Article by the Chief Executive of The Australian Gas Association, Bill Nagle, published in The Australian Financial Review on Thursday 18 January 2001, as part of a series on “The Business of Saving the Planet”.

To date, public debate on improving our environment—through changes to our energy mix—has largely centred around an anachronistic mindset of fossil fuels versus renewables.

This approach has done nothing to promote cleaner energy generation in Australia.

The New Year provides an ideal opportunity to think outside the square, particularly regarding the pre-eminent environmental issues of greenhouse and urban air quality.

In any debate on these issues—and in any consideration of Australian Federal or State energy policies—there should not simply be an antiquated contrast between fossil fuels and renewables.

Rather, the contrast should be between high-emission fuels, such as coal and oil, and low-emission fuels, such as natural gas and some forms of renewables.

Importantly, natural gas is the only major fuel which can realistically meet Australia’s growing demand for a reliable and efficient energy supply, at least cost to our environment.

An independent study commissioned last year by the Australian Gas Association (AGA)—Assessment of Greenhouse Gas Emissions from Natural Gas—shows clearly that natural gas has significantly lower greenhouse gas emissions than either black or brown coal.

Furthermore, the recently-updated Australia’s National Greenhouse Gas Inventory, released in July by the Australian Greenhouse Office, confirmed that the emission intensity (emissions produced per unit of electricity generated) of brown coal is about 5 percent higher than black coal, and 83 percent higher than natural gas.

Natural gas is also available in large quantities throughout Australia (lessening the need for fuel imports), has a reliable and secure supply system, and is often a significant factor in encouraging industry development in regional Australia, through providing economical energy options.

Over the past year, some State governments have recognised these benefits and have incorporated a greater role for natural gas in their electricity generation policies.

In May, the Queensland Government announced its new Cleaner Energy Strategy, which requires that thirteen percent of Queensland’s electricity sales be produced from natural gas by 2005, along with another two percent from renewable energy sources. Already, the development of one 385 megawatt gas-fired power station has been approved by the Queensland Government, in line with the Strategy.

Last month, the AGA also welcomed an announcement by the Western Australian Government to upgrade WA’s public power generation system, with at least 600 megawatts of the State’s additional generation capacity for the next decade likely to be fueled by natural gas.

The WA Government has also approved the development of gas-fired power generation in the State’s West Kimberley region, replacing diesel-generated electricity. South Australia and the Northern Territory are also strong converts to gas.

In the highly-populated and large coal-based States of Victoria and New South Wales, however, very little natural gas is being used in electricity generation, with the majority of power being produced from coal. If these States are to more fully contribute to improving Australia’s air quality—and to lowering greenhouse gas emissions—they must follow the lead of Queensland, Western Australia, South Australia and the Northern Territory, in explicitly choosing natural gas for much more of their future power generation needs.

The Federal Government, too, must move to more explicitly encourage an increased use of natural gas, over coal, in electricity generation.

While it, and the Australian Democrats, are to be commended for actively working to develop further natural gas vehicles refueling infrastructure—and increase the natural gas vehicles market—in Australia, little has been accomplished federally with regards to requiring more natural gas use in electricity generation.

The Council of Australian Governments (COAG) recently agreed to develop a national energy policy during 2001. This provides an ideal opportunity for the economic, environmental and regional benefits of natural gas to be fully recognised in future electricity generation decisions.

The AGA believes that the policy should, inter alia: