With most of the country dealing with a gas supply shortage in recent weeks, it’s not surprising that the idea of a west-east gas pipeline has been re-imagined.
Most important points:
- Experts are divided on whether to build the pipeline
- Some say it doesn’t fit Australia’s low-emissions future
- There are also concerns about its commercial viability
The idea of connecting Western Australia’s gas resources to the eastern states isn’t new, but while some experts think it’s a good idea to bolster energy security, others say it will be obsolete by the time it becomes available. built as the nation moves forward with the transition to renewable energy.
When Australia’s national electricity market operator wholesale electricity spot market suspended in response to the energy crisis that grips the east of the continent, two Macquarie academics have proposed different solutions.
While I emphasized that there was no panacea for achieving energy security, Tina Soliman Hunter and Madeline Taylor proposed three linked solutions†
- shipping gas from WA to ports on the east coast
- gas reservation policy like that in WA
- connecting WA’s gas pipelines to the rest of the country
They noted that a west-east pipeline could not only help address the energy crisis on the east coast, but also transport hydrogen in the future.
“For years it was seen as too difficult; not technically, but commercially, as most pipelines are privately owned,” they wrote.
They urged the government to “step up and build, given the importance of energy security”.
China has shown the concept is feasible with its West-East Gas Pipeline network, which spans over 8,700 kilometers, with expansions planned.
It already supplies billions of cubic meters of natural gas from China’s western gas fields to Shanghai and other population centers in the east of the country.
Pipeline would cost billions
A trans-Australian pipeline is not a new idea.
In the 1970s, Whitlam Secretary of State Rex Connor proposed a pipeline from WA’s North West Shelf through remote desert landscapes to the East Coast.
A feasibility study 2017 It is estimated that it would cost $5.8 billion to build a 2,900-mile pipeline from Dampier, in northern WA, to Moomba, in South Australia, near the borders with Queensland and New South Wales.
Then Prime Minister Malcolm Turnbull said WA’s gas resources should be connected to the eastern states was an “opportunity” his government considered†
By May 2020, a federally-guaranteed west-east pipeline was back on the agenda as part of a draft report from the national COVID Coordination Commission to help the economy recover from the virus.
Questions about how gas will fit into the future energy mix
And with much of the country facing severe energy insecurity and high prices, the idea has resurfaced.
But not everyone shares Macquarie academics’ enthusiasm for the project, with concerns that it is not commercially viable, that more gas is not the solution as renewables increase, and the need for clear support from government policies.
Even those in favor of gas as a transition fuel to a low-carbon economy recognized the serious challenges involved.
Roberto Aguilera, a senior research fellow at Curtin University’s Oil and Gas Innovation Center, said tackling energy shortages on the East Coast could mean tapping WA’s vast unconventional shale gas resources in the Canning Basin, via the controversial method of hydraulic fracturing. , with reserves estimated at about 250 trillion cubic feet.
But for Dr Aguilera, the key question was where natural gas would fit into the long-term energy mix as Australia aims to meet its emissions reduction targets.
“In the event that renewables cannot meet our energy needs as quickly as many hope, natural gas from the Canning Basin, which is so well endowed, could help us meet domestic energy needs and meet export obligations, with the cleanest burning fossil fuel.
“We will probably find out if this project is actually feasible and meaningful once the energy market starts to settle down.”
Pipeline will be obsolete by the time it’s ready, says expert
dr. Aguilera’s colleague at Curtin University, sustainability professor Peter Newman, was sure that a nearly 3,000-mile gas pipeline was not the answer.
“No, it’s not because by the time you’re done you won’t need any more gas,” Professor Newman said.
“Solar energy and batteries are now so cheap and effective. Batteries turn on in milliseconds when there is variation in the grid. It takes six seconds for a gas-fired power station to start.”
Rosalind Archer, head of Engineering and Built Environment at Griffith University, also wondered whether a pipeline would solve long-term energy problems.
“The electricity crisis in the eastern states is caused by the need for shippable power plants,” said Professor Archer.
“However, a low-carbon future must embrace low-carbon technology options such as batteries, pumped hydropower or large-scale hydrogen generation and storage.”
Pipeline not the best option to solve supply problems, study found
The Turnbull Government’s 2017 feasibility study also found that a west-east pipeline was “not the best or most economical option” for addressing supply challenges facing the gas market in eastern Australia at the time.
The analysis by ACIL Allen Consulting concluded it was a technically viable option, but the “commercial and market risks pose major challenges to the project”.
Indeed, it would need to make sufficient long-term commitments from both gas producers and buyers to mitigate the risk enough to make it viable from a financing point of view.
It said the significant market uncertainty at the time, which still exists today, was not conducive to entering into long-term contractual obligations.
ACIL Allen consulted with state and territory governments, gas producers, pipeline operators and major gas users who raised these market-related risks, as well as the issue of government funding, regulatory risks and questions about the best route for a pipeline, with Moomba being preferred because it had access to to maximize the market.
Critically, Western Australia was concerned about domestic gas supply to its own state after the mid-2020s due to an expected reduction in gas supply from the North West Shelf.
“There was no need to divert gas from existing fields away from LNG or outside the Western Australian domestic market,” the study said.
Project would not solve immediate problems
The study estimated that a pipeline would take at least seven years and would not solve the immediate problems of high prices and limited supply.
Instead, it proposed to increase supply from the Bass Strait in the short term and divert gas from LNG projects in Queensland to the domestic market.
In the long run, it pointed to the development of conventional, shale gas, and tight gas developments in areas much closer than northwest WA.
But it said that if these alternatives didn’t come online soon enough to secure long-term gas supplies for the eastern states, “the West-East Pipeline could become the best option available.”
“For this reason, it would make sense to keep that option open.”
The energy landscape has changed since 2017
Griffith University senior lecturer Alexandr Akimov said domestic and international factors have changed since the 2017 feasibility study.
He said geopolitical risks, such as the war in Ukraine, made it more sensible for Australia to ensure its gas self-sufficiency, and a pipeline that could also carry hydrogen was worth discussing.
“I think it’s a good idea to reconsider,” he said.
dr. Akimov argued that renewable energy sources were not yet reliable enough or on a large enough scale to replace other energy sources.
At the same time, however, his assessment was that the likelihood of the pipeline being built, especially without government financial and policy support, was unlikely.
Even if the Labor government supported the project, the Greens would block it in the Senate and leave it to the private sector to fund, he said.
“The willingness of financiers to fund fossil fuel projects has probably declined quite a bit, so where would you find funding for such a project?” he said.
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