Big Oil’s new fashion accessory: “green gas” plants

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Big Oil appears to have come up with a new fashion item to hide their fossil fuel addiction: “green gas plants”. Most people call them solar plants.

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Roller Painting House Siding Green --- Image by © Lawrence Manning/Corbis
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So, here’s the good news. Big Oil is increasingly looking at large-scale renewable energy plants as a valid alternative to coal and gas plants – not surprising given the plunging cost of wind and solar technology in the last few years.

Shell is the latest to commit to building large-scale renewables, confirming late last week a promise that it made nearly a year ago that it was looking to invest in wind and solar plants, a shift it hopes will help underpin the demand for gas.

Together, Big Oil hopes, they can kill the coal industry by marrying wind, solar and gas, and they are talking up the climate imperative to help them do so.

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But “green gas plants”? This ranks up there with “clean coal” as fossil fuel propaganda, but it is exactly the way that the Murdoch media chose to describe Shell’s promise to combine solar and gas in Oman, Brunei and Australia, trumpeting the headline “Shell to invest in green gas plants” to lead its business section.

Roller Painting House Siding Green --- Image by © Lawrence Manning/Corbis

Let’s get a few things in perspective. It’s great that Big Oil is increasingly looking at wind and solar for new investments. Dong Energy has already shifted in a big way to wind and will dump coal altogether in a few years. France’s Total is the major shareholder in SunPower.

Shell and the other Big Oil players hope that the world uses more gas and sees the big push towards renewable energy as a major opportunity to create demand for their huge gas reserves: hence their concerted attack on coal as a dirty and unnecessary power source.

But is Shell really going to build new gas plants to partner solar facilities? Hardly. Australia does not have a shortage of gas plants: Most of them sit unused for large chunks of the time, sidelined by cheaper coal or the growth in renewables, and by soaring gas prices.

And its biggest competition will not come from more renewables, which it sees as a potential partner, but from battery storage, particularly as gas prices continue to remain high.

Storage costs are coming down fast, and batteries are much more responsive than gas and can provide more added value – to the grid, in avoiding network investment as well as responding to variations in demand and supply and peak demand events.

And if Shell’s commitment to big solar in Australia sounded just a little vague, there is a reason why,

As the Financial Times points out in its reporting of the press conference late last week, Shell intends to invest less than $1 billion a year in renewables across the globe – just a fraction of its annual capital expenditure of nearly $US30 billion.

And this would include wind farms – already it is contracted to build a large wind farm off the Dutch coast and has been shortlisted for a similar US project in waters off North Carolina.

In other words, its commitment to “green gas” in Australia will be minuscule, and likely less significant than the many new players entering the Australian markets to build facilities that go by their real name: solar plants.

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21 Comments
  1. Don McMillan 3 years ago

    The goal is to design a system to minimize emissions. There is no such thing as a full cycle zero emission system. The manufacturing of, maintenance of, disposal of wind farms, solar, batteries etc must generate emissions [steel, plastics exotic materials etc]. What I would like to see a benchmark system which we can measure full life cycle emissions and its socioeconomic impact. Easier said than done.

  2. Brian Innes 3 years ago

    I cant see any downside in having the oil majors starting to deploy their capital and hoping “they can kill the coal industry by marrying wind, solar and gas”

    In the end renewables will be cheap energy, batteries will help with peaks and gas will be the backup when renewables and batteries fail. We may only need them a few % of the time but we will need them until batteries are so rediculously cheap that we can use them 2% of the time and make an arbitrage return..

    • Brian Tehan 3 years ago

      I think that there are probably already enough gas plants to backup renewables as more renewables and storage comes online in the next few years, so no need for more. As we’ve seen in SA, they need to be turned on,though.

      • Don McMillan 3 years ago

        There will be plenty of gas. AGL’s proposing to import US Shale gas -[20 plus year contract] to supply the East coast. ASX 14Nov16 page 33.
        The greens are not opposing this either most on this website. I am very alone in opposing this.

        • nakedChimp 3 years ago

          wait.. oz imports gas while at the same time it is exporting gas?

          • Don McMillan 3 years ago

            Its all about the timing. When QLD proposed to export, NSW & Vic said fine we have our own gas. NSW had $3 -4 Billion already invested in NG. So QLD sign longterm contracts.
            Then NSW kicked the Gas explores out & went AHHH! we now want QLD gas!! – too late. Vic way too late.
            AGL says that is OK we can now import US Shale gas via longterm contracts.
            All the people that once were passionately opposed gas exploration, the GREENS, northern rivers groups, Alan Jones, Drew Hutton & you guys on this website are silent.
            It cannot be to do anything about the environment – to ship -160C gas you need to burn a lot of gas!. Local gas which does not require refrigeration is way better on emissions.
            So I am not convinced people here are that concerned about emissions.

          • nakedChimp 3 years ago

            No, what I don’t get is.. we got a lot of sun & wind here, so why not use that money to buy solar + wind turbines + some battery backup + use whatever FF is able to run to fill in if demand > renewables?

            Essentially do it like Norway or Saudi Arabia – sell the LPG/NG to the highest bidder in Asia/worldwide (were the conditions for RE aren’t as good yet, like in Japan) and get the local/national energy system transferred over to RE as fast as possible and live happily thereafter.

        • suthnsun 3 years ago

          Thanks for alerting us to this Don. IMHO it is insane.

        • Giles 3 years ago

          So, a couple of points to be made here.
          First, it is an option. No decision has been made and no decision will be made for another year or so.
          Second, it is not focusing on US shale gas. AGL CEO Vesey says it is just as likely to buy gas from West Australia, and shipping it from there is much cheaper than building a pipeline.
          Third, lots of countries import and export gas at same time according to market demand. The US among them.
          Of course, Don would prefer to allow the big gas companies to march into private property and have a gas drilling free for all. But that lacks a social licence, among many other things.

          • Don McMillan 3 years ago

            AGL will spend over $15M doing this study so they are very serious. They have a lot of backing. Also the announcement was made to see if the greens, Alan Jones etc made any noise – & they are silent. If implemented it will be a longterm contract & expensive- so much for phasing gas out & batteries in.
            To develop offshore OZ gas the project financiers demand that the gas be contracted out. The largest uncontracted gas is in the US. What AGL will do is do swaps. Buy US gas & supply NWS costumers & take NWS loads for the east coast thus saving some shipping costs [cheaper component]. Does not matter LNG is less environmentally friendly than local gas because freezing gas to -160C you have to burn a lot of gas to get temperature this low. These emissions would be avoided with local gas
            No one person owns 100% property other than the crown. Something like 44% of farmland is leased [effectively renters of the land component of the property] Freehold is the same the farmer only owns/buys the land. The petroleum, mineral, coal rights are auctioned out. There is nothing preventing farmers bidding for the petroleum, coal or other parts of the property they do not own – it is their choice. The error State Govs make is that the arrangements between the owners [multiple] of these properties are not inplace prior to auction. This is why petroleum companies feel cheated in NSW as the Govt invited them in sold them petroleum properties and after investing $3-4B basically kicked them out.
            Social licence visit Toowoomba in QLD and Casino in NSW
            What needs to be done is the domgas users, unions, farmers and state pollies need to sit down and discuss what is best for their state. Decide do you want cheap, expensive or no gas?

    • Brian 3 years ago

      Fracking the water and air is a huge downside and has to stop. We should not be digging up fossil to burn. We pay to dump our wastes to rot and release methane, even with attempts to capture it. We need to convert our waste to fuels, and use the fuels as the backup for solar and wind.

      This is not crops to fuel, not incineration. We need to recover the un oxidized metals, rare materials and hydrocarbons from our wastes to have a sustainable system.

      Since everything we harvest is eventually dumped this easily more then enough to supply 20% of the total energy demand from fuels from wastes.

      Batteries do already work in places with very regular sun. Most places the sun is seasonally too low and wind cannot compensate completely. I’m guessing a typical combination of 60% solar, 20% wind and 20% hydrocarbons from wastes. Maybe someday batteries will be cheap enough to supply 20% of our energy, it’s going to be awhile, and we have to deal with our wastes anyway.

    • jeffhre 3 years ago

      That is true on the ground. Financially however…it encourages investment in NG facilities (hedge your energy investing with clean gas from Shell etc.) which takes money from actual renewable projects, which would place investments in 100% in clean energy not 3.3%. And it masks the risks of stranded FF assets as clean investments. Brian Innes, it also provides for (0) progress on the issues Brian T and Brian have written so cogently about below.

  3. Ian 3 years ago

    You can’t blame these big oil companies for chasing the buck if it’s oil ,gas or any other energy resource. Would their foray into renewables continue to grow and would they morph into renewable energy companies?

    • Don McMillan 3 years ago

      Exxon spent $B’s on bio-genetics – as far as I can see not very successful. BP experimented with “Beyond Petroleum”. Shell big in wind farm technology, Origin in and out of wind farms – currently in on Solar. AGL given up on gas exploration in OZ and wants to concentrate on solar & batteries. I do not think AGL is totally convince their renewable strategy is full proof as they are proposing to import Shale Gas from the USA. ASX 14Nov16 pg33

      • Giles 3 years ago

        No, AGL – if they go ahead with this project – just as likely to ship gas from W.A., not from US. Beyond Petroleum was never anything more than a half baked branding exercise, it spent more of advertising the concept than on actual technologies.

        • Don McMillan 3 years ago

          See above WA gas offshore is contracted out. They’ll buy US gas [heaps are uncontracted] and do swaps. The ships will be from WA but they’ll be purchasing US
          Correct “Beyond Petroleum” I do not think anyone was fooled, except the BP’s board members.

    • Bristolboy 3 years ago

      They may morph, but they are just as likely o be beaten by the existing renewable companies who have much more knowledge and experience.

  4. BeyondZeroEmissions 3 years ago

    Wondering if anyone has seen mention of Shell looking at gas boosted CST?

  5. trackdaze 3 years ago

    I’m all for gas replacing half of brown coal. next week after that then I’m afraid renewables is the better cheaper choice.

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