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Energy and Emissions Reduction - Gas Industry

Dr Rosalie Woodruff MP

Dr Rosalie Woodruff MP  -  Thursday, 9 September 2021

Tags: Fossil Fuels, State Budget, Hydrogen

Dr WOODRUFF - Minister, my office and I have received a stream of promotional materials from Font PR of behalf of Tas Gas and the Tasmanian Gas Pipeline over the last few months. We confirmed in GBE Scrutiny last year, in the Gas section, that the contract for the Tasmanian Gas Pipeline is running out in 2022, and would need to be renegotiated to 2026. The fossil fuel industry is clearly worried that they're being displaced by renewable energy - and rightly so, in the world's view.

The Office of the Economic Regulator's report made an assumption of annual gas generation in 2016 being 1752 gigawatts, because of the energy crisis. In 2019 20 there were 100 gigawatt hours, and this year the monitor has assumed 67 gigawatt hours, so we're still using fossil fuel power in Tasmania. When a hydrogen facility becomes feasible, could this replace LPG?

Mr BARNETT - Our gas supply and security is very important for both industrial and domestic users in Tasmania, and we're providing long-term certainty to key players in that space. We will be developing and releasing a Tasmanian gas strategy between now and the end of the year. A consultation paper will be released for public comment shortly, and the final strategy will be published in early 2022.

In terms of our plans for renewable hydrogen, I am pleased to advise that Tas Gas - who I met with on many occasions, including with my department and others - are very proactive, and they have infrastructure in the Tasmanian Gas Pipeline network in Tasmania that is capable of transporting renewable hydrogen. That is unlike many other gas pipelines around Australia, so it's very good news for Tasmania that they can participate. You would then have renewable hydrogen being transported through that gas pipeline to other industrial users across the state. That's very encouraging. There's real opportunity there, and we have every intention of the industries working together.

Dr WOODRUFF - What you've talked about is 'shandying' or blending gas with green hydrogen. I have just heard a lot from you and Mr Terry about how we're trying to get a green hydrogen certification. By its very definition we would fall down if we were doing that process. You cannot have brown hydrogen on an island that is saying it is transporting brown gas mixed with green hydrogen and call us a green hydrogen state. Do you agree that would prejudice our green certification, by definition?

Mr BARNETT - Can I pass to Mr Terry, I think there is a slight misunderstanding in terms of the use of the renewable hydrogen. The certification system relates to the actual hydrogen that is manufactured. Then, in terms of it blending with gas, that’s a different matter. I think Mr Terry can explain.

Mr TERRY - Yes, that's right. Obviously, our preference is that the hydrogen that goes into the blending is green hydrogen. But the product in the gas pipeline is not a carbon free product. The hydrogen that will support that, from our view and our aspirations, will be green hydrogen. I accept that once you blend that with a carbon based fuel, that product itself is not green, is not 100 per cent renewable energy. Absolutely, from our perspective, we are prosecuting the argument that the input into that should be green hydrogen.

Dr WOODRUFF - So, to be clear, it is LPG, so it can make green LPG? We can make LPG from green hydrogen, that is what you confirmed, did you confirm that?

Mr TERRY - No, it's a blend -

Dr WOODRUFF - It wouldn't replace it? We can't replace LPG?

Dr BROAD - You displace some LPG.

Mr TERRY - That's right. It displaces some. It's natural gas, it's not LPG.

Dr WOODRUFF - Why can't we displace all of it?

Mr TERRY - It's the technology, basically. The ability to make higher blends in our gas network is the challenge.

Dr WOODRUFF - Is that because we have steel-lined mains?

Mr TERRY - No, we've actually got HDPE. Probably TasGas will have better expertise on this and they're looking at the levels of blending they can get into their network at the moment. It will be a blended product.

Whether we can get 100 per cent hydrogen at some point in time in our networks, that may be possible. In fact, I am aware that you can get 100 per cent hydrogen for transportation. There are some conversion requirements at the end user you would have to make, even for blending. If you went to 100 per cent hydrogen, there would be some challenges at the end use around conversion. But it is technically possible for a transportation to transport 100 per cent hydrogen.

Dr WOODRUFF - I am entirely confident that if we didn't transport 100 per cent green across that pipeline, that we would prejudice our green brand. Any way you like to spin it, if we are throwing a pipeline to a fossil-fuel industry at this point on the planet, and we're talking about contracts going into the future and doing that, that is not going to stack up with the green hydrogen label in Tasmania.

Mr TERRY - The green hydrogen stacks up, but whether it's 100 per cent renewable energy, that's another question.