Coal seam gas (CSG) developers have been accused of ‘massively understating’ their carbon tax liabilities, with the sustainable energy think-tank Beyond Zero Emissions (BZE) saying their actions will throw the future of the entire industry into question.

 

Research published by Southern Cross University shows significantly higher levels of methane at the Tara CSG gas fields, which indicate the likelihood of fugitive emissions associated with other operations.

 

Currently, CSG developers are using an assumed fugitive emissions factor of 0.12%. This is based on a 1996 American Petroleum Institute document intended for health and safety, which explicitly states it should not be used as basis for emissions inventory accounting standards.

 

“This method is clearly unsatisfactory,” said Matthew Wright, Executive Director of BZE.

 

“While it is currently under review by the Federal government, companies have had the option to self-monitor, but have refused to do so.

 

BZE has calculated that if a CSG well, producing a typical one terajoule of CSG per day, leaked a low 1% of fugitive emissions (nearly ten times the assumed figure), it would be liable for $31,700 per year at the current carbon price of $23/tonne.

 

Based on the existing US and the preliminary SCU data, fugitive emissions would likely exceed 4%. At 4%, each well's carbon price liability would be $126,800. This would create an overall annual carbon price liability of around $3.8 billion for the projected 30,000 CSG wells.

 

“Investors in these companies would have to ask whether the companies would be better off leaving their hard earned money in the bank, where at least they will make something – or investing in something with a proven track record of profitability, like solar panels.”