It is a pleasure to be here at Australia’s first National Carbon Capture and Storage Week.
I express my thanks to those that have organised this event.
National CCS Week is an important opportunity for industry to exchange ideas and share their experiences.
Australia’s energy mix
To appreciate the importance of CCS technologies it is important to look at Australia’s energy mix – past, present and future.
A reliable, secure energy supply is the basis upon which we have grown Australia’s economy – an economy that is now the envy of the developed world.
Historically, this supply has been derived primarily from fossil fuels.
Even today around 80 per cent of our electricity is generated from coal fired power stations - but that mix is changing.
In the drive to lower our emissions, gas is emerging as an important transitional fuel.
Emitting 35 per cent less emissions that the cleanest coal fired power stations, gas offers security of supply, baseload capacity and is a cleaner burning fuel source as we make the transition to a low carbon economy.
Renewable energy also has a role to play in our future energy mix – particularly as technologies improve and costs come down.
In its World Energy Outlook 2010 the International Energy Agency predicts that the global use of renewable energy will triple between 2008 and 2035.
Their findings confirm that this uptake of renewable energy will take time, money and policy certainty.
That is why the Government is directly funding and supporting renewable energy along the innovation chain from R&D, through to demonstration and commercial deployment.
That is also why the Government continues to prosecute its case for a putting a price on carbon as the most cost-effective way of providing the certainty needed to drive further investment.
What the Government is not doing is picking winners.
We are testing a broad range of technologies and tackling the challenges of climate change on a number of fronts.
We are addressing increased demand for energy with strengthened energy efficiency measures.
Of particular relevance to this gathering is our support for the development of CCS technologies and new emissions standards for power stations.
In mapping out the future for Australia’s energy mix and our vision for a low emissions economy we cannot ignore the important future role CCS can play, both domestically and internationally.
We must recognise that at the same time as the IEA points to an increase in the use of renewable energy they also recognise that the use of fossil fuels – including gas – will also increase.
Let’s look at some of the facts:
In the next decade alone, around 1,000 new Chinese coal-fired power stations will be brought online.
Globally, more than one billion people have no access to electricity.
And those who do want more.
Unabated, global energy demand will rise by nearly 50 per cent by 2030.
The role of CCS
If CCS captured 90 per cent of Australia’s emissions from coal-fired power and all reservoir gas emissions, we could cut our emissions by the equivalent of 21 per cent of our total 2006 greenhouse gas emissions.
The Global challenge is to respond to current and future energy demand while offering sustainable solutions.
CCS could provide a mechanism for countries that rely on fossil fuels to reduce their greenhouse gas emissions.
So the challenge is real – and the importance of proving up CCS technologies is clear.
Government support for CCS
The Australian Government is investing $5.1 billion through the Clean Energy Initiative - add to this our legislated 20 per cent by 2020 Renewable Energy Target and you start to get an idea of the magnitude of our commitment to a low emissions future.
The Government’s direct support for the development of CCS includes:
· The $1.9 billion CCS Flagships Program;
· The $385 million National Low Emissions Coal Initiative;
· The Australian National Low Emissions Coal R&D organisation;
· Research on geological storage of CO2; and
· Over $300 million for the Global CCS Institute.
We are also funding the CO2CRC’s Otway Project - the world’s largest research and geosequestration demonstration project.
Australia is at the forefront of global efforts to accelerate the commercial-scale deployment of CCS – our job, collectively, is to keep us there.
Our investment in CCS Flagships and the Global Institute is directed at proving commercial-scale CCS can be part of the low-carbon energy solution.
So far, four CCS Flagship projects have been shortlisted by the Independent Assessment Panel.
The scale and the timeframe in which we and the global community are seeking to achieve our CCS objectives is ambitious.
The Government is currently considering advice from the Independent Assessment Panel.
These are complex matters and the Government is determined to take the time to make the right decisions.
I expect to be in a position to announce the next significant stage in the development of CCS Flagships in the first half of 2011.
These demonstration projects will play an important role in building investor confidence in the technology, and building knowledge about applying CCS at scale.
Commissioning CCS at-scale from 2015 remains a challenging target.
But with the knowledge gained from early projects, we are constantly refining our understanding.
And Government policy is flexible enough to let us prioritise issues in the most appropriate way.
The question of storage
The need to prove-up storage basins to permanently sequester captured CO2 is chief among our challenges.
Successful projects hinge on it.
I acknowledge the work on storage exploration and data acquisition by Geoscience Australia, its state counterparts and project proponents under the CCS Flagships program.
More work, however, is a priority.
I urge state governments to continue working with the Commonwealth to ensure storage work goes forward as quickly as possible.
This time last year, I released the Concise Report of the Carbon Storage Taskforce, the National Carbon Mapping and Infrastructure Plan.
The Report aims to drive the prioritisation of, and access to, national storage capacity to accelerate CCS.
Today I am releasing the Full Report and its accompanying “plain English” brochure.
These two documents will help inform the important work around CCS storage.
NLEC Strategy
Today I am also releasing the National Low Emissions Coal Strategy and an accompanying update paper.
This Strategy and the Carbon Storage Taskforce reports will inform the debate on Australia’s energy future.
They will also inform the Energy White Paper process and provide a reference point for policymakers and industry to identify and address key energy issues.
Cleaner Power Stations
I mentioned in my introduction that the Government is tackling the challenges of climate change on a number of fronts.
An important part of our work is seeking to make power generation cleaner and more sustainable.
This includes requiring that new coal-fired power plants be ‘CCS-ready’ and implementing new emissions standards, in accordance with our election commitment.
As part of delivering on that commitment, I am today releasing a discussion paper on Cleaner Power Stations.
The CCS-Ready concept requires consultation given the questions it raises and the need for a proper definition of CCS-Ready.
I urge stakeholders to read the discussion paper and engage with consultation process established to implement this policy.
Broader application of CCS
But our work does not end there.
I believe Australia needs a nationally-consistent regulatory regime for CCS.
This is vital for:
· future investment;
· consistent conditions under which CO2 is captured, transported and stored; and
· meeting national environmental standards.
I want to ensure such regulations are in place and will continue to work with my state and territory counterparts to achieve this goal through our Ministerial Council.
Looking ahead, the potential for CCS goes well beyond coal-fired power generation.
It includes gas-fired power generation, LNG processing, liquefied fuel technologies and emission-intensive industrial processing.
High-value gas and industrial production from, for example, steel and cement and LNG processing may eventually need CCS application.
The Gorgon LNG project is perhaps the best example.
It will capture waste CO2 from reservoir gas flows and compress and store it deep underground.
This will be the biggest carbon capture project in the world.
It has been recognised by the G8 as one of the 20 integrated CCS projects to be established globally by 2020.
The Gorgon project demonstrates the extent to which the upstream oil and gas industry is integral to the uptake of CCS – it is an important partner in this journey.
National CCS Council
Recognising that CCS goes beyond coal-fired power generation, I am pleased to announce today the establishment of the National CCS Council, which will comprise members drawn from the generation, coal and petroleum sectors.
The National CCS Council will build on the impressive work already undertaken by the National Low Emissions Coal Council and the Carbon Storage Taskforce.
The National CCS Council will also play a key role in assisting the development of the CCS-ready standard I mentioned earlier.
Conclusion
Ladies and gentlemen, the question of energy security is a complex one.
It is vitally important to industry, business and indeed to every Australian.
We have some challenges in front of us but the Government is ready to confront them.
We know that CCS could play an important role in reducing carbon emissions, in Australia and overseas and the Government will continue to encourage its development.
I wish you all the best for your endeavours at National CCS Week.
Thank you.