A new report released by the Australia Institute has warned that the country risks significantly underestimating its contribution to global climate change if it fails to adequately measure fugitive emissions from coal seam gas wellheads.


The institute found that while concerns have been raised about the direct environmental impact of CSG practices, particularly that of fracking on the water supply, little research had been done into the broad effects of CSG extraction.


Gas is increasingly being seen by some as a 'bridging fuel' in the fight against climate change, yet because we don't accurately measure the amount of leakage at wellheads we have no way of knowing if we're actually reducing our emissions by switching from coal to coal seam gas,” Australia Institute’s Senior Economist Matt Grudnoff said.


"What's worse is that we could inadvertently be making it harder for the world to limit the warming effect of climate change below the environmental tipping point of two degrees."

The report recommends allocating funding from the $200 million the government has put aside from the Minerals Resource Rent Tax towards measuring fugitive emissions.


Another consequence of underestimating fugitive emissions from CSG is that it blunts the impact of the carbon price as firms will not be paying the tax on all of their emissions. An extra 62 million tonnes over three years is equivalent to giving CSG companies more than $1.5 billion the report found.

"If emissions from coal seam gas are significantly lower than actual emissions then there is no incentive for CSG producers to introduce world's best practice. This means Australian taxpayers are effectively subsidising this industry to be inefficient," said Mr Grudnoff.


The report can be found here