Climate activists are calling on the South Korean government to end financial support for “Australia’s dirtiest offshore gas mine,” after a report found nearly $US200 million of public funds had been tipped into the controversial Barossa project near Darwin.
The $5.6 billion Barossa-Caldita Gas Field Project is being developed in the Timor Sea by Australian oil and gas giant Santos and Korean equity partner SK E&S, which currently holds a 37.5% stake in the project.
The controversial project has the dubious distinction of being described by the Institute For Energy Economics and Financial Analysis as “more like a CO2 emissions factory with an LNG by-product,” due to the unusually high carbon content of the resource.
According to IEEFA report author and LNG industry expert John Robert, the gas contains so much CO2 that most of it will have to be separated and vented offshore to meet the requirements of the Darwin LNG plant it will be piped to.
“The unprecedented scale of the Barossa emissions relative to the LNG production creates major risks for shareholders [and investors],” Robert concluded.
The South Korean government, as it turns out, is a major bankroller of Australian oil and gas projects across the board, with a new report revealing it has funnelled more money – a total of $3.6 billion – to upstream gas mining projects in Australia than in any other country.
According to the report from South Korean advocacy group Solutions for Our Climate (SFOC), this included the “worst of the worst” of Australian gas projects – Barossa.
SFOC found that the Barossa project had already received $US196.4 million from Korean export bank KEXIM since Santos announced its intention to proceed with the project in March.
Other public Korean financial institutions were believed to be considering extending further support, the report said.
“It’s no surprise that a project like Barossa needs more Korean taxpayer money, because it doesn’t stack up on its own,” said SFOC climate finance program director Sejong Youn, in a statement on Thursday.
“But South Koreans don’t want Santos’ dirty gas, and the South Korean government shouldn’t be funnelling our taxpayer money into this project.
“The Barossa gas project is expected to release 5.4 million tonnes of greenhouse gas emissions into the atmosphere each year, while only producing 3.7 million tonnes of LNG,” he added. “Simply put: Santos’ Barossa project is projected to release more pollution than usable gas.”
The campaign to end South Korean financial support for the Barossa project is also being supported by Jubilee Australia, a research centre that promotes economic justice for communities in the Asia-Pacific region and accountability for Australian corporations and government agencies operating there.
“Santos’ Barossa project is the worst of the worst,” said the organisation’s campaigns director, Dina Hopstad Rui.
“The majority of the OECD countries are moving away from publicly funding fossil fuels like coal, oil and gas. The Korean government should follow suit and abandon plans to bankroll Santos’ Barossa project.”
The Korean government has, in fact, moved away from funding coal, with South Korean President Moon Jae-in announcing in April that his country would end all new financing for overseas coal projects, in line with the country’s goal to achieve carbon neutrality by 2050.
And while it will prove no small task to convince the government to follow suit on the bankrolling of overseas oil and gas, the timing is right, with South Korea currently making a pitch to host the 28th UN Climate Change Conference of the Parties (COP 28) in 2023.
Santos, meanwhile, is fending off criticism and activism from all sides. Just last week a shareholder advocacy group launched legal action against the company in the Federal Court, alleging it had made multiple breaches of corporate and consumer protection laws through false claims that gas was a form of “clean energy”.
The Australasian Centre for Corporate Responsibility (ACCR) will argue that Santos has breached the Corporations Act and the Australian Consumer Law, by allegedly undertaking “misleading or deceptive conduct” in claiming it was a producer of “clean energy” and “clean fuels” in its 2020 annual report.
“Our client is taking this action to ensure Santos and other gas companies are held to account for the claims they make about their product and its future in a highly carbon-constrained global economy,” said Elaine Johnson, the director of legal strategy at the Environmental Defenders Office, which is representing ACCR in the case.
“Claims like those made by Santos need to be based on solid foundations. If companies are telling investors they have a credible pathway to net zero emissions, they need to have robust, sound plans to back them up.”
To deal with its considerable emissions problem, Santos has been investigating carbon capture and storage technologies, including economically dubious plans for a flagship project in the Moomba gas fields in South Australia.
Challenging economics aside, CCS remains a notoriously difficult technology to prove out, with Chevron – the operator of Australia’s only commercial-scale carbon capture and storage project – recently conceding that the Gorgon project had failed to meet its targets, by millions of tonnes of carbon dioxide.
This even rated a mention in the federal government’s latest update on national greenhouse gas emissions figures, with the report partly attributing a surge in fugitive methane emissions from LNG production to failures at the Gorgon CCS project.