What APPEA and its members are doing to abate carbon this year and beyond

Australia’s peak industry body for the Oil and Gas sector, APPEA, is no stranger to the topic of environmental sustainability. Decades before the Paris Agreement was established, the association was quick to champion cleaner energy projects, famously favouring gas over a potential coal-fired plant in the Northern Territory in 1984 and halving its emissions in the process.

Now that Australia has stepped up its net zero commitments – and new technologies are in play – what else is the industry doing to abate carbon and meet its ESG objectives? Director of NT Exploration, Cassy Schmidt, gives some insight ahead of the Environmental Management & Decarbonisation Forum, hosted by Informa Connect.

Carbon neutral LNG

Liquid natural gas (LNG) emits significantly less carbon dioxide during its lifecycle (production, processing, transportation and end-use combustion) than the equivalent lifecycle of coal. However, ranking as the most emission-intensive energy source across the oil and gas sectors, it was a logical priority for APPEA members’ abatement efforts.

“The Australian government estimates Australia’s exports have the potential to lower emissions in LNG-importing countries by about 170 million tonnes of carbon dioxide equivalents per year, by providing an alternative to higher emissions fuels. That equates to almost a third of Australia’s total annual emissions. Natural gas has only half the greenhouse gas emissions of coal when used to generate electricity and it can do things renewables simply cannot do, such as power manufacturing plants,” Ms Schmidt said.

Achieving carbon neutral LNG production is difficult, but the industry is “up for the challenge”. Each of the 5,500 LNG cargoes sold in 2019 in Australia, emitted on average 270,000 tonnes of carbon dioxide, meaning a total of 1.5 billion trees would have been required to offset the emissions. However, cleaner practices around upstream production, liquefaction and transportation are a more reasonable objective, Ms Schmidt said.

“The Northern Territory (NT) has started to see carbon neutral tankers of LNG leave our shores and producers develop efficiencies for running liquefaction in LNG plants. Some of the newer plants have installed aeroderivative turbines, [which are more sensitive to the compressor inlet temperature and therefore run more efficiently]; and waste heat recovery machines [which minimise the need for operational fired heaters and boilers].

“Among our members, there has also been increased talk of combined-cycle power generation. This involves recovering the heat from exhaust gas and using it to generate power – enabling around 50 percent more electricity from the same quantity of fuel.”

Meanwhile, operational control tools that monitor plant performance are making a big impact across the sector. These tools determine how much feedstock enters the plant and how much leaves as LNG – revealing how much is consumed as fuel or lost to flaring.

“We and our members are always looking for improvements in technology that can help us run more efficiently, in any aspect of the LNG value chain,” Ms Schmidt added.

Carbon capture and storage

With LNG and other energy-intensive industries notoriously hard to decarbonise, APPEA members have been taking advantage of the NT’s unique environment for carbon capture and storage (CCS).

CCS – where emissions from power stations, industrial operations, and gas fields are captured and injected into the ground – is growing in popularity, given its potential to achieve ‘net-negative’ emissions. This is where a project removes more greenhouse gases from the atmosphere than it emits.
“The NT has some outstanding geological stores in close proximity to existing gas infrastructure and there are some solid CCS options around Middle arm as a regional hub,” Ms Schmidt said.

“For example, the Petrel Sub-basin is expected to be a highly prospective storage resource [once appraisal work has confirmed viability] – storing in excess of 20 million tonnes of carbon per year and more than 6 gigatonnes in total.”

APPEA members INPEX, Santos, Eni, Woodside, Xodus Group and Origin Energy – alongside the NT Government and CSIRO – are also developing a joint business case to assess the viability of a large-scale CCUS hub.

“This would mitigate carbon emissions from current and future natural gas processing and accelerate low-emission industry development, including clean hydrogen production,” Ms Schmidt added.

Biodiversity offsets

Preventative grass fire burns in the West Arnhem Land Savannah (WALFA) have been a common practice among Indigenous communities for centuries and, more recently, through local ranger projects. APPEA members have now found a way to incentivise these practices, via the Australian Carbon Credit Unit (ACCU) scheme.

“In the NT, grass fire is a different beast [to other parts of Australia] often doubling my head-height. Regular burns prevent wild fires, which reduces overall carbon burn. For this reason, the industry has been undertaking Savannah burns for years.

“However, we wanted to encourage broader participation, so the industry worked with Charles Darwin University to get these projects approved as an offset methodology. Thankfully, it was a success and they are now recognised as a legitimate practice for earning ACCUs,” Ms Schmidt said.

Since it began in 2006, the WALFA project – a landscape-scale model on which the approved Savanna burning methodology is based – has also been an extraordinary success.

“Indigenous fire managers and their partners in Arnhem Land have successfully reinstated customary burning practices producing significant social, cultural, environmental and economic benefits for Indigenous landowners,” Ms. Schmidt concluded.

Hear more from Cassy Schmidt about the exiting work APPEA and its members are doing to abate carbon at the Environmental Management & Decarbonisation Forum, as part of NT Resources Week 2022, hosted by Informa Connect. This years’ event will be held 24-25 August at the Darwin Convention Centre. Learn more and register here.