V007-0005
Adding Regional Economics to Natural Resource Development with Bluecap: Evaluating the Economic Fairways for Mineral and Hydrogen Production

Tuesday, 8 December 2020
Poster
Stuart D Walsh1, Marcus Haynes2, Laura Easton2, Andrew J Feitz3, Joseph Moloney2 and Zhehan Weng4, (1)Monash University, Civil Engineering, Melbourne, Australia, (2)Geoscience Australia, Canberra, Australia, (3)Geoscience Australia, Canberra, ACT, Australia, (4)Monash University, Melbourne, VIC, Australia
Abstract:
Under traditional models of natural (extractive and renewable) resource development, explicit assessments of economic potential may be delayed until late in the project lifecycle. However, this strategy may result in the sub-optimal allocation of resources to geologically favourable, but economically disadvantageous projects. An alternative approach introduces economic considerations alongside geological evaluations in the early stages of resource development by identifying “Economic Fairways”, i.e. regions more suited to resource development due to proximity to key infrastructure and transportation routes, and local fiscal considerations.

This presentation introduces Bluecap: an open-source tool for identifying such economic fairways for natural resource development. The code produces estimates of regional economic potential, by assessing the costs of development and production over the project lifecycle, as well as the costs associated with transportation, power and water infrastructure. In so doing, it accounts for the effects of both geological and economic inputs on the potential success of the project.

We will describe how the Bluecap code, originally created to evaluate mineral development economics, has been extended to include assessments of the economic fairways for hydrogen projects. The new Hydrogen Economic Fairways Tool (HEFT) includes assessments of both green and blue hydrogen projects. Supported methods of hydrogen production include electrolysis from wind and solar, steam methane and coal gasification. The presentation will demonstrate how renewable and extractive resources are evaluated within the code, and discuss how it can be used to inform both industry members and policy makers alike. Finally, we will present examples of economic fairways assessments for both renewable and extractive natural resources projects across Australia using the Bluecap code.

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