At both the state and federal levels, there are various moves to reduce greenhouse emissions and to improve energy efficiency to meet the Australian Government’s target of a 60 per cent reduction in greenhouse gas emissions by 2050. These efforts encompass the Australian Government’s Carbon Pollution Reduction Scheme (CPRS); legislated targets; funding to assist improved energy efficiency; and, in some states such as Queensland, adoption of policies for the increased use of gas as a transitional fuel in power generation.

The emphasis on increased use of gas is an advantage to the industry, but the policies also bring with them increasing impositions on operators to provide yearly accounting for greenhouse emissions, quantify emissions during the approvals process and to work to continually improve performance.

What does carbon accounting mean for the pipeline industry?

Transition fuel = demand for more pipelines.

The first obvious benefit to the pipeline industry is the supply opportunities due to the recognition of gas as a transitional fuel, since it is a more energy efficient source than coal. Generally, combined cycle gas turbine power stations currently emit 50 per cent less carbon than traditional coal-fired power plants per unit of energy produced. This estimate is based on emissions of 450 tonne carbon dioxide equivalent per gigawatt hour (CO2-e/GWh) compared to 900 tonne CO2-e/GWh respectively. One benefit of this has been the upsurge in coal seam gas (CSG) development, which is leading to an increased need for pipelines to transport the gas to market. In Queensland alone last year, six LNG plants based on CSG were announced, all of which require gas transportation.

As a result there is increasing interest and accountability for the environmental impacts from the actual construction of the supporting infrastructure, which, for pipelines, includes the impacts of vegetation clearing and the overall carbon/greenhouse footprint of a project.

Demands on the industry to account for its emissions and vegetation clearing

One of the measures being introduced across Australia as part of the CPRS is the need for every business that produces more than 25,000 tonnes of C02-e emissions per year to prepare a carbon return.

Another element of the greenhouse debate that is starting to influence construction approvals, including pipelines, is the overall carbon footprint of a project. For some time now it has been necessary to address the carbon emissions associated with a project. Matters now being raised by government approvals agencies include addressing carbon releases associated with transport of materials and personnel to and from the workplace (including air transport); and, carbon releases associated with vegetation clearing.

This raises the question of where you draw the boundaries around a project – who is responsible for accounting for the carbon footprint in materials manufacture and transport? And what constitutes project travel versus existing facilities? It is important for the industry as a whole to work towards establishing the parameters that will enable it to continue to construct commercially viable infrastructure. To do this, construction and engineering companies need to support the approvals team and to work with the Australian Pipeline Industry Association to ensure that government decisions are practical and effective for the industry whilst achieving the global outcomes that will be important in the overall climate change debate.

What are the carbon impacts associated with a pipeline?

To get an appreciation of how a pipeline may have carbon impacts, a hypothetical gas pipeline for a reasonably large 630 MW power station is considered. The pipeline is assumed to be 450 mm in diameter, 600 km long, goes through mature bushland for half of its length and the construction works will require clearing of a 30 m wide corridor through the vegetation. No other pipes will be placed into this corridor and, to minimise the impacts, it has been assumed that 20 m of the cleared 30 m wide corridor will grow back in the years after construction, leaving just enough clear space for ongoing maintenance access.

The carbon footprint estimates for the construction of this pipeline are shown in Figure 1. (Note: this is the carbon footprint that could be considered for the purposes of an environmental impact statement (EIS). It is not the footprint that would be accounted in the currently proposed CPRS).

In considering climate change and greenhouse gas, it is not only emissions that are under review, but also the loss of greenhouse sinks. Forests provide an important greenhouse sink and the loss of vegetation through land clearing is therefore seen as an important element in any greenhouse and climate change policy. This is of particular relevance to the pipeline industry, since one of the main consequences of constructing a pipeline is land clearance. Therefore, in calculating the above example, tree clearing has been taken into account. It is interesting to note that the Federal Government’s proposed CPRS does not currently require that the impacts of tree clearing be taken into account.

Based on the hypothetical pipeline, the single greatest contributor to the overall carbon footprint is associated with the clearing of vegetation during construction. It should also be noted that this will vary considerably with the requirement to clear vegetation and the type of vegetation being cleared.

One strategy for offsetting both carbon and biodiversity impacts from pipeline construction has been to allow cleared vegetation to re-establish over significant proportions of alignment cleared during construction. Typically, construction of a medium sized gas pipeline requires a cleared corridor of approximately 30 m width. Once construction is complete, operation, protection and maintenance of a pipeline generally only requires a 7 m wide corridor over the pipe to be kept clear of trees and shrubs. Figure 1 shows how significant the recapture of carbon by regrowth over the majority of the cleared corridor could become over time.

It is noted however, that revegetation of easements comes with a risk; if the pipeline owner ever wants to loop the original pipeline, they may be prevented from doing so by the newly reinstated environmental values. In this case, infrastructure and environmental outcomes may be optimised by maintaining the entire alignment free from trees and shrubs and undertaking the environmental offset activities in other locations.

Figure 2 shows a comparison of the carbon footprint of the construction of our hypothetical pipeline with the annual carbon footprint of burning gas in the power station; and, the annual carbon footprint of the operation of the pipeline.

Figure 2 illustrates that the total carbon footprint associated with the construction of the pipeline, including in the manufacture of the pipe steel and from the clearing of vegetation, is much smaller than that the power station. Given that a combined cycle gas turbine power station could potentially have half the carbon footprint of a traditional coal-fired power station (i.e. 2,250,000 tonne CO2-e per annum compared to 4,500,000 tonne CO2-e per annum for this 630 MW power station), replacement of coal as a fuel by gas could, in the first year of operation, potentially save approximately eight times the amount of carbon that was released in the construction of the pipeline.

It can be seen from Figure 2 that the carbon footprint from the ongoing operation of the pipeline is relatively negligible.

Where should the carbon footprint be accounted and who pays?

The cost of carbon for each item will be added to the overall cost of the pipeline and theoretically, be passed on to consumers at the end of the chain. In this regard it is often considered to be similar in action to the GST.

In terms of the ultimate cost being passed onto consumers, the CPRS estimates an energy price increase to consumers as a result of a $20/tonne, CO2-e permit cost that will be in the order of 16 per cent.

The additional financial costs that may be expected for construction of our hypothetical pipeline as a result of accounting for carbon impacts, excluding vegetation clearing, of 78,370 tonnes of CO2-e would (at $20/tonne) equate to approximately $1.5 million. On current costs, this would represent a 0.28 per cent increase to the estimated construction costs of $540 million. There would be an additional $4 million if vegetation clearing was included, to total $5.5 million for carbon.

Pipelines in a carbon constrained future

The details of the operation of the CPRS and the carbon economy are still to be worked out and will continue to be developed into the future. A number of developments will have already occurred between the time of this article being submitted and its publication.

There may be as the accounting systems for the carbon economy matures, future opportunities for pipeliners to accrue credits for carbon capture through natural revegetation of pipeline alignments or neighbouring areas, or through a range of biodiversity and carbon offset programs. It is certainly not currently clear whether these will be options in the more immediate future.

References

1. Australian Greenhouse Office (AGO), 2005. National Carbon Accounting Tool. http://www.climatechange.gov.au/ncas/index.html. 2. Carbon Planet, 2008. Flight emissions calculator online at: http://www.carbonplanet.com/shop/flight_emissions_calculator. 18 July 2008. 3. Department of Climate Change (DCC), 2006. Australian Methodology for the Estimation of Greenhouse Gas Emissions and Sinks 2006. Commonwealth of Australia. http://www.climatechange.gov.au/inventory/methodology/index.html 4. EcOz Environmental Services & Australian Pipeline Trust (EcOz & APT), 2007. Public Environment Report - Bonaparte Gas Pipeline - Wadeye to Ban Ban Springs Station. Prepared for: Australian Pipeline Trust by: EcOz Environmental Services, 2007.