CSG emissions substantially underestimated: study

How clean is coal seam gas? New research by think thank The Australia Institute has delved into the murky issue of fugitive emissions produced by CSG extraction – including through the controversial practice of fracking – and found that the size of the underestimate “could be substantial.” And by substantial, they mean 62 million tonnes of CO2e over three years.

The study, released today, used the new US EPA estimates for fugitive emissions to estimate that fugitive emissions from Australia’s CSG mining operations would to amount 125 million tonnes of CO2e. “This is twice the emissions that would be estimated if the current default factor is used,” says the report.

The consequences of this emissions gap? The TAI says that not only would this underestimation prevent us from correctly calculating Australia’s contribution to climate change – and thus inadvertently making it harder for the world to limit global warming – it could also work to blunt the effectiveness of the carbon price, because firms would not be paying for all of their emissions.

This is probably not what the CSG industry wants to hear – especially with the federal government announcing that it has commissioned a review into the measurement of greenhouse emissions from coal seam gas drilling in the wake of the TAI report. If the review turns up findings anything like the Institute’s estimates, it could cost the industry dearly, increasing the estimated carbon price paid by companies over the next two years from $1.5 billion to $3 billion.

“An extra 62 million tonnes of CO2e over three years is equivalent to giving CSG companies more than $1.5 billion,” says the TAI report – a figure it points out is likely to be an underestimate, with the actual size of the subsidy likely to be far higher.

Of course, according to the the Australian Petroleum Production and Exploration Association, fugitive emissions of greenhouse gases from CSG mining have not been underestimated. “Like all other liable entities, relevant companies are required, by law, to measure their emissions and acquit those emissions under the National Greenhouse and Energy Report Act 2007 and the Clean Energy Act 2011,” an APPEA spokesman told the SMH. “There is no underestimation and no subsidy.”

But according to the TAI study, for every tonne of natural gas produced from CSG, there is greater potential for fugitive gases like methane to escape the wellhead when compared with each tonne of gas produced from a conventional natural gas well.

The report says that the amount of emissions that leak from CSG wellheads increases when fracking is used, which – unlike conventional gas – is likely to happen on 25 to 40 per cent of Australian CSG wells.

“Before we jump into the golden age of gas as a way of combating climate change, it is essential that we have a good understanding of the effect that switching from coal to gas will have on our emissions,” says the report. “The solution is to undertake better measurement of fugitive emissions, particularly at the CSG wellhead.”

“Before the government approves more CSG production it would be prudent to allocate funding from the $200 million it has put aside from the Minerals Resource Rent Tax for scientific research on the effects of CSG extraction towards measuring fugitive emissions.