Australia's plan to become the world's biggest exporter of methane gas in its super-chilled form as liquefied natural gas (LNG) is being threatened by another gas, carbon dioxide.

The gas-clash has come to a head in Western Australia, home to four LNG projects, and potentially several more as demand for the fuel rises because it is less polluting when burned than other fossil fuels such as coal and oil.

But LNG's appeal as a relatively clean fuel does not save it from the Paris Agreement, an accord ratified by most members of the United Nations and designed to tackle climate change by cutting the emission of gases such as carbon dioxide which is produced when methane is burned.

LNG Caught In The Paris Agreement

In theory, LNG could make a contribution to the fight against climate change because it replaces more polluting fuels but Australia faces the problem of being a Paris Agreement signatory and a big energy exporter.

A solution might be found if LNG production could be offset by investment in carbon reduction projects such as tree planting and renewable energy like solar and wind farms.

The immediate issue, however, is that two of the proposed new LNG projects are approaching a final investment decision, and that process has run headlong into a recommendation of the Western Australian Environmental Protection Authority which wants all big new projects to fully offset their emissions.

For Woodside Petroleum, the Australian company leading the push to develop the Browse and Scarborough gasfields, the EPA interpretation of the Paris Agreement came as a shock. It also came as a shock to the state government which is keen to see both projects proceed.

Source: Forbes