Gas producers say Australia must act to take advantage of the opportunities carbon capture and storage (CCS) presents as Asia-Pacific economies decarbonise, with the industry pushing for greater regulatory certainty.
Facing requirements for new greenhouse gas (GHG) emissions reductions under the Australian government's changes to emissions regulations, the industry pre-emptively has turned to CCS technology in recent years to preserve upstream development. But offsetting the immense costs of CCS by developing new markets through storage deals looms as the sector's next challenge.
The proposed development of regional CCS hubs was impeded by cost, S&P Global Commodity Insights executive director Antonio Dimabuyu told the audience at this week's oil and gas industry conference in Adelaide hosted by Australian upstream industry group the Australian Petroleum Production and Exploration Association (APPEA).
"Cost reduction efforts through better project management, collaboration to establish shared facilities and utilising technology would be enablers," Dimbuyu said. "Countries would also be required to provide incentives and strengthen regulatory and legal framework to stimulate CCS."
The federal government last year cut CCS funding promised by its predecessors despite the industry's call for policy development to promote investment and support from Australia's Climate Change Authority for a standards framework,
The technology remains controversial with opponents wary of promises to sequester carbon dioxide (CO2) instead of reducing fossil fuel extraction. Australia's major operational CCS project Gorgon has struggled to reach targets for CO2 injection.
APPEA chair and the chief executive of Australian independent Woodside Meg O'Neill said her company saw scope for significant CCS development, to take advantage of places of high industrial activity nearby depleted reservoirs suitable for CO2 injection.
"If we had the right regulatory framework we'd be accelerating work on two fronts, one is Bass strait, the second is with our North West Shelf joint partners looking at Angel, which is another depleted reservoir, a great example near LNG plants and emissions sources," she said.
The government acknowledges that CCS represents an "opportunity for Australia if we get it right", said Australia's federal resources minister Madeleine King. But she stopped short of providing funding support for the technology's implementation, saying the government's role was in supporting industry investment by reducing risk through legal and regulatory frameworks and policy guidance. "We want a regulatory system for offshore CCS that is robust and responsive and positions Australia's resources sector to bring new CCS projects on line."
The minister also promised to shortly start public consultation on a new round of GHG storage acreage, following two new permits issued last year.
