Di­ver­sity of sup­ply de­mand­ing bil­lions

The Weekend Australian - Travel - - Resources -

Keith Orchi­son

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

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