In January 2022, the Western Australian government published the findings of the ‘Dampier to Bunbury Natural Gas Pipeline Public Knowledge Sharing Report’ (Report) into hydrogen gas blending in the Dampier to Bunbury Natural Gas Pipeline (DBNGP). The Report found that the DBNGP is suitable for blending up to 9% hydrogen with natural gas. For proponents of green hydrogen as the next major form of clean energy and a leap towards rapid decarbonisation, this Report represents a step forward. However, our analysis of both the operational aspects of hydrogen gas blending as well as associated regulatory and legal issues indicates that blending green hydrogen, particularly in the DBNGP, is still something of a ‘pipe dream’.
The key takeaways from this article are:
- operational issues exist, as the ability to blend hydrogen with natural gas in the DBNGP is only possible in some sections of the pipeline which do not (for now) include the main section between the Burrup and Perth, thereby limiting the potential of gas blending. However, this may not be entirely incongruous with hydrogen’s viable use cases in heavy industry;
- safety issues arise in relation to blending high percentages of hydrogen with natural gas;
- producers, transporters and users of hydrogen alike need to be aware of the potential for greenwashing in relation to hydrogen blends; and
- the regulatory framework around gas transportation requires modification to allow for hydrogen blending.
Outcomes from the hydrogen gas blending Report
The Report into hydrogen gas blending in the DBNGP was prepared by the Australian Gas Infrastructure Group (AGIG), the owner and operator of the DBNGP. This Report arises out of a goal of Western Australia’s Renewable Hydrogen Strategy to distribute renewable hydrogen in Western Australia’s gas network by 2022 as a means to partially decarbonise gas consumption and achieve deeper decarbonisation in the longer term. The Report received funding from the Western Australian State government’s Renewable Hydrogen Fund.
Overall, the Report found that a 9% hydrogen blend with natural gas in the pipeline was achievable without causing harm to pipeline safety or performance. Indeed, the Report noted that some parts of the DBNGP (being some of the lateral pipelines extending from the main pipeline) may be suitable for 100% hydrogen if international hydrogen piping and pipeline standards are applied to them.
Operational constraints on hydrogen blending as a decarbonisation initiative
The DBNGP is made up of 42 unique pipeline sections, which transport the majority of Western Australia’s natural gas. These can be subdivided into three main sections:
- ‘Mainline North’, which runs from the Burrup Peninsula to Kwinana and incorporates extensive use of compression equipment;
- ‘Mainline South’, from Kwinana to Bunbury, in which compression equipment is rarely utilised; and
- so-called ‘lateral’ pipeline sections, which operate all along the main lines and extend to mining and industrial hubs. No compression equipment is required in these sections.
The Report notes that Mainline South and the laterals are well suited for hydrogen blending, with further studies to be done on these two pipeline areas by AGIG. Meanwhile, Mainline North may, in future, have some potential for hydrogen blending. This distinction is primarily due to the operating pressure of the different pipeline sections: Mainline South and the laterals rarely, if ever, operate with compression equipment, thereby making them suitable for hydrogen blending (as the gas is more likely to react under greater pressure). This indicates that the main section of the DBNGP is (for now) inaccessible for hydrogen gas blending, with only small sections of the overall network realistically capable of transporting hydrogen in the future.
On the one hand, the characteristics of the DBNGP network limit the extent to which gas blending is capable of facilitating material decarbonisation objectives in Western Australia across commercial and household uses. However, in order to decarbonise energy use, it is generally well accepted that the most viable use cases of green hydrogen relate to heavy industry and household energy should be derived directly from renewable electricity generation and not green hydrogen. From that perspective, if hydrogen is to be blended into the DBNGP, we consider that blending hydrogen into the lateral pipelines, which primarily lead to mining and industrial centres, makes the most sense, as these industries need to decarbonise in areas that renewable electricity alone cannot achieve. Of course, this begs the question whether a 9% hydrogen blend will achieve much, if anything—on that, see the next section on greenwashing.
The Report also notes, in passing, that 100% gas blending may be possible in sections of the DBNGP if international hydrogen piping and pipeline standards are applied. There appears to be general consensus that blending up to 10% hydrogen into existing gas networks is viable and safe (see, for instance, ‘Hydrogen in the Gas Distribution Networks’ published by the COAG Energy Council (among others)); increasing this blend will bring with it corresponding safety issues (such as embrittlement of the pipeline). This will require greater pipeline design changes as well as more significant regulatory changes than those currently envisaged (see below).
Legal and regulatory obstacles to decarbonisation through hydrogen blending
While the thought of successfully blending green hydrogen into the DBNGP is exciting—and, crucially, seems to put Western Australia a step ahead in the race between States to encourage the growth of their nascent hydrogen industries—the risk of greenwashing is ever-present. Natural gas has been touted by some as the ‘clean’ fossil fuel; fundamentally, however, it still emits greenhouse gases. Blending hydrogen with natural gas will not make the natural gas ‘clean’ or ‘green’, particularly at blending percentages as low as 9%. If such blends are labelled as clean, green or even sustainable, this creates the potential for allegations of greenwashing or misleading and deceptive conduct. Should hydrogen gas blending occur in the DBNGP, producers, transporters and users of the gas derived from the pipeline need to be careful not to misrepresent the qualities of that gas.
Quite aside from operational and greenwashing issues, hydrogen gas blending faces regulatory obstacles that will need to be overcome prior to any actual blending. The Report noted that significant regulatory change is required to facilitate hydrogen blending in the DBNGP. Among these, the Report notes in section 4.7.1 that the following legislative issues require consideration:
- the definition of gas needs to be specified to include hydrogen under the National Gas Access (WA) Act 2009 (WA), its regulations and rules in order to allow hydrogen gas blending;
- the potential impact of the Work Health and Safety (Petroleum and Geothermal Energy Operations) Regulations (WA), which is yet to be passed, needs to be considered in relation to hydrogen blending from a safety case perspective;
- amendments to the Gas Supply (Gas Quality Specifications) Act 2009 (WA) are required to ensure that other entities (and not just gas producers) can supply gas (mixed with a specified hydrogen percentage) in a transmission pipeline—this is of particular relevance to companies such as Fortescue Future Industries and other miners-cum clean energy pioneers interested, for instance, in spoke and hub models of hydrogen distribution;
- the Gas Supply (Gas Quality Specifications) Regulations 2010 (WA) will require significant amendments for gas blending specifications of greater than 15% hydrogen, to ensure safe blending of hydrogen; and
- the definition of petroleum will need to be amended to include hydrogen under the Petroleum Pipelines Act 1969 (WA), to allow for hydrogen to be blended in the pipelines.
In addition, the Report notes that shipping contracts may need to be amended to allow for the transportation of hydrogen gas blends.
In short, much needs to occur from a regulatory perspective to even allow hydrogen into gas pipelines, quite aside from the question of whether the pipelines can withstand such blending. Recently, however, State Energy Ministers agreed to amend the National Gas Law, National Energy Retail Law and subordinate instruments to bring hydrogen into the regulatory fold: see our article ‘Shifting the focus of economic regulation – adaptation, evolution or revolution?’
The Report suggests that hydrogen gas blending up to 9% is viable in the DBNGP, indicating a major step forward for clean energy and decarbonisation initiatives revolving around green hydrogen as the next major player in the energy transition. However, given the Report was penned by the owner and operator of the pipeline, AGIG, this finding is perhaps unsurprising. Our review of the Report indicates that there are inherent weaknesses and key issues that remain to be resolved. Most notably, hydrogen blending will only be possible in small sections of the DBNGP. Arguably, these are the parts that count most, given they connect to industry and can therefore help decarbonise otherwise hard to abate sectors. However, this serves to further underline the view of some commentators regarding the major inefficiencies of hydrogen as a common household fuel. Additionally, producers, transporters and users of green hydrogen blend gas should beware of the perils of greenwashing, given the low level hydrogen blending currently envisaged. Not least, fundamental regulatory change is required to even get hydrogen into the pipelines in the first place. As presently contemplated, it appears the role of green hydrogen blending to achieve material decarbonisation objectives remains a pipe dream.