Sarah Belfield - Reporter and writer, freelance

s a r a h b e l f i e l d

reporter & writer, freelance

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CLIMATE CHANGE CLASHES CONTINUE

(Oil & Gas Gazette, April 2006)

IN DELIVERING his sixth blueprint speech in early March, federal opposition leader Kim Beazley said the only environmentally sustainable energy policy for Australia was investing in two transformations.

One such transformation was making the country's specialist solar sector into a "world beating" industry as big as coal is today. The other was a cleaner coal industry.

The blueprint, Protecting Australia From The Threat of Climate Change, outlined what the Labour Party saw as the measures needed to effect those transformations.

According to a copy of the blueprint, Beazley said: "...If we are to transform the coal industry into a cleaner coal industry and to develop solar energy to the scale required, we need a full set of market-based policies and transition arrangements as well as technology.

"Arguably the most promising of the new clean coal technologies — Integrated Gasification Combined Cycle or IGCC technology — involves the conversion of coal to gas for direct firing of gas turbines in power stations that are much more efficient than today's."

He also said that using part of the stream in gas to liquids (GTL) technology to make transport fuels and chemicals could help commercialise IGCC technology for power generation.

He spoke of a long-term national target of 60% cut to Australia's year 2000 level of greenhouse emissions by 2050 — a target that would help industry "... make informed decisions about which technologies they should be investing in and [allow] the economy and society to adjust in a reasonable timeframe."

He said the Labour Party would establish a national emissions trading system to reach the target 60% cut.

"Market-based mechanisms such as emissions trading are central to moving to a low-carbon economy," Beazley said.

He said a 'climate change trigger' in the Environment Protection and Biodiversity Conservation (EPBC) Act 1999 would ensure that major new projects are assessed for their climate change impact as part of any environmental assessment process.

At the time of writing, this 'trigger' proposal was before Parliament in the form of a private member's bill put forward by shadow environment minister, Anthony Albanese.

Beazley said the ALP supported increasing the Mandatory Renewable Energy Target (MRET) and the party would announce details of that increase closer to the next election.

"This will be an increase over and above our longstanding commitment to lift MRET to at least five percent," he said.

The party would encourage industry to take up new and cleaner technologies such as clean coal and geosequestration, and combined cycle natural gas.

It would also examine ways to reconfigure the incentives and disincentives in our tax system to encourage investment in cleaner and renewable energy technologies.

That could include changes in the areas of research and development, depreciation of capital equipment purchases and the provision of a fixed energy research allowance, Beazley said.

Macfarlane 'bemused'

While the federal environment minister, Senator Ian Campbell, could not be reached, industry and resources minister Ian Macfarlane told the Oil&Gas Gazette his thoughts on the blueprint.

"The thing that amused me, if that's the right word — bemused me might be better — about Beazley's statement was that he agreed with us in terms of geosequestration, he agreed with us in terms of the importance of the gas industry, he agreed with basically our whole premise of the [energy] white paper. He disagreed on uranium; for what reason, we can't actually fathom."

"And basically his statement had no detail or costings other than he's going to do this dramatic reduction in greenhouse gas emissions. Well, if he sat down and worked that out, it is impossible to do ... it's just not achievable."

"It showed that his statement was just nothing but hot air really and it had no detail."

Macfarlane disagreed with the notion that the blueprint was very different from the government's current policy. He said that much of what Beazley said had just been lifted straight out of the Howard Government's white paper — Securing Australia's Energy Future — from 2004.

Defended

But shadow environment minister Anthony Albanese defended the level of detail appearing in the blueprint.

"At the moment there's a mandatory renewable energy target of 2%. We're saying that's insufficient, and that needs to be increased to more than 5%. We don't put a figure on it because this isn't our final policy document," he told Oil&Gas Gazette.

"The idea of the blueprints is to get statements of principle out there and to encourage further debate, so that people know the direction in which we're headed — which is why they're blueprints rather than policy statements. Obviously prior to the election, any policy commitments that we put out will be fully costed.

"The mandatory renewable energy target is a good example: there's not much point in 2005 making a promise for what you'll promise to do in 2007.

"Certainly we have to consider whether it's realistic to promise a commitment by 2010 in 2007. If what we're about is encouraging longer-term investment, then it may well be that we look at 2015 for example for an increase in the target."

He also defended the 'newness' of aspects of the blueprint.

"Some of the principles outlined in the blueprint, such as ratifying Kyoto, and [a] national emissions trading scheme, increasing MRET, have been Labour policy for some time. What this did was to put some further detail on top of that and it's certainly new to announce that long-term commitment, the 60% cut [in greenhouse emissions].

"Part of what underpins the blueprint is that business in particular needs investment certainty, and that's why setting the long-term target of a 60% reduction by 2050 does that."

Albanese returned Macfarlane's fire, asserting the federal government of behaving erratically with respect to climate change matters.

"The government is fairly contradictory to say the least on this," he said.

"On the long-term target, they've had Ian Campbell and other government members and ministers state that what's needed is a 60% reduction by 2050. They've said that on numerous occasions because that's the figure on which there's a global scientific consensus — to the extent that you ever have a scientific consensus, this is it. That's needed to restrict global warming to 2%, which is the figure on which scientists agree once you get beyond that it gets extremely dangerous.

"So on the one hand you had that. On the other hand you've had the government come out and be critical of the target since then."

He said the government had displayed the same sort of behaviour when it came to carbon emissions trading.

"You've also had the government be critical of emissions trading and yet Ministers Costello, Downer and Campbell have all in the past supported emissions trading — including as recently as this year, both Senator Campbell in senate estimates and Treasurer Costello in his address in Los Angeles spoke about the need and the critical importance of price signals.

"So the government's position's fairly contradictory I think."

Trigger

Albanese accused the government of another instance of back-tracking.

"What is missing from the EPBC Act is a climate change 'trigger', so that automatically for any major development the impact on climate change is considered as part of the project," Albanese said.

"That was promised by the Howard government that that would occur, but they haven't done anything about it. And that's why I've moved a private member's bill along those lines."

The bill, Avoiding Dangerous Climate Change (Climate Change Trigger) Bill 2005, if passed, would establish which projects needed to be assessed for their climate-change impact ahead of development. It would also define civil penalties for individuals and bodies corporate knowingly, intentionally or recklessly taking an unapproved climate change action.

A climate change action included creating an industrial plant or other facility that emitted, or is likely to emit, more than 500,000 tonnes of carbon dioxide or carbon dioxide equivalent per year.

"What we need to do in Australia in all these projects is to have best practice. That trigger is designed to encourage that to occur. It means that climate change will be considered as a matter of course."

Mr Albanese said such a trigger shouldn't affect feasibility studies or cause delays for major new projects. He also said no new agencies or regulators would need to be formed.

Emissions trading

Albanese provided examples of emissions trading systems elsewhere around the world.

"The whole of Europe has introduced an emissions trading system [that] began on January 1 of last year," he said.

"That's been quite successful ... I've actually seen the system in operation in London and it's up and running.

"The European system has been quite remarkable in how well it's gone ... There were some issues that had to be resolved by experience. Over-allocation of permits was one issue — [concerning] the national allocation plans of the different nation states in Europe that made up the system.

"That required some resolution, but by and large it's been remarkably successful in the way that it's gone from basically nothing to the way that it's grown."

"Under the Clean Air Act of 1990 [the USA] established an emissions trading system to deal with sulphur dioxide, which was extremely successful in overcoming that environmental issue, but also establishing an economic model.

"There's also various voluntary emissions trading systems, including in the Chicago Climate Exchange, which operates very effectively [and] has major companies such as DuPont and General Motors and other companies in the United States."

He also cited a new emissions trading system that was under construction.

"In the United States under the REGGI, the Regional Economic Greenhouse Gas Initiative, the north-east states are in the process of establishing an emissions trading system there."

According to Albanese, the Sydney Futures Exchange (SFE) spent a "considerable" sum in establishing the basis for a carbon emissions trading desk in Sydney.

In November, SFE managing director and chief executive Robert Elstone addressed the Melbourne Business School, saying, "Over the next year or so [the SFE] plans to extend its commodities reach to include water derivatives and, should Australia ever sign up to the Kyoto protocol, would be well placed to facilitate carbon (emissions) trading risk management."

"Particular commodities tend to have a centre of trading," Albanese said.

"I think that part of the Sydney Futures Exchange vision was to become a centre of [carbon emissions] trading for the Asia-Pacific region, not just for Australia.

"Potentially, the fact that Australia's behind the game leaves a gap for Singapore or for another centre in the region ... [such as] Tokyo.

"We have to I guess wait and see, but it's also the case that the states are establishing an emissions trading scheme are well underway.

"One of the messages that we've got [from business] is that they would much prefer for there to be a scheme implemented at the national level."

Push before pull

The research study, Technological Development and Economic Growth, prepared by the Australian Bureau of Agricultural and Resource Economics (ABARE) for the inaugural ministerial meeting of the Asia Pacific Partnership on Clean Development and Climate (AP6) held in January.

According to ABARE executive director Brian Fisher, unlike the United Nations Framework Convention on Climate Change (which involved around 192 member countries for every decision made) AP6 requires decision making from just six countries.

The countries involved in AP6 were Australia, China, India, Japan, Korea and the United States.

"Now those six countries constitute approximately 50% of everything that's important to climate change," Fisher told Oil&Gas Gazette.

It meant together they represented around 50% of global GDP, population, energy consumption — and emissions.

"So with just six countries in the room, not 192, you have 50% of the major players, basically, in the room.

"With a group of six you have some potential to make some sensible decisions."

The ABARE study assessed the potential economic, environmental and energy consumption effects of possible action taken on clean technologies as part of AP6. ABARE researchers examined three enhanced technology scenarios.

The researchers found government involvement was needed for the enhanced development, adoption, diffusion and transfer of energy efficient technologies and carbon capture and storage technologies.

They said technology push, such as research and development policies, and technology pull, such as emissions trading, would be required in the long term.

Possible technology push policy measures included collaborating on research and development, introducing industry technology standards and increasing technology transfer between countries.

But it was important that enough research funding and support be provided to reinvigorate public- and private-sector energy research. It was also important that "... the necessary technologies to substantially reduce emissions actually exist and are capable of deployment before technology 'pull' policies are adopted," they said.

"We need new technology to solve this problem," Dr Fisher said. He added that today's climate problems could not be solved using today's technology.

"At the moment the technology doesn't exist — it's not commercial. And so we need a program of research and development to develop the technology and we need partnerships between countries with all of the skills necessary to do that.

"There's no point in trying to drag this technology into the market until it exists. So you can tax people, you can subsidise them, you can do whatever you like to them, but you won't fundamentally solve the problem until the technology is there to be sucked into the marketplace."

Fisher said ABARE was working on including more technologies in its models and also on a longer-term model that incorporated a physical climate model (called MAGICC) "... so we can do proper benefit-cost analysis of the impacts of climate change".

Gas to liquids

ABARE's Fisher said GTL technology was "pretty interesting".

"If you were going to convert gas to liquids, then that takes energy," he said, adding it didn't sound very sensible to him.

"Right at the moment, companies can sell basically all of the gas they've got as gas. So why would anybody invest in billions of dollars in a gas-to-liquids plant, when they can sell the feedstock as is?

"Gas-to-liquids is not necessarily a sensible solution to this problem," he said.

CSIRO Petroleum's research group leader of gas processing, Professor David Trimm, said while there was no technical risk associated with a GLT plant, the economics of it all had become a moving target of late.

"If you go back a few years, the whole of industry was just saying that when oil reached $32 a barrel then gas-to-liquids would become competitive," he said.

But since then factors other than oil price had confounded that rule of thumb. While the price of oil had gone up, so had the price of gas.

"And because of the China syndrome the price of capital has gone up. Capital expenditure was supposed to be $20,000 per barrel and this was going to give you a 15 percent rate of return if the price of oil was $32.

"Now because of these factors that are changing, it really does turn you upside down and revolve you around."

So what is Trimm's take on the technologies likely to be used ahead?

"I think what you have to say is the concept of peak oil exists," he said.

"I'm not at all sure we are at the peak, but fairly obviously at some stage we will be at the peak. And after that we will need some kind of transport fuel."

"Now hydrogen presents very real problems and I don't think they'll be solved for 25 to 50 years — primarily because of the difficulty of distributing hydrogen and storing it on the vehicle."

"Once you're over peak oil you've got to [ask] 'What are going to be the transport fuels?' In Australia, biomass would be lucky to get 10% of fuel. Probably closer to 5%.

"There's just not enough around, because our consumption is 28 gigalitres of fuel a year and I think they can make 500 million litres of biofuel. So it's pretty small.

"So then you've got to say, 'Well, what are you going to run things on?' I would say in the short term: gas-to-liquids. Longer term: coal-to-liquids. And then you have a close look at who owns the coal fields and that will surprise you."

On the topic of relatively new technologies, APPEA chief executive Belinda Robinson said that while a lot of work had been done in the past the key to good energy policy was keeping all options open and encouraging diversity in supply.

"In terms of the petroleum industry, the more work done on innovative future options the better, as it is with any other energy industry," she said.

"A lot of the suggestions that are being kicked around at the moment I don't think are currently commercial in their current form.

"But when and if they become commercial and they use gas, that could be a very, very beneficial way of turning some of our standard gas into commercial viability."

"I think there's a lot of [industry] interest in energy technologies, energy sources, which is terrific. Increasing options is the key to a secure energy future."

s a r a h b e l f i e l d reporter & writer, freelance

About Services Clips Ideas Contact	Sample clip CLIMATE CHANGE CLASHES CONTINUE (Oil & Gas Gazette, April 2006) IN DELIVERING his sixth blueprint speech in early March, federal opposition leader Kim Beazley said the only environmentally sustainable energy policy for Australia was investing in two transformations. One such transformation was making the country's specialist solar sector into a "world beating" industry as big as coal is today. The other was a cleaner coal industry. The blueprint, Protecting Australia From The Threat of Climate Change, outlined what the Labour Party saw as the measures needed to effect those transformations. According to a copy of the blueprint, Beazley said: "...If we are to transform the coal industry into a cleaner coal industry and to develop solar energy to the scale required, we need a full set of market-based policies and transition arrangements as well as technology. "Arguably the most promising of the new clean coal technologies — Integrated Gasification Combined Cycle or IGCC technology — involves the conversion of coal to gas for direct firing of gas turbines in power stations that are much more efficient than today's." He also said that using part of the stream in gas to liquids (GTL) technology to make transport fuels and chemicals could help commercialise IGCC technology for power generation. He spoke of a long-term national target of 60% cut to Australia's year 2000 level of greenhouse emissions by 2050 — a target that would help industry "... make informed decisions about which technologies they should be investing in and [allow] the economy and society to adjust in a reasonable timeframe." He said the Labour Party would establish a national emissions trading system to reach the target 60% cut. "Market-based mechanisms such as emissions trading are central to moving to a low-carbon economy," Beazley said. He said a 'climate change trigger' in the Environment Protection and Biodiversity Conservation (EPBC) Act 1999 would ensure that major new projects are assessed for their climate change impact as part of any environmental assessment process. At the time of writing, this 'trigger' proposal was before Parliament in the form of a private member's bill put forward by shadow environment minister, Anthony Albanese. Beazley said the ALP supported increasing the Mandatory Renewable Energy Target (MRET) and the party would announce details of that increase closer to the next election. "This will be an increase over and above our longstanding commitment to lift MRET to at least five percent," he said. The party would encourage industry to take up new and cleaner technologies such as clean coal and geosequestration, and combined cycle natural gas. It would also examine ways to reconfigure the incentives and disincentives in our tax system to encourage investment in cleaner and renewable energy technologies. That could include changes in the areas of research and development, depreciation of capital equipment purchases and the provision of a fixed energy research allowance, Beazley said. Macfarlane 'bemused' While the federal environment minister, Senator Ian Campbell, could not be reached, industry and resources minister Ian Macfarlane told the Oil&Gas Gazette his thoughts on the blueprint. "The thing that amused me, if that's the right word — bemused me might be better — about Beazley's statement was that he agreed with us in terms of geosequestration, he agreed with us in terms of the importance of the gas industry, he agreed with basically our whole premise of the [energy] white paper. He disagreed on uranium; for what reason, we can't actually fathom." "And basically his statement had no detail or costings other than he's going to do this dramatic reduction in greenhouse gas emissions. Well, if he sat down and worked that out, it is impossible to do ... it's just not achievable." "It showed that his statement was just nothing but hot air really and it had no detail." Macfarlane disagreed with the notion that the blueprint was very different from the government's current policy. He said that much of what Beazley said had just been lifted straight out of the Howard Government's white paper — Securing Australia's Energy Future — from 2004. Defended But shadow environment minister Anthony Albanese defended the level of detail appearing in the blueprint. "At the moment there's a mandatory renewable energy target of 2%. We're saying that's insufficient, and that needs to be increased to more than 5%. We don't put a figure on it because this isn't our final policy document," he told Oil&Gas Gazette. "The idea of the blueprints is to get statements of principle out there and to encourage further debate, so that people know the direction in which we're headed — which is why they're blueprints rather than policy statements. Obviously prior to the election, any policy commitments that we put out will be fully costed. "The mandatory renewable energy target is a good example: there's not much point in 2005 making a promise for what you'll promise to do in 2007. "Certainly we have to consider whether it's realistic to promise a commitment by 2010 in 2007. If what we're about is encouraging longer-term investment, then it may well be that we look at 2015 for example for an increase in the target." He also defended the 'newness' of aspects of the blueprint. "Some of the principles outlined in the blueprint, such as ratifying Kyoto, and [a] national emissions trading scheme, increasing MRET, have been Labour policy for some time. What this did was to put some further detail on top of that and it's certainly new to announce that long-term commitment, the 60% cut [in greenhouse emissions]. "Part of what underpins the blueprint is that business in particular needs investment certainty, and that's why setting the long-term target of a 60% reduction by 2050 does that." Albanese returned Macfarlane's fire, asserting the federal government of behaving erratically with respect to climate change matters. "The government is fairly contradictory to say the least on this," he said. "On the long-term target, they've had Ian Campbell and other government members and ministers state that what's needed is a 60% reduction by 2050. They've said that on numerous occasions because that's the figure on which there's a global scientific consensus — to the extent that you ever have a scientific consensus, this is it. That's needed to restrict global warming to 2%, which is the figure on which scientists agree once you get beyond that it gets extremely dangerous. "So on the one hand you had that. On the other hand you've had the government come out and be critical of the target since then." He said the government had displayed the same sort of behaviour when it came to carbon emissions trading. "You've also had the government be critical of emissions trading and yet Ministers Costello, Downer and Campbell have all in the past supported emissions trading — including as recently as this year, both Senator Campbell in senate estimates and Treasurer Costello in his address in Los Angeles spoke about the need and the critical importance of price signals. "So the government's position's fairly contradictory I think." Trigger Albanese accused the government of another instance of back-tracking. "What is missing from the EPBC Act is a climate change 'trigger', so that automatically for any major development the impact on climate change is considered as part of the project," Albanese said. "That was promised by the Howard government that that would occur, but they haven't done anything about it. And that's why I've moved a private member's bill along those lines." The bill, Avoiding Dangerous Climate Change (Climate Change Trigger) Bill 2005, if passed, would establish which projects needed to be assessed for their climate-change impact ahead of development. It would also define civil penalties for individuals and bodies corporate knowingly, intentionally or recklessly taking an unapproved climate change action. A climate change action included creating an industrial plant or other facility that emitted, or is likely to emit, more than 500,000 tonnes of carbon dioxide or carbon dioxide equivalent per year. "What we need to do in Australia in all these projects is to have best practice. That trigger is designed to encourage that to occur. It means that climate change will be considered as a matter of course." Mr Albanese said such a trigger shouldn't affect feasibility studies or cause delays for major new projects. He also said no new agencies or regulators would need to be formed. Emissions trading Albanese provided examples of emissions trading systems elsewhere around the world. "The whole of Europe has introduced an emissions trading system [that] began on January 1 of last year," he said. "That's been quite successful ... I've actually seen the system in operation in London and it's up and running. "The European system has been quite remarkable in how well it's gone ... There were some issues that had to be resolved by experience. Over-allocation of permits was one issue — [concerning] the national allocation plans of the different nation states in Europe that made up the system. "That required some resolution, but by and large it's been remarkably successful in the way that it's gone from basically nothing to the way that it's grown." "Under the Clean Air Act of 1990 [the USA] established an emissions trading system to deal with sulphur dioxide, which was extremely successful in overcoming that environmental issue, but also establishing an economic model. "There's also various voluntary emissions trading systems, including in the Chicago Climate Exchange, which operates very effectively [and] has major companies such as DuPont and General Motors and other companies in the United States." He also cited a new emissions trading system that was under construction. "In the United States under the REGGI, the Regional Economic Greenhouse Gas Initiative, the north-east states are in the process of establishing an emissions trading system there." According to Albanese, the Sydney Futures Exchange (SFE) spent a "considerable" sum in establishing the basis for a carbon emissions trading desk in Sydney. In November, SFE managing director and chief executive Robert Elstone addressed the Melbourne Business School, saying, "Over the next year or so [the SFE] plans to extend its commodities reach to include water derivatives and, should Australia ever sign up to the Kyoto protocol, would be well placed to facilitate carbon (emissions) trading risk management." "Particular commodities tend to have a centre of trading," Albanese said. "I think that part of the Sydney Futures Exchange vision was to become a centre of [carbon emissions] trading for the Asia-Pacific region, not just for Australia. "Potentially, the fact that Australia's behind the game leaves a gap for Singapore or for another centre in the region ... [such as] Tokyo. "We have to I guess wait and see, but it's also the case that the states are establishing an emissions trading scheme are well underway. "One of the messages that we've got [from business] is that they would much prefer for there to be a scheme implemented at the national level." Push before pull The research study, Technological Development and Economic Growth, prepared by the Australian Bureau of Agricultural and Resource Economics (ABARE) for the inaugural ministerial meeting of the Asia Pacific Partnership on Clean Development and Climate (AP6) held in January. According to ABARE executive director Brian Fisher, unlike the United Nations Framework Convention on Climate Change (which involved around 192 member countries for every decision made) AP6 requires decision making from just six countries. The countries involved in AP6 were Australia, China, India, Japan, Korea and the United States. "Now those six countries constitute approximately 50% of everything that's important to climate change," Fisher told Oil&Gas Gazette. It meant together they represented around 50% of global GDP, population, energy consumption — and emissions. "So with just six countries in the room, not 192, you have 50% of the major players, basically, in the room. "With a group of six you have some potential to make some sensible decisions." The ABARE study assessed the potential economic, environmental and energy consumption effects of possible action taken on clean technologies as part of AP6. ABARE researchers examined three enhanced technology scenarios. The researchers found government involvement was needed for the enhanced development, adoption, diffusion and transfer of energy efficient technologies and carbon capture and storage technologies. They said technology push, such as research and development policies, and technology pull, such as emissions trading, would be required in the long term. Possible technology push policy measures included collaborating on research and development, introducing industry technology standards and increasing technology transfer between countries. But it was important that enough research funding and support be provided to reinvigorate public- and private-sector energy research. It was also important that "... the necessary technologies to substantially reduce emissions actually exist and are capable of deployment before technology 'pull' policies are adopted," they said. "We need new technology to solve this problem," Dr Fisher said. He added that today's climate problems could not be solved using today's technology. "At the moment the technology doesn't exist — it's not commercial. And so we need a program of research and development to develop the technology and we need partnerships between countries with all of the skills necessary to do that. "There's no point in trying to drag this technology into the market until it exists. So you can tax people, you can subsidise them, you can do whatever you like to them, but you won't fundamentally solve the problem until the technology is there to be sucked into the marketplace." Fisher said ABARE was working on including more technologies in its models and also on a longer-term model that incorporated a physical climate model (called MAGICC) "... so we can do proper benefit-cost analysis of the impacts of climate change". Gas to liquids ABARE's Fisher said GTL technology was "pretty interesting". "If you were going to convert gas to liquids, then that takes energy," he said, adding it didn't sound very sensible to him. "Right at the moment, companies can sell basically all of the gas they've got as gas. So why would anybody invest in billions of dollars in a gas-to-liquids plant, when they can sell the feedstock as is? "Gas-to-liquids is not necessarily a sensible solution to this problem," he said. CSIRO Petroleum's research group leader of gas processing, Professor David Trimm, said while there was no technical risk associated with a GLT plant, the economics of it all had become a moving target of late. "If you go back a few years, the whole of industry was just saying that when oil reached $32 a barrel then gas-to-liquids would become competitive," he said. But since then factors other than oil price had confounded that rule of thumb. While the price of oil had gone up, so had the price of gas. "And because of the China syndrome the price of capital has gone up. Capital expenditure was supposed to be $20,000 per barrel and this was going to give you a 15 percent rate of return if the price of oil was $32. "Now because of these factors that are changing, it really does turn you upside down and revolve you around." So what is Trimm's take on the technologies likely to be used ahead? "I think what you have to say is the concept of peak oil exists," he said. "I'm not at all sure we are at the peak, but fairly obviously at some stage we will be at the peak. And after that we will need some kind of transport fuel." "Now hydrogen presents very real problems and I don't think they'll be solved for 25 to 50 years — primarily because of the difficulty of distributing hydrogen and storing it on the vehicle." "Once you're over peak oil you've got to [ask] 'What are going to be the transport fuels?' In Australia, biomass would be lucky to get 10% of fuel. Probably closer to 5%. "There's just not enough around, because our consumption is 28 gigalitres of fuel a year and I think they can make 500 million litres of biofuel. So it's pretty small. "So then you've got to say, 'Well, what are you going to run things on?' I would say in the short term: gas-to-liquids. Longer term: coal-to-liquids. And then you have a close look at who owns the coal fields and that will surprise you." On the topic of relatively new technologies, APPEA chief executive Belinda Robinson said that while a lot of work had been done in the past the key to good energy policy was keeping all options open and encouraging diversity in supply. "In terms of the petroleum industry, the more work done on innovative future options the better, as it is with any other energy industry," she said. "A lot of the suggestions that are being kicked around at the moment I don't think are currently commercial in their current form. "But when and if they become commercial and they use gas, that could be a very, very beneficial way of turning some of our standard gas into commercial viability." "I think there's a lot of [industry] interest in energy technologies, energy sources, which is terrific. Increasing options is the key to a secure energy future."
	Copyright © 2006-2010 Sarah Belfield. All rights reserved.