Australia could be left with $26 billion worth of stranded gas pipelines, according to a report that calls the country's investment in costly new assets "incompatible" with efforts to wean economies off fossil fuels.
Global Energy Monitor (GEM), a US-based environmental pressure group, said Australia risked locking in "decades" of fossil fuel dependency amid plans to build more than 12,000 kilometres of gas pipelines across the country.
In a report released overnight, the group said the value of gas pipelines either under construction or planned was $US18.6b — the fourth highest amount of any country in the world.
China, Russia and India were the only countries with more pipelines on the drawing board.
GEM said the spending would make it significantly harder for Australia to help global efforts to keep temperature rises to 1.5 degrees Celsius and was at odds with calls from the International Energy Agency to end fossil fuel development within five years.
But the industry body representing pipeline owners rejected the claims, saying gas was a cleaner fuel than coal and oil, and would be needed in the shift towards green energy.
Natural gas 'not easy to replace'
Australian Pipelines and Gas Association (APGA) boss Steve Davies also questioned the assumptions made by GEM, saying it appeared to have included any possible project.
Mr Davies said many of the projects were competing with each other, meaning some would not go ahead.
He said that unlike coal, gas competed less directly with renewable energy and could complement solar and wind by stepping in when the sun didn't shine or the wind wasn't blowing.
"Natural gas will have a long-term role in the global energy mix," Mr Davies said.
"It's a low-emission fuel that is not going to be easily replaced.
GEM noted there was just one major gas pipeline currently being built in Australia – the $460 million Northern Goldfields interconnector in WA – but said many others were planned.
The group said the anticipated expansion of the country's gas pipeline network reflected the federal government's enthusiasm for the fuel through its so-called gas-fired recovery plan for the economy.
Australia a fossil fuel 'holdout'
"Australia is a net exporter of fossil fuels and a holdout on coal among OECD nations, slow to commit to a 2050 net-zero pledge in a plan that still relies heavily on coal and gas," GEM wrote in the report.
"Despite pressure, the government has refused to strengthen its near-term emissions commitments by 2030, currently a 26 to 28-per-cent reduction relative to 2005, the lowest among wealthy G20 nations.
"This directly serves the 'gas-fired recovery' announced in 2020 that will drive major gas infrastructure expansion in the next decade."
As part of the plan, the Coalition wants to tap gas basins in places such as Gunnedah in New South Wales, where oil producer Santos is developing its Narrabri project, along with the relatively unproven Beetaloo in the Northern Territory.
The push comes amid concerns about rising gas prices in Australia, where significant employers such as aluminium and fertiliser producers rely on the fuel.
There are also claims that gas will be crucial as a flexible source of electricity generation as Australia transitions away from base-load coal power to intermittent renewable energy.
But gas pipeline owners have become increasingly worried about the long-term viability of the assets as the world moves away from coal, oil and gas in the decades to come.
Pipeline lives are shortening
Those concerns were highlighted last year when the Chinese company that owns Australia's longest gas pipeline – the Dampier to Bunbury trunk in WA – slashed the expected life of the asset from 2090 to 2063.
Meanwhile, states and territories are also going cold on gas at a residential level, with the ACT ending a requirement for new housing to have gas infrastructure and Victoria considering a similar initiative.
The decisions have been sparked by the rise of renewable energy, which is pushing out gas as a source of heating and electricity.
Mr Davies acknowledged that the operators of gas pipelines were facing growing risks, but argued the assets would be needed in the fight to combat rising emissions.
He said the industry was pouring large amounts of time and money to investigate whether fuels such as hydrogen and bio-methane could be transported in bulk in gas pipelines.
And he noted that not every major customer could simply substitute renewable energy for gas, saying fuel itself was vital to some manufacturing processes.
"There is a lot of work going on right now to work out the best way to transport hydrogen, in particular, in natural gas pipelines," he said.
"Bio-gas is methane, so there won't be any issue whatsoever transporting bio-methane.
World at an 'inflection point'
Despite the assurances, GEM claimed gas production was in "direct conflict" with goals to reach carbon neutrality by 2050.
"The world is at an inflection point, where it can hasten the transition to renewables or further entrench itself in fossil fuels," the group said in its report.
"It is choosing the latter, with 194,400km of new gas pipelines in development representing an expenditure of $US485.8b on assets counterproductive to the 1.5 degrees Celsius Paris goal and a green transition.
"The scale and lifetime of this intended expansion stands in misguided defiance of the IEA's net-zero pathway, which stresses no new investment in fossil fuel supply projects."
