LNG giant a conundrum for Lucky Country

gases as coal. But leakage from wellhead valves, pipelines and liquefaction equipment offset much of the difference.

In addition, new LNG supplies have driven down the price of gas. That helps undercut coal, but it also stimulates greater demand for polluting energy in general.

‘‘Australian LNG is helping reduce the carbon intensity of the Chinese economy and Korean economy because those countries are importing more and more LNG, and replacing coal-fired power plants,’’ said Pavel Molchanov, an energy analyst at the US investment firm Raymond James.

‘‘Increasing LNG exports helps to make gas more affordable,’’ said Jason Bordoff, founding director of Columbia University’s Center on Global Energy Policy. ‘‘That’s helpful if you are replacing coal and less so if you’re undermining the economics of renewables and nuclear.’’

LNG exports give the Australian economy a boost. On the Gorgon project alone, Chevron and its partners have spent more than US$40 billion on Australian goods and services and awarded more than 700 contracts to Australian companies. Overall, LNG exports make up about 2.5 per cent of the Australian economy.

‘‘The Australian debate is dominated by the idea that acting on climate change is bad for our economy,’’ said Paul Gilding, onetime head of Greenpeace who now teaches at the University of Cambridge and lives in the Australian island state of Tasmania.

But Gilding, who advises businesses on climate change, and other political observers say that the devastating wildfires will alter perceptions of the economy and climate change by damaging the tourism business, disrupting other parts of the economy. And they think the fires will tie fossil fuels more closely with greenhouse gas emissions.

Australian Prime Minister Scott Morrison and others defend the mining and gas sectors by saying the country’s carbon footprint is relatively small. The Union of Concerned Scientists says that Australia makes up 1 per cent of global emissions.

But Australia, which is also the world’s largest exporter of coal, has seen its greenhouse gas emissions rise as a result of LNG expansion. The country’s emissions grew 0.6 per cent as LNG output jumped 19 per cent, the government said in an August 2019 greenhouse gas update. And a major coal-exporting terminal on the northeast coast is in the works, with coal destined for India.

On a per capita basis, UCS says, Australia would rank second after Saudi Arabia and ahead of the United States in greenhouse gas emissions.

Bordoff said that the Australian government should be paying closer attention to these domestic numbers as a matter of policy.

‘‘The Australian government is retreating from what it takes to reduce its own emissions and is retreating from playing a leadership role of getting other countries, including India, to move more quickly in a lowcarbon direction,’’ he said. Instead, at the recent climate conference in Madrid, the United States, Brazil and Australia joined to undercut efforts to slow down climate change.

Chevron has already tangled with the state Environmental Protection Authority in Western Australia, which early last year said it would impose a zerocarbon guideline for large natural resource projects. The agency later withdrew the proposal for further analysis.

The Gorgon field, which began operating in 2016, contains an unusually high level of carbon dioxide along with its methane; the CO2 makes up 14 per cent of the gas the project produces on average.

Sensitive to climate concerns, Chevron has planned and belatedly begun a more than US$2.5 billion project to capture carbon dioxide from the Gorgon gas venture and inject it underground. The company said it hopes to eventually store 40 per cent of the project’s CO2 in a reservoir under Barrow Island. – Washington Post