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National
Marion Rae

Oil, gas bosses mull zero-emission options

The oil and gas industry is trying to reinvent itself to survive in a future carbon-neutral economy.

Santos CEO Kevin Gallagher said on Wednesday that the momentum of the energy transition must be maintained without compromising energy security.

“We can only do this through decarbonisation, not de-fossilisation,” he told Australia’s biggest oil and gas industry conference.

Energy companies are also fuelling the decarbonisation of mining, with both sectors still key sources of Australian prosperity.

“As mining drives its own path to net zero, we, as the suppliers of energy, help them to be able to do that,” Shell Australia boss Tony Nunan said.

Diesel-powered truck fleets are responsible for most of a mine’s emissions and Shell is part of a global project backed by BHP and Rio Tinto to make fast-charge haul trucks commercially viable.

Off-road haul trucks powered by large electric batteries, rapid-charging hubs, and micro-grids to support remote mining sites are central to the Charge On Innovation Challenge launched last year.

Mr Nunan said Shell also looks at hydrogen in a similar way.

Companies are developing the global supply chains needed to make hydrogen a viable option, including loading and unloading technology, liquefaction techniques, and long-distance shipping of bulk liquid hydrogen.

“Sound familiar? This is something which is mirroring the LNG supply chains and demonstrating it can also be done for liquid hydrogen,” Mr Nunan said.

Wood Mackenzie said in a new report that the possibility to burn hydrogen and ammonia in power plants also provides coal-dependent countries with another way of decarbonising the electricity generation sector. 

Researcher Prakash Sharma said priorities have shifted now that commodity prices are at record highs and are expected to remain elevated for some time. 

The ability to co-fire ammonia or low-carbon hydrogen in thermal generation is an increasingly attractive proposition in Japan and South Korea, even if costs may be higher, according to the report.

Industry professionals at the Australian Petroleum Production and Exploration Association (APPEA) event are also spruiking the benefits of carbon capture and storage technology.

Liquefied natural gas combined with CCS technology is touted as the fastest and most realistic path to a future hydrogen economy, but is not yet commercially viable.

The “zero-emissions solution” would see coal and gas projects, power plants, manufacturing and heavy industries capture emissions and pump them into the ground.

Both major parties vying to win Saturday’s federal election back net zero emissions by 2050, and a strong energy and mining sector that is supported to evolve and develop new technology.

Critics say the industry already enjoys overly generous tax breaks and Australian taxpayers don’t get a fair return for their resources.

But APPEA acting CEO Damian Dwyer said politicians need to get the investment settings right so Australia can continue to exploit its natural advantages and make the energy transition.

Mr Gallagher said if Australia wants an economy that makes things, then oil and gas use must continue.

He said renewable energy sources are unsuited for high-temperature brick and cement kilns, steel furnaces and aluminium pot lines, nor can they be used as feed stocks for fertilisers and plastics.

Worley executive Peter Cox said the LNG sector can transition to zero emissions with environmental and business success.

“Australia is vying with Qatar and the US to be the top global LNG exporter, with the Australian LNG industry earning around $30 billion annually and employing tens of thousands of people,” he said.

Mr Cox recommended mitigating fugitive emissions and flaring, converting carbon dioxide to methane, electrifying LNG facilities, and using technology produce clean burning hydrogen and solid carbon.

He said less capital investment was required because the LNG export, regasification and gas distribution infrastructure already exists.

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