Common sense says we should tap our own resources
The Overland Telegraph Line was built in 1877 and the TransAustralian Railway in 1917. These projects were bold for their time and helped bring together a young Australia.
With the electricity and gas crisis on the east coast, we could do with some of that pioneer spirit and vision today. Why not a transcontinental gas pipeline?
It is simply extraordinary that a country so rich in energy resources faces an energy shortage. Australia is the second-largest exporter of coal, home to one-third of the world’s uranium reserves and will be the leading exporter of liquefied natural gas by the end of the decade. And there is an abundance of sunshine and wind.
The reasons for the energy crisis are many and overlapping. They include an expensive renewable energy target, the unreliability of renewables, the closure of coal-power stations, the export of east-coast gas, bans on coalseam gas and regulatory failure.
The proposed solutions are equally diverse. These include lifting the ban on CSG, pumping water up and down the Snowy Mountains, restricting LNG exports, keeping old power stations going, so-called clean coal, new clean-energy targets, big batteries, emergency diesel generators and so on.
What these “solutions” have in common is that they are ad hoc, of marginal impact and mainly short-term. They reflect a lack of a coherent national energy policy. Meanwhile, households have had a 20 per cent rise in energy costs and businesses have experienced increases of 40 per cent or more.
It is obvious a new and reliable source of energy needs to come into the domestic market. And yes, the opportunity should be taken to ensure it is cleaner energy.
Gas is an obvious solution. The emissions from a combined-cycle gas plant are less than half of that from a coal-power station. Assuming the bans on CSG remain in place, the only alternative is to make better use of Australia’s conventional, or reservoir, gas.
There are two obstacles. The first is the political influence of the coal lobby and the renewable lobby, both of which see gas as a competitor to their own interests. And second, the gas is a long way away.
Australia has conventional gas reserves of about 167 trillion cubic feet. Australia’s domestic market consumes just 2TCF of gas a year. In other words, there is easily more than 75 years of gas available, with more to be discovered. The problem is 95 per cent of this conventional gas resource is off the Western Australian and Northern Territory coasts.
To make use of this gas and thereby solve the energy shortage requires a transcontinental pipe- line. It is true LNG could be transported by ship, but that would tie Australia into international prices and therefore sacrifice a potential gas advantage at home.
The pipeline would need to connect the northwest coast to the existing gas infrastructure at Moomba in central Australia. That is about 3000km. The estimated cost is about $5 billion, which is significant, but should be seen in the context of the national broadband project that is costed at $49bn.
In the 1990s, a 1500km pipeline, of smaller diameter, was built from the northwest coast to Kalgoorlie in one year at a cost of $450 million. In the early 1980s, a larger diameter but similar length Dampier-to-Bunbury pipeline was built in 10 months and cost about $1bn. That pipeline has since been duplicated.
Pipelines are not difficult from an engineering perspective. They can vary in size and gas pressure as well as be expanded by a process of looping. A buried pipeline is out of sight and can use existing infrastructure easements. And unlike other parts of the world, there are no physical barriers in crossing the flat and largely empty space of central Australia.
Trans-continental pipelines are common throughout the world. A similar project for Australia should be privately funded and operated. The proper role for government is to set the policy and seek proposals for development. The policy might well include a commitment to using more gas in power generation. The pipeline proponents are likely to include gas producers and energy utilities.
Without a significant increase in gas supply, the east coast energy crisis is certain to continue. In other words, households and businesses will face further steep price rises without any certainty over the reliability of supply. That will further hurt household budgets and discourage business investment.
Surely it is time for some pragmatism and common sense. Surely we should use more of our gas for Australia.
The key to exploiting energy resources is WA gas