Santos expects that Australia is on a path to develop its carbon capture and storage (CCS) industry following the release of the King review and the federal government’s response.
Kevin Gallagher, Santos managing director and chief executive officer, said the review made ‘sensible, job-creating’ recommendations that would cut through red and green tape to accelerate investment in real emissions reduction opportunities in Australia.
The company’s proposed Moomba CCS project in South Australia is set to capture 1.7 million tonnes per annum of carbon dioxide that is currently separated from natural gas at the Moomba gas processing plant.
It will reinject the gas into the the same geological formations that have safely and permanently held oil and gas in place for tens of millions of years.
CCS projects globally store around 40 million tonnes per year of carbon dioxide, which the International Energy Agency predicts as two billion tonnes short of what CCS carbon project need to store by 2040.
“Australia needs low-cost, large-scale abatement to maintain our position as a leading energy exporter and manufacturer of energy-intensive materials such as steel and cement, as well as to enable new industries such as hydrogen,” Gallagher said.
“With the Cooper Basin’s re-injection capacity assessed at up to 20 million tonnes of carbon dioxide per year for 50 years, it has the potential to be de-carbonise energy at its source.”
Energy and Emissions Reduction Minister Angus Taylor said the government would open up new opportunities to reduce emission across the industrial, manufacturing, transport and agriculture sectors through the $2 billion Climate Solutions fund.
The King review aims to build on the success of the Emissions Reduction fund and is the next step in the government’s technology not taxes approach to reducing emissions.
Taylor said the government would look to deploy the $2 billion Climate Solutions fund to support Australian farmers, businesses and communities to adopt new technologies that reduce emissions and increase efficiency and productivity.
“The government will target dollar for dollar co-investment from the private sector and other levels of government to drive at least $4 billion of investment that will reduce emissions across Australia,” Taylor said.
The Emissions Reduction fund has contracted more than 190 million tonnes of emissions reductions at an average price of around $12 per tonne.