Diversity of supply demanding billions
PROJECTS underway and in the planning involve scores of billions of dollars being outlayed to change Australia’s energy profile. While the annual petroleum industry conference identified $100 billion worth of projects in the pipeline, mostly focusing on cleaner-burning gas, there are plans to spend at least half as much again on other energy developments. This is more than 12 times as much as the original investment in the North West Shelf LNG project, Australia’s biggestever resource development.
Beyond the petroleum sector, proposals include an estimated $20 billion on renewable power projects once the federal Government has met its election commitment to enlarge the mandatory electricity target to deliver 20 per cent of power consumption by 2020— and $10 billion to $15 billion on lower-emission generation plants to meet both baseload and peak requirements.
As well, there are government and industry plans to spend up to $5 billion on greenhouse gas abatement research, development and demonstration projects while a consortium is looking to outlay about $5 billion in Victoria on converting brown coal to diesel fuel.
To these can be added proposals for the nation’s energy networks — covering electricity wires and gas pipelines — to spend about $15 billion across Australia on new developments and existing system upgrades in the next 5-8 years. The Energy Networks Association says its members are investing more than $6 billion a year in meeting capital and operational requirements for a system that now involves 800,000 kilometres of power cables and 75,000 kilometres of gas pipelines.
Establishing the country’s newest energy industry — mining heat in ‘‘ hot rocks’’ up to five kilometres underground to produce electricity — could see some $2 billion spent on drilling, plant development and linking the remote central Australian resource to the eastern states.
Billions more will need to contribute to future energy developments by undertaking petroleum exploration now. The Western Australian Treasurer, Eric Ripper, told the recent Australian Petroleum Production & Exploration conference in Perth that almost $2 billion had been spent on the oil and gas search in the past year, and another $4 billion was committed to exploration in the next six years in WA alone.
None of this massive outlay includes development of carbon burial systems from coal-fired power stations. It is rumoured that the Victorian Government is considering spending $200 million to construct a common pipeline hub in the Latrobe Valley to transport emissions from the brown coal generation industry offshore for sequestration. In South Australia, Santos is in the initial stages of examining a $700 million carbon storage project to sequester emissions from southern States in the Cooper Basin.
Meanwhile, the uranium industry is looking at spending $25 billion on expanding exports to fuel the world’s nuclear power stations. South Australian Mineral Resources Development Minister Paul Holloway says 29 new uranium projects could be developed in the state, as well as the $5 billion expansion in the pipeline for the giant Olympic Dam.
In a comment about the 25 major oil and gas projects worth an estimated $100 billion which could be applied equally to all the energyrelated developments, APPEA chief executive Belinda Robinson said at Perth petroleum conference: ‘‘ Their size means that a lot is at stake and Australia needs to ensure it gets the policy settings right to bring all these projects to fruition. It is exciting to consider this potential, but it all becomes a bit academic unless the nation is committed to ensuring they are developed efficiently.’’
The message was underlined by another APPEA conference speaker, Ben Hollins, an executive of consultants Wood Mackenzie, who warned that sharply escalating project costs, skills shortages and too much regulatory red tape were all hurdles to Australia reaching its energy development potential.
Power: Big sums and big projects will source it in various way