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Senate to probe BP Great Australian Bight oil plans – a $2.6bn carbon bomb?

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The plans of global oil major BP to drill for the fossil fuel in the Great Australian Bight will be the subject of a new Senate inquiry, as critics question the environmental cost and high carbon risk of the proposed project.Great_Australian_Bight_Marine_Park

South Australian Greens senator Robert Simms said the inquiry would give the community and experts a chance to have their say on the project while BP prepared its second application.

The first application was rejected in November 2015, when the National Offshore Petroleum Safety and Environment Management Authority (NOPSEMA) ruled BP had failed to meet all of its environmental requirements.

“We need this inquiry so that we can protect the beautiful, Australian coastal environment and the marine life in these waters,” Senator Simms said.

“This is going to… ensure that all the facts are put on the table and the implications of BP’s drilling in the Bight will be considered.”

One pretty damning fact, according to the Carbon Tracker Initiative, is that there just isn’t any room in the rapidly diminishing global carbon budget for the oil BP hopes to extract from the Bight, making it a huge possibility to become a stranded asset – and a costly one, at that.

In a statement on Monday, issued in response to the vote for a Senate Inquiry, Carbon Tracker points to $US2.6 billion of potential CAPEX identified out to 2025 to develop awarded fields in the Australian Bight, the majority of which is not needed in a 2°C (2DS) scenario – as it sits too far up the cost curve.

“Allocating capital to high cost, high risk projects in the Australian Bight appears unwarranted in a low demand, low carbon future,” said Carbon Tracker research director, James Leaton.

“Shareholders should challenge whether this is the best strategy for the companies to create value.”

Greg Muttitt, a senior advisor at Oil Change International, goes further, describing BP’s plans to bring new carbon into a saturated atmosphere as “an act of criminal irresponsibility”.

“If we are to limit climate change below 2 degrees, at least three quarters of the already-known fossil fuel reserves must stay safely in the ground,” Muttitt said.

“Yet BP wants to dig us even deeper into the problem by opening up a whole new oil province. If this project goes ahead, BP will cause devastating loss of life and economic damage.”Oil-Rig-sinking

Indeed, it’s an interesting strategic move for BP, with oil prices still languishing at around $US32 a barrel, and with less than six years’ distance between it and the Deepwater Horizon oil spill that devastated the Gulf of Mexico and cost BP tens of billions in compensation and damages. And then there’s the new Paris climate agreement, to limit global warming to well below 2°C.

A BP spokesperson has said the company welcomes the scrutiny the Senate inquiry will bring, and will engage fully with it.

“We will look to explain why we believe the oil and gas industry can operate safely and responsibly in the Great Australian Bight,” a statement said.

“The industry as a whole makes a very important contribution to Australia and provides many social and economic benefits.

“BP is continuing to work on its environment plan for the Great Australian Bight.”

But Wilderness Society SA’s Peter Owen said it was unlikely the Senate inquiry would find nothing of concern in the project.

“What we’re talking about here is the Great Australian Bight whale nursery, is a pristine marine environment, and not at all an appropriate place to be looking to industrialise and try and turn into an oil field.

“We need to be phasing out fossil fuels, not further expanding the industry.”

The committee is due to report its findings on May 12, 2016.

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  • Farmer Dave

    Congratulations to those Senators who proposed and then supported this enquiry. It is essential that issues of the carbon budget and the need to keep most of the already discovered fossil fuels safely in the ground be discussed publicly at every available opportunity. There should be an Australia-wide moratorium on the issuing of any new exploration or production permits for fossil fuels. We cannot safely burn the oil, gas and coal we already know about, so why allow exploration for more?

    • suthnsun

      More than a moratorium is needed , really an irrevocable ban on exploration licences in perpetuity, not just Australia but globally (but start here by all means)

  • onesecond

    Would be really interesting to know the cost per barrel when they want to go ahead with it despite the low oil prices. Or is it a legacy project and build on hope?

    • Smurf1976

      I think it’s a case of BP being aware that global oil consumption is rising whilst production capacity is starting to decline.

      Go forward a few years and we’ll have fuel prices as a mainstream political issue.

  • Ian

    Excellent story it high lights so many of the issues facing global warming, environmental risk and big finance. There is a huge amount of money at stake, can these few politicians stem the tide of development? Only stranding fossil fuel assets will save this place from development. Electrifying transportation is probably as important or more important than renewables deployment. Right now the world is swimming in oil, the Americans have it up to the brim, OPEC has opened the spigot wide and its happy days at the fuel pump, but with such a surplus there will be a scarcity later on. BP know this and are obviously planning ahead. The only way to keep oil prices so low that new sources of supply are not developed is to greatly reduce demand. EV and public transportation are the keys to that.

    To me it seems so obvious the urgency to develop batteries and cost effective electric vehicles.

  • KWPenland

    Aside from the stupidity of drill-baby-drill during an oil glut — not to mention the resultant carbon footprint that will increase as a result of burning fuel — this is a southern right whale calving and breeding area. Where pregnant whales deliver and nurse offspring for months before heading south for the Antarctic summer to feed. This would be an unmitigated disaster for this endangered species, not just from the potential of oil spills but from the incessant noise of exploration, drilling, and pumping. This entire stock of animals would be permanently displaced.

    This is a unique and beautiful part of the Australian coast, even more appreciated from the air and from the high cliffs at the top of the Bight. Please, Australia, say no to BP and to any other fossil fuel company that comes calling.