing that stashing emissions diverts focus from efforts to decarbonise in the first place, and fearing it could be used as a delaying tactic to prolong the consumption of harmful fossil fuels.
CCS technology remains in its infancy, with 50 projects in commercial use around the world, according to the Global CCS Institute.
Moomba is operated as a joint venture between Santos and another ASX-listed oil and gas producer, Beach Energy, whose biggest shareholder is billionaire Kerry Stokes’ Seven Group Holdings.
In an update to investors last week, Santos said Moomba had already stored 340,000 tonnes of carbon dioxide-equivalent.
“At full injection rates Moomba CCS avoids more emissions every four days than 10,000 electric cars avoid in one year,” Gallagher said.
The Business Briefing newsletter delivers major stories, exclusive coverage and expert opinion. Sign up to get it every weekday morning.