AUSTRALIA could have underestimated the CO2 emissions from the CSG industry and be missing out on $1.5 billion in carbon tax.
The Australia Institute report said fugitive emissions that occurred when gas leaked during the extraction, processing and transportation of CSG were likely to be double the level estimated but there were no reliable calculations.
It said gas leaking at the wellhead during extraction was the most significant source of fugitive emissions and was also the source for which the least amount of measurement had been done, the Daily Telegraph reports.
"The size of the underestimate in CSG fugitive emission could be substantial," it said in the report.
It said using the US Environmental Protection Agency system of calculation Australian CSG would produce 125 million tonnes of CO2.
"This is twice the emissions that would estimated if the current default factor is used. This is an underestimate of 62 million tonnes of CO2 over three years."
The report said the impact of the underestimate was that Australia's ability to tackle climate change would be reduced and there would be a significant cut to its carbon tax income.
"(It) may be inadvertantly making it harder for the world to limit the warming effect of climate change below the environmental tipping point of two degrees.
"Preventing two degrees of warming is important, because climate science is telling us that important tipping points are likely to be triggered if the globe warms more than two degrees.
"Tipping points cause feedback effects that in turn cause more warming, which once begun cannot be stopped.
"Once we pass two degrees of warming we may be unable to stop a further three or four degrees from occurring, even if we dramatically reduce our emissions.
"Before we jump into the golden age of gas as a way of combating climate change, it is essential that we have a good understanding of the effect that switching from coal to gas will have on our emissions. We cannot do this until we can measure the fugitive emissions that occur in the CSG extraction process.
"Before the government approves more CSG production it would be prudent to allocate funding from the $200 million it has put aside from the Minerals Resource Rent Tax for scientific research on the effects of CSG extraction towards measuring fugitive emissions."
APPEA, the representative group for the gas industry, rejected any underestimate of CO2.
Read more at the Daily Telegraph.