Australian LNG exports are not clean, not cheap, and are not materially displacing coal in Australia’s largest export markets. These are the latest research findings in the Australasian Centre for Corporate Responsibility (ACCR) report released today, ‘Facts over fiction: debunking gas industry spin’. These findings are in direct contrast to the Australian LNG industry’s spurious claims that gas has a role to play in the transition to a low carbon economy.
The key findings include:
- Gas has not materially displaced coal use in Australia’s key LNG export markets to date;
- Paris-aligned IEA scenarios project a limited role for coal-to-gas displacement;
- Gas emits far more than half the emissions of coal when combusted. Processing and fugitive methane emissions in the supply chain further reduce the climate benefits of coal-to-gas switching;
- Gas is an expensive source of electricity generation, more expensive than renewable electricity and it is increasingly less competitive than battery storage.
Commenting on the research, Dan Gocher, Director of Climate and Environment, said:
“Australia’s LNG export industry has made iterations of the same unsubstantiated claims for decades, which are routinely repeated by gas companies, industry associations, politicians, analysts and the media verbatim.
“This report analyses the available data and finds that gas is an expensive source of electricity generation that has not driven a move away from coal in Australia’s key LNG export markets.
“Renewable energy is the largest source of new electricity capacity in China and Japan. It could be argued that additional gas is more likely to crowd out renewable energy in those markets.
“In China and India, new build solar and wind power is cheaper than running existing gas generators.
“This report lays bare the very real risks to the resilience of LNG investments under Paris-aligned scenarios, and should lead investors to question the carrying value of existing LNG assets.
“The lack of transparency, including the deliberate use of out-of-date International Energy Agency data in scenario analyses, and lip service to the objectives of the Paris Agreement, make it very difficult for shareholders to assess the future earnings and value of companies such as Origin Energy, Santos and Woodside.
“This report helps arm investors with reliable information to challenge the pervasive greenwashing of gas.
“The Australian Petroleum Production and Exploration Association (APPEA) has been one of the chief promoters of these claims, and investors should call for an end to its damaging advocacy altogether.”
Report is available here.