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Charlie Veron was the first full-time scientist to study the Great Barrier Reef in the 1970s — now he fears for its future.

Business as usual is not an option. CSIRO/Wikimedia Commons, CC BY

One does not have to look far to see signs that the oil and gas industry has a bumpy road ahead. Demand might stay high for decades, but given the dizzying pace of technological change, who would bet on that?

Take the recent pledges by India, France, Britain, and China to phase out petrol and diesel vehicles. Or the plummeting costs of grid-scale solar power, rapidly becoming cheaper than fossil-fuelled electricity.

These developments should cause oil and gas companies to think very carefully about their next move. Big investments in natural gas globally, made on the assumption that gas is a bridge to a clean energy future, may fall flat because renewables are developing so swiftly.

The fact of the matter is that oil and gas companies need to start planning for a low-carbon future and embrace the opportunities it presents. One approach is to diversify their products and embrace renewable energy, one of four strategies that CSIRO has identified in its industry-led Oil and Gas Roadmap that outlines some of the future directions the industry might take.

Read more: Big oil’s offshore scramble is risky business all round

With 40% of companies involved in the exploration and production of petroleum likely to move away from oil and gas in 2017, solar photovoltaics and energy storage offer alternative avenues in which oil and gas companies can invest.

Renewables can be integrated into operations to reduce both the cost and the carbon intensity of operations. In the longer term, these technologies could help energy companies to develop more sophisticated offerings. For instance, hybrid solar and gas microgrids could be sold to developing nations, allowing them to leapfrog from energy poverty into clean, cheap distributed energy for all, effectively skipping expensive, centralised electricity grid infrastructure.

The Oil and Gas roadmap. Gas-powered ships

Two more strategic opportunities focus on expanding the potential of the least carbon-intensive fossil fuel: natural gas.

For example, global demand for liquefied natural gas (LNG) for transport is expected to grow fourfold to 100 million tonnes a year by 2030, a prime target being maritime shipping. Meeting this LNG demand could open up a valuable market for Australia.

Another opportunity lies in the creation of higher-value products. Natural gas can be converted to many refined products that can fetch higher margins in the market, including diesel and other chemicals such as methanol and dimethyl ether.

More investment is needed to make conversion technology economically competitive, but it would be a wise investment, especially in light of Australia’s lack of domestic strategic fuel reserves.

Read more: Running on empty: Australia’s risky approach to oil supplies

Hydrogen fuel is another possibility for Australian resource companies. It can be produced from gas, but in the future hydrogen fuel could also be manufactured by solar-powered electrolysis of water. Both would be good options, given Australia’s abundance of gas and sunlight.

Investments will be needed to improve the production and transport economics of hydrogen, including the development of efficient technologies that can convert hydrogen carriers (like ammonia) to hydrogen at the point of use.

Smarter fuel options. CSIRO, Author provided

Our roadmap also suggests other ways for companies to get involved in the energy transition, by becoming more efficient, less wasteful, and more productive.

Advanced environmental solutions point to ways to improve water quality and reuse, reduce or eliminate greenhouse gas emissions (including sequestering carbon dioxide, controlling fugitive emissions, and finding alternatives to flaring), and finding the best ways to decommission assets like wells and offshore platforms after their useful life is over.

The industry needs to be much more efficient in exploring and producing oil and gas so that the life of existing assets can be lengthened, often using less environmentally damaging approaches such as waterless fracturing and reservoir rejuvenation using microbes. Robots and artificial intelligence could also help to improve efficiency and safety.

The oil and gas sector has an important role to play in the future of the energy sector, but that role is changing. Companies need to be proactive to remain relevant. If they pursue some of the opportunities outlined here, they will help ensure they stay viable into the future.

Jerad A. Ford has previously received research funding and scholarships from the UQ Centre for Coal Seam Gas while a student and post-doc researcher at the University of Queensland Business School.

For the Soviet Union, the launch of the satellite was a triumph not just for science. but socialism.

When two Dutch journalists travelled to the DRC to report on illegal gold mining in the vast Okapi wildlife reserve, they ended up running for their lives

Conflict is never far away in the Democratic Republic of Congo – a country rich in natural resources such as gold, diamonds, coltan and tin – and the country is on the brink of a new civil war. Tensions have been rising since December, when President Joseph Kabila postponed the elections.

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Meet Mochi from South Dakota, who has just bagged herself a Guinness World Record.

It’s time the world woke up to the real impact of modern, industrial farming, says Philip Lymbery, author of Farmageddon and the Deadzone

The world desperately needs joined-up action on industrial farming if it is to avoid catastrophic impacts on life on earth, according to the head of one of the world’s most highly regarded animal campaign groups.

Philip Lymbery, chief executive of Compassion in World Farming (CIWF) and the author of Farmageddon and more recently Deadzone, said: “Every day there is a new confirmation of how destructive, inefficient, wasteful, cruel and unhealthy the industrial agriculture machine is. We need a total rethink of our food and farming systems before it’s too late.”

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The Nobel prize in chemistry is awarded to three scientists for advances in the imaging of biological molecules

Tepco, still struggling to decommission Fukushima Daiichi, gets initial approval to start two reactors at Kashiwazaki-Kariwa

The operator of Japan’s stricken Fukushima Daiichi nuclear power plant has been given initial approval to restart reactors at another atomic facility, marking the first step towards the firm’s return to nuclear power generation more than six years after the March 2011 triple meltdown.

Japan’s nuclear regulator on Wednesday approved an application from Tokyo Electric Power (Tepco) to restart two reactors at Kashiwazaki-Kariwa – the world’s biggest nuclear power plant – even as the utility struggles to decommission Fukushima Daiichi.

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South Africa’s rising poaching problem has seen a shocking 6,115 rhinos killed in the last nine years. Saving the Survivors’ ground-breaking initiative sees a small team of vets race to the scene to try and treat the animals before it’s too late

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Exclusive: Every area of the capital breaches global standards for PM2.5 pollution particles, with most areas exceeding levels by at least 50%

The scale of London’s air pollution crisis was laid bare on Wednesday, with new figures showing that every person in the capital is breathing air that exceeds global guidelines for one of the most dangerous toxic particles.

The research, based on the latest updated London Atmospheric Emissions Inventory, shows that every area in the capital exceeds World Health Organisation (WHO) limits for a damaging type of particle known as PM2.5.

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Renewables accounted for two-thirds of new power added to world’s grids last year, says International Energy Agency

Solar power was the fastest-growing source of new energy worldwide last year, outstripping the growth in all other forms of power generation for the first time and leading experts to hail a “new era”.

Renewable energy accounted for two-thirds of new power added to the world’s grids in 2016, the International Energy Agency said, but the group found solar was the technology that shone brightest.

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Morfa Harlech, Gwynedd They have drifted on ocean currents for 500m years, pulsing gently towards landfall

The wave smudges out something written in the sand with a stick. I imagine it as a spell cast to charm ashore those lost at sea. And so it does, as tides ebb and flow, stranding the barrel jellyfish. These extraordinary creatures, also known as dustbin-lid jellyfish because of their size and shape, have been shipwrecked after an epic voyage.

Rhizostoma pulmo or R octopus is the largest jellyfish in British waters (they can grow to nearly 90cm in diameter) and is harvested around Wales for high-value medical-grade collagen. It feeds on plankton and its sting does not injure humans any more than do nettles; it is fed upon by leatherback turtles and sunfish.

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Indian mining giant Adani’s proposal to build Australia’s largest coal mine in Queensland’s Galilee Basin has been the source of sharp national controversy, because of its potential economic, health, environmental and cultural risks.

These concerns were amplified this week when India’s former environment minister Jairam Ramesh told the ABC’s Four Corners:

My message to the Australian government would certainly be: please demonstrate that you have done more homework than has been the case so far.

It’s a valid warning, considering that a Commonwealth investment board is considering loaning Adani A$1 billion in federal money to assist the development of mining infrastructure.

Read more: Adani gives itself the green light, but that doesn’t change the economics of coal

The loan, expected to be announced any day now, will no doubt agitate further political controversy.

It is also likely to pave the way for yet more court challenges against Adani’s proposal.

Why does Adani want Commonwealth money?

One of the major questions about Adani’s mine is its financial viability, and its inability to secure private sector funding. Its proponents blame anti-coal campaigners, but arguably more important are the myriad concerns about Adani’s liquidity, its corporate structure and conduct, and the ever-weakening international coal market.

Against this backdrop Adani has requested A$1 billion from the Northern Australia Infrastructure Facility (NAIF), a A$5 billion discretionary government fund set up in 2015 to promote economic development in the country’s north.

The timing and geographical focus of the fund have raised fears it is just a government “slush fund”, set up with Adani’s plans specifically in mind. The federal government initially denied this, with Energy Minister Josh Frydenberg stressing that the mine “needs to stand on its own two feet”.

But shortly after the NAIF Act was passed, Adani’s application was made public, although there remains little available detail about whether or why it will be given the money, or the exact amount.

Loan procedures

NAIF’s board will make the decision, not a government minister. Its processes are shielded from scrutiny by a lack of transparency requirements and consistent blocking of Freedom of Information requests.

As the loan decisions are made by a quasi-corporate board, rather than a minister, it is much harder (if not impossible) to challenge them directly in court. Nor does the NAIF Act provide grounds for review or appeal.

Ultimately, this leaves those who object to Adani receiving Commonwealth money with a very limited avenue of legal challenge. The only option is to argue that the NAIF Act is itself unconstitutional.

Constitutional challenge

The Commonwealth has no direct power to make laws that control or support infrastructure or mining directly. Instead, the NAIF Act seeks to do this indirectly using Section 96 of the Constitution, which states:

During a period of ten years after the establishment of the Commonwealth and thereafter until the Parliament otherwise provides, the Parliament may grant financial assistance to any State on such terms and conditions as the Parliament thinks fit. (emphasis added)

There are two points to note here.

The first is that this granting provision was clearly meant as a transitional measure for the decade immediately following federation, to protect poorer states from bankruptcy while adjusting their economies to a federal model. Note also that the provision was clearly intended to help state governments, not corporations.

The second is the phrase “terms and conditions”, which clearly relates to the repayment of these loans, much like the terms and conditions applied to any banking loan today.

Both of these things were ignored by the early (and somewhat infamous) Engineers High Court from the 1920s to 1950s, which tended to interpret the Constitution in a way that favoured the Commonwealth over the states.

Perhaps most importantly, the court ruled that Section 96 allows the Commonwealth to apply any terms and conditions it likes to the loans, rather than simply setting the terms of repayment. That has meant that states can be compelled to take particular actions – such as accepting national educational standards, building roads or, indeed, infrastructure development – in return for financial assistance. States were also forced to stop collecting income tax in return for federal monies. This resulted in a “vertical fiscal imbalance” which has left the states at the financial mercy of the Commonwealth ever since.

This extremely liberal interpretation of Section 96 has not been legally challenged since the early days of the federation, not least because recipients or potential recipients of money are unlikely to bite the hand that feeds them. But the Adani loan might just change this.

Critics of the use of Section 96 have long hoped for a High Court challenge to its ever-growing use to expand Commonwealth financial influence. The Adani loan may be the right vehicle. Thennicke/Wikicommons

Adani’s prospective loan seems clearly inconsistent with the wording of Section 96. Any constitutional challenge against it is likely to be complex and nuanced, but two basic arguments present themselves.

First, the Constitution states that it is the Commonwealth Parliament that must determine both the loan and its conditions. However, the NAIF Act grants these powers to a corporate board, which answers only indirectly to the Parliament.

Second, the Constitution states that it is the state that must receive the loan. But the Queensland Government has stated that it will simply pass the NAIF funding straight to Adani, and that:

Commonwealth’s borrowings for the NAIF project will remain on the Commonwealth’s balance sheet and not on Queensland’s.

This is a highly questionable use of a federal power that was conceived as a way to help states with their financing, rather than private multinational companies.

Note also the apparent bypassing of the Senate in this process. Senators may be likely to bring a legal challenge if they feel that federal money meant to benefit their states is being distributed improperly.

More than just federal money at stake

While it is impossible to second-guess the High Court on such a complex matter, its recent decisions indicate a major swing away from unsupervised Commonwealth spending, especially on issues that affect the fiscal balance between the states and Commonwealth. The potential Adani loan certainly seems to fall into that category.

Read more: Why are we still pursuing the Adani Carmichael mine?

Yet as much as Section 96 has been stretched beyond its original intention, it has also been used to support vital and important national enterprises, from education, to social welfare, and indeed national development projects.

With that in mind, the Commonwealth might ultimately come to doubt the wisdom of granting such a vast sum of money to a questionable company. If it leads to more restrictive reading of Section 96 by the High Court, it might significantly limit Canberra’s ability to fund valuable schemes in other areas.

Brendan Gogarty is has provided pro bono (free) legal advice to the Australian Conversation Foundation on the constitutionality of the proposed Adani Loan. The advice was provided in a voluntary capacity in his role as a community legal practitioner.

A Melbourne company that has found a way to recycle EV batteries for use in household and grid-scale storage gets some money from Turnbull's innovation fund.

Why, if Adani’s gigantic Carmichael coal project is so on-the-nose for the banks and so environmentally destructive, are the federal and Queensland governments so avid in their support of it?

Once again the absurdity of building the world’s biggest new thermal coal mine was put in stark relief on Monday evening via an ABC Four Corners investigation, Digging into Adani.

Read more: Adani gives itself the green light, but that doesn’t change the economics of coal

Where the ABC broke new ground was in exposing the sheer breadth of corruption by this Indian energy conglomerate. And its power too. The TV crew was detained and questioned in an Indian hotel for five hours by police.

It has long been the subject of high controversy that the Australian government, via the Northern Australia Infrastructure Facility (NAIF)that is still contemplating a A$1 billion subsidy for Adani’s rail line, a proposal to freight the coal from the Galilee Basin to Adani’s port at Abbot Point on the Great Barrier Reef.

But more alarming still, and Four Corners touched on this, is that the federal government is also considering using taxpayer money to finance the mine itself, not just the railway.

No investors in sight

As private banks have walked away from the project, the only way Carmichael can get finance is with the government providing guarantees to a private banking syndicate, effectively putting taxpayers on the hook for billions of dollars in project finance.

The prospect is met with the same incredulity in India as it is here in Australia:

FOUR CORNERS: “Watching on from Delhi, India’s former Environment Minister can’t believe what he is seeing.”

JAIRAM RAMESH: “Ultimately, it’s the sovereign decision of the Australian Government, the federal government and the state government.

FOUR CORNERS: "But public money is involved, and more than public money, natural resources are involved.

JAIRAM RAMESH: "I’m very, very surprised that the Australian government, uh, for whatever reason, uh, has uh, seen it fit, uh, to all along handhold Mr Adani.”

Here we have a project that does not stack up financially, and whose profits - should it make any - are destined for tax haven entities controlled privately by Adani family interests. Yet the Queensland government has shocked local farmers and environmentalists by gifting Adani extremely generous water rights, and royalties concessions to boot.

Why are Australian governments still in support?

The most plausible explanation is simply politics and political donations. There is no real-time disclosure of donations and it is relatively easy to disguise them, as there is no disclosure of the financial accounts of state and federal political parties either. Payments can be routed through opaque foundations, the various state organisations, and other vehicles.

Many Adani observers believe there must be money involved, so strident is the support for so unfeasible a project. The rich track record of Adani bribing officials in India, as detailed by Four Corners, certainly points that way. But there is little evidence of it.

In the absence of proof of any significant financial incentives however, the most compelling explanation is that neither of the major parties is prepared to be “wedged” on jobs, accused of being anti-business or anti-Queensand.

There are votes in Queensland’s north at stake. Furthermore, the fingerprints of Adani’s lobbyists are everywhere.

Adani lobbyist and Bill Shorten’s former chief of staff Cameron Milner helped run the re-election campaign of Premier Annastacia Palaszczuk. This support, according to The Australian, has been given free of charge:

Mr Milner is volunteering with the ALP while keeping his day job as director and registered lobbyist at Next Level Strategic Services, which counts among its clients Indian miner Adani…

The former ALP state secretary held meetings in April and May with Ms Palaszczuk and her chief of staff David Barbagallo to negotiate a government royalties deal for Adani, after a cabinet factional revolt threatened the state’s lar­gest mining project.

Adani therefore enjoys support and influence on both sides of politics. “Next Level Strategic Services co-director David Moore — an LNP stalwart who was Mr Newman’s chief of staff during his successful 2012 election campaign — is also expected to volunteer with the LNP campaign.”

So it is that Premier Palaszczuk persists with discredited claims that Carmichael will produce 10,000 jobs when Adani itself conceded in a court case two years ago the real jobs number would be but a fraction of that.

If the economics don’t stack up, why is Adani still pursuing the project?

The Adani group totes an enormous debt load, the seaborne thermal coal market is in structural decline as new solar capacity is now cheaper to build than new coal-fired power plants and the the government of India is committed to phasing out coal imports in the next three years.

Why flood the market with 60 million tonnes a year in new supply and further depress the price of one of this country’s key export commodities?

The answer to this question lies in the byzantine structure of the Adani companies themselves. Adani already owns the terminal at Abbot Point and it needs throughput to make it financially viable.

Both the financial structures behind the port and the proposed railway are ultimately controlled in tax havens: the Cayman Islands, the British Virgin Islands and Singapore. Even if Adani Mining and its related Indian entities upstream, Adani Enterprises and Adani Power, lose money on Carmichael, the Adani family would still benefit.

Read more: Australia’s $1 billion loan to Adani is ripe for High Court challenge

The port and rail facilities merely “clip the ticket” on the volume of coal which goes through them. The Adani family then still profits from the privately-controlled infrastructure, via tax havens, while shareholders on the Indian share market shoulder the likely losses from the project.

As the man who used to be India’s most powerful energy bureaucrat, E.A.S. Sharma, told the ABC: “My assessment is that by the time the Adani coal leaves the Australian coast the cost of it will be roughly about A$90 per tonne.

"We cannot afford that, it is so expensive.”

More questions than answers remain

This renders the whole project even more bizarre. Why would the government put Australian taxpayers on the hook for a project likely to lose billions of dollars when the only clear beneficiaries are the family of Indian billionaire Gautam Adani and his Caribbean tax havens.

My view is that this project is a white elephant and will not proceed. Given the commitment by our elected leaders however, it may be that some huge holes in the earth may still be dug before it falls apart.

Michael West does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond the academic appointment above.

Investec Australia Limited’s Infrastructure Finance & Investment team has added to its local funding of green energy by helping a UK developer of solar projects expand in Australia.

The IEA may be underestimating Australian household energy bills by 25% because of a lack of accurate data from the federal government.

Plant’s operator seeks approval for a phased development in the face of residents’ opposition and concerns over air quality

Plans for the world’s biggest waste-to-energy plant in Sydney’s west have been cut in half, in an effort to address concerns from health and environmental authorities, and residents.

The Next Generation, a company owned by one of the largest waste operators in Australia – Ian Malouf, founder of Dial A Dump – has lodged new documents seeking a phased development of the plant.

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Once upon a time political divisions on energy policy would have had a significant impact on the renewable energy market. This time, however, it has been largely ignored.

While it may take decades yet for renewables to become the dominant form of generation globally, their presence today is permanent, economically rational and their advance inevitable.