Adelaide
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Introduction
I thank the Cooperative Research Centre for hosting this symposium on Carbon Capture and Storage.
Today, we will gain a further understanding of progress, obstacles and opportunities in this important field.
Reducing our carbon emissions requires technological breakthroughs.
Commercial solutions to these challenges cannot be found without first testing a range of technologies.
We must recognise not all proposed technologies will prove to be viable from a technical or economic point of view.
Indeed, many clean energy technologies may ultimately not be applicable in the same manner that we originally envisaged.
And progress will certainly not be as smooth as we would like it to be.
But we need to keep investigating the various technologies while sustaining a strong economy and maintaining social cohesion.
CCS in context
For Australia to substantially reduce its carbon emissions we must transform our energy sector.
Although important, wind generation and other renewable energy are not currently commercially viable base load solutions – and our future energy mix will likely rely on many technologies.
Since three-quarters of Australia’s electricity currently comes from coal, developing low-emission fossil fuel technologies is critical.
With CCS in place, coal and gas may contribute around 30 per cent of Australia’s power generation by 2050.
And globally, coal fired power stations continue to be built, and coal will continue to be the world’s fastest growing energy source for some time.
As the Japanese response to the Fukushima incident demonstrates, any slowdown or reduction in the use of nuclear power is likely – in the short and medium term – to lead to increases in electricity generated using coal.
In seeking technological solutions, we must continue to develop CCS technology.
Although CCS can potentially sustain Australia's booming coal and gas exports, Australia cannot act alone and the challenges posed by its commercialisation means that global co-operation is essential.
Global co-operation
The Australian Government’s primary response to the need to foster such co-operation and knowledge sharing has been to establish and support the Global Carbon Capture and Storage Institute.
I was pleased in September to attend the Carbon Sequestration Leadership Forum in Beijing, where Ministers agreed to keep up the global effort on CCS despite current economic uncertainty.
As well as Government, industry also has a role to play in progressing CCS outcomes.
Australia’s projects with our overseas partners provide examples of global effort in action.
Just consider the $20 million that the Commonwealth Government has provided to the Australia-China Joint Coordination Group on Clean Coal Technology.
Our co-operation with China has already led to a memorandum of understanding and a feasibility study into a full-scale post combustion capture project.
Smaller amounts of money will fund six collaborative research projects between Australia and China.
These projects are now underway.
And next week a delegation from the European Union will come here to learn about how Australian is developing its CCS technology.
In line with the EU’s ongoing commitment to the uptake of CCS, the visit is an opportunity to identify areas of future co-operation.
The delegation will visit CO2CRC sites in Victoria and learn about collaborative CCS Flagships work on the West Australian Collie South West Hub project.
Beyond the EU, the Commonwealth Government remains supportive of efforts to deploy CCS in less developed countries.
That's why Australia has led the push to include CCS in the Clean Development Mechanism.
I am hopeful that the UNFCCC conference currently underway in Durban will finally sign off on this measure.
CCS in Australia
Turning to a domestic focus, the Commonwealth is making its own sizeable contribution to developing our capacity to deploy CCS technology.
To that end the Commonwealth Government is contributing $75 million to a national low-emissions coal-research program (ANLEC R&D) and other pilot demonstration projects in various states.
Significantly, the Commonwealth Government has also allocated $1.7 billion to the CCS Flagships program to support the development of industrial scale CCS demonstration projects.
To date, the West Australian Collie South West Hub is the first project to be selected for funding under the program.
The Commonwealth will provide up to $52 million in funding for the first key phase of the project development, the completion of a detailed storage viability study.
Ultimately, if successful, the Collie South West Hub project will be a world leading commercial scale CCS demonstration project.
Storage and community acceptance
Solving the technical and economic aspects of capturing carbon is only part of the challenge.
Identifying storage sites is equally important.
That’s why the Australian Government is providing $60 million for a National CO2 Infrastructure Plan and is prioritising expenditure towards storage for CCS Flagships projects.
This builds on the work and advice of the Carbon Storage Taskforce and the National CCS Council.
As a result of the pre-competitve work by Geoscience Australia and its state counterparts, the cost of commercial exploration of storage should be lower than it otherwise would have been.
My department is also working with the Energy Pipelines CRC on best-practice standards for pipeline regulation in Australia.
As with other forms of clean energy, social and community acceptance cannot be overlooked.
Recent debates with respect to coal seam gas have only underscored this fact.
Industry and government cannot neglect to take the broader community along as new technology is deployed.
Securing a social licence to operate is essential, and a challenge that must be met.
Community concerns are not unique to Australia.
Consider the reaction in the Netherlands to the proposed Barendrecht project which failed when community opposition developed into political opposition.
There are no easy solutions to our energy challenges.
Challenges such as rising prices, the need to reduce greenhouse gas emissions, community opposition to wind farms, or community opposition to drilling – whether it be for gas, geothermal or associated with CCS.
The community has some difficult choices to make.
In making these choices, information that is credible and accessible to the public is central to acquiring trust and community acceptance.
To this end the Global CCS Institute and the CSIRO are producing a communications and engagement tool kit.
And in this regard the quality of the work of the CO2CRC has been critical.
The Centre has been a steadfast advocate of CCS for more than a decade, and its website provides a wealth of credible information and avenues to enhance technical knowledge.
The way forward
In order to meet the global targets to reduce carbon emissions there needs to be a huge transformation in the way we generate electricity.
The Australian Government is doing its part through the carbon price package which Parliament passed earlier this month.
Alongside a 20 per cent renewable-energy target, carbon pricing is a powerful incentive to lower carbon emissions.
But we recognise that these measures are not of themselves sufficient to drive the research, development and demonstration projects required to meet this challenge.
That is why we are supporting CCS through the $1.7 billion CCS Flagships program.
But in any research and development activity it is important that scarce funding is used to maximum effect.
By establishing the GCCSI, the Government has established a body that will assist in limiting duplication of effort, and will maximise international co-operation.
Any research effort needs to be ready to adapt to changing priorities – here and overseas.
Careful thought and planning needs to begin now about the RD&D that CCS will require in the future – especially as other sectors come on board.
To date, a lot of the RD&D focus has been on applying CCS to coal fuelled electricity generation.
While this should remain a high priority, the further development of higher value coal gasification may also offer a commercial route to CCS demonstration and deployment.
This is recognised internationally, but it is particularly true in Australia, where power prices are comparatively low and significant enhanced oil recovery revenue opportunities are not available to support some of the costs of CCS.
For this reason the Collie South West Hub project, which includes the proposed Perdaman coal to urea project, is an important proposal.
The Commonwealth is also collaborating with the Victorian Government to evaluate proposals by Japanese companies to apply gasification technologies to brown coal.
The idea is to convert Victoria's abundant supply of brown coal to higher value commodities such as substitute natural gas, hydrogen and liquid fuels whilst capturing the CO2.
For CCS to have any meaningful impact on the global energy mix, we need to keep the momentum going.
We need to collectively succeed in overcoming shared challenges.
Australia is a leader – we are committing money, expertise, policy direction and a sense of purpose to international collaboration on carbon capture and storage.
The stakes are high, and the impediments to the development and deployment of CCS are many.
I am nevertheless confident that the world, with Australia’s full participation, can overcome these challenges.
Thank you