“Tick and flick:” Win to Woodside as court lets regulator off the hook on emissions

The Australian offshore oil and gas regulator is not required under law to investigate fossil fuel company plans to reduce greenhouse gas emissions on new projects even where they lack sufficient detail, the federal court has found.

The decision means Australian petroleum giant Woodside has survived the first of three eleventh-hour legal challenges in the Federal court to its multi-billion Scarborough gas project, this one brought by Doctors for the Environment (DEA) in May.

DEA sought a judicial review of the decision by the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) which it said waved through environmental approvals on an aspect of the $16.5bn Scarborough development in an action the group described as a “box ticking exercise”.

At the core of the claim was the regulator’s decision to accept an assertion by Woodside that gas produced from Scarborough would displace dirtier fossil fuels elsewhere.

The decision marks the first time the courts have considered what measures the regulator, NOPSEMA, was required to take when reviewing a company’s environment plan.

In handing down his decision on Friday, Justice Shaun McElwaine said in a summary of his reasoning that Woodside’s environment plan estimated the project would produce 162 megatons of CO2-e over the five-year life of the plan and 778 megatons of CO2-e over the life of the project.

McElwaine added that the plan included a “hypothetical worst case” scenario that assumed all greenhouse gas emissions are “entirely additive” but only made up 0.33% of “the remaining global carbon budget to limit global warming to no more than 1.5C, and 0.07% of the remaining global carbon budget to limit global warming to no more than 2C.”

However, Justice McElwaine said it was not open to him to “express views about whether NOPSEMA should have been satisfied with the environment plan” or the “justification provided for the release of significant quantities of greenhouse gas into the atmosphere”. In a judicial review, the court was limited to deciding whether NOPSEMA’s acceptance of the plan was allowed under law.

“It was open to NOPSEMA to accept the environment plan as meeting the environment plan acceptance criteria,” he said. “I have concluded that it was not a mandatory requirement of the regulatory scheme for the title holder to specify an acceptable level of Scope 3 GHG emissions.”

“The scheme is designed to regulate a large field of petroleum and greenhouse gas activities conducted in offshore areas. It is designed to accommodate flexibility in the identification and assessment of environmental impact.”

Justice McElwaine said that it was up to NOPSEMA to “determine whether a greater level of precision is required” by a company when planning how to manage greenhouse gas emissions from its activities.

In dismissing DEA’s application, McElwaine added that even if regulations required a company to be clear about how it planned to control its greenhouse gas emissions, the framework “does not prescribe the methodology that must be adopted”.

Speaking after the decision, DEA Executive Director Dr Kate Wylie said it appeared that NOPSEMA was permitted under current law to take the promises of companies about their greenhouse gas emissions at their word, even where they lacked sufficient detail.

“If we behave like NOPSEMA have, we wouldn’t be considered to be good doctors. We’d be considered to be tick and flick, six-minute medicine doctors,” she said.

Woodside CEO Meg O’Neill, in a statement issued after the judgment, welcomed the decision saying it would bring jobs and generate tax revenue.

“Scarborough is expected to be one of the lowest carbon intensity sources of LNG delivered into north Asian markets, providing reliable energy to the region while also supporting local energy security through critical domestic gas supply,” O’Neill said.

O’Neill previously conceded in early April during a sustainability briefing that there was no way to prove the claim that the gas it produces displaced coal use elsewhere.

“Trying to definitively prove that our cargo of LNG displaced coal that would have otherwise been burned is a very difficult strategy,” she said.

A 2019 CSIRO report commissioned, and later buried, by Woodside found that exporting gas to Asia worked to displace renewables, not coal.

The decision leaves two remaining legal challenges to Woodside’s industrial developments, one morning by Friends of Australian Rock Art to approvals given for the North West Shelf plant and another by Murujuga traditional custodian Raele Cooper against Murray Watt.

NOPSEMA was contacted for comment.