Cheap Coal for Sure (CCS)

I know I should try to write shorter posts, but once I get started, I can’t seem to stop. So make a cuppa before you start reading.

magpies on power lines The New South Wales state government is about to privatise NSW’s electricity generation and the retail electricity market. Former Executive Director of The Australia Institute Clive Hamilton, investigated the problems of future emissions trading schemes for investors in NSW’s coal fired generators [1]. I read his report as WA’s state government is experiencing problems two years after privatising our electricity generation. To sweeten the deal for the WA public, electricity prices for small business and households were capped until 2009. I doubt the NSW government will take any notice of what’s happening in WA, but it might help them if they did.

In October last year the only electricity provider in Perth (from government monopoly to private monopoly) increased the unit price of NaturalPower, their renewable energy option, from 15.40 to 16.67 cents per kilowatt hour, an increase of 8.25%. That month Go Greener blogged about Eloise Dortch and Jasmine Horobin’s grass roots letter-writing campaign on the renewable energy price increase. The campaign was unsuccessful in changing the price rise because residential customers currently pay about 13c/kwh for coal/natural gas generated electricity until 2009, 72% below the production cost. In the next six to eight years the WA government will phase in a price increase in order to sell electricity at its true cost [2].

In 2005/2006 60% of WA’s electricity was generated from liquefied natural gas (LNG). I can’t find the percentage for Perth’s electricity generation. There are many regional gas turbine power stations and some which operate on a combination of diesel oil and natural gas, but facilities are still being built to run solely on diesel. The Kwinana Power Station (900MW capacity), which supplies Perth’s electricity, is able to use oil, coal or natural gas and change as needed [3]. The smaller Cockburn One Power Station (240MW) operates solely on natural gas and another 320MW natural gas fired power station will open in Kwinana this year. This station will supply electricity to Perth and regional areas in the south west of WA [3].

just one gorge in the Burrup on Flickr by Alan Thompson Natural gas is locally extracted (mined) from the North West Shelf and when used to generate electricity emits 60% less greenhouse gases than equivalent coal fired plants [4]. Woodside Energy is a major LNG producer and proudly states LNG is “clean energy,” but this is relative and LNG is not a renewable energy source. Woodside’s Pluto LNG project is currently under construction on the Burrup Peninsula, an amazing, pristine wilderness 1,500km north of Perth.

The region is home to some of the most ancient and comprehensive rock art or petroglyphs in the world, carved by the land’s first inhabitants over 20,000 years ago. [5]

In July 2007, after much debate and protest, Malcolm Turnbull, then Federal Environment Minister announced,

the renowned rock art of Western Australia’s Dampier Archipelago (including the Burrup Peninsula) would be included in the National Heritage List. The 241 square kilometre listed area is 99% of the land area where National Heritage values occur. Rock art on the remaining 1% will continue to be protected under WA legislation and the companies whose leases cover this rock art are committed to working around the sites of high heritage value. Where that is not possible rock art will be relocated in consultation with the indigenous communities. [6]

rock carving of a speared kangaroo in the Burrup on Flickr by Alan Thompson Of course, the 1% fell in the area of Woodside’s Pluto LNG processing plant, now known as the Burrup LNG Park. The tragedy is that this area has the highest concentration of rock art. In March 2007 Woodside was yet to decide whether they would invest $6 to $10 billion in the project. Just in time for Woodside’s August Board meeting, Turnbull announced the National Heritage Listing and the investment was approved. Big business breathed a sigh of relief. Now Woodside has to deal with the pesky little problem of what to do with over 200 pieces of rock art in Burrup LNG Park. The WA government is slightly interested in the Burrup and have commissioned CSIRO to investigate the possible effects of industrial emissions (from industry like Burrup LNG Park) on Aboriginal rock art on the Burrup Peninsula.

The other problem with natural gas in WA is the Greater Gorgon gas fields on Barrow Island, a Class A Nature Reserve (supposedly). The second largest island in WA is home to internationally significant biodiversity values, including twenty four known animal species (five of them marsupials) that live nowhere else, and Flatback turtle (Natator depressus) nesting sites, a threatened species [7]. Being an island means feral animals and weeds have not had such a chance to take hold, but the increased human access and activities of the Gorgon gas project will change this. Chevron, Exxon Mobil and Shell will have up to 25 offshore wells and gas processing facilities submerged in 200m of water [3]. A port will be built in an area previously earmarked for inclusion in the surrounding marine reserve [8]. The carbon dioxide extracted from the gas is to be re-injected into a saline reservoir 2.5km beneath Barrow Island [9], but Barrow Island and its surrounding waters will never be the same. After government approval to begin construction last year, Chevron, Exxon Mobil and Shell now say they won’t make enough money and want to increase annual LNG production by 50%, to 15 million tonnes [10].

Close to 40% of electricity in WA is generated from coal (or diesel in regional areas) and coal fired power stations are still being built. Griffin Energy is very proud to be constructing Bluewaters Power Station,

the first privately owned, coal fired power station in Western Australia and a key contributor to Western Australia’s energy mix.

I still haven’t worked out how a company in the process of constructing a coal fired power station is able to say they are,

committed to sustainability and minimising greenhouse gas emissions in order to provide a sustainable future for the state’s energy supply.

Coal mined in Collie is low in sulphur and has zero methane content, does that make everything ok? I think it’s because the power station is in Collie, where the coal is mined, so there won’t be too many greenhouse gas emissions transporting all that coal just down the road. Griffin Energy forgot to mention that coal fired power plants release about one tonne of carbon dioxide per megawatt hour (1000 kilowatt hours) of electricity produced [11].

Griffin Energy isn’t content to stop at just one power plant, three more are planned for Collie, to be powered with the coal Griffin mines [12]. They’re also planning another 130MW wind farm (good!) near their existing 80MW Emu Downs facility. Part of the electricity from Emu Downs desalinates sea water for Perth consumption (necessary because we waste so much water). In 2004 the WA government signed a 20 year deal with Woodside to provide natural gas for current gas turbine power stations [3]. The export price for LNG is so high that future WA power stations are more likely to be powered by much cheaper coal (even when the future emissions trading scheme increase of about 15% is factored in) [12]. The government thinks we need more and more power stations, but here’s an idea, if we stopped wasting electricity and we won’t need them. ACF recommends increased energy efficiency as the first step in reducing carbon emissions [13].

Companies like Griffin Energy with an interest in maintaining the status quo and continuing their mining, selling and burning of coal are affiliated with the Australian Coal Association and/or the World Coal Institute. In 2003 Coal21 was developed to investigate ways to reduce or eliminate greenhouse gas emissions from coal fired electricity generation in Australia, ie. Carbon Capture and Storage (CCS) – the best way to sell more coal. The commercial use of CCS in electricity generation would enable “clean coal” to become the solution to all that ails us. Dr Ben McNeil, a research fellow at the Climate Change Research Centre at the University of NSW isn’t optimistic in this regard.

Even if the technology [CCS] becomes commercially proven, it would need to be fitted to existing coal power stations to have any hope of reducing Australia’s greenhouse gas emissions from today’s levels. [4]

BP and Rio Tinto have no interest in existing power stations and are looking into building a $2 billion coal fired power station at Kwinana in outer suburban Perth. This would capture 90% of the carbon dioxide produced and store it permanently in a saline formation under the seabed off the Perth coast [14] (similar to the proposed CCS under Barrow Island). The final decision whether to go ahead may be made in 2011 and construction would take three years. It could be operational in 2014, but this is contingent on the technology working as hoped and quite a few government incentives because it would be enormously expensive.

=^.^=

photo credits

Just one gorge in the Burrup by Alan Thompson
Rock carving of a speared kangaroo in the Burrup by Alan Thompson
Magpies on power lines by Clare Snow

references

  1. Hamilton, Clive (2008) Carbon Liabilities of NSW Electricity Generators, Research paper 51.
  2. Drummond, Mark (2008) “Gas prices to join list of soaring house bills” The West Australian, 10 April, p.1.
  3. Western Power (2007) “The facts about natural gasWorld of Energy.
  4. McNeil, Ben (2007) “An addiction that fouls the airThe Sydney Morning Herald, 16 January.
  5. Fitzsimmons, Hamish (2006) “Unique carvings cause debate on Burrup PeninsulaThe 7:30 Report. Australian Broadcasting Corporation.
  6. Turnbull, Malcolm (2007) Burrup Peninsula.
  7. Conservation Council of WA (2005) “About the Gorgon Gas projectRescue Barrow Island: Australia’s Ark.
  8. WWF Australia (2006) Gas weighs heavily on Barrow wildlife.
  9. AAP (2007) “Geosequestration part of Gorgon projectThe Age, 7 September.
  10. ABC News (2008) Gorgon wants production ramped up at LNG project, 4 January.
  11. Western Power (2007) “The facts about coal: The environmentWorld of Energy.
  12. Jerrard & Drummond (2008) “Plan to build more coal power stations” The West Australian, 17 April, p.1.
  13. Australian Conservation Foundation (2007) Consumers’ Guide to Going Carbon Neutral. Melbourne: ACF.
  14. Warren, Matthew (2007) “BP eyes $2bn clean coal plantThe Australian, 21 May.

5 thoughts on “Cheap Coal for Sure (CCS)

  1. Ah, privatisation of utilities, that wonderful old chestnut. Finding examples of privatisation disasters is as easy as throwing a dart at a map of the world. Water problems in Tanzania, electricity black outs in New York, nuclear reprocessing shut down at Thorp in Sellafield, UK. It just goes on and on, and prices to consumers keep on going up and up.

    Privatisation of energy and water utilities doesn’t work. And in an open energy market such as the UK the irony is that government backed companies, such as those from France, come in and buy up the goodies. Not a smart energy security policy in my books.

  2. At least one of the new companies carved out of the old Western Power is on the verge of bankruptcy and needs to be bailed out by the State Government by millions of dollars.

    How can a monopoly loose money? And if there isn’t the profit what was the point of making it a private company in the first place?

  3. Pingback: 1000 island marine construction

  4. The proposed CCS at Kwinana has been cancelled because

    after more than two years of investigations and several million dollars of research, BP has now admitted that the geological formations off Perth contain gas “chimneys” that mean it is next to impossible to establish a seal in the strata that could contain the CO2.

    Source: Wilson, Nigel (2008) Chimneys sweep BP clean coal plan away, The Australian, 10 May.

  5. Hey Clare. Good summary and very comprehensive. I’m stunned that a company in the business of generating CO2 has the ordacity to claim sustainability!!!

    I like your blog :)

    CHRIS

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