Labor accused of refashioning NAIF into gas fuelled “carbon disaster”

Federal Labor’s pledge to spend up to $1.5 billion unlocking gas supply in Queensland and the Northern Territory has angered green groups, and blurred the lines between Bill Shorten’s apparently climate-forward policies and those of Scott Morrison’s climate-denying Coalition.

Labor this week announced plans to refashion the Coalition’s $5 billion Northern Australia Infrastructure Fund – which Shorten has described as an “abject failure” as has promised would not be used to back Adani’s Queensland coal mine – into its own version of a “fossil fuel slush fund,” but with a focus on gas instead.

The repurposed financing facility, to be called the Northern Australia Development Fund, would put $1.5 billion towards proposed pipelines across Queensland’s Galilee and Bowen basins, and another pipeline connecting the Beetaloo sub-basin, south of Katherine, to Darwin and across to the east coast.

According to Labor, subsiding the construction of these gas pipelines would bolster manufacturing in the NT, boost Australia’s gas exports, increase domestic supply to Australia’s east coast, and put downward pressure on wholesale gas prices.

Beetaloo, alone, the party says, could provide enough gas to supply the domestic market for up to 400 years.

On top of this, Labor promises to honour existing projects and keep the funding allocation to the existing Northern Australia Infrastructure Facility, despite it being an “abject failure.”

(It should be noted that despite early signs the NAIF was going to live up to claims it was a poorly disguised “slush fund” for the fossil fuel industry, existing project have so far included $150 million earmarked to add solar and battery storage to airports in Darwin, Alice Springs and Tennant Creek; and $516 million in concessional finance to Genex Power’s world-leading solar and pumped hydro storage project in north Queensland.)

Critics of Labor’s gas plan say it would have little to do with fixing Australia’s broken gas market, and everything to do with propping up existing industry assets that, without government subsidisation, would make little economic sense.

And in terms of the climate, the policy makes no sense at all, and risks dealing a major blow to Labor’s momentum in the polls, which has been closely connected to its promises of strong action to combat global warming, and ambitious plans for renewable energy.

“The unconventional gas industry is a massive carbon polluter,” said Naomi Hogan, a spokesperson of the anti-coal seam gas mining Lock The Gate Alliance.

“Fracking for gas in the Northern Territory’s Beetaloo Basin could unleash a carbon disaster that would make it impossible for Australia to meet our Paris targets.

“It will raise Australia’s emissions by 6 per cent, at a time we need to be bringing them down.”

Tim Forcey, an Australian gas industry veteran and former gas principal at the Australian Energy Market Operator, said federal Labor’s backing of unconventional gas mining was not particularly surprising – indeed, as the AFR reports, industry and industrial energy users are thrilled by the proposal.

But coal seam gas mining, or fracking, remains a hugely volatile voter issue, and – as Forcey himself has documented in reports published by the Melbourne Energy Institute – is far more volatile in terms of emissions than anyone in Australian government circles has so far been prepared to admit.

“Looking specifically at methane emission rates from unconventional gasfields, measurements in the US are up to 10-25 times higher than rates reported by the Australian government to the UNFCCC,” Forcey said in 2016.

To put that in context, if methane leakage from Australian gas fields matched US measurements, then at 2016 production levels Australia would have been emitting an extra 92Mt of CO2 equivalent per annum – or double the amount of emissions reductions we have committed to under the Paris Agreement. Never mind the new pipelines.

But as Forcey noted in comments to RE on Friday, state and federal government policy on coal-seam gas fracking is by no means consistent, and is mostly shaped by the levels of opposition to it from other key industrial sectors, such as farming.

In Victoria, for instance, the Labor government banned unconventional CSG mining back in August 2016. The Labor Northern Territory government, meanwhile, has recently lifted a moratorium on the practice in the state, following a Scientific Inquiry into Hydraulic Fracturing – and despite a final report from the inquiry suggesting NT unconventional gas extraction could contribute more than 6 per cent of Australia’s emissions.

Industry is also somewhat divided on the issue; in February of 2016, AGL Energy announced it would quit all gas exploration and production as part of a move to accelerate the company’s focus on the “evolution” in the energy industry – and in response to “volatile” commodity markets.

And as the AFR reports, even those major gas explorers pushing for greater access to unconventional resources have warned that it would be unrealistic to expect gas to be immediately available from the targeted resources, particularly in the case of Beetaloo, which still requires significant drilling and testing.

And with the industry “on track to export 81 per cent of Australia’s gas,” Forcey says promises of near-term relief to domestic supply and to prices are dubious, at best.

Meanwhile – as Beyond Zero Emissions’ Eytan Lenko writes here – it ignores a huge opportunity to put that $1.5 billion behind developing renewables in the solar rich Northern Territory, at a time when solar and wind energy are the cheapest form of new electricity generation in Australia.

All this puts Shorten in an awkward spot, politically, undermining his credentials on climate and renewables, and further closing the door on any chance of climate policy collaboration between Labor the Australian Greens.

“We are in the middle of a climate emergency and we can’t be opening up any more coal, oil or gas fields if we are going to hand over a sustainable environment to our children and grandchildren,” Greens leader Richard Di Natale said on Wednesday.

“The Greens will use our numbers in the new Senate to exclude any Naif funding for fossil fuel projects because taxpayer money shouldn’t be used to continue subsidising polluting industries,” he said.

Strategically speaking, Labor hitching its wagon to unconventional gas exploration at this stage of the election campaign seems “mindblowingly stupid,” says David Spratt, research director at the Breakthrough National Centre for Climate Restoration.

“Even the TAI poll found more than half ALP voters opposed exploration for any new fossil fuels, by 55 per cent to 26 per cent,” Spratt said in comments to RE on Friday.

“Federal Labor has ruled out NAIF funding for the climate wrecking project of Adani, how can it justify propping up an industry that will trash the Northern Territory with fracking?” said LTGA’s Hogan.

“Fracking the gas out of the Beetaloo Basin has been measured to be the pollution equivalent of building and operating at least 50 new coal fired power stations – it’s the wrong move for Australia.”