Greenhouse gas storage and its impacts on the upstream petroleum and gas industry*

Abstract

Is the reservoir half full or half empty? Both scenarios are one for the optimist depending on whether that optimist is a petroleum producer, or a greenhouse gas storage provider.

As Australia looks towards greenhouse gas storage as an important option for reducing carbon dioxide emissions, greenhouse gas storage may herald the emergence of an entirely new industry. This new industry will have far-reaching impacts across a broad spectrum of existing industries, not least of which is the upstream petroleum and gas industry.

In this time of increasing demand for gas, not only will competition for the same geological spaces remain rife among petroleum and gas producers, but greenhouse gas storage providers may seek these very same spaces for their own operations. Other points of contention between the industries could include concurrent land use on overlapping tenures and the development, operation and ownership of pipelines.

Petroleum and gas industry participants will need to adapt to the new challenges arising from the emergence of greenhouse gas storage. And if petroleum and gas producers decide to take up some of the opportunities offered by the new industry, they will need to grapple with significant questions about feasibility and risk associated with greenhouse gas storage projects inherent in the legislative regimes enacted to date.

Using Queensland’s new Greenhouse Gas Storage Act 2009 as a platform, Ben Cansdale will examine these challenges and discuss the potential impact a greenhouse gas storage industry will have for Australia’s petroleum and gas industries.