Has there been a reduction in global carbon emissions as a result of Australia’s gas exports?

By Peter Trute and James Lane

The Statement

“We are seeing a reduction in emissions as a result of Australia's gas exports.”

Federal Minister for Energy and Emissions Reduction Angus Taylor. August 30, 2019.

The Analysis

Australia’s latest greenhouse gas emissions scorecard was released on August 30, 2019, showing a slight increase in emissions for the year to March, 2019. [1]

The report, from the Department of the Environment and Energy, states that the increase in emissions was “primarily due to increased LNG exports”, which rose 18.8 per cent during the period. LNG, or liquefied natural gas, is a major Australia export commodity, worth $50 billion in 2018-19. Gas for export is produced from gas fields in Queensland, the Northern Territory and Western Australia. [2] [3]

Gas production causes fugitive emissions of methane, which is a more intensive greenhouse gas than carbon dioxide. [4]

As Australia’s gas production increased, fugitive emissions from gas production has increased. In the year to March, 2019, a 5.9 per cent rise in fugitive emissions was driven by a 15.4 per cent rise in natural gas production, according to the department report. [2]

In announcing the latest quarterly greenhouse gas inventory update on August 30, federal Energy and Emissions Reduction Minister Angus Taylor said: "We are seeing a reduction in emissions as a result of Australia's gas exports, but we have to wear a small increase (in domestic emissions) as a result of it.” [5]

A media statement issued by Mr Taylor on the same day said: “Australia’s LNG exports for the year to March 2019 are estimated to be worth $47.8 billion and have the potential to reduce global emissions by up to 152 Mt (million tonnes) CO2-e, or up to 28 per cent of Australia’s annual emissions.” [6]

AAP FactCheck contacted the minister’s office seeking the evidence that supported the assertion that “we are seeing a reduction in emissions as a result of Australia’s gas exports”.

AAP FactCheck also sought clarification of how the figure of 152 Mt CO2-e (million tonnes of carbon-dioxide-equivalent gas) was calculated.

Mr Taylor’s office cited internal Department of the Environment and Energy calculations, based on National Greenhouse and Energy Reporting standards, for the 152 Mt CO2-e figure. The calculations compared the carbon emissions from burning the 71.4 million tonnes of LNG exported by Australia in the year to March, 2019 with the emissions that would have resulted from burning black coal to generate the same amount of energy.

Those calculations showed emissions from LNG combustion of 202.43Mt CO2-e and emissions from energy-equivalent coal combustion of 354.46Mt CO2-e, yielding a difference of 152Mt CO2-e.

However the minister’s office did not provide information that shows that Australia’s export gas is replacing coal in the importing countries. Mr Taylor’s office also did not provide information that supports the statement that there is an observable reduction in global emissions as a result of Australia’s gas exports.

The minister’s August 30 press release referred to a recent CSIRO report that found substituting gas for coal in electricity generation produces a substantial greenhouse gas emissions saving of up to 50 per cent. [7]

The CSIRO research, also cited in the March greenhouse gas inventory quarterly update, compared emissions from using gas and coal to generate electricity in Queensland and found a 31 to 50 per cent emissions reduction from gas. The CSIRO report states “considerable climate benefits are possible where natural gas replaced coal for electricity generation; particularly in developing countries.” [7]

However, the CSIRO report also stated that “climate benefits or dis-benefits of natural gas depend on whether displacement of renewable sources of energy by gas occurs; such as under scenarios where cheap abundant natural gas displaced more expensive renewable and nuclear electricity generation”. [7]

The report also states: “In the present study, we cannot calculate directly the GHG (greenhouse gas) emissions reduction of LNG exports from Curtis Island, Queensland, relative to coal-fired electricity generation in Asia because we do not know the proportion of gas used to displace what would have been produced from coal.” [7]

Separately, the International Energy Agency states that gas, alongside renewable and nuclear energy, has helped limit global emissions since 2010 and that gas “where it replaces more polluting fuels … also reduces air pollution and limits emissions of carbon dioxide”. [8]

In China, Australia’s second biggest export market, demand for gas has grown strongly in recent years, with gas consumption rising 18 per cent in 2018, faster than the increase in coal consumption of 0.9 per cent, according to the BP Statistical Review 2019. However China’s emissions still rose by 2.2 per cent in 2018, faster than the 0.5 per cent annual growth in emissions over the previous five years. [9]

Director of the Centre for Climate Economics and Policy at the Australian National University, Professor Frank Jotzo, questioned the claim that Australia’s gas exports are reducing global emissions when Mr Taylor made a similar statement in June, at the time of the release of the December 2018 quarterly greenhouse inventory report. [10] [11]

In an article co-authored with Crawford School of Public Policy research manager Salim Mazouz, Prof Jotzo said Australian gas “displaces a mix of energy sources, including gas from other exporters”. “Whether and to what extent Australian gas exports reduce emissions therefore remains unclear,” Prof Jotzo and Mr Mazouz wrote. [10]

When contacted by AAP FactCheck, Prof Jotzo said there has been no change to his view since the article was written in June.

Based on this evidence, AAP FactCheck found it is not possible to determine whether Australian gas exports are leading to reductions in global emissions. While using gas to replace coal in energy generation is shown to reduce emissions, there is no available evidence to show the extent to which Australian-sourced gas is being used by importing countries to replace coal-fired power.

The Verdict

  • Ambiguous - It is not possible to determine the veracity of the statement.

The References

1. 'Quarterly Update of Australia's National Greenhouse Gas Inventory for March 2019'. (Homepage). Department of the Environment and Energy: https://www.environment.gov.au/climate-change/climate-science-data/greenhouse-gas-measurement/publications/quarterly-update-australias-nggi-mar-2019

2. 'Quarterly Update of Australia's National Greenhouse Gas Inventory for March 2019'. (Report download). Department of the Environment and Energy, Australian Government. (pages 3, 14): https://www.environment.gov.au/system/files/resources/6686d48f-3f9c-448d-a1b7-7e410fe4f376/files/nggi-quarterly-update-mar-2019.pdf

3. 'Resources and Energy Quarterly June 2019'. Department of Industry, Innovation and Science, Australian Government: https://publications.industry.gov.au/publications/resourcesandenergyquarterlyjune2019/documents/Resources-and-Energy-Quarterly-June-2019.pdf

4. 'Fugitive methane emissions factsheet - updated'. CSIRO Gas Industry Social and Environmental Research Alliance (GISERA): https://gisera.csiro.au/factsheet/fugitive-methane-emissions-factsheet/

5. 'Australia's emissions continue to rise', by Rebecca Gredley. The Canberra Times/AAP. August 30, 2019: https://www.canberratimes.com.au/story/6358121/australias-emissions-continue-to-rise/?cs=14231

6. 'Australia's National Greenhouse Gas Inventory March 2019 Quarterly Update released'. The Hon Angus Taylor MP, Minister for Energy and Emissions Reduction. August 30, 2019: https://minister.environment.gov.au/taylor/news/2019/australias-national-greenhouse-gas-inventory-march-2019-quarterly-update-released

7. 'Whole of Life Greenhouse Gas Emissions Assessment of a Coal Seam Gas to Liquefied Natural Gas Project in the Surat Basin, Queensland, Australia', by Heinz Schandl, Tim Baynes, Nawshad Haque, Damian Barrett, Arne Geschke. CSIRO. July, 2019 (page 27): https://gisera.csiro.au/wp-content/uploads/2019/07/GISERA_G2_Final_Report-whole-of-life-GHG-assessment.pdf

8. 'The Role of Gas in Today's Energy Transitions'. International Energy Agency: https://www.iea.org/publications/roleofgas/

9. 'BP Statistical Review - 2019. China's energy market in 2018'. BP: https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/energy-economics/statistical-review/bp-stats-review-2019-china-insights.pdf

10. 'Australia's energy exports increase global greenhouse emissions, not decrease them', by Frank Jotzo and Salim Mazouz. The Conversation. June 19, 2019: https://theconversation.com/australias-energy-exports-increase-global-greenhouse-emissions-not-decrease-them-118990

11. 'Australia's National Greenhouse Gas Inventory December 2018 Quarterly Report released'. The Hon Angus Taylor MP, Minister for Energy and Emissions Reduction. June 6, 2019: https://minister.environment.gov.au/taylor/news/2019/australias-national-greenhouse-gas-inventory-december-2018-quarterly-report

First published September 5, 2019 17:02 AEST