Successive governments have been happy to have Australia as the world’s quarry. But now there’s an additional role for us as the world’s CO2 dump. Rex Patrick reveals the secret plans.
We’ve got a whole continent to ourselves. You’d think our leaders would have had a plan that would take full advantage of that. But that’s not what has happened.
We dig and ship our rocks (and LNG). And while the corporations doing the digging are making billions in profit, little is returned to the Australian public, who actually own the resources.
Australia and Qatar export a similar amount of LNG to the world each year. In 2021 the government of Qatar forecast collecting $26.6 billion in royalties from its LNG reserves. In the same year, Australia forecasted $800 million for a similar volume of gas.
We’ve been giving away much of our national wealth for decades.
Up the value chain
Our ‘leaders’ have got it all wrong. Instead of exporting iron ore, we should be climbing the value and skilled jobs chain and exporting steel. Actually, green steel now.
Australia has the world’s largest titanium reserves, particularly the source metals rutile and ilmenite. We export these minerals at around $400 a tonne and import the titanium powder back at $300K a tonne; 750 times is the value-add produced elsewhere in a market worth close to $U5B.
Instead of shipping billions of dollars in lithium spodumene, we should be climbing the value and skilled jobs chain and exporting trillions of dollars in lithium batteries. Sure, that may well take billions in investment, but that’s what smart governments do.
The Government of Taiwan very deliberately made a strategic investment in (and is the largest shareholder of) the Taiwan Semiconductor Manufacturing Company (TMSC), the world’s dominant advanced silicon chip fabricator (including chips for Apple, Amazon and Google). Its revenue in 2022 was $US75B.
Imagine if our leaders had Taiwan’s vision and courage.
Prime Minister Albanese could well argue that ‘the past is the past and can’t be changed now’,
but their new critical minerals strategy is largely one of ‘dig and ship’, again.
Professor Clinton Fernandes’ analysis of the government’s critical minerals strategy is that they aim to “make Australia a better quarry”.
Sadly, we don’t appear to have moved on from journalist and social critic Donald Horne’s pithy observation some six decades ago that “Australia is a lucky country run mainly by second-rate people who share its luck.”
Climate action, until Japan complains
Despite Labor’s electoral success in 2022 on a promise to deal with climate change, Albanese has been duplicitous in meeting his commitment to his constituents.
In the early days of his Government, they formally communicated to the United Nations Climate Change Conference Australia’s new emission reduction targets of 43 per cent below 2005 levels by 2030 and net zero by 2050. The Government then quickly brought the targets into law through its Climate Change Bill.
Over the next nine months, Labor legislated an improved safeguard mechanism law, requiring our largest carbon emitters to reduce their emissions every year. Without some form of large-scale carbon abatement, those changes represented a death blow for any new LNG projects.
An LNG wind back wouldn’t be a bad thing for the world. The International Energy Agency has stated the pathway to net zero by 2050 requires that no new oil and gas fields get approved. Complying with that directive would have little effect on Australia’s energy supplies; we have enough gas in existing projects to meet our own needs until the transition to renewables is complete.
But Japan, our second largest trading partner and a key strategic ally, was having none of the decree and launched a concerted attack on Albanese, Foreign Minister Penny Wong, Climate Change and Energy Minister Chris Bowen and Resources Minister Madeleine King.
Australia had to be a secure and reliable supplier of cheap energy to Japan. After all, how else could Japan do its industrial value-adding without cheap energy?
One of the projects Japan is relying on for its energy security is Santos’ Barossa LNG project. In June last year the AFR reported Japan had formally requested our government exclude the project from the safeguard mechanism.
Instead, our Government asked the Parliament to make changes to the Environment Protection (Sea Dumping) Act 1981. The explanatory memorandum to the amendment Bill stated the purpose of the amendments was to “implement Australia’s international obligations under the 1996 Protocol to the Convention on the Prevention of Marine Pollution by Dumping of Wastes and Other Matter 1972 (the London Protocol)”
But the Bill’s real purpose, at least in part, (as revealed in briefs to ministers obtained under FOI), was to give comfort to Santos and Japan that CO2 from the Barossa project could be piped across the Australian-Timor Leste border for depositing in the depleted Bayu-Undan gas field using carbon capture and storage (CCS).
Carbon Capture and Storage
Carbon Capture and Storage (CCS) is a technology that captures, compresses and injects into suitable underground or undersea rock formations CO2 emissions from the production, processing and combustion of fossil fuels, locking it away for all of geological time.
CCS at an industrial scale is largely unproven.
The Gorgon LNG project on the North West Shelf uses CCS to abate some of its CO2 emissions. CCS injection commenced in August 2019, but it’s never been able to sequester the 4 million tonnes of CO2 per annum that it was supposed to. It’s only ever achieved well under half of its objective.
The reality is that CCS is not ready for deployment. Santos anticipates the first injection by 2028, but this is extremely optimistic.
Risks associated with CCS are not fully understood on account of the limited experience with geological storage. The largest and most obvious risk of CCS is leakage of compressed carbon.
Leakage can occur due to pipeline failures, injection well failures, undetected faults, fractures, seal failure, poor site selection, poor preparation and mineral dissolution. Leakage can be abrupt or gradual.
A sudden and large release of CO2 would pose immediate dangers to human life and health, animals and ecosystems. A gradual leak would have similar, but less serious, effects. Both would negate abatement objectives.
The real plan: Dump
And that leads us to the real ambitions of the Albanese Government.
Whilst amending the Sea Dumping Bill would allow the Barossa project to continue, to the great relief of Japan, it also paves the way for CCS 2050 – Albanese’s plan to make Australia the abatement go-to place for the world.
Australia is to become the world’s CO2 dumping ground.
A briefing provided to Minister Bowen stated:
“Over the last 12 months, there has been [a] significant rise in interest from Australian industry and companies (for example, APPEA, Santos, deepC Store and Denison Gas) as well as regional partners with limited CO2 storage potential, such as Singapore, Japan, and the Republic of Korea (ROK), seeking to establish a pathway for Australia to become a regional location for CO2 geological storage.
“Prospective estimates indicate Australia might have a storage capacity of over 20 billion tonnes (DISER, 2021) in at least four strategic sedimentary basins to safely sequester CO2 permanently underground (both on and offshore).”
The brief also talked of the risk of “the overallocation of storage to international partners,” so popular the idea is with our regional partners.
Our energy bureaucrats are even worrying that this might impact negatively on Australia’s ability to meet our own net-zero goals.
But this plan hasn’t been discussed publicly. The Government has kept this all very quiet indeed. There is nothing that describes the extent of the plan, nor the benefits or risks to Australians.
Great Artesian Basin
Certainly, there are concerns as elements of the big plan are brought to life.
In recent months environmentalists and farmers have joined forces to oppose Glencore’s plan to trial the storage of CO2 (from the Millmerran coal-fired power station) in the Precipice Sandstone aquifer 2.3 km underground near the farming town of Moonie, located in the Darling Downs of Queensland within the Great Artesian Basin.
Opponents have rightly expressed concerns about injecting carbon dioxide into the Great Artesian Basin, a water resource worth about $13 billion to the national economy and vital for communities and businesses.
A visionless plan
Anthony Albanese’s world CO2 dump plans need to be revealed in full and properly debated. Albanese needs to sell his plan to the Australian public.
But the truth is, it’s a plan utterly lacking in vision.
Australia should capitalise on its natural advantages. We have what it takes to compete with the industrial powerhouses of China, Japan and South Korea. We have the intellect, innovation and skills they have, but we have the natural resources they don’t. We have the sun, wind and space that they don’t have to ‘do’ in a climate-friendly way.
With real vision, we could ‘dig and do’ cleanly.
We just don’t have a plan.
Instead, we are pandering to the cheap carbon-emitting fossil fuels needs of foreign competitor countries seeking to continue powering their industrial machines to process our minerals.
And in response they’re happy to sell us their value add back to us at many times the price they paid for the rocks we dug up for them. It’s a vision of sorts. But it’s one that has Australia remaining as a colonial economy.
It’s a vision of Australia that was forged in the mid-nineteenth century by British bankers, trading companies and industrialists and Australia’s governing elite acquiesced in exchange for a few scraps from the table.
Nearly two centuries later, not that much has changed – only it’s Tokyo, Seoul and Beijing, rather than London, that are dictating Australia’s economic role to a subservient government in Canberra.
Albanese is breaching his climate change commitments to the electorate and short-changing Australia’s future in more ways than one.
He’s happy to see Australia remain as a deindustrialised quarry.
There was a time when Labor Governments embraced a nation-building ethos – from Ben Chifley’s commencement of the Snowy Mountains Hydro project to Gough Whitlam and Rex Connor’s vision of Australia as a minerals and industrial superpower. But that’s not so with Anthony Albanese.
Rather than having a ‘dig and do’ strategy; he’s content to just ‘dig and dump’.