LNG exporters must divert gas to the domestic market to avoid shortfalls: ACCC
August 1, 2022
The ACCC’s July 2022 Interim gas report, released today, forecasts the east coast of Australia could face a shortfall of 56 PJ in 2023. At the same time last year, our Gas Inquiry interim report found 2022 could face a 2PJ shortfall.
“Our latest gas report finds that the outlook for the east coast gas market has significantly worsened. To protect energy security on the east coast we are recommending the Resources Minister initiate the first step of the Australian Domestic Gas Security Mechanism (ADGSM),” ACCC Chair Gina Cass-Gottlieb said.
“We are also strongly encouraging LNG exporters to immediately increase their supply into the market.”
Much of the gas produced in Australia’s east coast is produced by companies that are also LNG exporters.
The ACCC’s report raises concerns about the high level of market concentration, noting that LNG exporters and associates had influence over almost 90 per cent of the proven and probable (2P) reserves in the east coast in 2021 through direct interests, joint ventures and exclusivity arrangements.
The east coast of Australia is forecast to produce 1981 petajoules (PJ) of gas in 2023 of which 1299 PJ, or 65.6 per cent, is forecast to be exported overseas under long term contacts. LNG exporters are also expected to produce a further 167 PJ over what they require to meet their contractual commitments.
This excess gas is not contractually committed and could be supplied into either the domestic market or the international LNG market.
“Increasingly, LNG exporters have diverted most of their excess gas to overseas spot markets, with as much as 70 per cent of the excess volume going overseas in recent years,” Ms Cass-Gottlieb said.
“If LNG exporters were to provide all of their excess gas to overseas markets, the east coast gas market would be facing a supply shortfall 56 PJ.”
LNG exporters have been net withdrawers of gas from the domestic market since 2021, purchasing more gas from domestic producers than they supply to domestic customers, which has worsened the gas shortfall. The volume of gas withdrawn by LNG producers is increasing and is estimated to reach 57.6 PJ of gas from the domestic market in 2023 (see Chart 2).
Chart 1: Forecast east coast supply-demand balance in 2022/23
Source: ACCC analysis of data obtained from gas producers as at May 2022 and of the domestic demand forecast (Progressive Change scenario) from AEMO's March 2022 GSOO. Note: Totals may not add up due to rounding.
Chart 2: LNG exporters' net contributions to the east coast gas market
Source: ACCC analysis of data obtained from LNG exporters as at May 2022.
The report highlights concerns that some LNG exporters are not engaging with the domestic market in the spirit of a Heads of Agreement signed in early 2021, which commits LNG exporters to offer uncontracted gas to the domestic market first on internationally competitive market terms before it is exported.
A well-functioning Heads of Agreement with LNG exporters could ensure that LNG exporters make gas broadly and transparently available to all domestic users (including commercial and industrial users and gas-powered generators and retailers) at demonstrably competitive prices, in volumes and for periods suitable to buyers' needs, and with sufficient notice.
The Government has committed to renegotiating the Heads of Agreement.
“Under the Heads of Agreement, exporters can offer excess gas to domestic market participants through an expression of interest process. We are concerned that domestic gas users don’t always have reasonable notice of these offers, and that LNG exporters do not make counter-offers to bids, which could indicate they are not seriously engaging in the domestic market,” Ms Cass-Gottlieb said.
“We welcome the announcement by the Minister for Resources that Australian Government has decided to review and renegotiate the ADGSM and the Heads of Agreement with LNG exporters,” Ms Cass-Gottlieb said. “Both mechanisms are critical to ensuring adequate supply to the domestic market in 2023 and future years.”
Concerns about upstream competition and the timeliness of supply
The ACCC has examined upstream competition and timeliness of supply and found that this market is highly concentrated and dominated by the three LNG exporters and their associates.
The LNG exporters influence supply through numerous joint ventures and exclusivity agreements.
“With the high degree of concentration in this part of the market, we have observed that joint ventures, joint marketing and exclusivity arrangements are contributing to the lack of effective upstream competition in the east coast,” Ms Cass-Gottlieb said.
“They may also increase the risk of coordinated conduct and increase the market power of the LNG exporters. This is particularly concerning given the current supply conditions and the reliance on the LNG exporters to meet domestic supply.”
Notes
The report emphasises that the ACCC’s net contribution calculation is based solely on the LNG exporters' supply into the domestic market under gas supply agreements, and withdrawals from the domestic market under purchases from third parties.
Our approach does not consider whether these purchases from third parties are 'third party export compatible gas' as defined in the ADGSM and as the question of determining if gas in 'third party export compatible gas' is a matter for the Minister for Resources under the ADGSM Guidelines, the ACCC has not collected information from parties that would help determine this question.
Background
On 19 April 2017, the Australian Government directed the ACCC to conduct an inquiry into the supply of and demand for wholesale gas in Australia and publish regular information on the supply and pricing of gas for three years. On 25 July 2019, this inquiry was extended until December 2025.
The ACCC is required to submit interim reports at least six-monthly and provide information to the market as appropriate, with a final report by 30 December 2025.
On 21 January 2021, the Australian Government announced a new Heads of Agreement had been signed which commits LNG exporters to offer uncontracted gas to the domestic market first on internationally competitive market terms before it is exported. The new Heads of Agreement was entered into in late December 2020 and operates over 2021–23.
On 30 November 2021, gas suppliers and gas users agreed to a voluntary industry Code of Conduct for the negotiation and development of Gas Supply Agreements. The code was due to commence on 1 June 2022 but has been delayed.
On 7 February 2022, the ACCC received a direction from the then Assistant Treasurer to examine Incitec Pivot’s gas tender process for its Gibson Island plant. We have reported on this using producers’ responses to compulsory information notices, in addition to information voluntarily provided by Incitec Pivot.
On 6 June 2022, the Treasurer wrote to the ACCC conveying his concern about the significant increases in wholesale electricity and gas prices and setting out his expectation that the ACCC will ensure the factors influencing prices in the market are made transparent, making any appropriate policy recommendations and investigate concerns about anti-competitive and false and misleading conduct in electricity and gas markets.
First global map of cargo ship pollution reveals effects of fuel regulations
August 2, 2022
A new study in Science Advances led by UMBC's Tianle Yuan used satellite data from 2003 -- 2020 to determine the effect of fuel regulations on pollution from cargo ships. The research team's data revealed significant changes in sulfur pollution after regulations went into effect in 2015 and 2020. Their extensive data set can also contribute to answering a bigger question: How do pollutants and other particles interact with clouds to affect global temperatures overall?
Tiny particles in the atmosphere, which are called aerosols and include pollution, can harm human health, but they also often have a cooling effect on the planet because of the way they interact with clouds. However, estimates of the extent of that effect range by a factor of 10 -- not very precise for something so important.
"How much cooling the aerosols cause is a big unknown right now, and that's where ship tracks come in," says Yuan, an associate research scientist at the Goddard Earth Sciences Technology and Research (GESTAR) II Center.
Sea of data
When pollutant particles from ships enter clouds low in the atmosphere, they decrease the size of individual cloud droplets without changing the total volume of the cloud. That creates more droplet surface area, which reflects more energy entering Earth's atmosphere back to space and cools the planet.
Instruments on satellites can detect these differences in droplet size. And the air over the ocean is generally very clean, making the relatively narrow ship tracks that snake across the ocean easy to pick out. "Most of the original cloud is unpolluted, and then some of it is polluted by the ship, so that creates a contrast," Yuan explains.
While ship tracks can be relatively obvious in satellite data, you have to know where to look and have the time and resources to search. Before advances in computing power and machine learning, Yuan says, Ph.D. students could focus their entire thesis on identifying a group of ship tracks in satellite data.
"What we did is automate this process," Yuan says. His group "developed an algorithm to automatically find these ship tracks from the sea of data."
This huge advance allowed them to generate a comprehensive, global map of ship tracks over an extended period (18 years) for the first time. Next, they will share it with the world -- opening the door for anyone to dig into the data and make further discoveries.
Disappearing act
Even before pollution-limiting regulations were put into place, Yuan and his colleagues found that ship tracks didn't occur everywhere ships were traveling. Only areas with certain types of low cloud cover had ship tracks, which is useful for adjusting the role of clouds in climate models. They also found that after Europe, the U.S., and Canada instated Emission Control Areas (ECAs) along their coastlines in 2015, ship tracks nearly disappeared in those regions, demonstrating the efficacy of such regulations for reducing pollution in port cities.
However, shipping companies didn't necessarily reduce their pollution output across the board. Instead, they made changes to adapt to the new rules. Ports in northern Mexico (not part of the ECA system) saw increased activity, and pollution "hot spots" built up along the boundaries of the ECAs as ships altered their routes to spend as few miles as possible inside the restrictive zones.
In 2020, though, an international agreement set a much more restrictive standard for shipping fuel across the entirety of global oceans, rather than only near coastlines. After that, the only ship tracks the team's algorithm could detect were those in the cleanest clouds. In clouds with even mild background pollution, the presumed ship tracks blended right in.
A figure from the new study shows an image collected by NASA’s MODIS satellite of the U.S. West Coast (left) overlaid with ship tracks detected by the research team’s algorithm (right).
Climate conundrum
It seems obvious that reducing pollution from ships would produce a net benefit. However, because particles (such as shipping pollution) have a cooling effect when interacting with clouds, reducing them significantly could contribute to a problematic uptick in global temperatures, Yuan says.
That's another reason it's important to firm up the degree to which particulate pollution cools the planet. If the cooling effect of these pollutants and other particles is significant, humans will need to balance the need to prevent extensive warming with the need to reduce pollution where people and other species live -- which creates difficult choices.
"Ship pollution alone can create a substantial cooling effect," Yuan says, "because the atmosphere over the ocean is so clean." There is a physical limit to how small cloud droplets can get, so at a certain point, adding more pollution doesn't increase the clouds' cooling effect. But over the ocean, because the background is largely unpolluted, even a small amount of pollution from ships has an effect.
Ocean pollution is also an outsize driver of the cooling effect of aerosols, because low clouds, which are most conducive to creating ship tracks, are more common over water than on land. And, as Yuan reminds us, "the ocean covers two-thirds of the Earth's surface."
Another figure from the paper shows how regulations affected ship tracks. In the middle panel, blue areas show how ships were carefully avoiding the Emission Control Areas near the coasts. The red and orange areas show increased traffic just outside the ECA boundaries and at ports not affected by the regulations. In 2020 (bottom panel), blue areas indicate that ship tracks largely disappeared even in areas with high ship traffic.
The bigger picture
Moving forward, Yuan and his colleagues are helping address this conundrum by continuing their work to define more precisely the role clouds play in climate. "We can take advantage of the millions of ship track samples we have now to start to get hold of the overall aerosol-cloud interaction problem," Yuan says, "because ship tracks can be used as mini-labs."
By analysing data from a relatively simple and well-controlled system -- narrow ship tracks running through very clean clouds -- they can come to conclusions they can be confident about."
Other research teams can also use the team's data set and algorithm to come to their own conclusions, amplifying the potential public impact of this work. That spirit of collaboration will help scientists and communities determine how best to approach global challenges like pollution and temperature change.
Tianle Yuan, Hua Song, Robert Wood, Chenxi Wang, Lazaros Oreopoulos, Steven E. Platnick, Sophia von Hippel, Kerry Meyer, Siobhan Light, Eric Wilcox. Global reduction in ship-tracks from sulfur regulations for shipping fuel. Science Advances, 2022; 8 (29) DOI: 10.1126/sciadv.abn7988
Construction for new Tweed Valley Hospital reaches highest point
August 2, 2022
The new seven-storey $723.3 million Tweed Valley Hospital development has reached a major milestone, hitting its highest point of construction. Deputy Premier and Minister for Regional NSW Paul Toole said the new hospital campus is the state’s largest regional hospital project. “This is about delivering world-class health facilities and services closer to home to transform healthcare for communities in the Tweed Valley region,” Mr Toole said.
“Today’s ‘topping out’ ceremony is a significant milestone for this incredible new health facility which will double capacity of the existing hospital to better meet the current and future healthcare needs of this community which has grown by 6,000 people since this project was first announced.”
Minister for Regional Health Bronnie Taylor said the hospital will feature two new major services, including an interventional cardiology service and an integrated cancer care service with radiotherapy and PET-CT.
“These services will be a game-changer for the local community, providing treatment locally to ensure up to 5,000 people no longer have to travel outside of the region to access life-saving treatments,” Mrs Taylor said.
“Once complete next year, the new hospital will boast almost 200 more beds and an extra 16 new Emergency Department treatment spaces.”
Member for Tweed Geoff Provest said in addition to the world-class health facility, construction for the hospital has provided a boost to the local economy, supporting hundreds of jobs since work began.
“As the project moves into the internal fit-out stage, work is ramping up with around 400 people on-site each day,” Mr Provest said.
“Importantly, many of the workers contributing to this project are from the local community.”
The hospital has been designed in close collaboration with staff and the community and will include:
- More than 400 overnight and day only beds to address future demand for health services
- Expanded emergency department with 42 treatment spaces
- Expanded outpatient services with more clinics
- 12 operating theatres, an increase of five from the existing Tweed Hospital
- New interventional cardiology service
- New radiotherapy service as part of integrated cancer care, including a PET-CT suite
- Outdoor green spaces
- Campus roads and car park.
With the hospital reaching its full structural height, construction teams will continue the internal fit-out of the building, services installation and the hospital’s facade.
Construction of the new hospital is on track for completion in 2023.
A new $50 million multi-storey car park will also be delivered as part of the project, providing staff, patients and visitors with access to over 1,200 car park spaces at the new hospital campus when complete. Construction is underway and on-track to open in 2023.
The Tweed Valley Hospital development is part of the NSW Government’s record $10.8 billion investment in health infrastructure over four years to 2024-25, with nearly a third of the spend in this financial year earmarked for regional and rural health facilities.
Since 2011, the government has delivered more than 170 hospitals and health facilities across NSW, with more than 110 currently underway – of those, more than 70 are in rural and regional areas.
Explorers just uncovered Australia’s deepest cave. A hydrogeologist explains how they form
Cave explorers have traversed what’s now the deepest known cave in Australia. On Saturday a group of explorers discovered a 401-metre-deep cave, which they named Delta Variant, in Tasmania’s Niggly-Growling Swallet cave system within the Junee–Florentine karst area. Its depth just beat out its predecessor, the Niggly Cave, by about four metres.
With a descent that lasted 14 hours and took many months to prepare for, Delta Variant is causing a stir among explorer communities.
But it holds a different kind of fascination for researchers such as myself, who study the interaction between groundwater and rocks (including in the context of caves). This helps us learn about natural processes and how Earth’s climate has changed over millions of years.
Exciting as Delta Variant is in an Australian context, it is arguably just an appetiser in the wider world of caves; the deepest known cave, located in Georgia, goes more than 2.2 kilometres into the earth.
So how exactly do these massive geologic structures form, right under our feet?
How do caves form?
Put simply, caves form when flowing water slowly dissolves rock over a long time. Specifically, they form within certain geological formations called “karst” – which includes structures made of limestone, marble and dolomite.
Karst is made of tiny fossilised microorganisms, shell fragments and other debris that accumulated over millions of years. Long after they perish, small marine creatures leave behind their “calcareous” shells made of calcium carbonate. Corals are also made of this material, as are other types of fauna with skeletons.
This calcareous sediment builds up into geological structures that are relatively soft. As water trickles down through crevices in the rock, it continuously dissolves the rock to slowly form a cave system.
Unlike much harder igneous rocks (such as granite), calcareous rocks dissolve on contact with water that is naturally acidic. When rain falls from the sky, it picks up carbon dioxide from the atmosphere and soils along the way, which makes it acidic. The more acidic the water, the faster it will erode karst material.
So, as you can imagine, cave formation can become quite complex: the specific composition of the karst, the acidity of the water, the level of drainage and the overall geological setting are all factors that determine what kind of cave will form.
In geology there’s a lot of spatial guesswork. Being able to see how deep a cave formation goes is a bit like getting into the deepest layers of a cake, where you may not find the same thing in all directions.
Stalagmites and stalactites
From a research perspective, caves are incredibly valuable because they contain cave deposits (or “speleothems”) such as stalagmites and stalactites. These are sometimes spiky things that point up from cave floors, or droop from the ceilings, or form beautiful flowstones.
Cave deposits form as a result of water passing through the cave. Like trees, these contain growth rings (or layers) that can be analysed. They can also include other chemical signatures the water contained, which can reveal processes that occurred at the time of formation.
While they may not seem like much, we can use these deposits to unravel past secrets about Earth’s climate. And since they’re a feature of the interaction between rock and water during cave formation, we can basically expect to find them in most caves.
How deep can we go?
Descending deep into a cave system is no small feat. You can’t use your mobile (since there’s no reception), it’s incredibly dark and you’re usually relying on a guide line to find the way back out. There could be many dead ends for explorers, so effectively mapping the space requires time and great spatial exploration skills.
While cave systems are usually stable (shallow caves can in theory collapse and form sinkholes, but this is very rare) – there’s always risk. The unexpected geometry of caves means you could find yourself making tricky manoeuvres, twisting and swaying in all kinds of uncomfortable manner as you abseil into darkness.
Although the air pressure doesn’t change to a dangerous extent as you descend, other gases such as methane, ammonia and hydrogen sulfide can sometimes pool and lead to suffocation risk.
Despite all of the above, cave exploration is something people continue to do, and it brings great benefit for researchers in various sub-fields of geology.
And though we’ve come a long way, there are always nooks and crannies we can’t get inside – after all, humans aren’t tiny. I’m sure there are small spaces, too snug for us to explore, that open into much longer or bigger systems than we’ve ever discovered.
Gabriel C Rau, Lecturer in Hydrogeology, School of Environmental and Life Sciences, University of Newcastle
This article is republished from The Conversation under a Creative Commons license. Read the original article.
Engineers develop new integration route for tiny transistors
August 3, 2022
Researchers from the Materials and Manufacturing Futures Institute designed the material. Photo: Robert Largent.
Researchers from UNSW Sydney have developed a tiny, transparent and flexible material to be used as a novel dielectric (insulator) component in transistors. The new material would enable what conventional silicon semiconductor electronics cannot do – get any smaller without compromising their function.
The research, recently published in Nature, indicates the potential for large-scale production of a 2D field-effect transistor – a device used to control current in electronics. The new material could help overcome the challenges of nanoscale silicon semiconductor production for dependable capacitance (electrical charge stored) and efficient switching behaviour.
According to the researchers, this is one of the crucial bottlenecks to solve for the development of a new generation of futuristic electronic devices, from augmented reality, flexible displays and new wearables, as well as many yet-discovered applications.
“Not only does it pave a critical pathway to overcome the fundamental limit of the current silicon semiconductor industry in miniaturisation, but it also fills a gap in semiconductor applications due to silicon’s opaque and rigid nature,” says Professor Sean Li, UNSW Materials and Manufacturing Futures Institute (MMFI) Director and principal investigator on the research. “Simultaneously, the elastic and slim nature could enable the accomplishment of flexible and transparent 2D electronics.”
Solving the semiconductor scaling issue
A transistor is a small semiconductive device used as a switch for electronic signals, and they are an essential component of integrated circuits. All electronics, from flashlights to hearing aids to laptops, are made possible by various arrangements and interactions of transistors with other components like resistors and capacitors.
As transistors have become smaller and more powerful over time, so too have electronics. Think your mobile phone – a compact hand-held computer with more processing power than the computers that sent the first astronauts to the moon.
But there’s a scaling problem. Developing more powerful future electronics will require transistors with sub-nanometre thickness – a size conventional silicon semiconductors can’t reach.
“As microelectronic miniaturisation occurs, the materials currently being used are pushed to their limits because of energy loss and dissipation as signals pass from one transistor to the next,” says Prof. Li.
Microelectronic devices continue to diminish in size to achieve higher speeds. As this shrinkage occurs, design parameters are impacted in such a way that the materials currently being used are pushed to their limits because of energy loss and dissipation as signals pass from one transistor to the next. The current smallest transistors made of silicon-based semiconductors are 3 nanometres.
To get an idea of just how small these devices need to be – imagine one centimetre on a ruler and then count the 10 millimetres of that centimetre. Now, in one of those millimetres, count another one million tiny segments – each of those is one nanometre or nm.
“With such limits, there has been an enormous drive to radically innovate new materials and technologies to meet the insatiable demands of the global microelectronics market,” says Prof. Li.
Dr Jing-Kai Huang, Dr Ji Zhang, Dr Junjie Shi and Professor Sean Li from the UNSW Materials and Manufacturing Futures Institute. Photo: Robert Largent.
Breaking the bottleneck for future electronics
For the research, MMFI engineers fabricated the transparent field-effect transistors using a freestanding single-crystal strontium titanate (STO) membrane as the gate dielectric. They discovered their new miniaturised devices matched the performance of current silicon-semiconductor field-effect transistors.
“The key innovation of this work is that we transformed conventional 3D bulk materials into a quasi-2D form without degrading its properties,” says Dr Jing-Kai Huang, the paper’s lead author. “This means it can be freely assembled, like LEGO blocks, with other materials to create high-performance transistors for a variety of emerging and undiscovered applications.”
The MMFI academics drew on their diverse expertise to complete the work.
“Fabricating devices involves people from different fields. Through MMFI, we have established connections with academics who are experts in the 2D electric device fields as well as the semiconductor industry,” says Dr Ji Zhang, a co-author of the paper.
“The first project was to fabricate the freestanding STO and to study its electrical properties. As the project progressed, it evolved into fabricating 2D transistors using freestanding STO. With the help from the platform established by MMFI, we were able to work together to finish the project.”
The team is now working towards wafer-scale production. In other words, they hope to see whether the material can be used to build all the circuits for an entire computer on one chip.
“Extensive data sets were collected to support the performance of these 2D electronics, indicating the technology’s promise for large-size wafer production and industrial adoption,” says Dr Junjie Shi, another co-author of the paper.
“Achieving this will enable us to fabricate more complex circuits with a density closer to commercial products. This is the crucial step to make our technology reach people,” says Dr Huang.
The researchers also say their development is a promising step toward a new era of electronics and local manufacturing resilience.
“From shifting geopolitics and the pandemic, we have seen more disruption in the global semiconductor supply chain, and we believe this is also an opportunity for Australia to join and strengthen this supply chain with our unique technology in the near future,” Dr Huang says.
Currently, the technology is protected by two Australian provisional patent applications, with MMFI and UNSW looking to commercialise the intellectual property and bring it to market.
“We are currently fabricating logic circuits with the transistors,” says Prof. Li. “At the same time, we are approaching several leading industries in the Asia-Pacific region to attract investment and establish a semiconductor manufacturing capability in NSW via industrialisation of this technology.”