Carbon framework fails to keep pace

The race is on to find ways to store carbon dioxide emissions, but some in the sector argue the legal framework has to be put in place to deal with this new issue and the business opportunities it creates.

In the area of geosequestration, the act of putting CO2 back into the ground, business is already pushing the envelope, seeking solutions they may have no legal right to apply.

South Perth-based Aviva Corporation Ltd has commissioned a $250,000 study by the Canberra-based Cooperative Research Centre for Greenhouse Gas Technologies, better known as CO2CRC, to assess the potential for geosequestration near its Coolimba power station project near Eneabba, south of Geraldton.

But, unlike the extraction of gas from geological formations, laws are yet to be written guiding those in this sector on how the rights to use formations suitable for CO2 storage are to be assigned.

CO2CRC chief executive Dr Peter Cook said it was a significant issue for the sector, with state and federal governments grappling with the subject.

“The current status is that it is an issue,” Dr Cook said.

He said most of what had been framed so far, including at least one international convention, centred around the offshore storage of CO2, typically as part of the oil and gas production process.

In that case, it was fairly clear that CO2 obtained from a particular structure may be returned to it, a practice that has gone on for decades as petroleum producers have used gas injection to improve oil production.

In the case of Chevron’s Gorgon project, the project’s right to geosequestrate CO2 emissions from LNG production is contained in the WA Barrow Island Act 2003.

“If it is an integral part of the operation, it could be argued so long as you are putting it back into the same area you are producing from then it is OK,” Dr Cook said.

“If it is not the same area, it is less clear.”

“It is even more unclear if it is CO2 from a power station.”

Dr Cook acknowledged that it was difficult to regulate without activity in this sector and that actual operations but a lagal framework was needed.

“We don’t want to sit on our hands for too long,” he said.

Dr Cook said federal government draft legislation had been delayed with the change of government, while several states had released discussion papers on the issue.

The state government said the relevant legislation was the WA Petroleum and Geothermal Energy Resources Act 1967 for onshore gas storage. Amendments have been drafted to better define CO2 within the act and broaden its scope to cater for permanent gas storage.

In some areas of the carbon sequestration, such as using plantations as carbon sinks, business has already entered the field.

Groups like CO2 Ltd is trading on the stock market and Patersons Capital Partners, a joint venture between former executives from Alinta Ltd and Patersons Securities, launched this week with plans to establish a carbon sequestration and bioenergy businesses.