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Gladstone coal gasification project a carbon bomb: 60m tonnes over 30yrs

Picture: Diagram of proposed Gladstone coal gasification technology, sourced from Australian Future Energy investor presentation, with CO2 emissions highlighted by FFB.

Fossil Fool Bulletin 1.44 • 2 October 2018

By Eve Sinton

A $1 billion project recently announced for Gladstone is a carbon bomb.

Australian Future Energy’s (AFE) Gladstone Energy and Ammonia Project (GEAP) will belch out two million tonnes of CO2 annually for 30 years.

The project illustrates how governments and industry blithely continue to initiate fossil fuel projects as if there is no prospect of climate disaster.

AFE says the plant will yield 330,000 tonnes per annum of ammonia product, and up to 8 PJ of pipeline quality gas for the east coast domestic gas market.

In addition, the proposed project will generate approximately 90 MW of electrical power, with approximately 25 MW of this being available for export to the local domestic grid.

The project has been fast-tracked by the Queensland Co-ordinator General as a ‘co-ordinated project’, and welcomed uncritically in mainstream media such as the Gladstone Observer.

It will create 800 construction jobs and 200 operational jobs over a 30-year lifespan.

As is typical of resource projects, the company claims 1,280 indirect jobs will be also be created. However, they are using a Queensland Resources Council employment multiplier that has been discredited by economists at The Australia Institute.

The GEAP will devour 1.5 million tonnes per annum of low-quality coal, mostly sourced from the Callide mine.

Plant will be a ‘major hazard facility’

It is classified as a major hazard facility and will require a gigalitre of water every year.

The company says water will be sourced from the Gladstone Area Water Board. A previous concept of the technology discussed using coal seam gas wastewater from the Darling Downs.

The plant will produce a number of air emissions from the gasification and gas purification processes. These will include sulphur oxides, nitrogen oxides, and particulates PM10 and PM2.5

In addition, there are potential fugitive emissions from gas leaks. Gases produced will include syngas – synthetic natural gas (methane), carbon dioxide and ammonia. There is potential for these gases to leak from pipelines and process plant equipment.

AFE claims that most of the CO2 will be captured, with potential for carbon sequestration – a technology with zero commercial success to date. The company says it could also be sold directly to ‘available markets’.

FFB notes that one such market could be ‘enhanced oil recovery’, a process that does not guarantee the CO2 won’t escape into the atmosphere.

AFE says its power plant will periodically have boiler blowdown discharges comprising highly saline waters.

Any unscheduled stoppages in syngas processing will see gases (H2, CH4, CO, CO2, NH3, N2, steam) flared off and released to the atmosphere.

The production of ammonia requires disposal of notable quantities of oxides and sulphides of the heavy metals Co, Ni, Mo, Cu, Zn and Fe.

American parent company ‘shady’

The coal gasification technology to be utilised on the Gladstone project has been developed by Synthesis Energy Systems (SES) a US-based Nasdaq listed company, which holds approximately 40% of the issued capital in AFE.

Investment researcher White Diamond, writing in 2016, had nothing good to say about SES.

“The company hasn’t had a profitable quarter in over seven years,” White Diamond said.

“Synthesis Energy has a shady past with deals that never go through, and that won’t change despite management’s big talk.

“Yet, management continually talks a big game to keep bringing in new investors to buy the stock so it doesn’t get delisted from the Nasdaq.”

The company currently has some gasification systems operating, the largest being at Yima, China.

Australian Future Energy (AFE) is a privately-owned Australian company founded in 2014 by its primary shareholders, coal industry veteran Edek Choros and SES, using SES technology.

Choros company defeated at Felton

Edek Choros is well-known to the people of Felton, on the Darling Downs, who stymied his company Ambre’s gasification project there after a four-year battle.

The Courier-Mail reported, “The final nail for Ambre came with the election of the Newman Government, which rejected the Felton petrochemical scheme because it was not in the public interest because of its location in high value farming land near Toowoomba.”

“Dropped us to the wolves”

Choros told the Courier-Mail, “He [Newman] dropped us to the wolves to please some people. We were probably 20 years ahead of ourselves with that project.

“After fighting everyone at Felton, forget opening a new mine. We are starting with proven technology.”

Choros was referring to a plan to develop the Callide coal mine into a $2 billion coal gasification project – which has now found a new home in the Gladstone State Development Area. The area is the location of a number of noxious industries such as the three liquid natural gas (LNG) export plants sucking most of the gas out of the Darling Downs.

AFE appointed former Cougar Energy exec Kerry Parker as CEO in March this year.

Having the Gladstone project listed as a co-ordinated project by the Queensland government was a huge boost for AFE. The company has submitted an Initial Advice Statement (IAS) which can be downloaded here:

https://www.statedevelopment.qld.gov.au/assessments-and-approvals/gladstone-energy-and-ammonia-project.html

The next step is preparation of draft terms of reference by the Coordinator-General who will then invite community comment on the matters to be investigated in the EIS.

These may include: ecology impacts; generation of large quantities of pure carbon dioxide; stormwater; wastewater; air quality and dust; ash management; solid waste management; groundwater ; cultural heritage; Native Title and Indigenous Land Use Agreements; water supply; amenity impacts – visual, noise and odour; hazard and risk – health and safety.

The project is estimated to commence construction by mid-2020, and start production in mid-2022.

The company also says, in an investor presentation, it will seek funding from the Northern Australia Infrastructure Fund (NAIF).

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