Petratherm to Diversify with Fossil Fuel Investments
Talk of switching to a floating carbon price was less than 24 hours old when one renewable energy company revealed plans to join, rather than beat, the fossil fuel industry.
After years of trying to commercialise geothermal energy in the South Australian outback, ASX listed Petratherm announced plans to diversify into shale oil and gas in Tasmania. ”This decision by Petratherm to extend into unconventional shale oil and gas exploration leverages our core areas of expertise that include basin geology and deep drilling,” the company said.
Petratherm managing director Terry Kallis sought to reassure environmentally conscious investors that the company had not abandoned its geothermal project, which is planned to be about 75 per cent smaller than previous plans.
But funding is hard to come by, and a $13 million government grant can be used only if Petratherm can raise millions of its own, a task that will be even more difficult under a lower carbon price.
Mr Kallis said gas could offer the consistency of supply that his company’s other projects could not, and would complement the company’s attempts to commercialise multiple forms of renewable energy. ”Gas acts as a catalyst or an enabler because it gets rid of the intermittency between things like solar and wind and it gives us time to provide a firm product to a customer,” he said.
”A lot of people need to see that gas, which is the cleanest in terms of CO2 of any of the fossil fuels, is actually an enabler for renewables … It really is the transition fuel.”
While Petratherm is just one company, Simon O’Connor from the Responsible Investment Association of Australasia said many renewable energy aspirants had struggled in recent times. ”The uncertainty and volatility in the policy environment has driven most of it. We’ve seen a very difficult environment in which to make long-term business decisions and planning,” he said.
Australian Conservation Foundation economist Dr Brett Parris said the changing focus of some renewable energy companies should send a signal to the government. ”If clean energy companies don’t feel confident that the government supports renewables, they may withhold their own investment or diversify into fossil fuels, which would slow vital investment in clean energy,” he said.