A CSG Conundrum

The overwhelmingly important issue in assessing our response to coal seam gas – and similar unconventional gas sources such as shale gas – is the impact of CSG development on climate change.

There are, of course, a lot of problems associated with drilling, extraction, transport and so on, but the same is true of other fossil fuels, not to mention renewables like wind, which have attracted a fair bit of community opposition in some places.

The climate change question raises two issues, neither of which can be easily resolved.

First, what is the global warming potential of CSG, and how does it compare to conventional natural gas?

Second, what’s the relationship between CSG and the broad campaign to stabilise the global climate?

On the first question, the big question is whether CSG (and for that matter, conventional natural gas) is associated with excess methane emissions, and if so, how much this changes the standard assessment that gas has about half the global warming potential of oil or coal. The issues are complex, and it’s hard to find a trustworthy source. The CSG companies say there’s no problem, but of course that’s what they would say.

On the other hand, the main source for the view that methane is a big problem, Robert Howarth of Cornell, is clearly an advocate rather than an independent expert. The most obvious way in which he skews the data is to focus on a 20-year timeframe, which makes the impact of methane look a lot bigger, since it has a shorter residence time. The justification he’s offered, that this is the typical life of a gas project, is nonsensical. Howarth’s work has received lots of criticism on other grounds that I’m less competent to assess, but having seen him load the dice on an issue I understand, I’m not inclined to give him much credence on other points.

Howarth relies heavily on the argument that shale gas companies vent unburnt methane to the atmosphere. There is dispute over the extent of this practice, but in any case the US EPA has prohibited it, despite claims by the oil and gas industry that such restrictions are unnecessary overkill.

Some papers criticising Howarth and supporting the standard assessment can be accessed here and here.

Of particular interest is this paper from the Tyndall Centre, which comes out strongly against unconventional gas, but nevertheless concludes that its GWP is similar to that of the conventional kind and around half that of coal.

The Tyndall argument against fracking is simply that any cheap additional supply of fossil fuel is likely to increase total energy use and discourage the growth of renewables and that this will more than offset any benefit from the substitution of gas for coal.

This is probably too complicated to assess in a single post.

The first question is analytical – is the Tyndall analysis right about the impact of expanding natural gas supplies, from whatever source they are obtained?

The answer: it depends.

If we are relying on a combination of technical progress and some limited support for renewable energy to solve our problems, then cheap natural gas is likely to make matters worse. Investment in renewables has fluctuated (though around a rising trend) precisely because of the variability in these policies.

On the other hand, if we had a carbon price consistent with stabilising the global climate, say $50/tonne, new natural gas would almost entirely act as a substitute for coal and a complement for an expanding supply of renewables.

As it is, Australia is in a halfway house. We have a carbon price, but it is well below the level that is really needed. I hope that, once the carbon price comes into effect, and the alleged dire consequences don’t materialise, it will be possible to open the question of increasing the price, at least for the period after 2020.

There is also a question of political tactics. Globally, it’s clearly too late to think about an across-the-board ban, so the question is how much effort to put into campaigns about particular gas projects, as opposed to other fossil fuel projects, and campaigns for better climate policies (carbon prices, energy efficiency, less energy-intensive lifestyles) in general.

From the climate change viewpoint, the main case for focusing on CSG projects, rather than, for example, new coal mines or coal-fired power stations, is that they may be easier to stop. But it’s important to recognise that the payoff from stopping a CSG project is much less than that from stopping a coal project of the same size (in terms of the energy produced or used).

Similar questions arise in the Australian context. For example, there’s an obvious tactical problem in making alliances with Bob Katter. While he is good on some issues, he’s a climate delusionist, an opponent of carbon pricing and a supporter of coal mining.

To sum up: if you share my view that climate change is the most important environmental issue facing Australia and the world, you should be very cautious about advocating all out opposition to CSG.

Professor John Quiggin is a Federation Fellow in Economics and Political Science at The University of Queensland. Read more about FAQ Research writers here.

This story first appeared on www.crikey.com.au on February 15. Republished with permission.