The fossil gas industry is under pressure, fighting for its future. The release to atmosphere of its key product – the powerful greenhouse gas methane – is smashing our climate. Gas prices are again going through the roof. Businesses and householders are making the switch to cheaper and cleaner renewables-based alternatives.
What’s to be done? Might it be time for a public relations campaign?
The fossil gas industry could plan to wind-down as consumers move past fossil fuels. But no, it’s decided it’s not time for that yet. Rather, they’ve launched a public-relations offensive targeting householders and decision-makers at all levels of government, and engineered some major mergers at the same time.
In this article, I review parts of the Energy Network Association’s latest PR brochure “Reliable and Clean Gas for Australian Homes” (July 2021). What does ENA’s brochure say, and more importantly, what doesn’t it say?
Gas is clean?
In the title, the ENA’s brochure claims that gas is “clean”. And the sales pitch goes on to say, “gas is delivered to the home at ¼ the emissions of grid electricity”. So what’s wrong with this?
1) Dirty gas: As we found at the University of Melbourne in 2016, the gas industry isn’t required to measure or report its actual emissions to the authorities. Rather it uses out-dated and even irrelevant assumptions, nearly made-up figures. Australia’s gas industry has been doing this for years and it looks like they’ll never be required to stop.
Gas users in Victoria, for example, be aware as production from the Bass Strait finishes up that more and more of the gas you burn is coal seam gas coming down by pipeline from thousands of kilometres away in Queensland. Gas users across eastern Australia should consider the pollution and societal impacts of relying on that damaging energy source.
In Western Australia likewise, gas producers scrape the bottom of the barrel, tapping ever-dirtier deposits of gas containing higher levels of carbon dioxide, that along with methane, is simply removed from the gas and vented into our atmosphere.
2) Cleaner grid: As readers here well know, Australia’s electricity grids get cleaner every day. So, much like their polluting methane, the gas-industry’s claim that their product is comparatively clean drifts off into thinner and thinner air.
3) Dodgy accounting: The ENA brochure quotes comparative emissions factors for gas and electricity on the basis of “energy delivered to the home”. However, “energy delivered to the home” is irrelevant. What matters is the emissions and cost after gas or electricity is used in a heating appliance to provide useful heat for heating water or living spaces. This means the ENA’s figures can be off by a factor of 5, as I’ll further describe later.
This argument is one I liken to buying a box of cereal and later finding it’s 80% full of air. Might this dodgy emissions accounting be of interest to advertising regulators?
But when they’re honest, even the gas industry knows their product is highly polluting. That’s why much of the PR campaign focuses on a hypothetical future where potentially cleaner – though prohibitively expensive – hydrogen becomes available.
Gas is cheap?
Australian gas left the “cheap” zone years ago. 2015 saw the first big price run up when a volume of exports that dwarfed domestic use began from Gladstone Queensland.
Now we’re seeing the latest price spike here at home as a hemisphere away, warmer and warmer temperatures drive Asian air-conditioning demand, electricity demand, and therefore demand for imported Australian gas.
Even earlier this Australian winter, we saw a huge spike in wholesale gas prices as equipment failed during the critical home-heating season. Gas being reliable?
Still, even with gas prices outside of any control, the ENA brochure claims that “gas provides more affordable energy to the home” and “gas is supplied to the home at around half the cost of electricity”. Let’s debunk this.
Let’s assume gas is supplied to a home at a current fairly low price of $0.02/megajoule. (If you get a gas bill, check it. You’re probably paying more than this.) Converting energy units, this is equivalent to 7.6 cents/kilowatt-hour of energy (gas).
To electricity-watchers, indeed this looks like cheap energy, because you might pay 25 cents/kWh (electricity) at home to buy electricity from the grid. If we stop our analysis here as the gas industry does, we can claim that gas is a cheaper energy source than electricity.
But here’s the thing. None of us buy gas to have gas, to store it in a jar or something. And none of us buy electricity just to have electricity. What we really want at home is useful heat: hot water and toasty loungerooms. So how do the economics look when we turn that gas or electricity into useful heat?
Throw your energy away – or use it to collect more?
A characteristic of gas is that after you buy it, the first thing you do is set it on fire. With that, much of the heat you thought you bought is thrown away up the flue or chimney. What if when we bought milk, the first thing we did when we got home was to pour half down the drain?
Gas-burning appliances therefore have efficiencies of less than 100% and sometimes very much less than 100%.
Whereas many of us can choose to heat our water and lounge rooms with heat pumps (e.g. reverse-cycle air conditioners). Now widely used in Australia and recognised globally as a key emissions-reduction technology but seemingly unknown to ENA, heat pumps use electricity to collect free renewable heat from the air outside your home. Heat pumps therefore are energy collectors not destroyers, and can be said to have efficiencies of 400% or even 500%, and can be five to thirteen times more efficient than gas heaters.
What is the cost of useful heat?
Assuming the gas and electricity prices above and assuming a gas appliance produces heat with 80% efficiency vs a heat pump at 400% efficiency, what is the resulting cost of useful heat?
The gas appliance produces useful heat at a cost of 9.5 cents/kWh (useful heat).
The heat pump produces useful heat at a cost of 6.3 cents/kWh (useful heat).
Therefore the heat pump produces heat at a cost only 66% of the gas appliance, or a 34% reduction on your heating bill, in this example.
Note this analysis ignores the fact that gas heating can also use a surprising amount of electricity to power air circulation fans.
Winner winner – heat pump dinner
The advantages of heat pumps can be even greater if your existing gas heater is old and not that efficient, or if your gas price is very high (hello New South Wales), or if your electricity price is lower than what I’ve assumed above.
In our home, we now heat with air cons at a cost only 1/3rd of the now-decommissioned ducted gas. Our 2015 University of Melbourne research showed some households can save more than $1,000 each heating season, research that has now been proven in thousands of homes across Australia.
“We used our reverse-cycle air conditioner this winter in Canberra. On track to save $1,100.”
- Testimonial from one of our 34,000 members at My Efficient Electric Home
Heat pump / air con suppliers such as Daikin, who have now spotted a winter market, claim a 63% reduction in heating costs versus gas.
It gets even better with solar on your roof
In electrified homes, people are using electricity from their rooftop solar PV panels – that they can’t sell for that much given the falling feed-in tariffs – to run their hot water heat pumps and reverse-cycle air conditioners at a very low cost.
If your feed-in tariff has fallen as low as 5 cents/kWh (electricity), with a heat pump you can produce heat for as little as 1.3 cents/kWh (useful heat) – 7 times less than using gas!
With these remarkable economics (like comparing an old incandescent light with an LED), we see why the gas industry is frightened for its future, just as you would be if all you had to sell was an old light bulb.
The economics are even worse for the gas industry if we consider their much-hyped but very expensive future technologies: hydrogen or bio-methane. Fun fact: It can require more than 7 times as much electricity to heat your house with renewable hydrogen versus using a heat pump.
Customers want gas? Really?
Time for a short comic break. To make the point that “customers want gas”, the ENA brochure says that “two-thirds of all Australian households own a barbeque”. ENA admits that most of these “run on cylinder gas”, but they’ve done a switcheroo here and are hoping we don’t realise that “cylinder gas” is LPG (liquefied petroleum gas, i.e. propane and butane), a far different product than their threatened money maker – pipeline reticulated methane.
Gas demand in households is growing?
ENA’s brochure features a heading “Gas demand is growing” and then describes growth that occurred in households from 2005 to 2020.
Unfortunately for the gas industry, the Australian Energy Market Operator (AEMO) says despite continuing population and economic growth, residential and commercial consumption will “gradually decline over the next five years”. Note to gas industry: negative growth… isn’t growth.
Sadly, AEMO doesn’t forecast the use of cylinder-gas barbeques, a place where the gas industry may have a brighter future.
Gas burned to generate electricity also falling
The ENA brochure closes with data showing continuous growth in the volume of gas burned to make electricity over the 15 years ending in financial year 2019-20. Fortunately for ENA, the publication date of their brochure (July 2021) may have precluded them showing the situation for the most recent financial year 2020-21, where the amount of gas burned to make electricity fell calamitously – for the gas industry – by nearly 10%.
Gas-lighting in 2021
After reading the ENA brochure, the average householder or policy-maker would end up confused. I think that’s the intent. When it gets cold, feel free to put on a wool jumper. But please don’t let the gas industry pull it over your eyes.