APGA welcomes the opportunity to provide feedback on incorporating international best practice benchmarks for baseline setting for the Safeguard Mechanism. Alongside the consultation on new production variables, this is an influential series of reforms.
APGA refers to its submission to the consultation on the Production Variables Update, and particularly to comments on industry averages, for additional background to our comments below.
As noted in the consultation paper, all new Safeguard Mechanism Facilities will be given baselines set at international best practice levels, adapted for an Australian context. This will lead to issues when considering the specific circumstances of gas transmission pipelines.
Australian gas transmission pipelines are not directly comparable to pipelines in other jurisdictions. In Australia gas supply tends to be further away from gas customers, and Australian gas demand is relatively small compared to our international peers. Due to this, Australian pipelines are longer, narrower, and operate at higher pressures than their international peers (Table 1). This means they also deliver comparatively less gas (Table 2) per emissions produced due to geographical and demand constraints, not due to unnecessarily emissions intensive design.
Table 1: Gas and transmission pipeline figures (all figures approximate)
|
Jurisdiction |
Area (km2) |
Annual consumption (PJ pa) |
Pipeline length (km) |
Pipeline pressure (kpa) |
Pipeline diameter (cm) |
|
East Coast Gas System |
5.1 million |
580 |
37,300 |
10,000 – 15,000 |
30-60 |
|
United States |
8 million |
27,000 |
480,000 |
1,300 – 10,000 |
40-120 |
|
New York City |
738 |
500 |
- |
- |
- |
|
European Union |
4.2 million |
15,000 |
200,000 |
8,000 – 10,000 |
40-220 |
|
Belgium |
30,530 |
600 |
- |
- |
- |
Table 2: Energy consumed per pipeline length and jurisdiction area (approximate)
|
Jurisdiction |
Energy per km pipeline (PJ pa) |
Energy per km2 (PJ pa) |
|
East Coast Gas System |
0.0155 |
0.0001 |
|
United States |
0.0562 |
0.0034 |
|
New York City |
- |
0.6775 |
|
European Union |
0.0750 |
0.0036 |
|
Belgium |
- |
0.0198 |
Compared to the East Coast Gas System, the United States delivers 3.6 times more gas (PJ) per kilometre of pipeline, and 24 times more gas per square kilometre of surface area. The European Union delivers 4.8 times more gas per kilometre of pipeline, and 31 times more gas per square kilometre.
Granular examples provide an even more stark comparison. With approximately the same annual consumption of gas as the East Coast Gas System, Belgium consumes 1,730 times more gas per square kilometre. New York City consumes just under 6,000 times more gas per square kilometre.
The differences between the Australian gas transmission industry and those in other jurisdictions are sufficiently wide as to make comparison fraught. Australian pipelines operate under different frameworks, and with different standards – including safety standards. This means that benchmarking to international standards, such as for emissions intensities, will not produce the outcomes intended for the Safeguard Mechanism.
Further, the nature of these international benchmarks and how the framework for identifying ‘best practice’ will be determined is unclear.
In the consultation paper, DCCEEW has requested feedback on identifying which production variables to prioritise for benchmarking. Considering the above, APGA recommends that natural gas transmission be abandoned, or at least deprioritised until the appropriateness of international benchmarking can be fully considered for the industry.
To discuss any of the above feedback further, please contact me on +61 422 057 856 or jmccollum@apga.org.au.
Yours Sincerely,
JORDAN MCCOLLUM
National Policy Manager
Australian Pipelines and Gas Association
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