Resource depletion impact assessment by consequence analysis: impacts of a natural gas scarcity in Australia

2017-02-27T05:21:17Z (GMT) by Rimos, Shaun
Sustainable management of abiotic resources is crucial for the current generation and future generations to meet their needs. When a resource runs scarce, it holds various implications and there are potential consequences for society, such as an escalation in selling price and disruption to services and product manufacturing. Different methodologies have been proposed to measure resource depletion within the framework of a Life Cycle Assessment (LCA) over the life cycle of a product, such as the Eco-Indicator 99 method and the ReCiPe method. However, as yet, there is no consensus on what should be measured that reflects the impacts of resource depletion, whether it be the loss of reserves or the increase in environmental impacts of resource extraction in the future. To address the wide range of resource depletion impacts, this study uses the principle of substitution to measure impacts derived from replacing one resource with another when scarcity has occurred. These impacts are examined under environmental categories (e.g. changes in global warming, acidification, photochemical oxidation, particulate emissions, water withdrawal and discharge, and solid waste generation) and economic categories (capital cost penalty and change in operating cost). The proposed methodology was used to model the impacts of substitution with black coal, diesel fuel, or coal seam gas (CSG) to explore the implications of a natural gas scarcity in Australia. This was carried out both for the upstream fuel extraction and treatment and downstream consumption of the fuel. To enable a system perspective encompassing all industries in Australia, detailed data is extrapolated from major sectors of the Australian economy to provide an approximate impact assessment for Australia as a whole. Currently, Australia has $75 billion worth of natural gas-based plant facilities, consumes 27.3 Mt of natural gas per year and spends an average operating cost of $746 per t natural gas consumed. In a natural gas scarcity, substitution to black coal or diesel will result in an increase in all environmental impact categories. In particular, for every t natural gas substituted, CO2-equivalent emissions will increase by 2 t (85% increase), freshwater withdrawal increases by 3.3 t (184% increase) and solid waste generation increases by more than 7.8 t. The previous sunk capital costs will be lost, and new capital investment worth $124 billion will be required to transition away from natural gas. Operating costs will more than double. This will have the effect of increasing the selling price of goods such as electricity, ammonia and residential heating. If the chosen alternative was CSG, this will result in a minor decrease in most environmental impacts. CSG also has a lower transfer price which lowers operating costs. All natural gas facilities can run using CSG as fuel and feedstock and no capital cost penalty is incurred by the substitution. However, large amounts of CSG water with high salt and metals content are withdrawn from beneath the surface through CSG extraction with uncertain consequences and require purification. The substitution impact methodology is able to measure a diverse range of normalised environmental impacts and economic impacts both for upstream extraction and downstream processing across multiple sectors and integrate them all in a system wide analysis. This makes it a useful tool to study the far-reaching consequences of resource depletion at a broader level (e.g. the entire economy of a nation). It can be used to identify sectors which should have priority for the particular resource. It can examine the effects of variation in resource quality and location on extraction emissions and costs. The proposed methodology is useful for policy and decision makers to assess the impacts of a resource scarcity at a broader level or to look at the environmental and economic benefits or risks of a substitution in different countries.