Health, Economic, and Environmental concerns: gas energy industry in Australia

Are the ‘Health and Environmental concerns’ limited to domestic cooking/heating with gas?

In the 1990’s the push for gas and electricity privatisation started. A key leader was the Premier of Victoria Jeff Kennett (Liberal). The main reason was that private companies would run the assets more efficiently. However, as it turned out, the principal aim has been to maximise ‘shareholders’ returns. Decisions were made to ship gas offshore leading to high prices domestically. Now a mixture of foreign and Aus. (private and gov.) are the owners of gas companies. ‘Origin Australia’ is owned by the Hong Kong based CLP group.
The majority of Australian gas is exported to Asian countries, biggest buyers are Japan and China, and Japan makes a profit by reselling to Taiwan and Sth Korea.

Natural gas extraction and processing are a great air and water pollutant contributing to smog and respiratory problems and chemical contamination to underground water.

Asian countries have expressed concerns about the future of Australia’s gas exports and its consequences.

The head of Japan’s biggest oil and gas producer has warned that Australia risks undermining global security through a decision to “quietly quit” the international gas trade.
Gas is an extremely important energy source in Japan.
Mr Yamagami said it was for those reasons Australia was a “trusted and stable energy exporter”, providing Japan 70 per cent of its coal imports, 60 per cent of its iron ore and 40 per cent of its gas.
“Japan and Australia have grown – and continue to grow – together,” Mr Yamagami said.
"You only have to look at the vibrant streets of Japan’s never-sleeping capital.
“It’s hard to imagine the neon lights of Tokyo ever going out, but … this is exactly what would happen if Australia stopped producing energy resources.”

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Japan is making windfall profits reselling Australian LNG. No wonder they are concerned about continuing supplies of LNG!

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Indeed! Makes one wonder why Australian households must do away with gas appliances and be reliant on just one source of energy, which surely will not be enough to cope, and at the same time our environment is being polluted by the mining of gas to be shipped overseas.

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Pretty as a picture?

And a link to the source data.
https://www.energy.gov.au/sites/default/files/2024-08/australian_energy_update_2024.pdf

Total residential consumption of 166 petajoules in 2023. An almost insignificant amount compared to the 433 PJ consumed in the LNG plants preparing Australian NG for export.

Another concern domestically is the significant reliance of manufacturing on NG and how that impacts on the costs of the products produced and or employment prospects.

There are various sources - mostly Gas Industry supported which empathise the economic value of the industry to the nation - notably exports. It’s not that clear. The economic benefits are reportedly many times greater than the cash return through excise and royalties. Difficult to assess because inputs supplied through Australian entities are counted at full value. Reality is many of the inputs are imported products, hence not a true reflection on the value returned to the Australian economy. Simply a reflection of the intermediate cash flows.

There is also no discounting of the net benefits for the negative cost impacts on consumers and the domestic economy. Due to the higher cost of gas supplies arising from how the market now prices domestic supply. Nominally 3-4 times more expensive than the pre export boom (2014-15). These price increases in local gas supplies have flowed through to consumers in many ways. In addition to use for home heating, hot water and cooking, EG From bakery products (bread, biscuits etc) to peak electricity generation market supply costs.

An aside:
Approx one third of Australia’s Scope 1 Green House Gas emissions due to Natural Gas come from the production of NG for export. A recent observation from the most recent [National GHG Accounts].(https://www.dcceew.gov.au/sites/default/files/documents/nggi-quarterly-update-december-2024.pdf).

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Royalties being paid to Australia?

  • No royalties are paid on 56% of the gas that is exported from Australia, including 73% of gas exported from WA.* Over the last four years, multinational companies made $149 billion exporting royalty free gas.* At least $13.3 billion in revenue could have been raised over the last four years had royalties been charged on royalty-free gas.* No royalties are paid on gas supplying major facilities owned by Chevron, Woodside (Pluto), Shell, Inpex and Santos* Royalties are only paid by the heavily subsidised North West Shelf and onshore fields.
    “Many Australians will be shocked to realise that a large portion of the nation’s gas is given away, essentially for free,” said Mark Ogge, Principal Advisor at the Australia Institute.
    “In the words of WA Treasury, ‘a royalty is the purchase price for a community-owned resource,’ and ‘the community expects a fair return for its petroleum resources’.
    “However, in many cases Australians are getting no return at all for the sale of their gas.
    “If you engaged an agent to sell your house for the best price, but instead they gave it to their mate for free, you would be angry. This is exactly what Australian governments from both political parties have been doing with our gas resources for decades.
    “It is no coincidence that the Federal Government’s Future Gas Strategy does not mention the words ‘royalties’, ‘tax’ or ‘return’ in its entire 67 pages.
    “Australians have missed out on better healthcare, education and public housing because the gas industry hasn’t been paying for the gas it exports.
    “Australians have a right to know how we got into this absurd situation.
    “Australia needs urgent reform to the tax and royalty system for resources to end this obscene giveaway.”

Difficult to understand how this could happen :thinking:

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The Commonwealth PRRT charges royalties on profits from gas extraction. This means, operational costs can be offset by the sale of gas produced - and such gas is exempt from royalties. Thereafter, any incremental increase in gas production after costs are paid for, is then subject to royalties.

I haven’t checked how the corporate tax and royalties under the PRRT work. If royalties are tax deductible and the royalty rate is less than corporate tax rates, it may be possible that the Commonwealth total receipts from gas production is higher than charging PRRT royalties on all gas produced.

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Do you mean just solar power? That isn’t the only source of renewable energy though it is Australia’s most easily sourced supply of abundant energy. There is wind power, there is geothermal power, there is tidal energy power. What we lack is not the potentially available energy here, it is the needed storage of that energy. Australia’s financial support for fossil fuel energy production far outweighs any support given to renewable energy production support. If we, as Australia, put as much money into renewables and storage (things like batteries and pumped hydro storage) as we give to and that we do not take from fossil fuel industries, fossil fuel would not be a needed energy source or would be reduced to a very minimal need.

Or do you mean in the home being limited to one type of power source and that being electricity?

In the home electrical power is probably the best source for energy use.

Gas has been linked to particulate pollution, this has been linked to asthma, and other respiratory issues. It has also been linked to benzene levels in the home. Benzene is a known carcinogen and in one study the level of benzene from gas burning was above chronic exposure levels.

Wood, kerosene, charcoal, oil and similar heating fuels also produce similar concentrations of, if not the same level, of pollutants

With one burner on high or the oven at 350 degrees, the researchers found benzene levels in a house can be worse than average levels for second-hand tobacco smoke. And they found the toxin doesn’t just stay in the kitchen, it can migrate to other places, such as bedrooms.

The research from which the statement above from an article was presented, is linked below:

https://pubs.acs.org/doi/10.1021/acs.est.2c09289

Some interesting excerpts from the study

indoor NO2 from gas stoves can quickly exceed US Environmental Protection Agency (EPA) and World Health Organization (WHO) 1-h exposure benchmarks in kitchen air. (2,4,18,19) NOx (defined here as NO + NO2) pollution has been shown to harm human health; for instance, a meta-analysis of 41 studies on gas stoves and childhood respiratory health concluded that children who live in homes with gas stoves had a 24% higher risk of lifetime asthma and a 42% increased risk of having asthma currently. (20)Furthermore, a recent population-level analysis concluded that approximately 12% of childhood asthma in the U.S. is attributable to gas stoves.

the formation of NOx, carbon monoxide, and formaldehyde from gas combustion in stoves is relatively well-characterized

Benzene exposure causes both cancer and noncancerous health effects. Shorter-term benzene exposure suppresses blood cell production, and chronic benzene exposure increases the risk of leukemias and lymphomas. The carcinogenic effects of benzene exposure follow a linear dose-response curve with no lower threshold, meaning that any additional benzene exposure increases leukemia and lymphoma risk. In contrast, some adverse noncarcinogenic effects, such as the suppression of blood cell production, likely occur only when benzene exposure exceeds a threshold.

The carcinogenic and noncarcinogenic effects of benzene are reflected in current benzene exposure benchmarks. These benchmarks generally fall between 2.0 μg/m3 (∼0.63 ppbv), established in France, and 5.0 μg/m3 (∼1.6 ppbv), the most common global benchmark adopted by the European Union, India, South Korea, and other jurisdictions. The World Health Organization, however, concluded that for cancer effects, “there is no known exposure threshold for the risks of benzene exposure” and that “it is expedient to reduce indoor exposure levels to as low as possible”.

By measuring benzene concentrations in bedrooms during and after gas burner and oven use, we also showed that benzene produced from gas stoves migrates well beyond the kitchen. People outside the kitchen can be exposed to elevated levels of benzene for hours after the stove is turned off

Perhaps the question should be, why do we continue to rely on outmoded and dangerous to human health energy sources such as for used for heating and cooking?

As to PRRT, Woodside has this to say

The North West Shelf, which produces more than 40 per cent of Australia’s oil and gas, was exempt from the 40 per cent PRRT and operated under its own tax regime.

Woodside owns about one-sixth of the project, and other joint venture partners include BHP, BP, Chevron Australia, Japan Australia LNG and Shell.

In a statement, Woodside said it expected the tax arrangements at the project to “essentially remain unchanged”.

“While the North West Shelf Venture will move to PRRT, Woodside expects this regime to be no more onerous than the royalties and excise regime under which the facilities currently operate,” the company said.

“A key feature of the transition arrangements for the North West Shelf Venture will be the right to use the market value as the starting base for project assets, including oil and gas rights.”

So new tax arrangement will not be more onerous than not paying PRRT on 40% of Australian gas and oil production. Nothing changes in reality.

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Indeed! Have you all heard Richard Denniss on the matter of gas exports? He’s furious that the government can’t see whats wrong with their policy.

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I might be wrong, and not many might agree with me, but this is what I’ve been trying to get across:

Mining and exporting Gas overseas generates more pollution in Australia than domestic usage. From extraction to transport, processing and export, Gas damages our climate and our environment. Gas is made up mainly of Methane, a greenhouse more potent than Carbon Dioxide.

What we see being done by government in Vic and other States is passing laws which concern domestic and some commercial usage. In Vic. no newly built homes are allowed to have Gas connections but are to be all electric. In existing dwellings where gas hot water systems fail they are to be replaced by electric. By March 2027 in Vic. Gas will be phased out (there have been some concessions lately by the Premier after a great public outcry).

But .. mining of gas will remain as required by export contracts with our Asian neighbours who rely heavily on Aus gas energy exports and have been assured of Aus commitment to it. (I have provided links in my posts above).

In conclusion, the environmental damage will stay unchanged notwithstanding the phasing out of domestic usage.

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Here I absolutely agree with you, sorry if I misread what you were trying to get across.

Extraction and “treatment” of gas leads to huge emissions, not of all of that is methane. Large amounts of gas is used to fuel the treatment of the gas that is going to be exported or used domestically. There is compression of the gas to convert it to a liquid for storage and transport. There is treatment of the raw gas to remove some elements such as water. This all requires power and gas is the main source of that energy.

Then there are fugitive emissions, basically leaks both from the treatment works, storage, transport (including pipes, valves, and similar), and the drilled sources. Fugitive emissions are sometimes quoted as adding about 5% to the global GHG emissions, there are ways of making estimates of the amount, though there remains some amount of uncertainty in particular about whether the level is far higher than estimated. Measurements can be taken when there is an ability to see the sites. Bottom of the ocean releases are far harder to assess for the amount of fugitive emissions.

In Australia, there is still a substantial amount of emissions for domestic use. While it pales into comparison compared to export and industrial use, that doesn’t mean it should be ignored. Though I think in the household context, my greatest concern is the health consequences for those who have gas usage in their homes.

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My apologies for not being clearer.:slightly_smiling_face:

In Victoria new homes must be ‘built all electric’. Old homes have some exemptions.

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Sometimes changes occur that are painful for many parts of the population. The move to the metric system, the move to decimal currency, the closure of the 3G network is a recent one where large parts of the population felt hurt or at least inconvenienced, are some of the changes were people felt some level of pain. Another was the move from the old POTS phone service. If done well, hopefully these changes bring future benefits.

As humans, mostly we like steady state of affairs. We tend to resist change, sometimes more strongly than others. Luddites were an example of more severe resistance to change.

Victoria are not the only Government moving to reduce gas usage. There are, as I posted in the following post Cooking with gas - health and environmental concerns - #86 by grahroll, Councils moving to ban new gas use in their local government areas.

This topic has the heading of Health and Environmental concerns of the gas energy industry in Australia, and while cost of use and convenience is a factor in assessing the economic impacts, it has less impact in what gas use has for our health and the environment outcomes. Using gas, wood, oil, kerosene, or other carbon burning fuel in our houses have far ranging negative impacts on our health. This in turn impacts our ability to work, it has impacts on the cost to our health systems such as patients in hospitals who may have not needed this if homes were more human health friendly.

I don’t know if economic cost has been thoroughly calculated, but the health costs certainly are significant and health costs do impact economic cost. Lead in petrol removal, was done because of health concerns. If gas use was more benign in its impacts on the residents of the home environment then it would be easier for us to argue against the changes. Exemptions have been given for old premises, the changes for them only affect when the premises require upgrades/replacement to the existing gas using systems. I think similar laws for requiring some sort of renewable energy production system (most likely solar in most circumstances) to be installed on new premises where installing is possible, should be introduced. I think that a requirement for community based batteries should also be legislated.

Environmental impact of home use regarding global GHG emissions, will not be of as large a concern compared to other uses of the gas such as in Industry and large scale energy production. If the argument was purely the global environment, it would be a harder change for Governments to argue considering those other large emitters.

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True of most imposed change.
In context the policies being implemented in Victoria are not due to an immediate and critical threat to the health of the population. It’s a decreasing supply/availability issue. If it were as simple as the health debate, the whole of Australia would have unilaterally agreed to remove all gas cooking and internal gas heating appliances ASAP.

Gas cooking is a minor portion of residential gas use. The need to end the other residential uses of gas does not have the same health derived arguments. How does one subsequently justify removing gas from residential use for hot water or home heating? There is an inconsistency in suggesting these other residential uses are also terminated when there is no equivalent ban or end to gas use for mining, manufacturing and power generation.

Replacing in home cooking using gas with electric does not lead to a significant change in total gas use nationally. Further the electricity required to power the replacement electric cooking appliances will likely be supplied from gas fuelled peaking generators in many instances. Where there are health arguments for reducing residential reliance on gas they appear to be poorly supported nationally.

Little surprise that many consumers may be feeling hard done by when the big users are let off the hook and the big exporters are making windfall returns. What ever the cost to Government, how does one accept the major concessions and offsets given to the gas exporters, or export parity pricing of domestic supply, are treating consumers equitably and fairly.

An alternate viewpoint to the latest intended changes to residential gas services in Vic and NSW. The more painful it is for those consumers currently relying on gas at home to change the more likely they are to side with the messaging of the petroleum and gas industry. Currently the upfront cost for most home owners to convert is not a zero sum. And not all users nationally are being provided the same opportunities!

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This topic raised the issues of health impacts and environmental impacts. My take was based purely on the home use of gas to cook and the health impacts associated with that. Other uses within the home will have similar impacts. Often houses that use gas heating or hot water also use gas cooking, as the supply is already in place. Why shouldn’t the health concerns be of nationwide importance? Isn’t it something that should be more widely discussed, and changes made? While Victoria may be doing it because of financial and supply issues, there is a good deal of scope to sell the health benefit outcomes. Are they being well advised in that regard?

Perhaps I should have been clearer my concern was for any gas use within the walls of the house.

Depends on the home heating, if it is a heater inside the home it introduces the same risk as for cooking purposes.

I’m not sure there would be many in the house gas hot water heaters, but if there are these again also introduce the same risks.

For things on the exterior of the house, the impacts may be very low or even negligible.

Should we ignore the health costs? That may have not been a primary or even secondary reason for the changes, still an unintended but potentially beneficial consequence?

I do not disagree with the sentiment that why have big players been let off. I fill in petitions, I write to my elected members of all levels of Government to tell they need to address the problems of using fossil fuels. Seems easy to continue letting the industry side of town off when it comes to many issues and “punish” the easy targets like householders. There is a lot of potential discussion around Scope 1, 2, and 3 emissions and how Australia in reality is a very big contributor to World emissions. Our Government say that they are committed to reducing carbon impacts but then approve large projects that will fuel carbon emissions.

This time though it has that possibly unintended helpful consequence for those who use gas inside their homes and small businesses.

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Many good points were made in a well presented and thoughtful manner.

As noted the vast majority of ‘gas things in a home’ are outdoors such as gas storage water services and hydronic boilers. Ducted gas heating? Outdoors or in a ceiling space that is vented. ‘Old school’ gas heaters in walls are gradually being decommissioned regardless of reasons.

Wood burners providing more than ample interior smoke might be more dangerous to health? When there is a health issue from ‘gas things’ it is probably going to be from lack of maintenance not because it is gas fueled. The main exception will be gas cook tops where lots of older homes have no range hood, or non-vented range hoods, or exhaust fans meant for bathrooms. The later could also become fire hazards as they suck up unfiltered airborne grease and deposit it ‘somewhere’. If health is #1 mandating vented range hoods seems an opportunity to improve older homes everywhere it is practical and at costs generally less than ripping out serviceable gas things and replacing them with electrics.

The gas supply issue and ‘who gets the money’ aspects are the province of MPs and governments, not social media - excepting social media can encourage citizens to apply pressure (one way or another). One side sees health issues caused by gas, one side sees health issues caused by malnutrition etc from lack of jobs, and one side sees dollars in their pockets.

As is often pointed out we can do whatever and other parts of the world are going to party on. This data set is undated, and can be sorted by columns.

As with most things everything is not equal; most things are complex to understand all the causes, effects, and relationships; and many governments swing and sway to the whims of votes while others make no pretences and get on with their approach be it scientific or dogmatic or populist. Would any of that be sufficient reason to play ostrich rather than getting on with it? As usual there are differences of opinion.

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You are correct @Gaby. For an positive environment benefit, any gas used in the Australian domestic environment must be left in the ground. This won’t happen and will be sold to anyone else (industry, exported) who wants to use it. Net outcome will be no change in environmental impacts.

The driver for the bans is seen to be doing something, even if it has no long term effect. If the impacts occur elsewhere, it is someone else’s problem…but a state government can claim to have reduced emissions in their own backyard - it gives one a warm and fuzzy feeling. Unfortunately, emissions blow over the fence which makes it a nonsensical argument unless they can guarantee the gas which would otherwise be used is left in the ground.

Health benefits are also questionable. Possibly it could be argued in a well sealed house like that in many cold areas of the world…but not in Australia which is known for its ‘leaky’ homes. It is worth noting well sealed home can have other toxic gases which may be of greater concern:

There might be some green washing going on in relation to health risks from in house gas use in Australia.

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I wouldnt mind if they banned gas use in homes, but “they” will have to pay the convert my house… I’ve already established that its beyond my means… In the meantime I use a portable hob (induction) and the only gas I use is for hot water washing dishes in the sink (i usually use the mini dishwasher) and my shower. The gas bill is still too high.

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There are probably many people in a similar situation today as well as into the future when the prohibitions start. Can you provide resources to who ‘they’ are or will be and how to engage with them for assistance, and anything you know about means tests?

I could imagine some properties, some very expensive (how many are not?), could be very costly to ‘upgrade’ to all electric and even people/families with relatively high incomes might not be able to afford doing it.

As an example I am self funded and an all-up cost for replacing my gas fired hydronic heating with a heat pump equivalent would be in the vicinity of $35,000 vs $7,000 for a replacement condensing gas boiler. Although there are cheaper alternatives like a split in numerous rooms to cover the living space, it would diminish the livability and comfort. Why would I want to do that voluntarily so where is my $35,000? No need to answer but I trust a point has been made that as with most government policies there will be winners and losers, and in some cases a cohort of ‘losers’ could be hard up against the wall.

Knowing if and what resources are available early will help many. If there are none contacting one’s MP now might start something good?

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For older people, some may be able to access support under MyAged Care packages. This would require assessment and approval but as an example a friend had most of the cost of a stair lift purchase and installation covered under their package. While this isn’t the same as heating or cooking equipment, in the case of these potentially mandatory changes that affect necessary equipment in a house, it might be possible to argue the cost is coverable so that the person is able to continue to reside in their home.

While it currently doesn’t exist everywhere, I would suggest where the Government does require the change then they should make an interest free loan or funding options available. Though there is some current small similarity when people change to energy efficient water heating (Hot water rebate | energy.gov.au), it isn’t much of a support but covers $1,400 of the cost. In the ACT there is a program that does cover the cost of the changeover, it is by referral only and households must prove that it would otherwise not be financially feasible. (Access to Electric Program | energy.gov.au) (Home Energy Support: Rebates for Homeowners - Climate Choices)

Similar programs by all Governments to help changing to electric based heating and cooking, might be worth campaigning about in the States that do not have a scheme like the ACT one. Or like the nbn, make it a Federal Government program.

If it is going to be a loan, then it is to be paid off over some period, for households where cost would otherwise be prohibitive. Origin Energy provides interest free loan schemes for installations of solar panels and batteries to customers.

This definitely requires that elected officials are “badgered” into getting the changes made to support these types of proposal. Organisations such as Salvation Army, ACOSS, Lifeline, Saint Vincent’s who have social needs support interests should be encouraged to get their support active in the area of lobbying for change. Even CHOICE could possibly play a part in helping to create a campaign to find ways to help consumers overcome the financial obstacles.

The following information is from 2023 so not all of it will be current. It does show that Governments have in the recent past been willing to provide at least some incentive for change.

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I agree that the Government should help pay for converting a household to all electric. People’s expenses won’t be small, ranging from new heating/cooking systems/appliances to professional installers and wiring updates and checks. New appliances and electricians are not an insignificant cost.
Plus, because of the greater load on power there’s the real danger of outages, planned and unplanned. Just during the past summer, right in the middle of a heat-wave, the power in my flat failed due to a power outage.
Fuel extraction is a major source of pollution and afaik there’s no plans to stop the mining of LNG for exports. But remuneration doesn’t seem to match the effort. The Australian people are the owners of LNG resources and are not getting a fair return for the loss of that ‘non-renewable’ resource.

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