ENERGY: balanced discussion needed

Posted : Thursday, October 27, 2011

Open and accurate conversation about fuel choices including renewables and Coal Seam Gas (CSG) is needed, Managing Director of Origin Energy has told a CEDA Energy series audience.

At CEDA's Energy series lunch event held in Sydney, Origin Energy Managing Director, Grant King said: "For us to have a balanced debate on the energy choices available to us we must demand consistency in the arguments used for and against these choices."

Mr King said discussion around energy sources has become a "good" vs. "bad" argument, where renewables are the "good" and fossil fuels are the "bad". Further, gas has moved from being represented as a friendly transitional energy source to an "enemy of renewables".

"This misunderstands the true long term role of gas as a balancing fuel to support a world with an increasing amount of renewable but intermittent energy," he said.

"Australia's greatest contribution to reducing global greenhouse gas emissions, and ...providing reliable supplies of energy to consumers is to expand our liquified natural gas production and export."

Despite this, Mr King said that in the Clean Energy Future package liquified natural gas will receive the lowest level of assistance.

The core issue is carbon, he said, and the carbon package should put an end to the "good" and "bad" fuel debates.

Origin Energy welcomed the Clean Energy legislative package, as a long time supporter of an Emissions Trading Scheme. Mr King noted how important competitive energy costs are to consumers. "In the normal course, blessed with resources as we are, the industry will chose those technologies and fuels that produce the lowest cost for consumers".

If fossil fuels are bad because of CO2 emissions, "we should also consider the environmental impacts of the production of renewable energy to ensure we have some balance in discussion on these choices," he said.

Mr King's observations about the environmental impacts of some of the most popularly promoted forms of renewable energy included:

The manufacture of solar photovoltaic cells uses a range of chemicals including hydrofluoric acid, phosphoric acid and sodium hydroxide, highly toxic and corrosive chemicals.
Unconventional geothermal requires hydraulic stimulation, known as fraccing, that is the same as is required with shale gas (in America) and sometimes with coal seam gas. Both conventional and unconventional geothermal electricity generation produce large amounts of water.
Hydro electric dams produce significant amounts of carbon dioxide and methane.

"The point of these examples is not to say renewables are 'bad' rather that all forms of energy bring environmental issues which must be considered and appropriately balanced in any fuel choice we make," he said.

In regard to consumer energy prices, Mr King explained that since 1998 energy costs have consistently represented 2.6 per cent of household income. In fact, the "energy share of household expenditure has hardly changed over 25 years".

Though "there are a number of prospective issues that will give rise to future increases in energy prices, we expect that increased network costs that have driven increases to date have peaked and will moderate over the next few years," he said.

Further, Mr King said that "we expect the wholesale cost of energy to rise in coming years for a number of reasons" and that "these costs comprise a relatively small percentage of the costs to residential consumers and therefore are substantially muted at a retail level".

The question and answer session covered a range of topics from fraccing in the CSG process to carbon pricing and the media's role in seeking facts around energy sources and their environmental impacts.

On the topical, yet controversial, issue of CSG, Mr King was questioned about the fraccing process during CSG extraction and the risk of contamination of the water table.

"The shortest answer is, there is no toxicity in the fluids," he said.

"One of the mistruths and misperceptions is the chemicals used in fraccing; they are almost without exception either drunk, eaten or washed in by all of us today."

Mr King directed people to Origin's Senate submission around LNG, available at www.aplng.com.au, for more information.

This was the final event in 2011 for CEDA's Energy series, which examined economic policy, technologies and the energy market. The series will continue in 2012.

For event audio click here.

Nuclear Energy research paper launch
In Melbourne on 10 November, CEDA will release the first of three Energy and Climate Policy research papers, the first of which focuses on Nuclear Energy. For event information click here.

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