Climate pressure on gas sector is ramping up, Santos boss warns By Nick Toscano and Peter de Kruijff June 15, 2021 https://www.smh.com.au/business/com...ing-up-santos-boss-warns-20210614-p580y0.html Santos, one of the nation’s largest gas producers, has acknowledged the world wants to see a faster transition away from fossil fuels amid historic climate pressure engulfing global energy giants and rising pushback against new gas fields off the coast of Australia. On the eve of a major industry conference in Perth this week, Santos managing director Kevin Gallagher said oil and gas have probably been the “single biggest boost to living standards in the history of humankind”. Gas giants Santos and Woodside are planning to develop large new gas fields off the coast of Australia.Credit:Glenn Campbell But concerns about climate change have intensified in the past year, he said, and equity investors had “turned off the taps”. “Whatever the reason, there is no doubt the world wants a faster energy transition and many people see that as a world without fossil fuels,” Mr Gallagher said. Globally, the world’s biggest oil and gas producers are under increasing pressure to act on climate change, with leading energy analysts openly questioning whether the sector is facing a “watershed” moment. First, the International Energy Agency released a landmark report warning against investing in new oil and gas fields if the world is to achieve the Paris climate agreement’s aspirational target of limiting global temperatures to 1.5 degrees. Then, in a landmark ruling, a Dutch court ordered Royal Dutch Shell to set deeper and faster emissions cuts targeting a 45 per cent reduction by 2030, while ExxonMobil, on the same day, was dealt a blow with an activist fund unseating three board members and installing green-leaning replacements instead. In Australia, Santos and Woodside Petroleum have been facing renewed pressure from climate advocates over their plans to develop new gas fields off the coast of Australia due to the additional greenhouse gas emissions they would generate. Santos recently gave the go-ahead to its $4.7 billion Barossa gas project north of Darwin after its plans were put on hold last year amid the coronavirus-driven market crash. Woodside and BHP, meanwhile, are targeting a final investment decision on their $15 billion Scarborough field off the coast of WA. Shareholder activists at the Australasian Centre for Corporate Responsibility (ACCR) have described Barossa as a “carbon bomb”, with carbon dioxide content as high as 19 per cent. “This company is not committed to the Paris Agreement, but to climate chaos,” the group’s climate director Dan Gocher said. “Institutional investors are demanding credible transition plans. Santos continues to fail on this measure.” In WA, environmental groups have initiated legal action in the state’s Supreme Court seeking to overturn approvals already issued to Woodside for its Scarborough project, arguing regulators failed to sufficiently assess the impact on global warming. The climate push against the industry could have significant implications for Australia, which counts liquefied natural gas (LNG) as one of its most valuable exports. Gas firms say demand has been rebounding swiftly after collapsing last year amid global COVID-19 lockdowns, and forecast consumption to remain strong as Asian nations turn to the fossil fuel for a cheap, reliable and less-emitting alternative to coal. “In fact, Australian liquefied natural gas is helping to reduce emissions in importing countries by about 170 million tonnes each year,” the Australian Petroleum Production and Exploration Association’s Claire Wilkinson said. In the longer term, however, the industry is facing deepening questions about the role of gas in a rapidly decarbonising world. Investors are voicing concerns about the fuel’s emissions footprint and the risk of new gas fields becoming stranded assets under the Paris agreement’s goals to slow global warming. “We are Australia’s third-biggest export industry, bringing in around $50 billion in export income last year,” Mr Gallagher said on Monday. “I am confident that APPEA and our members can continue to play a vital role in Australia’s future through to 2050 and beyond.“
Forrest blasts Santos, Woodside as ‘fossils’ Brad Thompson and Angela Macdonald-Smith Jun 15, 2021 https://www.afr.com/companies/energy/forrest-blasts-santos-woodside-as-fossils-20210614-p580vt Andrew Forrest has savaged multibillion-dollar investments in LNG projects in Australia and singled out the country’s two biggest players, Santos and Woodside, for criticism over their contribution to global warming on the eve of a major oil and gas conference in Perth. The Fortescue Metals Group founder and chairman blasted Santos over its decision to go ahead with the $US3.6 billion ($4.7 billion) development of the Barossa gas field off Australia’s northern coast. Andrew Forrest says Santos’ Barossa LNG project is atrocious in terms of its carbon emissions. David Mariuz Australia’s richest man also warned Woodside, chaired by fellow West Australian Richard Goyder, that it would be a big mistake to press on with its $16 billion Scarborough and Pluto LNG expansion project. The Australian Petroleum Production & Exploration Association hit back, accusing Dr Forrest of acting out of self-interest, while federal Resources Minister Keith Pitt suggested his comments were divisive. With Woodside poised to make a final investment decision on Scarborough and acting chief executive Meg O’Neill due to speak at the APPEA conference on Tuesday, Dr Forrest said: “Only a fossil would back long-term fossil fuel in today’s world.” Fresh from securing a deal for Fortescue to develop the world’s biggest hydro power project by damming part of the Congo River in central Africa, Dr Forrest reserved his harshest criticism for Santos and the Barossa project. “The oil and gas players like Santos and the Wheatstone developers (US oil and gas giant Chevron in partnership with Woodside) have had a disgraceful experience and a disgraceful track record with their carbon emissions,” he said. “Santos is about to kick off one of the most polluting projects in the world. It needs to be called for what it is. It is an atrocious project, an atrocious project.” If Mr Forrest doesn’t believe in the environmental benefits of gas, then why is he trying to build a gas import terminal and a gas power station? Kevin Gallagher-led Santos hit “go” on Barossa, which will supply 20 more years of gas for the 3.7 million tonnes-a-year Darwin LNG project, in March in what represented the biggest new investment in Australia’s oil and gas sector since 2012. Dr Forrest, who has set his sights on growing iron ore miner Fortescue into a global force in green energy and green hydrogen, accused governments and the fossil fuel industry of trying to foist another “great lie” on the Australian public. “As predicted the fossil fuel industry’s cosiness with governments will lead to a perpetuation of that great lie ‘clean coal’ with its next sister great lie ‘clean hydrogen’,” he said. “If it is not green, i.e. renewable electricity splitting water, then it is not clean. It is a fossil fuel and as a fossil fuel they are going to brush it up as blue or pink or grey, and they are going to try to call it clean hydrogen and it is an outright lie.” Dr Forrest said Fortescue had secured development rights to green energy projects in the Democratic Republic of Congo, Kenya and Ethiopia with investors and financiers ready to stump up more than $US100 billion into green hydrogen production aimed at markets in Europe. Efforts by the oil and gas industry to lower its emissions footprint through carbon offsets and carbon sequestration, and promotion of the role it could play in large-scale hydrogen production are expected to dominate the three-day APPEA conference. APPEA chief executive Andrew McConville suggested the Forrest attack might be motivated by self-interest given his move to build an LNG import terminal and associated power station at Port Kembla, which would under his plans eventually convert to green hydrogen supplied by Fortescue. “If Mr Forrest doesn’t believe in the environmental benefits of gas, then why is he trying to build a gas import terminal and a gas power station?” Mr McConville said. “It sounds as though he would prefer to have no competition from other projects. Mr Forrest’s comments make no sense given the majority of experts agree that natural gas is a pathway to a large-scale hydrogen industry. “Australia’s LNG export success means the Australian upstream oil and gas industry has the technology, expertise, commercial and trade relationships to make hydrogen exports a reality.” Pitt needs sector ‘working together’ Mr Pitt, who has clashed with Dr Forrest in the past over his dire predictions about the demise of coal mining in Australia, defended the Barossa project. “It is roughly $5 billion, it will expand the life of Darwin LNG for probably another two decades, it will provide 600 jobs for Australians. They are the things that I am focused on,” he said. “Individuals are welcome to make their comments but I need the resources sector, not only to perform, but to continue to work together. “They did a phenomenal job during COVID, they really did work hand-in-hand in the national interest and the results have been absolutely outstanding. I want to see that type of bipartisanship and multilateral work right across the Australian sector continue into the future because it helps us all.” The Australasian Centre for Corporate Responsibility has described the Barossa project as a “carbon bomb” based on the 18-19 per cent CO2 content of the gas. Woodside’s Scarborough project is a fraction of that CO2 content but it faces a Supreme Court challenge to approvals for the project from conservation groups who have branded it “worse than Adani” for emissions. A Woodside spokesman said Scarborough gas contained almost no carbon dioxide. “It is amongst the lowest carbon sources of LNG globally that can be delivered to our north Asian customers,” the spokesman said. “Carbon-neutral energies are not yet ready to meet the world’s energy needs. This is particularly apparent for our customers in Asian countries where hundreds of millions of people still rely on more carbon-intensive fuels, or lack access to modern essentials like refrigeration and heating.” Woodside said it would be progressing new energy technologies, like hydrogen, ammonia and renewables.