Prime ministerial advocacy of new technologies that capture and store carbon dioxide emissions landed, in equal measure, a perplexing surprise and welcome encouragement for Grant Page.
Page runs the world's peak agency for the promotion of the sort of carbon management technologies that Malcolm Turnbull offered as one of two bridges between Australia's increasing complicated energy security challenges and its resolute commitment to a carbon future light enough to meet our commitment to the Paris climate agreement.
After a working life working mostly in the public service and dealing often with the complications of the Australian electricity sector, Page accepted an invitation to run the Melbourne-based Global CCS Institute in August 2011. And pretty much ever since he has wandered purposeful through a wilderness of dogma and ill-logic that sees a world desperate to contain its climate crisis refusing to look beyond one or two pathways to carbon emission management.
"But the landscape appears to be changing," he offered last Friday morning after being asked to reflect on Turnbull's unexpected public embrace of technology agnosticism in energy markets.
"It is a very interesting time," Page added, and not just because the carbon scales have fallen from powerful eyes.
Needless to say, Page is a passionate believer in the capacity of CCS to contribute to the world's climate solution. The science on carbon storage is in, the technology of carbon capture is moving forward rapidly and the cost of each is becoming ever more competitive.
"Everything that was done under the minority government driven by the Greens, it needs, in my view, to be peeled back if we are serious about this [meeting the Paris obligations]. I am not saying 'forget about emissions targets'. We here would say emissions targets have to get tighter everywhere in the world if we are to meet the Paris agreement. So we ask, 'why are you taking stuff off the table?'
"The great challenge in this whole debate is that it is coming off the back of a whole of state blackout. And there are really two intertemporal periods we have to think about. How do you deal with what we have today to try to avoid that blackout happening again. That is one whole issue.
"The second thing is, on a longer term investment basis, how are you going to put the policies in place that allow you to get a reliant, affordable but emissions sensitive electricity sector. I think that is the bigger challenge. Because the former challenge, to be honest, can be solved in one way or the other, it is just will not be a solution than comes cheap," Page said.
"I worry that people keep saying all we need is renewables, batteries and a bit of gas," Page said. "I worry that we have got a utilities sector that is taking a short-run cost view of technologies that are changing so fast. I worry that too many options are being closed off too early in a process that demands massive transition. Each time you close an option, the task of meeting 2 degrees or better is made more difficult and more costly."
Page defines the power sector's Paris challenge crisply. The power sector accounts for 35 per cent of Australia's CO2 emissions. "By mid-century we have to be approaching effectively zero. How do you get the policy settings right to make that happen while ensuring there is energy security? You just have to use every technological option. And CCS has to be one of those options.
"We have to move away from dogmatic positions. We need to open things up. But you then have to create the intersection of this refreshed discussion with what the policy settings have to achieve what you decide to do. That is where the battlelines get drawn.
"This is no time for ideological decisions. I think we have to, once and for all, stop the nonsense about renewables being cheaper than coal. If that were the case renewables would not need the subsidy it gets. But, as you soon as someone says you don't need the RET the screams begin. That tells me they are either making unearned rent or their claims about cost are not real."
Whether pure coincidence or not, Turnbull's decision to ventilate the flaws of an energy policy that has been shaped by an almost religious belief in the capacity of renewable energy to save the world from itself, comes at an evolutionary moment for the fossil burning power sector.
Last week, ahead of Turnbull's clarion, the Commonwealth's Chief Scientist Alan Finkel popped by for an update from Page and his people on the global state of play in CCS. There was a lot to discuss.
On January 10 US utility NRG Energy flicked the switch on a new $US1 billion generator outside Houston called Petra Nova. It is the power world's biggest carbon capture project and its financial supporters include US and Japanese utilities and their government which together pitched in $US420 million.
The 240MW plant, which came in nearly on time and right on budget, captures 90 per cent of its emissions (about 1.4 million tonnes annually) for reuse in driving oil out of a community of nearby oil fields. And it has been reported that the people who built the plant reckon it could be replicated at a 20-30 per cent discount to this Texas pioneer.
The business of capturing carbon in the US is becoming very interesting. At Kemper in Mississippi they have turned on and then turned off (temporarily) a new $US2 billion plus lignite gasification plant whose leading edge carbon capture technologies have the capacity to trap up to 3 million tonnes of CO2 annually.
All this going to plan the facility will also make money converting emissions into sulphuric acid and deliver about 20,000 tonnes a year of ammonia to regional chemicals plants. This will generate an estimate $US100 million in extra revenues that the operator reckons will be spent on lower electricity costs.
The other imminent arrival in the US CCS world is a sequestration project being run by the grains company Australia rejected, Archer Daniels Midland. It will capture about 1 million tonnes a year of CO2 from its corn-to-ethanol plant at Decatur in Illinois and then ship and store it in a sandstone trap about 2130 metres below ground level.
Each of these developments land near enough to two years after the CCS landscape in North America was refashioned by the Boundary Dam CCS project in Canada's lignite rich Saskatchewan. There a 50-year-old coal-fired generator was refurbished and retrofitted with CCS technology at a total cost of $C1.2 billion, though the CCS bit is estimated to have absorbed but $C800 million of that. It has been running since October 2014 and last year alone stored about 800,000 tonnes of C02.
There are some decisions to be made yet at Boundary Dam. It has two more units due for retirement but that could be retrofitted. The operators have said each unit could be transformed at a 30 per cent discount to the original rebuild. And it has been suggested that, if they could match the terms of the CO2 trading, the next phase of development could be done without any government finance. The Canadian government threw $C240 million at the first project. Prime Minister Justin Trudeau commitment to some for a national carbon pricing could prove the final fillip for that project.
These moments of signal progress come after a very tough few years for the CCS industry, with the closure of a once prospective US research joint venture called FutureGen (whose supporters included BHP Billiton and Rio Tinto) and the loss of support for a German CCS venture.
To digress for a moment, it has to be noted that, while FutureGen has gone, BHP's interest in CCS. Far from it. Chief executive Andrew Mackenzie is a firm believer in the threat of climate change and the necessity of CO2 mitigation. He believes that CCS looms a pivotal technology for both coal and gas. And that is probably why he is said to have raised CCS, it potential and its necessity, during a remarkable January 10 meeting with the then US President-Elect, Donald Trump.
Turnbull is right to wonder at the paradox of Australia's place as a world senior coal exporter and its failure to match the world's best in either carbon efficient power generation or CSS. But that does not mean there is not progress here. Victoria and Western Australia boast hubs of CCS progress while Barrow Island, in WA's distant north-west, will soon host one of the world's biggest CCS projects with the ramping up of the blighted but massive Gorgon project.
