Non-profit think tank the Institute for Energy Economics and Financial Analysis (IEEFA) has criticised proposals by the Australian Government to amend its environment legislation, arguing that the taxpayer will ultimately foot the bill.
IEEFA, which examines issues related to energy markets and policies, presented a submission to the inquiry into the proposed amendments to Australia’s Environment Protection (Sea Dumping) Act.
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The submission argues against amendments that would see imports of carbon dioxide (CO₂) emissions from other countries for burial in geological formations beneath the seabed, suggesting that the plan could cost taxpayers billions.
According to IEEFA oil and gas analyst Kevin Morrison, the proposed legislation relies too heavily on largely “unproven” carbon capture and storage (CCS) technologies to manage the CO₂ it imports. The financial burden associated with depending on these technologies could fall on the taxpayer.
“There needs to be a conversation about who’ll be footing the bill here,” Morrison said in a statement. “Any economic benefits derived from importing other countries’ emissions for disposal has to be balanced against the risk – financial and otherwise – that Australia would be lumbered with. The scale of these projects would essentially make them ‘too big to fail’. Can Australian taxpayers really afford to cover that risk?” he asked.
Australia’s proposed Environment Protection (Sea Dumping) Amendment (Using New Technologies to Fight Climate Change) Bill 2023, employs CCS as a means to mitigate carbon emissions. IEEFA’s submission highlights the technology’s chronic, decades-long underperformance.
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By GlobalData“CCS has been around since the 1970s and continues to fail to live up to the expectations promoted by oil and gas producers,” Morrison said. “It was originally designed to extract more oil and gas from depleted wells, not for the management of CO₂ emissions. In that latter application it has not been proven effective and has been found to develop problems with significant long-term cost burdens.”
The submission details instances where even functioning CCS projects have been beset with problems. The Gorgon CCS facility, operated by oil giant Chevron and located in Western Australia, is discussed at length as a key example of this. According to the submission, Gorgon has “spectacularly underperformed” in its ability to sequester CO₂.
In May, Chevron admitted that the facility, one of the largest CCS plants in the world, is running at just one third of its planned capacity. According to IEEFA, the CCS facility has captured less than 4% of the total emissions the Gorgon liquefied natural gas project pumps into the atmosphere each year.
IEEFA argues that continued uncertainty around CCS technology would mean proposed projects are accompanied by significant environmental risks, leaving Australia exposed to “unacceptably high” levels of financial and legal liability.
The think tank also states that the passing of proposed amendments would provide an excuse for gas producers to continue to open new gas fields and increase emissions. This criticism of CCS is routinely posed by activist organisations such as Greenpeace. At the end of 2021, Greenpeace UK wrote a letter of evidence to the UK Government arguing that reliance on uncertain carbon removal technologies will delay immediate action on the root cause of emissions reductions.
