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From climate pariah to climate saviour: what the petroleum industry can do about climate change

By Andrew Hopkins, Emeritus Professor, Australian National University

Natural gas has a clear role to play as part of the transition to cleaner forms of energy. Here, Andrew Hopkins outlines several things that the petroleum industry can do to help combat global warming – while protecting its own economic interests.

Environmentalists argue that the petroleum industry is contributing to global warming. The gas industry, on the other hand, sees itself as part of the solution.

Its reasoning is as follows. Gas fired power stations produce far less greenhouse gas than coal fired generators. So if gas can replace coal, at least in the short term, this is a win for the industry, and for the environment.

It is worth thinking more systematically about win/win strategies, that is, things that the petroleum industry can do, in its own economic interests, that will help to combat global warming. I list four below.

Andrew Hopkins believes the gas industry can provide a solution to methane released from melting polar ice caps.

Andrew Hopkins believes the gas industry can provide a solution to methane released from melting polar ice caps.

1. Benefit from a price on carbon.

First, the renewable energy industry is expanding at an ever increasing rate and will eventually replace not only coal but also gas. But there is a window of opportunity for gas.

Ironically, the best way to take advantage of this window is to place a price on carbon. This will fall more heavily on coal than on gas, initiating or accelerating the transition to gas.

All official pronouncements from the petroleum industry now support a price on carbon, but the industry is not lobbying for it. It should be.

When the Abbott government was preparing to abolish the carbon tax in 2013, this was an ideal opportunity to argue for the retention of the tax, but with full exemption for the trade exposed sector, in particular, the LNG industry. The industry did not avail itself of this opportunity.

Lobbying for a price on carbon involves a parting of the ways with coal. The petroleum industry has traditionally sought to present its interests as complementary to those of coal. They are not. They are in conflict.

It will take political courage on the part of the petroleum industry to lobby for a price on carbon with the intention of taking market share from coal.

2. Develop technologies and systems to minimise methane leaks.

Second, the argument that gas is more environmentally friendly than coal depends on minimising methane leaks.

Methane is much worse than carbon dioxide as a greenhouse gas, and a relatively small amount of leakage can cancel the advantage gas has over coal for electricity generation.

There are many potential emission sources. Leakage at the point of production, especially where fraccing is involved, is receiving increased scrutiny. But all along the supply chain – processing, transmission, distribution and storage – there are leaks.

A recent blowout from an underground storage facility on the outskirts of Los Angeles led to the release of 100,000 tonnes of methane over several months. This was a substantial economic loss to the company.

In addition, the blowout severely embarrassed the governor of California who had made the reduction of methane emissions one of his signature issues.

He responded by imposing a requirement on the storage facility operator that it put in place a methane abatement program (tree planting, etc) that would compensate for the release. This is an expense that companies can be expected to incur in future in such circumstances.

But more importantly, the blowout challenged the social license of the operator and indeed the industry. This is one of the obvious points at which the interests of the gas industry and environment coincide.

A price on carbon would fall more heavily on coal than on gas, accelerating the transition to gas.

A price on carbon would fall more heavily on coal than on gas, accelerating the transition to gas.

3. Further develop methane capture technologies.

Stopping climate change is not just a matter of reducing human emissions, even to zero.

The problem is that there are natural amplifiers or accelerators at work, which mean that the degree of warming the world has already experienced may already have triggered runaway change – unless of course we can find a way to interrupt those natural amplifiers.

In actual fact, the petroleum industry is particularly well placed to do this. Indeed, it has the potential to make a major contribution to saving the planet as we know it.

Hence the third win/win strategy. One of the consequences of climate change is the melting of the Arctic permafrost.

There are massive amounts of methane stored in the permafrost, which are escaping into the atmosphere in ever increasing quantities. Even if emissions directly generated by humans are reduced to zero, the release of methane from the Arctic will probably accelerate.

The gas industry has shown itself adept at harvesting widely distributed sources of methane. This raises the possibility of capturing methane releases from the Arctic, particular from the floor of the Arctic Sea, which is releasing streams of methane which bubble to the surface.

These releases could either be flared, converting the methane to carbon dioxide and thereby greatly reducing its greenhouse effect, or better still, transported to market.

Capturing methane releases may not be commercially viable.

It may therefore be necessary for governments to pay companies to harvest Arctic methane releases, based on a “reverse” carbon price – price paid per tonne of carbon captured. The industry could take the lead in determining a price on carbon that would make this worthwhile and begin lobbying governments to fund such a project.

4. Look at ways to extract carbon from the atmosphere.

Fourth, even if we were able to reduce human and non­-human emissions to zero, this may still not be enough to prevent dangerous global warming because of the concentrations of greenhouse gases already in the atmosphere. We must go further and find ways of extracting carbon from the atmosphere.

Again, this is where the petroleum industry is uniquely placed to contribute. One of the most promising ways of “drawing down” carbon is by cultivating algae, such as seaweed.

The petroleum industry is already experimenting with algae as a second generation biofuel. However, biofuels are likely to end up back in the atmosphere as carbon dioxide. From a climate point of view this is one step forwards and one step back.

What is needed is a method of converting algae into a stable form of carbon for long term storage. One such method is pyrolysis, which converts biomass, such as algae, into char, a relatively pure form of carbon that is valued by farmers as a soil additive.

The petroleum industry is already funding research on pyrolysis. If the pyrolysis of algae can be perfected, this promises to be an effective way of drawing carbon out of the atmosphere.

Again, this might not be commercially viable and governments may need to pay a price for carbon sequestered in this way. But again, the industry could take the lead in determining what that price might be, and lobbying for it.

So there are indeed win/win options for the petroleum industry and the environment. Adopting them would transform the industry from a climate pariah, as environmentalists tend to see it, to a climate saviour.

Andrew Hopkins is an internationally­ renowned presenter, author and consultant in the field of industrial safety and accident analysis. Andrew’s ideas as outlined in this article are developed further in a paper available at www.tai.org.au.

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