The report discusses the contribution of natural gas production to climate change. The Australian and global gas industries convince its customers and investors that its product has 50% fewer greenhouse gas (GHG) emissions than coal thereby playing a key role in a lower carbon future. Meanwhile, the full environmental effects of gas production and distribution are underestimated.

First, the gas industry does not take into account a full life cycle assessment of its product. Since Australia exports about 75% of gas, GHG emissions released from the shipping phase are necessary for accurate calculations. In addition to emissions from transportation, gas must be chilled to 161ºC in an extremely energy intensive process associated with potential gas leakages. Therefore, the claim that gas emits 50% less greenhouse gas emissions than coal is true only for domestic consumption. While considering all emissions from gas liquefaction, shipping, regasification and distribution, its carbon footprint would exceed the impact of coal use.

Second, effects of methane, the primary component of natural gas, are damaging to the climate. Around 25% of man-made global warming is caused by methane emissions that have been growing strongly since 1985, according to data from the National Oceanic and Atmospheric Administration (NOAA). Although methane survives in the atmosphere for a shorter period than carbon dioxide released from coal production, it has a high planet-warming potential. On a 20-year timeframe, a tonne of methane is 86 times more effective at trapping heat in the atmosphere than a tonne of carbon dioxide, thereby posing a greater threat to climate change in the short to medium terms when total green house gas emissions need to peak and fall.

Third, to generate electricity gas can be burned in combined cycle gas turbines (CCGT) or open cycle gas turbines (OCGT) known as gas peaking plants. According to the Gas Industry Social and Environmental Research Alliance, burning gas in CCGT releases 50% fewer emissions than coal but the other option demonstrates different results, only 31% fewer emissions than coal. Nevertheless, CCGTs are not a big part of Australia’s national electricity system because they are very expensive to run and less flexible compared to OCGTs.

Finally, despite repeated claims of the gas industry that conventional gas is a transition fuel for Australia, it proposes a long list of new onshore and offshore gas projects around Australia. Meanwhile, the country does not see a need for more gas in a transformed energy system. Gas is so expensive in Australia that it has simply not been able to compete against cheaper, renewable sources of energy. Due to massive overpricing and supply concerns, conventional gas use in Australia’s National Electricity Market (NEM) has fallen some 59% in the last five years, whereas renewable energy has grown strongly. Besides, the Australian Energy Market Operator (AEMO) has published its integrated systems plan illustrating the “least cost” reliable future energy system under current policy settings. According to this plan, the grid will be 76% renewables by 2042.

1. Methane emissions from conventional or natural gas have been seriously underestimated by 25 - 40%.
2. There are no committed plans to build gas generation in Australia while renewables have the largest share of the projects in the National Electricity Market.
3. Leakages of more than 2% to 3% of methane are worse for the climate than the burning of coal.
4. Around 25% of human-induced global warming is caused by methane emissions.
5. The gas industry promotes gas as a transition fuel while planning to operate around Australia far beyond 2050.
6. There is a need for using more open cycle gas turbines as they can fill energy supply gaps more quickly when renewable power is deficient, but these plants have low utilisation rates and so require less gas.
7. The Australian Energy Market Operator sees gas as a small player in balancing customer demand with wind and solar energy generation.