The Greens crusade against CSG and LNG continues. The week before last it was claims that lifecycle greenhouse gas emissions from CSG are similar to emissions from coal-fired power, claims that were effectively laid to rest by the industry.
Then last week Greens Senator Larissa Waters introduced her bill into the Senate to restrict access by CSG explorers to “food producing land” and the Greens released a Galaxy poll purporting to show that 68% of respondents want a moratorium on CSG in Australia until the effects on the environment are more fully known.
However, there’s one place where the effects of Australian CSG (and LNG generally) on the environment are already clear and that’s in China, where they are overwhelmingly positive.
As all visitors know, China has numerous environmental challenges. Sixteen of the 20 most polluted cities in the world are in China. The air quality is terrible. Last year I was in Shanghai on a Sunday afternoon and the smog was so bad it was like the middle of the night. A 2007 World Health Organisation report estimated that diseases triggered by outdoor and indoor air pollution killed 656,000 Chinese citizens each year. (The indoor pollution comes from cooking over coal or charcoal indoors.)
There is no doubt that the Chinese are committed to cleaning up the mess. Addressing the 2011 National Peoples’ Congress earlier this year Premier Wen Jiabao dealt at length with environmental progress made under the 11th Five Year Plan (as well as the aims for the next five years):
“We made genuine progress in energy conservation, emissions reduction, ecological improvement and environmental protection. We formulated policies, measures and national objectives for controlling greenhouse gas emissions by 2020 and drew up a comprehensive work plan for conserving energy and reducing emissions. We vigorously developed clean energy. Energy consumption per unit of GDP fell 19.1%, chemical oxygen demand by 12.45% and sulphur dioxide emissions by 14.29%.”
An important part of China’s strategy to clean up the environment in general and air quality in particular is to increase use of natural gas. According to BP, natural gas was only 4% of primary energy supply in 2010 (against a world average of 24%). China aims to increase this to 10% by 2020. However this is also a challenge. Chinese gas-use is currently supplied constrained. However, supplies are growing, with increasing domestic production, increasing pipeline supplies from Central Asia and increasing LNG imports, which is where Australia fits in.
Australia is already the largest LNG supplier to China from the North West Shelf, with 3.3 million tonnes per annum (Mtpa). Gorgon has contracts for a further 4.25 Mtpa and the CSG LNG projects for 11.9 Mtpa, Altogether Australia will be supplying China with nearly 20 Mtpa of LNG before the end of the decade.
This will be a material contribution to Chinese gas supply. Australia (a small country of 22 million people) will be supplying around 10% of the gas needs of a country of over a billion people. In doing so, Australia will be making and a material contribution to improving the Chinese environment, particularly urban air quality. That will be good for China, good for Australia and good for the global environment.