The WA Environmental Protection Authority requires Chevron to provide an emissions reduction plan for its $US34 billion Wheatstone LNG plant that likely must outline gradual cuts to carbon emissions from almost 4 million tonnes a year to zero by 2050.
The US-major has the task after a request three years ago by then Environment Minister Stephen Dawson for the EPA to investigate conditions placed on greenhouse emissions from the plant near Onslow.
In those three years, the scope of the emissions reduction plan required has increased enormously.
When Chevron sanctioned Wheatstone in 2011, the EPA required it to offset all CO2 from the reservoir, as required for the earlier Gorgon and Pluto LNG projects. The more substantial emissions from gas burnt to operate the LNG plant were not affected.
Two years later, Colin Barnett’s Liberal Government removed the requirement as it believed it was not needed after the Labor Federal Government introduced a carbon price.
With a carbon price long gone, the EPA was expected to recommend the reinstatement of the requirement to offset CO2 from the reservoir.
The volume would be less than one million tonnes a year of the 3.85 million tonnes of CO2 Wheatstone emitted in the 12 months to June 2020. A small portion of Wheatstone’s emissions are from its offshore platform and outside the jurisdiction of the EPA.
However, the EPA raised the hurdle a year ago when it issued new guidance for assessing carbon pollution for projects after industry and the State Government rejected a requirement for complete offsets in early 2019.
EPA chair Matthew Tonts said the new guidance is being used to assess Wheatstone.
“This guidance requires proponents to develop a Greenhouse Gas Management Plan that demonstrates their contribution towards the aspiration of net zero emissions by 2050,” Tonts said.
“The EPA is currently discussing with Chevron the application of this guidance to the existing Wheatstone Development proposal.”
Tonts said the inquiry in response to Dawson’s three-year-old request had taken longer than expected, and the Authority planned to complete it in 2021.
In September 2019, the EPA expected to finish the inquiry by the end of 2020.
EPA actions indicate big cuts expected
Boiling Cold asked Chevron if it accepted the need for Wheatstone’s emissions to reduce in support of the WA Government’s net-zero by 2050 target, and if so, what actions was it planning.
A Chevron spokesperson said it was continuing discussions with the EPA and managing greenhouse gas emissions was an integral part of how Chevron operates.
“The Wheatstone natural gas facility has a range of innovative technologies in place to reduce emissions, and we continue to evaluate all opportunities to minimise emissions over the full life of the facility,” the spokesperson said.
The EPA has assessed two projects under the new guidance.
The Waitsia onshore gas project provides clues to what the EPA might want from Chevron. The Perth Basin development committed to offsetting all reservoir gas CO2 from the start of production and reducing or offsetting total emissions in a roughly straight line to zero by 2050.
Achieving a significant drop in emissions from the relatively new Wheatstone plant would be difficult, leaving Chevron the options of capturing and storing the CO2 or offsetting the emission with vegetation plantings.
The LNG plant already captures reservoir CO2, but Chevron has found it difficult to store reservoir CO2 at its Gorgon project reliably.
The cost of carbon offsets instead of emissions cuts is predicted to rise to $20 to $45 a tonne of CO2 offset by 2030.
Once Chevron produces a plan acceptable to the EPA, the Authority will recommend to Environment Minister Amber-Jade Sanderson that it be accepted. Sanderson is free to go against EPA advice.
Most EPA assessments must be completed before a project can commence. In this case, Chevron has little incentive to produce the plan quickly as it can continue to operate without restrictions on its emissions in the meantime.
Main image: Wheatstone LNG plant near Onslow. Source: Chevron Australia Pty Ltd.