Pipelines can help gas customers decarbonise by delivering renewable gas, but gas infrastructure produces emissions too. APGA National Policy Manager Jordan McCollum discusses a recent study depicting how pipelines can also reduce emissions.
Written by APGA National Policy Manager Jordan McCollum
Gas infrastructure emissions are often cited as a reason to question the use of renewable gases in a net zero future. However, new analysis by engineering firm Worley indicates that gas pipelines have a range of cost-effective opportunities available to significantly reduce methane and carbon dioxide (CO₂) emissions.
In a study commissioned by APGA’s Gas Infrastructure Emissions Reduction Reference Group, Worley’s decarbonisation advisory team assessed 76 separate emissions abatement options for cost effectiveness and practicality of implementing them.
Whittling this list down to the ten preferred options for each greenhouse gas, the study summarised its learnings in marginal abatement cost charts for each gas.
Some outcomes of the study confirmed expectations. Methane abatement through compressor seal gas recovery (or destruction) represented the greatest volumes of methane abatement at one of the lowest costs. And for CO₂ reduction, converting parasitic and auxiliary loads to solar paled in comparison to other opportunities.
Some outcomes were expected, but for unexpected reasons. Converting compressor fuel gas to renewable gas was the largest and most cost-effective approach to CO₂ reduction. But the competitiveness of renewable gas against grid-sourced compressor electrification was much greater than expected. The cost of connecting to the NEM drove grid-based electrification costs much higher than renewable gas or even the development of remote renewable microgrids.
And some outcomes were quite unexpected. Replacing gas driven actuators with electric driven was more cost effective than converting to air driven actuators. And the cost of using heat pumps to replace gas heating loads was around half that of using simpler resistive heating alternatives.
At the highest level, the majority of preferred methane abatement opportunities have an abatement cost below the $75/tCO₂-e price cap for Australian Carbon Credit Units (ACCUs) put in place alongside the Safeguard Mechanism.
This indicates that methane abatement can be a primary abatement opportunity for pipeline Safeguard Mechanism Facilities.
The majority of carbon dioxide abatement options also have an abatement cost below the Safeguard Mechanism $250/tCO₂-e penalty cost. While these may not be as viable until ACCU supply becomes limited, there will come a time when ACCUs cannot be relied upon for all Safeguard Mechanism Facilities to comply. Pipeline facilities can rest assured that procuring renewable gas will be the most cost-effective way to reduce the majority of their CO₂ emissions when this time comes.
But these outcomes are important for more than just those pipelines captured by the Safeguard Mechanism today. Thanks to proposed changes to how ACCUs can be produced, all pipeline facilities will have the opportunity to produce potentially profitable ACCUs through these abatement options, through proponent-lead ACCU method creation.
Once pipeline facilities are able to create their own ACCU production methods, and hence produce ACCUs for below ACCU market prices inflated by the Safeguard Mechanism, emission abatement options can become a profit-making opportunity for pipeline facilities and industry.
And this highlights the smart design of the Safeguard Mechanism and the proposed changes to introduce proponent-lead ACCU production method development. Enabling Safeguard Mechanism Credit trading between facilities ensures that all facilities can access the lowest cost emissions reduction. And removing unnecessary gate-keeping practices around ACCU method creation ensures that companies which own both Safeguard Mechanism Facilities and all other facilities can move lower cost emissions reduction between facilities.
Ultimately, it is the least cost emissions reduction options that should occur first. The pipeline industry has some of those least cost options available to it. But more importantly, the opportunity to use renewable gas will be a least cost option for many of Australia’s existing gas customers. Through Worley’s study we can be certain that the infrastructure delivering that renewable gas can reduce its methane and CO₂ emissions as well.
For more information and to access the study, visit the APGA website.
This feature also appears in the July edition of The Australian Pipeliner.