Australia could take CCS stage by storm

Australia is well positioned to become a leading carbon, capture and storage (CCS) and carbon capture, storage and utilisation (CCUS) player on the global stage, according to Australian Petroleum Production & Exploration Association (APPEA) chairman, Ian Davies.

Under the International Energy Agency’s Net Zero scenario, 7.6 billion tonnes per annum of carbon dioxide would need to be stored in CCUS by 2050, 200 times more than is being stored in the 30 or so commercial projects around the world today.

This is an opportunity for Australia and for the nation’s industries including the oil and gas sector, according to Davies.

“It could be our competitive advantage for the future, not only to decarbonise our own economy, but to help our customer countries decarbonise.

“Just as our customers in Asia have looked to Australia for energy security over the last half century, they are now looking to us to help them reduce their emissions as they work towards net zero targets.”

Australia’s long-term liquefied natural gas customers such as Japan and South Korea do not have the nature-based and geological carbon sequestration resources that Australia has in abundance.

“The opportunity for Australia lies in our carbon storage resources, in basins where we already produce oil and gas, and which are often close to large-scale industrial sources,” said Davies.

These carbon storage resources can provide the foundation for emissions reductions across the Australian economy, he told delegates at the APPEA 2022 conference.

This will range from enabling the production of clean hydrogen using natural gas; to storing carbon from industrial and manufacturing processes; and even to permanently removing carbon from the atmosphere through technologies such as direct air capture with geological storage.

Australia’s national, state and territory governments have released greenhouse gas storage acreage, introduced regulatory regimes to ensure CCUS projects are safely developed, and are supporting CCUS hubs to underpin new resource and industrial development in a low-carbon world.

Against this backdrop, Australia’s Clean Energy Regulator’s CCS methodology is intended to accelerate the deployment of CCS projects by enabling them to generate carbon credits under the Emissions Reduction Fund.

Australia is home to the world’s largest operational CCS project — at the Chevron-operated Gorgon LNG project in Western Australia which, despite some technical glitches, has stored 6 million tonnes of CO₂ since start-up in mid-2019.

Meanwhile, Santos is constructing the Moomba CCS project in South Australia, which will initially capture and store 1.7 million tpa of CO₂.

“CCUS can not only reduce emissions from our production — it will also enable clean hydrogen to be made from natural gas and deliver new hydrogen supply to the market, faster and more affordably than other forms of hydrogen,” added Davies.

Consultancy Wood Mackenzie forecasts that globally, CCUS will contribute 20% of energy-related emissions reductions by 2050, while hydrogen will contribute 15%.

The Paris-headquartered IEA lists CCUS as one of the four key pillars of decarbonisation, alongside electrification, energy efficiency and low-carbon fuels such as hydrogen, biomethane and sustainable biofuels.

Frontline of the decarbonisation challenge

Global greenhouse gas emissions from energy last year reached an historic peak, above the previous record set in 2019, with coal-fired power generation also reaching an all-time high — up 9% year-on-year.

Almost 80% of the world’s primary energy still comes from oil, gas and coal — the same as 45 years ago and under the IEA’s Net Zero scenario, the world will still be using oil and gas in 2050.

“So, if we’re serious about decarbonisation, we have to focus on reducing emissions from their production and use. This puts our industry at the frontline of the decarbonisation challenge,” said Davies.

“It is a challenge that we must meet, without compromising energy security at home or in our region. That means producing and delivering reliable, affordable and lower-carbon energy products.”

He noted that it took 150 years to build the energy and economic system that has helped to progressively build all the wonders of our modern world.

“Now it must be reconstructed in under three decades. The technology that is critical for us to achieve this at scale is CCUS.”