Faking climate action will be the main game at major gas conference

Every fossil fuel company in the world is struggling to cope with climate change. Not the actual, real-world phenomenon, which they’re actively worsening – but the social, cultural and economic changes that arise as we try to undo the damage.

Recently, the International Energy Agency put out a report that examined what’s required to reach net zero emissions in energy by the year 2050. Unsurprisingly, that included ending exploration for new coal, oil and gas: existing mining operations already supply enough to meet demand as it rapidly declines, in a net zero scenario. It was well known prior, but the IEA taking this position was a significant moment.

Today, Australia’s gas lobby is holding its annual conference. The Australian Petroleum Production & Exploration Association (APPEA)’s big do in Perth is held over four days. You can organise one-on-one meetings with the Russian Ambassador, Dr Alexey Pavlovsky. You can swing a few rounds in the “Australian Oilfield Golf Tournament“. Sponsored by gas giant Woodside and engineering firm Clough, big names, including Australia’s former Chief Scientist Dr Alan Finkel and a pre-recorded video message from PM Scott Morrison, feature on the glossy program.

The IEA’s report, which sent shockwaves through the industry, hangs heavy over their heads. “We need to make sure that Australia and our industry, remains an attractive place to invest. After all, the International Energy Agency’s (IEA) Net Zero Emissions by 2050 scenario shows the world still needs more investment in upstream supply”, writes APPEA chairman Kevin Gallagher in the program’s introduction blurb.

It’s blatantly wrong – the IEA’s net zero scenarios shows pointedly less investment in upstream supply in every decade after this one, and a hard zero investment in new fields from here on out. All the cash goes towards treading water and slowing the sink – the days of swimming are over, if this scenario is realised:

The response from the oil and gas industries has been genuinely quite cynical. Instead of figuring out ways to use their power and influence to substantially reduce the demand for their fossil products – the primary bulk of the climate damage related to their industries – they are instead choosing to address the smaller problem of emissions related to producing fossil fuels.

Woodside’s fake climate targets

Woodside, the sponsor of the conference, is a perfect illustration of the stack of tricks being used by fossil extraction companies to essentially create climate targets that result in a near-zero change to their business operations. Emissions related to ‘making’ their fossil product (extracting it, processing it and transporting it, scope 1 and 2) are nowhere near as high as those that are released when the stuff they sell is burned (scope 3).

As a fun extra, Woodside’s latest annual report also includes a cumulative quantity of “avoided emissions” since 2008, which I’ve included above. That’s around 2.8 megatonnes of CO2-e, since 2008: around 6% of the total emissions Woodside is responsible for in 2020 alone.

The company’s scope 3 emissions – that is, the emissions from the burning of the product they sell – have gone up significantly between 2019, rising from 28 to 33 MTCO2-e (equity basis). Scope 1 and 2 – emissions from making the product – increased from 3.3 to 3.6 MTCO2-e.

Scope 3 data is only published for two years, but considering the annual report heralds a “RECORD ANNUAL PRODUCTION” of 100 million barrels of oil equivalent for 2020, it’s pretty safe to say it’s a record. Woodside’s emissions are increasing, because they’re selling way more gas than they ever have.

The company’s climate targets, like many other Australian fossil fuel companies, pointedly only address the smaller chunk. That is, they want to reduce the emissions footprint of digging up fossil fuels, while absolving themselves of any responsibility for the normal use of the thing they sell (if someone buys a canister and gas and chooses to burn it for energy instead of just placing it on a shelf forever for no reason, that’s their damn choice!).

Their baseline is the average scope 1+2 emissions between 2016 to 2020, and their targets are a 15% reduction by 2025 and a 30% reduction by 2030, on the pathway to an “aspiration” (sort of like Scott Morrison’s “preferably”) of net zero emissions by 2050.

That looks like this:

I have generously assumed that the company’s scope 3 emissions remain the same as the average of 2019 and 2020.

This assumption is definitely wrong – the company is planning a massive expansion of gas extraction at its Scarborough project, along with an expansion of the Pluto processing site.

That plan was just approved by the West Australian government, on the condition that the Pluto project reduces its emissions (scopes 1 and 2 only) by 30% by 2030, and reaches net zero emissions by 2050. Sounds good, right?

But a 2007 ‘baseline’ year was chosen – an old estimate of emissions that means the project is free to increase its scope 1 and 2 emissions by 60%, up to 2030, and still be within the bounds of this “target”.

Considering all scopes for this project, it will unlock total annual carbon pollution of around 15 coal-fired power stations, or around 1.2x the carbon pollution of the Adani coal mine’s products, as found in a recent report from the Australia Institute (TAI). Woodside’s expansion plans will increase all emissions – from making the product to selling it. Even Woodside’s own website admits their expansion will worsen emissions: “Forecast Scope 1 and 2 emissions from current and future project assets1 are estimated to be 15.9 million tonnes per annum (MTPA) CO2-e, increasing from the current 9.6 MTPA for the NWS Project and Pluto LNG. This increase is driven by the approved second train onshore at Pluto LNG and new sources of offshore emissions at Browse and Scarborough”. And they admit that scope 3 emissions will increase by 16 MTCO2-e.

So how are they compatible with the targets?

Put simply, Woodside will purchase a bunch of carbon offsets, to try and cancel out the rising emissions (at least, the emissions they choose not to ignore).

More importantly, Woodside use an accounting method (which I replicated in the above charts to illustrate their targets) that underplays their emissions. As TAI point out, Woodside are legally responsible under Australian law for the projects they operate. This includes emissions, which they report in full, as ‘operated’, to the National Greenhouse and Energy Reporting Scheme (NGERS).

But their targets are based off what’s called “equity” emissions. This is where their responsibility for emissions is calculated as a percentage of their shared ownership. “This leaves the majority of Woodside’s emissions unaccounted for, and not subject to any emissions reduction plans or targets”, write TAI. In a chart:

“In a decarbonising world, successful energy projects will need to be low-cost and low-carbon”, Woodside’s acting CEO, Meg O’Neill, said today. “While the world talks about net zero, it is only achievable if companies like Woodside use our expertise and resources to drive the changes that are needed for a lower-carbon future”. Woodside’s chairman Richard Goyder told the board that whoever gets the CEO gig “will be living with Scarborough for a very long time”. The Australian’s Helen Clark writes, breezily, that “The large, high CO2 Browse fields – 900km from shore – which have seen a series of development concepts since their discovery many decades ago, are large enough to keep the [North West Shelf] facility running to 2070”. Apparently, “Australia…faces a battle to keep its existing LNG trains full to capacity”.

They sound very much like the coal industry in the early 2010s: bold, reproachful and angrily insistent of their own necessity, even as the world realises they are very much not needed.

The tricks are running dry

Spend even a cursory amount of time buried in the details of a climate plan created by a fossil fuel company, and the contradictions, excuses, tricks and fudges come shooting out from the screen at you. It is indicative of a deeper attitude: creating the illusion that rapidly expanding fossil fuel extraction projects is ‘good’ for climate action.

Woodside’s actual track record on climate is horrific. As Boiling Cold’s Peter Milne details here, Woodside was successful in fighting off an effort from the WA EPA to regulate emissions from projects, back in 2019. WA’s government has ensured climate targets are only “aspirations”, Woodside’s LNG ships are subsidised by taxpayers, and, of course, the recent news about Woodside’s Scarborough plans.

Gas companies in particular seem heavily invested in trying to present their business – digging up and selling gas – as something that’s particularly clean and ‘climate friendly’. There’s an emerging trend of offering “carbon neutral LNG”, or some variant of that phrase, which is normal fossil gas that comes paired with the purchase of a bunch of highly suspect tree planting offset certificates.

It’s sure to be a topic of polite yet barely-concealed concern at this week’s APPEA conference. The screws are turning on the stack of tricks used to present the world’s dirtiest industry as if it’s part of the solution rather than part of the problem. Can the defensiveness last?