Barnett lets off embarrassing gas gaffe
The understanding of the Liquefied Natural Gas industry by Western Australian Premier Colin Barnett came under scrutiny this week.
Barnett told ABC Radio’s AM program there were two ways LNG could be transported around the country.
“You can pipe it – that’s possible but probably the more expensive option,” he said.
“What Australia could well do would be to develop an LNG receival point, perhaps at somewhere like Gippsland, and so that gas can be transported in liquid form around Australia.”
Barnett was making the point that a number of producing gas fields exists in Commonwealth waters, lying off the West Australian coast.
“I would have thought a more important issue, with respect, would be ‘Why isn’t Australia using more of that natural gas?’” he said.
“For example, if Australia was to take a simple policy decision that half of all of the new electricity generation in Australia would be powered by natural gas, we wouldn’t need a carbon tax.
“We’d reduce emissions in a costless and painless way by at least as much.”
Barnett’s comments regarding the transportation of the gas around the country were jumped upon by the gas transmission industry’s representative, Australian Pipeline Industry Association (APIA) chief executive Cheryl Cartwright.
Cartwright said that although Barnett was right in saying natural gas is Australia’s energy future, he was wrong to suggest that WA offshore gas will replace gas produced in Australia’s East – or that it would ever be transported around the coastline via ship.
“The WA Government recently considered establishing an LNG receiving terminal in Perth but shelved the idea because of cost,” Cartwright said in an announcement.
“Not only would it be foolish on a cost basis – the very reason gas is the future of energy is because it will reduce greenhouse gas emissions.
“One LNG terminal produces 10 times more CO2 emissions than the whole of Australia’s gas pipeline infrastructure.”
Cartwright said she was surprised as to why Barnett would make such a misleading statement and that he would do better to focus on getting gas from the North West Shelf into the local WA market rather than allowing major international companies to export the product without considering domestic gas customers.
“The current gas retention policy in WA is virtually ineffective, although it does give the Government an opportunity to feign interest in increasing the State’s domestic gas supply,” Cartwright said.
According to APIA, LNG will never be a cheaper alternative than pipeline gas for Australia.
The body offered as proof to support this statement the price of LNG for international transportation being $14 to $16 per gigajoule compared to the cost of domestic gas in WA, transported via pipeline, of $6 to $8.
APIA said that although construction costs are comparable, continuing operating costs of a transmission pipeline would be far less.
“Premier Barnett clearly doesn’t understand this major industry in WA,” Cartwright said.
“Even if the Government wasted taxpayers’ funds on a new LNG terminal in Perth, there aren’t enough ships to move the gas!”
Barnett’s transportation commentary emerged from speculation regarding the upsurge in price of electricity and gas in West Australia and across the country.
The Premier claimed the West Australian economy to be the world’s biggest and most sophisticated mining economy and that the state was now emerging as an important global source of natural gas.
“The point I’m making is that if Australia really wants to be serious about reducing greenhouse emissions, just note the one simple fact that a baseload power station using natural gas will produce probably a third to a half of the emissions of an equivalent, even clean, coal plant,” Barnett said.
“So why wouldn’t we make a simple policy decision as a country and use some of Australia’s natural gas for power generation and distribution here, and do what Japan, Korea, China and India are quite deliberately doing?
“The reason they’re buying our natural gas is because it’s clean energy.”