China is heading towards what will likely be an unwelcome status as the world’s biggest creator of carbon emissions.
But Australia is doing its bit to help reduce the impact of its urbanisation and industrial growth in the country with the world’s biggest population and second biggest economy (after the USA).
Australia is providing liquefied natural gas – lots of it – to fuel Chinese energy needs in a more environmentally friendly manner.
As China heads to the top of the world’s economic production list, Australia is heading to the top of the list of global providers of LNG. In fact we are likely to get to the top of the LNG exporters list before China can displace the USA at the top of the gross domestic production (GDP) leader board.
From the global perspective, the great thing about our LNG exports is that they help reduce carbon emissions into the earth’s atmosphere.
Our natural gas, converted to LNG, is being sold to developed countries in Asia, where it is being used as a mainstream alternative energy source as economies wind back their dependence on coal for energy.
Gas-powered electricity cuts carbon emissions by 50-60% when replacing coal-fired power.
This is a huge opportunity for big economies such as those in China, Japan (world’s third biggest) Korea (an Asian leader) and India (with the second largest global population and a place in the GDP top 10).
In the USA, the benefits have become very clear in the past few years, as it rides a wave of economic buoyancy brought about by natural gas development. With low-priced natural gas and substitution of coal-fired power, the USA has enjoyed an economic boom and the nation’s first ever period of reduced growth in carbon emissions.
Manufacturing has been revitalised, energy independence has been restored and taxpayers and the environment has been improved – at no cost to taxpayers.
Because of its relatively small population, Australia has a modest economic output and small contribution to global carbon emissions (about 2-3% of the global total).
By exporting LNG, we can do two very positive things – fire our own domestic economy and punch above our weight in helping reduce global emissions.
This is a point made very clearly this week in the publication of Energy Quest data estimating Australian LNG exports – noting record output from the nation’s new LNG plants on our east and west coasts and a positive impact on Chinese air quality.
And the air quality improvement is not confined to replacement of coal-fired power with LNG. It is also a result of pushing gas as a replacement for electricity in household energy consumption in Beijing – a city with a population the size Australia’s entire east coast, and a serious air pollution problem.
And there is more growth ahead for 2018. The new projects off the WA coast are still in the early stages of production, and the three Queensland projects, based at Gladstone, have yet to all hit their straps simultaneously.
Another important aspect is that the increased export production has not come at the expense of domestic gas supply, as we noted here.