Briefing Notes For The Joint Committee on Northern Australia Inquiry into Northern Australia Perth Monday 7th April, 2015

Leveraging of Northern Australia’s Carbon Resources: Renewable Natural Gas Boyd Milligan Curtin University Sustainability Policy Institute

Abstract Northern Australia is a primary producer of carbon dioxide. It thus contributes significantly to Australia’s carbon budget. Currently the majority of the carbon is produced as a by-product of the production of natural gas and its liquefaction into LNG. Only one site of the many that are currently producing or are about to in the foreseeable future is doing anything to address this. That is Chevron’s Barrow island production facility which will sequester a proportion of its emissions. This briefing note outlines issues and opportunities for one potential use of this resource, Renewable Natural Gas (RNG). Renewable hydrocarbon is an option being considered amongst many worldwide for “carbon utilisation” as the world addresses the twin risks of fossil hydrocarbon scarcity and escalating costs, along with the global Climate Change risk associated with greenhouse gases. RNG presents as a particular opportunity for Australia and particularly its Northern regions. As one of the latest frontiers of research, and linked with the abundant resources of both water and carbon dioxide offered in our North, such technologies offer Australia one of a rapidly diminishing pool of opportunities to capitalise on the future direction of renewable fuels, whilst sponsoring the development of natural gas infrastructure, knowing it has a future beyond fossil natural gas. This note shows that by combining solar energy through solar thermal plant, with these resources we can develop an advanced technology of a world scale, thus leveraging our resources well beyond their “use by date”. Further it directly outlines risk minimisation opportunities by maintaining a diversity of energy supply chains, minimising infrastructure investment, and how using an known and versatile product (natural gas), minimises development of “consumer” technologies. Briefing Notes For The Joint Committee on Northern Australia Inquiry into Northern Australia: Leveraging of Northern Australia’s Carbon Resources: Renewable Natural Gas

Table of Contents Abstract ...... 1 Table of Contents ...... 2 Introduction ...... 3 Sustainable Natural Gas: Compressed Hydrogen Energy ...... 4 Our Energy Networks ...... 4 Oil Distribution ...... 5 Electrical Distribution ...... 6 Fossil Natural Gas Distribution ...... 7 Hydrogen ...... 7 RNG ...... 9 Technological Understanding ...... 10 Opportunistic and Primary Production ...... 13 Utilising Technologies ...... 13 References...... 15

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Briefing Notes For The Joint Committee on Northern Australia Inquiry into Northern Australia: Leveraging of Northern Australia’s Carbon Resources: Renewable Natural Gas

Introduction In considering our world, the only enriching and external energy stream is the sun, everything else is subject to the second law of thermodynamics: “that the entropy of an isolated system which is not in equilibrium will tend to increase over time, approaching a maximum value at equilibrium”. Humankind face an almost intransigent task in mapping its future due to a barrage of factors which impact on our everyday lives. Almost preeminent amongst these is the reliance our world has developed on fossil energy. Few would argue that the current levels of advancement in standards of living and ability to explore the frontiers of human existence at an ever increasing rate have been made possible by easy access to inexpensive sources of energy. Energy, particularly from fossil fuels, has enabled us to leverage our relatively limited human capacity, to take giant leaps forward. On a more mundane level, much has been documented regarding the factors contributing to a looming energy crisis including1:  Peak Oil (also Natural Gas, Coal, Uranium and any other non-renewable resources directly or indirectly contributing to our energy supply chain);  A Historically unprecedented increase in world population adding significant pressure for more of everything;  Unbalanced distribution of the world’s wealth (and hence energy consumption); and  Environmentally limiting factors including Human Induced Planetary Level Climate Change. The associated document “Briefing Facts for the Joint Committee on Northern Australia: Inquiry into Northern Australia, Perth Monday 7th April, 2015 Northern Australia’s Carbon Resources” clearly identifies the issue of the carbon emissions in the Northern Regions of Australia. The response to all this has been relatively typical with current and entrenched industrial players responding in a variety of ways which range from the “cigarette defence” of denial and obfuscation, others just duck their corporate heads and do “business as usual” and a percentage drive forward looking for opportunities to grow into the new environment2. There is also a plethora of organisations nominally outside of the established industry vigorously pursuing new opportunities. Whilst energy consumption reduction, nuclear, and geothermal do not, the remainder obtain embodied energy directly from the sun, all with a variety of efficiencies. Many such arguments are well summarised in a paper by Abbott3. He has taken a meta-view of resource availability and energy sustainability, ultimately concluding that the sun must be our ultimate source of energy and that solar thermal systems are the least resource intensive and efficient system to harvest this energy. Based on this he represents much of the conventional wisdom around the transition from a fossil fuel based economy to a renewable future: a renewable electrical grid coupled with a renewable hydrogen economy for most other purposes, primarily transport. Much of this philosophy is based on the basis of all other sources of fuel are too environmentally, socially or economically costly. The energy sector is interwoven to an almost inseparable extent into the fabric of our society. Its integration presents a security risk, but its diversity militates against this. The almost overwhelming discourse on electrical solutions to the transport of energy in most foreseeable futures intensifies the security and competitive risks around our energy systems by effectively

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Briefing Notes For The Joint Committee on Northern Australia Inquiry into Northern Australia: Leveraging of Northern Australia’s Carbon Resources: Renewable Natural Gas

developing a monoculture. Hydrogen has been, perhaps unconsciously, positioned to provide a distributed option to the electricity grid, as well as a pathway to transport fuel. All previous scenarios have considered that hydrogen is the best fuel with which to enervate the renewable energy sector. This view is challenged by the potential of “renewable natural gas” (RNG). We review the key arguments in the advantages in the use of RNG and look at some of the technological issues underlying this potential Sustainable Natural Gas: Compressed Hydrogen Energy The name “Sustainable Natural Gas” is based on the premise that the major constituent for natural gas is methane (CH4), which represents 70-95% of the physical and embodied energy in most locations where fossil derived natural gas (FNG) is exploited. The industrial production of methane is a known science. Thus the production of CH4 on an economic, sustainable and socially integrated basis may be termed “Sustainable Natural Gas”. Chemically the basic process is:

2H 2O  CO2  energy  CH 4  2O2 The various process’ possible and their pedigree show that the technology and engineering necessary to undertake this process development already exist, is economic, and (though it requires significant effort to demonstrate and capture the attention of our society) it is a route which offers a variety of benefits.

The addition of CO2 has some significant benefits in comparison to H2, including its ability to act as a “carbon compressor”, by increasing the energy density (decreasing the unit volume) of the resultant gas by about 250%, and at cryogenic temperatures about 90 ºC warmer on a liquid for liquid basis, 331% as a gas at atmospheric pressure, and 413% better at a typical storage pressure of 350 atmospheres. The energy necessary to transform the gases to a storable or transportable energy density is also of similar magnitudes different, to the benefit of RNG. Much discussion in the introduction of alternative fuels has revolved around safety issues. Optimistically humanity is ingenious enough to overcome most safety issues raised by the use of any fuel. A key characteristic of any fuel is that they all have their dangers. In the case of oil, natural gas and the energy carrier electricity, these dangers are generally understood and the risks associated accepted within the community. The general knowledge and acceptance of a new set of dangers is not a trivial societal matter and the effort must be included in the requirement to develop “soft” infrastructure around such endeavours, through scientific analysis, engineering solutions, education for trades responsible for implementation and finally allaying sometimes deep seated suspicions of new risks by the broader community. Our Energy Networks The delivery of energy to our primary secondary and tertiary users seems such a simple thing to most people. We flick a switch or turn on a dial and its there. How irritated are we when we are deprived of the benefits of its use? Storm, fire, industrial accident, system overload, and nonlinear reactions in system dynamics, all can and, it seems at an increasing rate does, bring a system down easily. The delivery systems for an energy type all depend on a long supply chain, from: exploration, technology development, construction, production and decommissioning of exhausted energy resource fields; similar life cycles for conditioning and conversion of the raw products;

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Briefing Notes For The Joint Committee on Northern Australia Inquiry into Northern Australia: Leveraging of Northern Australia’s Carbon Resources: Renewable Natural Gas

transport (sometimes on a global scale); secondary conditioning and conversions (such as at petroleum refineries); distribution and tertiary processing; to final products; and, finally use by end consumers. These systems become more complex and interlinked the more our societies develop. There is any number of researchers which indicate the “tighter” systems become the more vulnerable they are to perturbations. These delivery systems represent a vast economic and social investment in both hard and soft infrastructure. Soft infrastructure includes such things as the easy acceptance by the end user, including domestic users nonchalantly using electricity and in many cases natural gas in the home and filling their vehicles with petrol at the fuel pump, to the education training and experience of those who maintain and develop the hard infrastructure, from light fitting and stove top manufacturers to the engineers in the design offices for huge floating production rigs. These investments have occurred over nearly two centuries of the industrial revolution. The term used to describe energy in a form suitable for transport and storage is as an “energy carrier”. The primary delivery systems for energy carriers are effectively those for petroleum fuels, electricity and fossil based natural gas. Of these, the most versatile has proved to be the electrical grids and oil networks, followed closely by natural gas networks. The major difference between these systems is that the electrical system is currently incapable of storing significant quantities necessary to manage perturbations lasting from hours to months. The energy storage for this system is generally in the form of coal, gas or nuclear fuel, at the beginning of its journey to the end user. i.e. electricity is an “active” energy carrier, in that to stop its means of production generally stops its delivery. On the other hand both oil and natural gas systems may be termed a “passive” energy carrier in that to stop the means of “production” doesn’t immediately stop its delivery along the downstream supply chain. The dominance of the electricity network is almost assured in the foreseeable future. From a security of supply and a price minimisation perspective, it is essential to provide alternative energy supply systems. Basic risk management science dictates that alternative systems should not be provided by parallel implementation of similar or the same technological solutions: i.e. that merely providing separate electricity infrastructure in direct competition will only partial provide price competition and will not maximise security of supply. Traditionally, competition and security has been supplied with the three traditional and vastly different systems. We now see the potential for short term shrinkage and perhaps the long term demise of the oil based energy supply system, and in the medium term, a similar fate may await the FNG system. This contraction towards a single system is not healthy. Hydrogen has been proposed to provide the next generation of competitive and alternative energy supply system. RNG is a better option.

Oil Distribution The success of oil has been its high energy intensity and its ease of handling and transport, hence its application in transport and remote energy requirements, and subsequently is a very good passive energy carrier. Other fossil fuels also to a lesser extent demonstrate this propensity. Oil has created a high benchmark for other pretenders. Excluding coal, an analysis of US energy statistics for March 20104,5 shows that it’s strategic reserve is entirely crude oil, with commercial storage of oils and gases making up the total. Effectively the US used 19 million barrels of liquid fuels and approximately 2160 billion cubic feet (bcf) of natural gas fuel for its domestic markets in the 4 weeks up to 12 Mar 2010, thus using about 5,000 PJ for the 4 week period, of which 58% is derived from oil. The US has about 11,000 PJ of energy stored via a variety of mechanisms. Of this, about 85% is oil based. This equates to about 90 days of reserves at current consumption. The remainder is 6 gaseous. This equates to about 840 million tonnes of sequestered CO2 . The importance of this buffer stock is highlighted by the fact that 35.1% of this is held by the US government as strategic reserves. The remainder is commercial stock, also indicating the importance of fuel storage to assist in the distribution of the fuel and to manage short term

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Briefing Notes For The Joint Committee on Northern Australia Inquiry into Northern Australia: Leveraging of Northern Australia’s Carbon Resources: Renewable Natural Gas

perturbations. Extrapolation of these results world wide show that the role of fuel storage is critical to strategic and commercial operation of our society, and the critical role that oil based fuels currently play. Oil’s ease of use and pervasiveness within our society has ensured that it highly integrated, with significant positive impacts, such as unprecedented personal mobility, its ability to underpin the globalist free market system through (also) unprecedented transport systems, and terrific ability to power our more remote endeavours and communities. Its relative price insensitivity also ensures it is a significant contributor to government coffers. Its significant negative impacts include a high and increasing financial cost to achieve the positive impacts, potential to increase urban poverty through these financial imposts, environmental degradation from its impact right from the start of its supply through to its final consumption, and its role in degrading some less developed economies through its exploitation7,8. We, as a society now accept that petroleum fuels are a finite resource and many argue that we have reached peak oil, and suggest that peak FNG is not far behind. The outcome of this view is that we need to transition now to other options, particularly for thermal uses transport and remote areas. Personal urban and mass transport is turning towards plug in hybrid and electric vehicles with commensurate environmental advantages. According to many, the only other options are utilisation of biofuels and hydrogen. The former is feasible on a smaller scale, but has some significant risks regarding competition as a food source and land use9, as well as efficiency issues. Petroleum is also a precious resource for many other chemically based products important to humanity, so perhaps we should be conserving this resource and not running it down to empty. Again time seems of the essence in our need to transition to alternative energy sources. Opportunities to overlay this network in the longer run rest with derived liquid fuels from a multitude of sources including coal, natural gas and biomass. The former two have very few attributes of value, as they are both based on fossil fuels and the conversion processes are energy intensive and from a greenhouse gas emissions perspective, explosive, without the use of sequestration. The use of sequestration, as a solution to our climate change challenges, has issues similar to that of wholesale implementation of a hydrogen economy: The technology has yet to be commercialised, and a new massive carbon dioxide transmission infrastructure needs development.

Electrical Distribution Electricity has proven itself as a good energy carrier though its major historical downside is its inability to be stored in any meaningful way for normal large scale energy tasks. Its prevalence has ensured that it is the most dominant general purpose energy carrier. Electricity as an energy carrier is a terrific medium for transport and distribution of energy and is likely to form the backbone of many of our distributed renewable energy sources and thus allowing transition from the centrally based fossil based and finite resources on which it now relies. The challenge for the electrical grid seems to be how to manage a more distributed supply which in itself may be unreliable, away from the centralised large power plant now used. Currently the storage of electricity generally occurs at the base production stage, subsequently demand swings are met through base loading and peaking generating units. As distributed renewable electricity generation is implemented this problem is exacerbated, creating a problem for a bright renewable future. Storage of energy within this network is attracting a lot of attention with proposals all the way from salt storage10 and flywheel systems, to plug in hybrid vehicles, all of which will add to the robustness of the system. The

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Briefing Notes For The Joint Committee on Northern Australia Inquiry into Northern Australia: Leveraging of Northern Australia’s Carbon Resources: Renewable Natural Gas

Achilles heel of all this is with extended outages where the network or supplies to the network are out of action for extended periods – what can be done?

Fossil Natural Gas Distribution Natural gas systems are developing at an increasing rate, mainly because of its ability to be a versatile fuel, providing the ability to produce electricity as well as thermal heat on a continuous basis, and its best performance as a passive energy carrier. It also is very well entrenched in our societies. Traditionally fossil natural gas systems have filled an important role. Its versatility as an feed for electricity production from mega to micro scales, as a source of thermal heat and as a transport and storage medium has ensured that it has found a place in society as a important fuel and energy carrier. Readily available data from the US Energy information Office shows that it is effectively the only other fuel to provide buffer stock to the US consumer. Their figures show that it provides about 41% of the energy needs for the US, and a variety of mechanisms are used to provide about 14% of the energy reserves for the commercial sector (about 21 days of consumption). It is subject to much debate over the timing of its own “Hubert Peak”, versus its role as bridging fuel to our bright renewable future11. Natural gas’ versatility sees it being advocated as a clear and clean replacement for coal and nuclear from a price viewpoint, and in comparison to coal 54% better from a greenhouse gas perspective. From an infrastructure perspective it has a significant and growing presence in most economies. However it is a fossil fuel and is thus a finite resource and still a significant contributor to greenhouse effects and other environmental problems.

Hydrogen Hydrogen has for many years been advocated as being the only fuel carrier which has a future. The implementation of this vision is of a revolutionary type, effectively overlaying a complete and new energy delivery system on a scale and timeframe unprecedented in modern times. It favoured position is perhaps due to the absence of debate and equivalent social energy regarding a more natural and less revolutionary option: RNG. Hydrogen doesn’t occur naturally but is also a reasonable passive energy carrier, once it has been manufactured. As a promising fuel and related infrastructure development proposal, hydrogen has been intensively backed for several decades now to fill some stationary energy production needs but has been aimed primarily at the transport field. Introducing the hard infrastructure has been estimated to take about 0.3% of annual GNP of the world’s richest economy, that of the United States, an immense cost even for this nation. Less fortunate economies will be more severely traumatised by this impost, especially if it is unnecessary. Hydrogen production costs are reasonably well understood12,13,14,15. They vary significantly depending on the production process and source of energy from which it is derived. Of interest is that there are 22 production processes documented from four different studies. Of these, 9 are based on fossil fuels (of which 5 are based on natural gas feed), and 10 are solar derivate sources, 1 (EU mix) is a hybrid system and the remnants (geothermal and nuclear) are potentially resource limited. Also of interest is that the only source which currently costs less than natural gas is an advanced fossil coal gasification facility coupled with carbon capture and sequestration, the later being a technology yet to be commercially launched and thought by many to be several decades away, and with some risk. In almost all cases derivation of hydrogen from fossil fuels provide the only route to cost effective replacement of transport and remote facility fuels, however in almost all cases natural gas is currently the best cost effective option at this stage.

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Briefing Notes For The Joint Committee on Northern Australia Inquiry into Northern Australia: Leveraging of Northern Australia’s Carbon Resources: Renewable Natural Gas

The hydrogen lobby is clearly advocating the implementation of a hydrogen economy based upon a short to medium term low cost, and at this stage a highly environmentally damaging and limited sustainable fossil fuel future, with the (justified) understanding that like many other new technologies, including photovoltaics and computers et al, the cost of the other renewable techniques will reduce remarkably with research and development, economies of scale, and economies of experience. The energy cost of converting energy from one form of useful energy carrier (FNG) to another (hydrogen) is an energy cost of about 1/3 of the original embodied energy. The greenhouse gas emissions of hydrogen manufactured from natural gas embody four (4) times that embodied in the feed natural gas, i.e. 11.9 kg/kg H2 compared with 2,972 for the embodied natural gas. The large majority of this increase is from conversion plant construction operation and decommissioning, with a small percentage from external electricity supply, and only a very small percentage is avoided by the process of production of hydrogen16. Abbott was mostly right; he had just not reviewed the opportunities that are open for RNG which requires much less radical a change from the status quo and will (potentially) a lot better outcome. The introduction of hydrogen as a major energy carrier has all along required a social, economic and technological revolution. The impact on infrastructure requirements is enormous. Not only will a hydrogen system require a virtually new transport and distribution system, but by comparing the energy transport rates of RNG, it will need capacity physically several times larger, with commensurate capital operational and maintenance costs17. RNG is compatible with the installed hard and soft infrastructure embodied already within our society, thus signifying a reduced risk with its introduction. Similarly the policy analysis of strategic exhaustion of natural gas fields becomes simpler. As argued by many, FNG is viewed as a strategic bridging fuel from a climate change perspective, as a coal replacement fuel18. If we are able to produce RNG then the rapid development of existing FNG resources is clearly less problematic from a security of supply and intergenerational equity perspective. Similarly its role-out is validated by the long term future for new infrastructure beyond the life of fossil resources, which otherwise might become stranded assets. Interestingly, and harking back to the exposition of the earth as a closed system heading towards maximum entropy, in considering the laws of thermodynamics, one of the few forms of matter which does escape the earth’s boundaries is hydrogen. Its small and extremely dynamic molecules are capable of escaping the atmosphere, perhaps explaining why we have only extremely small amounts of hydrogen in it. Finally, the pace of implementation of a hydrogen economy has been hampered by the slower than expected role-out of producer and user technologies into the community, despite significant efforts over many decades. To implement the hydrogen economy, techniques for the large scale transportation, distribution, and distributed energy using systems such a stationary and mobile fuel cells have been in development. This revolutionary approach, where every step of the supply chain necessitates radical changes to how we currently operate, has proved problematical. Whist we are seeing the commercial introduction of stationary hydrogen fuel cells in high value electrify supply circumstances, the mass uptake of this technology has yet to emerge. Similarly recent proponents of the hydrogen economy have indicated that realistic introduction of commercial scale vehicular fuel cells is problematic. Dr Joseph J Romm, himself an active administrator overseeing hydrogen and fuel cell research in the Clinton Government, advises:19

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Briefing Notes For The Joint Committee on Northern Australia Inquiry into Northern Australia: Leveraging of Northern Australia’s Carbon Resources: Renewable Natural Gas

“I believe that the most plausible strategy is an e-hybrid running on a combination of low carbon electricity and a low carbon liquid fuel. The Hydrogen fuel cell is the alternative fuel cell vehicle that has the most technical and infrastructure hurdles and is the least efficient pathway for utilising renewable fuels.” RNG Dr Romm suggests that much of the current hype about hydrogen is misplaced. He also appeared unaware that there are other, non-liquid, vehicular fuels which can be low carbon and compatible with the emerging hybrid technologies. One such is RNG. FNG infrastructure and vehicles now is a fixture in many economies around the world20, so necessity for significant infrastructural transition to RNG is not required. What’s more, and as noted previously, as the cost of RNG is reduced through the effects of further research, economies of scale and of experience, it will in the medium term prove itself as a robust, strategic competitor and alternative to the distribution of electricity through the existing and proposed expansion of the natural gas networks and transport systems. It will also lead to initiatives similar to those evident in the development of the electricity grid aimed at its capacity to accept alternative and carbon free energy sources. From a policy perspective, the increased exploitation of fossil natural gas may argued to be strategically, economically socially and environmentally beneficial, when aligned with technologies which will provide a direct replacement and leading to a sustainable fuel. We see in the electricity grid the development of a variety of strategies and policies to manage technical commercial and societal change due to:  alternative generation locations, in electrical terms for example geothermal and solar sources  distributed smaller scale generation, currently ranging in scale from wind farms and down to the domestic production level;  supply quality; and,  mismatch between supply and demand. These issues will become just as strategic for the natural gas system given the commercial advent of renewable natural gas. Particularly within a natural gas system supply quality is less of an issue than that for electricity, which requires tight voltage phase and surge quality issues brought about by the instantaneous nature of an electrical grid, as “contaminants” such as extraneous hydrogen from the production process’ may be accommodated. Similarly the issues relating to mismatch between supply and demand of energy supply are virtually eliminated as: the storage transport and distribution systems are effective surge control devices; further enhanced through distributed systems; and, by current techniques, enabling perturbations lasting days and in strategic supplies, weeks to be managed with little impact. Some initiatives which can parallel electrical commercial systems include:  the introduction of a new commercial product “green gas” which may be marketed similar to green electricity, which attracts higher prices both for power retailers and for consumers;  the introduction of smart gas grids to enable the trading of natural gas from small, medium and large suppliers, warehousing companies (currently not an electrical option), and users;  in regard to vehicular specifics, the use of an urban hybrid electric/RNG vehicle not only as a mobile storage unit for electricity, but a generating platform to help balance

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Briefing Notes For The Joint Committee on Northern Australia Inquiry into Northern Australia: Leveraging of Northern Australia’s Carbon Resources: Renewable Natural Gas

green electrical grids to a much higher degree than that envisaged by proponents of the electric plug in vehicle; and,  also in regards vehicle activities, the ability to have a totally renewable cost effect and proven option for urban combined use domestic and commercial vehicles and for regional road transport. Of particular importance and in comparison to hydrogen RNG energy density levels have already been proven to be already suitable for use in vehicular fuelling (as noted previously in NG penetration of the vehicular market), and with more efficient hybrid and related IC, turbine and fuel cell technologies with which it is compatible, this desirable characteristic will only improve. Similarly energy densities have a large impact on the cost of transport and distribution of fuels and power. Further, the application of this concept does not require fundamental research to achieve commercial reality. It will leverage off existing cost effective and know technologies, some of which have been developed specifically for the production of hydrogen. Subsequently its initiation may not be as costly, nor as far away in time as some may expect. This aspect is also explored in later sections.

Technological Understanding Perhaps the major obstacle facing the introduction of RNG is a possible perception of the need for a massive research effort comparable to that for hydrogen, for its normalisation within the community. This couldn’t be further from the actual position today. Natural gas itself is almost endemic in many societies and its use for base load peaking remote and distributed electrical generation, thermal use in industry and in the home, and as a vehicle fuel is common place. This pervasiveness buys time to develop the sustainable replacement for FNG, whilst contributing to the replacement of coal based production through FNG’s rapid deployment and reducing the infrastructural cost and displacement necessary to introduce alternative and new systems. The final barrier to overcome is in its economic production, but with some limited time provided by exploitation of FNG, RNG is a real option. Most scientific advances of our modern world stand upon the achievements of the multitudes of people who have preceded us. The ability to achieve production of RNG from constituent components is no different. Barring a significant new technology, as yet unthought-of, all fundamental technical research necessary to do so has been achieved. What is left to do is to undertake the applied research and engineering necessary to demonstrate and implement the integration of the diverse sciences necessary to achieve this outcome.

Essentially the process requires access to CO2, for the carbon molecule, and water or similar, from which the hydrogen molecule is detached. The global hydrogen and carbon cycles are fundamental to the whole concept of sustainability of the production of natural gas. Processes may include the separate or conjunctive split of the carbon and hydrogen atoms from their respective carriers, and then the subsequent catalytic bonding of the methane molecule. The finely-divided metal hydrogenation catalysis of the methane molecule from organic compounds and hydrogen is famously described as the Sabatier process and has been know since the late 19th century. However, all these processes need a source of energy. Perhaps a way of categorising these sources is to divide them into three:  fossil fuels originating from the sun and produced through photosynthesis, being in short supply, being a significant carbon sink, and having a long gestation period;  earthly, including such resources as uranium and geothermal heat, which whilst not being totally renewable, significantly extend the life of our energy society; and,

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Briefing Notes For The Joint Committee on Northern Australia Inquiry into Northern Australia: Leveraging of Northern Australia’s Carbon Resources: Renewable Natural Gas

 stellar, also originating from the sun, but having a human scale gestation period, and not depleting any carbon sink. These include biological production, solar electrical, solar thermal and solar chemical and hybrids thereof. Much has been written on each of these energy sources. One key element of selection processes relates to efficiency: efficiency is a good proxy indicator as to effectiveness in a resource starved world. In 1912 Paul Sabatier (1854 -1941) was awarded the Nobel Prize in Chemistry for his method of hydrogenating organic compounds in the presence of finely divided metals. His work formed the bases of the margarine, oil hydrogenation, and synthetic methanol industries, and now possibly the foundation of a bright new era for the production of RNG21. The understanding of this process is highly advanced and of global interest22. Fundamentally the concept of RNG is about harnessing the sustainable carbon atom as an hydrogen compressor. The carbon atom forms the basis of all organic life and is present in nearly 10 million compounds. Subsequently it is part of nearly everything with which we associate23. It’s unique bonding abilities provide the basis for long chain chemistry and contributes to such fundamentals as DNA. Of particular interest to many is the currently changing balance in the carbon cycle which is contributing to global warming24. Effectively the IPCC has estimated that there is about 16,000 Gt C of carbon locked up in fossil deposits world wide. Annually about 6.3 Gt C fossil based emissions contribute their carbon stocks to the 3.2 Gt/yr increase in atmospheric stocks on a baseline stock of about 750 Gt C already in the atmosphere25. The chemical reaction for the production of RNG is:

CO2  4H 2  CH 4  H 2O

From a climate change perspective, the source of the CO2 is important.

Should the source of the CO2 be from a fossil based source, for example from carbon capture from a fossil fuelled (coal or FNG) power-station, natural or manufactured CO2 subsequent to fossil oil or gas production, or other processes, then the combination with hydrogen will have a secondary effect on reducing greenhouse gases. The secondary effects are:  enabling the development of the framework for completely renewable fuel with RNG;  substitution of the “re-used” carbon based fuel for “new” carbon from fossil based fuels otherwise used, thus reducing the human induced greenhouse gas loading on the atmosphere;  providing a dynamic sequestration system capable of sequestering a significant amount of CO2 through the implied storage of the fuel either strategically, commercially or in transit.

 removing the CO2 emission from the corporation’s carbon account for emissions reductions and transferring this to the using entity

 if the product is exported, removing the CO2 emission from the national carbon account for emissions reductions and transferring this to the receiving nation;

Should the CO2 be sourced through Carbon Farming, of which there are a variety of options, including:  bio production through such sources as algae, bacteria, crops and agri-waste;  synthetic photosynthesis in its fullest sense;  direct atmospheric26,27 or oceanic capture.

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Briefing Notes For The Joint Committee on Northern Australia Inquiry into Northern Australia: Leveraging of Northern Australia’s Carbon Resources: Renewable Natural Gas

Utilisation of these sources contributes to a truly sustainable natural gas industry, with its attendant benefits. The primary results of such a transportable storable and uniquely flexible fuel are bolstered by the secondary effects which include:  utilising the existing natural gas framework and thus reducing the significant technical financial and social burden of developing entirely new energy systems including manufacture transport and storage, such as that proposed by the hydrogen lobby;  providing a dynamic sequestration system capable of sequestering a significant amount of CO2 through the implied storage volumes of the fuel either strategically, commercially or in transit. Extrapolation of figures for the US as an approximation of the orders of magnitude, the replacement of the world’s existing commercial stockpiles with RNG, would currently and dynamically store about 0.38 billion tonnes of CO2, compared with the 0.5 billion tonnes of new CO2 stored in the supply chain and currently entering the cycle every 54 odd days;  enabling a policy shift towards significant ramping of FNG exploitation and related infrastructure expansion secure in the knowledge we can directly replicate the fuel in a sustainable way; and,  open the way for the development of natural gas technologies as renewable energy technologies, much the same as heat pump based products. An example of this is the current problem of a methane fuelled solid oxide fuel cell developed in Australia by Ceramic Fuel Cells Ltd which, due to policy constraints of the federal Government, is unable to obtain access to Federal support offered for renewable fuels, but not high efficiency products. The company is thus is forced to move off-shore to enable its full development, loosing employment opportunities and technological leadership. The relevant minister stated “gas isn’t a renewable”28. Bio production is being studied and implemented at a significant rate worldwide, and tends to be a part of the complete cycle of fuel production for biofuels such as methanol and diesel. Similarly direct photosynthesis tends to be part and parcel of the work to produce fuels directly, and not targeting the manufacture of carbon dioxide directly. In regard to atmospheric capture, costs have been estimated to be between USD53- 29 124/tonne CO2 . Since we can assume that the value of CO2in proposed trading schemes probably won’t include a transport component, the ability to co-locate plant may sway the costs towards this type of process for CO2 supply as the economies of scale, learning and technology research and development continue to drive costs lower. This compares with recent reports of some merchantable carbon dioxide in the USA being marketed currently well above USD10030. Whilst the introduction of a cost for carbon dioxide emissions, as governments introduce means of reducing such emissions, enormously increased supply will significantly lower the later figure, it indicates that early costs can be competitive and the longer term costs can be driven down, perhaps even as low as the USD10-15/tonne CO2 that the previously referenced Lackner indicated in his early work31. Fundamentally the concept of RNG is about harnessing the sustainable hydrogen atom as an energy carrier. Effectively the end result may well be the production of RNG from through the hydrogen – water cycle, where water is split to provide the basic hydrogen molecule for reaction within the process with the other product being oxygen as noted in the earlier sections:

2H 2OL  2H 2  O2 , This is of interest in that water creates one of the great earthly cycles and the promise of hydrogen energy has been to tap into this cycle and generally have the process of combustion return the water vapour to the atmosphere, having generally extracted it from water reservoirs, enabling a perpetual cycle for our energy needs.

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Briefing Notes For The Joint Committee on Northern Australia Inquiry into Northern Australia: Leveraging of Northern Australia’s Carbon Resources: Renewable Natural Gas

Of course the reverse reaction is the really useful reaction: the release of the energy as the hydrogen reacts with oxygen back to water:

2H 2  O2  2H 2Og

Opportunistic and Primary Production The choice of technology for production of the RNG may well be dependent on the reasons for implementing the plant. In regard to electrolysis, where the originating energy source has already been converted to electrical product, with attendant inefficiencies, then the production of RNG, with its attendant inefficiencies, may well be considered as a secondary process, where it may be used as a load balancing storage option for when the supply exceeds demand for the electricity, such as may be the case for wind wave and photovoltaics, or where the marginal cost of the electricity production may be low enough to make it economic and strategic enough to produce RNG, which may be the case for geothermal or nuclear production. Similarly the use of other opportunistic sources such as waste heat or biomass make sense in many niche markets, however the introduction of primary production is essential to meet our burgeoning needs for an alternative energy delivery structure to electricity. Direct production of RNG from originating energy sources for primary production may well be the most environmentally beneficial and cost effective route to primary production.

Solar Thermal Interestingly, much of the contemporary literature on solar thermal technology and methane relates to the reformation or cracking of methane to make hydrogen. In the absence of the concept of RNG and in the presence of carbon capture and sequestration, this makes sense. Given RNG, these processes don’t make sense. However some work has been done on the direct solar thermal chemical production of hydrogen32. In one reported case and using a ZnO/Zn chemical reaction energy costs in the medium term (2025) are expected to be in the order of USD 29-44/GJ, both above the greatest cost of a barrel of oil to date (about USD 27/GJ in 2008) 33. A little studied area is the solar thermal chemical production of RNG, and as previously shown for hydrogen, it is one of the currently most cost effective means of manufacture for hydrogen, and similar scales of economy are likely for RNG. It has been reported to be “a highly effective” methodology for the rapid production of chemical fuels from thermal (ideally, solar- thermal) energy using a relatively abundant and inexpensive oxide and without the need for precious-metal catalysts” 34.

Utilising Technologies Both FNG and electricity have a large number of pathways to and technologies for the use of their respective energies. Current and ongoing developments in each arena of application change the competitive and environmental attributes of each pathway and application. Several overriding efforts have undermined the effort being directed at pathways and technologies for the use of FNG because of its status as a fossil (and thus non-renewable) fuel. This is reflected in the lack of research and development and further incentives for both consumers and businesses to enhance its role in the community. In the 2006/7 year, in Australia, there was around AUD2 billion dollars of expenditure on energy research and development. There was about $480 million spent on the developments in the supply of energy and another $1.4 billion spent on development of new fuel sources and innovation in energy extraction35. The approximately $1.5 billion spent by private

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enterprise on energy research and development in 2007/8 year represented an astonishing 74% of the total business expenditure on R & D in Australia for that year36. The breakdown of this figure shows $132 million spent on exploration, $1.2 billion on mining and extraction R & D, $280 million on the preparation and production, $132 million on renewables, $98 million on storage distribution and supply, $46 million on energy conservation and $65 m on environmental issues. A 2008 report shows that in Australia, the research funding for renewables is all for electricity generation, and the overall gas related research funding was non-existent37. As previously mentioned with respect to methane fed SOFC technology, some very efficient gas based technologies are not being supported under the current federal government policy regimes of the renewables and energy efficiencies efforts because natural gas is viewed as a fossil based fuel, and thus not renewable. Focus on RNG as a renewable will mean that not only production technology, but downstream technologies, will be enabled and subsequently funded under these types of regimes. The hydrogen economists have focused on two potential areas for the early introduction of hydrogen fuel, where conventional electricity supplies are inadequate, and oil based fuels are providing scope for market expansion. FNG will probably follow a similar though easier path in satisfying these demands, being: high quality, distributed, domestic, remote and, security sensitive electricity supply applications; and transport. Of course the advent of “protective marketing” cannot be underestimated. Electrical functionality and related renewable products seem to be eating away at the margins of natural gas demand. This is evident in the power supply for domestic use. In many parts of Australia, government assistance is provided to switch out older electric hot water systems for electrically boosted solar systems, and for photovoltaics to replace grid power. Natural gas is caught “between”, not being able to offer similar products and services, and getting no support from government for its environmental credentials. The application and availability of RNG should challenge this.

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References

1 Homer-Dixon, T, The Upside of Down: The End of the World as We Know it and Why This may not be such a Bad Thing, The Text Publishing Company, 2006 2 Frogett, A Lahn, G, “Sustainable Energy Security: Strategic Risks and Opportunities for Business”, Lloyds 360º Risk Insight, Chatham House, 2010 3 Abbott A, “Keeping the Energy Debate Clean: How Do We Supply the Worlds Energy Needs?”, Proceedings of the IEEE, Vol. 98, No 1, January 2010 4 US Energy Information Administration, “Weekly Natural Gas Storage Reports”. March 16 2010 5 US Energy Information Administration, “Summary of Weekly Petroleum Data for the Week ending March 12, 2010” 6 Milligan, BS, unpublished calculations 7 Carson, I Vaitheeswaran, V, Zoom: The Global Race to Fuel the Car of the Future, Penguin Books, 2008, pp 143-151 8 Vallette, J Kretzmann, S, “Tug of War: The Winners and Losers of World Bank Fossil Fuel Finance” Sustainable Energy and Economy Network, April 2004 9 Bello W, The Food Wars, Verso Press 2009, Chapter 6 10 Hermann U, Kelly B, Price H, ”Two Tank Molten Salt Storage for Parabolic Trough Solar Power Plants” Energy 29 p883-893 2004 11 Flavin C, Kitasei S, “The Role of Natural Gas in a Low-Carbon Economy” Worldwatch Institute April 2010 12 Bartels, JR Pate, MB Olson, NK, “An Economic Survey of Hydrogen Production from Conventional and Alternative Energy Sources”, International Journal of Hydrogen Energy XXX, (2010), pp. 1-14 13 Pregger, T Graf, D Krewitt, W Sattler, C Roeb, M Moller, S, “Propsects of Solar Thermal Hydrogen Production Processes”, International Journal of Hydrogen Energy 34 (2009) pp. 4256-4267 14 Mueller-Langer, F Tzimas, E Kaltschmitt, M Peteves, S, “Techno-economic Assessment of Hydrogen Production Processes for the Hydrogen Economy for the Short and Medium term”, International Journal of Hydrogen Energy, 32, (2007), pp. 3797-3810 15 Amos, WA “Updated Cost Analysis of Photobiological Hydrogen Production from Chlamydomonas reinhardtii Green Algae” Milestone Report, National Renewable Energy Laboratory, US Department of Energy, Jan 2004 16 ibid p 1 17 International Energy Agency, “Hydrogen Production & Distribution”, IEA Energy Technology Essentials, April 2007 18 Ibid pp 8, 9 19 Romm JJ, The Hype About Hydrogen: fact and Fiction in the Race to Save the Climate, Island Press 2005, p208 20 International Association for Natural Gas Vehicles, IANGV - Alternative Fuels, CNG, LNG, NGV

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21 The Nobel Foundation, Paul Sabatier - Biography 22 Ralston, J, “The Sabatier Reaction, Possible Solution to CO2 Emissions”, The Sabatier Reaction, Possible Solution to CO2 Emissions 23 Bragg, M, “In Our Time: Carbon” Last broadcast on Thu, 15 Jun 2006, 21:30 on BBC Radio 4, BBC iPlayer Console - In Our Time: Carbon 24 Prentice, IC, “The Carbon Cycle and Atmospheric Carbon Dioxide” IPCC Report 2001 25 Watson, RT, “The Carbon Cycle – Policy Nexus”, IPCC Chair, COP-6bis, Bonn Germany, July 17th 2000 26 Lackner, KS Grimes, P Ziock HJ, “Capturing Carbon Dioxide from Air” US Department of Energy, National Energy Technology Laboratory Conference 2001 27 First Successful Demonstration of Carbon Dioxide Air Capture Technology Achieved, 2007 28 7:30 Report, “Green Push”, Australian Broadcasting Corporation, 24 June 2010 29 Stolaroff, JK Keith, DW Lowry, GV, “Carbon Dioxide Capture from Atmospheric Air Using Sodium Hydroxide Spray”, Environ. Sci. Technol. 2008, 42, pp2728-2735 30 Lackner, KS Worzel, E, “Air Capture and Mineral Sequestration: Tools for Fighting Climate Change”, Hearing, Geoengineering II: The Scientific Basis and Engineering Challenges COMMITTEE ON SCIENCE AND TECHNOLOGY, Republican Caucus, US House of Representatives, Feb 4 2010 31 Lackner, KS Grimes, P Ziock, HJ, “Capturing Carbon Dioxide from Air”, US Department of Energy, National Energy Technology Laboratory Conference 2001, p11 32 Lichty, PR Scott, AM Perkins, CM Bingham, C Weimer, AW, “Solar Thermal Reactor Materials Characterisation” Midwest Research Institute under Contract to US Department of Energy, 2008 33 Weimer, AW Perkins, C Litchy, P Funke, H Zartman, J Hirsch, D, “Development of a Solar- thermal ZnO/Zn Water Splitting Thermochemical Cycle” US Department of Energy Sub- contract RF-05-SHGR-006, Final Report, April 1, 2009 34 Chueh, WC Haile SM, “Ceria as a Thermochemical Reaction Medium for Selectively Generating Syngas or Methane from H2O and CO2”, ChemSusChem, 2, # 8, pg 735-739, 2009 35 Australian Bureau or Agriculture and Resource Economics, “Energy in Australia 2009”, Department of resources and Tourism, Australian Federal Government, April 2009 36 Australian Bureau of Statistics, “BUSINESS EXPENDITURE ON ENERGY RESEARCH AND DEVELOPMENT”, 4614.0.55.003 - Energy in Focus: Business Expenditure on Energy Research and Development, Nov 2010 37 “Energy Research and Development in Australia 2008: A Statistical Profile of Expenditure”, The Department of Resources Energy and Tourism, Australian Federal Government, 2008

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