Miners question Gorgon approval

THE battle over energy in Western Australia has taken another twist with a consortium dominated by mining companies asking the government to set more stringent conditions on another resources project.

The unusual request is contained in an appeal to Environment Minister Donna Faragher submitted by the DomGas Alliance with regard to the approval process for the $50 billion Gorgon gas project on Barrow Island.

The alliance is arguing that domestic gas has a lighter environmental footprint than LNG - producing about 20 per cent less greenhouse gas emissions - and should therefore form a bigger component of the project, from the beginning, in order to reduce the output of CO2 and its equivalent.

The DomGas Alliance is a body representing major gas users including Fortescue Metals Group, Alcoa Australia and Newmont, as well as other big industrial players such as Burrup Fertilisers, which would all face significant environmental hurdles in the development, operation and expansion of their own projects.

That such a body of heavy industrial companies should demand stricter environmental conditions for a project considered as important to the state and the nation underscores the ill-feeling between those producing LNG for export and local users, who claim access to energy is threatening their long-term viability.

The Environmental Protection Authority recently granted conditional approval to Gorgon for its proposed 50 per cent expansion to 15 million tonnes per annum from the previously approved 10mtpa project.

Final approval for that expansion now rests with Ms Faragher in a process being managed by the Office of the Appeals Convenor. It is understood the Gorgon partners have appealed to her against some of the conditions proposed by the EPA.

In requesting the minister to require the project to provide a 15 per cent domestic supply commitment to start with the first LNG train, DomGas claims such a move would deliver emission reductions of 66mt over the life of the project.

Gorgon has previously said that it intends to start supplying the domestic market with 150 terajoules per day in 2015, after the start-up phase, increasing to 300tj/day up to six years later.

DomGas claims that 8 per cent of energy is lost in supplying natural gas to the local market, 3 per cent of that in piping gas via the Dampier to Bunbury Natural Gas Pipeline.

"In contrast, LNG is only 74 per cent energy efficient, with 26 per cent of the energy consumed by the LNG supply chain," DomGas said.

"Unlike LNG, domestic gas does not need to be liquefied, shipped long distances in tankers and then regasified before it can be used as a fuel - an energy intensive process."

DomGas cites international studies, including one by US-based Carnegie Mellon University, which found some LNG emissions were close to those produced by high-tech coal energy.

However, gas industry figures dispute the DomGas claims and point out that the Carnegie Mellon report is based on assumptions that some believe are flawed, including the use of outdated information about LNG production.

Gorgon said its project would supply 15 per cent of the domestic market by the end of 2015, and 33 per cent when fully operational.