# Boiling Cold > Independent news and insight into energy, industry and climate in Western Australia. Public Ghost content for AI and LLM tooling. This file includes a bounded export of public pages first, then recent public posts. Append `.md` to any post or page URL to get the content in Markdown (for example, `/example-post.md`). ## Pages ### About Boiling Cold URL: https://www.boilingcold.com.au/about/ Last updated: 2026-01-29T07:12:23.000Z ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2024/11/Screenshot-2024-11-25-at-4.19.50-PM.jpg) ## About Boiling Cold Boiling Cold is independent news and insight into energy, industry and climate in Western Australia ## A challenge Australia's biggest and driest state has a lot to lose from climate change but much to gain from the energy transition. Decisive action now is the best way to maximize the economic benefits and limit the environmental damage. However, necessary change is often slowed by incumbents who benefit from the status quo. Their views are relevant, but in WA the coordinated power of rich individuals, resource companies, their lobby groups and willing media combined with a lackluster political class means alternative perspectives and stories that don't align with the agreed narrative are drowned out. Much news coverage misses this with a short term focus on squabbles between those insiders and who will make the most money out of the game as it is played now. It is reporting about who gets a seat at the captain's table, not whether the ship is heading for an iceberg. ## A step towards some balance *Boiling Cold* is news for the rest of us: citizens, voters, employees, communities and the curious; those who want an independent perspective on what is really happening, governments working for their citizens, and a future WA with a robust economy coexisting with an environment we can all enjoy. *Boiling Cold*'s approach is different: - sets its own agenda - don't focus on what the powerful are saying by covering media releases, tell readers what they are actually doing (so [please make contact](https://www.boilingcold.com.au/contact/) with what you know) - keep covering an important topic when the mainstream media has moved on - otherwise the players just promise change while the spotlight is on them, then revert back to business as usual - dive into detail when necessary - it often hides the difference between a media release and reality All of this takes time, so there won't be a story every day, but there will be stories you would never read otherwise. Stories that hold the powerful to account. ## Help nudge WA in the right direction This work requires time and independence, but it will have little impact hidden behind a paywall read by a select few, so *Boiling Cold* is free for all to read. That means it can only survive with your support. Please consider chipping in each month to help others know what's going on and hold the powerful to account so we can push them towards acting in the long term interests of all of us. [support independent journalism in WA](https://www.boilingcold.com.au/#/portal/signup) Alternative, a one off tip would be fantastic. [help Boiling Cold dig up what's happening](https://www.boilingcold.com.au/#/portal/support) If you are in a position to offer more substantial support, please make [contact](https://www.boilingcold.com.au/contact/). ## A track record *Boiling Cold* is written by Peter Milne, who previously covered energy for *The West Australian,* started and ran *Boiling Cold* in 2020 and 2021, then covered business for [WAtoday](https://www.watoday.com.au/by/peter-milne-p535u2?ref=boilingcold.com.au). There he won [five MEAA WA Media Awards](https://www.boilingcold.com.au/awards/), including for [numerous exclusives](https://www.watoday.com.au/topic/alcoa-investigation-6fut?ref=boilingcold.com.au) exposing the threat to Perth's water supply from Alcoa's clearing of jarrah forest to mine bauxite. Prior to journalism, he had a 20-plus years oil and gas career in engineering, economic analysis and commercial negotiation roles. You can follow *Boiling Cold* on [LinkedIn](https://www.linkedin.com/in/peterjmilne/?ref=boilingcold.com.au), [Bluesky](https://bsky.app/profile/petemilne.bsky.social?ref=boilingcold.com.au), [Facebook](https://www.facebook.com/boilingcoldnews), [Twitter/X](https://x.com/PeteMilne4?ref=boilingcold.com.au), [Google News](https://news.google.com/publications/CAAqBwgKMNnNmAsw6tewAw?ceid=AU:en&oc=3&ref=boilingcold.com.au) or through [RSS](https://www.boilingcold.com.au/latest/rss). ## Standards *Boiling Cold* is a member of the [Local and Independent News Association](https://lina.org.au/?ref=boilingcold.com.au) and the Australia Press Council. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/01/Screenshot-2026-01-29-at-3.10.11---pm.png) *Boiling Cold* is bound by the Standards of Practice of the Australian Press Council. If you believe the [Standards](https://presscouncil.org.au/standards/statement-of-principles?ref=boilingcold.com.au) may have been breached, you may approach *Boiling Cold* or make a complaint to the Australian Press Council in writing at [www.presscouncil.org.au](https://oxbdaj.clicks.mlsend.com/tl/c/eyJ2Ijoie1wiYVwiOjEwOTY1ODAsXCJsXCI6MTcxOTI3MTI5MTI5MjIzODcxLFwiclwiOjE3NzkwODYzNjY1NTI4OTQ0MH0iLCJzIjoiMzExNDdkNzYzNmY5Y2U2ZSJ9?ref=boilingcold.com.au). The Council may also be contacted on 1800 025 712. --- *Banner image: Santos gas plant on Varanus Island - Imagery ©2024 Airbus,CNES / Airbus, Maxar technologies, Map data ©2024* ### Contact Boiling Cold URL: https://www.boilingcold.com.au/contact/ Last updated: 2025-09-30T05:43:19.000Z ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2024/11/Screenshot-2024-11-30-at-2.16.30-PM-1.jpg) ## Contact Boiling Cold Got a hot tip, a little snippet of info, an idea for a story or just spotted an error that needs to be fixed? Please email [peter.milne@boilingcold.com.au](mailto:peter.milne@boilingcold.com.au) I also check LinkedIn messages frequently, and I'm on [Signal](https://signal.me/?ref=boilingcold.com.au#eu/2R9%5FLvkBqa5O78sspntCdiSc7r%5FmgiYrBeDlLD-BNwYsUaTdv9VAApq6EygqiyFK). If you are unsure what to do, say hi, and we can take it from there. In all cases, your identity will be kept completely confidential. If things are especially sensitive set up a free [ProtonMail](https://protonmail.com/?ref=boilingcold.com.au) account on a non-work phone or computer and send an anonymous encrypted email to [boilingcold@protonmail.com](mailto:boilingcold@protonmail.com) You can follow *Boiling Cold* on [LinkedIn](https://www.linkedin.com/in/peterjmilne/?ref=boilingcold.com.au), [Bluesky](https://bsky.app/profile/petemilne.bsky.social?ref=boilingcold.com.au), [Facebook](https://www.facebook.com/boilingcoldnews), [Twitter/X](https://x.com/PeteMilne4?ref=boilingcold.com.au), [Google News](https://news.google.com/publications/CAAqBwgKMNnNmAsw6tewAw?ceid=AU:en&oc=3&ref=boilingcold.com.au) or through [RSS](https://www.boilingcold.com.au/latest/rss). --- Banner image - Rio Tinto's Brockman iron ore mine in WA's Pilbara - Google Maps Map data ©2024 Imagery ©2024 Airbus, CNES / Airbus, Marat Technologies ### Privacy Policy URL: https://www.boilingcold.com.au/privacy/ Last updated: 2024-11-29T03:05:28.000Z This Privacy Policy sets out our commitment to protecting the privacy of personal information provided to us, or otherwise collected by us, offline or online, including through our website boilingcold.com.au (**Site**). In this Privacy Policy **we**, **us** or **our** means Boiling Cold Pty Ltd ABN 89 638 507 856. ### Personal information The types of personal information we may collect about you include: - your name; - your contact details, including email address, mailing address, street address and/or telephone number; - your credit card details; - your demographic information, such as postcode; - your preferences and/or opinions; - information you provide to us through customer surveys; - details of products and services we have provided to you and/or that you have enquired about, and our response to you; - your browser session and geo-location data, device and network information, statistics on page views and sessions, acquisition sources, search queries and/or browsing behavior; - information about your access and use of our Site, including through the use of Internet cookies, your communications with our Site, the type of browser you are using, the type of operating system you are using and the domain name of your Internet service provider; - additional personal information that you provide to us, directly or indirectly, through your use of our Site, associated applications, associated social media platforms and/or accounts from which you permit us to collect information; and - any other personal information requested by us and/or provided by you or a third party. - We may collect these types of personal information directly from you or from third parties. ### Collection and use of personal information We may collect, hold, use and disclose personal information for the following purposes: - to enable you to access and use our Site, associated applications and associated social media platforms; - to contact and communicate with you; - for internal record keeping and administrative purposes; - for analytics, market research and business development, including to operate and improve our Site, associated applications and associated social media platforms; - to run competitions and/or offer additional benefits to you; - for advertising and marketing, including to send you promotional information about our products and services and information about third parties that we consider may be of interest to you; - to comply with our legal obligations and resolve any disputes that we may have. ### Disclosure of personal information to third parties We may disclose personal information to: - third party service providers for the purpose of enabling them to provide their services, including (without limitation) IT service providers, data storage, web-hosting and server providers, debt collectors, maintenance or problem-solving providers, marketing or advertising providers, professional advisors and payment systems operators; - our employees, contractors and/or related entities; - our existing or potential agents or business partners; - anyone to whom our business or assets (or any part of them) are, or may (in good faith) be, transferred; - courts, tribunals and regulatory authorities, in the event you fail to pay for goods or services we have provided to you; - courts, tribunals, regulatory authorities and law enforcement officers, as required by law, in connection with any actual or prospective legal proceedings, or in order to establish, exercise or defend our legal rights; - third parties, including agents or sub-contractors, who assist us in providing information, products, services or direct marketing to you. This may include parties located, or that store data, outside of Australia - third parties to collect and process data, such as \[Google Analytics or other relevant businesses\]. This may include parties that store data outside of Australia. We may store personal information overseas. Where we disclose your personal information to the third parties listed above, these third parties may also store, transfer or access personal information outside of Australia. Unless we seek and receive your consent to an overseas disclosure of your personal information, we will only disclose your personal information to countries with laws which protect your personal information in a way which is substantially similar to the Australian Privacy Principles and/or we will take such steps as are reasonable in the circumstances to require that overseas recipients protect your personal information in accordance with the Australian Privacy Principles ### **How we treat personal information that is also sensitive information** Sensitive information is a subset of personal information that is given a higher level of protection under the Australian Privacy Principles. **Sensitive information** means information relating to your racial or ethnic origin, political opinions, religion, trade union or other professional associations or memberships, philosophical beliefs, sexual orientation or practices, criminal records, health information or biometric information. Sensitive information includes: - an individual’s racial or ethnic origin, - health information, - political opinions, - membership of a political association, - professional or trade association or trade union, - religious beliefs or affiliations, - philosophical beliefs, - sexual orientation or practices, - criminal record, - genetic information, - biometric information that is to be used for certain purposes, and - biometric templates. We only collect, hold, use and disclose sensitive information for the following purposes: - any purposes you consent to; - the primary purpose for which it is collected; - secondary purposes that are directly related to the primary purpose for which it was collected, including disclosure to the above listed third parties as reasonably necessary to provide our services to you; - to contact emergency services, or to speak with your family, partner or support person where we reasonably believe there is a serious risk to the life, health or safety of you or another person and it is impracticable for us to obtain your consent; and - if otherwise required or authorised by law. ### Your rights and controlling your personal information **Choice and consent**: Please read this Privacy Policy carefully. By providing personal information to us, you understand we will collect, hold, use and disclose your personal information in accordance with this Privacy Policy. You do not have to provide personal information to us, however, if you do not, it may affect your use of this Site or the products and/or services offered on or through it. **Information from third parties**: If we receive personal information about you from a third party, we will protect it as set out in this Privacy Policy. If you are a third party providing personal information about somebody else, you represent and warrant that you have such person’s consent to provide the personal information to us. **Restrict**: You may choose to restrict the collection or use of your personal information. If you have previously agreed to us using your personal information for direct marketing purposes, you may change your mind at any time by contacting us using the details below. **Access**: You may request details of the personal information that we hold about you. An administrative fee may be payable for the provision of such information. In certain circumstances, as set out in the *Privacy Act 1988* (Cth), we may refuse to provide you with personal information that we hold about you. **Correction**: If you believe that any information we hold about you is inaccurate, out of date, incomplete, irrelevant or misleading, please contact us using the details below. We will take reasonable steps to correct any information found to be inaccurate, incomplete, misleading or out of date. **Complaints**: If you believe that we have breached the Australian Privacy Principles and wish to make a complaint, please contact us using the details below and provide us with full details of the alleged breach. We will promptly investigate your complaint and respond to you, in writing, setting out the outcome of our investigation and the steps we will take to deal with your complaint. **Unsubscribe**: To unsubscribe from our e-mail database or opt-out of communications (including marketing communications), please contact us using the details below or opt-out using the opt-out facilities provided in the communication. ### Storage and security We are committed to ensuring that the personal information we collect is secure. In order to prevent unauthorised access or disclosure, we have put in place suitable physical, electronic and managerial procedures to safeguard and secure the personal information and protect it from misuse, interference, loss and unauthorised access, modification and disclosure. We cannot guarantee the security of any information that is transmitted to or by us over the Internet. The transmission and exchange of information is carried out at your own risk. Although we take measures to safeguard against unauthorised disclosures of information, we cannot assure you that the personal information we collect will not be disclosed in a manner that is inconsistent with this Privacy Policy. ### Cookies and web beacons We may use cookies on our Site from time to time. Cookies are text files placed in your computer's browser to store your preferences. Cookies, by themselves, do not tell us your email address or other personally identifiable information. However, they do allow third parties, such as Google and Facebook, to cause our advertisements to appear on your social media and online media feeds as part of our retargeting campaigns. If and when you choose to provide our Site with personal information, this information may be linked to the data stored in the cookie. We may use web beacons on our Site from time to time. Web beacons (also known as Clear GIFs) are small pieces of code placed on a web page to monitor the visitor’s behaviour and collect data about the visitor’s viewing of a web page. For example, web beacons can be used to count the users who visit a web page or to deliver a cookie to the browser of a visitor viewing that page. ### Links to other websites Our Site may contain links to other websites. We do not have any control over those websites and we are not responsible for the protection and privacy of any personal information which you provide whilst visiting those websites. Those websites are not governed by this Privacy Policy. ### Amendments We may, at any time and at our discretion, vary this Privacy Policy by publishing the amended Privacy Policy on our Site. We recommend you check our Site regularly to ensure you are aware of our current Privacy Policy. **For any questions or notices, please contact our Privacy Officer at:** Boiling Cold Pty Ltd ABN 89 638 507 856. Email: peter.milne@boilingcold.com.au Last update: 29 November 2024 Privacy Policy provided by [LegalVision.com.au](https://legalvision.com.au/?ref=boilingcold.com.au) ### Topics URL: https://www.boilingcold.com.au/topics/ Last updated: 2022-01-05T07:39:16.000Z Browse the leading topics covered by Boiling Cold. [LNGAustralia is the world’s biggest producer of liquefied natural gas. WA has the North West Shelf, Pluto, Gorgon, Wheatstone, Prelude & Ichthys LNG projects.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/size/w600/2021/08/Pluto-Scarborough-graphic.jpg)](https://www.boilingcold.com.au/tag/lng/) [Carbon EmissionsWA is the only State where greenhouse gas emissions have risen since 2005, the Paris Agreement baseline, mainly due to an expanded LNG industry.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/size/w600/2021/09/Goodwyn-Platform--North-West-Shelf-Project-web-cropped.jpeg)](https://www.boilingcold.com.au/tag/carbon-emissions/) [Woodside PetroleumThe Perth-based LNG specialist operates the North West Shelf and Pluto LNG projects and is developing the Scarborough and Browse fields.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/size/w600/2021/09/Griffin-Venture-FPSO.jpg)](https://www.boilingcold.com.au/tag/woodside/) [ChevronThe US oil and gas supermajor is the major LNG producer in WA with its Gorgon and Wheatstone LNG projects and a share in the North West Shelf.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/size/w600/2021/08/Varanus-Island.jpg)](https://www.boilingcold.com.au/tag/chevron/) [SafetyThe Department of Mines, Industry Regulation and Safety oversees workplace health and safety in WA and NOPSEMA is responsible for offshore workers.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/size/w600/2021/08/Ngujima-Yin-FPSO-close-up.jpg)](https://www.boilingcold.com.au/tag/safety/) [DecommissioningOil and gas producers are required to plug and abandon wells and remove equipment when production ends.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/size/w600/2021/09/Griffin-Venture-FPSO.jpg)](https://www.boilingcold.com.au/tag/decommissioning/) [Federal GovernmentThe Federal Government controls offshore oil and gas production outside of nearshore State waters and determines emission and climate policy.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/size/w600/2021/08/North-West-Shelf-LNG-plant.jpg)](https://www.boilingcold.com.au/tag/federal-government/) [Renewable EnergyRenewable energy in WA comes mainly from rooftop solar panels and wind farms.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/size/w600/2021/08/bp-h2-logo.jpg)](https://www.boilingcold.com.au/tag/renewable-energy/) [net-zero 2050Net-zero carbon emissions are required to meet the Paris Agreement aim of limiting global warming to close to 1.5℃.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdThe Conversation![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/size/w600/2021/08/Ichthys-LNG-plant.jpg)](https://www.boilingcold.com.au/tag/net-zero-2050/) [Gorgon LNGChevron’s Gorgon LNG project on Barrow Island began operating in 2016 has the world’s third-largest carbon capture and storage system.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/size/w600/2021/07/CVX-CO2.jpg)](https://www.boilingcold.com.au/tag/gorgon/) [AnalysisInsights from Boiling Cold, piecing together not just what is happening in WA energy and climate, but why.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/size/w600/2021/08/North-West-Shelf-LNG-plant.jpg)](https://www.boilingcold.com.au/tag/analysis/) [WA GovernmentThe Mark McGowan-led Labor government includes Bill Johnston who is responsible for energy and resources and minister for environment Stephen Dawson.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/size/w600/2021/09/Goodwyn-Platform--North-West-Shelf-Project-web-cropped.jpeg)](https://www.boilingcold.com.au/tag/wa-government/) [GasMost gas in Western Australia is produced offshore and exported as LNG, with some reserved for domestic use. Onshore production is increasing.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/size/w600/2021/09/Goodwyn-Platform--North-West-Shelf-Project-web-cropped.jpeg)](https://www.boilingcold.com.au/tag/gas/) [Domestic GasDomestic gas, or domgas, in WA comes from gas LNG producers are required to reserve for the local market and smaller domestic gas-only projects.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/size/w600/2021/06/APPEA2021_210617-1672-1.jpg)](https://www.boilingcold.com.au/tag/domestic-gas/) [NOPSEMAThe National Offshore Petroleum Safety and Environmental Management Authority is the independent oil and gas regulator in Commonwealth waters.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/size/w600/2021/09/Griffin-Venture-FPSO.jpg)](https://www.boilingcold.com.au/tag/nopsema/) [OilOil production in WA comes from condensate produced with gas for LNG plants and dedicated FPSOs: floating production storage and offloading vessels.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/size/w600/2021/08/Dorado-graphic-from-presentation.jpg)](https://www.boilingcold.com.au/tag/oil/) [Northern EndeavourNorthern Oil and Gas Australia bought the Northern Endeavour oil production vessel in the Timor Sea from Woodside in 2016 and went into liquidation in 2020.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/size/w600/2021/08/Northern-Endeavour-mid-2021-from-anon-3-cropped.jpg)](https://www.boilingcold.com.au/tag/northern-endeavour/) [Climate ChangeWA is particularly susceptible to climate change with South West rainfall already hard-hit yet it is the only State with rising carbon emissions.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/size/w600/2021/08/wpl-bhp-deal-logo-1.jpg)](https://www.boilingcold.com.au/tag/climate-change/) [Power GenerationPower in WA’s South West is generated by State-owned Synergy and private companies while the State’s Horizon Power and miners cover the rest of the State.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/size/w600/2021/07/SWIS-area-graphic-from-WoSP.jpg)](https://www.boilingcold.com.au/tag/power-generation/) [North West Shelf LNGThe Woodside-operated North West Shelf project near Karratha exported Australia’s first LNG cargo in 1989 and now has five trains and a domestic gas plant.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/size/w600/2021/08/Northern-Endeavour-mid-2021-from-anon-3-cropped.jpg)](https://www.boilingcold.com.au/tag/north-west-shelf/) [Scarborough LNGWoodside plans to bring gas from the Scarborough field it owns with BHP to the Pluto LNG plant on the Burrup Peninsula.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/size/w600/2021/08/Pluto-Scarborough-graphic.jpg)](https://www.boilingcold.com.au/tag/scarborough/) [SantosSantos owns the Varanus Island and Devil Creek domestic gas plants in the North West, the Dorado oil field off WA and the Barossa LNG project into Darwin.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/size/w600/2021/09/bayu-undan.jpg)](https://www.boilingcold.com.au/tag/santos/) [Prelude LNGShell’s Prelude floating LNG facility off the WA coast, that is the worlds largest vessel, has struggled to produce reliably since mid-2019.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/size/w600/2021/05/Prelude-flare-reflection.jpg)](https://www.boilingcold.com.au/tag/prelude/) ### Support Boiling Cold URL: https://www.boilingcold.com.au/support/ Last updated: 2025-04-07T13:22:11.000Z ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2024/11/Screenshot-2024-11-30-at-2.09.04-PM-1.jpg) ## Support Boiling Cold Independent, spin-free coverage of energy, industry and climate in Western Australia cannot happen without your backing. *Boiling Cold* allows you and others to be informed about energy, industry and climate in WA with journalism independent of the big end of town. The energy transition is on, and WA can either embrace it and emerge a winner or be held back by entrenched interests with a short-term outlook. Mainstream media has to play nice to maintain access to exclusive drops and interviews with chief executives. The price for access is pulling your punches. Instead *Boiling Cold* uses industry knowledge, sources, documents and analysis so you get to read what the corporate and government spin doctors would rather be left untouched. This work requires time and independence, but it will have little impact hidden behind a paywall read by a select few, so *Boiling Cold* is free for all to read. That means it can only survive with your support. **Please consider chipping in each month** to help others know what's going on and hold the powerful to account so we can push them towards acting in the long term interests of all of us. [support independent journalism in WA](https://www.boilingcold.com.au/about/#/portal/signup) **Alternatively, a one off tip to would be fantastic.** [help Boiling Cold dig up what's happening](https://www.boilingcold.com.au/about/#/portal/support) If you are in a position to offer more substantial support, please make [contact](https://www.boilingcold.com.au/contact/). --- *Banner image - Merredin solar farm - Google Maps - Map data ©2024 Imagery ©2024 Airbus, CNES, Maxar Technologies* ### Terms of Service URL: https://www.boilingcold.com.au/terms-of-service/ Last updated: 2024-11-29T02:46:47.000Z Boiling Cold Pty Ltd – WEBSITE TERMS OF USE This website (**Site**) is operated by Boiling Cold Pty Ltd ABN 89 638 507 856 (**we**, **our** or **us**). 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If you access our Site from outside Australia, you do so at your own risk and are responsible for complying with the laws of the jurisdiction where you access our Site. **For any questions and notices, please contact us at**: Boiling Cold Pty Ltd, ABN 89 638 507 856 Email: peter.milne@boilingcold.com.au **Last update: 29 October 2024.** Website Terms of Use provided by [LegalVision.com.au](https://legalvision.com.au/?ref=boilingcold.com.au) ### Award winning journalism URL: https://www.boilingcold.com.au/awards/ Last updated: 2025-11-07T06:46:01.000Z ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2024/11/Screenshot-2024-11-25-at-3.59.57-PM-1.jpg) ## Award winning journalism The journalism behind Boiling Cold has been recognized as independent, well researched and impactful with Peter Milne winning five WA Media Awards in the past four years. ## 2024 **Science and Environmental Report** ### ***The real legacy for WA from Alcoa*** Judges comments: > Peter Milne’s work reflects the benefits of **doggedly pursuing a topic**. Using freedom of information requests and knowledge he has accumulated over several years, he provides **major new insights** on the impact of Alcoa’s operations. Milne also highlights major regulatory and policy shortcomings in WA. [When will Alcoa clean up in Kwinana?After six decades the US miner has left Kwinana with a contaminated plant and enough toxic red mud to fill Optus Stadium 138 times.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/watoday-2024.png)WAtodayPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/1946a618e7ca2738bff369e85cd35e4767d99860)](https://www.watoday.com.au/national/western-australia/when-will-alcoa-clean-up-in-kwinana-20240110-p5ewcw.html?ref=boilingcold.com.au) [WA government overrode water supply warnings to approve Alcoa miningThe WA environment regulator opposed Alcoa’s mining but proposed safeguards if it went ahead. The Cook government ignored the first recommendation and watered down the second.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/watoday-2024-1.png)WAtodayPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/653d52867e7e12cff4cc4b8b26267b4c0c5fb2e1)](https://www.watoday.com.au/national/western-australia/wa-government-overrode-water-supply-warnings-to-approve-alcoa-mining-20240501-p5fo3c.html?ref=boilingcold.com.au) [Worries of ‘irreversible’ damage to jarrah forest by Alcoa revealedWater Corporation concluded that contamination of Perth’s dams is “certain” but the state government heavily watered-down its recommendations to reduce the risks from bauxite mining.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/watoday-2024-2.png)WAtodayPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/387f2e9bed66a9e641d7b30f7f3be4d3841c25f8)](https://www.watoday.com.au/national/western-australia/worries-of-irreversible-damage-to-jarrah-forest-by-alcoa-revealed-20240621-p5jnpj.html?ref=boilingcold.com.au) ## 2023 **News Coverage** ### ***Tackling the rogue miner in WA’s jarrah forest*** Judges’ comments: > Peter Milne’s series on aluminium producer Alcoa’s environmental performance was the standout in this category, both for its impact and for **holding power to account**. The pieces were **thoroughly researched** and relied on the reporter’s ability to mine for documentary evidence and to **see through the spin** produced by government and well-funded public relations teams. It was an outstanding entry. [Alcoa mining threatens Perth’s drinking waterMining practices by Alcoa near Perth’s biggest dam could shut it down for years, causing water restrictions and potentially billions in water treatment costs.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/watoday-2024-3.png)WAtodayPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/7fb6962e56cfc3df7125ecb8a1241e12da2cd8b2)](https://www.watoday.com.au/environment/sustainability/alcoa-mining-threatens-perth-s-drinking-water-20230207-p5cijm.html?ref=boilingcold.com.au) [Alcoa in WA: 60 years, 28,000 hectares of forest cleared, zero rehabilitation completedThe department of conservation says Alcoa has not met the rehabilitation completion criteria, but the miner claims it has rehabilitated 75 per cent of the forest it has cleared.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/watoday-2024-4.png)WAtodayPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/1fc3c4542a87b69e9fafca81413dcee1763752eb)](https://www.watoday.com.au/environment/sustainability/alcoa-in-wa-60-years-28-000-hectares-of-forest-cleared-zero-rehabilitation-completed-20230307-p5cq4j.html?ref=boilingcold.com.au) [Alcoa piped toxic waste over drinking water dam, and asked for approval afterwardsUS aluminium giant Alcoa pumped water with “forever chemical” PFAS over a dam near Waroona without regulatory approval or telling the Water Corporation.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/watoday-2024-5.png)WAtodayPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/6fb52f5c5013ed0302d4b29f4592a00d717a7198)](https://www.watoday.com.au/environment/sustainability/alcoa-piped-toxic-waste-over-drinking-water-dam-and-asked-for-approval-afterwards-20230223-p5cn5u.html?ref=boilingcold.com.au) --- **Business, Economics or Finance Report** ### ***Alcoa’s reputation car crash: water supply at risk, denuded forests and a toxic pipeline*** Judges’ comments: > When it came to picking a winner ... Peter Milne’s work was a standout. This piece was the culmination of a six-month investigation that started with tip-offs, that came his way because of **the reputation he has established for fair and fearless reporting**. What followed was a deep dive into documentation about the issue, including the results of Freedom of Information requests and careful questioning of key stakeholders. This story and others resulting from the ongoing investigation are raising serious questions about the company with the rights to mine a considerable portion of the state’s last remaining jarrah forests. Same three stories as the News Coverage award. --- **Columnist – The Matt Price Prize** ### **Digging into the spin from the big end of town** Judges’ comments: > Peter Milne boldly took on three big topics – the Western Australian of the Year awards, and mining giants Alcoa and Andrew Forrest. He wrote three excellent columns, expressing **powerful opinions backed by in-depth research and hard facts**. They were entertaining, informative and challenging. [WA’s embarrassment of richies makes us look ridiculousThe small group that decided controversial billionaire Gina Rinehart was Western Australian of the Year needs to look beyond the rich and powerful to find our most noteworthy citizens.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/watoday-2024-6.png)WAtodayPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/dab0b8caf353fb057b91bbe7cfd2c295f735b0cc)](https://www.watoday.com.au/national/western-australia/wa-s-embarrassment-of-richies-makes-us-look-ridiculous-20230606-p5deja.html?ref=boilingcold.com.au) [Alcoa’s deal with WA a 62-year-old relic from a different timeThe terms of Alcoa mining WA’s jarrah forest were decided when the scale of planned deforestation was tiny as was Perth’s population. Plenty has changed since then.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/watoday-2024-7.png)WAtodayPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/90f64c26d2955466cd9eda83367d51cd79269297)](https://www.watoday.com.au/environment/sustainability/alcoa-s-deal-with-wa-a-62-year-old-relic-from-a-different-time-20230214-p5ckfs.html?ref=boilingcold.com.au) [Forrest ‘locked and loaded’ for net-zero but does Fortescue have the calibre?Andrew Forrest does not hold back: if you doubt his miner Fortescue will be a world leader in reducing emissions then you are one of “the f---wits that loves fossil fuels”.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/watoday-2024-8.png)WAtodayPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/0fa54e853272a94891fc286afa6f8fff7de22e56)](https://www.watoday.com.au/business/companies/forrest-locked-and-loaded-for-net-zero-but-does-fortescue-have-the-calibre-20220920-p5bjjo.html?ref=boilingcold.com.au) ## 2022 **Business, Economics or Finance Report** ### **Calling out working with Shell as a dangerous hell** A series of stories on dangerous working conditions on Shell's Prelude floating LNG vessel. [How Shell lost control of its $24b Prelude floating gas factoryWith almost every system on Australia’s most complex offshore facility out of action workers scrambled to restart power that everything depended on.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/watoday-2024-9.png)WAtodayPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/c91532daf1a9e8ed7cda7059580db86082c21456)](https://www.watoday.com.au/politics/western-australia/how-shell-lost-control-of-its-24b-prelude-floating-gas-factory-20211221-p59jb4.html?ref=boilingcold.com.au) [Shell’s Prelude gas vessel faced ‘catastrophic failure’ from power outagePower problems on Shell’s giant Prelude gas vessel in December risked the “catastrophic failure” of parts of the ship’s structure according to a report by the offshore safety regulator.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/watoday-2024-10.png)WAtodayPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/3cb13bf6f556226445096791cfc7d0afda96b8d1)](https://www.watoday.com.au/national/western-australia/shell-s-prelude-gas-vessel-faced-catastrophic-failure-from-power-outage-20220103-p59lly.html?ref=boilingcold.com.au) [Shell’s Prelude gas ship hit by safety, crewing and industrial problemsShell is running its $US17 billion Prelude floating LNG plant with critical positions filled with crew who are not fully qualified and more than 200 safety alarms out of action ahead of industrial action due to start on Friday.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/watoday-2024-11.png)WAtodayPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/3cb13bf6f556226445096791cfc7d0afda96b8d1-1)](https://www.watoday.com.au/national/western-australia/shell-s-prelude-gas-ship-hit-by-safety-crewing-and-industrial-problems-20220609-p5askw.html?ref=boilingcold.com.au) --- *Banner image - Alcoa's mining near Serpentine Dam - Map data ©2024 Imagery ©2024 Airbus, CNES / Airbus, Landsat / Copernicus, Maxar Technologies* ### Tags URL: https://www.boilingcold.com.au/tags/ Last updated: 2024-11-25T08:25:53.000Z ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2024/11/Screenshot-2024-11-25-at-4.24.05-PM.jpg) ## Topics ### Latest URL: https://www.boilingcold.com.au/latest/ Last updated: 2024-11-25T07:18:40.000Z _No content available._ ### Archive URL: https://www.boilingcold.com.au/archive/ Last updated: 2024-11-25T07:19:40.000Z _No content available._ ### Thanks for subscribing URL: https://www.boilingcold.com.au/welcome-subscriber/ Last updated: 2024-12-02T02:04:43.000Z Thanks for subscribing to the weekly newsletter out each Friday morning (with a bit of flex for a one-person operation as stuff happens). There you'll read what *Boiling Cold* has reported for the week plus what else has been happening in energy, industry and climate in WA and some commentary that hopefully makes some sense of it all. *Boiling Cold* offers news and insight into WA's energy transition and climate that is independent, informed and investigative. Pushing our state in the right directions requires us all to hear more than one perspective. You can read more about *Boiling Cold* [here](https://www.boilingcold.com.au/about/). Any questions, comments, story ideas or tips? Please make [contact](https://www.boilingcold.com.au/contact/). If you like what you see please consider [upgrading to a paid membership](https://www.boilingcold.com.au/about/#/portal/signup) or [giving a tip](https://www.boilingcold.com.au/about/#/portal/support). ### Thanks for backing independent news URL: https://www.boilingcold.com.au/welcome-backer/ Last updated: 2026-01-19T12:44:15.000Z Thanks for supporting *Boiling Cold*'s news and insight into WA's energy transition and climate that is independent, informed and investigative. Pushing our state in the right direction requires us all to hear more than one perspective. It could not happen without you. You can read more about *Boiling Cold* [here](https://www.boilingcold.com.au/about/). Any questions, comments, story ideas or tips? Please make [contact](https://www.boilingcold.com.au/contact/). You can access your subscription details [here](https://urldefense.proofpoint.com/v2/url?u=https-3A%5F%5Fbilling.stripe.com%5Fp%5Flogin%5F8x2eVd6b715q8kV8pg3F600&d=DwMGaQ&c=euGZstcaTDllvimEN8b7jXrwqOf-v5A%5FCdpgnVfiiMM&r=E1Nb7AlB4dmfS6OwwQSwc%5F5yzASr6GZAGjh6RzBj0MQ&m=qj1ftHKiv3CNlmZfKy8pDXizXJMaYUExf3q2Ps-s58SxOF%5FbouVmKERZsLxhvRIW&s=AWs%5FjjCIuuiYbJ2Bc0vFUgVpdxHyAv5JvdzH9mnfsQI&e=&ref=boilingcold.com.au) to change your plan or credit card details. ## Posts ### Helium drilling set to start after WA taxpayers shielded from cleanup costs URL: https://www.boilingcold.com.au/helium-drilling-set-to-start-after-wa-taxpayers-shielded-from-cleanup-costs/ Last updated: 2026-08-31T22:00:25.000Z A small UK firm chasing helium, hydrogen and gas in the remote Little Sandy Desert will ensure the WA Government that it has decommissioning costs covered in all eventualities before starting drilling planned for September. London-listed Georgina Energy seeks to drill more than three kilometres underground but must first allay fears that its Hussar well could become a smaller Cliff Head, where financial failures in July left an unfunded clean-up bill for oil facilities of more than $200 million. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/08/Hussar-well-location-map.png) The WA Department of Mines, Petroleum and Exploration (DMPE) would not specifically comment on the Hussar well as arrangements are confidential, but a spokesman said the Government's position was clear: > "Petroleum titleholders are responsible for the decommissioning of oil and gas projects in WA, ... (the) community will not bear the costs," he said. "Where required, operators must procure Public and General Liability insurance, along with an Operators Extra Expense policy covering well control and pollution. "This insurance must be in place before operational activities commence on site." It appears that the WA Government has set down those requirements for Georgina's Australian subsidiary, Westmarket Oil and Gas. *Boiling Cold* asked Georgina Energy what arrangements were in place to ensure that, regardless of possible cost overruns or lack of exploration success, the Hussar site would be decommissioned and restored, and whether the arrangements were independent of the company's financial strength. A company spokeswoman said the drilling would comply with a well management plan approved by DMPE that "covers all the items you have raised.” ## The helium hopeful half a world away Georgina Energy, which has no revenue and just two projects - Hussar in WA and Mt Winter in the NT, where it is also chasing helium, hydrogen and gas - is valued at £34 million ($65 million) by the London stock market. In its most recent financial accounts to January 31 2026, the auditor concluded that "a material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern.” However, since then it has received £7 million ($13 million) from equity raisings to pursue developing Hussar, which it claims has helium and hydrogen with a [potential "in-situ" value](https://wp-georgina-energy-plc-2025.s3.eu-west-2.amazonaws.com/media/2025/08/Georgina-Energy-Presentation-AUGUST-2025-updates-Final-.pdf?ref=boilingcold.com.au) of $US55 billion ($77 billion). Investor interest is likely buoyed by the US-Iran war, which has blocked th Strait of Hormuz, [isolating a third of the world's supply](https://www.abc.net.au/news/2026-05-18/push-for-austraila-to-extract-helium-as-iran-war-impacts-supply/106666710?ref=boilingcold.com.au) of the gas vital for semiconductor manufacture and MRI machines. Even if Georgina finds significant quantities of helium, it could face a huge technical challenge to develop Hussar. A study commissioned by Georgina that "[confirms the potential](https://www.georginaenergy.com/operations/ep513-hussar/?ref=boilingcold.com.au) for a commercial gas field development at Hussar, capable of producing helium, hydrogen, LNG, and argon" came with a caveat: "[no existing process](https://wp-georgina-energy-plc-2025.s3.eu-west-2.amazonaws.com/media/2025/04/Georgina-Energy-Plc-Scoping-Study-Hussar-February-2025.pdf?ref=boilingcold.com.au) operating in this manner is known to the author." [Alcoa refuses to rule out mining the Perth HillsAlcoa raised hopes that the jarrah forest inland from Perth would escape its bauxite strip mining, but the US miner is keeping its options open![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-111c6e5a-6bcc-4a58-8474-f068c51657ee.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/perth-hills-1-1aedc2b1-d812-4105-af34-142b3ea1e513.jpg)](https://www.boilingcold.com.au/alcoa-refuses-to-rule-out-mining-the-perth-hills/) ## Who pays for oil and gas cleanups? In July, the two ASX-listed owners of the Cliff Head platform off the coast of WA's Mid West - Pilot Energy and Triangle Energy - [called in administrators](https://www.boilingcold.com.au/triangle-energy-fails-due-to-200m-oil-field-clean-up-bill-off-wa/), leaving an estimated $200 million decommissioning bill in Commonwealth waters, and more work in WA's jurisdiction of shallow waters and onshore. Prior to the failure, Pilot's accounts, like Georgina before its fundraising, reported "a [material uncertainty](https://www.boilingcold.com.au/significant-doubt-pilot-energy-responsible-for-a-wa-oil-platform-can-survive/) which may cast significant doubt as to whether the group will continue as a going concern" In recent years, numerous small oil and gas companies in Australia have failed, leaving governments responsible for making wells safe, removing equipment and restoring sites. In 2020, the owner of the Northern Endeavour oil vessel in the Timor Sea [went ](https://www.boilingcold.com.au/northern-endeavour-headed-for-liquidation-govt-on-the-hook/)into[ liquidation](https://www.boilingcold.com.au/northern-endeavour-headed-for-liquidation-govt-on-the-hook/), just four years after Woodside sold the vessel to an under-financed one-man company. In response, the Federal Government introduced a levy on offshore petroleum production so the industry, not taxpayers, pays the estimated $1 billion decommissioning bill. Federal Resources Minister Madeleine King has said she would have [no hesitation](https://thewest.com.au/business/energy/jadestones-montara-among-fears-for-wa-oil-platforms-in-junior-hands-after-triangle-pilot-collapse-c-22655251?ref=boilingcold.com.au) in extending the levy to cover Cliff Head. However, it is unclear how the WA Government would fund the clean-up of Cliff Head's onshore and shallow-water facilities within its jurisdiction while maintaining its vow that the community will not pay. ### Rio Tinto moves Winu copper mine forward with public environmental review URL: https://www.boilingcold.com.au/rio-tinto-moves-winu-copper-mine-forward-with-public-environmental-review/ Last updated: 2026-09-06T01:12:50.000Z Rio Tinto has lodged its [detailed proposal](https://www.epa.wa.gov.au/proposals/winu-project?ref=boilingcold.com.au) to develop the Winu copper deposit in the Pilbara, discovered in 2017, with the WA Environmental Protection Authority. The proposed copper and gold mine is a below-the-water-table open pit that will connect to the Great Northern Highway via an 183-kilometre-long access road, over which concentrate will be trucked out for export. Almost 5000 hectares of native vegetation will be cleared, covering critical habitat for six species including the Greater Bilby. The clearing occurs within a 24,000-hectare development envelope, [downsized](https://www.theaustralian.com.au/business/mining-energy/rio-cuts-winu-coppergold-mine-footprint-as-traditional-owners-have-their-say/news-story/8cd339910e69752722069f71c7de0807?ref=boilingcold.com.au) in 2025 from 37,000 hectares after pushback from Traditional Owners. The public can [comment on the proposal](https://consultation.epa.wa.gov.au/open-for-submissions/winu-project-per/?ref=boilingcold.com.au) until 22 October 2026. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/08/Map-Winu-copper-mine-location-in-the-Pilbara-region.png) ****The Winu mine site is remote, even by Pilbara standards.** Map: Rio Tinto environmental submission Rio Tinto majority-owns and operates the project, and Japan's Sumitomo holds [a 30 per cent stake](https://www.riotinto.com/en/operations/anz/western-australia/winu?ref=boilingcold.com.au). For decades, Rio Tinto and BHP have based their business on producing iron ore in WA. However, copper is becoming more important. In recent half-year results, the metal accounted for [more than half](https://www.bhp.com/news/media-centre/releases/2026/08/bhp-results-for-the-full-year-ended-30-june-2026?ref=boilingcold.com.au) of BHP's earnings and [more than a third](https://cdn-rio.dataweavers.io/-/media/content/documents/invest/financial-news-and-performance/results/2026/2026-half-year-results.pdf?rev=a679d7cf629e4f9bb065bee92ddc0f84&ref=boilingcold.com.au) at Rio Tinto. Rio Tinto already mines copper at Kennecott in the USA and Oyu Tolgoi in Mongolia. As well as Winu, it is also pursuing new copper revenue from the Resolution project in the US, which it owns with BHP. S&P Global [forecasts](https://www.spglobal.com/market-intelligence/en/campaigns/copper-mining-trends?ref=boilingcold.com.au) the world will need 42 million tonnes of copper in 2040, 50 per cent more than demand in 2025. --- **CORRECTION** 27 August 2026 - Corrected the size of the initial and final development envelopes. ### Australian Renewable Energy Hub's $50b plan shrinks URL: https://www.boilingcold.com.au/australian-renewable-energy-hubs-50b-plan-shrinks-and-drops-hydrogen/ Last updated: 2026-08-27T08:48:25.000Z The size of Australia's largest renewable energy project has been cut by nearly half, and the remote Pilbara site will no longer produce ammonia from green hydrogen. The Australian Renewable Energy Hub was to incorporate 26 gigawatts of wind and solar power generation over 6,500 square kilometres of WA's North West to make 10 million tonnes of green ammonia a year, at a cost of about $50 billion. On Wednesday, WA's environmental watchdog, the EPA, [posted](https://epa.wa.gov.au/sites/default/files/Termination%5Fnotice/Notice%20to%20terminate%20assessment%5F2.pdf?ref=boilingcold.com.au) that it had terminated its assessment of the project at the request of the proponent [InterContinental Energy](https://intercontinentalenergy.com/portfolio-of-projects/?ref=boilingcold.com.au) (ICE). An ICE spokeswoman said the project's initial phases would continue under an [earlier approval](https://epa.wa.gov.au/proposals/asian-renewable-energy-hub?ref=boilingcold.com.au) for a 15-gigawatt power project, and it may seek approval for a future expansion. She said the now-dumped referral "proposed a number of additional elements, including desalination and green hydrogen and ammonia production infrastructure, alternative export arrangements, an expanded solar footprint and a company town." ![The Australian Renewable Energy Hub is located between Port Hedland and Broome](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/08/image.png) ****Hub location between Port Hedland and Broome** *. Source: AREH* "ICE has requested termination of that unassessed referral as an administrative clean-up, as no assessment of those proposed revisions is being progressed under that referral," she said. ICE lodged its earlier 15-gigawatt plan with the EPA in 2018, and the WA Government approved it in 2020\. It envisaged exporting power to Indonesia and Singapore via a subsea cable, but dropped that option some years ago. For over a decade, ICE has sought ways to monetise its exclusive rights to develop renewable energy in the project area (see timeline below). In that time, blue-chip partners Vestas, Macquarie and BP have come and gone, and early investor CWP Global exited in 2025. The initial concept to power South East Asia was replaced by making ammonia from green hydrogen at the remote site and loading it onto ships through a purpose-built marine facility. [Alcoa refuses to rule out mining the Perth HillsAlcoa raised hopes that the jarrah forest inland from Perth would escape its bauxite strip mining, but the US miner is keeping its options open![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-26ab241c-e18c-474e-8415-2bd5b1e9ca9f.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/perth-hills-1-e6570f1b-70eb-412d-96f0-429626b1fa7d.jpg)](https://www.boilingcold.com.au/alcoa-refuses-to-rule-out-mining-the-perth-hills/) The company spokeswoman said the project strategy subsequently evolved toward supplying renewable electricity and hydrogen to support industry in the Pilbara, including green iron, mining decarbonisation and critical minerals processing. In 2023, AREH was [allocated land](https://www.bp.com/en%5Fau/australia/home/media/press-releases/wa-land-allocation-welcomed.html?ref=boilingcold.com.au) at the Boodarie Strategic Industrial Area near Port Hedland "with a plan to supply renewable power and green hydrogen to miners and industrial users in the Pilbara, and for export to major international markets." To succeed, the project needs the [Pilbara Green Link](https://www.ghd.com/en/about-ghd/news/03-07-2024-ghd-to-deliver-preliminary-engineering-for-pilbara-green-link?ref=boilingcold.com.au) to connect AREH and the Pilbara power network with 550km of high-voltage 330kV transmission lines. ## Hydrogen retreat The news of AREH being downsized comes days after Woodside canned its commitment to [invest $US5 billion in clean energy](https://www.theguardian.com/australia-news/2026/aug/25/woodside-scraps-emissions-clean-energy-targets-australia?ref=boilingcold.com.au) by 2030\. The move will further reduce the likelihood of it building its [PerthH2 plant](https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=CAEShwEB6zswFTTe5CmEK73%5FfyMIEOlzdDmd48mLCMLtdx8bRMLRrHVtVHB-HJoADLGR%5F%5FgkhTol6KCQy%5Fa79Tav94yOcNR7KipSbQVBs-R%5FsF7jbraS-mlnhV5--5IninrCYkm1II4LdU9tR8mO7WLSldrEhoDWV431bIkT7FTLqbGs6SH60KtCvQs&ved=2ahUKEwiKgeqA6r-WAxUPTGwGHaqvKt4QFnoECBgQAQ&uoh=2&usg=AOvVaw0vblbjluQU%5FoPKsWkv-FOZ) to export lower-carbon blue hydrogen. Woodside did invest $US2.35 billion in the Beaumont blue ammonia project in Texas. However, the future of the investment to produce lower-carbon blue ammonia by using carbon storage is now under review. In 2025, fellow WA company Fortescue [axed two green hydrogen projects](https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://www.theguardian.com/environment/2025/jul/25/fortescue-cancels-green-hydrogen-projects-trump-us-policy-renewable-energy&ved=2ahUKEwjZ9pLbm76WAxVUcGwGHRQQCXQQFnoECDgQAQ&usg=AOvVaw1IszkF5Qp113pHzj6FNX4m) and [slashed jobs](https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://www.abc.net.au/news/2025-05-14/fortescue-green-hydrogen-job-losses/105291962&ved=2ahUKEwjZ9pLbm76WAxVUcGwGHRQQCXQQFnoECDcQAQ&usg=AOvVaw2wQArOxIiutpYiITHo-35u) associated with the clean fuel. ## Government dollars for hydrogen plan In January, the Australian Renewable Energy Agency (ARENA) [backed the AREH project](https://arena.gov.au/projects/intercontinental-energy-decarbonising-the-pilbara-and-beyond/?ref=boilingcold.com.au) with $22 million towards a $95 million study focused on renewable hydrogen production in the Pilbara. ICE said the study would advance the project's aim to produce [large volumes of low-cost green hydrogen](https://assets.ctfassets.net/8jlz82vr8e01/7KL1Lt0wqnC1O6NgA1ulWl/c365ae678b7ccabdada4a2b3809e45ce/ARENA%5F%5F%5FAREH%5FPress%5FRelease%5FFinal%5F27%5FJan.pdf?ref=boilingcold.com.au) to underpin efforts to make green iron in the Pilbara. An ARENA spokeswoman said the pre-FEED study will assess the technical, commercial, environmental and stakeholder requirements associated with potential renewable hydrogen development at Boodarie to support future green iron production [![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/10/CTA-industry-energy-climate.png)](https://www.boilingcold.com.au/support/) --- ## Timeline of an ever-expanding green dream *2014* \- Planning begins *2016* \- WA Government awards exclusive rights to develop a renewable energy project over a vast area between Port Hedland and Broome. *2017* \- InterContinental Energy, CWP and wind turbine manufacturer Vestas [launch the Asian Renewable Energy Hub](https://www.perthnow.com.au/news/business/energy/asian-renewable-energy-hub-plans-132b-pilbara-renewables-plug-in-to-light-up-south-east-asia-ng-b88676878z?ref=boilingcold.com.au) to supply **five gigawatts** of wind and solar electrical power to Indonesia through subsea cables at a cost of **$13 billion.** A final investment decision (FID) for the Asian Renewable Energy Hub was planned for **2020**. *2018* \- [Planned capacity increased](https://www.businesstimes.com.sg/companies-markets/energy-commodities/macquarie-joins-huge-australian-solar-wind-project?ref=boilingcold.com.au) to **11 gigawatts** to provide power to the Pilbara as well as Indonesia. Macquarie joined as an investor at a cost of **$22 billion**. FID planned for **2021**. *May 2020* \- [WA EPA approves](https://www.boilingcold.com.au/pilbara-wind-solar-farm-gets-environmental-tick/) **$22 billion** plans for **15 gigawatts** of generation. FID planned for **2025**. *October 2020* \- AREH switches to **26 gigawatts** of renewable generation to produce [10 million tonnes a year of green ammonia](https://www.boilingcold.com.au/pilbara-energy-hub-targets-10m-tonnes-a-year-of-green-ammonia/) for export at a cost of **$50 billion**. Project to span 6,500 square kilometres. FID still planned for **2025**. Revised proposal submitted to the WA EPA. *2022* \- BP [buys a 40 per cent stake](https://www.bp.com/en%5Fau/australia/home/media/press-releases/bp-to-lead-and-operate-one-of-the-worlds-largest-renewables-and-green-hydrogen-energy-hubs-based-in-western-australia.html?ref=boilingcold.com.au) in AREH and assumes operatorship. Vestas no longer involved. Project renamed the Australian Renewable Energy Hub. 2023 - AREH [allocated land](https://www.bp.com/en%5Fau/australia/home/media/press-releases/wa-land-allocation-welcomed.html?ref=boilingcold.com.au) at the Boodarie Strategic Industrial Area "with a plan to supply renewable power and green hydrogen to miners and industrial users in the Pilbara, and for export to major international markets." *2024* \- [Macquarie sells out](https://www.watoday.com.au/business/companies/macquarie-exits-bp-s-55-billion-wa-green-energy-project-20240226-p5f7y6.html?ref=boilingcold.com.au) to BP. *2025* \- [BP pulls out](https://www.boilingcold.com.au/bp-pulls-out-of-mega-scale-pilbara-hydrogen-project/). CWP Global also exits. ICE back in charge. *January 2026* \- ARENA contributes $22 million to investigate hydrogen production. *May 2026* – ICE [adds data centres](https://intercontinentalenergy.com/wp-content/uploads/2026/05/UK-FINAL-Node-Data-Centre-Press-Release-12-May-2026-rev-for-website.pdf?ref=boilingcold.com.au) to its plans to use power from the AREH. *August 2026* \- ICE stops assessment of 26-gigawatt project, reverts to the **15-gigawatt** plan approved in 2020. --- **UPDATE** 27 August 2025 - Following clarification from ICE, added: CWP Global is no longer an investor in AREH; power for data centres is being pursued; ICE may apply for approval to expand to 26 gigawatts in the future; and while ammonia will not be produced on the project site, this could occur at Boodarie. ### Woodside tips in cash as Labor fights to get its employee into parliament URL: https://www.boilingcold.com.au/woodside-tips-in-cash-as-labor-fights-to-get-its-employee-into-parliament/ Last updated: 2026-08-19T06:54:07.000Z ANALYSIS Oil and gas giant Woodside's $12,100 donation to WA Labor last week is part of a $1.2 million torrent of corporate cash flowing in since May as the party fights to see off One Nation in the formerly safe seat of Secret Harbour. Many big names in corporate WA feature among the top donors, but a company few have heard of leads the pack. WA Labor has used its status as the governing party at both state and Federal levels, and its massive number of elected members on the public payroll, to capture 78 per cent of all WA political contributions since May 1, according to [disclosures](https://disclosures.elections.wa.gov.au/public-dashboard/?ref=boilingcold.com.au) published by the WA Electoral Commission. The August 29 by-election follows the resignation of Navy and SAS veteran Paul Papalia, announced on July 6, after almost two decades in Parliament. In his place Labor has offered Georgia Tree, a long-term Labor Party apparatchik living more than 60 km from the electorate, who recently left the office of gas exporter-friendly Federal Resources Minister Madeleine King to join Woodside. [Exit polling](https://thewest.com.au/politics/state-politics/labor-on-the-back-foot-one-nation-defends-lack-of-policy-as-secret-harbour-by-election-gets-underway-c-22733170?ref=boilingcold.com.au) of early voters this week suggested One Nation could win the seat, justifying Labor's clearly expensive campaign, but where is the money coming from? As there was significant speculation that Papalia would depart well ahead of the announcement, *Boiling Cold* has analysed WA political contributions since May 1 to gauge the funds parties are raising ahead of the by-election. Donations to Perth Trades Hall were treated as donations to Labor. Most of Labor's funds have come from gifts. It also has the unique revenue of affiliation fees from unions and huge inflows from its compulsory party levy on its elected members in WA. In the most recent state and Federal elections, Labor gained 78 of the 124 seats in the WA Parliament and for the state's senators and representatives in Canberra. A levy on the income taxpayers pay these members has yielded $206,000 in just 15 weeks. ## Pay to say - revenue from access to ministers The big money, however, is from significant gifts - largely donated by companies and industry lobby groups. All political parties raise money from events where companies pay to attend for the opportunity to have face time with senior elected members. The technique favours governing parties that can offer up Ministers who make decisions that may affect those companies. This practise, while unsavoury to many voters, is legal. *Boiling Cold* does not suggest the Labor Party or any of its financial supporters have done anything that is not in accordance with the law. Parties must disclose, as a gift, the profit they make from each attendee at a fundraising event by deducting the cost from the donation. Disclosures since May reveal groups of disclosed gifts of identical but not round amounts that are almost certainly from these events. It appears almost half the money Labour has raised since May 1 is from these cash-for-access events. The attendance fees are likely to keep flowing, with [a report](https://thewest.com.au/politics/state-politics/anthony-albanese-headlines-six-day-wa-fundraising-blitz-aiming-to-fill-labors-pockets-with-more-than-1m-c-22728410?ref=boilingcold.com.au) that Prime Minister Anthony Albanese will attend fundraising events when he travels to Perth next week. The appetite to pay up can be explained by one attendee not authorised to talk to the media, who said it was the only way for their organisation to get its position put to the relevant ministers. Of course, the expense shuts small companies, community groups and most non-government organisations out of the conversation. [![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/10/CTA-industry-energy-climate.png)](https://www.boilingcold.com.au/support/) ## Who is paying WA Labor? The surprise top donor since May 1 is government affairs consultancy [Anacta Strategies](https://www.anacta.com.au/?ref=boilingcold.com.au), which has made 12 donations in 15 weeks, totalling $81,502. Anacta, like its two competitors on the top donor list, has strong connections to Labor. An Anacta spokesman said none of the money it donated was on behalf of clients. **UPDATE** 19 August, 2:45 PM: Added Anacta response ### Health and safety failure INPEX reaps $1.5b half-year profit from Ichthys LNG URL: https://www.boilingcold.com.au/health-and-safety-failure-inpex-reaps-1-5b-half-year-profit-from-ichthys-lng/ Last updated: 2026-08-10T09:21:37.000Z ANALYSIS On Friday, INPEX released its [half-year results](https://www.inpex.com/english/ir/library/upload/result20260807.pdf?ref=boilingcold.com.au), including $1.93 billion of revenue from its 68 per cent stake in the Ichthys LNG project for a profit of $1.54 billion. > "Revenue increased by ¥32.1 billion, or 17.5%, to ¥215.8 billion due to an increase in sales price of crude oil. Profit attributable to owners of parent increased by ¥34.0 billion, or 24.5%, to ¥173.0 billion." That is an eye-watering 80c in every dollar of sales going straight to the bottom line at a rate of more than $8 million a day, courtesy of the blocked Strait of Hormuz. This is the same company that in the past year : - has been prosecuted by the NT Government for [underreporting dangerous benzene and toluene emissions](https://www.abc.net.au/news/2026-08-05/nt-epa-prosecutes-gas-company-inpex/106998434?ref=boilingcold.com.au) from its Ichthys LNG plant near Darwin by a [factor of more than 100](https://www.abc.net.au/news/2025-10-29/federal-government-investigates-gas-giant-inpex-oil-spill/105939714?ref=boilingcold.com.au) - spilled [36,000 litres of oil](https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://www.capitalbrief.com/briefing/inpex-admits-oil-spill-at-darwin-alongside-release-of-toxic-emissions-data-ce3f0a04-3b76-4c95-8722-9a97c6620826/&ved=2ahUKEwirpfO0zJWWAxUka2wGHe33OK4QFnoECB8QAQ&usg=AOvVaw2fHz4qLF2Raaeh77oVZYcI) into Darwin Harbour - [bypassed equipment](https://www.boilingcold.com.au/inpex-safety-shortcuts-exposed-ichthys-lng-workers-and-ocean-to-mercury/) to handle mercury at its offshore facilities, exposing workers to the toxic metal Before these debacles, its chief executive, Takayuki Ueda, [called for less regulation](https://www.boilingcold.com.au/inpex-chief-executive-expects-australias-help-to-blow-the-paris-agreement/) in Australia. The Japanese company has the financial capacity to operate Ichthys safely, but instead it is endangering the environment and the health of Australian workers and residents. INPEX's half-year results indicate that the entire Ichthys project could contribute $1.4 billion to Australia in 2026 if the much-discussed [25 per cent gas tax](https://www.theguardian.com/business/grogonomics/2026/jul/23/gas-exports-tax-pressure-growing-inside-labor-alp-conference?ref=boilingcold.com.au) was implemented. [![Want energy and climate news to hold gas giants to account? Support Boiling Cold.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/07/CTA-donate-big-gas-1.png)](https://www.boilingcold.com.au/support/) ## ### Alcoa refuses to rule out mining the Perth Hills URL: https://www.boilingcold.com.au/alcoa-refuses-to-rule-out-mining-the-perth-hills/ Last updated: 2026-08-31T02:14:03.000Z In June, residents of the Perth Hills welcomed news that the jarrah forest surrounding them would not be strip-mined for bauxite - but it was a false hope. A letter from Alcoa ([below](#alcoa-letter-to-adam-hort)) to the Liberal member for Kalamunda, Adam Hort, in May appeared on a quick read to offer reassurance that the miner would spare the forest on Perth's south-east fringe, where many people have moved to enjoy nature. > "I have now received written confirmation from Alcoa that ... in plain English, that means no drilling, no exploration and no mining in our part of the Perth Hills," Hort told his constituents in a [Facebook post](https://www.facebook.com/share/p/1MmpgroAac/). However, Alcoa, which plans to mine the jarrah forest [for another 40 years](https://www.boilingcold.com.au/western-australia-drives-alcoa-to-buy-south32-aluminium-business/), did not write the letter in plain English. A closer reading, a legal perspective, and enquiries with Alcoa all show the miner has left its options open to extract bauxite from all of its lease, which extends north past Mundaring and covers almost all of the Perth Hills. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/06/BNAA---Perth-Hills-Alcoa-Expansion.png) ****Almost all of the Perth Hills are within Alcoa's mining lease (pink boundary).** Map: Bibbul Ngarma Aboriginal Association ## Mining heads north towards Perth Alcoa has applications before the WA and Federal Governments to expand its clearing of jarrah forest to the north side of Serpentine Dam - a major water source for Perth that is [already threatened by Alcoa's clearing](https://www.theguardian.com/australia-news/2025/aug/20/perth-water-supply-risk-alcoa-bauxite-mining?ref=boilingcold.com.au). The US$12 billion company, which is allowed to drill up to [105,000 exploration holes a year](https://www.legislation.wa.gov.au/legislation/prod/filestore.nsf/FileURL/mrdoc%5F46761.htm/$FILE/Environmental%20Protection%20%28Darling%20Range%20Bauxite%20Mining%20Proposals%29%20Exemption%20Order%202023%20-%20%5B00-00-00%5D.html?OpenElement&ref=boilingcold.com.au#:~:text=must%20not%20bore%20more%20than%20105%C2%A0000%20drill%20holes%20in%20any%20calendar%20year), also wanted to investigate farther north in search of the next forested area to strip mine. Moving closer to more well-populated areas full of residents who love the forest that surrounds them sparked a furore: in August 2025, five normally conservative local governments, from Pinjarra north to Mundaring, passed resolutions ([below](#a-local-revolt)) opposing Alcoa. Four councils voted against any expansion of strip mining. The Shire of Murray - where Alcoa's Pinjarra refinery is a major employer - opposed it unless the miner accepted 21 pages of detailed conditions it had developed to reduce harm to the environment and water supply. In November, Alcoa moved to calm concerns by announcing it would [remove exploration drilling](https://www.alcoa.com/australia/en/news/releases?id=2025/11/alcoa-withdraws-perth-hills-exploration-plans&year=y2025&ref=boilingcold.com.au) planned for forests in the Armadale, Kalamunda, Mundaring, Beverley and York local government areas from its plans for state government approval out to 2029. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/07/Exploration-Disturbance-Footprint-Shire-Map_2025.jpg) ****Alcoa removed northern exploration plans (grey) from its near-term plans but it could restart as early as 2031.** Map: Alcoa Alcoa probably hoped the announcement would placate at least one front in one of WA's biggest-ever environmental battles. However, many Hills residents were not convinced. In June, Hort, in a [Facebook post](https://www.facebook.com/share/p/1MmpgroAac/), said to his constituents, "many of you rightly raised concerns that this may only be a short-term decision, and that Alcoa could look to bring drilling back in future plans." Hort told *Boiling Cold* that he then discussed these concerns with the miner. > "Alcoa confirmed that drilling, exploration and mining in the City of Kalamunda and Shire of Mundaring would not form part of their plans. I asked them to put that position in writing so residents could see for themselves," Hort said. "If Alcoa ever sought to reverse course or bring drilling, exploration or mining back into the Kalamunda electorate, I would be the first person on the front line fighting against it." However, Alcoa never changed course; it just delayed exploration drilling a few years. ## 1 - The fine print Alcoa is engaged in three environmental approval processes (maps below) to support its dream to stay in WA's jarrah forest until the 2060s: 1. Some areas in its immediate rolling 5-year mine management plans (MMP) are under review by the WA Environmental Protection Authority (EPA). 2. An expansion of its northern Huntly mine, which feeds Alcoa's Pinjarra refinery and threatens Perth's water supply, into three new areas is under review by the EPA and the Federal Government. 3. A strategic assessment designed to ease the path for Federal approvals to 2045 over large unmined areas around both the Huntly and Willowdale mines. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/07/Current-Approval-Areas.jpg) ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/07/Proposed-Future-Mine-Regions-1.jpg) ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/07/Strategic-Assessment-of-Current-and-Future-Mining-Map.jpg) ****Alcoa's 3 approvals: 1 current mining (yellow), 2 near-term expansion at Huntly (blue), 3 long-term expansion (grey).** Maps: Alcoa Alcoa's letter to Hort was full of reassuring statements for his Kalaumunda constituents: - Its 2023-2027 mining plan under assessment by the EPA had been [amended](https://epa.wa.gov.au/sites/default/files/S43A/s.%2043A%20-%20130426.pdf?ref=boilingcold.com.au) to remove the northern exploration that triggered a backlash in the Perth Hills. "This amendment formalises the removal of proposed low-impact exploration drilling in the northern parts of our mineral lease." - Alcoa also removed these areas from its 2025-2029 plan currently before the WA Government for approval. - "Alcoa has no plans to undertake exploratory drilling in the Kalamunda electorate, including ... during the 2025-2029 MMP or 2026-2030 MMP period." - And longer term, the "Strategic Assessment will cover current operational areas, as well as potential future mine areas, across the Huntly and Willowdale mines through to 2045 and does not include activity in the Shire of Mundaring or Cities of Kalamunda and Armadale." However, the language of Alcoa's letter does not preclude it from adding areas from the northern portion of its lease back into its 2027-2031 MMP. Also, the Strategic Assessment includes "potential future mine areas", but not explicitly all potential future mine areas. So, has Alcoa given up ever mining closer to Perth? ## 2 - The legal check Does the boundary of the Federal Strategic Assessment limit the extent of Alcoa's future trip mining? Ruby Hamilton, a special counsel with the Environmental Defenders' Office, said the Federal Strategic Assessment has a "landscape-scale" scope. "In practice, Alcoa stands to gain a decades-long approval from the Federal Government without the need to play by everyone else’s rules and front up to the government and the community when it wants to expand or extend its mining operations," Hamilton said. However, she said there is nothing stopping Alcoa from applying in the future to mine outside the strategic assessment area. > "The existence of the current strategic assessment does not provide any limits on Alcoa’s ability to seek further approvals for mining outside the strategic assessment area," Hamilton said. ## 3 - Alcoa's chance to clarify Maybe Alcoa just did not word its letter to Hort carefully enough? *Boiling Cold* went back and forth with the miner three times ([see below](#searching-for-a-straight-answer)), seeking clarity on its plans for the Perth Hills. Alcoa's initial response avoided the crucial point - would Alcoa rule out changing its plans? Alcoa was then asked if it would be fair for the story to lead with "*Alcoa refuses to rule out mining in Perth's hills.”* Given the opportunity to rebut this line of reporting, the miner's spokeswoman merely said: "We have nothing further to add." Alcoa's small concessiion to delay drilling in the Perth Hills by a few years has not dampened opposition. Francesca Flynn, executive director of Bibbul Ngarma Aboriginal Association (BNAA), a Noongar-led environmental group based in the Perth Hills, said Alcoa's letter to Hort gave the impression that it would never operate in Mundaring, Kalamunda or Armadale. "But Alcoa has made misleading claims before, so it is difficult to take these assurances at face value," she said. [Alcoa lied about jarrah forest rehabilitation: ad watchdogThe Ad Standards decision has demolished a key plank of the US miner’s expensive campaign to win public support for expanded mining in WA.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-4cbef3ef-aec2-439d-b527-c25cc71d604e.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Alcoa-forest-rehabilitation-ad-1-a8a09273-ef7f-4fce-835b-b833a172174a.jpeg)](https://www.boilingcold.com.au/alcoa-lied-about-jarrah-forest-rehabilitation-advertising-watchdog/) BNAA chair Walter McGuire said successive WA governments have for decades allowed Alcoa to destroy Noongar land, bypassing the community’s rights to safe drinking water. > "Water is life, and without it, we are nothing," McGuire said. WA Forests Alliance director Jess Boyce said Alcoa is attempting to appease the public by vaguely alluding to scrapping mining exploration without making any substantial commitment. "After fierce community opposition in the Perth hills, it is obvious that Alcoa is desperately trying to claw back some social license," she said. "This is an American-owned company that is acutely aware of the fact that a vast majority of Western Australians would like to see it not just withdraw from Mundaring and Kalamunda, but the whole Darling Range." Mundaring Shire President Paige McNeil community victories against international mining giants are rare. "Alcoa’s announcement to remove the northern exploration from their 2025-29 MMP gives our community time to build a continuing case for the permanent protection of our jarrah forest," she said. "The Shire of Mundaring’s position remains firm, the Mundaring Weir Catchment area must be protected in perpetuity, and we will continue to work to achieve this outcome, however long it takes." [![CTA Image](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/02/DJI_0449-Myara-copy.JPG)](#/portal/signup) **Boiling Cold*'s unrivalled [reporting on Alcoa](https://www.boilingcold.com.au/tag/alcoa/) is free for all to read, maximising impact and accountability. I need your backing to keep covering stories that would otherwise go unreported. [Support independent journalism in WA ](#/portal/signup) ## Background: ## Alcoa letter to Adam Hort ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/06/aloca-letter-to-adam-hort.JPG) --- ## A local revolt ### five councils oppose Alcoa **City of Armadale -** [**11 August 2025**](https://assets.ctfassets.net/p4i5hqtl4d48/7qnSRS6LFAvOCviXGfGXVB/16458171ab614cd84c584c0ffe24fea3/2025-08-11%5F-%5FMinutes%5F-%5FOrdinary%5FMeeting%5Fof%5FCouncil.pdf?ref=boilingcold.com.au) **\- carried unanimously** *"Objects to all Alcoa’s bauxite mining activities, particularly exploratory drilling and all mining operations on the Darling Range, including in and the surrounds of the City of Armadale, on the grounds that such activity poses significant environmental and sustainability impacts."* **Shire of Mundaring -** [**12 August 2025** ](https://mundaring.resolve.red/web/Player.aspx?id=25&key=-1&mod=-1&mk=-1&nov=0&ref=boilingcold.com.au)**\- carried unanimously** *"Opposes any proposed expansion of the ALCOA exploration and mining operations into the Mundaring Weir Catchment and Northern Jarrah Forest because of the severe damage to the environment and loss of habitat for local native species that would result from clearing access for exploration and potential future mining operations."* **City of Kalamunda -** [**12 August 2025**](https://www.kalamunda.wa.gov.au/docs/default-source/agenda-and-minutes/2025/minutes---special-council-meeting---12-august-2025.pdf?sfvrsn=41b662ea%5F2&ref=boilingcold.com.au) **\- carried unanimously** *"Objects to all Alcoa’s bauxite mining activities, particularly exploratory drilling and all mining operations on the Darling Range, including in and the surrounds of the City of Kalamunda, on the grounds that such activity poses a significant negative impact and risk to the long-term character and amenity of the Perth Hills region."* **Shire of Serpentine Jarrahdale -** [**18 August 2025**](https://civicclerkau.blob.core.windows.net/stream/SJSHIRE/4d6903c400.pdf?sv=2015-12-11&sr=b&sig=EIoZxOGmcqJkKsD7isc24PeEV%2Bx4H%2FTol9N%2BJaYIaik%3D&st=2026-06-29T03%3A03%3A00Z&se=2026-06-29T03%3A09%3A00Z&sp=r&rscc=no-cache&rsct=application%2Fpdf&rscd=inline%3B%20filename%3D%224d6903c400.pdf%22&ref=boilingcold.com.au) **\- resolved** *"Alcoa’s Pinjarra Alumina Refinery Revised Proposal will have significant consequences for the Shire, its environment, residents, visitors and economy.* *The proposal provides little, if any, benefit to the residents of Jarrahdale, the broader community of Serpentine Jarrahdale, or the local government - there are no economic, social, environmental or any other real benefits.* *The Shire is opposed to the proposal, which will have unacceptable, long-term and likely irreversible impacts on flora, fauna, the local economy and the tourism sector."* **Shire of Murray -** [**28 August 2025**](https://www.murray.wa.gov.au/council-meetings/ordinary-council-meeting/ordinary-council-meeting/155/documents/ordinary-council-meeting-confirmed-minutes-thursday-28-august-2025.pdf?ref=boilingcold.com.au) **\- carried unanimously** *"Does not support the two Alcoa Public Environmental Reviews until the following recommendations are addressed" .. followed by 21 pages of detailed recommendations.* --- ## Searching for a straight answer Correspondence between *Boilng Cold* and Alcoa seeking to confirm if Alcoa had committed to any restraint on its activities beyond the next few years: Boiling Cold *Is it correct to say Alcoa has committed to NEVER mine any area of its lease except for within the Strategic Assessment Area Boundary or the proposed Myara North and Holyoake mine regions under separate assessment?* *The material (letter to Hort and details of* [*Strategic Assessment*](https://www.alcoa.com/australia/en/sustainability/environmental-assessments/pdfs/strategic-assessment-factsheet.pdf?ref=boilingcold.com.au)*) seems to say that, but I just want to check I haven't missed something.* Alcoa *The current strategic assessment area, coupled with the Myara North and Holyoake development envelopes reflect the planned extent of our potential operations across the Huntly and Willowdale mines to 2045\.* *Subject to future approvals, including where relevant, under the WA EP Act, only part of the area within the Strategic Assessment would be mined or disturbed.* Boiling Cold *I understand that there is no legal reason why Alcoa cannot, in the future, seek federal approval to mine outside the strategic assessment area.* *I will confirm that with lawyers who understand the act.* *If that is correct, it will be fair for me to lead with something along the lines of “Alcoa refuses to rule out mining in Perth's hills.”* *For full transparency, just telling where your non-response is pushing the story.* Alcoa *We have nothing further to add.* Boiling Cold *I‘m hoping you can respond to this more focused question:* *Will Alcoa rule out seeking to operate in the Shire of Mundaring or the Cities of Kalamunda and Armadale in the future?* Alcoa *Thanks for the opportunity to clarify, but we have nothing more to add at this time.* ### The way Australia taxes gas production is stuck in the past URL: https://www.boilingcold.com.au/the-way-australia-taxes-gas-production-is-stuck-in-the-past/ Last updated: 2026-07-23T02:41:22.000Z ANALYSIS span>[Jason Nassios](https://theconversation.com/profiles/jason-nassios-318488?ref=boilingcold.com.au), *[Victoria University](https://theconversation.com/institutions/victoria-university-1175?ref=boilingcold.com.au)* Australian liquefied natural gas (LNG) exports peaked at just over [A$90 billion](https://www.industry.gov.au/sites/default/files/2025-12/resources-and-energy-quarterly-december-2025-historical-data.xlsx?ref=boilingcold.com.au) in 2022-23 following Russia’s invasion of Ukraine, easing to $65 billion in 2024-25\. That placed Australia third in value of LNG exports, behind [the United States and Qatar](https://www.ga.gov.au/aecr2025/production-and-trade?ref=boilingcold.com.au). More recently, the US-Iran war has delivered a [$6 billion boost](https://www.theguardian.com/australia-news/2026/jul/03/australia-gas-tax-lng-exporters-predicted-windfall?ref=boilingcold.com.au) to Australian LNG exports for the last fiscal year, with 2026-27 forecasts also revised upward by $21 billion, according to [government estimates](https://www.industry.gov.au/sites/default/files/2026-07/resources-and-energy-quarterly-june-2026.pdf?ref=boilingcold.com.au). That’s why many Australians have been surprised to learn that our national gas tax, the Petroleum Resource Rent Tax ([PRRT](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/petroleum-resource-rent-tax/prrt-concepts?ref=boilingcold.com.au)), raises only modest revenues each year: about [$2.2 billion](https://www.pbo.gov.au/sites/default/files/2025-12/2025-26%20MYEFO%20Historical%20Fiscal%20Data.xlsx?ref=boilingcold.com.au) at its peak, before easing recently to about $1.5 billion. Right across the political spectrum, pressure for a tax on gas exports [is mounting](https://www.smh.com.au/politics/federal/gas-giants-to-reap-18-billion-war-windfall-reviving-export-tax-calls-20260702-p60c11.html?ref=boilingcold.com.au). This week, the Labor Party’s national conference will [reportedly seek](https://www.afr.com/politics/federal/gas-tax-plans-to-be-enshrined-in-alp-policy-platform-20260717-p60g2s?ref=boilingcold.com.au) “a fairer return” on Australia’s natural resources – although on Wednesday the federal government once again [ruled out](https://www.afr.com/politics/federal/prime-minister-stamps-out-chances-of-a-gas-tax-any-time-soon-20260722-p60hhu?ref=boilingcold.com.au) any imminent change on a gas tax. Former [Treasury Secretary Ken Henry](https://www.aph.gov.au/Parliamentary%5FBusiness/Committees/Senate/Taxation%5Fof%5FGas%5FResources/TaxationofGasResources/Report/Australian%5FGreens%5FAdditional%5FComments?ref=boilingcold.com.au) has been particularly blunt in recent months, urging the government to “just do it” when it comes to reform. The question is not whether gas companies pay tax. They do, particularly via corporate income tax, which peaked at $12 billion in 2022-23\. It has since eased to [$10.4 billion](https://data.gov.au/data/dataset/faea4485-f407-457d-97f8-3f0822ccd654/resource/3e87173b-2d23-4ae1-bf6d-2ae1897e84e3/download/ts24company05keyitembyindustrybyyear.xlsx?ref=boilingcold.com.au). But is the PRRT, which was specifically designed to tax oil and gas, suited to the modern LNG industry? ## What does the PRRT actually tax? A common misunderstanding is the PRRT taxes LNG exports. It does not. The tax [applies](https://treasury.gov.au/review/review-of-the-petroleum-resource-rent-tax/final-report?ref=boilingcold.com.au) only to the “[upstream](https://www.investopedia.com/ask/answers/060215/what-difference-between-upstream-and-downstream-oil-and-gas-operations.asp?ref=boilingcold.com.au)” stage of production – extracting the oil and gas from the ground. The tax does not apply to the “downstream” or processing activities – liquefaction, shipping and export – which transform gas into LNG for delivery to overseas markets. When the tax was introduced in [1987](https://emersoneconomics.com.au/analysis/prrt-reforms-offer-a-fairer-return-to-taxpayers-and-stability-for-the-industry?ref=boilingcold.com.au), this design made a lot of sense. Australia’s offshore petroleum industry was dominated by oil and pipeline gas projects, which need a lot less processing after extraction. Identifying the value of the resource was straightforward. Modern liquefied natural gas projects look quite different. They combine offshore extraction, pipelines, liquefaction plants and export facilities, often within a single integrated company. This raises a difficult question: how much of a project’s revenue should be attributed to the gas extracted at the wellhead? ## Problem 1: How much is that gas worth? To work out the value of the extracted gas, Australia’s PRRT uses gas “[transfer pricing rules](https://treasury.gov.au/sites/default/files/2023-05/p2023-388153.pdf?ref=boilingcold.com.au)”. This provides a framework companies can use to split a project’s revenue between the upstream and downstream activities. The resulting figure becomes [the basis for the PRRT](https://www.ato.gov.au/businesses-and-organisations/gst-excise-and-indirect-taxes/petroleum-resource-rent-tax/prrt-concepts?ref=boilingcold.com.au). The challenge is that this calculation is inherently complex. If only part of the total revenue is allocated to the upstream stage, then only part of the project’s value is taxable by the PRRT. The result is that large gas export profits do not automatically translate into large PRRT payments. ## Problem 2: The deductions go on … and on The second issue is easier to understand. LNG projects cost [tens of billions of dollars](https://www.afr.com/companies/energy/chevron-gorgon-partners-give-green-light-for-3b-gas-investment-20251201-p5njwu?ref=boilingcold.com.au) to build. Instead of the government providing a refund to a company when a project makes a loss, like the tax system that [operates in Norway](https://www.norskpetroleum.no/en/economy/petroleum-tax/?ref=boilingcold.com.au), the PRRT allows companies to use the losses from one year to offset tax payable in future years. Importantly, once the loss is made, its value does not remain fixed, and instead grows over time. The rate at which these losses grow is known as the “uplift rate”. Imagine a company spends $10 billion developing a project. If production does not start for many years, this initial $10 billion loss can grow at 10% a year. This means a company can generate strong export revenues and substantial profits, while still paying little PRRT, because it is working through a large stock of past losses. My recent [working paper](https://www.copsmodels.com/ftp/workpapr/G-372.pdf?ref=boilingcold.com.au) argues that these two features – the narrow upstream tax base and the treatment of past losses – help explain why PRRT revenues have remained modest even during periods of exceptionally high gas prices. [INPEX shortcuts exposed Ichthys workers and ocean to mercuryINPEX bypassed equipment and ignored procedures agreed with the regulator that together were meant to keep the toxic metal contained.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-def0694f-d985-427c-bb47-b31a1f8cdf99.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/cpf-from-website-02d01451-4b37-416a-bbe9-c7df9254dd8c.jpg)](https://www.boilingcold.com.au/inpex-safety-shortcuts-exposed-ichthys-lng-workers-and-ocean-to-mercury/) ## How do other countries tax resources? Norway is often held up as a benchmark in resource taxation, although the comparison to Australia is not perfect. Norwegian gas is largely exported by pipeline, which has cost advantages compared to Australia’s reliance on expensive liquefaction facilities. Nevertheless, Norway captures a much larger share of the value of its resources through a combination of high petroleum taxes and direct government ownership. In 2023, the most recent year we have complete data for, the Norwegian government collected [465 billion kroner](https://www.ssb.no/en/statbank/table/14668?ref=boilingcold.com.au) (A$66 billion) from petroleum taxation, resulting in a total tax rate on oil and gas of about 48%. This is about as much revenue as local council rates, state land taxes, and stamp duties raised [Australia-wide](https://www.abs.gov.au/statistics/economy/government/taxation-revenue-australia/2022-23/55060DO001%5F202223.xlsx?ref=boilingcold.com.au). In Australia, we raise far less from the PRRT and company tax on our oil and gas industry – about $14 billion in 2023 – resulting in a total tax rate on oil and gas of about 15%. ## What are the options for reform? Several reform paths are now being discussed. One option is to further tighten deduction rules. Treasurer Jim Chalmers [introduced a cap](https://ministers.treasury.gov.au/ministers/jim-chalmers-2022/media-releases/changes-petroleum-resource-rent-tax?ref=boilingcold.com.au) on the use of deductions in 2023, requiring companies to pay PRRT on at least 10% of revenues each year. Another is a [royalty](https://www.afr.com/policy/tax-and-super/there-s-a-way-to-tax-gas-windfalls-for-the-long-term-20260422-p5zpxg?ref=boilingcold.com.au) scheme, where companies pay a percentage of the value of the oil and gas they extract to governments, or a [flat export tax](https://australiainstitute.org.au/post/australians-are-fed-up-with-our-governments-giving-our-gas-resources-away-for-free/?ref=boilingcold.com.au), like proposals by the Australia Institute and independent Senator David Pocock. More ambitious proposals would redesign the PRRT itself. For example, the think tank Superpower Institute’s [proposed levy](https://www.superpowerinstitute.com.au/work/the-case-for-pricing-pollution?ref=boilingcold.com.au) would tax [above-normal profits](https://www.superpowerinstitute.com.au/news/watch-fair-share-levy-explainer?ref=boilingcold.com.au), while seeking to preserve incentives for future investment. A final possibility is [greater government ownership](https://www.ssb.no/en/offentlig-sektor/offentlig-forvaltning/statistikk/offentlig-forvaltnings-inntekter-og-utgifter/articles-for-general-government-revenue-and-expenditure/petroleum-revenues-and-surplus-down?ref=boilingcold.com.au) of the LNG industry, which was successful for Norway. But with the privately owned LNG industry already established in Australia, this option would be difficult to implement. ## The real question Australia’s gas tax debate is often centred on whether Australia taxes gas enough. A better question is whether our gas tax, the PRRT, was designed for the industry that exists today. The answer is no. It was created for a previous era of oil and pipeline gas. Today’s LNG plants are larger, more integrated and far more complex than crude oil rigs of yesteryear. As a result, a tax that performed reasonably well in its original setting now struggles to capture above-normal profits generated by Australia’s petroleum exports. This presents a strong case for revisiting whether the PRRT remains fit for Australia’s modern LNG industry. As Ken Henry put it: “just do it”.![The Conversation](https://counter.theconversation.com/content/287785/count.gif?distributor=republish-lightbox-basic) [![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/10/CTA-industry-energy-climate.png)](https://www.boilingcold.com.au/support/) [Jason Nassios](https://theconversation.com/profiles/jason-nassios-318488?ref=boilingcold.com.au), Deputy Director and Associate Professor, Centre of Policy Studies, *[Victoria University](https://theconversation.com/institutions/victoria-university-1175?ref=boilingcold.com.au)* This article is republished from [The Conversation](https://theconversation.com/?ref=boilingcold.com.au) under a Creative Commons license. Read the [original article](https://theconversation.com/the-way-australia-taxes-gas-production-is-stuck-in-the-past-this-is-why-companies-arent-paying-their-fair-share-287785?ref=boilingcold.com.au). ### Triangle Energy fails due to $200m oil field clean up bill off WA URL: https://www.boilingcold.com.au/triangle-energy-fails-due-to-200m-oil-field-clean-up-bill-off-wa/ Last updated: 2026-07-23T03:27:41.000Z A week after Pilot Energy folded, its partner, Triangle Energy, has followed, unable to meet its legal requirements to pay for the $200 million decommissioning of the Cliff Head oil platform, wells, and pipelines. In a [statement to the ASX](https://www.listcorp.com/asx/teg/triangle-energy-global-limited/news/appointment-of-voluntary-administrator-3379597.html?utm%5Fmedium=email&utm%5Fsource=transactional&utm%5Fcampaign=following%5Frelease%5F1) on Tuesday morning administrator Bryan Hughes from 101 Advisory said the company decided to appoint him "in light of Triangle’s inability to meet its potential decommissioning obligations under the Offshore Petroleum and Greenhouse Gas Storage Act." A 2025 report for the Federal Government put the likely cost at $200 million, but Centre for Decommissioning Australia chief executive Francis Norman said "it could be way more," [according to *The West Australian*](https://thewest.com.au/business/energy/clean-up-bill-for-cliff-head-oil-field-off-was-mid-west-could-be-way-more-than-forecast-c-22601886?ref=boilingcold.com.au). Neither Triangle or its junior 21 per cent partner Pilot recognised any decommissioning liability in their financial accounts. Many in the oil and gas industry long expected that the two tiny companies would fail, likening the outcome to the Northern Endeavour oil production vessel in the Timior Sea. Its financially weak owner Northern Oil and Gas Australia went into administration in 2020 leaving the Federal Government with a billion-dollar decommisioning bill that was passed onto the industry in the form of a legislated levy. Last week Federal Resources minister Madeleine King said "[under no circumstances](https://www.watoday.com.au/business/companies/labor-threatens-oil-giants-with-emergency-offshore-clean-up-levy-20260715-p60fgf.html?ref=boilingcold.com.au) will taxpayers be left on the hook” for Cliff Head. “In the event of companies being unable to pay, I will have no hesitation in extending the Northern Endeavour levy or taking other measures to cover all costs for decommissioning,” she said. After Pilot Energy entered voluntary administration, offshore safety regulator NOPSEMA [directed Triangle](https://www.nopsema.gov.au/sites/default/files/documents/General%20Direction%202118%20-%20Cliff%20Head%20Field%20Offshore%20Operations.pdf?ref=boilingcold.com.au) to ensure essential workers were paid and the facilities 11km off the coast near Dongara were kept safe. A spokesman for the regulator said there was no imminent safety or environmental risk at the facility has not produced oil since August 2024 and is not normally crewed. "NOPSEMA is continuing to exercise its regulatory powers to ensure the safe management of the Cliff Head facility," he said. "NOPSEMA is working with the administrators and other government agencies to ensure continued oversight of the facility." [Gas producers face $200m bill after Pilot Energy faltersPilot Energy and Triangle Energy - two listed minnows with no revenue - may struggle to afford to decommission the Cliff Head platform off the WA coast.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-23377fa7-78bd-412c-9de6-02bd86e9aad7.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Cliff-Head-platform-v2-aa0718af-f7bd-4daa-9054-72355af0d414.jpg)](https://www.boilingcold.com.au/gas-producers-face-200m-ocean-clean-up-bill-after-pilot-energy-enters-administration/) [Regulator moves after no cash for wages for WA oil platformThe failure of Cliff Head’s owners, Pilot Energy and Triangle Energy, to meet payroll does not bode well for their ability to pay the $200 million decommissioning cost.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-2bd732b7-5511-420f-98d6-3e7e69f79079.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Cliff-Head-Alpha-with-HWU-installed-source-Triangle-1024x674-1.jpg-4a1056f2-fe36-43d6-946d-eb387a29ccc6.webp)](https://www.boilingcold.com.au/regulator-moves-after-no-cash-for-wages-for-wa-oil-platform/) ### Regulator moves after no cash for wages for WA oil platform URL: https://www.boilingcold.com.au/regulator-moves-after-no-cash-for-wages-for-wa-oil-platform/ Last updated: 2026-07-17T01:56:00.000Z Triangle Energy, the majority owner of the shuttered Cliff Head oil platform, has refused to pay wages to the workers who keep the facility safe, prompting the offshore safety regulator to act. It is the latest event in this week's long-expected unravelling of a joint venture with two owners with almost no revenue and a $200 million decommissioning liability that is not represented in their accounts. The move by regulator NOPSEMA comes after Triangle's minor partner and fellow ASX-listed junior, Pilot Energy, [entered voluntary administration](https://www.boilingcold.com.au/gas-producers-face-200m-ocean-clean-up-bill-after-pilot-energy-enters-administration/) on Tuesday. The next day, Triangle Energy (Operations) Pty Ltd, the entity that runs Cliff Head day-to-day and is owned equally by Pilot and Triangle, entered voluntary administration. Before the market opened on Thursday, Triangle requested that the [trading in its shares be suspended](https://teg2.irmau.com/pdf/ee684e54-f354-44d0-806b-f7d9255560bb/Platform/ListPage/Suspension-from-Quotation.pdf?ref=boilingcold.com.au) until it better understood the impact of Pilot's troubles. Triangle has loaned Pilot money and had agreed to sell its 79 per cent of Cliff Head to Pilot. Cliff Head, 300km north of Perth, produced oil from 2006 to 2024, and Pilot had hoped to reuse the facility for carbon storage. On Thursday, NOPSEMA [directed Triangle subsidiaries](https://www.nopsema.gov.au/sites/default/files/documents/General%20Direction%202118%20-%20Cliff%20Head%20Field%20Offshore%20Operations.pdf?ref=boilingcold.com.au) to ensure there were sufficient personnel and organisational capability to keep the platform, eight wells and pipelines from posing a threat to worker safety or the environment. Shortly after taking control of Pilot on Tuesday, its administrators requested that Triangle fund the wages for the workers who operate Cliff Head, but Triangle "declined this request", according to the NOPSEMA direction. > "The appointment of voluntary administrators introduces immediate uncertainty about the continued availability of personnel, funding, contracts and services necessary to maintain the facilities and wells in a safe condition," NOPSEMA said. > "There is a risk that cost-reduction or restructuring decisions could result in the loss of critical personnel." NOPSEMA's directions included maintaining all employment and service contracts necessary to keep Cliff Head in a safe condition. ## Triangle refuses to pay A spokeswoman for Triangle said in 2023 that it [entered a binding agreement](https://announcements.asx.com.au/asxpdf/20230727/pdf/05s01kl0qlrgy7.pdf?ref=boilingcold.com.au) to sell its interest in Cliff Head to Pilot. "Under that agreement, Pilot Energy is legally obligated to fund all operational expenses of Triangle Energy (Operations) Pty Ltd," she said. Pilot Energy also agreed to cover all operating expenses for the offshore assets it owned only 21 per cent of, despite having no funding or regulatory approval to complete the purchase. Pilot never secured sufficient funds to complete the purchase thta both parties expected to close in early 2024. The two companies expected to complete the sale in early 2024, but Pilot never secured sufficient funds. However, until now, Pilot has covered all Cliff Head's operating costs. The deal between the two companies does not affect their joint and several liability under Australian offshore petroleum legislation for all costs associated with the offshore project. If Pilot ceases to exist, Triangle is [responsible for all costs](https://www.industry.gov.au/publications/trailing-liability-decommissioning-offshore-petroleum-property-guidelines/trailing-liability?ref=boilingcold.com.au#:~:text=I-,n%20practice%2C%20this%20means%20that%20all%20joint%20venture%20parties%20are%20titleholders%2C%20and%20as%20such%20are%20liable%20for%20obligations%20under%20the%20Act%2C%20including%20remedial%20directions.,-3.37) associated with Cliff Head, as the sale was never completed and it remains a title holder. At the end of March, Triangle had [$4.8 million in cash](https://teg2.irmau.com/pdf/c6a45674-7d25-460b-b1cd-bc972324c6b0/Platform/ListPage/Quarterly-Activities-and-Cashflow-Report.pdf?ref=boilingcold.com.au). Since then, it has spun off its most valuable asset - exploration acreage in the Philippines - into a separate ASX-listed company, Tetragon Energy. At the close of trading on Thursday, Triangle was worth $2.2 million and Tetragon $9.9 million. [Doubling of mercury emissions from Alcoa Wagerup prompts appeals“The government is allowing Alcoa to do whatever they friggin want,” according to a long-term campaigner for better regulation of WA’s alumina refineries.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-153d9a13-c629-4c42-adc2-833377421ad9.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/cattle-near-Wagerup-refinery-b-32ac0d83-b984-4ad5-bff5-0d57dafea920.JPG)](https://www.boilingcold.com.au/doubling-of-mercury-emissions-from-alcoa-wagerup-prompts-appeals/) ## Triangle has no responsibility for WA assets NOPSEMA's direction does not apply to pipelines within 5.5 km of the coast or to the Arrowmith onshore plant, which used to process oil from Cliff Head, both of which are within state jurisdiction. Both companies owned these assets until March 2025, when Triangle supplied Pilot with $5.6 million of [funding to purchase its share](https://announcements.asx.com.au/asxpdf/20250624/pdf/06l1b7rfx939pq.pdf?ref=boilingcold.com.au), with the loan to be repaid in September 2026. The effect of the transaction to date is that while Triangle has not received any cash for the onshore assets, it no longer has any exposure to their decommissioning costs. [![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/10/CTA-industry-energy-climate.png)](https://www.boilingcold.com.au/support/) A similar sale was not possible for the offshore assets in Commonwealth waters - the platform, wells, and portions of the pipelines - as it would require approval from the National Offshore Petroleum Titles Administrator (NOPTA). One of NOPTA's requirements is that a purchaser of an interest in an offshore title have sufficient financial capability to develop the resource safely. However, Pilot's [accounts](https://wcsecure.weblink.com.au/pdf/PGY/02956631.pdf?ref=boilingcold.com.au) published in June 2025 recorded a "material uncertainty which may cast significant doubt as to whether the Group will continue as a going concern." The inability or unwillingness of Cliff Head's owners to meet the immediate wage bill does not auger well for their chances of paying the estimated $200 million decommissioning cost of the asset. On Wednesday, Federal Resources Minister Madeleine King said she would have "no hesitation” in applying [a levy on offshore oil and gas production](https://www.watoday.com.au/business/companies/labor-threatens-oil-giants-with-emergency-offshore-clean-up-levy-20260715-p60fgf.html?ref=boilingcold.com.au) to pay the bill, as has been done for the approximately $1 billion clean-up of the Northern Endeavour oil vessel in the Timor Sea. --- UPDATE 17 July 2026: Added response from Triangle Energy, Triangle Energy (Operations) Pty Ltd entering voluntary administration and a better explanation of joint and several liability. ### Gas producers face $200m ocean clean-up bill after Pilot Energy enters administration URL: https://www.boilingcold.com.au/gas-producers-face-200m-ocean-clean-up-bill-after-pilot-energy-enters-administration/ Last updated: 2026-07-14T10:07:59.000Z ASX-listed Pilot Energy [called in administrators](https://www.listcorp.com/asx/pgy/pilot-energy-limited/news/appointment-of-voluntary-administrators-3377280.html?utm%5Fmedium=email&utm%5Fsource=transactional&utm%5Fcampaign=following%5Frelease%5F1) on Tuesday, casting doubt on its plans to use the shuttered Cliff Head oil platform off the WA coast for carbon storage. This would leave the Australian Government with a $200 million clean-up bill that it has said will be borne by the oil and gas industry. However, federal taxpayers may not see any reward for a [$6.5 million grant ](https://business.gov.au/grants-and-programs/carbon-capture-technologies-program/grant-recipients?ref=boilingcold.com.au)awarded to Pilot to investigate carbon capture technologies. The voluntary administrators from Cor Cordis will, among other things, revisit a much-delayed deal for Pilot to buy the 79 per cent of Cliff Head it does not own from fellow ASX minnow Triangle Energy. Pilot has been in a trading halt for more than three months while its board "worked tirelessly" but ultimately failed to secure funding or a partner for the carbon storage project. After trading closed on Tuesday the ASX [suspended Pilot](https://www.listcorp.com/asx/pgy/pilot-energy-limited/news/suspension-from-quotation-3377444.html?utm%5Fmedium=email&utm%5Fsource=transactional&utm%5Fcampaign=following%5Frelease%5F1) as its "financial condition is not adequate to warrrant the continued quotation of its securities." Triangle went [into a trading halt](https://www.listcorp.com/asx/teg/triangle-energy-global-limited/news/trading-halt-3377142.html?ref=boilingcold.com.au) early on Tuesday that will remain in place until it can update the market on the Cliff Head sale. If one partner in an offshore joint venture fails financially, legislation makes remaining owners fully liable for decommissioning costs. Pilot ($7 million) and Triangle ($2 million) are together valued at less than five per cent of the cost of decommissioning the platform that last produced oil in 2024. In 2025, the Department of Industry, Science and Resources released a [report](https://www.industry.gov.au/sites/default/files/2025-11/xodus%5Faustralian%5Foffshore%5Foil%5Fand%5Fgas%5Fdecommissioning%5Fliability%5Festimate%5F2025.pdf?ref=boilingcold.com.au) estimating that the offshore oil and gas industry faces a $44 billion bill to 2070 to remove its infrastructure from Commonwealth waters. The report by engineering consultancy Xodus estimated the bill for the Perth Basin, where Cliff Head is the only offshore facility, at $200 million. Neither Pilot or Triangle acknowledges any decommissioning liability on its books for the facility 11km off the coast near Dongara in WA's Mid West. In May, corporate regulator ASIC announced it would [review the disclosures](https://www.asic.gov.au/about-asic/news-centre/find-a-media-release/2026-releases/26-098mr-asic-sets-financial-reporting-audit-and-sustainability-focus-areas-for-fy-2026-27/?utm%5Fmedium=email&utm%5Fcampaign=ASIC%20sets%20financial%20reporting%20audit%20and%20sustainability%20focus%20areas%20for%20FY%20202627&utm%5Fcontent=ASIC%20sets%20financial%20reporting%20audit%20and%20sustainability%20focus%20areas%20for%20FY%20202627+CID%5F13b3391a1a4871601749702d03b2994a&utm%5Fsource=CampaignMonitor&utm%5Fterm=View%20the%20full%20media%20release) of companies with liability for decommissioning and site restoration. [Australian oil & gas lags in disclosing $44b clean-up billSantos’ decommissioning liability matches a quarter of its $22b value, but its disclosures to investors fared poorly against the latest accounting standards, according to an international survey.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-af87414e-94aa-4bc6-9083-878ab291437b.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/ExxonMobil-decommissioning-graphic-e49f15a4-271b-4c0e-be97-1fd34a8ae898.png)](https://www.boilingcold.com.au/australian-oil-gas-lags-in-disclosing-44b-clean-up-bill/) ## Who pays for Cliff Head? Cliff Head may be a rerun of the Northern Endeavour, whose owner went into liquidation in 2020, [leaving the Federal Government responsible](https://www.thesaturdaypaper.com.au/news/resources/2020/02/15/decommissioning-oil-vessel-could-cost-taxpayers-230m/15816852009400?ref=boilingcold.com.au) for removing the ageing vessel and subsea equipment and permanently sealing the wells. The then Coalition Government passed that cost onto offshore oil and gas producers in the form of a [levy on production](https://www.industry.gov.au/mining-oil-and-gas/oil-and-gas/offshore-oil-and-gas/decommissioning-northern-endeavour/offshore-petroleum-cost-recovery-levy?ref=boilingcold.com.au) that, in its first three years, raised $1.16 billion. Last year, Federal Minister for Resources Madeleine King [told an energy conference](https://www.minister.industry.gov.au/ministers/king/speeches/speech-energy-exchange-australia-conference-perth?ref=boilingcold.com.au) in Perth that Labor would follow a similar approach if required. > "Decommissioning is and must always remain the responsibility of industry, King said. > "Taxpayers will never be left to foot the bill" The Northern Endeavour bill is borne predominantly by gas exporters as their revenue is vastly greater than Australia's offshore oil fields. A spokesman for King said the Government is aware that Pilot has entered administration and is working with the administrator. "Titleholders are obligated by Australian law to pay all costs associated with decommissioning," he said. "Insolvency does not excuse titleholders from decommissioning responsibilities and the Government will hold responsible titleholders and related parties accountable." In 2024 offshore safety regulator NOPSEMA [directed Triangle](https://www.nopsema.gov.au/sites/default/files/documents/General%20Direction%20-%201947.pdf?ref=boilingcold.com.au), as operator of Cliff Head, to make the wells safe and flush all pipleines when production stopped. A spokeswoman for the regulator said this was done and Triangle has continued to manage the unmanned facility in a way to reduce risks to as low as reasonably practicable, including 24 hour a day monitoring. "NOPSEMA continues to maintain active regulatory oversight and engagement with relevant duty holders as well as other government departments – even as circumstances evolve," she said. [![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/10/CTA-industry-energy-climate.png)](https://www.boilingcold.com.au/support/) ## Cliff Head on the cliff edge Oil production at Cliff Head [started in 2006](https://www.wa.gov.au/government/media-statements/Carpenter%20Labor%20Government/Premier-welcomes-first-commercial-oil-project-for-the-Perth-Basin-20060518?ref=boilingcold.com.au), and ownership eventually ended up with Triangle Energy, which operated the field, and Pilot Energy. In mid-2023, with production dwindling, Pilot [agreed to buy](https://announcements.asx.com.au/asxpdf/20230727/pdf/05s0n5r862489v.pdf?ref=boilingcold.com.au) Triangle's 79 per cent of Cliff Head to develop a carbon storage facility. The deal for two cash payments totalling $7.5 million and a further $7.5 million in royalties if the project went ahead was expected to be completed by early 2024 but is still not done. In mid-2024, [a new deal](https://announcements.asx.com.au/asxpdf/20240723/pdf/065v4n8gfst140.pdf?ref=boilingcold.com.au) resulted in Pilot having more time to pay but at a higher price, with Triangle first selling its interest in the Cliff Head onshore processing plant at Arrowsmith for $4.5 million to be paid by December 2024, with a later $4 million payment for the offshore well and platform. In October 2024, Pilot Energy made some payments but after promised financing did not materialise reneged on payments due in December. Managing director Conrad Todd said the company was "[disappointed to announce ](https://announcements.asx.com.au/asxpdf/20241218/pdf/06csj7tprw85gr.pdf?ref=boilingcold.com.au)that Pilot failed to meet the first payment deadline." The [open disagreement](https://www.boilingcold.com.au/shares-in-two-perth-basin-oil-players-plunge-after-payment-dispute/) pushed the Triangle share price down by a third, and Pilot scrip plunged 50 per cent, tanking the value of the two companies to $8.4 million and $8.2 million, respectively. Since then, the deal between the two parties has been revised numerous times. [‘Significant doubt’ owner of WA oil platform can survivePilot Energy is a going concern, but its accounts report “a material uncertainty which may cast significant doubt” on that continuing.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-f9c912d1-cb45-4618-9704-e1ac0b851687.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Cliff-Head-platform-v2-60057e80-e4ae-4b6f-8c28-18027fd12639.jpg)](https://www.boilingcold.com.au/significant-doubt-pilot-energy-responsible-for-a-wa-oil-platform-can-survive/) In June 2025, Pilot's [half-year accounts](https://wcsecure.weblink.com.au/pdf/PGY/02956631.pdf?ref=boilingcold.com.au) reported that a "material uncertainty exists that may cast significant doubt on the consolidated entity’s ability to continue as a going concern." Pilot's efforts to stay afloat include a [$250,000 loan from Triangle](https://teg2.irmau.com/pdf/3710b994-79c8-4183-ab27-2469e2936ceb/Platform/ListPage/Pilot-Shortterm-Loan-Extension.pdf?ref=boilingcold.com.au) that has not been repaid. In late March, Pilot [entered a trading halt](https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-03073987-6A1318668&v=undefined?ref=boilingcold.com.au) to allow a "range of funding and strategic initiatives" to be executed, with trading expected to resume two days later. It never did. Should Pilot's administrators not be able to revive the company, Triangle now has less assets to help pay the bill than a few months ago. Its most valuable asset - acreage in the Philippines - was spun out into a new company called Tetragon Energy that [started trading](https://www.listcorp.com/asx/tet/tetragon-energy-limited/news/tetragon-lists-on-asx-with-exploration-program-underway-3375702.html?ref=boilingcold.com.au) on the ASX last week. The market values Tetragon, which is free of any liability for Cliff Head, at $10 million, compared to just $2 million for Triangle. ### INPEX safety shortcuts exposed Ichthys LNG workers and ocean to mercury URL: https://www.boilingcold.com.au/inpex-safety-shortcuts-exposed-ichthys-lng-workers-and-ocean-to-mercury/ Last updated: 2026-07-07T22:00:16.000Z Japanese gas giant INPEX bypassed equipment and procedures at its Ichthys offshore gas facilities, exposing workers and the Indian Ocean off WA's Kimberley to toxic mercury, according to the offshore safety regulator. The $37 billion company's actions since two mercury releases in 2025 to better contain the toxic metal have been inadequate, leading to "increased uncertainty regarding the environmental impacts and risks," according to a [direction](https://www.nopsema.gov.au/sites/default/files/documents/General%20Direction%202100%20-%20Ichthys%20Project%20Offshore%20Facility.pdf?ref=boilingcold.com.au) issued on Tuesday by the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA). On August 29, workers on the Ichthys Explorer central processing platform in the Browse Basin were [told they had been exposed](https://www.theaustralian.com.au/business/mining-energy/gas-giant-inpex-faces-federal-investigation-over-suspected-mercury-poisonings/news-story/d09f52f7fa38fb133a2b2923abc0c745?ref=boilingcold.com.au) to mercury sulphate, *The Australian* reported. Just three weeks later, on September 18, mercury sulphide spilled into the ocean from both the Ichthys Explorer central processing platform and the Ichthys Venturer floating production facility, a NOPSEMA spokeswoman said. The project was shut down at the time for planned maintenance. She said the second incident was not a concern for workers' health and safety. "As this is an active regulatory matter, NOPSEMA will not provide further comment at this stage." NOPSEMA investigations to date found INPEX bypassed equipment and changed procedures, contrary to its [environment plan](https://docs.nopsema.gov.au/A826886?ref=boilingcold.com.au) agreed with the regulator. These unauthorised actions "materially changed" mercury emissions and discharges. [Federal plan delivers three times more gas to WA than BrowseAustralia’s most gas-dependent state can be well supplied for decades without drilling near Scott Reef or fracking the Kimberley, according to an exclusive analysis by Boiling Cold.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-df7a97a0-a77d-43cb-8a8e-8741c9de4cd3.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/gorgon-lng-trains-large-d-1-d467e747-b7df-4798-be69-2ac0f8b29c3d.jpg)](https://www.boilingcold.com.au/federal-plan-delivers-three-times-more-gas-to-wa-than-browse/) INPEX identified the changes as contributing to the second release of mercury, according to the NOPSEMA direction. The regulator slammed INPEX's efforts so far to make the platform safer as inadequately "characterised, quantified, or validated through monitoring or analysis" NOPSEMA concluded it could not be sure INPEX is managing its offshore facilities in a way that protects the environment, so has directed the firm to take a series of actions. INPEX must launch an independent expert review of its management of mercury and then develop and implement a plan to reduce the risk from mercury to as low as reasonably practicable. INPEX Senior Vice President Corporate, Bill Townsend, said INPEX took the matters raised by NOPSEMA seriously. "We are working constructively with the offshore regulator to address the matters ... and further strengthen our systems and controls." "Worker health screening, conducted in accordance with Safe Work Australia guidance, found mercury levels within the range typically observed in the general population," he said. [INPEX seeks Australia’s help to blow the Paris AgreementThe Japanese energy giant is cherry-picking data to justify its gas growth plans.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-22f14fb6-ebf6-4f2a-9462-fbcdfa6dcc5a.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Ichthys-LNG-plant-25b537f7-f978-4df9-8a36-80fd5322aa7a.jpg)](https://www.boilingcold.com.au/inpex-chief-executive-expects-australias-help-to-blow-the-paris-agreement/) The Ichthys project's safety and environmental performance have also been found wanting on land. The gas from the Ichthys field is piped 1000km to a processing plant near Darwin, where an [independent review](https://ntepa.nt.gov.au/news/2026/independent-review-of-inpex-pollutant-emissions?ref=boilingcold.com.au) has found INPEX had "[systematically underestimated](https://www.abc.net.au/news/2026-03-01/review-finds-inpex-lng-emissions-systematically-underestimated/106400678?ref=boilingcold.com.au)" toxic emissions since 2018. INPEX reported to authorities that its gas export plant emitted 4 tonnes of dangerous benzene in the 12 months to June 2024, but the true amount was 557 tonnes, more than 100 times higher. This week, it was [reported](https://www.theaustralian.com.au/nation/nt-government-sat-on-medical-warning-about-lng-fumes-for-years/news-story/45d56ff98015c8081afab3134d0040d2?ref=boilingcold.com.au) that two years ago, a medical advisory committee warned the NT Government about the health risks posed by the plant's emissions, but no action was taken. The Ichthys LNG project is operated by INPEX, which has a 68 per cent stake. Other owners are Total Energies (26 per cent) and four Japanese and Taiwanese energy utilities. [![Want energy and climate news to hold gas giants to account? Support Boiling Cold.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/07/CTA-donate-big-gas-1.png)](https://www.boilingcold.com.au/support/) ### The magic trick is over: investigation shows carbon capture can't save fossil fuels URL: https://www.boilingcold.com.au/the-magic-trick-is-over-investigation-shows-carbon-capture-cant-save-fossil-fuels/ Last updated: 2026-07-03T05:23:23.000Z *By Louise Morris, Australia Institute* *OPINION* Next week, more than 700 delegates will fill Melbourne’s Melbourne Convention and Exhibition Centre (MCEC) for the [Carbon Capture APAC Summit](https://www.carboncaptureapac.com/?ref=boilingcold.com.au). The region’s fossil fuel industry will once again talk up carbon capture and storage (CCS) as the technology that lets us keep burning coal and gas, while still hitting our climate targets. It’s the second time this year Melbourne has hosted a CCS spruik fest. Back in February, the CO2CRC CCS Symposium gathered under the banner ‘confronting energy realities’, where Resources Minister Madeline King told the room that gas needs CCS in order to reach net zero. There’s just one problem. The technology doesn’t work anything close to the scale its boosters need it to, and what little of it exists only survives on heavy taxpayer subsidies. That’s the conclusion of a major new investigation, [Carbon Captured](https://projects.propublica.org/carbon-captured/?ref=boilingcold.com.au), published this week by ProPublica and Drilled. It traces decades of oil industry-funded university research into climate “solutions” that were designed, from the outset, to let the public keep using oil and gas. The investigation found that boosters of carbon capture and storage have ignored evidence of the technology’s limitations, or overstated its potential, and in doing so, convinced the world that it could be effective. [Federal plan delivers three times more gas to WA than BrowseAustralia’s most gas-dependent state can be well supplied for decades without drilling near Scott Reef or fracking the Kimberley, according to an exclusive analysis by Boiling Cold.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-a267655f-5466-400c-9804-4310585dc696.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/gorgon-lng-trains-large-d-1-a011b13f-7960-4488-942a-791fa2838ec4.jpg)](https://www.boilingcold.com.au/federal-plan-delivers-three-times-more-gas-to-wa-than-browse/) The numbers in the companion piece, [Why Carbon Capture Can’t Conceivably Solve Climate Change](https://projects.propublica.org/why-carbon-capture-cant-solve-climate-change/?ref=boilingcold.com.au), are worth sitting with. Back in 2008, the International Energy Agency projected that to stave off dangerous warming, the world would need to be burying around 1.6 billion tonnes of CO2 a year by 2025\. We are nowhere close. Right now, the world is permanently burying less CO2 than a single large power plant emits in a year. Over that same period, solar power became the energy technology that actually thrived, while carbon capture and storage remained elusive, doing precisely what the modellers said it couldn’t. None of this will surprise anyone who has followed The Australia Institute’s work on this, or the work of analysts who have been sounding this alarm for years. Climate and energy analyst Ketan Joshi has been tracking the gap between the promises of CCS and its reality in his [annual CCS updates](https://ketanjoshi.co/2024/11/24/2024-ccs-update-the-revolution-refuses-to-arrive/?ref=boilingcold.com.au) since 2022, and his findings anticipate much of what the ProPublica and Drilled investigation has reported. Joshi’s analysis of the Global CCS Institute’s own pipeline data shows operational capacity has consistently landed at a small fraction of what earlier project timelines promised, while the gap between the International Energy Agency’s net zero scenarios and what CCS has delivered keeps widening, rather than closing. He has also gone through Chevron’s own environmental performance reports for Gorgon and found that in 2023-24, of the 5.3 megatonnes of CO2 the project removed from its gas stream, only 1.6 megatonnes made it underground. The rest was vented into the atmosphere. Since the project began operating seven years ago, roughly two thirds of all the carbon dioxide it has ‘removed for injection’ has ended up in the atmosphere anyway, all while Chevron buys offsets to paper over the shortfall. [Gas seeping to surface from Chevron’s Barrow Island oil operationThe WA environment regulator is investigating unknown amounts of hydrocarbons rising to the surface on the Class A nature reserve.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-003459ff-2ddb-47dc-9f80-932691110b7a.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Screenshot-2025-07-11-at-10.59.27---am-1-1-1-39979971-695a-4d78-8abe-b3d0c712da8b.png)](https://www.boilingcold.com.au/gas-seeping-to-surface-from-chevrons-barrow-island-oil-operation/) We’ve been calling CCS a [boondoggle](https://australiainstitute.org.au/post/this-carbon-policy-has-been-a-spectacular-failure-lets-put-this-zombie-in-the-ground-for-good/?ref=boilingcold.com.au) and a scam for years, and the evidence keeps piling up. ZeroGen, the $4.3 billion “clean coal” flagship in Queensland, collapsed in 2011, having sequestered nothing, at a cost of more than $100 million to taxpayers. Chevron’s Gorgon project was supposed to capture 80 per cent of its reservoir CO2\. It has run at a fraction of that for years, with no penalty for missing its target. More than twenty years of [sunk costs](https://australiainstitute.org.au/report/sunk-costs-carbon-capture-and-storage-will-miss-every-target-set-for-it/?ref=boilingcold.com.au) into Australia’s CCS experiment, and we still have nothing resembling the industry we were promised. And when something does go wrong, it’s the public who wears the risk. Under Australia’s CCS legislation, a company’s liability for its buried carbon doesn’t last forever. Once a project closes and passes a 15-year monitoring period, if the regulator is satisfied the site is stable, liability transfers to the Commonwealth, meaning taxpayers. If the company no longer exists by then, the Commonwealth simply inherits the risk, the costs and the responsibility for monitoring an abandoned CCS dump. Companies bank the credit and the subsidies now. Any leak or failure decades from now becomes ours to manage and pay for into the future. What we do have is a reliable mechanism for making dirty projects look clean on paper. [Santos’s Barossa gas field](https://australiainstitute.org.au/post/expensive-publicly-funded-carbon-capture-storage-is-barely-visible-in-new-emissions-data/?ref=boilingcold.com.au), one of the most emissions-intensive projects ever approved in Australia, won approval partly on the promise that carbon offsets would cover what its own capture equipment can’t. Santos isn’t only buying those offsets either. It’s positioned to generate and sell its own, for carbon it should have been capturing in the first place. That’s the offset system in a nutshell: a mechanism engineered by the very companies whose emissions it’s meant to cancel out, the same integrity problem running through the ACCU scheme, where credits for projects that would likely have gone ahead anyway wave through new fossil fuel developments. This is the throughline connecting a ProPublica investigation to two CCS spruiking conferences held in Melbourne this year alone. Carbon capture and carbon offsets are the same trick in different costumes: mechanisms that let governments claim climate progress and let fossil fuel companies claim subsidies and social licence to expand, all without reducing what gets burned. When Minister King tells CCS speculators that gas needs CCS technology to reach net zero, she’s repeating an industry line that decades of failure have already disproven. None of this is an argument for a better-designed CCS scheme. It’s an argument for a fossil fuel phase-out. [![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/01/support-CTA-for-posts-1.png)](https://www.boilingcold.com.au/#/portal/signup) The Australia Institute’s position has been consistent: stop approving new coal and gas projects rather than waving them through on the promise that unproven technology will bury the consequences later, and stop subsidising these polluting scams. Woodside’s Browse gas development makes the point well. Developers openly acknowledge the project needs carbon capture and storage, and offsets bolted on just to manage its unusually high CO2 content, and a project that depends on CCS and offsets to be viable shouldn’t be approved in the first place. Whatever happens to projects already given the green light, one line should hold firm: not another cent of public money, whether through grants, tax concessions or ACCU offset credits, should flow to carbon dumping CCS. So, as APAC’s CCS industry gathers in Melbourne – again – to talk up bankable projects, subsidies, social license and regional cooperation, it’s worth asking a simple question: bankable for whom? The public has funded this technology for more than two decades with nothing to show for it, and will inherit the liability once these projects close or fail. The fossil fuel industry, meanwhile, has banked exactly what it wanted all along: permission to keep drilling. ***Louise Morris is an advocate at the Australia Institute*** *This article was originally published on* [*The Point*](https://thepoint.com.au/opinions/260703-the-magic-trick-is-over-a-new-investigation-shows-carbon-capture-cant-save-the-fossil-fuel-industry?ref=boilingcold.com.au)*. Read the* [*original article*](https://thepoint.com.au/opinions/260703-the-magic-trick-is-over-a-new-investigation-shows-carbon-capture-cant-save-the-fossil-fuel-industry?ref=boilingcold.com.au)*.* *Republished under* [*Creative Commons — Attribution-NoDerivatives 4.0 International — CC BY-ND 4.0*](https://creativecommons.org/licenses/by-nd/4.0/?ref=boilingcold.com.au)*.* ### WA drives Alcoa $US4.1b buy of South32 aluminium business URL: https://www.boilingcold.com.au/western-australia-drives-alcoa-to-buy-south32-aluminium-business/ Last updated: 2026-07-02T03:57:26.000Z 🎄 WHY IT MATTERS · Alcoa will be more dependent on Western Australia than ever · Alcos plans to mine in WA until the mid-2060s - two decades after the expiry of its current state agreement · Economies of scale and the ability to more efficiently match bauxite quality and allocation to each refinery will increase the returns from an already profitable business · WA's South West is now more exposed to the willingness and ability of one foreign company to rehabilitate a vast area of forest and four refinery sites with mountains of toxic red mud tailings · The US firm only recognises a third of the cost for this clean up compared to South32 An alumina refinery and bauxite mine in WA is the cornerstone of Alcoa's $US4.1 billion purchase of South32's global bauxite, alumina and aluminium business announced on Wednesday. Alcoa chief executive Bill Oplinger [told analysts ](https://s25.q4cdn.com/195584580/files/doc%5Fevents/2026/Jun/30/Alcoa-Announcement-Conference-Call-Transcript.pdf?ref=boilingcold.com.au)in the US that synergies from the deal, expected to conclude in early 2027, would save the company $US50 million in its first year, and total savings have a present value of $US900 million. In addition to the Worsley refinery and the Boddington mine in WA, Alcoa is acquiring South32's wholly-owned Hillside aluminium smelter in South Africa, as well as its interest in the MRN bauxite mine and the Alumar refinery and smelter in Brazil. Oplinger, speaking on Wednesday morning Perth time, said the biggest opportunities for synergies are in WA. "We're not looking at massive rationalisation of jobs; what we're looking at is applying our expertise to running Worsley in a way that we can creep capacity and make it more efficient," he said. South32's business in WA generated revenue of $US1.7 billion in 2025, resulting in earnings before interest, taxes, depreciation, and amortisation (EBITDA) of $US600 million. The $2.4 million-a-day earnings flow comes from mining forests and farmland for bauxite on the eastern edge of the Darling Scarp and moving the ore south on a 51 km-long conveyor system to be refined into alumina at Worsley for export through Bunbury. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/07/map-of-Alcoa-and-S32-assets-in-WA.png) Map: [Alcoa](https://s25.q4cdn.com/195584580/files/doc%5Fevents/2026/Jul/01/Alcoa-Announces-Acquisition-%5F-Final-Investor-Presentation.pdf?ref=boilingcold.com.au) Much of the area mined by South32 is closer to Alcoa's Pinjarra refinery than it is to Worsley. Oplinger said the Pinjarra and Worsley refineries were designed to process specific types of bauxite, limiting what ore each company could extract from its lease. "Our mining lease has Greenstone bauxite in it. Their mining lease has granitic bauxite in it," he said. "There are tremendous opportunities to be able to blend the bauxite grades to achieve a very favourable outcome." Alcoa chief financial officer Molly Beerman said Alcoa now expected to be able to optimise a mine move planned for early next decade that was to cost hundreds of millions of dollars. "On the long term mine plans we are looking at a 40-year life of mine plan," she said. [Doubling of mercury emissions from Alcoa Wagerup prompts appeals“The government is allowing Alcoa to do whatever they friggin want,” according to a long-term campaigner for better regulation of WA’s alumina refineries.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-7d8870b6-91a9-4df6-932d-77cb9a54f53c.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/cattle-near-Wagerup-refinery-b-d4f37185-32ae-4b40-b0df-6ab4e21650af.JPG)](https://www.boilingcold.com.au/doubling-of-mercury-emissions-from-alcoa-wagerup-prompts-appeals/) In 2025, the WA Government [approved South32's expansion](https://www.abc.net.au/news/2025-02-14/federal-approval-for-south32-worsley-alumina-expansion/104934258?ref=boilingcold.com.au) of the Boddington mine. "That's one of the big positives," Oplinger said. "I think that the majority of our stakeholders really understand the rationale for this deal and are excited about the opportunity to make a stronger Western Australian alumina bauxite and alumina business." Oplinger is also confident Alcoa's contentious proposed expansion of its Huntly mine will get a green tick. "I've been in Australia for the last month, I'm convinced that we're going to get through our permitting process, and we will be back into strong bauxite quality toward the end of the decade." [![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/10/CTA-industry-energy-climate.png)](https://www.boilingcold.com.au/support/) South32's accounts recorded a $US1.2 billion liability for the future cost of retiring the assets Alcoa has bought, including decommissioning the Worsley refinery and rehabilitating that site and the strip-mined jarrah forest. However, Oplinger said Alcoa will only allow a third of that amount, as it uses US GAAP, which, unlike the IFRS standard used by South32, does not require a future cost to be recognised until the asset's closure date is known. Olpnger sold the deal to analysts as cheap access to capacity. "We're acquiring smelting capacity at about $US1850 per tonne (per annum), we're acquiring refining capacity at $US600 per tonne ... both of those numbers are below what the Chinese build in Indonesia today." He added that in the West, new smelting capacity would cost up to $ 8,000 per tonne and refining up to $ 2,000 per tonne. Alcoa is buying South32's 86 per cent share of its WA business. The remainder is held by Japanese firms Sojitz (4%) and a joint venture between Sumitomo and Malaysian company Press Metal Bintulu (10%). --- Updates 2 July - Added Why It Matters box and Oplinger's confidence about gaining approval for Huntly expansion. ### 'State-sponsored greenwashing': Australia’s flagship climate policy criticised over reliance on carbon offsets URL: https://www.boilingcold.com.au/state-sponsored-greenwashing-australias-flagship-climate-policy-criticised-over-reliance-on-carbon-offsets/ Last updated: 2026-06-23T01:08:30.000Z *By Tegan George* Australia’s flagship climate policy is failing to reduce actual emissions because major polluters are relying on unlimited carbon offsets, according to new research. The [Australia Institute report](https://australiainstitute.org.au/post/safeguard-mechanism-failing-to-drive-actual-emission-reductions-new-research/?ref=boilingcold.com.au) argues Labor’s [Safeguard Mechanism](https://www.dcceew.gov.au/climate-change/emissions-reporting/national-greenhouse-energy-reporting-scheme/safeguard-mechanism?ref=boilingcold.com.au#toc%5F0) has failed to drive reductions in gross emissions from Australia’s largest industrial facilities. Instead, it says the scheme allows some companies to increase pollution while still claiming progress on climate action. “The Safeguard Mechanism is so poorly designed that you can drive an enormous diesel-fuelled haulage truck through it,” Australia Institute co-CEO Richard Denniss said. “The policy was supposed to make our biggest polluters pollute less. That is simply not happening.” The findings come as the Albanese government prepares to review the scheme, which covers around 200 of Australia’s biggest industrial emitters and accounts for about 30 per cent of the nation’s greenhouse gas emissions. Independent MP Dr Sophie Scamps said the policy had become a “monumental smokescreen” that was allowing major polluters to continue increasing emissions. “We know that many of those offset systems are deeply flawed,” she said. “It’s time we really look at the offset system and see whether it is actually doing what we need this policy to do, and that is reduce our climate pollution emissions.” The report warns the scheme’s biggest flaw is its unlimited use of carbon offsets, which allow facilities to purchase credits rather than reduce their own pollution. Worse still, some of the polluters regulated by the scheme can generate credits despite increasing their emissions, and sell these to other polluters as offsets for their emissions. According to the Australian Financial Review (AFR), the loophole has allowed Shell’s Prelude offshore gas facility in Western Australia to [earn more than $90 million in carbon credits](https://www.afr.com/policy/energy-and-climate/giant-gas-project-earns-90m-in-free-carbon-offsets-20260619-p608hc?ref=boilingcold.com.au) in the last two years even though it increased its total emissions over the same period. [Federal plan delivers three times more gas to WA than BrowseAustralia’s most gas-dependent state can be well supplied for decades without drilling near Scott Reef or fracking the Kimberley, according to an exclusive analysis by Boiling Cold.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-f5bfaf7a-85cc-4590-bf74-139f03d303f1.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/gorgon-lng-trains-large-d-1-b78f8ad6-91ec-44ca-9073-4277c86fadc2.jpg)](https://www.boilingcold.com.au/federal-plan-delivers-three-times-more-gas-to-wa-than-browse/) While the government highlights the reductions in ‘net emissions’ driven by the scheme, the report argues the figures rely heavily on carbon offsets “that are not a substitute for genuine emissions reduction”. While gross emissions fell by 2.3 per cent in the last financial year (2024–25), the Climate Change Authority noted this decline was mainly due to facility closures, temporary shutdowns, and production fluctuations unrelated to decarbonisation. “While millions of Australian homes and businesses are doing the right thing, installing solar panels and batteries, and buying EVs, many of our biggest polluters are using dodgy offsets to pollute more than ever,” Dr Denniss said. Report author Dr Fergus Green noted Australia had become a ‘global outlier’ by allowing unlimited offset use under the scheme. “Australia is one of a small handful of jurisdictions, including Kazakhstan, that allow polluters to pollute as much as they want, and then purchase an unlimited amount of offsets to meet their obligations,” he wrote. The report found fossil fuel companies were the biggest users of offsets under the Safeguard Mechanism, with research showing they account for more than two-thirds of offset use. “Offsets have been scientifically discredited,” Dr Green told reporters at a Parliament House press conference. “Because offsets are dodgy, they’re cheap, and that is why so many companies are choosing to use offsets rather than reduce their own emissions,” he said. “So, it seems that the Safeguard Mechanism is really safeguarding the fossil fuel industry’s expansion plans.” While the Albanese Government campaigned on climate action during the 2025 federal election, it’s faced sharp criticism for continuing to sign off on fossil fuel developments. The Climate Council says since coming to power, the government has [approved 36 new, expanded or extended coal and gas projects](https://www.climatecouncil.org.au/resources/albanese-governments-fossil-fuel-approvals/?ref=boilingcold.com.au). The Australia Institute report argues those approvals, combined with unlimited offsetting, have allowed the Safeguard Mechanism to support fossil fuel expansion rather than drive industrial decarbonisation. Crossbench MPs have called for stronger restrictions on offset use and tougher emissions limits. [![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/10/CTA-industry-energy-climate.png)](https://www.boilingcold.com.au/support/) Independent MP Nicolette Boele said the scheme lacked meaningful emissions caps and failed to provide strong incentives for companies to invest in cleaner technologies. “This is a real opportunity to change things up,” she said. “We’re not sending the right signals for those polluters to retool and to make sure that they are, systematically in the future, able to be competitive internationally with clean, electric, and the best possible equipment and factories that make them competitive.” Independent MP Andrew Wilkie said the findings should be a “clarion call” for the government to tighten the rules governing carbon offsets and strengthen Australia’s climate policies. “It’s no good having a law that can be so easily rorted,” he said. “There clearly needs to be a much tighter, much tougher regulatory framework that ensures that if offsets are allowed, they are fair dinkum and not some claim to some dodgy tree plantation in some corner of the world.” The Australia Institute is calling on the government to use the upcoming review to reform the Safeguard Mechanism so that major polluters are required to reduce actual greenhouse gas emissions rather than rely on offsets. “We saw recently that BHP had cancelled plans, cancelled plans to decarbonise, cancelled plans to electrify, because under the Safeguard Mechanism the easy thing for BHP to do was simply to buy dodgy carbon offsets,” said Dr Denniss. “If Australia is to decarbonise and remain competitive, Australia needs policies and incentives in place to get actual polluters to reduce their actual pollution. “This is state-sponsored greenwash. If we don’t reduce actual emissions, we can’t actually reduce climate change.” *This article was originally published on* [*The Point*](https://thepoint.com.au/new/260623-state-sponsored-greenwashing-australias-flagship-climate-policy-criticised-over-reliance-on-carbon-offsets?ref=boilingcold.com.au)*. Read the* [*original article*](https://thepoint.com.au/new/260623-state-sponsored-greenwashing-australias-flagship-climate-policy-criticised-over-reliance-on-carbon-offsets?ref=boilingcold.com.au)*.* *Republished under* [*Creative Commons — Attribution-NoDerivatives 4.0 International — CC BY-ND 4.0*](https://creativecommons.org/licenses/by-nd/4.0/?ref=boilingcold.com.au)*.* ![](https://thepoint.com.au/api/republish-pixel/260623-state-sponsored-greenwashing-australias-flagship-climate-policy-criticised-over-reliance-on-carbon-offsets) ### Fracking little use for WA: Roger Cook allowed 87pc to be exported URL: https://www.boilingcold.com.au/fracking-little-use-for-wa-roger-cook-allowed-87pc-to-be-exported/ Last updated: 2026-06-01T21:30:40.000Z In 2021 Premier Roger Cook exempted US-owned Black Mountain Energy from WA’s ban on exporting onshore gas, meaning its troubled Project Valhalla will be little help to local industry. A spokesman for the Premier said that if it proceeds, Valhalla “would be allowed to export a portion of its production under Western Australia’s domestic gas reservation policy as the 'first mover' in the Canning Basin.” The government neglected to specify the extent of the “portion.” It is 87 per cent. Black Mountain will be treated the same as offshore production in Commonwealth waters, and have to supply 15 units of gas to the WA market for every 100 units exported (% of total production for local use = 15 / (100+15) = 13 per cent ). [Federal plan delivers three times more gas to WA than BrowseAustralia’s most gas-dependent state can be well supplied for decades without drilling near Scott Reef or fracking the Kimberley, according to an exclusive analysis by Boiling Cold.![](https://static.ghost.org/v5.0.0/images/link-icon.svg)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/size/w1200/2026/05/gorgon-lng-trains-large-d-1.jpg)](https://www.boilingcold.com.au/federal-plan-delivers-three-times-more-gas-to-wa-than-browse/) The action of Cook as state development minister in 2021 is not the only hurdle stopping Black Mountain filling what the Premier called a “Browse-sized hole in our energy supplies in the early 2030s.“ Black Mountain’s initial drilling of 20 appraisal wells in the Kimberley will be done over seven years to determine if the underground formation can deliver sufficient gas for a larger project to be economically viable, according to Department of Climate Change, Energy, the Environment and Water meeting minutes released in May after a freedom of information request. If the Federal Government follows WA and approves Valhalla this year, Black Mountain would not know if a production scale project was viable until 2033\. If the investment made sense, then the design, approval and construction of a pipeline to the Pilbara and the drilling of hundreds of wells to fill it with gas would take many years. It would be almost 2040 until the 13 per cent of production dribbled into the WA market. That is way too little and too late for Cook’s early 2030s gas shortage. There is also the difficulty of Black Mountain Energy, that had just $302,000 in the bank at the end of 2025, affording the initial appraisal drilling. Its US parent Black Mountain Oil and Gas is already trying to build a $US10 billion ($14 billion) data centre in Fort Worth, Texas, so may not want to divert resources to an investment that will take more than a decade to get first revenue. ## Any other options? The Premier’s spokesman said any future proposals in the Canning Basin would be treated the same as other onshore gas developments and be required to sell 100 per cent of volumes to the domestic market. However, after Black Mountain, there is little prospect of other companies holding acreage in the Kimberley supplying the rest of the state with gas. Buru Energy is developing its Rafael project, which does not need fracking to produce gas. If it goes ahead, the ASX-listed company [plans to supply only the Kimberley](https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-03095166-6A1327525&v=undefined?ref=boilingcold.com.au), using trucks to deliver liquefied natural gas to the region's power stations. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/05/Kimberley-petroleum-leases---Lock-the-Gate-1-1.jpg) Image: [Lock the Gate](https://www.lockthegate.org.au/fracking%5Fthe%5Fkimberley?ref=boilingcold.com.au) Rey Resources ceased to be an ASX-listed company in 2025 when it was taken over by private company Vigourous Resources whose majority owner was owed $22 million by Rey. In 2022 private company Theia Energy withdrew a proposal for fracking that was with the WA Environmental Protection Authority. [![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/01/support-CTA-for-posts-1.png)](https://www.boilingcold.com.au/#/portal/signup) ### For 44 years, Australia has subsidised diesel use. Is it time to stop? URL: https://www.boilingcold.com.au/for-44-years-australia-has-subsidised-diesel-use-is-it-time-to-stop/ Last updated: 2026-05-31T07:46:04.000Z By [Ray Wills](https://theconversation.com/profiles/ray-wills-10093?ref=boilingcold.com.au), [*The University of Western Australia*](https://theconversation.com/institutions/the-university-of-western-australia-1067?ref=boilingcold.com.au) and [Peter Newman](https://theconversation.com/profiles/peter-newman-1858?ref=boilingcold.com.au), [*Curtin University*](https://theconversation.com/institutions/curtin-university-873?ref=boilingcold.com.au) Mining giant BHP has [come under fire](https://www.theguardian.com/world/2026/may/25/bhp-diesel-trucks-pilbara-australia-mining-climate-pollution?ref=boilingcold.com.au) for spending hundreds of millions of dollars on new diesel trucks in the Pilbara, despite promising a transition to electric trucks in its climate strategy. Like other mining companies, BHP’s diesel-driven fleet is eligible for fuel tax credits on diesel. The company’s [controversial decision](https://www.abc.net.au/news/2026-05-25/bhp-leaked-documents-climate-emissions-cuts-delay-electric-truck/106706762?ref=boilingcold.com.au) to shelve its plans raises the pressing issue of the diesel fuel rebate. This rebate began as targeted support for a struggling agricultural sector in the 1980s, but has morphed into an almost [$5 billion subsidy](https://australiainstitute.org.au/post/scrap-fuel-tax-rebates-for-mining-industry-not-farmers/?ref=boilingcold.com.au) for some of the nation’s most profitable corporations. So, what is the diesel fuel rebate? And is this fossil fuel subsidy still fit for purpose? ## Why do we have a diesel rebate? Since federation in 1901, diesel and petroleum products imported into Australia have been subject to import taxes. Since 1929, tax collected from the petrol pump has been earmarked to [build and maintain](https://bulkfuel.com.au/news/history-of-fuel-taxation-in-australia?ref=boilingcold.com.au) the nation’s road network. Australia’s diesel fuel [rebate scheme](https://www.pbo.gov.au/sites/default/files/2023-03/Fuel%20Taxation%20in%20Australia%20Attachment%20A%20-%20A%20brief%20history.pdf?ref=boilingcold.com.au) was introduced in 1982\. The [Fuel Tax Credits Scheme](https://www.ato.gov.au/businesses-and-organisations/income-deductions-and-concessions/incentives-and-concessions/fuel-schemes/fuel-tax-credits-business?ref=boilingcold.com.au), as it’s officially known, was designed to [cushion farmers](https://www.abc.net.au/listen/programs/countrybreakfast/history-of-australian-farming---the-1980s/8109418?ref=boilingcold.com.au) from [rising fuel costs](https://pmtranscripts.pmc.gov.au/release/transcript-6698?ref=boilingcold.com.au). Farm and mine businesses [buying diesel](https://www.dpi.nsw.gov.au/%5F%5Fdata/assets/pdf%5Ffile/0008/1315286/energy-efficiency-and-farm-vehicles.pdf?ref=boilingcold.com.au) for off-road uses like tractors, harvesters and irrigation pumps could claim a rebate. At the time, Australia’s mining sector was [far smaller](https://doi.org/10.1111/1467-8489.12540?ref=boilingcold.com.au). Now, 44 years later, the rebate scheme still allows businesses like agriculture and mining to claim back the federal fuel tax paid on diesel used in eligible machinery, equipment and heavy vehicles. Today, the mining industry receives [about half](https://ieefa.org/resources/minings-costly-diesel-addiction-must-be-budget-priority?ref=boilingcold.com.au) of the diesel rebate. ## Diesel up, petrol down Since 2010, Australia’s consumption of liquid fuel has changed dramatically, with official statistics showing falling petrol demand and rising diesel use over the past decade. Petrol use has gradually declined as vehicle efficiency has improved. In contrast, diesel consumption has nearly doubled. This surge in diesel consumption reflects Australia’s growth in freight, heavy vehicles and, particularly, mining. The diesel rebate scheme is now one of Australia’s largest [fossil fuel subsidies](https://climateenergyfinance.org/wp-content/uploads/2026/01/2026-27-Pre-Budget-Submission.pdf?ref=boilingcold.com.au), alongside tax concessions for aviation fuel and a range of support measures for coal and gas production, with recent analysis putting its annual cost at around $11.2 billion by 2026–27. Mining is by far the largest beneficiary, claiming about $5 billion a year in diesel rebates according to [one analysis](https://ieefa.org/resources/cutting-australian-minings-diesel-emissions?ref=boilingcold.com.au). This includes roughly $1.5 billion for coal mining alone. Agriculture receives only a fraction of the total. What began as support for farmers [using off-road fuel](https://www.gsherald.com.au/countryman/opinion/opinion-stop-using-farmers-as-human-shields-for-mining-tax-credits-c-22283086?utm%5Fsource=csp&utm%5Fmedium=portal&utm%5Fcampaign=Isentia&token=Bd0CPqpYa29%2BauoIrBRaLHZ5U%2BzhRAtJR5VGjneMCpAKsqGCs%2BkKIVH%2BVoQgH0YfHiM%2Foj5OLn2IPGQ%2BvdCo7A%3D%3D) has become a standing subsidy for Australia’s most profitable miners. Meanwhile, aviation fuel pays little excise – about 3 cents per litre – to [fund the Civil Aviation Safety Authority](https://www.pbo.gov.au/about-budgets/budget-insights/budget-explainers/fuel-taxation-australia?ref=boilingcold.com.au). This compares to a fuel excise rate of 52c per litre on petrol and diesel, which the Australian [government halved on April 1](https://www.pm.gov.au/media/fuel-excise-halved-three-months?ref=boilingcold.com.au) this year in response to fuel price spikes from the US-Israeli war in Iran. Since 1992, the formal link between petrol and diesel excise and road funding has ended, with fuel tax now flowing into general revenue rather than a dedicated roads fund. The rebate was originally justified on fairness grounds – off‑road users were not meant to subsidise public roads – but once fuel tax stopped being a dedicated roads charge, that logic largely evaporated. [Federal plan delivers three times more gas to WA than BrowseAustralia’s most gas-dependent state can be well supplied for decades without drilling near Scott Reef or fracking the Kimberley, according to an exclusive analysis by Boiling Cold.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-48f04f242390615e8f7766b92b2020fb590290d487cec9945d1f33d1b7c81b7b.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/gorgon-lng-trains-large-d-1-1e660dd537c6910980d70e40fd9cd2ff293595bf0dc0329a392da4c99abf1d09.jpg)](https://www.boilingcold.com.au/federal-plan-delivers-three-times-more-gas-to-wa-than-browse/) ## Fuel tax cuts in response to war The May 2026 federal budget [fuel package](https://www.trademinister.gov.au/minister/don-farrell/media-release/government-securing-more-fuel-reserves-australian-fuel-security-and-resilience-package?ref=boilingcold.com.au) was worth more than $10 billion, centred on a permanent government-owned [fuel reserve](https://theconversation.com/cutting-fuel-excise-is-a-sugar-hit-we-need-a-plan-to-slash-dependence-on-imports-279556?ref=boilingcold.com.au). These are reminders Australia’s fuel security problem is immediate, not theoretical. The government’s response has been to buy and store more fuel, rather than reduce our structural dependence on imported oil and support a shift to electrification and renewable energy. Australia’s fuel rebate entrenches higher diesel use. But the “we need more fuel” argument ignores the fact Australia’s economy is decisively decoupling from fossil energy consumption. Uncoupling from oil is not a theoretical future possibility – it is slowly happening. Oil consumption in particular has plateaued since the early 2000s, even as GDP has roughly doubled. If Australia wants to meet its emissions-reduction commitments, it should hasten the shift away from fossil oil, not maintain a subsidy for it. ## A fair share of resources Australia has long failed to gain a fair [share of revenue](https://theconversation.com/australia-isnt-getting-a-fair-share-of-tax-on-gas-exports-queensland-has-shown-how-to-raise-the-bar-281526?ref=boilingcold.com.au) from our finite mineral wealth. Our petroleum resource rent tax [is notoriously weak](https://australiainstitute.org.au/post/australians-are-fed-up-with-our-governments-giving-our-gas-resources-away-for-free/?ref=boilingcold.com.au). Mining companies argue tougher taxes will drive investment offshore. But Australia has some of the world’s highest-grade iron ore, coal and critical minerals. A tax regime would have to be [extraordinarily high](https://www.prosper.org.au/2026/04/how-to-get-a-decent-public-return-from-australias-gas-resources-a-25-export-tax-or-something-else/?ref=boilingcold.com.au) to make extraction unprofitable. We are now in the fourth major oil crisis. Unlike the others, this one arrives with cheaper renewable alternatives readily available. Wind, [solar, batteries](https://theconversation.com/is-oil-king-again-chinas-surging-cleantech-exports-show-the-opposite-is-true-281349?ref=boilingcold.com.au) and [electric vehicles](https://thedriven.io/2026/05/06/china-now-biggest-player-as-electric-cars-surge-and-ice-only-sales-slump-in-australia/?ref=boilingcold.com.au) are now cheaper than fossil alternatives and faster to deploy. [During a fuel crisis](https://reneweconomy.com.au/what-fossil-madness-is-this-wars-cant-interrupt-flow-of-wind-and-the-sun-but-all-we-hear-is-drill-baby-drill/?ref=boilingcold.com.au), we should scrutinise where our finite tax revenues are directed. The fuel rebate was designed mostly for farmers, when the mining industry was a fraction of its current size. Does the policy need to return to its original aim? Or is a new form of [road user](https://thedriven.io/2026/05/12/road-user-charge-for-evs-put-on-hold-more-money-for-regional-and-kerbside-charging/?ref=boilingcold.com.au) tax required? Whatever the mechanism, it makes sense to direct revenue towards electrification, not lock in another decade of diesel dependence. [![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/10/CTA-industry-energy-climate.png)](https://www.boilingcold.com.au/support/) --- ## Response from BHP: *In a statement, a spokesperson for BHP said it has net zero goal for reducing its scope 1 and 2 greenhouse gas emissions to net zero by 2050.* *Despite this progress, many of the technologies the resources industry will need to achieve net zero are not yet ready to be deployed, BHP said.* *“For example, no Australian mining operation is currently utilising critical 240-ton battery-electric haul trucks as the technology is not advanced enough to scale to an operational fleet,” the spokesperson said.* *BHP is partnering with equipment producers to run trials of battery-electric equipment, including two 240-ton battery electric haul trucks, on a BHP site in the Pilbara, and four battery-electric locomotives which we plan to commence trialling in coming months.* --- ![The Conversation](https://counter.theconversation.com/content/283075/count.gif?distributor=republish-lightbox-basic) [Ray Wills](https://theconversation.com/profiles/ray-wills-10093?ref=boilingcold.com.au), Adjunct Professor, [*The University of Western Australia*](https://theconversation.com/institutions/the-university-of-western-australia-1067?ref=boilingcold.com.au) and [Peter Newman](https://theconversation.com/profiles/peter-newman-1858?ref=boilingcold.com.au), Professor of Sustainability, [*Curtin University*](https://theconversation.com/institutions/curtin-university-873?ref=boilingcold.com.au) This article is republished from [The Conversation](https://theconversation.com/?ref=boilingcold.com.au) under a Creative Commons license. Read the [original article](https://theconversation.com/for-44-years-australia-has-subsidised-diesel-use-is-it-time-to-stop-283075?ref=boilingcold.com.au). ### Federal plan delivers three times more gas to WA than Browse URL: https://www.boilingcold.com.au/federal-plan-delivers-three-times-more-gas-to-wa-than-browse/ Last updated: 2026-05-29T03:38:48.000Z ANALYSIS The Federal Government's domestic gas reservation scheme would solve WA's looming [gas shortage](https://www.boilingcold.com.au/gas-leftover-from-exports-not-enough-for-wa-power-and-industry-aemo/) with no need for Woodside to drill near the Scott Reef for its Browse project, according to a detailed analysis by *Boiling Cold*. However, WA Premier Roger Cook is instead relying on pushing an uncertain Browse as essential and relying on gas giants Woodside and Chevron to "do the right thing" to ensure his state has sufficient affordable gas. The Albanese Government wants gas exporters to supply the Australian market with gas equivalent to [20 per cent of their exports](https://consult.dcceew.gov.au/domestic-gas-reservation-scheme-draft-design-framework?ref=boilingcold.com.au) from 2027. The effective application of this policy would deliver 3.5 times as much additional gas to WA as Woodside's proposed Browse development near the pristine Scott Reef. The extra 3166 petajoules of domestic gas to 2045 is driven not just by the Federal Government reserving 20 per cent instead of WA's 15 per cent, but also by assuming that Canberra, unlike WA, implements its policy effectively. WA's current gas export projects - Chevron's Gorgon and Wheatstone and Woodside's Pluto and North West Shelf - have supplied the equivalent of [just eight per cent of their exports](https://domgas.com.au/?ref=boilingcold.com.au) to WA, according to the DomGas Alliance of major gas consumers. Just achieving the 15 per cent targeted by WA's [Domestic Gas Policy](https://www.wa.gov.au/government/wa-domestic-gas-policy?ref=boilingcold.com.au) delivers an extra 1326 petajoules of gas to WA industry, miners and power generators - substantially more than the 913 petajoules from Browse. *Boiling Cold* performed the analysis with the best publicly available data and reasonable, informed assumptions. It conservatively ignores the large amount of gas that exporters owe the local market due to past underdelivery. The full analysis can be downloaded below. Other approaches could reasonably produce slightly different results. However, given the vast gulf between the estimated gas volumes under the national scheme and those from the Browse development, it would not alter the conclusion that Woodside's development is not required for the local economy. ## Cook ignores the national fix Just last week, WA Premier Roger Cook framed WA's gas problem as a choice between Woodside's development of Browse and fracking for gas in WA's remote Kimberley. “We all need to be realistic about the idea that you can just somehow reject Browse,” Cook [told *The Australian Financial Review*](https://www.afr.com/politics/federal/premier-warns-wa-could-be-forced-to-frack-in-the-kimberley-20260521-p5zzei?ref=boilingcold.com.au). “There’s a big debate around Browse at the moment, but I can tell you that all the predictions are that there’s about a Browse-sized hole in our energy supplies in the early 2030s,” Cook said, without which WA would be "forced to frack" the Kimberley. The looming hole in WA's gas supply is actually bigger than Browse. Respected gas sector consultant EnergyQuest [cautioned in 2025](https://www.boilingcold.com.au/western-australia-faces-growing-gas-shortfall/) that Browse would only slow, not halt, the increase in gas prices, which have already doubled over the past five years. Browse cannot deliver cheaper gas to WA industry, but 3.5 times more volume from the Federal policy almost certainly would, improving the viability of crucial industries, such as critical minerals processing and fertiliser production. The only winners from Cook's choice to ignore the opportunity presented by Canberra's policy are the state's largely foreign-owned gas export projects. Woodside keeps a central pillar in its fight to win social license for Browse, and all the exporters avoid having to divert more gas to the local market, where it will fetch lower prices. A spokesman for the Premier said his government took compliance with its domestic gas reservation policy seriously “It’s the government and community’s strong expectation that Woodside, Chevron and all gas producers do the right thing and provide domestic gas to WA in accordance with the policy," he said. *Boiling Cold* asked the Premier if expecting Woodside and Chevron to do the right thing to ensure WA has enough gas was extremely naive. No response was provided. The Premier was also asked if he would support the implementation of the national policy in WA, given it can solve WA’s gas shortage without risking drilling near Scott Reef or fracking the Kimberley. His spokesman said the state government had been assured by the Commonwealth that WA’s policy would be compatible with the national approach, and that it would wait for the Commonwealth to provide more detail before offering further comment. ## Problems with solutions Delivering the gas WA needs will require more than the Federal Parliament passing legislation. The gas companies will have to expand their domestic gas plants and pipelines, and bring forward future offshore drilling. They will cry poor and say this will be expensive, and it will be. But the costs must be weighed against their financial strength. In 2025, Chevron alone made a [$2.5 billion profit](https://www.theaustralian.com.au/business/mining-energy/energy-giants-reap-nearly-5bn-in-profits-as-pm-rules-out-new-gas-tax/news-story/f01969542c616abf86e14793c1d61fb7?ref=boilingcold.com.au) from its 47 per cent stake in Gorgon and 64 per cent stake in Wheatstone. That was a bad year - the 2024 profit was twice as high, and in 2026, the US major will benefit from the US-Iran war throttling its competitors. Approvals will be an issue, but Cook could use his much vaunted [State Development Act](https://www.abc.net.au/news/2025-12-16/wa-state-development-act-passes-parliament/106146908?ref=boilingcold.com.au) to speed things up. Crucially, the 20 per cent requirement is likely beyond what WA needs. This would allow negotiations that reward producers who move quickly with slightly reduced obligations. A solution would be complex but achievable. [Factcheck: Is WA really ‘running out of gas’? No, gas companies will export almost 10x as much WA gas as they’ll supply domesticallyWestern Australia’s Premier claims his home state is running out of gas, while defending a system that allows gas companies to sell the vast majority of WA’s gas overseas, rather than providing it to the people who elected him.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/favicon-7fd06bd8145d4a613912fa5f3e54b9b46aa0672da743826047d2a47c4cae2d67.png)The PointPiers Verstegen![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/20251105151555408401-original-ae94746a258f928a99e3d4a73efa550c66fd3b4547fbadbce8b1eb90e73786da.jpg)](https://thepoint.com.au/opinions/260529-factcheck-is-western-australia-really-running-out-of-gas?ref=boilingcold.com.au) In contrast, relying on Browse is not only insufficient but also problematic, as it may never happen. Shell [exited the project](https://www.watoday.com.au/business/companies/poor-returns-high-co2-forced-shell-s-hand-on-woodside-s-browse-lng-20230524-p5daru.html?ref=boilingcold.com.au) in 2023 due to likely low financial returns and high carbon emissions. Browse does not have WA or Federal environmental approvals. In 2024, the WA Environmental Protection Authority's preliminary view was that it was [unacceptable](https://www.watoday.com.au/national/western-australia/unacceptable-red-flag-for-woodside-s-browse-gas-project-poses-problem-for-federal-government-20240725-p5jwjm.html?ref=boilingcold.com.au) due to the threat to Scott Reef from oil spills, risks to pygmy blue whales and the possibility of turtle nesting sites sinking below sea level. After years of negotiation, the Browse joint venture has not been able to agree on a deal with the North West Shelf joint venture to process its gas for export. That task is now harder after Japan's INPEX [bought into Browse](https://www.inpex.com/english/news/upload/20260515.pdf?ref=boilingcold.com.au) and likely intends to reconfigure the project to send the gas to its export plant in Darwin. It is simply irresponsible to stake WA's economy on the mirage of Browse. ## Who will supply the extra gas? Chevron's Gorgon, Australia's largest gas export project, will provide the most additional gas under the Federal 20 per cent reservation scheme. In 2014, Chevron, Shell and ExxonMobil [decided](https://chevroncorp.gcs-web.com/news-releases/news-release-details/chevron-makes-final-investment-decision-construct-gorgon-natural?ref=boilingcold.com.au) Gorgon, producing 15 million tonnes a year (MTPA) of LNG, was a worthwhile investment. It included a 300 TJ/day domestic gas plant, just enough to meet WA's 15% obligation. However, the plant has produced an average of 16.8 MTPA of LNG in the past three financial years, according to [annual reports](https://www.der.wa.gov.au/component/k2/itemlist/filter?fitem%5Fall=gorgon&array26%5B%5D=Licence&moduleId=94&Itemid=175&ref=boilingcold.com.au) filed with WA's environment regulator. To meet WA's 15 per cent target, Gorgon should deliver 340 TJ/day of gas to WA, but in 2025 it supplied just 250 TJ/day. More importantly, under the [2003 Barrow Island Act, ](https://www.legislation.wa.gov.au/legislation/prod/filestore.nsf/FileURL/mrdoc%5F47123.pdf/$FILE/Barrow%20Island%20Act%202003%20-%20%5B01-d0-00%5D.pdf?OpenElement&ref=boilingcold.com.au)an earlier WA Labor Government [did not impose an ongoing obligation ](https://www.watoday.com.au/national/western-australia/the-gorgon-deal-that-could-up-the-stakes-on-wa-s-looming-gas-shortage-20240702-p5jqic.html?ref=boilingcold.com.au)for Gorgon to supply the local market. Instead, there is a requirement to deliver 2000 PJ that will be fulfilled in about 2038\. After that, under the present arrangements, WA's largest domestic gas supplier could turn off the tap. Other additional gas comes from Wheatstone and Woodside's new Scarborough gas project, meeting a 20 per cent obligation instead of 15 per cent. In the early years, there will also be significant additional volumes from Pluto that, to date, has [only delivered the equivalent of four per cent](https://thewest.com.au/business/oil-gas/wa-domestic-gas-supply-manufacturers-urge-revised-domgas-deal-for-woodsides-pluto-c-22166624?ref=boilingcold.com.au) of its exports to the local market. [![Want energy and climate news to hold gas giants to account? Support Boiling Cold.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/07/CTA-donate-big-gas-1.png)](https://www.boilingcold.com.au/support/) --- ## The Calculations The complete data, references, assumptions and calculations behind this analysis can be downloaded: [Future WA domestic gas supply scenariosprovided for transparency and accountabilityWA domgas analysis May 2026.xlsx304 KBdownload-circle](https://www.boilingcold.com.au/content/files/2026/05/WA-domgas-analysis-May-2026.xlsx "Download") Before entering journalism, Peter Milne worked in oil and gas for 25 years. This experience, which at Chevron included leading the economic analysis of the Gorgon project and helping negotiate the Wheatstone domestic gas agreement with the WA Government, provides the expertise to support this level of analysis. Note that consulting companies that provide analysis to governments and industry for publication never provide this level of transparency. ### Feds probe more illegal clearing by Alcoa after 'deliberate repeat’ destruction of jarrah forest URL: https://www.boilingcold.com.au/feds-probe-more-illegal-clearing-by-alcoa-after-deliberate-repeat-destruction-of-jarrah-forest/ Last updated: 2026-05-20T02:15:05.000Z EXCLUSIVE Alcoa's strip mining of WA's jarrah forest is under further investigation after its "deliberate repeat breach" of environmental laws that destroyed habitat for protected species and cost it $40 million to avoid prosecution. The ongoing probe into Alcoa's clearing at its Willowdale mine was revealed in [talking points](https://www.industry.gov.au/sites/default/files/2026-04/disclosure-log-2026-0035-300349m.pdf?ref=boilingcold.com.au) for Federal Ministers prepared ahead of the February announcement of a [record $55 million settlement](https://www.boilingcold.com.au/alcoa-slugged-55-million-over-illegal-jarrah-forest-clearing/) for clearing at its Huntly mine. News of another Federal probe piles more pressure on Alcoa's bauxite mining in south west WA, which [threatens Perth's water supply](https://www.theguardian.com/australia-news/2025/aug/20/perth-water-supply-risk-alcoa-bauxite-mining?ref=boilingcold.com.au), has destroyed about 280 sq km of jarrah forest, [none of which the company has rehabilitated](https://www.watoday.com.au/environment/sustainability/alcoa-in-wa-60-years-28-000-hectares-of-forest-cleared-zero-rehabilitation-completed-20230307-p5cq4j.html?ref=boilingcold.com.au) in sixty years, and when refined into alumina, results in [mercury-laden emissions](https://www.boilingcold.com.au/doubling-of-mercury-emissions-from-alcoa-wagerup-prompts-appeals/), [contaminated groundwater](https://www.boilingcold.com.au/1-2b-kwinana-clean-up-bill-drives-alcoa-australia-to-a-600m-loss/) and millions of tonnes of [unstable toxic bauxite residue](https://www.watoday.com.au/national/western-australia/alcoa-s-mountains-of-red-mud-fail-to-pass-stability-checks-20240830-p5k6qy.html?ref=boilingcold.com.au). [Doubling of mercury emissions from Alcoa Wagerup prompts appeals“The government is allowing Alcoa to do whatever they friggin want,” according to a long-term campaigner for better regulation of WA’s alumina refineries.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-291.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/cattle-near-Wagerup-refinery-b-1.JPG)](https://www.boilingcold.com.au/doubling-of-mercury-emissions-from-alcoa-wagerup-prompts-appeals/) Alcoa is pushing the WA and Federal Governments to approve an expansion of its northern Huntly mine, much of it around Perth's largest drinking water dam, the Serpentine. > Chief executive Bill Oplinger calls permission to strip mine more of WA's jarrah forest his ["number one" lever](https://www.boilingcold.com.au/alcoa-spruiks-profit-boost-if-mining-more-wa-forest-approved/) to boost the earnings of the $25 billion company. The February deal included Alcoa spending $40 million to remedy what the Government called "a deliberate repeat breach—318 hectares cleared while under investigation" in 2023 and 2024, according to the talking points released in response to a freedom of information request. Jess Boyce, director of the WA Forest Alliance, said the Federal Government's labelling of Alcoa's clearing as a "deliberate repeat breach" indicates the company was "well aware that it was acting with blatant disregard for environmental law." "The question is, why did the Federal Government not only let this continue for two years, rather than halt clearing, but has now given Alcoa an exemption to continue clearing despite proving it can’t be trusted?" [Alcoa acknowledged](https://www.dcceew.gov.au/sites/default/files/documents/enforcable-undertaking-alcoa-2024-2025.pdf?ref=boilingcold.com.au) it destroyed the known habitat of protected species, but denied it breached the law. The breach created an "offset liability of 3000 hectares", and the Federal Government has imposed an enforceable undertaking on Alcoa to spend at least $40 million on land purchases by the end of 2026\. Another [undertaking](https://www.dcceew.gov.au/sites/default/files/documents/enforcable-undertaking-alcoa-2019-2023.pdf?ref=boilingcold.com.au) to spend $15 milion covers Alcoa clearing 1777 hectares of jarrah forest - equivalent to four of Perth's Kings Park - from 2019 to 2023. --- ⛏️ Alcoa's clearing at Huntly destroyed known habitat of: \- Baudin's Black-cockatoo - endangered \- Carnaby's Black-cockatoo - endangered \- Forest Red-tailed Black-cockatoo or Karrak **\-* vulnerable \- Woylie - endangered \- Chuditch or Western Quell **\-* vulnerable \- Numbat **(WA's fauna emblem) -* endangered \-Quokka **\-* vulnerable ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/05/Baudins-cockatoo-Jean-Hort-1.jpg) ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/05/Carnaby-s_Black-Cockatoo.jpg) ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/05/Forest_Red-Tailed_Black_Cockatoos-_Beelu_National_Park-_Western_Australia-1.png) ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/05/Woylie_walking_near_log_-_DPLA_-_d285e13d9e34391d73ff5d3fe25f4b53-1.jpg) ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/05/quoll.jpg) ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/05/numbat-4070485_1280-3.jpg) ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/05/Quokka_-Setonix_brachyurus-_-27725086285-.jpg) > The Australian environment minister "[considers](https://www.dcceew.gov.au/sites/default/files/documents/enforcable-undertaking-alcoa-2024-2025.pdf?ref=boilingcold.com.au) that the action taken by Alcoa has contravened a civil penalty ... (and) has had, or is likely to have had, **a significant impact** **on listed endangered and vulnerable species**. --- An Alcoa spokesman said its mining, which started in the early 1960s, has historically been undertaken in accordance with WA legislation. "Our operations predate the (Federal) EPBC Act, and we have always maintained we were operating under grandfathering provisions (Section 43B “continuing use” at Huntly and Section 43A “prior authorisation” at Willowdale) of the Act", he said in a statement to *Boiling Cold.* "Section 43B was amended as part of the recent package of revisions made by the Government to the EPBC Act, meaning it could no longer be relied on at Huntly. Section 43A remains in the Act and was unchanged." The Huntly mine, which is mainly in water catchments, supplies Alcoa's Pinjarra alumina refinery. The newly revealed investigation is into possible illegal clearing at Alcoa's southern Willowdale mine, which feeds its Wagerup refinery, where a [gallium plant](https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://www.boilingcold.com.au/trump-critical-minerals-deal-could-lock-in-jarrah-forest-mining-for-decades/&ved=2ahUKEwifs9n6o7iUAxUrm68BHW-EI%5F0QFnoECBsQAQ&usg=AOvVaw1Y6NJJ68HqZ7q03yviQK%5Fw) backed by the Australian, Japanese and US governments is planned. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/05/Assessment-2385-ERD-Rev2_Ch01-Overview-of-Proposal-1.jpg) ****Alcoa's lease extends well beyond its current mining at Huntly (red) and Willowdale (pink).** Image: Alcoa EPA submission A spokeswoman for the Department of Climate Change, Energy, the Environment and Water said its investigation into land clearing at Alcoa's Willowdale mine is ongoing and it would not comment further. ## Alcoa cleared by three state probes Alcoa was also under investigation by WA authorities for three alleged violations of restrictions on clearing near trees suitable for black cockatoo nests. If just one breach was proven, it would invalidate the 2023 exemption to the Environmental Protection Act's prohibition on conducting an activity that is under review by WA's environmental watchdog, the EPA. Much of Alcoa's mining in WA would have had to cease immediately unless the Cook Labor Government granted another exemption. The possible breaches were reported to authorities by Greens WA upper house member Jess Beckerling earlier this year. A spokesman for the Department of Water and Environmental Regulation said it had conducted a thorough investigation into the alleged breaches and found insufficient evidence to substantiate the claims. On Friday evening two of the investigation reports were tabled in the WA Parliament. Beckerling said the 59,000 submissions to the EPA about Alcoa's proposed expansion indicated a "profound level of discontent with continued clearing of the highly biodiverse Northern Jarrah Forests." "We have a serious problem in this country with multinational corporations destroying places we love and our laws and governments being completely inadequate to rein them in," she said. [![CTA Image](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/02/DJI_0449-Myara-copy.JPG)](#/portal/signup) **Boiling Cold*'s unrivalled [reporting on Alcoa](https://www.boilingcold.com.au/tag/alcoa/) is free for all to read, maximising impact and accountability. I need your backing to keep covering stories that would otherwise go unreported. [Support independent journalism in WA ](#/portal/signup) --- **Updates** 15 May - After inital publication, the Department of Water and Environmantal Regulation released a statement that it had found insufficient evidence to substantiate the claims reported by Beckerling. The story was updated to reflect this. --- **Image credits** Baudin's Black-cockatoo - [Jean Hort](https://www.flickr.com/photos/jean%5Fhort/33282440722/in/photostream/?ref=boilingcold.com.au) Carnaby's Black-cockatoo - [Noah B Marshall](https://commons.wikimedia.org/wiki/File:Carnaby%27s%5FBlack-Cockatoo.jpg?ref=boilingcold.com.au) Forest Red-tailed Black-cockatoo - [Maclearite](https://commons.wikimedia.org/wiki/File:Forest%5FRed-Tailed%5FBlack%5FCockatoos,%5FBeelu%5FNational%5FPark,%5FWestern%5FAustralia.png?ref=boilingcold.com.au) Woylie -[Warren Garst](https://commons.wikimedia.org/wiki/File:Woylie%5Fwalking%5Fnear%5Flog%5F-%5FDPLA%5F-%5Fd285e13d9e34391d73ff5d3fe25f4b53.jpg?ref=boilingcold.com.au) Chuditch or Western Quell - [Brett Vercoe](https://www.inaturalist.org/photos/57636947?ref=boilingcold.com.au) Numbat - [Seashalia](https://www.needpix.com/photo/download/1820725/numbat-western-australia-perth-animals-cute-tree-free-pictures-free-photos-free-images?ref=boilingcold.com.au) Quokka - [Patrick Kavanagh](https://commons.wikimedia.org/wiki/File:Quokka%5F%28Setonix%5Fbrachyurus%29%5F%2827725086285%29.jpg?ref=boilingcold.com.au) ### Problems again stall production from Santos' $6.8b Barossa LNG URL: https://www.boilingcold.com.au/problems-again-stall-production-from-santos-6-8b-barossa-lng/ Last updated: 2026-05-05T11:53:52.000Z EXCLUSIVE The restart of Santos' flagship Barossa gas export project encountered an array of problems in the same week that chief executive Kevin Gallagher [received $5 million](https://thewest.com.au/business/oil-gas/santos-boss-kevin-gallagher-awarded-5m-worth-of-incentive-shares-his-stake-now-worth-a-whopping-41m-c-22198699?ref=boilingcold.com.au) in company shares under a [2021 deal](https://www.santos.com/news/growth-projects-incentive-for-ceo/?ref=boilingcold.com.au) to reward him for the successful delivery of projects. Clogged heat exchangers, faulty valves on subsea wellheads, and accommodation doors that do not seal properly are all causing headaches for the Adelaide-based company. When Santos went ahead with the $US4.8 billion ($6.8 billion) project in 2021 to supply gas to its Darwin LNG plant, it [planned to start](https://www.santos.com/news/santos-announces-fid-on-the-barossa-gas-project-for-darwin-lng/?ref=boilingcold.com.au) production in the first half of 2025\. The first cargo of liquefied natural gas (LNG) was sent to Asia in January. Still, there have been significant problems since, including a "[planned shutdown](https://www.boilingcold.com.au/santos-shuts-down-barossa-lng-amidst-global-gas-crunch/)" in March to fix compressor seals and reinforce failing pipework. On April 23, Santos [told investors](https://www.santos.com/news/2026-first-quarter-report/?ref=boilingcold.com.au) it expected to ramp up production from Barrosa in the next week when two vital heat exchangers were flushed and cleaned. However, that attempt to clear the equipment failed, according to multiple sources familiar with Barossa but not authorised to talk to the media. Speaking a week later, a Santos spokeswoman said it had finished clean-up operations on one heat exchanger and "indications are that it has been successful." The second exchanger was being cleaned, and Santos was "in the process" of restarting production using the first heat exchanger. "The facility, including the BW Opal, remains safe to operate," she said. [Doubling of mercury emissions from Alcoa Wagerup prompts appeals“The government is allowing Alcoa to do whatever they friggin want,” according to a long-term campaigner for better regulation of WA’s alumina refineries.![](https://static.ghost.org/v5.0.0/images/link-icon.svg)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/size/w1200/2026/04/cattle-near-Wagerup-refinery-b.JPG)](https://www.boilingcold.com.au/doubling-of-mercury-emissions-from-alcoa-wagerup-prompts-appeals/) In addition, the closing mechanisms on eight accommodation doors that shield workers from potential gas leaks are not working properly. A spokesman for offshore safety regulator NOPSEMA said it had been told of the problem and was satisfied that interim arrangements in place until spare parts arrived meant there was no increased risk. Problems with the heat exchangers and the doors on the BW Opal production vessel are the joint responsibility of Norwegian firm BW Offshore, which owns and operates the vessel under [a $US4.6 billion contract](https://bwoffshore.com/media/bw-opal-achieves-first-gas?ref=boilingcold.com.au), and Santos, which leases it on behalf of the Barossa joint venture. It is an unusual contractual arrangement in Australia‘s multi-billion dollar gas export projects, where the norm is for the production joint venture to own all crucial plant and facilities. Several industry sources told *Boiling Cold* that having two companies involved was complicating the vessel's commissioning. In February, BW Offshore [told investors ](https://bw-offshore.s3.eu-north-1.amazonaws.com/2025+Q4+Presentation.pdf?ref=boilingcold.com.au)it expected the BW Opal to reach full capacity by the end of March It was also expected to achieve Practical Completion on its contract with Santos by mid-March - a contractual milestone that requires the Opal to be safe and functional with nothing but minor issues to be addressed. [Australian oil & gas lags in disclosing $44b clean-up billSantos’ decommissioning liability matches a quarter of its $22b value, but its disclosures to investors fared poorly against the latest accounting standards, according to an international survey.![](https://static.ghost.org/v5.0.0/images/link-icon.svg)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/02/ExxonMobil-decommissioning-graphic.png)](https://www.boilingcold.com.au/australian-oil-gas-lags-in-disclosing-44b-clean-up-bill/) ## Production choked underwater On the seabed, up to 280m below the BW Opal, vital valves have failed on some of the six wellheads installed by Santos. Choke valves on two wellheads, which control the flow of oil and gas from the underground reservoir to the vessel, were replaced during commissioning, and another well has a suspected choke failure, according to Santos. "An initiative is in place to proactively change out any others as required," the Santos spokeswoman said. This degree of failure of vital subsea components early in a project's life is uncommon in the offshore oil and gas industry. Valves are normally subject to stringent independent quality assurance during manufacturing, and then, when the wellhead is assembled, they are tested thoroughly onshore. The effort is intended to avoid costly repairs on the seabed and even more expensive loss of production. The Santos spokeswoman said that just two of the six wells are sufficient for Barossa to operate at full capacity. The Barossa project is operated and 50 per cent owned by Santos. The other joint venture partners are Japan's JERA with a 12.5 per cent stake, and the Korean firm SK, which owns 37.5 per cent through its Australian subsidiary PRISM Energy International Australia. The total cost estimate for Barossa is $US4.822 billion ($6.8 billion). It comprises the [initial 2021 decision](https://www.santos.com/news/santos-announces-fid-on-the-barossa-gas-project-for-darwin-lng/?ref=boilingcold.com.au) to invest $US3.6 billion in offshore development and $US600 million to upgrade the Darwin LNG plant, plus the $US622 million decision [18 months later](https://www.santos.com/news/darwin-pipeline-duplication-project-go-ahead/?ref=boilingcold.com.au) to undertake additional offshore pipeline work to allow CO2 from the reservoir to be stored in the future. The capital cost would have been much higher if Santos had bought a production vessel, rather than leased it. [![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/10/CTA-industry-energy-climate.png)](https://www.boilingcold.com.au/support/) ### $1.2b Kwinana clean up bill drives Alcoa Australia to a $600m loss URL: https://www.boilingcold.com.au/1-2b-kwinana-clean-up-bill-drives-alcoa-australia-to-a-600m-loss/ Last updated: 2026-05-01T01:04:05.000Z The cost to clean up Alcoa's Kwinana alumina refinery and its toxic tailings has driven the aluminium specialist's Australian operation to a $592 million loss in 2025. The US company booked a $1.245 billion restructuring charge, predominantly driven by the closure of the refinery south of Perth, according to the [2025 accounts](https://www.documentcloud.org/documents/28084854-alcoa-of-australia-ltd-2025-report-to-asic/?ref=boilingcold.com.au) of Alcoa of Australia Limited, filed with corporate regulator ASIC. Coupled with a $445 million charge in 2024, the cost of closing the Kwinana refinery is now $1.7 billion. The 2025 charge included $614 million to cover future costs to close facilities and rehabilitate the environment, indicating that Alcoa significantly underestimated these costs in prior accounts. Alcoa's $592 million loss in Australia in 2025 followed an $818 million profit in 2024\. Alcoa's operations in Australia are its strip mining of bauxite in the jarrah forest water catchments along the Darling Scarp, alumina refineries in Pinjarra and Wagerup, and a 55 per cent stake in the Portland aluminium smelter in Victoria. It received $6.1 billion from alumina and aluminium sales last year, paid $4.9 billion to employees and suppliers, and sent $636 million of dividends to its owners. The Kwinana-related restructuring charge is a one-off, suggesting Alcoa's Australian operation will likely return to profitability in 2026. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/04/image-2-1.png) ****Alcoa's bauxite residue dump at Kwinana spans about 2km by 2km.** Image: Google Maps ## A contaminated mist to dispose of toxic water Alcoa has a stockpile of 141 million cubic metres of toxic red mud, accumulated over six decades of alumina refining at Kwinana, that is proving difficult to manage. In 2009, Alcoa's Kwinana bauxite residue area was [classified as a contaminated site](https://www.documentcloud.org/documents/28084855-alcoa-kwinana-refinery-basic-contaminated-site-record/?ref=boilingcold.com.au) requiring remediation due to alkali groundwater contamination within and beyond its boundaries. In 2025, Alcoa increased the funds set aside for rehabilitating Kwinana by $614 million to cover the costs of water management and new designs for long-term landforms. The move follows a $341 million charge in 2024 for managing water at Kwinana. The company is required under the Contaminated Sites Act to [continually extract contaminated groundwater](https://www.der.wa.gov.au/images/documents/our-work/licences-and-works-approvals/Decisions%5F/L5245/L5245%2022-08-2025%20AR.pdf?ref=boilingcold.com.au) beneath the bauxite tailings to prevent the contamination from spreading. This water was disposed of by using it in the refinery, where it evaporated. With the refinery shut down, Alcoa now has [permission to operate 37 giant sprinklers](https://www.der.wa.gov.au/images/documents/our-work/licences-and-works-approvals/Decisions%5F/L5245/L5245%2022-12-2025%20-%20AR.pdf?ref=boilingcold.com.au) to spray thousands of tonnes of contaminated water an hour in a fine mist over the tailings, allowing some of it to evaporate. The sprays are an interim measure until Alcoa can construct a wastewater treatment plant that received [regulatory approval](https://www.der.wa.gov.au/images/documents/our-work/licences-and-works-approvals/Decisions%5F/W3105/W3105%2005-02-2026%20DRv2.pdf?ref=boilingcold.com.au) in February. ## Approval delays and low-grade bauxite The $23 billion company is also facing problems in the jarrah forests of WA, where it sources three quarters of its bauxite - the ore that aluminium is extracted from. Alcoa has delayed by two years plans to expand its Huntly mine that supplies the Pinjarra refinery, according to its [2025 annual report lodged with US regulator](https://www.documentcloud.org/documents/28084856-alcoa-2025-annual-sec-report-with-appendix/?ref=boilingcold.com.au) the SEC. ![A map showing Alcoa's planned expansions of its Huntly bauxite mine that feeds its Pinjara alumina refinery: Myara North to the north amd Holyaoke to the south.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/03/image-1.png) ****The WA and Federal regulators are assessing Alcoa's planned expansion into the Myara North and Holyoake areas.** Source: [Alcoa](https://www.alcoa.com/australia/en/pdf/1-Approval-Areas-Map.pdf?ref=boilingcold.com.au) The US miner anticipates it will start mining the Myara North and Holyoake regions of its mine "no earlier than 2029." The target, in its [2024 report](https://www.documentcloud.org/documents/28084857-alcoa-2024-annual-sec-report-with-appendix/?ref=boilingcold.com.au), was "no earlier than 2027." Alcoa has been mining lower-grade bauxite in WA since 2023, when approvals to access new areas slowed and came with greater restrictions due to concerns that its deforestation risked contaminating dams vital to Perth's water supply. [Perth’s water supply at ‘high risk’ from Alcoa bauxite mining, expert study findsExclusive: GHD identified contamination threats to dams inland of Perth from sewage, oil spills, and soil erosion![](https://static.ghost.org/v5.0.0/images/link-icon.svg)The GuardianPeter Milne![](https://i.guim.co.uk/img/media/67d89a2a3a31f03cf6d79cc94c99cac9376da2a1/0_0_2532_2025/master/2532.jpg?width=1200&height=630&quality=85&auto=format&fit=crop&precrop=40:21,offset-x50,offset-y0&overlay-align=bottom%2Cleft&overlay-width=100p&overlay-base64=L2ltZy9zdGF0aWMvb3ZlcmxheXMvdGctZGVmYXVsdC5wbmc&enable=upscale&s=32556661f542741355bbf419c11ebdeb)](https://www.theguardian.com/australia-news/2025/aug/20/perth-water-supply-risk-alcoa-bauxite-mining?ref=boilingcold.com.au) For five consecutive years, annual bauxite production has declined. However, the alumina Alcoa shipped from WA was still among the cheapest 25 per cent of global production, according to the report to the SEC, but WA production could slip into the second quartile of costs until Alcoa gains access to new mining areas. --- *Boiling Cold* reporting featured in *Juice Media*'s recent take on Alcoa in WA. Please [support journalism holding resource companies to account](https://www.boilingcold.com.au/support/) \- because WA Labor and *The West Australian* certainly will not. [![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/03/Screenshot-2026-03-20-at-11.12.17---am.png)](https://youtu.be/FWrdQxmGlO8?si=5DLvtXwvwW-lNFf8&ref=boilingcold.com.au) ****Boiling Cold's journalism featured on Juice Media's "Honest Government Ad" on Alcoa - click to watch.** --- UPDATE: 1 May 2025 - added charges for closing Kwinana is now $1.7 billion. ### Cyclone damage shuts Jadestone's Stag oil field off WA URL: https://www.boilingcold.com.au/cyclone-damage-shuts-jadestones-stag-oil-field-off-wa/ Last updated: 2026-05-04T20:54:10.000Z Cyclone Narelle has shut down Jadestone Energy's Stag oil field, that now has a sinking mooring for oil tankers and damaged casings around wells drilled from the platform. A number of industry sources told *Boiling Cold* that the cyclone left Stag, 60km north west of Dampier, with a CALM buoy that has lost buoyancy, and conductors that extend 70 m from the platform deck to the seabed, requiring repairs. The UK-listed and Singapore-headquartered company may not have fully disclosed the cyclone's full impact to offshore regulator NOPSEMA. A NOPSEMA spokeswoman said the company reported that the CALM buoy was damaged, but it was "following up with Jadestone regarding damage to other safety-critical equipment to understand the circumstances, including whether all relevant reporting obligations have been met," she said. "As part of normal practice, NOPSEMA will investigate where the need arises, and where there is potential non-compliance, appropriate regulatory action will be taken." ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/04/Stag-facility-schematic.png) ****Oil is continuously loaded onto a tanker connected to the CALM buoy.** Image: [Stag Environment Plan](https://docs.nopsema.gov.au/A1180740?ref=boilingcold.com.au) The CALM buoy sits about 2km from the Stag platform, tethered to the seabed with six chains. It allows oil to continually flow from the platform to a waiting oil tanker. The platform cannot store oil, so there can be no production until the CALM buoy is retrieved and then repaired or replaced. The buoy has six watertight compartments and is designed to remain stable if one is flooded, according to the [Stag environment plan](https://info.nopsema.gov.au/activities/46/show%5Fpublic?ref=boilingcold.com.au), indicating that more than one compartment has been breached. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/04/Stag-CALM-buoy.jpg) ****Stag's CALM buoy can secure 150,000 tonne tankers**. Image: [ONA Consultants](https://www.onaconsultants.com.au/projects/calm-buoy-re-lifing/?ref=boilingcold.com.au) Jadestone [told investors](https://otp.tools.investis.com/clients/uk/jadestone%5Fenergy%5Finc/rns/regulatory-story.aspx?cid=2446&newsid=2044638&ref=boilingcold.com.au) on March 30 that Stag was damaged after winds from Cyclone Narelle exceeded 200 km/hr, but released no details. Jadestone started shutting down Stag on March 23, and pipelines were cleared of oil and workers moved to shore. A spokeswoman told *Boiling Cold* that while its damage assessment was continuing, "there has been a partial loss of buoyancy in the CALM buoy and damage to some of the well conductors." "We will provide an update in due course when further information is available." The NOPSEMA spokeswoman said Cyclone Narelle was an extreme storm running down the coast of WA, impacting many offshore facilities. "The industry activated cyclone preparedness plans immediately, and no injuries or major environmental incidents have been reported," she said. Jadestone is claiming insurance for the damage to Stag and the cost of lost production and does not expect Cyclone Narelle will have a material financial impact. [Doubling of mercury emissions from Alcoa Wagerup prompts appeals“The government is allowing Alcoa to do whatever they friggin want,” according to a long-term campaigner for better regulation of WA’s alumina refineries.![](https://static.ghost.org/v5.0.0/images/link-icon.svg)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/size/w1200/2026/04/cattle-near-Wagerup-refinery-b.JPG)](https://www.boilingcold.com.au/doubling-of-mercury-emissions-from-alcoa-wagerup-prompts-appeals/) ## An Australian oil portfolio with a big clean up bill Jadestone produced 11,000 barrels of oil a day in Australia in 2024 from three projects that together impose a $US438 million ($614 million) clean-up liability on it. The $277 million company's other Australian interests are the Montara oil field it owns and operates in the Timor Sea and a 33 per cent stake in some Carnarvon Basin oil fields operated by Woodside. Jadestone, then called Mitra Energy, [bought Stag off Santos](https://www.jadestone-energy.com/mitra-closes-acquisition-of-stag-oilfield/?ref=boilingcold.com.au) in 2016 for $US10 million ($14 million). Stag has been in the red for each of the five years to 2024, according to accounts filed with corporate regulator ASIC, with a total loss of $US63 million ($88 million). During that time, annual daily production has fluctuated between a high of 2,672 barrels a day in 2023 to a low of 2,005 barrels a day in 2024\. Stag contributes about five per cent of Jadestone's production. Jadestone has recorded a $US127 million ($179 million) liability for decommissioning Stag and expects work to begin in 2036. The accounts note that this estimate assumes some equipment can be left on the seabed based on past decisions by NOPSEMA despite "under Australian legislation, complete removal of offshore assets is mandated." Montara produced 5262 barrels of oil a day in 2024 and made a loss of $US15 million ($21 million), according to the latest annual report filed with ASIC. In September 2025 NOPSEMA [directed Jadestone](https://www.nopsema.gov.au/sites/default/files/2025-09/General%20Direction%202043%20-%20Montara%20Venture%20Hull%20Integrity.pdf?ref=boilingcold.com.au) to urgently address corrosion on its 36-year-old Montara Venture oil vessel which "may pose significant safety and environmental risks." Production from Montara was threatened by industrial action by workers for Jadestone subcontractor Legineering just as oil prices are at record highs. However, the union Offshore Alliance [announced on Monday](https://www.facebook.com/share/p/1BHY3RXgTs/) that its members had accepted a pay rise deal. Jadestone has a provison of $US201 million ($282 million) for decommissioning Montara and expects work to start in 2031. [Jadestone slammed for dangerous corrosion in WA oil vesselNOPSEMA has ordered Jadestone to urgently address corrosion on its aged Montara Venture oil vessel in the Timor Sea, which “may pose significant safety and environmental risks.”![](https://static.ghost.org/v5.0.0/images/link-icon.svg)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/09/Montara-2-1.jpg)](https://www.boilingcold.com.au/regulator-slams-jadestone-energy-for-dangerous-corrosion-in-oil-vessel-off-wa/) In 2022 Jadestone [bought a one-sixth share](https://www.jadestone-energy.com/acquisition-of-interest-in-north-west-shelf-oil-producing-fields/?ref=boilingcold.com.au) of the Cossack, Wanaea, Lambert and Hermes (CWLH) oil fields fom BP and in early 2024 [doubled its stake](https://www.jadestone-energy.com/acquisition-of-additional-interest-in-the-cwlh-oil-fields/?ref=boilingcold.com.au) with a purchase from Japan Australia LNG, a Mitsui and Mitsibishi joint venture. In 2024 Jadestone's share of production averaged 3711 barrels of oil a day and it made a $US36 million ($50 million) profit from CWLH. It has provisioned $US110 million ($154 million) for its share of the cost of decommisioning from 2037 onwards. Like Stag, this estimate assumes NOPSEMA will allow some equipment to be left in the ocean. Jadestone has contributed $US169 million ($237 million) to a trust fund to cover this future cost at CWLH. The CWLH fields are not curently producing as the Okha production vessel sailed to Singapore for planned maintenance in January. Jadestone Energy's Australian subsidiaries have entered into a deed poll with the the Australian Government to ensure ithe decommissioning costs will be paid when they arise. The parent company must provide financial security to the Government when its future after tax tax flow is no longer 25 per cent higher than its decommissioning liability. [![Understand WA's energy transition with news independent of government and big business. Support Boiling Cold. ](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/07/CTA-donate-transition-2.png)](https://www.boilingcold.com.au/support-cta/) ### Doubling of mercury emissions from Alcoa Wagerup prompts appeals URL: https://www.boilingcold.com.au/doubling-of-mercury-emissions-from-alcoa-wagerup-prompts-appeals/ Last updated: 2026-06-01T21:32:50.000Z Environment and community groups have lodged appeals against a licence extension for Alcoa's Wagerup alumina refinery, where emissions of toxic mercury have nearly doubled over the past few years. The concerns focus on the effect of mercury on wildlife, dust emissions, and inadequate monitoring of emissions. The Conservation Council of WA (CCWA) has slammed as inadequate [changes to Alcoa's licence conditions](https://www.der.wa.gov.au/images/documents/our-work/licences-and-works-approvals/Decisions%5F/L6217/L6217%2013-03-2026%20AR.pdf?ref=boilingcold.com.au) made by the WA Department of Water and Environmental Regulation (DWER), after an eight-year review that is not yet complete. CCWA director Matt Roberts said it seems the WA environment regulator has taken no action while emissions of the toxic metal have grown substantially. 'This raises serious questions about our state regulator’s capacity to effectively hold the US-based miner to account,” Mr Roberts said. An Alcoa spokesman said emissions have grown due to problems with condensers used to capture the toxic metal and variations in the mercury content of bauxite mined to feed the refinery, but remain within safe limits. He said Alcoa expected to fix the problems in the condensers "in coming months." For the past two years, about 70 per cent of the mercury in bauxite mined for Wagerup has been emitted into the atmosphere, according to data in the [DWER report](https://www.der.wa.gov.au/images/documents/our-work/licences-and-works-approvals/Decisions%5F/L6217/L6217%2013-03-2026%20AR.pdf?ref=boilingcold.com.au). A few years earlier, when condenser corrosion was less severe, just 40 per cent of the mercury escaped. Roberts said nothing excused the ongoing release of mercury into the environment, with more than eight threatened species living within 2km of the refinery. ## Non-human risks not assessed An Alcoa-commissioned [health risk assessment](https://www.epa.wa.gov.au/sites/default/files/Additional%5FAssessment%5FInformation/EPA%20Report%201691%20-%20Wagerup%20Revised%20HRA%20to%20be%20published%20with%20the%20assessment%20report.pdf?ref=boilingcold.com.au) (HRA) completed in 2020 concluded that emissions from the refinery, including mercury, presented a low risk to humans. The Alcoa spokesman said the HRA methodology was robust and conservative. The company told DWER that ground-level mercury concentrations could increase 20-fold before there was a health risk. However, Roberts is concerned that the effect of mercury on plants and wildlife has not been considered. “Mercury is a dangerous neurotoxin which bioaccumulates in the environment," he said. “The licence application provided no research on the mercury levels in the environment or in threatened species like the numbat, chuditch, western ringtail possum, the rainbow bee-eater, black cockatoos, and Carter’s freshwater mussel." *Boiling Cold* asked Alcoa and DWER what had been done to show the mercury emissions were safe for non-human life. The company did not respond. A spokesman for the regulator said it would be inappropriate to comment as the licence extension it granted to Alcoa had been referred to the Office of the Appeals Convenor. DWER also did not say why the first stage of its review of Alcoa's Wagerup license took eight years, or how long stage 2, which will consider water quality and volatile organic compound emissions, will take. [Labor breaks vow and risks WA’s water supply for AlcoaRoger Cook granting Alcoa greater access to mine near Perth’s dams risks could cost taxpayers billions of dollars and result in water restrictions![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-290.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Alcoa-Cook-Water-feature-pic-27.png)](https://www.boilingcold.com.au/wa-labor-puts-alcoa-before-water-supply/) ## Fine dust a big concern Emissions of ultrafine dust smaller than 2.5 millionths of a metre (PM2.5) from Wagerup have increased more than fourfold in the past decade, according to the DWER report. Fine dust particles can be invisible, are readily inhaled, and are associated with a range of poor health outcomes. Emissions of larger but still serious PM10 particles have almost doubled in 10 years. However, Alcoa does not directly measure the total amount of PM2.5 and PM10 dust particles it emits; instead, it relies on calculations. In its appeal, CCWA has called on DWER to explain how it concluded that just one PM2.5 monitoring station would be sufficient for the 2.9 million tonnes of aluminium produced annually at the refinery. [![CTA Image](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/02/DJI_0449-Myara-copy.JPG)](#/portal/signup) **Boiling Cold*'s unrivalled [reporting on Alcoa](https://www.boilingcold.com.au/tag/alcoa/) is free for all to read, maximising impact and accountability. I need your backing to keep covering stories that would otherwise go unreported. [Support independent journalism in WA ](#/portal/signup) Another appeal against the extension of Wagerup's license is from the Community Alliance for Positive Solutions (CAPS). CAPS chair Vince Puccio worked for Alcoa for 25 years and has campaigned for better regulation of WA's alumina refineries for three decades. He was born in Yarloop, a town south of the Wagerup refinery that is now partly abandoned due to dust and emissions from the refinery. CAPS has never called for Wagerup to close, but it does want a significant change to how Alcoa manages dust and mercury, saying in its submission that many of DWER's conclusions are not soundly based in science. > *"The government is allowing Alcoa to do whatever they friggin want," Puccio said.* "There needs to be a balance where industry, government, and community can work for the common good." The Australian, US, and Japanese governments plan to produce the strategic [rare earth metal gallium](https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://www.boilingcold.com.au/trump-critical-minerals-deal-could-lock-in-jarrah-forest-mining-for-decades/&ved=2ahUKEwj7g5H55N2TAxXwWnADHUuPJNoQxfQBKAB6BAgJEAE&usg=AOvVaw1Y6NJJ68HqZ7q03yviQK%5Fw) at the Wagerup refinery, which could make any restriction on its operation politically sensitive. Federal Environment Minister Murray Watt relied on the proposed gallium plant to justify his February decision [not to prosecute Alcoa](https://www.boilingcold.com.au/alcoa-slugged-55-million-over-illegal-jarrah-forest-clearing/) for years of clearing jarrah forest without federal environmental approval. The three alumina refineries operating in WA's south-west all emit significant amounts of mercury. Alcoa closed the original Kwinana refinery in 2025\. Like Wagerup, emissions from Alcoa's 4.7 million tonnes a year Pinjarra refinery have grown steadily since about 2010\. In 2025, it emitted 30 per cent more mercury per million tonnes of capacity than Wagerup. South32's Worsley refinery had, until recently, pumped as much mercury into the atmosphere as Pinjarra. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/04/Pinjarra-refinery-2026-d.JPG) ****Alcoa's sprawling Pinjarra refinery and bauxite residue dumps.** Image: Peel Environmental Protection Alliance. Mercury from Wagerup adds to a growing list of concerns about Alcoa's operation in WA, including [threatening Perth's water supply](https://www.theguardian.com/australia-news/2025/aug/20/perth-water-supply-risk-alcoa-bauxite-mining?ref=boilingcold.com.au) and [failing to complete the rehabilitation](https://www.watoday.com.au/environment/sustainability/alcoa-in-wa-60-years-28-000-hectares-of-forest-cleared-zero-rehabilitation-completed-20230307-p5cq4j.html?ref=boilingcold.com.au) of a single hectare of strip-mined jarrah forest after more than six decades of mining. ### Aussies hit as gas giants reap export rewards: research URL: https://www.boilingcold.com.au/aussies-hit-as-gas-giants-reap-export-rewards-research/ Last updated: 2026-04-08T05:14:41.000Z *By Adrian Black* Australia's second-biggest oil and gas company has come under fire for its tax contributions, as tensions over domestic prices and export royalties heat up. Australian taxpayers receive a tiny fraction of the nation's massive windfall from natural gas exports while watching their own bills creep higher, new research claims. Oil and gas giant Santos has paid $33 million in corporate income tax in 10 years, representing 0.08 per cent of $41 billion in revenue from its Australian operations, according to a report by financial activist group Market Forces. That amounts to less than one cent paid on every dollar of sales. "Santos is fuelling catastrophic climate change and the huge rise in Australian household gas prices, all while sending the country's gas overseas for bigger profits," research head Kyle Robertson said on Wednesday. But Santos rejected the claims. > "Santos has no intention of responding to misinformation from Market Forces, a climate campaign organisation affiliated with Friends of the Earth, that wants to stop investment in oil and gas at a time when the world needs more investment in these critical fuels," a Santos spokesman said in a statement. The Market Forces report on Santos comes as pressure mounts on the federal government to reform how Australia taxes gas and oil exports, as commodity prices surge on the back of the Middle East conflict. In the oil and gas giant's latest tax disclosure statement for 2024, Santos declared Australian accounting revenue of $US2.36 billion ($A3.35 billion). It recorded $US19 million ($A27 million) in tax payable after deductions including exploration costs, petroleum resource rent tax, depreciation and other capital allowances. The payable tax amounted to about 6.3 per cent of its $US303 million ($A430 million) pre-tax profit, or 0.8 per cent of its 2024 Australian revenue. [Santos shuts down Barossa LNG amidst global gas crunchThe troubled $6 billion flagship will be out of action “for a number of weeks,” just as Santos’ customers are desperate for gas to replace supply from the Middle East.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-289.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/BW-Opal-Barossa-vessel-2-2.jpg)](https://www.boilingcold.com.au/santos-shuts-down-barossa-lng-amidst-global-gas-crunch/) The document showed Santos paid more than $US1 billion ($A1.4 billion) to Australian and foreign governments in tax and royalties, although that included $US295 million in employee taxes, such as pay as you go (PAYG) income tax payments. According to the disclosure, Santos paid the Australian government $US17 million ($A24 million), and paid Papua New Guinea $US420 million ($A595 million), despite producing significantly more gas in Australia. The Labor government is backing a parliamentary inquiry into the tax regime, and the prime minister's department has reportedly ordered Treasury to model "new levy options" on the gas industry. Independent ACT Senator David Pocock has been calling for an east coast gas reservation, by diverting uncontracted gas to the domestic market, along with a 25 per cent tax on gas export revenue. "Gas companies and especially Santos cannot be trusted to do the right thing by Australian households and businesses," Mr Pocock told AAP. The gas industry, along with the federal opposition, argues that new taxes would stifle investment. Under a federal scheme to commence in 2027, exporters will reserve between 15 and 25 per cent of gas for domestic use. [![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/10/CTA-industry-energy-climate.png)](https://www.boilingcold.com.au/support/) ### Cyclone Narelle shuts 44pc of WA gas supply URL: https://www.boilingcold.com.au/cyclone-narelle-shuts-44pc-of-wa-gas-supply/ Last updated: 2026-03-27T08:04:45.000Z Three plants that supply almost half of WA's gas are out of action Friday morning after Cyclone Narelle tore through the state's main offshore gas facilities on Thursday. Chevron's Wheatstone LNG project near Onslow, Santos' Varanus Island domestic gas plant, and Woodside's North West Shelf plant near Karratha are all not producing liquefied natural gas for export or gas for the domestic market. Together, the three plants have supplied 44 per cent of WA's gas so far in 2026. Additionally, Chevron's Gorgon project on Barrow Island has one of its three LNG trains out of action, but is continuing to supply gas into its pipeline to the mainland. The shutdowns do not necessarily mean WA gas users will not get the fuel they need. The Dampier to Bunbury Natural Gas Pipeline (DBNGP) can store significant amounts of gas as "linepack", and there are two underground gas storage facilities in the state. However, on Friday afternoon, the [WA Gas Bulletin Board](https://gbbwa.aemo.com.au/?ref=boilingcold.com.au#home) run by the Australian Energy Market Operator (AEMO) showed linepack status as amber at three locations along the DBNGP. The site's capacity outlook showed that Varanus Island would start up mid Sunday, the North West Shelf would not resume gas production until Monday, and Wheatstone would be down until Thursday. These times are likely rough estimates from the operators and will be confirmed once they have had a chance to fully inspect their shuttered facilities. Shutdowns after a cyclone are not uncommon, and some of the shuttered plants may be able to be restarted quickly. A Santos spokesperson said it prepared for Cyclone Narelle, including ensuring facilities in the cyclone’s forecast radius were safe and secured, and non-essential personnel evacuated. "As the cyclone passed over, the (Varanus Island) plant has tripped," she said. "Once weather conditions have abated and personnel can safely re-enter the plant, we'll return to normal operations. “We will keep authorities notified as appropriate." [WA Labor veteran slams “baseless” claims that gas is good for the climateWoodside and other exporters have a “shocking record” of not providing evidence that gas helps reduce carbon emissions, according to Chris Tallentire.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-284.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/9.-North-West-Shelf-project-1-1-3.jpg)](https://www.boilingcold.com.au/wa-labor-veteran-slams-baseless-claims-that-gas-is-good-for-the-climate/) Chevron has had problems at both its WA facilities. The offshore platform that supplies gas to the Wheatstone plant stopped working at midday on Thursday, ending production of gas for export and local use. “As is standard practice during significant weather events, all personnel were demobilised from the Wheatstone Platform ahead of the cyclone passing, which has been operated remotely from our Perth office since Tuesday afternoon," a Chevron spokesman said. Three hours later, the Gorgon plant had an outage at one of its three LNG trains. “Severe weather associated with the passing of Tropical Cyclone Narelle likely caused the interruptions to both Gorgon and Wheatstone operations," he said. “We will resume full production at both facilities once it is safe to do so.” A Woodside spokeman said the Karratha Gas Plant, the onshore processing facility for the North West Shelf Project, had a production interruption due to the cyclone. Two offshore platforms, North Rankin and Goodwyn, supply gas to the plant. "Production ... is expected to recommence after Woodside is able to mobilise its workforce to its offshore facilities," he said. "Our priority is the safety of our people, the environment and our assets, "If there is any material impact to production or assets, Woodside will update the market in accordance with its continuous disclosure obligations." The company is still supplying gas to the WA market from its Pluto and Macedon projects. [![Want energy and climate news to hold gas giants to account? Support Boiling Cold.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/07/CTA-donate-big-gas-1.png)](https://www.boilingcold.com.au/support-cta/) **UPDATES** - New Woodside comments added - Linepack status and capacity outlook from the Gas Bulletin Board added ### Cyclone closes Woodside's North West Shelf: Australia's largest gas plant URL: https://www.boilingcold.com.au/cyclone-closes-woodsides-north-west-shelf-australias-largest-gas-plant/ Last updated: 2026-03-26T12:02:02.000Z Woodside's sprawling Karratha gas plant in WA's north is shut down after Cyclone Narelle passed by on Thursday, according to multiple industry sources not authorised to speak to the media. *Boiling Cold* understands thatthe North West Shelf (NWS) project's four liquefied natural gas (LNG) trains, gas turbine power generators and the domestic gas plant are all down. The outage at Australia's oldest liquefied natural gas (LNG) plant comes a week after the nation's newest - Santos' Barossa - unexpectedly shut down for several weeks. [Santos shuts down Barossa LNG amidst global gas crunchThe troubled $6 billion flagship will be out of action “for a number of weeks,” just as Santos’ customers are desperate for gas to replace supply from the Middle East.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-282.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/BW-Opal-Barossa-vessel-2.jpg)](https://www.boilingcold.com.au/santos-shuts-down-barossa-lng-amidst-global-gas-crunch/) Both unplanned shutdowns come while gas-dependent nations scramble for LNG to replace the supply blocked behind the Strait of Hormuz. Australia's gas customers were looking for more of the vital fuel, but may instead get less than they had expected. The flow of gas from the NWS into the Dampier to Bunbury Natural Gas Pipeline (DBNGP), which supplies the south west of the state, has ceased. The plant supplies about five per cent of the state's gas. The pipeline acts as a significant store of gas, preventing any immediate effect on supply. Any concern about WA having sufficient gas would be eased by the recent unplanned shutdown of Yara's ammonia plant, which will free up gas for other users. The spokesman for the WA Department of Energy and Economic Diversification said it is aware that the cyclone has impacted gas production facilities and, under the [State Emergency Framework](https://www.wa.gov.au/organisation/state-emergency-management-committee/state-emergency-management-framework?ref=boilingcold.com.au), is working with relevant parties and monitoring the situation. Its spokesman noted that the line pack - gas stored - in the DBNGP was at "green" status on the [WA Gas Bulletin Board](https://gbbwa.aemo.com.au/?ref=boilingcold.com.au#home). Wind gusts of 122 km/hour were [recorded at Karratha](https://www.bom.gov.au/products/IDW60801/IDW60801.95307.shtml?ref=boilingcold.com.au) on early Thursday afternoon. As Cyclone Narelle tracked south of [Varanus Island](https://www.bom.gov.au/products/IDW60801/IDW60801.95303.shtml?ref=boilingcold.com.au), home to Santos' domestic gas production, had gusts of 174 km/hour at 6 PM, and Chevron's Gorgon gas export project on [Barrow Island](https://www.bom.gov.au/products/IDW60801/IDW60801.95304.shtml?ref=boilingcold.com.au) experienced gusts of 170km/hour. *Boiling Cold* asked Woodside about the state of its facilities in WA's north and when production is likely to recommence. A Woodside spokesperson said the company is monitoring the progress of Cyclone Narelle. "Our priority is the safety of our people, the environment and our assets," she said, "Our offshore workforce has been safely demobilised in line with our cyclone preparation arrangements, ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/03/Cyclone-Narelle-tracking-map.png) ****Karratha was on the edge of an area classified as having destructive winds.** Image: BOM "If there is any material impact to production or assets, Woodside will update the market in accordance with its continuous disclosure obligations." *Boiling Cold* understands all personnel are removed from offshore platforms in the days preceding the arrival of a cyclone. The Woodside spokeswoman said it was continuing to supply domestic gas to its customers from its WA assets. Woodside operates the North West Shelf project and owns one-third of it. It also operates and owns most of the Pluto gas export project that supplies a small amount of gas to WA, and wholly owns the Macedon domestic gas plant. A spokesman for the offshore safety regulator NOPSEMA said all operators have well-practised procedures to keep workers safe and protect the environment in the event of cyclones. --- **UPDATES** - Cyclone tracking map added - Woodside domestic gas comments and WA portfolio added. - WA Government comments added. - NOPSEMA comments added. - Clarification that platform personnel are normally set onshore prior to a cyclone added. - Wind speeds added. - Gas production chart and comment added. **CORRECTION** - Removed reference to the onshore plant being without power. It is likely that there is backup power for lighting and other critical systems. [![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/10/CTA-industry-energy-climate.png)](https://www.boilingcold.com.au/support/) ### Santos shuts down Barossa LNG amidst global gas crunch URL: https://www.boilingcold.com.au/santos-shuts-down-barossa-lng-amidst-global-gas-crunch/ Last updated: 2026-03-30T05:20:11.000Z EXCLUSIVE Santos, which has seen its share price jump 19 per cent in a month due to a global oil and gas shortage, has quietly shut down its flagship Barossa LNG export project for several weeks. Twenty per cent of global liquefied natural gas (LNG) capacity is isolated by the Strait of Hormuz, which Iran has blocked. The shutdown of the Darwin LNG plant, which processes gas from the Barossa offshore gas field, will deprive its customers of desperately needed supplies and prevent Santos from benefiting from sky-high prices for any uncontracted production capacity. ## A "planned shutdown" On March 19, Santos emailed stakeholders in the Darwin area about a "planned shutdown" of its 3.7 million tonnes-per-year Darwin LNG plant. "Flaring will occur at the facility and may continue for a number of weeks until the plant is restarted and operational," the email seen by *Boiling Cold* said. Only four weeks ago, BW Offshore, the owner of the Barossa offshore production vessel, seemed unaware of any planned shutdown. The Norwegian company [told investors ](https://bw-offshore.s3.eu-north-1.amazonaws.com/2025+Q4+Presentation.pdf?ref=boilingcold.com.au)it expected the Opal to reach full capacity by the end of March. The vessel may now produce nothing on March 31. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/03/image-2.png) ****The Barossa gas field is 300km north of Darwin.** Image: Santos In the 27 February presentation, BW Offshore said commissioning of the 358m-long vessel had been delayed by the need to reinforce pipes carrying seawater and to replace gas seals on compressors. BW Offshore had expected to achieve Practical Completion on its contract with Santos by mid-March - a contractual milestone that typically would require the Opal to be safe and functional with nothing but minor issues to be addressed. Santos went ahead with the $US3.95 billion ($5.7 billion) Barossa project in 2021\. That cost excludes the construction of the BW Opal owned by BW Offshore. Barossa has required substantial drilling, construction of almost 400km of subsea pipeline, and the refurbishment of the 20-year-old Darwin LNG plant, which had been used to process gas from the now-shuttered Bayu Undan field. [Australia’s top fertiliser input plant shuts for 2 monthsThe shutdown of the Yara Pilbara plant comes as a quarter of global trade in ammonia, used for urea fertiliser and mining explosives, is blocked by war.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-281.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Yara-Pilbara-1.jpg)](https://www.boilingcold.com.au/glitch-shuts-australias-biggest-maker-of-v/) Santos missed its end-of-year deadline to ship gas from Barossa, and the first carrier [left the Darwin LNG plant](https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-03049002-2A1649719&v=undefined?ref=boilingcold.com.au) on 25 January. Darwin Port [data](https://portinfo.darwinport.com.au/webx/?ref=boilingcold.com.au), going back to February 20, shows that the only LNG carrier to dock at the Darwin LNG berth in that period has been the Kool Husky on February 27\. The Darwin Port shipping schedule had shown that another LNG carrier, the Bishu Maru, was to arrive on March 16, but the berthing was later cancelled. The vessel is now going back and forth north of Darwin, according to the vessel tracking site *Marine Traffic*. Santos did not respond to the questions sent by *Boiling Cold* on Friday. The Barossa LNG project is operated and 50 per cent owned by Santos. Japan's JERA holds a 12.5 per cent stake, and the Korean firm PRISM Energy International Australia owns 37.5 per cent. [![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/10/CTA-industry-energy-climate.png)](https://www.boilingcold.com.au/support/) ### Glitch shuts Australia's biggest maker of vital fertiliser input for two months URL: https://www.boilingcold.com.au/glitch-shuts-australias-biggest-maker-of-v/ Last updated: 2026-04-16T03:14:14.000Z EXCLUSIVE Australia's largest ammonia plant will be shut for two months to repair damage caused by a power outage, amidst a global supply crunch for the vital fertiliser and explosives ingredient. More than a quarter of the world's traded ammonia flows through the Strait of Hormuz, as do [43 per cent of urea shipments](https://www.middleeastmonitor.com/20260317-blocking-fertilisers-the-hormuz-strait-and-agricultural-shock/?ref=boilingcold.com.au) \- the fertiliser made from ammonia. That flow has been cut to a trickle since the United States and Israel attacked Iran, as have vital gas supplies, causing [fertiliser plants in India to shut](https://www.energyconnects.com/news/gas-lng/2026/march/indian-urea-producers-shut-plants-as-iran-war-cuts-lng-flows/?ref=boilingcold.com.au). Yara's Pilbara plant, which uses gas to produce 850,000 tonnes of ammonia a year, suffered a power outage last week, damaging equipment. A spokesman for the Norwegian company said workers and the environment were unaffected, and initial assessments indicated repairs could take about two months. "Yara well understands the importance of its products to customers and will work to bring the operations back online as soon as practical," he said. An adjacent plant, half-owned by Australia's Orica, uses 140,000 tonnes of the ammonia to make the explosive technical ammonium nitrate (TAN) for WA's mining sector. The remaining ammonia is shipped to Australian and international customers, and much of it is used to make urea fertiliser. [Alcoa lied about jarrah forest rehabilitation: ad watchdogThe Ad Standards decision has demolished a key plank of the US miner’s expensive campaign to win public support for expanded mining in WA.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-280.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Alcoa-forest-rehabilitation-ad-1-9.jpeg)](https://www.boilingcold.com.au/alcoa-lied-about-jarrah-forest-rehabilitation-advertising-watchdog/) Only a week ago, Yara chief executive Svein Tore Holsether warned of the dangers of a prolonged closure of the Strait of Hormuz, which would affect the supply of fertiliser. “If the Strait of Hormuz was closed for a year, it would be catastrophic ... you will see significant reductions in the farm yield,” he said. “This is a regional conflict with global implications, and it goes straight into the food system.” The shutdown in the Pilbara could not have come at a worse time for Australia's farmers, who [last year imported 1.2 million tonnes](https://www.argusmedia.com/en/news-and-insights/latest-market-news/2794618-australian-urea-faces-supply-risk-on-iran-conflict?ref=boilingcold.com.au) of urea in April and May for use before or shortly after seeding. Three-quarters came from the Gulf nations, where shipping is now severely curtailed after the United States and Israel attacked Iran. ## Mining relies on explosives Australia's largest export could also be affected. For the next two months, WA's iron ore miners no longer have 330,000 tonnes a year of TAN produced on their doorstep. The explosive is used in vast quantities to blast rock so it can be collected, crushed and shipped to port. The degree of disruption to production, if any, will depend on the stocks of TAN the miners hold and whether they can source other supplies at short notice. Wesfarmers subsidiary CSBP runs WA's second-largest ammonia plant in Kwinana near Perth. CSBP uses Kwinana's 255,000 tonnes a year output and additional imported ammonia to make ammonium nitrate for fertilisers and explosives. CSBP would not say if any of its imported ammonia came from Yara. "It is standard business practice for us to continually monitor and manage our supply chain to ensure we meet customer demand," a company spokeswoman said. [![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/10/CTA-industry-energy-climate.png)](https://www.boilingcold.com.au/support/) **UPDATES** 23 March 2026: comments from Yara chief executive added. ### Roger Cook firms on WA gas for WA amidst global energy turmoil URL: https://www.boilingcold.com.au/roger-cook-firms-on-wa-gas-for-wa-amidst-global-energy-turmoil/ Last updated: 2026-03-13T08:04:57.000Z WA Premier Roger Cook has all but closed the door on easing his ban on exporting onshore gas as turmoil in global oil and gas markets shows the benefits of local supply. The WA Government has [prohibited the export of onshore gas](https://www.wa.gov.au/government/announcements/domestic-gas-policy-updated-secure-was-energy-future?ref=boilingcold.com.au) from 2031, but *Boiling Cold* understands some producers have been ferociously lobbying for significant exemptions. Cook launched a pitch to sell WA as a "state of energy" on Tuesday - based on renewable energy firming by batteries and gas, providing affordable and secure power - which needs a continued supply of gas to be a success. "The opportunity for the energy to transition to provide energy independence for Western Australia ... to become less reliant on others, less susceptible to global shocks, to stand on our own two feet," was the aim, he told the Energy Exchange Australia conference. [Gas leftover from exports not enough for WA: AEMORising gas prices resulting in job losses are inevitable unless the WA government mandates more supply from gas exporters.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-273.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/gorgon-australian-subsidiaries-1-1.jpg)](https://www.boilingcold.com.au/gas-leftover-from-exports-not-enough-for-wa-power-and-industry-aemo/) When asked by *Boiling Cold* whether the push for energy independence makes exemptions from the gas ban unlikely, Cook did not rule out some flexibility to help make potential projects more viable, but was adamant that local supply was the priority. "You can absolutely rest assured that our domestic gas reservation policy will be an important part of what we do," he said. > "I think you know what our position on this is - it was first brought in by Gallop, tightened by McGowan, and I've had a go at it, > "In the current global uncertainty, we'll want that domestic gas for WA businesses and families." In just seven years, Australia's most gas-dependent state has flipped from using the promise of cheap and abundant gas to lure investment to a [doubling of prices and shortages](https://www.boilingcold.com.au/western-australia-faces-growing-gas-shortfall/) predicted within a few years. Cook acknowledged the changed role of the fuel, warning of "the rising costs of coal and gas-fired power generation." The ban on exporting onshore gas leaves the Browse field as the only realistic option for Woodside to keep its ageing North West Shelf gas plant operating beyond the 2030's when the project's own fields are expected to be depleted. Black Mountain Energy, which plans to use fracking to produce gas in the Kimberley, has an exemption from the export ban, but the project is unlikely to happen. [Is Black Mountain’s Kimberley dream fracking impossible?Investors beware: after spending more than $40 million in the Canning Basin, the US-owned company’s continued pursuit of remote gas appears to be throwing good money after bad.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-274.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Danggu-Geikie-Gorgoe-on-Bunuba-lands-1.JPG)](https://www.boilingcold.com.au/is-black-mountains-kimberley-dream-fracking-impossible/) ### Wandoo oil gives Vermilion a profit-free decade off WA URL: https://www.boilingcold.com.au/wandoo-oil-gives-vermilion-a-profit-free-decade-off-wa/ Last updated: 2026-03-12T03:15:03.000Z Vermilion Energy, slammed by Australia's offshore regulator NOPSEMA for repeated non-compliance with its environmental protection plan, has barely made a profit from its Wandoo oil field off WA over the past decade. The low-profile Canadian firm's total profit from its only offshore production was just $550,000 over the years 2015 to 2024, according to annual reports filed by its Australian subsidiary with the corporate regulator ASIC. The 2025 report is not yet available. Over that decade, annual production fell 47 per cent, and in 2025 it dipped a further two per cent. ## Delay in new safety plan Safety on an oil and gas facility offshore Australia is governed by a safety case document produced by the operator and approved by NOPSEMA. The focus is on avoiding low probability but high consequence "major accident events" that could kill numerous workers. Vermilion submitted a required update to its Wandoo safety case in June 2025, according to a NOPSEMA spokesman. "The revision was not accepted," he said. "NOPSEMA assesses safety cases and revisions against legislative requirements and will not accept them where those requirements are not met." *Boiling Cold* understands Vermilion was told in July what it needed to fix. Eight months later it has not submitted an improved safety case to the regulators. A Vermilion spokesman said it originally submitted the safety case just before significant legislative changes. "Vermilion is now incorporating the relevant updates to its safety case in line with NOPSEMA’s process and expectations and the new legislation," he said. The [legislative changes](https://www.nopsema.gov.au/sites/default/files/documents/NOPSEMA%20Presentation%20-%20Information%20Session%20-%20March%20-%20Safety%20Cases%2C%20Critical%20systems%2C%20HSRs.pdf?ref=boilingcold.com.au) were published in December 2024, seven months before Vermilion submitted the safety case, and came into effect in June 2025. ## Regulator damns environmental protection at Wandoo In February, the regulator ordered Vermilion to stop loading oil tankers after it found the company had not demonstrated that the Wandoo oil export system was fit for service. Vermilion has now implemented temporary measures to make the system safe and recommenced export of stored oil on February 27. However, it has been directed to completely replace the export system by December 2027. NOPSEMA also had broader concerns about Vermilion's inadequate maintenance and failure to comply with its own plan to protect the environment around Wandoo. There have been four minor oil spills in the past five years, and it seems Vermilion ignored warnings to shape up. "These issues reflect recurring themes from earlier inspections and show that corrective actions and assurance processes have not fully addressed the underlying causes," the regulator noted in its [direction](https://www.nopsema.gov.au/sites/default/files/documents/General%20Direction%202084%20-%20Wandoo.pdf?ref=boilingcold.com.au). "These matters have been repeatedly communicated to VOGA (Vermilion Oil & Gas Australia)." [Regulator shuts Wandoo oil field off WA after spillCanadian firm Vermilion judged the chance of the December spill as “rare” - the same probability it claims for seven planned exploration wells that could affect anywhere along the Pilbara coast.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-272.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Wandoo-B-2.jpg)](https://www.boilingcold.com.au/regulator-shuts-wandoo-oil-field-off-wa-after-oil-spill/) VOGA has until early June to complete an independent third-party review into its management of health, safety and the environment. Vermilion vice president for international operations and health, safety, and the environment, Darcy Kerwin, [told investment analysts](https://au.investing.com/news/transcripts/earnings-call-transcript-vermilion-energys-q4-2025-earnings-miss-raises-concerns-93CH-4295980?ref=boilingcold.com.au) last week that the NOPSEMA direction was "kind of a standard regulator response in a situation like that." Wandoo has not produced oil since the facility was damaged by Cyclone Mitchell in early February. Vermilion chief executive Dion Hatcher said the company planned to restart production in the June quarter. Hatcher was speaking after announcing Vermilion [lost $CAD654 million](https://www.vermilionenergy.com/invest-with-us/press-releases/press-release-detail/?id=122871&ref=boilingcold.com.au) ($689 million) in 2025, its third consecutive year in the red. [![CTA Image](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/03/Ichthys-offshore-flaring-2.jpeg)](#/portal/signup) **Boiling Cold* keeps an informed and independent eye on WA's powerful oil and gas sector and is free for all to read, maximising impact and accountability. I need your backing to keep covering stories that would otherwise go unreported. [Support independent journalism in WA ](#/portal/signup) ## Exploration success or earlier clean-up cost Vermilion is preparing to search for more oil to produce from its Wandoo facility. "Vermilion has every intention of operating the platform to its 2037 end of life," a company spokesman said. In February, NOPSEMA approved a [Vermilion plan](https://info.nopsema.gov.au/activities/573/show%5Fpublic?ref=boilingcold.com.au) to survey the seabed around Wandoo for suitable locations for a drill rig. Vermilion has a [follow-up plan](https://info.nopsema.gov.au/environment%5Fplans/723/show%5Fpublic?ref=boilingcold.com.au) with the regulator for assessment to drill up to seven exploration wells in 2026 or 2027. If Vermilion does not drill the exploration wells, or if the results are disappointing, it will likely have to decommission the Wandoo facilities earlier than expected. Vermilion's consultants estimate decommissioning the steel Wandoo A platform, and pipelines will cost $103 million, and abandoning the wells an additional $106 million, according to th VOGA 2024 annual filing to ASIC. However, Vermilion has assumed it can leave the Wandoo B concrete gravity structure in the ocean forever, and has not allowed for its removal in the asset retirement obligations it discloses to investors. The massive sub-structure was [built in Bunbury ](https://heritage.engineersaustralia.org.au/wiki/Place:Wandoo%5FOffshore%5FOil%5FPlatform?ref=boilingcold.com.au)with 28,000 cubic metres of concrete and 8500 tonnes of steel and can store 400,000 barrels of oil. Above it is a 6500 tonne steel topsides structure. The cost to remove Wandoo B, likely many times greater than for Wandoo A, may not be easily avoided under current arrangements. Santos, Australia's second-largest oil and gas company, is [reported to be lobbying](https://www.theaustralian.com.au/nation/politics/santos-asks-for-change-to-default-offshore-rig-decommissioning-in-test-for-labor/news-story/d2454d5cec824f80f9b9a97db405df82?ref=boilingcold.com.au) the Federal Government to shift from its default position that all equipment is removed from the ocean. Vermilion slashed the book value of Wandoo by two-thirds to $84 million in its [2025 annual report](https://www.vermilionenergy.com/wp-content/uploads/2026/03/VEI-2025-Annual-Report.pdf?ref=boilingcold.com.au), released on Thursday, Australian time, which said the price-related impairment was "not an indication of deterioration in the performance or outlook" of Wandoo. The accounting adjustment was determined before the US and Israeli attack on Iran, and the subsequent closure of the Strait of Hormuz pushed oil prices skywards. ### Australian oil & gas lags in disclosing $44b clean-up bill URL: https://www.boilingcold.com.au/australian-oil-gas-lags-in-disclosing-44b-clean-up-bill/ Last updated: 2026-02-27T00:51:54.000Z ANALYSIS Australia's oil and gas sector faces a [$44 billion bill to clean up the ocean](https://www.industry.gov.au/publications/australian-offshore-oil-and-gas-decommissioning-liability-estimate-2025?ref=boilingcold.com.au), with more to do onshore, but it badly lags the UK and Canada in revealing this liability to investors, according to international energy finance analysts Carbon Tracker. Carbon Tracker examined [how well 38 companies disclosed information](https://carbontracker.org/reports/asset-retirement-obligations-what-lies-beneath/?ref=boilingcold.com.au) about decommissioning liabilities, using 15 metrics that it considered the minimum disclosure required under updates to international accounting standards. Australian companies, on average, disclosed just 19 per cent of the required metrics, less than half their foreign counterparts, the report released in December concluded. > **"Investors in these companies have little to no insight into the extent of (decommissioning) liabilities ... and the potential impacts of the different risks and uncertainties."** > Carbon Tracker on Australian oil and gas firms Barbara Davidson, head of capital markets transparency at Carbon Tracker, said investors cannot understand the risks embedded in these long-term liabilities without transparent assumptions, payment schedules and sensitivities. "Yet our findings also show that better disclosure is achievable," she said. "As the energy transition accelerates, incomplete reporting leaves markets exposed to growing financial and regulatory risks.” ## Decommissioning is a big deal The poor level of disclosure is at odds with the importance of provisions for decommissioning (or restoration) in assessing a company's value. The restoration provision for Santos, Australia's second-largest fossil fuel producer, is equivalent to a quarter of its current market value. For smaller firms, Beach and Amplitude, the liability is equal to 44 per cent and 58 per cent of their value, respectively. Carbon Tracker assessed the companies against [new guidance ](https://www.ifrs.org/news-and-events/news/2025/11/iasb-issues-illustrative-examples-reporting-uncertainties-financial-statements/?ref=boilingcold.com.au)issued by the International Accounting Standards Board in November. In January, the Australian Accounting Standards Board moved to implement these changes by issuing [new examples](https://aasb.gov.au/news/new-illustrative-examples-of-disclosures-about-uncertainties-in-financial-statements/?ref=boilingcold.com.au) on how to disclose uncertainties in estimating decommissioning liabilities, to be applied for the 2025/26 financial year. The revision promotes more detailed disclosure of assumptions about future uncertainties. For decommissioning, it points to the need to detail liabilities far into the future if there is a risk, such as climate change, that they may occur sooner. Investors need more granularity to assess if the risks associated with investing in oil and gas do not outweigh the promised returns. [![Want energy and climate news to hold gas giants to account? Support Boiling Cold.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/07/CTA-donate-big-gas-1.png)](https://www.boilingcold.com.au/support-cta/) ## Restoration calculations are not simple The liability a company records on its balance sheet for decommissioning is driven by four factors: the amount of infrastructure it expects to remove, when it will be removed, the cost for that work, and the discount rate used to convert future expenditure to today's dollars. All factors have room for legitimate variation in the estimate, but also ample opportunity to manipulate the recorded liability downward. Carbon Tracker notes that Woodside, Santos, Beach, and Amplitude all assume their offshore pipelines can be left in situ: industry jargon for leaving them in the ocean. This is despite the federal regulator NOPSEMA's [base case that all property is removed](https://www.nopsema.gov.au/offshore-industry/decommissioning?ref=boilingcold.com.au). On costs, globally, oil and gas companies have a history of underestimating decommissioning costs, with a [survey of projects](https://www.sciencedirect.com/science/article/abs/pii/S0195925520308143?via%3Dihub&ref=boilingcold.com.au) in the UK North Sea revealing the true costs were, on average, 76 per cent higher than the estimates. Locally, ExxonMobil appears to be an example of inadequate restoration provisions. In 2019, the US major's accounts lodged with the Australian Securities and Investments Commission (ASIC) revealed a $1.94 billion provision for restoration, predominantly for its 50 per cent of the Bass Strait operation it owns with Woodside. Now, despite [spending nearly $1.5 billion for its share](https://www.parliament.vic.gov.au/4aca38/contentassets/528808285c814db686db607676621d06/submission-documents/137.-exxon-mobil-australia%5Fredacted.pdf?ref=snapshot.bcsda.org.au) of Bass Strait work in recent years, it has a restoration provision of $3.6 billion. Five years less discounting to today's dollars can account for only a small part of the reason why the liability increased by $1.7 billion after spending $1.5 billion. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/02/Bream-A-platform.png) ****ExxonMobil and Woodside's Bream A platform is scheduled for removal in 2027.** Image: ExxonMobil Carbon Tracker said UK and Canadian regulators appeared to be more active in policing financial reporting than ASIC. "Market regulator practice at a jurisdictional level may be a key driver in the quality of financial statement disclosures," Carbon Tracker concluded. "Although ASIC has previously emphasised the importance of appropriate recognition and estimation of AROs, we did not observe the regulator compelling (or indeed companies providing) more useful financial statement disclosures." --- ## Australia's offshore clean-up to-do list Much decommissioning in Australia is occurring only after the federal regulator, NOPSEMA, ordered work to be done. Some of these projects are still required to publish annual progress reports. **Bass Strait - Victoria - ExxonMobil** [NOPSEMA direction in 2021](https://www.nopsema.gov.au/sites/default/files/2021-06/A783674.pdf?ref=boilingcold.com.au) [2025 annual report](https://corporate.exxonmobil.com/-/media/global/files/locations/australia/gd817-decommissioning-progress-report-2025.pdf?ref=boilingcold.com.au) **Stybarrow - WA - Woodside** [NOPSEMA direction 2025](https://www.nopsema.gov.au/sites/default/files/documents/General%20Direction%202022%20-%20Stybarrow.pdf?ref=boilingcold.com.au) superseded the original 2021 direction following "preventable safety incidents [resulting in injury](https://www.boilingcold.com.au/woodside-cleanup-off-wa-plagued-by-injuries-and-incidents-2/) as well as delays." [2023 annual report](https://www.woodside.com/docs/default-source/current-consultation-activities/australian-activties/stybarrow-annual-report---dec-2023.pdf?sfvrsn=e40c6717%5F3&ref=boilingcold.com.au) **Griffin - WA - Woodside** [NOPSEMA direction 2025](https://www.nopsema.gov.au/sites/default/files/documents/General%20Direction%202017%20-%20Griffin.pdf?ref=boilingcold.com.au) superseded the original 2021 direction following "several preventable health, safety, and [environmental incidents](https://www.boilingcold.com.au/woodside-spills-16-000-litres-of-oil-into-ocean-north-of-ningaloo/)." [2024 annual report](https://corporate.exxonmobil.com/-/media/global/files/locations/australia/2024-decommissioning-annual-report---griffin-rev-1.pdf?ref=boilingcold.com.au) **Minerva - Victoria - Woodside** [NOPSEMA direction 2025 ](https://www.nopsema.gov.au/sites/default/files/documents/General%20Direction%202016%20-%20Minerva.pdf?ref=boilingcold.com.au)superseded the original 2021 direction after [plastic was lost to the sea](https://www.watoday.com.au/environment/conservation/how-parts-of-a-dead-gas-rig-washed-up-on-our-beaches-20250514-p5lz1t.html?ref=boilingcold.com.au). [2023 annual report](https://amplitudeenergy.com.au/uploads/announcements/222407-WOOPET-Minerva-General-Annual-Reports-Proof-3.pdf?ref=boilingcold.com.au) [Woodside slammed for preventable offshore incidentsRegulator NOPSEMA has directed Woodside to properly plan its work after a series of preventable safety incidents off the WA and Victorian coasts.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-268.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Griffin-Venture-FPSO.jpg-2.webp)](https://www.boilingcold.com.au/woodside-slammed-for-preventable-offshore-decommissioning-incidents/) **Nganhurra Riser Turret Mooring - WA - Woodside** [NOPSEMA direction 2023](https://www.nopsema.gov.au/sites/default/files/documents/Direction%20-%201913%20-%20Nganhurra%20Operations.pdf?ref=boilingcold.com.au) [2025 annual report](https://www.woodside.com/docs/default-source/current-consultation-activities/australian-activties/2026/240509-woopet-decommissioning-annual-report-update---enfield---rev-0.pdf?sfvrsn=2db2599d%5F3&ref=boilingcold.com.au) **Basker, Manta, Gummy - Victoria - Amplitude Energy** [NOPSEMA direction 2021](https://www.nopsema.gov.au/sites/default/files/documents/General%20Direction%20824.pdf?ref=boilingcold.com.au) [2024 annual report](https://amplitudeenergy.com.au/uploads/corporate-governance/BMG-Closure-Project-Annual-Progress-Report-2024-Rev-0-2.pdf?ref=boilingcold.com.au) ### Woodside posts record production but profit down to $3.8b URL: https://www.boilingcold.com.au/woodside-posts-record-production-but-profit-down-to-3-8b/ Last updated: 2026-02-24T01:03:07.000Z *By Adrian Black* Australia's biggest oil and gas producer has posted record production and cut production costs, but weak commodity prices have weighed on profits. Softer oil and gas prices have dragged on Woodside's full-year bottom-line net profit, which slumped by almost a quarter to $US2.7 billion ($A3.8 billion) despite record production and lower unit costs. Underlying net profit after tax came in at $US2.6 billion ($A3.7 billion), an eight per cent slip from 2024. Oil prices tumbled 20 per cent in 2025, their worst year since 2020, due to a global supply glut that the International Energy Agency expects will persist in 2026. Record production of 198.8 million barrels of oil equivalent and a four per cent reduction in unit costs helped offset lower realised prices over the period, acting chief executive Liz Westcott said on Tuesday. "In a testament to the strength of our underlying business, during a period of increased capital expenditure and softer prices, we generated free cash flow of $US1.9 million ($2.7 million)," she told analysts in an earnings briefing. [Woodside spills 16,000 litres of oil into Indian OceanThe company that thinks a damaging oil spill from its planned drilling near Scott Reef is “only a mere theoretical possibility” weeks ago accidentally released a cocktail of hydrocarbons, chemicals and water into the Indian Ocean.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-266.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Mia-Yellagonga-signed-cropped-6.jpg)](https://www.boilingcold.com.au/woodside-spills-16-000-litres-of-oil-into-ocean-north-of-ningaloo/) Ms Westcott was optimistic about oil's attractiveness in 2026. "Oil is a core product for Woodside underpinned by a robust demand outlook," she said. "The difficulty of decarbonising hard to abate sectors such as heavy transport and petrochemicals means that oil demand is forecast to remain resilient as the world's energy mix evolves." Ms Westcott is acting for outgoing boss Meg O'Neill, who will become BP's first female leader on April 1. Woodside has not announced a permanent replacement for Ms O'Neill, but Ms Westcott confirmed the board was assessing several internal and external candidates and expected to make an announcement in the first quarter. "I know everyone's very interested in the outcome, but I want to reinforce that what I'm interested in and what I know is very important ... is that we continue to execute against our strategy and deliver shareholder value through our disciplined decision making and our operational excellence," she said. [Woodside’s Perth hydrogen plan: smaller, later, dirtierAfter a big splash four years ago and little publicity since, Woodside has teamed up with Japanese partners to promote a smaller, later, and dirtier hydrogen plant.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-267.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/h2perth-conceptual-image-1-1.jpg)](https://www.boilingcold.com.au/woodside-shrinks-and-delays-perth-hydrogen-plan/) Investors responded warmly to the results, as production topped the upper end of guidance, supporting a 1.4 per cent lift in Woodside shares to $27.48 in early trade. Woodside declared a final dividend of 59 cents per share, compared with 53 cents the year before. "The strength of our base business has delivered returns for shareholders, with Woodside having returned approximately $11 billion in dividends since merger completion in 2022," Ms Westcott said. In project news, the Beaumont New Ammonia project off the US Gulf Coast achieved first production in December 2025, Trion off Mexico remains on target for first oil in 2028, and Scarborough's first LNG cargo should be loaded off the WA coast in 2026. ### Is Black Mountain's Kimberley dream fracking impossible? URL: https://www.boilingcold.com.au/is-black-mountains-kimberley-dream-fracking-impossible/ Last updated: 2026-02-19T09:29:08.000Z ANALYSIS Since Texan oilman Rhett Bennett bought an exploration permit in Western Australia's Kimberley region in 2019, there has been a lot of cash burned and little progress. In January, Bennett's Black Mountain Energy finally [won the backing](https://www.boilingcold.com.au/wa-environmental-watchdog-backs-kimberley-fracking/) of Western Australia's Environmental Protection Authority (EPA) to drill up to 20 exploration and appraisal wells using hydraulic fracturing (fracking). After seven years and a bill of [more than $40 million](https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://www.abc.net.au/news/2024-02-13/black-mountain-delisting-kimberley-fracking-investment-struggles/103460200&ved=2ahUKEwjhsaLrleKSAxX71jgGHVlDEcUQFnoECCMQAQ&usg=AOvVaw1ryKAjneX6SsJ8m-UwMF59), the EPA's recommendation was a rare step forward for Bennett's Project Valhalla, but there is a long way to go before a well is drilled. Even if exploration proves the Canning Basin to be as good underground as US basins that have powered a fracking boom, the above-ground risks for investors are enormous compared to Texas. 🔥 ****Project Valhalla Key Facts** 📍 Location: EP371 permit, Canning Basin, Kimberley, WA. 🏢 Company: unlisted Black Mountain Energy ⛽ Initial scale: 20 exploration/appraisal wells, up to 4000m deep 💧 Water: 100 million litres per well (mixed with chemicals) 🚰 Risk: Mount Hardman Creek flows into Fitzroy River 🦎 At-risk species: Northern Blue-tongued Skink, Greater Bilby ✅ WA: EPA recommendation Jan 2026, appeals and Minister's decison to follow ❓Federal: Assessment ongoing (EPBC Act) ## Long road to spud a well for Project Valhalla Black Mountain sought WA environmental approval in 2021 but did not initiate the Federal process until 2024. It is proving more difficult to satisfy the experts in Canberra. After reviewing the studies submitted to the WA EPA, the Federal regulator concluded that Black Mountain had [not justified its claim](https://www.boilingcold.com.au/environmental-regulator-raises-doubts-over-kimberley-fracking/) that the drilling would not impact local water resources. There was also a real risk that vulnerable species protected under federal law could be affected. In December, the Independent Expert Scientific Committee advising the Federal Government published its findings, which [damned Black Mountain's reassurances](https://www.boilingcold.com.au/federal-experts-slam-science-behind-kimberley-fracking-plans/) as "largely unsupported" by a "limited and disjointed" assessment. Further analysis of the groundwater risks recommended by the committee will only increase Black Mountain's costs and delay a Federal decision. Within the state's jurisdiction, the EPA's green light is only a recommendation. The Appeals Convenor now has to consider an [unprecedented 8000 appeals](https://www.watoday.com.au/national/western-australia/8000-appeals-kimberley-fracking-plan-becomes-most-contested-project-in-wa-history-20260210-p5o10n.html?ref=boilingcold.com.au) against the EPA's call, and then submit a report to Environment Minister, Matthew Swinbourn, who makes the final decision. Weighing on Swinbourn's mind will be the Labor Party's November conference, which voted to [ban fracking across WA](https://www.abc.net.au/news/2025-11-09/labor-party-members-vote-for-fracking-ban-to-be-extended/105987602?ref=boilingcold.com.au). The vote is not binding on the Government, which is facing growing disenchantment among Party members over its environmental record. With two other contentious environmental decisions due this year - Alcoa's mining and Woodside's Browse gas project - taking a stance against powerless Black Mountain would be an easy way to placate the lay party. Should Swinbourn support Black Mountain's initial 20 wells, the company will have to repeat the lengthy EPA process to drill any further, with no guarantee that future EPA boards and environment ministers would reach the same conclusion. [![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/10/CTA-industry-energy-climate.png)](https://www.boilingcold.com.au/support/) ## Unknown code and Traditional Owner hurdles Even with environmental approval from both levels of Government, there remain two substantial hurdles before a drill rig can be put to use, but how high they are is not yet known. The WA Government is [five years late ](https://www.boilingcold.com.au/wa-fracking-safeguards-are-half-done-and-five-years-late/)implementing the safeguards it promised would be in place before it would allow fracking to occur. Two safeguards are particularly important to the viability of Project Valhalla. A promised, enforceable Code of Practice defining minimum standards for fracking activities, based on scientific research, has not been published. Without this information, no company can produce a reasonable estimate of the cost in WA to explore and develop so-called tight gas that requires hydraulic fracturing. Labor has also promised the Traditional Owners a veto over fracking, but has yet to publish any details on how this would work. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/02/Native-Title-areas-over-Black-Mountains-EP371.png) Black Mountain is understood to have the support of the two Traditional Owner groups in the southern part of Exploration Permit 371, where it wants to drill the initial exploration and appraisal wells: the Noonkanbah and Warlangurru people. However, fracking is not welcome in the northern part of EP 371, raising doubts about whether this area could be developed if initial drilling results are positive. The Walalakoo Aboriginal Corporation, representing the Nyikina Mangala people who have Native Title over 18 per cent of EP 371, made its opposition clear in a January Facebook post: "We have always been clear and consistent in opposing fracking and have long held contractual rights of veto over fracking in any agreements made in respect of oil and gas extraction." The Bunuba people, whose Native Title determination covers the much-drilled northern 40 per cent of EP37,1, have a similar stance. Traditional Owner Millie Hills, who was a National Party candidate in the last state election, said in November that her people voted not to support a retention lease that Black Mountain sought. > "We dont agree at all to fracking, we think it is going to ruin the countryside," Hills said. > "Water is more precious than gas." Depending on how the state government structures the Traditional Owner veto, Black Mountain also risks that currently supportive groups may change their minds in the future. Once it has approvals for the initial drilling, Black Mountain wants to [bring new investors into the deal](https://www.energynewsbulletin.net/operations/news-analysis/4412658/black-mountain-ceo-clarifies-position-controversial-kimberley-fracking-project?ref=boilingcold.com.au). Those investors need to know that approvals are only one factor that makes Kimberley fracking a high-risk, low-reward proposition. [Black Mountain, the firm that wants to frack the KimberleyA company with less than $5 million in the bank and a boss who lives in the US will soon get a red or green light from WA’s environment watchdog.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-263.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Wendy-Mitchell---Environs-Kimberley-6.jpg)](https://www.boilingcold.com.au/who-is-black-mountain-the-company-that-wants-to-frack-the-kimberley/) ## A long way to a market Project Valhalla is located in a remote and expensive region, even by the standards of Western Australia's sparsely populated north. That, and flooding in the wet season, will make Project Valhalla expensive to develop and operate. The remoteness also makes gas markets difficult to access. The most discussed option is a 1000-kilometre pipeline to Woodside's North West Shelf (NWS) gas export plant in Karratha, which will have increasing spare capacity in the coming years. Woodside has already permanently shuttered one of the five liquefied natural gas (LNG) trains, and restrictions on nitrous oxide emissions imposed by the Federal Government in 2025 may[ force the closure](https://thewest.com.au/business/oil-gas/north-west-shelf-project-further-closures-looming-for-lng-trains-at-karratha-gas-plant-c-20190995?ref=boilingcold.com.au) of the two other older trains. That leaves the cleaner running Trains 4 and 5, which have a total capacity of about 9 million tonnes per year. However, Woodside and other companies with a stake in the North West Shelf planned to develop the offshore Browse gas fields and [process 11 million tonnes of gas a year](https://www.woodside.com/what-we-do/developments-and-exploration/browse?ref=boilingcold.com.au) at the NWS plant. They may now need to reduce that output, but there is clearly no room for Project Valhalla gas at the NWS while the Browse project is alive. ASX-listed Equus Energy is pursuing any future spare capacity at the adjacent Pluto LNG plant. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/02/Black-Mountain-Energy-commercial-pathways.png) ****No link betwen gas production and consumption.** Source: [BME May 2025 presentation](https://blackmountainenergy.com/wp-content/uploads/2025/08/Canning-Basin-Project-Vahalla-Presentation-for-Seapex.pdf?ref=boilingcold.com.au) The option to export the gas through Darwin in the Northern Territory has similar problems of lengthy approvals to build an extraordinarily expensive pipeline to gas export plants with operators - Santos and INPEX - that have their own plans to keep them full. A new, or greenfield, LNG plant and export facilities would be ruinously expensive. It is a move even major players take with great caution. A pipeline to the East Coast gas market is also unlikely. It would require credible customers to sign long-term purchase agreements to support financing for the pipeline construction and build-out of Project Vahalla to large-scale production. But why would these customers commit to a high-cost and unproven gas province? [Federal experts slam Black Mountain fracking assessmentAn independent review found Black Mountain conducted a “limited and disjointed” assessment that came to “largely unsupported” conclusions.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-262.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/photo-1712519084041-adb875a647f3-6)](https://www.boilingcold.com.au/federal-experts-slam-science-behind-kimberley-fracking-plans/) ## Chicken and the Egg Project Valhalla is, in industry parlance, stranded gas: not just physically but commercially. Any option to export the gas requires substantial investment. That can be justified only if Black Mountain demonstrates beyond doubt that the field can reliably produce large volumes of low-cost gas. But how can Black Mountain scale up the operation if it cannot get the gas to market? Interim options such as trucking LNG from a small on-site plant would be prohibitively expensive. The world is not short of gas, and if, as gas spruikers claim, demand will grow for some time, there is ample untapped supply that is more economically viable than the Kimberley. If investors who want to back gas think Project Valhalla is the best place to park their cash, they haven't looked very hard. ### Alcoa slugged $55 million over illegal jarrah forest clearing URL: https://www.boilingcold.com.au/alcoa-slugged-55-million-over-illegal-jarrah-forest-clearing/ Last updated: 2026-02-18T08:15:02.000Z Alcoa has agreed to pay $55 million to restore a forest habitat that's home to protected species after clearing it for bauxite mining without approvals. Alcoa has been given the green light to clear more Australian forest after being fined for stripping land for bauxite mining without approvals. The US aluminium giant has agreed to pay $55 million to restore the environment as part of an enforceable undertaking reached with the federal government on Wednesday. It relates to habitat destruction in the Northern Jarrah Forest, south of Perth, between 2019 and 2025. "It's the largest conservation‑focused commitment of its kind," Federal Environment Minister Murray Watt said as he [spruiked the deal](https://minister.dcceew.gov.au/watt/media-releases/media-statement-alcoa-path-compliance-and-environmental-accountability?ref=boilingcold.com.au). The company did not seek the appropriate legal approvals to clear the land under the Commonwealth Environment Protection and Biodiversity Conservation Act 1999. The agreement, which is enforceable in the Federal Court, will deliver permanent ecological offsets to preserve important habitat. [Alcoa misleads investors on crucial WA mining approvalsChief executive Bill Oplinger told Wall Street the miner had responded to all 60,000 comments on its WA expansion plans—in fact, it responded to fewer than 10, and some were unacceptable.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-259.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Alcoa-Huntly-mine-near-Serpentine-dam-aerial-view-1-1.png)](https://www.boilingcold.com.au/alcoa-misleads-investors-on-mining-approvals/) It will also expand conservation programs for species, including Western Australia's three black cockatoo species, and strengthen invasive‑species management within the Northern Jarrah Forest. Senator Watt also granted Alcoa a national‑interest exemption to allow the company to continue land clearing for its mining operations for 18 months, while a strategic assessment is completed. This will ensure the continued supply of bauxite for industry in Australia and with trade partners, he said. It also ensures Alcoa can sustain its operations, which employ about 6000 workers. Greens WA environment spokeswoman Jess Beckerling said the announcement reeked of a deal to enable further clearing of native jarrah forests. "Alcoa has been granted a special free pass from Federal nature laws for 18 months, with the Environment Minister Murray Watt claiming the clearing is in the national interest," she said. The miner has committed to pay $4.2 million in additional offsets for activities covered by the exemption for management of the environmental impacts. The federal environment department and Alcoa have agreed to develop a strategic assessment agreement to enable future environmental approvals. This will guide sustainable mining at Alcoa's Huntly and Willowdale mining operations, around 100km south of Perth, until 2045. "This agreement will enable government to assess the cumulative environmental impacts of Alcoa's local mining operations and provide strong protections for threatened species and ecological communities, while offering Alcoa long-term operational certainty," Senator Watt said. [Alcoa lied about jarrah forest rehabilitation: ad watchdogThe Ad Standards decision has demolished a key plank of the US miner’s expensive campaign to win public support for expanded mining in WA.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-260.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Alcoa-forest-rehabilitation-ad-1-8.jpeg)](https://www.boilingcold.com.au/alcoa-lied-about-jarrah-forest-rehabilitation-advertising-watchdog/) Alcoa [said](https://www.alcoa.com/australia/en/news/releases?id=2026/02/alcoa-furthers-approvals-modernization-with-australian-government&year=y2026&ref=boilingcold.com.au) modernising the approvals framework will provide a better understanding of the potential impacts of land clearing and mining on significant flora and fauna into the future. The company will continue to limit clearing to 800 hectares per year and increase new rehabilitation rates annually to 1,000 hectares per year by 2027. "We are committed to responsible operations and welcome this important step in transitioning our approvals to a contemporary assessment process that provides increased certainty for our operations and our people into the future," Alcoa president and chief executive Bill Oplinger said. The strategic assessment will not impact an ongoing accredited environmental assessment of the future Myara North and Holyoake mine regions of the Huntly mine under WA and federal environment law. The Minerals Council of Australia [said the agreement was a pragmatic decision](https://minerals.org.au/resources/alcoa-decision-shows-pragmatic-path-forward-for-mining-approvals-and-jobs/?ref=boilingcold.com.au) by Alcoa and the federal government. Chief executive Tania Constable called on state and federal governments to "rapidly finalise" workable national environmental standards and assessment agreements to reduce mine approval delays. *AAP copy by Aaron Bunch* --- **UPDATES** 18 February 2026, 4:10 PM: Comments from Greens added ### Regulator shuts Wandoo oil field off WA after spill URL: https://www.boilingcold.com.au/regulator-shuts-wandoo-oil-field-off-wa-after-oil-spill/ Last updated: 2026-05-07T00:38:55.000Z Following a minor oil spill in December, the offshore environment regulator has shut down the Wandoo oil field, 80km off the Pilbara coast, until the Canadian owner, Vermilion, can demonstrate it is safe. Regulator NOPSEMA called out "systemic failures" in Vermilion's management of Wandoo, including inadequate inspection and maintenance, and repeated instances of not complying with Wandoo's approved environment plan. NOPSEMA's current assessment is that the hydrocarbon release was small with minimal environmenal impact, according to the regulator's spokesman. However, it is the fourth minor spill since 2021. ## Vermilion wants to drill seven more wells The condemnation of the $2.5 billion company's ability to operate Wandoo safely comes as it is [seeking environmental approval](https://info.nopsema.gov.au/environment%5Fplans/723/show%5Fpublic?ref=boilingcold.com.au) to drill up to seven exploration wells starting in 2026 or 2027, in the search for more oil. Vermilion claims in its [environment plan](https://docs.nopsema.gov.au/A1272086?ref=boilingcold.com.au) for the drilling under assessment by NOPSEMA to be committed to meeting all regulatory requirements and to maintain a strong health, safety, and environmental risk management system. It has not met either of these benchmarks with its current management of Wandoo, according to NOPSEMA's direction. NOPSEMA identified problems with Vermilion's management of Wandoo during inspections in October 2025 and after the December 11, 2025, oil spill. "These issues reflect recurring themes from earlier inspections and show that corrective actions and assurance processes have not fully addressed the underlying causes," the February 6 [NOPSEMA direction](https://www.nopsema.gov.au/sites/default/files/documents/General%20Direction%202084%20-%20Wandoo.pdf?ref=boilingcold.com.au) published on Friday said. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/02/Vermilion-safety-spin.png) ****Vermilion's** [****website**](https://www.vermilionenergy.com/our-operations/australia/wandoo-consultation-activities/?ref=boilingcold.com.au) **seeking consultation on its Australian plans** The NOPSEMA direction said the systemic weaknesses it identified may have contributed to the oil spill. Vermilion has operated the wholly owned Wandoo field since 2005. Wells reach out as far as three kilometres from two platforms: the unmanned Wandoo A and the crewed Wandoo B. NOPSEMA has ordered Vermilion not to export any oil from Wandoo until it can demonstrate that it has implemented measures to make the existing system safe. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/02/Wandoo-field-schematic.jpg) ****Wandoo produces about 5000 barrels of oil a day.** Image: Vermilion. Vermilion then has to have a completely new export system from the pipeline end manifold (PLEM) to the floating export hose in place by December 2027. A NOPSEMA spokesman said its direction to stop oil exports will be in place until it is satisfied Vermilion has reduced the risk to the environment to as low as reasonably practicable. "The General Direction also requires independent third-party reviews, corrective actions to strengthen environmental and integrity management systems, and a transition to a fully replaced oil export system by the end of 2027," he said. "NOPSEMA will continue to closely monitor the titleholder’s compliance ... and will take further regulatory action if required." Vermilion had a [NOPSEMA direction issued three years ago](https://www.nopsema.gov.au/sites/default/files/documents/OHS%20Improvement%20Notice%201899.pdf?ref=boilingcold.com.au) over concerns that its inadequate maintenance of pipework on the platforms could lead to oil or gas escaping, resulting in a fire or explosion. ## "Rare" oil spill risk has happened Vermilion's proposed exploration drilling poses the risk of oil spills that could result in "behavioural changes and sub-lethal and lethal effects" to marine life in a "Hydrocarbon Area" (green in map) that covers almost the entire coast of WA's vast Pilbara region. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/02/oil-spill-impact-map-Wandoo-exploration.png) ****The map shows the area where an oil spill could impact. No one oil spill would affect the entire area** Image: Wandoo exploration environment plan The analysis in Vermilion's environment plan also defines a much larger area of the environment that might be affected (EMBA - pink on the map). In this area, that stretches from Broome to Geraldton, the environment could be affected, but the impact may not be adverse. The Canadian company determined that the probability of an oil spill from an uncontrolled well during exploration drilling was "rare". This is the same probability that Vermilion's [environment plan](https://docs.nopsema.gov.au/A779255?ref=boilingcold.com.au) for its current Wandoo operations ranked the risk of an oil spill from the export system that occurred in December 2025. Vermilion estimates Wandoo oil production can continue until 2030\. If the exploration is not approved or is unsuccessful, the company will have to commence the expensive job of removing all infrastructure from the ocean. *Boiling Cold* has asked NOPSEMA for details about the December oil spill. Vermilion has been contacted for comment. [![CTA Image](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/02/IMG_4120-copy.jpeg)](#/portal/signup) **Boiling Cold*'s coverage of WA's oil and gas sector is free for all to read, maximising impact and accountability. I need your backing to keep covering this powerful and influential industry. [Support independent journalism in WA ](#/portal/signup) **Correction:** - Vermilion has complied with NOPSEMA direction issued in 2022\. The regulator's website had not been updated to reflect this. **Updates:** - February 13, 3PM - Comments from NOPSEMA spokesman added. - Exploration plans for Wandoo and associated oil spill risk added. - February 13, 4PM - Characterisation of December spill as minor and number of past oil spills added. ### Alcoa misleads investors on crucial Australian mining approvals URL: https://www.boilingcold.com.au/alcoa-misleads-investors-on-mining-approvals/ Last updated: 2026-02-10T08:01:24.000Z 👷‍♂️ WHY ALCOA'S WA MINING APPROVALS MATTER · Alcoa needs WA · More than 70% of its bauxite and alumina come from WA · Its share price plunged the last time investors were concerned about approvals. · Alcoa's mining is a threat to Perth's water supply · It has failed to complete the rehabilitation of a single hectare of jarrah forest after sixty years of strip mining. Alcoa chief executive Bill Oplinger incorrectly told investors the miner has completed its work on vital mining approvals, and that progress now depends on the WA Environmental Protection Authority (EPA). > "We received close to 60,000 comments. We've responded to all of those comments," Oplinger [told Wall Street analysts](https://s29.q4cdn.com/945634774/files/doc%5Fevents/2016/webcast-transcript-2016.pdf?ref=boilingcold.com.au) in January. > > "The next major milestone in the process is that we should have a recommendation from the EPA at the end of the first half and then have ministerial approvals by the end of the year." The real situation is that Alcoa has responded to less than ten submissions; some were not to a standard acceptable to the EPA, and there was no basis to expect an EPA recommendation by mid-2026. Oplinger's wish to be upbeat about Alcoa extending its six decades of access to WA's jarrah forest, where it mines more than 70 per cent of its bauxite, is understandable. He told investors in 2025 that obtaining its WA mining approvals was the ["number one" lever](https://www.boilingcold.com.au/alcoa-spruiks-profit-boost-if-mining-more-wa-forest-approved/) to boost profits for the global aluminium specialist. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/02/BillOplinger-560-590-1.jpg) ****Bill Oplinger has led Alcoa since September 2023.** Image: Alcoa In mid-2023, his predecessor, Roy Harvey, told a quarterly results call there was “no fixed timetable” for resolving approvals in WA. Alcoa's share price [plunged 6.5 per cent](https://www.watoday.com.au/national/western-australia/alcoa-says-no-wa-job-losses-as-share-price-plunges-7pc-20230719-p5dpmf.html?ref=boilingcold.com.au) in the first 10 minutes of trading and closed the day down 7.4 per cent, wiping $650 million off the value of the company. The Alcoa board [axed Harvey](https://www.watoday.com.au/national/western-australia/alcoa-swaps-out-us-boss-as-it-struggles-for-mine-approval-in-wa-20230926-p5e7oe.html?ref=boilingcold.com.au) and installed Oplinger before the next quarterly call. ## Approval ball still in Alcoa's court Environmental Protection Authority chair Darren Walsh said the responses received from Alcoa in January were only to submissions from "decision-making authorities" and the EPA had requested further information for some of them. Decision-making authorities are WA government departments. *Boiling Cold* understands Alcoa has also responded to the submission of state-owned utility Water Corporation, that has significant concerns about Alcoa's mining near its dams. Walsh told *Boiling Cold* that there was no agreed timetable for the environment watchdog to make its recommendation to Environment Minister Matthew Swinbourn. > *"The EPA will not commit to an assessment timeframe until Alcoa submits its outstanding responses," Walsh said.* > > "When these have been accepted as adequate by the EPA they will be published," he said. The EPA received [more than 59,000 submissions](https://www.boilingcold.com.au/record-59-000-submissions-to-epa-on-alcoa-as-us-boss-flies-in/) on Alcoa in August 2025\. Many were proformas, but more than 10 per cent were not, so the US company has about 6,000 different submissions to review and respond to. An Alcoa spokeswoman said in agreement with the EPA that it had prioritised responding to government regulators and was targeting to submit all responses by the end of March. If Alcoa achieves that target, it still has a long road to gaining approvals. The EPA has to review the responses, most likely resulting in more questions to Alcoa. Once the EPA deems the responses to be acceptable and publishes them, it can complete its assessment, which is likely to be the most complex it has ever undertaken. There will then be a three-week appeal period and a lengthy assessment by the Appeals Convenor before WA's environment minister can make a decision. In addition, there is a parallel Federal environmental approvals process. [Labor breaks vow and risks WA’s water supply for AlcoaRoger Cook granting Alcoa greater access to mine near Perth’s dams risks could cost taxpayers billions of dollars and result in water restrictions![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-255.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Alcoa-Cook-Water-feature-pic-25.png)](https://www.boilingcold.com.au/wa-labor-puts-alcoa-before-water-supply/) ****Read** ***Boiling Cold** **'s exclusive investigation of Roger Cook's work for Alcoa** Alcoa was asked on what basis it expected an EPA recommendation by mid-year. Its spokesperson said it was working collaboratively with stakeholders to achieve ministerial decisions by the end of 2026 and would continue to be responsive to requests for information from the EPA. *Boiling Cold* also asked if the company would correct its misinformation to the market. Alcoa pointed to its [press release](https://news.alcoa.com/press-releases/press-release-details/2026/Alcoa-Corporation-Reports-Fourth-Quarter-and-Full-Year-2025-Results/default.aspx?ref=boilingcold.com.au) accompanying its quarterly results, which was correct about its actual progress: “In January 2026… the Company submitted to the WA Environmental Protection Authority responses to comments received from government entities." [Mines Department blasts holes in Alcoa’s jarrah forest care claimsEndangered cockatoos - 105,000 exploration holes a year - insecure offsets: WA’s mining regulator has questions for the US miner.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-253.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/53188412830_0feafcf995-1.jpg)](https://www.boilingcold.com.au/mines-department-blasts-holes-in-alcoas-jarrah-forest-care-claims/) The departments of Water and Environmental Regulation, Mines, Biodiversity and Conservation, and Health all made submissions to the EPA, according to *Boiling Cold’s* freedom of information requests. The Mines Department was [scathing about Alcoa's claims](https://www.boilingcold.com.au/mines-department-blasts-holes-in-alcoas-jarrah-forest-care-claims/) to be caring for the northern jarrah forest. Other departments denied FOI access as the documents were part of an ongoing deliberative process. [![CTA Image](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/02/DJI_0449-Myara-copy.JPG)](#/portal/signup) **Boiling Cold*'s unrivalled [reporting on Alcoa](https://www.boilingcold.com.au/tag/alcoa/) is free for all to read, maximising impact and accountability. I need your backing to keep covering stories that would otherwise go unreported. [Support independent journalism in WA ](#/portal/signup) **Corrections:** The EPA requested further information for some of Alcoa's responses, not all of them. Alcoa has responded to Water Corporation's submission. --- ## ### WA fracking safeguards are half done and five years late URL: https://www.boilingcold.com.au/wa-fracking-safeguards-are-half-done-and-five-years-late/ Last updated: 2026-02-04T21:30:26.000Z The WA Labor Government has missed its own deadline to regulate hydraulic fracturing by five years, with eight of 20 promised protections still incomplete ahead of its first fracking decision on a Kimberley project. The Government committed to implementing all the safeguards against fracking recommended by an independent inquiry by December 2020, but the job is barely half done. Then Premier Mark McGowan said the government would "implement all of the inquiry's recommendations before any fracking production approvals are granted." A spokesman for Mines and Petroleum Minister David Michael said the Government’s position has not changed, and it intended to complete all 20 items before granting production approvals. Michael's Department was asked when all the safeguards would be in place. A spokesperson said the remaining actions are subject to ongoing work, with announcements to be made in the near future. A Kimberley environmental group that opposes fracking has called on the government to honour its promise to consult before it implements the remaining protections. Incomplete measures include the vital, enforceable Code of Practice that would set minimum standards for fracking, and legislation that would grant Traditional Owners and private landholders a veto. 🐌 ****Slow Progress** ***·** **October 2017* \- Inquiry into hydraulic fracturing led by EPA chair Tom Hatton is [announced](https://www.wa.gov.au/government/media-statements/McGowan%20Labor%20Government/Fracking-inquiry-panellists-named-20171009?ref=boilingcold.com.au). ***·** **November 2018* \- Hatton [report](https://frackinginquiry.wa.gov.au/sites/default/files/final%5Freport.pdf?ref=boilingcold.com.au) released. WA Government [lifts fracking moratorium](https://www.wa.gov.au/government/media-statements/McGowan%20Labor%20Government/Government-introduces-strict-new-controls-for-hydraulic-fracturing-20181127?ref=boilingcold.com.au) from two per cent of WA's area. ***·** **July 2019* \- Government releases a [plan to implement](https://www.wa.gov.au/organisation/department-of-mines-petroleum-and-exploration/independent-scientific-panel-inquiry-hydraulic-fracture-stimulation-western-australia?ref=boilingcold.com.au) all Hatton recommendations by December 2020. ***·** **January 2021 -* Black Mountain Energy's Project Valhalla [referred to the EPA](https://www.epa.wa.gov.au/proposals/valhalla-gas-exploration-and-appraisal-program?ref=boilingcold.com.au). ***·** **Mid-2022* \- Eight of 20 actions not completed. ***·** **January 2026* \- WA EPA [recommends](https://www.epa.wa.gov.au/media-statements/epa-delivers-report-west-kimberley-gas-exploration-proposal?ref=boilingcold.com.au) Project Valhalla proceed. ***·** **February 2026* \- Eight actions still not completed, same progress status as 3½ years ago. Five years late. ## Black Mountain the first fracking proposal to be assessed In January, the WA Environmental Protection Authority recommended that US-owned Black Mountain Energy be allowed to frack up to 20 wells in the West Kimberley, near the Fitzroy River. Fracking, or hydraulic fracturing, involves pumping a mixture of water and chemicals down a drilled hole at high pressure to crack the underground rock, allowing oil and gas to flow more freely. In contrast, oil and gas from conventional wells can rise to the surface without fracturing. [Black Mountain, the firm that wants to frack the KimberleyA company with less than $5 million in the bank and a boss who lives in the US will soon get a red or green light from WA’s environment watchdog.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-236.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Wendy-Mitchell---Environs-Kimberley-4.jpg)](https://www.boilingcold.com.au/who-is-black-mountain-the-company-that-wants-to-frack-the-kimberley/) The practice is controversial because of the large volumes of water required to crack the rock, the risk of contaminating water sources with the chemicals, and the far greater number of wells required, which increases the above-ground environmental impact. The next steps for Black Mountain's Project Valhalla's approval are for the Appeals Convenor to consider any appeals, many of which are expected, and then prepare a report for Environment Minister Matthew Swinbourn. He then decides whether the project will proceed and, if so, under what conditions. Swinbourn could approve the project before the safeguards are finalised, knowing that secondary approvals such as the Code of Practice would be applied before anything happened on the ground. However, Black Mountain would be unlikely to financially commit to the project before it knew all the restrictions it had to comply with. ## Consultation called for The 2019 Implementation Plan committed the Government to seek public comment on draft solutions and publish its responses for many of the actions: including the eight outstanding ones. Environs Kimberley executive director Martin Pritchard said the WA government had not kept its promise to consult the community and Traditional Owners about the regulations it committed to from the fracking inquiry. "Fracking has the potential to industrialise the Kimberley and threaten the Fitzroy River and communities that rely on it," he said. "We’re calling on Premier Roger Cook to stick to his promises and consult the community if he’s serious about developing a fracking Implementation Plan.” [Federal experts slam Black Mountain fracking assessmentAn independent review found Black Mountain conducted a “limited and disjointed” assessment that came to “largely unsupported” conclusions.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-237.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/photo-1712519084041-adb875a647f3-3)](https://www.boilingcold.com.au/federal-experts-slam-science-behind-kimberley-fracking-plans/) ### Alcoa flags 'pretty aggressive' cost cuts at alumina refineries URL: https://www.boilingcold.com.au/alcoa-flags-pretty-aggressive-cost-cuts-at-alumina-refineries/ Last updated: 2026-01-29T21:30:49.000Z Alcoa chief executive Bill Oplinger has signalled a cost-cutting drive at the company's alumina refineries, which Western Australia - home to the majority of production - would be unlikely to escape. The price the Pittsburgh-based company received for the aluminium smelter feedstock dropped 12 per cent in 2024, cutting earnings from its alumina division by a third. 🔢 ****KEY NUMBERS - Alcoa 2025** ***Profit** \- $US1,170 million, ⬆️ from $US60 million in 2024 ***Revenue** \- ⬆️ 8% to $US12.8 billion ***Bauxite** \- 25.8 million tonnes mined in WA, ⬇️ 7% ***Alumina** \- production ⬇️ 4% (mainly the Kwinana closure) \- price ⬇️ 12% \- adjusted EBITDA ⬇️ 36% to $US901 million ***Aluminium** \- production ⬆️ 4% (due to smelter restarts) \- price ⬆️ 19% \- adjusted EBITDA ⬆️ 61% to $US1058 million Alcoa's WA refineries, Pinjarra, Wagerup and Kwinana, which closed in 2024, typically produce more than 70 per cent of the company's alumina. When queried by Wall Street analysts last week on plans to cut costs and boost efficiency at Alcoa's refineries, Oplinger said that he understood where his alumina division was in the commodity cycle. > 'We've shown in the past ... that we can get pretty aggressive around costs," Olplinger said. However, Oplinger indicated that at least one of his predecessors had gone too far in response to previous low prices. "What we won't do this time around is really put any of our plants in jeopardy for the future," he said. Alcoa's WA operations - the Huntly mine that feeds the Pinjarra refinery and the Willowdale mine that supplies the Wagerup refinery further south - employs about 4000 people. ## Low prices hit Alcoa's alumina refineries Olpinger was speaking after the $22 billion company released its 2025 financial results that showed a falling financial performance of its alumina business countered by a much better year from its aluminium smelters. ![Graph showing the Platts global benchmark price for alumina over 2025 and 2025 - set by WA production - plunged in early 2025 from a peak of about $US800 a tonne to about $US300 a tonne.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/01/alumina-spot-price-2024-to-2025.png) ****The global benchmark price for alumina - set by WA production - plunged in early 2025\.** Source: Alcoa Q4 2024 [presentation](https://s29.q4cdn.com/945634774/files/doc%5Ffinancials/2025/q4/4Q25%5FEarnings-Presentation.pdf?ref=boilingcold.com.au) The global prices index for alumina which is based on WA production from Alcoa and South32 fell heavily in the first four months of 2025. Oplinger said the Chinese government had discouragred large-scale curtailment of production at its refineries despite about 60 per cent of them having difficulties at current pricing. "Alcoa is exceptionally well positioned to navigate market volatility, thanks to our low-cost mining and refining portfolio and our strong operational performance," Oplinger said. All of Alcoa's refineries are in the lowest 25 per cent of global production costs. ![A cost curve of the world's alumina refineries in 2025 showing all of Alcoa's refineries are in the lower quartile of breakeven price and half of global capacity is losing money at current prices. ](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/01/alumina-refinery-cost-curve.png) ****All of Alcoa's alumina refineries - including Pinjarra and Wagerup in WA - have low production costs.** Source: Alcoa Q4 2024 [presentation](https://s29.q4cdn.com/945634774/files/doc%5Ffinancials/2025/q4/4Q25%5FEarnings-Presentation.pdf?ref=boilingcold.com.au) He praised his teams at WA's Pinjarra and Wagerup alumina refineries for continuing to increase production despite the low bauxite grade Alcoa is currently mining in WA until it gains environmental approval to clear new swathes of jarrah forest. ![A pie chart of Alcoa's cost to produce alumina in the fourth quarter of 2025 - bauxite 25%, caustic 17%, natural gas 18%, other energy 5% and conversion 35%. ](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/01/Alcoa-alumina-production-cost-breakdown-2025-1.png) ****Mining accounted for only a quarter of Alcoa's alumina production costs in Q4 2025\.** Source: Alcoa Q4 2024 [presentation](https://s29.q4cdn.com/945634774/files/doc%5Ffinancials/2025/q4/4Q25%5FEarnings-Presentation.pdf?ref=boilingcold.com.au) The low grade of bauxite in WA means to produce a tonne of alumina Alcoa needs more ore, more caustic, and more natural gas. ## WA approvals or bust for Alcoa WA's Environmental Protection Authority (EPA) is assessing Alcoa's current mining and a planned expansion of the Huntly mine that is increasingly encroaching of the water catchments that supply Perth. In January Alcoa provided responses to the EPA to the [almost 60,000 submissions](https://www.boilingcold.com.au/record-59-000-submissions-to-epa-on-alcoa-as-us-boss-flies-in/) the independent watchdog received. Oplinger said he expected the EPA to publish its recommendations by mid-year and for Alcoa to receive the go-ahead from WA and Federal environment ministers by December. [Labor breaks vow and risks WA’s water supply for AlcoaRoger Cook granting Alcoa greater access to mine near Perth’s dams risks could cost taxpayers billions of dollars and result in water restrictions![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-233.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Alcoa-Cook-Water-feature-pic-24.png)](https://www.boilingcold.com.au/wa-labor-puts-alcoa-before-water-supply/) ****Read Boilng Cold's breakthrough revelations on how the WA government is doing all it can to put Alcoa before WA's forests and water supply.** Alcoa is betting everything on getting those approvals to continue its six decades of mining WA's jarrah forest that accounts for more than 70 per cent of its bauxite and alumina production. Oplinger said Alcoa had no plans to develop new mines or refineries. "Refining capital costs are still fairly high and certainly, at today's prices, it makes it difficult for a greenfield expansion." However he said Alcoa has opportunities for "brownfield" expansiion of existing mines, refineries and smelters. To continue mining in WA Alcoa will have to counter concerns about its [failure to complete the rehabilitation](https://www.watoday.com.au/environment/sustainability/alcoa-in-wa-60-years-28-000-hectares-of-forest-cleared-zero-rehabilitation-completed-20230307-p5cq4j.html?ref=boilingcold.com.au) of a single hectare of forest in six decades and the high chance its mining could [contaminate Perth's water supply](https://www.watoday.com.au/national/western-australia/intergenerational-risk-alcoa-s-troubled-mining-could-double-perth-water-bills-20230331-p5cx3t.html?ref=boilingcold.com.au). --- ### Key documents [Alcoa Q4 and full year 2025 results](https://news.alcoa.com/press-releases/press-release-details/2026/Alcoa-Corporation-Reports-Fourth-Quarter-and-Full-Year-2025-Results/default.aspx?ref=boilingcold.com.au) [Alcoa Q4 and full year 2025 results presentation](https://s29.q4cdn.com/945634774/files/doc%5Ffinancials/2025/q4/4Q25%5FEarnings-Presentation.pdf?ref=boilingcold.com.au) [Transcript of Alcoa conference call with investment analysts](https://s29.q4cdn.com/945634774/files/doc%5Fevents/2026/Jan/22/4Q25-Earnings-Conference-Call-Transcript.pdf?ref=boilingcold.com.au) ### South West WA grid beats 50 per cent renewable energy, slashing power prices 13 per cent URL: https://www.boilingcold.com.au/wa-renewables-hit-91-percent-power-prices-fall/ Last updated: 2026-01-29T00:56:56.000Z South West Western Australia's electricity grid achieved 91 per cent renewable energy generation at midday on December 20, 2025: a record enabled by 1,225 megawatts of new battery storage commissioned since October 2024\. 🔢 ****KEY NUMBERS - Q4 2025 SWIS Performance** 🔋 91% – peak renewable energy share (Dec 20, 2025) 📊 52% – average renewable share for quarter (up from 45%) ⚡ 1,225MW – new battery storage added since Oct 2024 💰 $69.55/MWh – wholesale price (down 13%) 🏭 -16% – gas generation decline 🪨 -6% – coal generation decline 🌱 0.43 tonnes/MWh – carbon intensity (down 15%) 🏠 20,000 – new household batteries H2 2025 The milestone contributed to renewable energy supplying more than half (52 per cent) of the region's power over the December quarter for the first time, as gas-fired generation fell 16 per cent and coal generation dropped 6 per cent compared to the previous year, according to the Australian Energy Market Operator's (AEMO) [quarterly report](https://www.aemo.com.au/-/media/files/major-publications/qed/2025/qed-q4-2025.pdf?rev=b29ae0bd014c48f59a259009d246280f&sc%5Flang=en&hash=49B19FB5A8783BBD5BF435153C523905&ref=boilingcold.com.au) released Thursday. ### Record renewable energy surge enabled by battery storage The dramatic surge in renewable energy share from 45 per cent to 52 per cent in just 12 months was enabled by the startup of five grid-scale batteries in Collie and Kwinana since October 2024. Just before noon on Saturday, 20 December, renewable energy provided 91 per cent of power on the South West Connected System (SWIS). ![Chart showing power sources in South West WA on December 20 2025 when the renewable energy share peaked at a record 91 per cent.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/01/power-source-contribution-WA-SWIS-20-December-2025--1.png) ****The SWIS recorded a record 91 per cent renewable energy share about noon on December 20, 2025.** Source AEMO quarterly report Sunny skies, high winds, more battery storage, unreliable coal-fired power generation and mild temperatures all contributed to the previous record of 85 per cent set a year before being smashed. ### Wholesale electricity prices fall 13 per cent AEMO policy manager Violette Mouchaileh said increased renewable and battery generation on the SWIS - which stretches as far as Kalbarri and Kalgoorlie - contributed to a reduction in coal and gas‑fired output of six per cent and 16 per cent respectively. "Greater renewable and storage output continued to place downward pressure on wholesale energy prices in WA, contributing to a 13 per cent fall to $69.55/MWh,” she said. [Labor breaks vow and risks WA’s water supply for AlcoaRoger Cook granting Alcoa greater access to mine near Perth’s dams risks could cost taxpayers billions of dollars and result in water restrictions![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-232.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Alcoa-Cook-Water-feature-pic-23.png)](https://www.boilingcold.com.au/wa-labor-puts-alcoa-before-water-supply/) The price also varied much less throughout the day. Batteries charging during the midday peak of solar power prevented prices from falling to extreme lows, while expensive gas lost market share in the evenings as the batteries discharged. Households and small businesses in WA are not directly affected by the wholesale power price, as state-owned Synergy has the monopoly to supply them at prices set by the WA Government. ### Gas generation drops 16% as batteries gain market share The use of gas in Australia's most gas-dependent state fell nine per cent in the December quarter compared with a year ago and was 16 per cent less than the preceding quarter. This was partly due to a 16 per cent drop in gas-generated power as renewable energy gained market share throughout the day. Acciona's Kwinana waste-to-energy plant [started up](https://thewest.com.au/business/energy/kwinana-waste-to-energy-plant-new-power-station-set-to-open-nearly-seven-years-after-first-sod-turned-c-20655609?ref=boilingcold.com.au) in November after seven troubled years of construction, adding a new type of renewable power to the system. ### Household battery installations surge with subsidies ![Two charts showing strong growth in rooftop solar and household battery capacity in South West WA.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/01/growth-in-solar-and-battery-power-capacity-in-South-West-WA.png) ****Household solar, and now batteries, continue to grow.** Source: AEMO quarterly report Household investment continued to add to WA's clean power capacity, with about 20,000 batteries installed in the last half of 2025, with uptake boosted by State and Federal subsidies. ### Carbon emissions intensity falls 15% On average, generating a megawatt-hour of power produced 0.43 tonnes of carbon pollution in the last quarter of 2025, 15 per cent less than a year before. [![Understand WA's energy transition with news independent of government and big business. Support Boiling Cold. ](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/07/CTA-donate-transition-2.png)](https://www.boilingcold.com.au/support-cta/) ### WA environmental watchdog backs Kimberley fracking URL: https://www.boilingcold.com.au/wa-environmental-watchdog-backs-kimberley-fracking/ Last updated: 2026-02-03T04:03:53.000Z 🔥 ****Project Valhalla Key Facts** 📍 Location: EP371 permit, Canning Basin, Kimberley, WA. 🏢 Company: unlisted Black Mountain Energy ⛽ Initial scale: 20 exploration/appraisal wells, up to 4000m deep 💧 Water: 100 million litres per well (mixed with chemicals) 🚰 Risk: Mount Hardman Creek flows into Fitzroy River 🦎 At-risk species: Northern Blue-tongued Skink, Greater Bilby ✅ WA: EPA recommendation Jan 2026, appeals and Minister's decison to follow ❓Federal: Assessment ongoing (EPBC Act) The WA Environmental Protection Authority has approved Black Mountain Energy's controversial plan to drill and hydraulically fracture 20 gas wells in the Canning Basin, 16 kilometers from the Fitzroy River—a decision that came just three months after independent federal scientists found the company's environmental risk assessment "limited and disjointed" with "largely unsupported" conclusions. The January 20 EPA decision marks the first major fracking approval in the Kimberley since the McGowan government lifted its complete moratorium in 2018. The US-owned company that had [less than $5 million](https://www.boilingcold.com.au/who-is-black-mountain-the-company-that-wants-to-frack-the-kimberley/) in the bank in mid-2025 plans to drill up to 20 wells 16km from the Fitzroy River in search of commercial quantities of gas, up to 4000m below ground. EPA chair Darren Walsh said he was satisfied that environmental risks were low from the proposal, which allowed for exploration for and appraisal of gas reserves but not for the production of the fuel. Walsh said protecting groundwater was critical, and he recommended that Black Mountain be required to conduct additional studies before drilling begins. Black Mountain Energy (BME) executive chairman Rhett Bennett said the recommendation was encouraging. "I remain a strong believer in the vast resource development opportunity that exists in our EP371 permit in the Canning Basin," he said. The EPA has recommended that if oil and gas activity grows in the Canning Basin, a study be done to assess the cumulative impact on the region. ## Kimberley green group shocked by EPA approval Environs Kimberley director Martin Pritchard said he was shocked by the EPA's decision. “Fracking would pollute the water that sustains life in the Kimberley and threaten rare and endangered wildlife as well as the National Heritage listed Martuwarra Fitzroy River," he said. "Premier Roger Cook needs to step in and protect the Kimberley from this polluting, damaging industry before it's too late." ![Map showing the location of Black Mountain Energy's Project Valhalla in Western Australia's Kimberley region where it plans to frack for gas.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/01/map-of-Project-Valhalla-footprint-in-the-Kimberlety.png) ****Black Mountain's proposed development (circled).** *Image DCCEEW* [EPBC Public Portal](https://epbcpublicportal.environment.gov.au/all-referrals/project-referral-summary/?id=83bb2523-747c-ef11-ac20-000d3acb720f&ref=boilingcold.com.au) The independent EPA published its [recommendation](https://www.epa.wa.gov.au/sites/default/files/EPA%5FReport/EPA%20Report%201800%20Valhalla.pdf?ref=boilingcold.com.au) on Tuesday, less than three months after the WA Labor conference voted to [ban fracking across the state](https://www.abc.net.au/news/2025-11-09/labor-party-members-vote-for-fracking-ban-to-be-extended/105987602?ref=boilingcold.com.au). The vote does not bind the parliamentary party, but is politically awkward for Environment Minister Matthew Swinbourn, who will make the final decision for the state after an appeals process likely to attract considerable public input. The drilling campaign, green-lit by the EPA on Tuesday, will allow BME to better understand the gas resources in its Canning Basin permit. If successful, hundreds more wells, requiring further approval, could supply large quantities of gas. BME could export the gas through Woodside's underutilised North West Shelf gas export plant, as in 2023 the WA Labor government exempted the Canning Basin from its ban on the export of onshore gas. The plan only works if there is enough gas and long-term demand certainty to justify building a 1000 km pipeline from the Kimberley to the Pilbara. ## Federal experts doubt Black Mountain's environmental work A [report](https://www.iesc.gov.au/sites/default/files/2025-12/iesc-advice-valhalla-gas-exploration-appraisal-project.pdf?ref=boilingcold.com.au) published in December by independent scientists advising the Federal Government, which also needs to approve what BME calls Project Valhalla, damned the company's environmental risk assessment. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/01/map-of-Black-Mountain-proposed-fracking-in-Fitzroy-River-catchment-1.png) ****Mount Hardman Creek runs through the project area into the Fitzroy River.** *Map:* [Environs Kimberley](https://assets.nationbuilder.com/lockthegate/pages/19947/attachments/original/1759150180/Valhalla%5Fbriefing%5Fpaper%5FEK%5FLTG.pdf?1759150180&ref=boilingcold.com.au) The Independent Expert Scientific Committee on Unconventional Gas Development (IESC) said BME conducted a "limited and disjointed" assessment of the risk to water resources posed by its planned drilling and reached "largely unsupported" conclusions. The wells, located in the catchment for the Fitzroy River, will each require 100 million litres of underground water, mixed with chemicals, to be injected at high pressure to fracture the rock and allow gas to flow to the surface more freely. The IESC rejected Black Mountain's conclusion that Mount Hardman Creek, which runs through the drilling area and into the Fitzroy River, would not be affected by the drilling. The EPA's assessment acknowledged that the IESC had identified uncertainties and knowledge gaps in BME's environmental work but concluded it had sufficient information to assess the proposal. [Federal experts slam science behind Kimberley frackingAn independent review found Black Mountain conducted a “limited and disjointed” assessment that came to “largely unsupported” conclusions.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-230.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/photo-1712519084041-adb875a647f3-1)](https://www.boilingcold.com.au/federal-experts-slam-science-behind-kimberley-fracking-plans/) The Federal Department of Climate Change, Energy, the Environment and Water (DCCEEW) was concerned about Project Valhalla even before it received the independent scientists' view. The Department concluded the drilling was “likely to have a significant impact” on the critically endangered Northern Blue-tongued Skink and the vulnerable Greater Bilby and Largetooth Sawfish, the largest freshwater fish in Australia. In March 2025, DCCEEW requested that BME provide a long list of additional information it needed to properly assess risks from the drilling. On Monday, a DCCEEW spokeswoman said it was assessing the information to determine if it was adequate, at which stage it would be published for public comment. [![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/10/CTA-industry-energy-climate.png)](https://www.boilingcold.com.au/support/) ## Who is Black Mountain Energy? BME, run by Texan Rhett Bennett, entered the Kimberley by buying petroleum titles from the Japanese giant Mitsubishi. The oil and gas potential of the Canning Basin attracted major international companies, but they all left disappointed, selling out to smaller companies. Hess departed in 2012, followed by ConocoPhillips [two years later](https://www.boilingcold.com.au/r/020aeef8?m=3dff8ebd-b09c-496c-beac-a196125985fb). Mitsubishi sold out in 2019, and Andrew Forrest’s Squadron Energy [departed in 2021](https://www.boilingcold.com.au/forrest-dumps-kimberley-fracking-on-climate-concerns/), then Origin left [in 2022](https://www.boilingcold.com.au/r/0ed18071?m=3dff8ebd-b09c-496c-beac-a196125985fb). The majors had been put off by the high costs of operating in an area remote even by the standards of WA’s resources sector. The distance to any sizable gas market was another major impediment. [Black Mountain, the firm that wants to frack the KimberleyA company with less than $5 million in the bank and a boss who lives in the US will soon get a red or green light from WA’s environment watchdog.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-229.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Wendy-Mitchell---Environs-Kimberley-3.jpg)](https://www.boilingcold.com.au/who-is-black-mountain-the-company-that-wants-to-frack-the-kimberley/) BME listed on the ASX in 2021, raising $11 million at 20 cents a share, leaving Rhett Bennett with a 78 per cent stake. Investors lost from day one, with shares trading between 12 and 15 cents for a few months before sitting at about two cents for most of 2023. The standing of the new company was not helped by the corporate regulator, ASIC, issuing it [three infringement notices](https://www.asic.gov.au/about-asic/news-centre/find-a-media-release/2023-releases/23-001mr-asic-issues-infringement-notices-to-energy-company-for-greenwashing/?ref=boilingcold.com.au)in 2022 for greenwashing. “BME had no credible basis for asserting that the natural gas it produced would be carbon neutral,” was [one of ASIC’s concerns](https://download.asic.gov.au/media/1nyh0sx2/infringement-notice-investor-presentation-b00725794.pdf?ref=boilingcold.com.au). BME paid almost $40,000 for the infringements, an action that is not an admission of guilt. The company briefly considered running computer servers in the remote outback to [mine cryptocurrencies](https://www.abc.net.au/news/2022-07-02/bitcoin-mining-cryptocurrency-proposal-for-kimberley-fracking/101202550?ref=boilingcold.com.au) using power generated by its gas. In September 2022, it [told investors](https://www.aspecthuntley.com.au/asxdata/20220908/pdf/02565759.pdf?ref=boilingcold.com.au) that environmental permitting was two-thirds complete, and it expected formal approval by mid-2023. In late 2023, the board [called it quits](https://www.aspecthuntley.com.au/asxdata/20231228/pdf/02758477.pdf?ref=boilingcold.com.au), recommending the company withdraw from the stock exchange. The board argued that after spending more than $40 million on what it dubbed Project Valhalla and having $7.5 million of cash, a market capitalisation of $8.8 million “places no value on the Company’s assets.” Today, BME is an unlisted public company with $4.8 million in cash as of June 30 2025, according to its [half-yearly report](https://www.documentcloud.org/documents/26300312-black-mountain-2025-h1-report/?ref=boilingcold.com.au) lodged with ASIC, which revealed a $809,000 cash burn over six months. --- **UPDATE:** 20 January 1:45: Comments from various parties and material from the EPA assessment report added. ### WA government investigating if one dead tree could halt Alcoa's mining URL: https://www.boilingcold.com.au/wa-government-investigating-if-one-dead-tree-could-halt-alcoas-mining/ Last updated: 2026-01-29T21:41:47.000Z WA's environment regulator is investigating whether Alcoa breached a condition designed to protect endangered black cockatoos, which, if proven, could shut down much of its lucrative bauxite mining. The probe was launched after Greens WA upper house member Jess Beckerling checked out a large jarrah tree on Alcoa's mine site just days before Christmas, which she says satellite imagery shows died within the past 12 months. “The tree is standing on a rocky island in a massive mine-site ... one of the largest remaining jarrah trees in the area," she said. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/01/IMG_0900.JPG) ****Beckerling with the jarrah tree she measured to have a 6.7m circumference**. Image supplied by Jess Beckerling "After 100 years of logging and clearing, trees this size are rare and precious, which is why Alcoa is supposed to protect them, “There was no way that a tree this size was going to survive this level of clearing, blasting and extracting so close to its base." The question for the Department of Water and Environmental Regulation (DWER) is whether the US company conducted "mining activities" within 10m of a "significant tree" protected by the [conditions of an exemption](https://www.legislation.wa.gov.au/legislation/prod/filestore.nsf/FileURL/mrdoc%5F46761.htm/$FILE/Environmental%20Protection%20%28Darling%20Range%20Bauxite%20Mining%20Proposals%29%20Exemption%20Order%202023%20-%20%5B00-00-00%5D.html?OpenElement&ref=boilingcold.com.au) from the Environmental Protection Act it operates under. Black Cockatoos nest in large tree hollows that only occur in the largest and oldest trees in the northern jarrah forest. ## Has Alcoa breached its special exemption? The Cook Government granted Alcoa the Section 6 exemption in December 2023, otherwise, its operation employing more than 4000 people would have been illegal once the WA Environmental Protection Authority (EPA) began assessing its activities shortly afterwards. The exemption covers much of, but not all of, Alcoa's mining, as the EPA is legally only able to assess areas it has not considered before. > The [WA government announcement ](https://www.wa.gov.au/government/media-statements/Cook-Labor-Government/New-framework-to-strengthen-Alcoa%27s-environmental-approvals-20231214?ref=boilingcold.com.au) said "any breach of conditions would see the exemption immediately cancelled." Beckerling said Alcoa had mined within 9m of the tree. An Alcoa spokesman said it took the conditions governing its operations seriously and considered it was compliant with conditions of its exemption. "The tree was identified in 2014 pre-mining surveys, and a 10m buffer was applied," he said. The area was cleared in 2020 and mined at various times up to March 2024, and Alcoa said none of this activity breached the buffer zone. A DWER spokesman confirmed it was investigating the matter and said the regulator would not make further comment until the investigation was completed. Legal advice from the Environmental Defender's Office (EDO) seen by *Boiling Cold* said if a breach was proven, it would be relatively simple to prosecute as the conduct does not have to be deliberate or negligent, nor shown to have caused harm. The EDO wrote that the exemption order would cease to have effect from the date of a proven breach, meaning that any mining done after that date would be illegal. The state government has the power to issue another Section 6 exemption order if the current one is cancelled. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/01/20251220_170038.jpg) ****Alcoa can strip mine 800 hectares of jarrah forest a year while the EPA assesses its operation - the equivalent of two Kings Parks.** Image supplied by Jess Beckerling. The exemption order restricts mining near two categories of trees - any large jarrah or marri trees which are classed as "significant trees," and "nesting trees" that have hollows that appear to have been used by black cockatoos. Jarrah trees with a diameter greater than 2m are significant. The exemption order bans mining within 10m of a significant or nesting tree, and from 2027, the banned area around a nesting tree is expanded to 50m. The Alcoa spokesman said it has proposed a 30m buffer around significant and nesting trees for its future mining, which is under assessment by the EPA. This would provide greater protection to significant trees than current conditions, but allow mining much closer to nesting trees. Beckerling said if a breach was not confirmed and Alcoa continued mining, the Government should increase the buffer around the trees to 50m now, not in 2027 as planned. "A 10m buffer is wholly inadequate and a death sentence for trees like this,” she said. --- ### Boiling Cold provides unmatched coverage of Alcoa in WA [Mines Department blasts holes in Alcoa’s jarrah forest care claimsEndangered cockatoos - 105,000 exploration holes a year - insecure offsets: WA’s mining regulator has questions for the US miner.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-223.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/53188412830_0feafcf995.jpg)](https://www.boilingcold.com.au/mines-department-blasts-holes-in-alcoas-jarrah-forest-care-claims/) The WA Mines Department is not convinced that drilling 105,000 exploration holes a year has a low environmental impact, questioned the value of the environmental offsets proposed by Alcoa, and noted that the US miner is not sharing information about endangered cockatoos on its mining lease. An exclusive story based on a freedom of information request by *Boiling Cold*. --- [Alcoa lied about jarrah forest rehabilitation: ad watchdogThe Ad Standards decision has demolished a key plank of the US miner’s expensive campaign to win public support for expanded mining in WA.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-224.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Alcoa-forest-rehabilitation-ad-1-7.jpeg)](https://www.boilingcold.com.au/alcoa-lied-about-jarrah-forest-rehabilitation-advertising-watchdog/) Australia's advertising watchdog ruled that Alcoa's claims to have rehabilitated 75 per cent of the WA jarrah forest it had strip-mined are unclear, overstated, without a reasonable basis, and not truthful or factual. --- [Labor breaks vow and risks WA’s water supply for AlcoaRoger Cook granting Alcoa greater access to mine near Perth’s dams risks could cost taxpayers billions of dollars and result in water restrictions![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-225.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Alcoa-Cook-Water-feature-pic-22.png)](https://www.boilingcold.com.au/wa-labor-puts-alcoa-before-water-supply/) WA Premier Roger Cook endangered Perth's water supply by allowing Alcoa into high-risk areas, lowering protection standards, and ordering its environmental regulator to put mining jobs before water quality. This exclusive *Boiling Cold* investigation was based on documents from numerous freedom of information requests and [shortlisted](https://www.meaa.org/meaa-media/state-media-awards/wa-media-awards/?ref=boilingcold.com.au) as one of the three best political stories in WA in 2025. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/01/Alcoa-by--MilesTweediePhotography_1.jpg) ## Alcoa's mining threatens Perth's water supply You won't read much about it in **The West Australian* Support informed and independent journalism [Support Boiling Cold](https://www.boilingcold.com.au/support/) ### Federal experts slam science behind Kimberley fracking plans URL: https://www.boilingcold.com.au/federal-experts-slam-science-behind-kimberley-fracking-plans/ Last updated: 2026-02-03T03:40:57.000Z Black Mountain Energy (BME) has conducted a "limited and disjointed" assessment of the risk to water resources posed by its planned drilling and reached "largely unsupported" conclusions, according to scientists advising the Federal Government. The [damning advice](https://www.iesc.gov.au/sites/default/files/2025-12/iesc-advice-valhalla-gas-exploration-appraisal-project.pdf?ref=boilingcold.com.au) from the Independent Expert Scientific Committee on Unconventional Gas Development (IESC) was published in December, just weeks before an expected recommendation from WA's independent Environmental Protection Authority (EPA). BME, owned mainly by its Texas-based chief executive, Rhett Bennett, needs approval from both the WA and Federal Governments to drill 20 wells in the remote Kimberley using the controversial hydraulic fracturing, or fracking, technique. The wells, located in the catchment for the Fitzroy River, will each require 100 million litres of underground water, mixed with chemicals, to be injected at high pressure to fracture the rock and allow gas to flow to the surface more freely. ![Map of Black Mountain Energy's planned fracking in the catchemnt of the Fitzroy River, Kimberley, Western Australia.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/01/map-of-Black-Mountain-proposed-fracking-in-Fitzroy-River-catchment.png) ****Mount Hardman Creek runs through the project area into the Fitzroy River.** Map: [Environs Kimberley](https://assets.nationbuilder.com/lockthegate/pages/19947/attachments/original/1759150180/Valhalla%5Fbriefing%5Fpaper%5FEK%5FLTG.pdf?1759150180&ref=boilingcold.com.au) Shaun Clark, fracking campaigner with Environs Kimberley, said the IESC advice confirmed its fears that fracking risked local aquifers and the nearby National Heritage-listed Martuwarra Fitztroy River. "The knowledge gaps and information failures identified and highlighted by the IESC are profound and cannot be ignored," he said. Clark wants the EPA to suspend any potential approval recommendation pending a full review of the advice. ![Aerial picture of the many trucks and other equipment required to frack a well, as proposed by Black Mountian Energy for the Kimberley region of Western Australia.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/01/typical-equipment-required-for-hydraulic-fracturing-1.png) ****Typical equipment required to hydraulically fracture a well.** Source: [BME submission to WA EPA](https://www.epa.wa.gov.au/sites/default/files/Referral%5FDocumentation/Supporting%20Information%20Document%20-%20Rev%201.pdf?ref=boilingcold.com.au). ## Late start to Federal approval process BME subsidiary Bennett Resources referred its plans, dubbed "Project Valhalla", [to the EPA](https://www.epa.wa.gov.au/proposals/valhalla-gas-exploration-and-appraisal-program?ref=boilingcold.com.au) in 2021, but only started the [federal approval process ](https://epbcpublicportal.environment.gov.au/all-notices/project-decision/?id=16d37409-abb5-ef11-b8e8-0022481295e6&ref=boilingcold.com.au)in late 2024. The Federal Department of Climate Change, Energy, the Environment and Water (DCCEEW) decided in February 2025 to assess the drilling after finding BME's conclusion that its drilling will not affect water resources was without foundation. The federal regulator was also concerned about threatened species and protecting the [West Kimberley](https://www.dcceew.gov.au/parks-heritage/heritage/places/national/west-kimberley?ref=boilingcold.com.au), which is designated as a National Heritage Place. [Enviro regulator raises doubts over Kimberley frackingBlack Mountain’s conclusion that its drilling will not affect water resources is without foundation, and threatened species and National Heritage are at risk, according to the Federal environment department.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-221.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Ant-Hill-Boabs-photo-credit-Damian-Kelly-3-1.jpg)](https://www.boilingcold.com.au/environmental-regulator-raises-doubts-over-kimberley-fracking/) ****The Federal environment regulator was concerned about Black Mountain's plans even before it received the damning independent expert's report.** In October, DCCEEW requested the IESC, which advises government regulators on the potential impacts on water resources to ensure their decisions are based on the best available science, to consider Valhalla. The independent scientists found the information Black Mountain used in its "limited and disjointed" environmental assessment was "not sufficient to assess the project’s potential impacts" on water, and its conclusions about potential impacts were "largely unsupported." The modelling of water flows was inadequate to determine the impact of accidental contamination. One of Black Mountain's rejected conclusions was that Mount Hardman Creek, which runs through the drilling area and into the Fitzroy River, would not be affected by the drilling. [![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/10/CTA-industry-energy-climate.png)](https://www.boilingcold.com.au/support/) The scientists questioned whether "given the potential toxicity of many of the contaminants," Black Mountain's plans to store waste water were adequate. The "somewhat simplistic" sizing of water retention ponds did not allow for increased rainfall from global warming that is already occurring, leading to a risk of overflow into the surrounding environment. Black Mountain also did not adequately justify its assumption that water acquifers could not be contaminated through naturally occuring underground faults or those caused by the high pressures of fracking. [Black Mountain, the firm that wants to frack the KimberleyA company with less than $5 million in the bank and a boss who lives in the US will soon get a red or green light from WA’s environment watchdog.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-222.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Wendy-Mitchell---Environs-Kimberley-2.jpg)](https://www.boilingcold.com.au/who-is-black-mountain-the-company-that-wants-to-frack-the-kimberley/) ****Black Mountain's chairman George Witman**, **said the company does not have the resources to develop its fracking project.** Black Mountain has pursued plans to produce gas in the Kimberley for six years, with the hope that a 1000km-long pipeline could be built to Woodside's underutilised North West Shelf gas export plant. It had a brief time on the ASX until it delisted in late 2023 due to investor indifference after spending more than $40 million on Project Valhalla. The company had less than $5 million in the bank in mid-2025. Black Mountain did not respond to *Boiling Cold's* questions. 🗞️ Want to see more **Boiling Cold* stories on Google search? Don't let algorithms make decisions for you [****CLICK HERE**](https://www.google.com/preferences/source?q=boilingcold.com.au&ref=boilingcold.com.au) to add **Boiling Cold* as a preferred source. ### 'Significant doubt' Pilot Energy, responsible for a WA oil platform, can survive URL: https://www.boilingcold.com.au/significant-doubt-pilot-energy-responsible-for-a-wa-oil-platform-can-survive/ Last updated: 2026-01-08T21:30:42.000Z ASX-listed Pilot Energy, which has financial responsibility for the Cliff Head oil platform near Dongara, may need significant injections of capital to survive the year, according to its [annual report](https://wcsecure.weblink.com.au/pdf/PGY/03042650.pdf?ref=boilingcold.com.au) released in late December. Pilot is in the process of buying out its Cliff Head joint venture partner, Triangle Energy, to achieve full ownership of the 20-year-old platform, 350km north of Perth, which stopped producing oil in 2024. The oil and gas junior, which now has just a 21 per cent interest in the facility, has agreed to pay all ongoing costs associated with the wells, platform and pipelines, even though the purchase is not yet completed. The proposed transaction has been reconfigured many times over the past few years. The troubled deal hit both companies hard in December 2024 when Pilot missed a $900,000 payment. The [open disagreement](https://www.boilingcold.com.au/shares-in-two-perth-basin-oil-players-plunge-after-payment-dispute/) pushed the Triangle share price down by a third, and Pilot scrip plunged 50 per cent, tanking the value of the two companies to $8.4 million and $8.2 million, respectively. A year later, the market values Triangle and Pilot at $3.1 million and $5.4 million, respectively. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/01/arrowsmith.jpg) ****Pilot Energy now owns all the Arrowsmith processing plant.** Image: Pilot Energy A burden on Pilot has been complying with a [direction from the offshore regulator](https://www.nopsema.gov.au/sites/default/files/documents/General%20Direction%20-%201947.pdf?ref=boilingcold.com.au) NOPSEMA to make Cliff Head safe after production stopped, which has cost more than expected. ## Recovery plans Since the September 2025 end date for the annual accounts, Pilot has made several moves to shore up its finances. These include arrangements with financiers to bring forward payments of petroleum resources rent tax (PRRT) refunds and Federal research and development incentives, pushing back the potential payment date for $5.8 million of convertible notes to December 2026, and selling an option to buy land to Strike Energy for $700,000. Pilot also secured a $500,000 short-term loan from existing shareholders and paid three consultants [in shares rather than cash](https://wcsecure.weblink.com.au/pdf/PGY/03044484.pdf?ref=boilingcold.com.au). In October, Pilot announced plans to [develop a data centre](https://wcsecure.weblink.com.au/pdf/PGY/03008892.pdf?ref=boilingcold.com.au) powered by unused gas-fired turbines at its wholly owned Arrowsmith plant, built to process oil from Cliff Head, with the first unit to be installed by March 2026. In January, it struck a deal to develop a[ solar and battery project](https://wcsecure.weblink.com.au/pdf/PGY/03043581.pdf?ref=boilingcold.com.au) and another data centre on land it owns near Three Springs that could see it receive up to $10.75 million in upfront and milestone payments. It is also seeking partners to fund exploration for gas within an offshore permit surrounding the Cliff Head platform area. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/01/oil-and-gas-assets-location-map.jpg) ****Pilot Energy is seeking a partner to help fund a search for gas in its vast offshore permit (in yellow)**. Image: Pilot Energy However, the main game for Pilot is to reuse the shuttered Cliff Head production facilities to store carbon dioxide under the seabed for use by paying customers and a future Pilot-led low-carbon ammonia plant. If that or other reuse plans do not come to fruition, Federal law requires the wells to be made safe and the platform and the portion of the pipeline not in state waters to be removed. Five years ago, Triangle [estimated](https://wcsecure.weblink.com.au/pdf/PGY/02450094.pdf?ref=boilingcold.com.au) the cost to be $29 million. Pilot is also [developing with Capture6](https://capture6.com/projects/?ref=boilingcold.com.au) direct air capture technology to separate carbon dioxide from the atmosphere, backed by a [$6.5 million Federal government grant](https://www.dcceew.gov.au/about/news/carbon-capture-technologies-program-grant-recipients-announced?ref=boilingcold.com.au) that included a $3 million initial payment. ## Material uncertainty Pilot reported "a material uncertainty which may cast significant doubt as to whether the group will continue as a [going concern](https://www.rsm.global/australia/insights/key-responsibilities-assessing-going-concern?ref=boilingcold.com.au#:~:text=The%20term%20'going%20concern'%20is%20a%20core%20concept%20in%20financial%20reporting.%20It%20is%20the%20assumption%20that%20the%20entity%20reporting%20its%20finances%20will%20continue%20to%20operate%20for%20at%20least%2012%20months.%C2%A0)," indicating there is a real question about whether it will still be operating in 12 months. The independent auditors' report by RSM concurred, saying Pilot Energy "incurred a net loss of $7,149,591 during the year ended 30 September 2025 and, as of that date, the Group’s current liabilities exceeded its current assets by $23,776,951." "These events or conditions, along with other matters as set forth in Note 2, indicate that a material uncertainty exists," RSM wrote. The matters Pilot noted included a reversal in net annual cash flow from a $2.1 million inflow to an outflow of $2.5 million and an operating cash flow deficit of $5.9 million, following a $5.3 million outflow the year before. RSM wrote that "Our opinion is not modified in respect of this matter," which, under [Auditing Standard ASA 570](https://www.auasb.gov.au/media/hvinxzy0/asa570%5F03-23.pdf?ref=boilingcold.com.au), indicates that Pilot has made adequate disclosure about the material uncertainty it is facing and that its directors' decision to prepare the books on the basis that it is a going concern was appropriate. [![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/10/CTA-industry-energy-climate.png)](https://www.boilingcold.com.au/support/) Pilot Energy chief executive Brad Lingo said the material uncertainty disclosure was a standard accounting requirement for companies at Pilot’s stage of development and related primarily to funding timing rather than asset quality or project viability. Pilot first disclosed the risk of it not continuing as a going concern in its [half-year accounts](https://wcsecure.weblink.com.au/pdf/PGY/02956631.pdf?ref=boilingcold.com.au) published in June. Lingo said the $23.8 million working capital deficit "does not directly equate to an immediate cash funding shortfall," as its liabilities due within 12 months were not all cash related. Pilot's current liabilities at its reporting date of September 2025 included $8.7 million in loans, with the largest from Triangle Energy and Capture6\. Another $14.5 million in liabilities is from convertible notes, which can normally be repaid in shares rather than cash, but only if the noteholders agree. The annual report notes that, for Pilot to remain a going concern and fund its business, it may need to raise additional working capital by issuing shares and taking on more loans. Lingo, who had led Pilot since 2020, said the material uncertainty about Pilot’s near-term future would not hamper efforts to secure more working capital. In addition to seeking financing, Pilot plans to continue to bring forward its PRRT refunds, attempt to sell up to 60 per cent of its interest in the carbon storage and ammonia projects, and chase grants from the Federal and WA governments. Lingo said the uncertainty would also not reduce the chance of it being awarded government grants. His confidence is supported by the action of the Federal government. It is understood that in December Pilot received an additional $500,000 from the carbon capture grant allocation - six months after the company first disclosed the risk that it may not be able to continue as a going concern. "Pilot continues to progress discussions across several government funding pathways, particularly in relation to carbon storage and clean energy initiatives," Lingo said. ### Exploration plans spark fear of another Santos oil spill off WA URL: https://www.boilingcold.com.au/exploration-plans-spark-fear-of-another-santos-oil-spill-off-wa/ Last updated: 2026-01-06T21:30:21.000Z WA's peak environmental body warns that proposed drilling by Santos to find oil under the seabed north of Port Hedland is a risk to marine parks, commercial fishing and protected species. Conservation Council of WA (CCWA) director Matt Roberts said Santos’ own modelling showed that spills from the drilling could cause wide-ranging devastation to WA’s iconic Pilbara coastline. “Santos wants permission to drill near some of our most iconic marine parks and around 40 kilometres from the Rowley Shoals Marine Park,” he said. Adelaide-based Santos plans to drill up to seven wells sometime in the next five years in the Bedout Basin, more than 100km from the WA coast (see pink outlined areas below). ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2026/01/Screenshot-2026-01-06-at-11.42.48---am.png) ****Area that could be affected by an oil spill - no single spill would impact the entire area.** Source: Santos Environment Plan In December Santos [lodged an environment plan](https://info.nopsema.gov.au/environment%5Fplans/732/show%5Fpublic?ref=boilingcold.com.au) for the drilling to be assessed by the Federal offshore environment regulator NOPSEMA. The Adelaide-based company's analysis showed that the environment that may be affected (EMBA - see blue outlined area above) was a vast swathe of ocean stretching from off Carnarvon, northwards to near Timor Leste. The most serious possible incident is a loss of well control, which Santos predicted in the worst case could last for 77 days until it could drill a relief well to stem the flow from the initial hole. "Hydrocarbons will persist within the environment for a longer period of time, although the hydrocarbon released is expected to weather quickly through evaporation and dispersion," the Santos environment plan stated. According to the CCWA, inside the area that may be affected are three World Heritage Areas - Shark Bay, Ningaloo and Murujuga - and nine marine parks. The area also contains fisheries for economically important crayfish, scallops, abalone and prawns and is home to 13 protected species. Roberts pointed to Santos' "dire record of ongoing leaks and spills in the Northern Territory and WA." ## Santos negligence caused an oil spill in WA In August, the *ABC* revealed that a tank holding liquified natural gas at a Santos gas export plant near Darwin had been [leaking for two decades](https://www.abc.net.au/news/2025-09-01/methane-leak-darwin-lng-plant-kept-secret-from-public/105692718?ref=boilingcold.com.au). In 2022 [three dead dolphins](https://www.watoday.com.au/politics/western-australia/dead-dolphins-spotted-near-wa-oil-slick-not-our-fault-santos-claims-20221115-p5byhk.html?ref=boilingcold.com.au) were found within 200m of an oil spill at Santos' Varanus Island gas processing plant off the Pilbara coast. The Adelaide-based company denied any link between the two events as, according to a company spokeswoman, the carcasses were found a few hours after the spill "in which time no harm would have resulted from this incident.” However, SA Museum honorary mammal researcher Dr Catherine Kemper said in 2022 that the fact that the dead dolphins were floating suggested a sudden death. ****insert caption here**. Source; Anon. In 2025 Santos [plead guilty](https://www.boilingcold.com.au/santos-pleads-guilty-over-varanus-island-dead-dolphin-oil-spill/) in the Karratha criminal court to "failing to operate its licensed pipeline in a proper and workmanlike manner, failing to prevent the escape of petroleum." A whistleblower whose anonymous statement was tabled in Federal parliament in 2023 [accused Santos of a cover up](https://www.theguardian.com/environment/2023/feb/16/santos-whistleblower-accuses-company-of-covering-up-extent-of-australian-oil-spill-that-killed-dolphins?ref=boilingcold.com.au). “Santos lied to us all. It is not a coincidence to find dead dolphins in the middle of an oil spill," he said. “It indicates a belief within Santos that they can operate to avoid public interest through misinformation, supported by a cosy relationship with regulators and government.” The oil spill was just one of five known serious safety and environmental incidents that occurred in just two years at Santos' operations around Varanus Island [Danger Island: Santos’ fifth safety incident off WA coast revealedSafety concerns have forced regulators to step in five times over the past two years at Santos’ Pilbara operations. The latest issue came just days after a gas leak forced the closure of a platform and curtailed WA’s supply.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/watoday-1.png)WAtodayPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/bb35d2a9bcaeb68a49806f606f609f9485402fa0-2)](https://www.watoday.com.au/business/companies/danger-island-santos-fifth-safety-incident-off-wa-coast-revealed-20230220-p5clwx.html?ref=boilingcold.com.au) In one incident several workers nearly died when the lift of a disused oil platform went out of control. The International Marine Contractors Association told its members it was a “serious incident” that “had a [high potential for multiple fatalities](https://www.watoday.com.au/national/western-australia/santos-swinging-platform-off-wa-coast-had-high-potential-for-multiple-fatalities-20211102-p595d2.html?ref=boilingcold.com.au)." WA safety regulator Worksafe [decided not to launch a prosecution](https://www.watoday.com.au/national/western-australia/no-prosecution-after-two-workers-nearly-killed-at-santos-facility-off-wa-20240626-p5jp0o.html?ref=boilingcold.com.au). Another problem was ten platforms found to be in a state of dangerous disrepair that "may result in injuries/fatalities to personnel visiting the platform," according to a Santos document. A drilling rig contracted by Santos had a blowout preventor intended to stop oil spills that was "unfit for service." Gas bubbling to the surface from a subsea pipeline forced a platform to be shut down for two months, curtailing gas supply to WA and forcing some industry to shut down. Santos was asked to comment. ### Gas leftover from exports not enough for WA power and industry: AEMO URL: https://www.boilingcold.com.au/gas-leftover-from-exports-not-enough-for-wa-power-and-industry-aemo/ Last updated: 2025-12-19T08:07:33.000Z ANALYSIS 🔥 WHY IT MATTERS · Gas is vital for power generation and minerals processing. · Prices doubled in five years, and rises are likely to continue. · Further price rises will force industry to curtail activity, causing job losses. · WA has plenty of gas, just not the political will to keep it here. Australia's most gas-rich and gas-dependent state faces a severe shortage of the fuel in the next decade, according to the Australian Energy Market Operator (AEMO). WA is expected to be short of gas from 2030 with the shortfall reaching an enormous 45 per cent of demand in 2045, according to AEMO's [2025 WA Gas Statement of Opportunities](https://www.aemo.com.au/-/media/files/gas/national%5Fplanning%5Fand%5Fforecasting/wa%5Fgsoo/2025/2025-wa-gas-statement-of-opportunities.pdf?rev=68cd9f6280d245158eb3aaef6b91286c&sc%5Flang=en&ref=boilingcold.com.au) released on Friday. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/12/Screenshot-2025-12-19-at-10.54.26---am.png) ****Predicted future shortages (yellow) are enough to deter investment now.** Base case predicted supply (aqua) and demand (purple). Source: AEMO 2025 WA GSOO AEMO manager for WA Kirsten Rose said the market would be broadly balanced this decade. However, AEMO predict the market will be severely undersupplied in the 2030s and beyond. “A combination of solutions, including the continued investment in new gas developments, alongside increased supply flexibility, could address potential longer-term shortfall risks,” Rose said. Those measures could fix the shortfall, but the odds are long. Mia Davies, spokeswoman for the Domgas Alliance of large WA gas users was more forthright: "Under every scenario modelled by AEMO, we are facing a structural shortfall of gas for domestic use that only worsens as the years go by," she said. "If planned Perth Basin projects don’t deliver as modelled, which you have to think there is a reasonable likelihood of occurring, the shortfall could be upon us sooner, > "That is likely to mean is higher energy prices for consumers, increased volatility as the state transitions from coal-fired power, a risk that new investment goes interstate or offshore and job losses in industries that rely on affordable and reliable gas for their viability." Here are some key takeaways about the fuel that just eight years ago WA governments thought would be [cheap and plentiful for decades](https://www.boilingcold.com.au/mcgowan-calls-for-business-to-move-west-for-cheap-available-gas/): ## WA has a surplus of exports not a shortage of gas WA's gas exporters consume more than eight times the amount of gas than all local industry and consumers combined. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/12/image-3.png) ****A small fraction of gas processed in WA goes to local users.** Source AEMO 2025 WA GSOO Piers Verstegen, an analyst at Climate Analytics, said exporters have delivered to the local market gas equivalent to just eight per cent of exports, only about half the 15 per cent targeted by long standing WA government policy. Verstegen calculated that if the 15 per cent target was met there would be no shortage of gas until at least 2034\. Further, if the shorfall of the past four years was made good the market would be well supplied until the early 2040s. WA is not short of gas. It is simply letting too much be exported ## Prices will keep rising In the five years from 2019, the average wholesale price in WA more than doubled to $7.27/GJ. The trend will only continue as the market tightens and customers who have no alternative to gas - which is many of them - compete to secure supply. Eventually something has to give... ## Jobs will be lost It is only two sentences in the report, but they pack a punch: > Gas price-sensitive industries may reduce or cease operations if gas or alternatives are not available at competitive prices ... this could occur from approximately $10.00/GJ. With the market tightening $10 will not be far away. Note that $10 was the median price that companies surveyed said would hurt them, so half the surveyed firms are in strife at a lower price. Industry also said they are likely to expand oparations at a gas price of about $4.30.GJ. That price will never be offered in WA again. The survey respondents are companies with substantial sunk costs. Potential new investors with significant capital expenditure ahead of them and alternative investment locations which will be much more sensitive to gas prices. The scale of the economic damage will not just be the jobs lost, but the unknown amount of jobs that are never created. The destruction of manufacturing that LNG exports have inflicted on the east coast is coming west. ## It's worse: future supply from Gorgon doubtful AEMO's base case supply forecast, as worrying as it is, is unrealistically high. Chevron's Gorgon project is the biggest supplier of gas to WA, and AEMO gas assumed that it will continue, with 274 TJ/day flowing for 20 years. That confidence has no basis in commercial reality. Chevron and its Gorgon partners - ExxonMobil, Shell and a sliver of Japanese utilities - do not have an obligation to reserve gas for the domestic market equal to 15 per cent of exports. Instead, the 2003 Barrow Island Act passed by a former Labor Government, required 2000 petajoules of gas to be set aside. This accounted for approximately 15 per cent of the then-planned gas exports, but by the time Gorgon went ahead six years later, the known reserves were much greater, and the project had grown to three export trains. [The Gorgon deal that could up the stakes on WA’s looming gas shortageWestern Australia’s biggest gas plant may be able to export for 30 years with no obligation to supply the state, thanks to an agreement struck two decades ago.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/watoday.png)WAtodayPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/c4dccdaa803c5ccb30462c9129a6ac3ec5fc9eae-4)](https://www.watoday.com.au/national/western-australia/the-gorgon-deal-that-could-up-the-stakes-on-wa-s-looming-gas-shortage-20240702-p5jqic.html?ref=boilingcold.com.au) The multinationals had a much bigger pie, but WA's slice remained the same size. Effectively, Gorgon has a domestic gas obligation of about seven per cent, which will be fulfilled in about 2037. The only reason Gorgon's partners will sell gas without an obligation is if it is as profitable exports. If that happens it means the WA gas price is linked to LNG, and the beneficial effects of WA gas reservation policy is no more. Gorgon supply after 2000 petajoules are delivered should not be in AEMO's base case. Accepting assurances from government and industry that all will be well is simply naive. ## And many other supply options a long shot AEMO's base case gas supply comes from fields that are producing now and "anticipated" projects with a high likelihood of being developed. Two anticipated projects AEMO counts on have not yet reached final investment decision: - Hancock Energy's [Belisama](https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://www.boilingcold.com.au/gina-rineharts-hancock-energy-perth-basin-gas-project/&ved=2ahUKEwjPsIG5kcmRAxXmUPUHHcUaOCoQFnoECBUQAQ&usg=AOvVaw1RX-j3rPU0LUqPhMrriO25) (called Lochyer Deep by former owner Mineral Resources): start 2029, maximum supply 90 TJ/day - Strike Energy's West Errugulla: start 2029, maximum supply 69 TJ/day. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/12/image-4.png) And for demand to be met a lot of projects deemed uncertain by AEMO must go ahead. The "uncertain" new projects are: - Woodside's Browse: start 2033, maximum supply 210 TJ/day - Equus Energy's Equus: start 2032, average supply 50 TJ/day - Strike Energy's Ocean Hill: start 2029, maximum supply 40 TJ/day For Browse, remember [Shell got out](https://www.smh.com.au/business/companies/poor-returns-high-co2-forced-shell-s-hand-on-woodside-s-browse-lng-20230524-p5daru.html?ref=boilingcold.com.au) as it was an expensive, highly polluting, low retrm investment. And Equus, well Hess [sold it for $US2](https://www.boilingcold.com.au/western-gas-micro-oil-gas-player-with-a-us100-million-clean-up-bill/) for a reason. There is no shining white knight on the horizon to solve the problem, the days of cheap and plentiful gas in WA are over. ## Gas delivery also getting more expensive There was more bad news for gas consumers this week. On Thursday, WA's Economic Regulation Authority (ERA) [greenlit an enormous 33 per cent hike](https://www.erawa.com.au/sites/default/files/era-media-statement-dampier-bunbury-pipeline-final-decision-18-december-2025.PDF?ref=boilingcold.com.au) in the cost of transporting gas from the Pilbara to the South West through the Dampier to Bunbury Natural Gas Pipeline (DBNGP). The "T1 Tariff" [is now](https://www.erawa.com.au/sites/default/files/dbngp-aa6-access-arrangement-2026-2030.pdf?ref=boilingcold.com.au) $1.82/GJ, up from the $1.37/GJ [set five years ago](https://www.erawa.com.au/sites/default/files/21861/DBNGP---DBP---AA5---ERA-APPROVED---DBNGP-revised-Access-Arrangement.PDF?ref=boilingcold.com.au). The move has the same effect on industry in the South West as a gas price hike - it pushes them closer to economic trouble. Many large industrial and power generation users take their gas direct from the DBNGP. Gas to other customers in the Mid-West and South-West travels from the DBNGP through the network owned by Canadian firm ATCO. A year ago the ERA approved a [33 per cent increase ](https://www.erawa.com.au/sites/default/files/era-media-statement-dampier-bunbury-pipeline-final-decision-18-december-2025.PDF?ref=boilingcold.com.au)in ATCO's tariff. ## Time for action .. or kick the can down the road? On every front, gas it getting more expensive. The WA economy will transform because of this, and it will be painful for some sectors of the economy. State government policy can determine where the hurt lands. Like their Federal counterparts, to date they have favoured gas exporters over local manufacturing and power generation. A gas shortage. higher prices, and an economic knock are inevitable in WA unless the state government mandates more local gas supply from export projects. --- ### Source documents [2025 Western Australia Gas Statement of Opportunities: December 2025](https://www.aemo.com.au/-/media/files/gas/national%5Fplanning%5Fand%5Fforecasting/wa%5Fgsoo/2025/2025-wa-gas-statement-of-opportunities.pdf?rev=68cd9f6280d245158eb3aaef6b91286c&sc%5Flang=en&ref=boilingcold.com.au) [2025 Western Australia Gas Statement of Opportunities: Appendices December 2025](https://www.aemo.com.au/-/media/files/gas/national%5Fplanning%5Fand%5Fforecasting/wa%5Fgsoo/2025/2025-wa-gsoo-appendices.pdf?rev=d87ef31188b14ec887bdbbc7551ade7d&sc%5Flang=en&ref=boilingcold.com.au) ### Regulator orders Stokes' Seven Group to fix leaking gas well off Victorian coast URL: https://www.boilingcold.com.au/regulator-orders-stokes-seven-group-to-fix-leak/ Last updated: 2025-12-16T03:01:33.000Z The offshore environment regulator has blasted Seven Group Holdings (SGH) for a decade of subpar performance and a gas well that has leaked off the Gippsland coast for two years. The interests of soon-to-retire media baron Kerry Stokes and his son, SGH chief executive Ryan Stokes, own 51 per cent of the company. Last week NOPSEMA ordered SGH to fix a well that has leaked gas at a small rate since at least 2023 and reinstate continuous monitoring of the Longtom wells 30km off the Gippsland coast. The Longtom field, developed by Nexus Energy, started producing gas from two wells in 2009\. An electrical fault forced the closure of one well in early 2014, and four months later, the troubled company was in administration. Seven Group bought Nexus in late 2014, only for Longtom production to cease in 2015 after another fault led to the loss of control and communication signals to and from the remaining well. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/12/Screenshot-2025-12-15-at-4.31.04---pm.png) ****The Longtom equipment on the seabed.** Image: [SGH](https://docs.nopsema.gov.au/A740303?ref=boilingcold.com.au) For the past decade, the asset has sat idle, and according to NOPSEMA, it has been poorly managed by SGH. NOPSEMA said that Seven leaving the wells unmonitored for a decade without installing equipment to seal them better was “an erosion of good industry practice, a widening gap to established industry standards, and a potential non-compliance” with Federal legislation. SGH has failed to meet three commitments it made under a plan accepted by the regulator in 2023: fix the leak, visually inspect the wells with a remotely operated vehicle annually, and test the wells' integrity every three years. NOPSEMA has [directed SGH](https://www.nopsema.gov.au/sites/default/files/documents/General%20Direction%202054%20-%20Longtom.pdf?ref=boilingcold.com.au) to stop the leak by March 2026, submit a study the next month detailing what is required to make the wells safe, and reinstate continuous monitoring of the wells by October 2027. An SGH spokesman said it would comply with the three NOPSEMA directions, with actions already underway for all of them. ## Seven needs help with Longtom Before it was shut down, gas from the Longtom field flowed through a 17km pipeline to the Patricia Baleen field owned by Amplitude Energy, which is now also shuttered. An Amplitude pipeline carried gas from both fields to the Orbost gas plant in Gippsland. Longtom’s gas is stranded unless Amplitude Energy, formerly Cooper Energy, restarts Patricia Baleen. In November, Amplitude chief executive Jane Norman said a [feasibility study with Seven was underway](https://app.sharelinktechnologies.com/announcement-preview/asx/3dd688c48fcaaae1da8141bc80d24df0?ref=boilingcold.com.au), and that Amplitude would decide in early 2026 whether to proceed with front-end engineering. [![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/10/CTA-industry-energy-climate.png)](https://www.boilingcold.com.au/support/) As Seven doesn’t yet have a binding agreement with Amplitude, which also owns the Orbost plant, it considered whether to impair the $120 million value it assigns to Longtom. Assuming it could start selling gas at $15 a gigajoule from 2029, SGH concluded no impairment was necessary, according to its [2025 annual report](https://sghl.com.au/assets/Uploads/ASX-SGH-2025-Annual-Report-Final-12-August-2025.pdf?ref=boilingcold.com.au). However, Seven found that if it did not secure access by 2058, an impairment would likely be required. SGH has a provision for the eventual decommissioning cost of Longtom, which assumes the pipeline to Patricia Baleen, which would cost $35 million to remove, remains on the seabed. The company's other oil and gas interests are a 30 per cent stake in ASX-listed Beach Energy and a 15.5 per cent interest in the Crux field. Shell is currently developing Crux to feed gas to its Prelude floating liquefied natural gas vessel off WA's Kimberley coast. ### Mines Department blasts holes in Alcoa’s jarrah forest care claims URL: https://www.boilingcold.com.au/mines-department-blasts-holes-in-alcoas-jarrah-forest-care-claims/ Last updated: 2025-12-12T06:55:11.000Z The WA mining regulator has told the state’s independent environment watchdog it has serious concerns about Alcoa’s mining for bauxite in the vast jarrah forest to the southeast of Perth. Its analysis of the US miner’s exploration, proposed offsetting of forest ecosystem damage and effects on endangered cockatoos, adds to other issues with Alcoa’s bauxite mining, including possible [contamination of the city’s water ](https://www.watoday.com.au/national/western-australia/intergenerational-risk-alcoa-s-troubled-mining-could-double-perth-water-bills-20230331-p5cx3t.html?ref=boilingcold.com.au)supply and [failure to complete any forest rehabilitation](https://www.watoday.com.au/environment/sustainability/alcoa-in-wa-60-years-28-000-hectares-of-forest-cleared-zero-rehabilitation-completed-20230307-p5cq4j.html?ref=boilingcold.com.au) after six decades of mining. The warnings are contained in an August 2025 response from the Department of Mines, Petroleum and Exploration (DMPE) to questions from the Department of Water and Environment Regulation (DWER) about Alcoa’s current mining plans. The letter to the DWER branch that supports the Environmental Protection Authority (EPA) was obtained from a freedom of information request by *Boiling Cold*. Jason Fowler, a campaigner for the WA Forests Alliance that referred Alcoa’s plans to the EPA, said it was the first time the plans had been independently assessed. “For too long, Alcoa has evaded proper public environmental assessment, and the massive impacts of their mining operation were not in the public domain,” he said. Alcoa did not answer questions from *Boiling Cold*. A spokesman said it is preparing responses to submissions made to the EPA, and the Authority will make those responses public in due course. ## Endangered cockatoos The northern jarrah forest is home to three species of black cockatoos, the endangered Baudin’s and Carnaby’s cockatoos, and the vulnerable forest red-tailed black cockatoo. For nesting, the birds rely on hollows in trees that can take hundreds of years to form. The mining regulator noted that Alcoa incorrectly assumed that there were enough empty holes to replace the ones it destroyed and ignored the loss of future hollows from its clearing. The mining regulator blasted Alcoa’s “noticeable lack of data sharing” with WA’s conservation department, DBCA, of information about cockatoos that compromised the conservation advice it could give. An Alcoa map included in DMPE’s letter starkly showed the near-absence of cockatoo roosting sites in Alcoa’s exploration and mining sites from DBCA’s database. The DBCA did not respond to questions on Alcoa sharing data about cockatoos. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/12/Screenshot-2025-12-08-at-1.23.09---pm.png) ****Alcoa has given the WA Government almost no information about black cockatoo sites in its mining (red) and exploration (black) areas.** **Source:* [**Alcoa EPA submission*](https://www.epa.wa.gov.au/sites/default/files/PER%5Fdocumentation2/Assessment%202385%20ERD%20Rev2%5FCh07%20Exploration.pdf?ref=boilingcold.com.au)**.* ## 105,000 “low impact” holes drilled a year In late 2023, the Cook Government [approved Alcoa’s 2023 to 2027 mining plan](https://www.wa.gov.au/government/media-statements/Cook-Labor-Government/New-framework-to-strengthen-Alcoa%27s-environmental-approvals-20231214?ref=boilingcold.com.au), which included permission to drill up to 105,000 holes a year into the jarrah forest in search of the best bauxite to mine. In the first eight months of 2025, [40,735 holes were drilled](https://www.alcoa.com/australia/en/pdf/August-2025-Environmental-Protection-Exemption-Order-Monthly-Report.pdf?ref=boilingcold.com.au). Alcoa told the EPA that it used drill rigs modified to minimise ground disturbance, drilling small holes less than 8cm in diameter and 6m deep, which were filled as soon as drilling finished. While the miner calls this “[low-impact forest drilling](https://www.alcoa.com/global/en/stories/releases?id=2025/06/innovative-rigs-allow-for-low-impact-forest-drilling&ref=boilingcold.com.au),” DMPE was not so sure. It questioned why Alcoa had provided no measurable evidence of minimal disturbance and natural recovery at the drill sites and along the drill rig’s path. DMPE classified unfilled holes and filled holes that later subsided as a major risk to fauna, exacerbated by their huge number. There is also a risk that paths created by the drilling rig make it easier for feral predators to access the forest. DMPE dismissed Alcoa’s proposal of increased monitoring of the animals as useless. DMPE also noted that Alcoa had not considered the effect of vibration of the equipment on native animals and provided no details to back up its claim that noise would have no long-term effects on cockatoos. The regulator cautioned that the noise may be enough to make cockatoos abandon eggs or chicks in their nests and recommended that Alcoa halt drilling during the cockatoo breeding season over spring and summer. [![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/10/CTA-industry-energy-climate.png)](https://www.boilingcold.com.au/support/) ***Boiling Cold** **shared its DMPE FOI document with other news outlets**, **as its supporters pay to hold power to account, so the more coverage the better.** ## Insecure and rare offsets Alcoa proposes to offset the environmental damage from strip mining up to 75 square kilometres of jarrah forest by having about three times that area of degraded jarrah forest elsewhere managed for at least 20 years. However, DMPE had concerns about the plan, which would be financed by Alcoa paying a fixed amount per hectare of cleared forest for a third party to do the work. For the offsets to be environmentally beneficial, the area must be in poor condition, but Alcoa’s submission to the EPA stated that most of the northern jarrah forest vegetation is intact. Similarly, a [2025 report](https://wabsi.org.au/wp-content/uploads/2025/03/REPORT1.pdf?ref=boilingcold.com.au) by the WA Biodiversity Science Institute, part-funded by Alcoa, concluded there was “a paucity of land available for offsets” in the northern jarrah forest. “Alcoa needs to demonstrate that the chosen offset conservation areas are highly disturbed and degraded for the proposed offset to make sense,” the department wrote. The Pittsburgh-based company committed to not mining the offset areas, but this is potentially “a null and void commitment” of no environmental benefit if Alcoa chooses land it was not going to mine anyway. Also, while Alcoa has the exclusive right to mine bauxite in its vast lease, it cannot stop other companies from extracting other minerals from the forest. Alcoa claimed work in the offset areas would benefit cockatoos within five years, but the department commented that the planned control of feral predators and installation of cockatoo drinking points were of no help against the gradual loss of tree hollows and breeding habitats. Fowler said Alcoa was making exaggerated, unsupported claims about the environmental gains from its offset plans. [Labor breaks vow and risks WA’s water supply for AlcoaRoger Cook granting Alcoa greater access to mine near Perth’s dams risks could cost taxpayers billions of dollars and result in water restrictions![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-217.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Alcoa-Cook-Water-feature-pic-21.png)](https://www.boilingcold.com.au/wa-labor-puts-alcoa-before-water-supply/) The mining regulator was also concerned that Alcoa’s Marri tree seedlings were dying more often, but the miner still assumed that later plantings to fill the gaps would have the higher historical survival rate. The EPA is expected to publish its recommendations on Alcoa’s current mining and planned expansion by mid-2026\. After a public comment period, Environment Minister Matthew Swinbourn will decide whether Alcoa can proceed, and, if so, under what conditions. *Boiling Cold* has applied for an internal departmental review of DMPE’s decision to redact much of the document containing its comments on Alcoa’s mining plans. --- ### Document obtained with a Freedom of Information request ### Environmental regulator raises doubts over Kimberley fracking URL: https://www.boilingcold.com.au/environmental-regulator-raises-doubts-over-kimberley-fracking/ Last updated: 2026-02-03T03:43:45.000Z Black Mountain Energy’s planned drilling for gas is likely to have a significant impact on threatened species, groundwater and the nearby West Kimberley National Heritage Place, according to the Department of Climate Change, Energy, the Environment and Water. The cautions were [documented in the reasons why](https://epbcpublicportal.environment.gov.au/all-referrals/project-referral-summary/project-decision/?id=08cd6d4a-f423-f011-8c4e-00224811099e&refentity=incident&refid=83bb2523-747c-ef11-ac20-000d3acb720f&refrel=mara%5Fprojectdecision%5Fproject%5FIncident&ref=boilingcold.com.au) the Department will assess the project under Federal legislation published in April, but not reported until now. Black Mountain Energy (BME) is seeking environmental approval to drill 20 wells using hydraulic fracturing, which, if successful, could lead to hundreds of wells producing gas from the Canning Basin in the Kimberley. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/11/Screenshot-2025-11-28-at-12.22.44---pm-1.png) ****Black Mountain's proposed development (circled).** Image DCCEEW [EPBC Public Portal](https://epbcpublicportal.environment.gov.au/all-referrals/project-referral-summary/?id=83bb2523-747c-ef11-ac20-000d3acb720f&ref=boilingcold.com.au) Each well will require 100 million litres of underground water, mixed with chemicals, to be injected at high pressure to fracture the rock and allow gas to flow to the surface more freely. The Department concluded the initial exploration drilling will, or is likely to, have a significant impact on four triggers for applying the Environment Protection and Biodiversity Conservation (EPBC) Act: threatened species, migratory species, water resources and National Heritage. The assessment was largely based on the 3910-page Environment Review Document that BME submitted to WA’s Environmental Protection Authority in 2024. ### Precious water BME concluded its drilling would have no impact on water flow or quality. The Department damned that assessment as having inadequate justification, with limited local data and no detailed study of Mount Hardman Creek, which feeds into the Fitzroy River and is only one kilometre from BME’s operations. There was also concern about BME wanting to withdraw water for hydraulic fracturing, or fracking, from the shallow Liveringa Aquifer, which is strongly connected to water flow in the Fitzroy River, where small pools of water over the dry season allow aquatic species to survive. [Black Mountain, the firm that wants to frack the KimberleyA company with less than $5 million in the bank and a boss who lives in the US will soon get a red or green light from WA’s environment watchdog.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-212.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Wendy-Mitchell---Environs-Kimberley.jpg)](https://www.boilingcold.com.au/who-is-black-mountain-the-company-that-wants-to-frack-the-kimberley/) ### Threatened Species Up to 19 threatened species and 15 species of migrating birds may be found within 20km of the drilling. The Department concluded BME’s drilling was “likely to have a significant impact” on the critically endangered Northern Blue-tongued Skink and the vulnerable Greater Bilby and Largetooth Sawfish, the largest freshwater fish in Australia. The Northern Blue-tongued Skink is already threatened by the growing spread of cane toads in WA, which are predicted to spread to the drilling area. BME plans to clear more than 100 hectares of suitable habitat. Most skinks are found near water sources, meaning the Department’s concern about BME’s lack of understanding of how it will affect the local water supply adds to its concerns about the Skink. BME’s position was that its drilling posed no credible direct risk to the Largetooth Sawfish, but the Department concluded, “there is a real chance or possibility that the proposed action will adversely affect habitat critical to the survival of the species.” The Fitzroy River, 16km south of BME’s proposed drilling, is considered an important area for the species to spend the first few years of their lives before moving to the ocean as adults. BME also wants to clear more than 20 hectares of vegetation where Bilbies have been found in four surveys since 2013. [![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/10/CTA-industry-energy-climate.png)](https://www.boilingcold.com.au/support/) ### National Heritage Where the largely US-owned firm wants to drill is near the boundary of the West Kimberley area, which was [placed on the National Heritage List](https://www.dcceew.gov.au/parks-heritage/heritage/places/national/west-kimberley?ref=boilingcold.com.au) in 2011 due to its biological richness, undisturbed landscape, and at least 40,000 years of Aboriginal culture. The Department concluded that without robust modelling to understand how the drilling could affect ground and surface water, it could not be sure that a significant impact on the West Kimberley National Heritage Place could be avoided. It also found BME had only consulted Traditional Owner groups that have native title over its area of operations and had ignored surrounding groups that could also be affected. ![Map of Black Mountain Energy's planned fracking in the catchemnt of the Fitzroy River, Kimberley, Western Australia.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/11/Screenshot-2025-11-28-at-4.01.54---pm.png) BME is expected to soon know the recommendation of WA’s Environmental Protection Authority (EPA), which issued the company’s environmental review document (ERD) for public comment in August 2024\. Lock the Gate Alliance WA spokeswoman Simone van Hattem said the Federal Statement of Reasons showed Black Mountain’s Valhalla fracking project was a threat to the intricate and precious waterways of the Kimberley, and the nature that relies on them. “Fracking is inherently risky because it requires the high-speed injection of huge volumes of water, sand, and toxic chemicals several kilometres beneath the earth's surface, often through important aquifers,” she said. “The Kimberley is a unique and precious place with unrivalled natural richness. It must not be sacrificed to dirty, dangerous fracking." The WA EPA is expected to publish its recommendation on Black Mountain's plans soon. The company needs approval from both the WA and Federal environment ministers to go ahead. Black Mountain Energy did not respond to *Boiling Cold's* questions. ### Who is Black Mountain, the company that wants to frack the Kimberley? URL: https://www.boilingcold.com.au/who-is-black-mountain-the-company-that-wants-to-frack-the-kimberley/ Last updated: 2026-02-03T03:48:08.000Z A company with less than $5 million in the bank will soon hear the verdict from WA’s environment watchdog on its plans to drill for gas in the remote Kimberley. It will be a pivotal moment for Black Mountain Energy (BME), which suffered the ignominy of delisting from the Australian Stock Exchange due to investor indifference. For six years, US-based Rhett Bennett has pushed to produce gas from the remote Canning Basin that requires controversial hydraulic fracturing, or fracking. Bennett’s firm, Bennett Resources, entered the Kimberley by buying petroleum titles from the Japanese giant Mitsubishi. The oil and gas potential of the Canning Basin attracted major international companies, but they all left disappointed, selling out to smaller companies. Hess departed in 2012, followed by ConocoPhillips [two years later](https://www.boilingcold.com.au/r/020aeef8?m=3dff8ebd-b09c-496c-beac-a196125985fb). Mitsubishi sold out in 2019, and Andrew Forrest’s Squadron Energy [departed in 2021](https://www.boilingcold.com.au/forrest-dumps-kimberley-fracking-on-climate-concerns/), then Origin left [in 2022](https://www.boilingcold.com.au/r/0ed18071?m=3dff8ebd-b09c-496c-beac-a196125985fb). The majors had been put off by the high costs of operating in an area remote even by the standards of WA’s resources sector. The distance to any sizable gas market was another major impediment. ![Aerial photos showing the location of Black Mountian Energy's exploration permit EP 371 where it plans Project Valhalla, with initially up to 20 wells looking for gas reserves.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/11/Screenshot-2025-11-26-at-3.56.45---pm.png) ****Black Mountain plans to drill up to 20 wells targeting gas up to 5km underground.** Image: [BME](https://www.epa.wa.gov.au/sites/default/files/Proponent%5Fresponse%5Fto%5Fsubmissions/Valhalla%20Exploration%20Drilling%20Response%20to%20Public%20Submissions%20%E2%80%93%20EPA%20Assessment%20No.2281.pdf?ref=boilingcold.com.au) In late 2021, Bennett’s company [gained an exemption](https://www.abc.net.au/news/2021-10-07/kimberley-fracking-project-granted-wa-gas-export-ban-exemption/100520190?ref=boilingcold.com.au) for the WA Government’s ban on exporting onshore gas. This opened up the possibility of exporting gas through Woodside’s underutilised North West Shelf gas export plant, but only if a pipeline to Karratha, almost 1000km long, was built. Soon afterwards, the company was listed on the Australian Stock Exchange as Black Mountain Energy, raising $11 million at 20 cents a share, leaving Rhett Bennett with a 78 per cent stake. Investors lost from day one, with shares trading between 12 and 15 cents for a few months before sitting at about two cents for most of 2023. In 2022, BME increased its estimate of [groundwater used](https://www.epa.wa.gov.au/sites/default/files/S43A/CMS17936%20-%20S43A%20Notice%20-%20060522.pdf?ref=boilingcold.com.au) for each well by a factor of 2.5 to 100 million litres. The standing of the new company was not helped by the corporate regulator, ASIC, issuing it [three infringement notices](https://www.asic.gov.au/about-asic/news-centre/find-a-media-release/2023-releases/23-001mr-asic-issues-infringement-notices-to-energy-company-for-greenwashing/?ref=boilingcold.com.au) in 2022 for greenwashing. “BME had no credible basis for asserting that the natural gas it produced would be carbon neutral,” was [one of ASIC’s concerns](https://download.asic.gov.au/media/1nyh0sx2/infringement-notice-investor-presentation-b00725794.pdf?ref=boilingcold.com.au). BME paid almost $40,000 for the infringements, an action that is not an admission of guilt. [Federal experts slam science behind Kimberley frackingAn independent review found Black Mountain conducted a “limited and disjointed” assessment that came to “largely unsupported” conclusions.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-234.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/photo-1712519084041-adb875a647f3-2)](https://www.boilingcold.com.au/federal-experts-slam-science-behind-kimberley-fracking-plans/) The company briefly considered running computer servers in the remote outback to [mine cryptocurrencies](https://www.abc.net.au/news/2022-07-02/bitcoin-mining-cryptocurrency-proposal-for-kimberley-fracking/101202550?ref=boilingcold.com.au) using power generated by its gas. In September 2022, it [told investors](https://www.aspecthuntley.com.au/asxdata/20220908/pdf/02565759.pdf?ref=boilingcold.com.au) environmental permitting was two-thirds complete, and it expected formal approval by mid-2023. In late 2023, the board [called it quits](https://www.aspecthuntley.com.au/asxdata/20231228/pdf/02758477.pdf?ref=boilingcold.com.au), recommending the company withdraw from the stock exchange. The board argued that after spending more than $40 million on what it dubbed Project Valhalla and having $7.5 million of cash, a market capitalisation of $8.8 million “places no value on the Company’s assets.” The company needed more money for day-to-day expenses, but the market that wouldn’t buy the existing shares had no appetite for new ones. “Recent capital raising initiatives have not received significant support from shareholders outside of entities associated with executive chairman Rhett Bennett,” according to the company statement. ## Micro company with mega ambition Today, BME is an unlisted public company with $4.8 million in cash as of June 30 2025, according to its [half-yearly report](https://www.documentcloud.org/documents/26300312-black-mountain-2025-h1-report/?ref=boilingcold.com.au) lodged with ASIC, which revealed a $809,000 cash burn over six months. To keep its exploration permit EP 371, it was required to spend about $1 million on a seismic survey by January 2025 and about $8 million on an exploration well a year later, according to the WA [petroleum title register](https://pgr.dmp.wa.gov.au/PGR/Default.aspx?ref=boilingcold.com.au). However, in 2024, BME successfully applied to delay these commitments by two years, and in November, it applied for another deferral. Apart from cash, the major components of BME’s balance sheet are a $3 million provision for rehabilitation and a $43 million valuation of its “exploration assets.” The exploration asset value is the amount “expected to be recouped through sale or successful development” of Project Valhalla. If the project does not receive environmental approval, the asset is effectively worthless, and the rehabilitation bill becomes imminent. That would leave little leeway between available cash and operating and cleanup costs. The EPA published BME’s [response to submissions](https://www.epa.wa.gov.au/sites/default/files/Proponent%5Fresponse%5Fto%5Fsubmissions/Valhalla%20Exploration%20Drilling%20Response%20to%20Public%20Submissions%20%E2%80%93%20EPA%20Assessment%20No.2281.pdf?ref=boilingcold.com.au) about its proposal in November and is expected to publish its recommendation shortly. If the EPA greenlights Project Valhalla, BME still needs approval from WA environment minister Matthew Swinbourn, who will first consider any appeals against the EPA's decision. Objections would likely flood the Appeals Coordinator. Swinbourn is also aware that just weeks ago, the WA Labor Conference voted in favour of [banning fracking](https://www.watoday.com.au/national/western-australia/could-this-weekend-herald-the-end-of-fracking-in-wa-20251107-p5n8lf.html?ref=boilingcold.com.au) throughout the state. In addition, the Federal Department of Climate Change, Energy, the Environment and Water decided in February that the [project must be assessed](https://epbcpublicportal.environment.gov.au/all-referrals/project-referral-summary/?id=83bb2523-747c-ef11-ac20-000d3acb720f&ref=boilingcold.com.au) under the EPBC Act. [WA environmental watchdog backs Kimberley frackingThe green light for Black Mountain Energy comes just months after Federal experts said its environmental risk assessment was “limited and disjointed” and reached “largely unsupported” conclusions.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-235.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/133419816_e11a677786-1-1.jpg)](https://www.boilingcold.com.au/wa-environmental-watchdog-backs-kimberley-fracking/) ## Who will develop Project Valhalla? If both WA and Federal environment ministers sign off on the project, BME does not have the resources to do it. In March, George Witman, president of Bennett's US company Black Mountain Oil and Gas, said the project was for sale. “We’ve got all the lease rights, we’ve got an export exemption, we’ve got some of the EPA permitting and seismic permitting done,” Witman said. “But it’s probably something that needs to be a major operator … it’s not really something we can do with the resources and the team that we have.” Rhett Bennett, who is chief executive of Black Mountain Oil and Gas, later tried to [walk the statement back](https://www.energynewsbulletin.net/operations/news-analysis/4412658/black-mountain-ceo-clarifies-position-controversial-kimberley-fracking-project?ref=boilingcold.com.au), telling *Energy News Bulletin* the company was not actively seeking joint venture partners. "We are most certainly not abandoning the project. Far from it, we continue to invest capital into it every month as we work with regulators," he said. "But do assume at some point in one to two years, when permitted, we will bring in partners on the project, as is common risk mitigation practice in the oil and gas industry," he said. BME did not respond to *Boiling Cold's* questions. [![Understand WA's energy transition with news independent of government and big business. Support Boiling Cold. ](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/07/CTA-donate-transition-2.png)](https://www.boilingcold.com.au/support/) ### Gina Rinehart's Hancock Energy nears launch of Belisama Perth Basin gas project URL: https://www.boilingcold.com.au/gina-rineharts-hancock-energy-perth-basin-gas-project/ Last updated: 2026-05-05T01:35:26.000Z Hancock Energy plans to produce up to 210 terajoules of gas a day from its Belisama gas project, starting in 2029, just as a serious gas supply shortfall is expected to hit Australia's most gas-dependent state. It is understood that Hancock Energy will submit the project to the WA Environmental Protection Authority this week. Underground pipelines will supply gas from the wells to a gas processing plant, built on a farm owned by Hancock Energy, according to information presented at a community consultation in Dongara on Tuesday and seen by *Boiling Cold*. Another underground pipeline will take the processed gas to the Dampier to Bunbury Natural Gas Pipeline, about 15km away. There is conflicting information in the public domain regarding the project's expected cost. A fact sheet at the community consultation stated the project is expected to result in about $2.2 billion in capital investment. However, an [Australian Industry Participation Plan](https://www.industry.gov.au/sites/default/files/aip/2025-10/belisama%5Fgas%5Fproject%5Fdraft%5Faipp%5Fsummary.pdf?ref=boilingcold.com.au) submitted to the Federal Government estimated the cost at between $500 million and $1 billion. The nearby Waitsia 250 terajoules a day gas project, owned by Mitsui and Beach Energy, was estimated to cost between $700 million and $8oo million, but now, nearing completion, the [cost sits between $1.2 and $1.3 billion](https://www.afr.com/companies/energy/beach-energy-ceo-shrugs-off-lng-gloom-as-waitsia-finally-starts-20251107-p5n8h7?ref=boilingcold.com.au). *Boiling Cold* contacted Hancock Energy for clarification of the expected cost. A spokesman said it was in the early stages of front-end engineering and design for Belisama. "Gas remains essential to powering WA’s homes and industries, providing much needed reliable energy that supports jobs and living standards," he said. "Further detail will be released at a later date.” [WA Gas Crunch: prices double as shortage looms post 2030EnergyQuest sees a scenario where WA’s miners, mineral processors and the South West power grid all need more gas at the same time. “That may be a difficult equation for WA to balance.”![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-211.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/9.-North-West-Shelf-project-1-2.jpg)](https://www.boilingcold.com.au/western-australia-faces-growing-gas-shortfall/) The gas will come from the Lockyer gas field 360km north of Perth, which Gina Rinehart's Hancock Energy bought from Mineral Resources in [a $1.1 billion deal in 2024](https://www.watoday.com.au/national/western-australia/hancock-prospecting-inks-1-1-billion-gas-deal-with-mineral-resources-20241031-p5kms9.html?ref=boilingcold.com.au) that also included the North Erregula assets. Belisama is a conventional gas project that will not use the controversial technique of fracking, or hydraulic fracturing. Gas from individual wells will be piped to hubs connected to pipelines flowing to the processing plant. Condensate extracted from the raw gas at the plant will be trucked out. The company expects construction to start in the second half of 2026 after environmental approvals are obtained and to take 27 to 30 months, with first gas to market in 2029. Hancock will be able to [export 20 per cent of the production](https://www.wa.gov.au/government/media-statements/Cook-Labor-Government/Updated-domestic-gas-policy-to-secure-WA%27s-energy-future-20240919?ref=boilingcold.com.au) until the end of 2030, due to the Cook Government adjusting its ban on the export of onshore gas to encourage the early development of projects. Hancock Energy has sited the processing plant in a different location than Mineral Resources planned. The new site reduces the clearing of native vegetation, is about 1.5km from public roads and outside bushfire-prone areas. Carbon pollution from the project is expected to be less than the 100,000 tonnes of CO2 per year that triggers coverage under the Federal Government's safeguard mechanism. [![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/10/CTA-industry-energy-climate.png)](https://www.boilingcold.com.au/support/) --- UPDATES: 26 November 2025, 11:30 AM: Opportunity for gas exports added. 26 November 2025, 4:40 PM: Hancock Energy comments added. ### WA Labor veteran slams “baseless" claims that gas is good for the climate URL: https://www.boilingcold.com.au/wa-labor-veteran-slams-baseless-claims-that-gas-is-good-for-the-climate/ Last updated: 2025-11-13T21:30:43.000Z WA’s gas giants have not provided evidence that their multi-billion-dollar exports help Asian countries reduce their emissions, according to Chris Tallentire, a Labor MP for 16 years. Tallentire’s [submission](https://www.parliament.wa.gov.au/Parliament/commit.nsf/luInquiryPublicSubmissions/374FBCAA51FFD52E48258D3B002345EB/$file/167NoCover.pdf?ref=boilingcold.com.au) to a WA [parliamentary inquiry](https://www.parliament.wa.gov.au/Parliament/commit.nsf/%28EvidenceOnly%29/2AB1C5D5620D2C0348258CED000FC147?opendocument&ref=boilingcold.com.au#Details) into “the role of Western Australia in the global effort on decarbonisation” refutes the basis of WA Premier Roger Cook’s strong support for gas exports. “It’s not good enough for claims to be made about Western Australian gas … without any supporting figures,” said Tallentire, who left politics in March. “Yet, that’s what’s happening, locking us into unleashing mega tonnes of climate-changing emissions.” Cook has consistently argued that WA’s emissions must continue to rise – unlike every other state – so it can export gas to Asia to displace coal and support renewables, and process minerals critical for the manufacture of renewable energy equipment. “Put simply, the benefits of WA helping other high-emission countries to decarbonise far outstrips the benefits of decarbonising our own economy,” Cook told an energy conference in late 2023. “And part of that equation is WA supply of transitional fuels (gas), because the global transition isn't always as simple as quitting fossil fuels and replacing them with renewables.” Tallentire, in his submission released on Thursday, said he had been prepared to accept this argument, but a lack of evidence made it difficult to address constituents’ concerns about Woodside’s plans to operate its North West Shelf export plant until 2070 and develop the Browse gas field. [![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/10/CTA-industry-energy-climate.png)](https://www.boilingcold.com.au/support/) “Woodside couldn’t produce the evidence and support its rhetorical claims about decarbonising Asia,” he said. Australia’s largest oil and gas company had commissioned the CSIRO to investigate the question, but in 2019, Australia’s premier science agency produced[ the wrong answer](https://www.smh.com.au/business/banking-and-finance/woodside-contradicts-csiro-report-debunking-key-climate-claims-20220307-p5a2d5.html?ref=boilingcold.com.au): gas was of no help, or even hindered the uptake of renewable energy unless the countries buying Woodside’s gas had a high carbon price. None of them do. “Woodside hid the [CSIRO report](https://www.woodside.com/docs/default-source/sustainability-documents/climate-change/modelling-the-emissions-impact-of-additional-lng-in-asia.pdf?ref=boilingcold.com.au) and only released it when compelled to do so, claiming it was out-of-date,” Tallentire said. Woodside went on to commission a [report](https://www.erm.com/contentassets/782dd692a5a546db8ea0c0fa052d4e70/april2020/wel-lca-report-rev3-apr-2020/?ref=boilingcold.com.au) from another consultant that assumed all of its gas would displace other fossil fuels [and not compete with renewables](https://www.boilingcold.com.au/woodside-study-says-gas-uncompetitive-v-renewables-in-asia/), accepting the premise the CSIRO had rejected. Tallentire said the WA Government commissioned Deloitte when it became clear that neither it nor Woodside had evidence that gas exports reduced global emissions, but the report was being kept secret. Since his October 10 submission, a draft of the report was leaked to the media, revealing exports of Australian gas carried “substantial risks” of [slowing the move to cleaner energy](https://www.theguardian.com/australia-news/2025/nov/06/confidential-western-australian-government-report-warns-gas-exports-risk-slowing-asias-move-to-clean-energy?ref=boilingcold.com.au) in Asian countries. Then, on Tuesday, the WA Government tabled a [later version of the report](https://www.parliament.wa.gov.au/publications/tabledpapers.nsf/displaypaper/4210700ac546fe8b9b480f8948258d4000137d3c/$file/tp+700+%282025%29+-+tabled+paper+deloittes+lng+study.pdf?ref=boilingcold.com.au) in Parliament and was accused of [doctoring it](https://www.abc.net.au/news/2025-11-12/claims-wa-government-doctored-secret-gas-report-for-net-zero/106000070?ref=boilingcold.com.au)to be more supportive of its pro-industry stance. Tallentire warned the committee to treat submissions from gas producers with caution. > “WA’s gas industry has a shocking record for making claims that later prove to be baseless,” he said. Tallentire also diverged from his Government’s unwavering support for the resources sector in his [farewell speech](https://www.parliament.wa.gov.au/parliament/Memblist.nsf/%28MemberPics%29/71F8AD803565E63EC82574CF001A6CF7/$file/Valedictory+Speech%5FCJ+Tallentire%5FAssembly%5F20241126.pdf?ref=boilingcold.com.au) to Parliament. “By nearly all measures, we continue to lose nature, yet we see absurd campaigns, especially by Seven West Media and certain interest groups, to weaken environmental laws,” he said. “There is never any acknowledgement of the gravity of the problem, nor a presentation of an alternative solution, “One minute it is calls for greater streamlining—invariably a euphemism for weakening—of state laws, the next it is attacks on proposed federal laws.” [Labor breaks vow and risks WA’s water supply for AlcoaRoger Cook granting Alcoa greater access to mine near Perth’s dams risks could cost taxpayers billions of dollars and result in water restrictions![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-208.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Alcoa-Cook-Water-feature-pic-20.png)](https://www.boilingcold.com.au/wa-labor-puts-alcoa-before-water-supply/) Tallentire, speaking in November 2024, called on the WA Labor Government to produce a state of the environment report, an action that is in its [member-endorsed platform](https://walabor.org.au/media/zqnenpig/2023-wa-labor-platform.pdf?ref=boilingcold.com.au). “Sadly, it will quantify how much we have lost since the [last report in 2007](https://www.boilingcold.com.au/r/f7948532?m=3dff8ebd-b09c-496c-beac-a196125985fb), but that is useful information for countering the wilful ignorance that abounds amongst interest groups, who get a disproportionately large hearing in our media.” In October, the Greens and Liberals in WA’s upper house supported the production of a new State of the Environment Report, but Labor environment minister Matthew Swinbourn [spoke against the motion](https://www.boilingcold.com.au/r/9e9ca8e0?m=3dff8ebd-b09c-496c-beac-a196125985fb). He provided no reasoning. Chris Tallentire was Labor shadow minister for the environment from 2013 to 2017\. He was not made the environment minister when Labor won government. ### Trump critical minerals deal could lock in jarrah forest mining for decades URL: https://www.boilingcold.com.au/trump-critical-minerals-deal-could-lock-in-jarrah-forest-mining-for-decades/ Last updated: 2025-10-29T06:25:21.000Z ANALYSIS The Australian Government will invest $US200 million ($307 million) in an Alcoa-run gallium plant in South West WA that will require fast track environmental approvals to meet schedule and likely lock in 20 years of jarrah forest mining. The plant is part a deal between Australia and the United States to [secure the supply](https://www.industry.gov.au/publications/united-states-australia-framework-securing-supply-mining-and-processing-critical-minerals-and-rare-earths?ref=boilingcold.com.au) of critical minerals signed by Prime Minister Anthony Albanese and President Donald Trump in Washington on Monday. Under the framework agreement both nations will take measures within the next six months to provide at least $US1 billion in finance to projects that produce critical minerals, many of which now come mainly from China. Alcoa, Australia and the US will form a special purpose vehicle (SPV) to take equity in a 100 tonnes a year gallium plant at Alcoa’s Wagerup alumina refinery together with a joint venture between the Japanese Government and Sojitz. SPV members will take a share of production in proportion to their ownership of the plant which has not been disclosed. China currently produces about 98 per cent of the 700 tonnes a year of gallium that is used crucial for high-speed semiconductors and LEDs and is also used in solar panels and high-performance electronic devices used by the military. [![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/01/support-CTA-for-posts-1.png)](https://www.boilingcold.com.au/#/portal/signup) ## Trees must go for gallium The gallium found in minute quantities in bauxite mined at Alcoa’s Willowdale mine in the Darling Scarp will be extracted when the ore is processed to make alumina. Any potential investor in a complex processing plant needs assurance that feedstock will be available in the long term – normally at least two decades. However, Alcoa’s mining at Willowdale and at its Huntly mine to the north that feeds the Pinjarra refinery is currently being assessed by WA’s independent Environmental Protection Authority (EPA). The investors plan to make a final investment decision in 2026 and achieve first production the same year, according to a [statement from Alcoa](https://news.alcoa.com/press-releases/press-release-details/2025/GOVERNMENTS-ANNOUNCE-SUPPORT-FOR-ALCOAS-GALLIUM-CRITICAL-MINERAL-DEVELOPMENT-PROJECT-IN-WESTERN-AUSTRALIA/default.aspx?ref=boilingcold.com.au). That Australia’s unknown share will cost more than $300 million indicates the plant will have a reasonable degree of scale and complexity. The targeted schedule is extremely ambitious to the point of being unrealistic but matches the political deal’s language that “new capacity to be made available in 2026.” Just two months ago Alcoa had not decided whether to locate the plant at its Wagerup or Pinjarra refineries, the public environmental approval process has not started, and construction across the state is facing delays. An Alcoa spokesman said the Wagerup refinery was chosen as there is room within its operational footprint for the significant clearing required for the gallium plant. The choice also makes sense as the 41-year-refinery is 12 years younger than the bigger Pinjarra refinery to the north. The schedule implies a final investment decision very early in 2026, despite the immaturity of the technical work. This would likely be before the EPA hands its recommendations on Alcoa’s mining to WA Environment Minister Matthew Swinbourn, who then makes a decision based on social and economic grounds, as well as the environment. The strategic importance of Australia and its allies becoming less reliant on China for a vital manufacturing input together with a direct investment by Australia’s main military partner would hand Swinbourn ample national security and sovereign risk excuses to override concerns about the jarrah forest destroyed by bauxite mining. [Alcoa lied about jarrah forest rehabilitation: ad watchdogThe Ad Standards decision has demolished a key plank of the US miner’s expensive campaign to win public support for expanded mining in WA.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-202.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Alcoa-forest-rehabilitation-ad-1-5.jpeg)](https://www.boilingcold.com.au/alcoa-lied-about-jarrah-forest-rehabilitation-advertising-watchdog/) ## First WA gallium plant had environmental issues The three Pacific allies will hope their investment in Alcoa’s gallium plant is more successful that [an earlier attempt](https://rovjok.com/the-pinjarra-gallium-plant-lessons-for-todays-critical-minerals-landscape/?ref=boilingcold.com.au) by French company Rhone Poulenc to extract the critical mineral from process liquids provided by Alcoa’s Pinjarra refinery. The $50 million plant - a significant amount at the time - only operated from 1989 to 1991, and again briefly in 1996 and 1997\. It was later purchased by GEO Specialty Chemicals that planned to restart the facility, but nothing happened. That earlier plant produced gallium concentrate that was shipped to France for purification. Rhone Poulenc wanted to build a two-stage plant in WA that first produced a rare earth hydroxide and then separated the rare earth. However in 1988 the EPA [rejected the second stage of processing](https://www.epa.wa.gov.au/sites/default/files/EPA%5FReport/774%5FB810.pdf?ref=boilingcold.com.au) as a byproduct would be radium-contaminated ammonium nitrate – a substance normally used as an explosive. The environmental watchdog said storage of large quantities of ammonium nitrate could pollute the ground water and add significant quantiles of nitrogen to nearby Peel-Harvey inlet that was already suffering from excessive nutrients from farm fertilisers. “There is no apparent environmentally acceptable method for the removal and disposal of radium contaminated ammonium nitrate,” the watchdog wrote. Even the 1996 restart of the relatively simple processing plant had a [myriad of environmental risks](https://www.epa.wa.gov.au/sites/default/files/EPA%5FReport/774%5FB810.pdf?ref=boilingcold.com.au) for the EPA to address. These included transporting low-level radioactive waste by road to a Goldfields disposal site and emissions of radioactive gases and dust from the plant. An Alcoa spokesman said the company was investigating a different and more advanced technology for the next gallium plant in WA. “Ion exchange technology is a safer, cleaner and more efficient process than some other gallium extraction methods,” he said. [Labor breaks vow and risks WA’s water supply for AlcoaRoger Cook granting Alcoa greater access to mine near Perth’s dams risks could cost taxpayers billions of dollars and result in water restrictions![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-201.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Alcoa-Cook-Water-feature-pic-18.png)](https://www.boilingcold.com.au/wa-labor-puts-alcoa-before-water-supply/) ## Green tape shredding may be required Chemical processing plants of the scale Alcoa is considering generally require a comprehensive assessment by the EPA before the watchdog makes a recommendation to the WA environment minister. Investors typically do not make a final investment decision until they know what conditions will be imposed by the environment minister. If the aim to produce gallium before the end of 2026 is genuine, rather than a just a statement to appease political stakeholders who value urgent action, it cannot be achieved under current environmental approval processes. However, the WA and Federal government are moving to expedite project approvals. In September the Cook Government introduced to parliament a [State Development Bill](https://www.wa.gov.au/government/media-statements/Cook%20Labor%20Government/Landmark-State-Development-Bill-to-drive-investment-and-growth-20250908?ref=boilingcold.com.au) that would give the Coordinator General, a government-appointed bureaucrat, unprecedented powers to push through the system any project deemed a priority by the Premier. Alternatively, existing Alcoa operations in WA come under legislated State Agreements, that, perhaps with amendment, could override regulatory check points. Federally, Environment Minister Murray Watt wants to [hand federal environmental assessments to WA](applewebdata://00ED10B6-C9D3-40AD-A9E1-FE65ECBE3A87/back) and is negotiating with the Coalition to [rewrite](https://www.abc.net.au/news/2025-10-09/watt-coalition-near-deal-epbc-environment-laws/105865472?ref=boilingcold.com.au) Federal environment protection laws. This week’s deal with the US increases the momentum for change: > “The participants are taking measures to accelerate, streamline, or deregulate permitting timelines and processes, including to obtain permits for critical minerals and rare earths mining, separation, and processing within their respective domestic regulatory systems, consistent with applicable law,” the framework agreement states. While Albanese’s meeting with Trump was reported to go well, largely due to the critical minerals agreement, challenges lie ahead to make the talk a reality. Engineering studies must be robust enough to convince investors that the plant can be built on time and budget and reliably produce quality product – four achievements that recent processing plants in WA have fallen short of, sometimes on all four criteria. Then a way needs to be found to bypass current environmental protection mechanisms. After that, a reliable and competent construction contractor that can muster sufficient resources in an overheated market needs to be engaged. Then everyhing has to go right. It will be a bumpy ride. ### Synergy plans $4.5b wind, solar and battery farm in WA's Wheatbelt URL: https://www.boilingcold.com.au/synergy-plans-4-5b-wind-solar-and-battery-farm-in-was-wheatbelt/ Last updated: 2025-09-26T02:37:48.000Z State-owned power utility Synergy is seeking planning approval for a 1.5-gigawatt renewable energy farm near Carnamah, a three-hour drive north of Perth. The Tathra Wind Farm could have up to 140 wind turbines with a maximum capacity of 1000 megawatts, solar panels generating 500 megawatts, and batteries to store 500 megawatts, according to a [planning application](https://www.carnamah.wa.gov.au/wp-content/uploads/2025/09/20250908-Tathra-Wind-Farm-Development-Application-Covering-Report-FINAL-1-1.pdf?ref=boilingcold.com.au) released for comment by the Shire of Carnamah in mid-September. The combination of wind, solar, and batteries would allow Synergy to maximise the utilisation of the nearby Eneabba to Three Springs 330 kilovolt transmission line's capacity. The wind farm would span 158 square kilometres of land across nine farms, whose owners have consented to the development application. The facilities would use about ten per cent of the land. The tips of the wind turbine blades could reach up to 250m above the ground, the same height as Central Park in Perth, where Rio Tinto is based. Synergy plans to build Tathra, which it estimated will cost $4.5 billion, in stages. If full capacity is reached, it will be by far the biggest wind farm in WA. In the meantime, that title will soon belong to nearby Warradarge Wind Farm, which will generate 283 megawatts once the $400 million installation of an [additional 30 turbines](https://www.wa.gov.au/government/media-statements/Cook%20Labor%20Government/Construction-starts-on-Warradarge-Wind-Farm-Stage-2-20250729?ref=boilingcold.com.au) to add 103 megawatts of generating capacity is completed in 2027. The Warrdarge expansion will help Synergy replace the generation capacity it will lose when its Collie coal-fired power station closes in 2027\. The utility will close its last coal-fired power station, Muja, in 2029\. Synergy would have to develop Tathra extraordinarily quickly for it to be operating before Muja closes. [WA needs Bluewaters power until 2028, but who will pay?The operator of South West WA’s power grid needs insolvent Griffin Coal to keep supplying a vital power station, but if the WA Government won’t keep it going, who will?![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-197.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/bluewaters-reduced.jpg-1.png)](https://www.boilingcold.com.au/wa-needs-bluewaters-coal-fired-power-until-2028-but-the-dollars-do-not-add-up/) Up to one million solar panels will be needed to generate 500 megawatts of electricity. They will be mounted on a tracking system to follow the sun and may be "bi-facial," allowing light reflected off the ground to be used. The panels will be installed in areas the farmers identified as of low agricultural value, and Synergy will consider designs that allow sheep to graze between the panels. Synergy declined to comment. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/09/Screenshot-2025-09-26-at-8.41.57---am.png) ****Layout of Tathra wind farm**. **Image: Synergy* ### Woodside shrinks and delays Perth hydrogen plan URL: https://www.boilingcold.com.au/woodside-shrinks-and-delays-perth-hydrogen-plan/ Last updated: 2025-09-25T10:02:42.000Z *ANALYSIS* Woodside has dropped cleaner green hydrogen technology from its proposed H2Perth plant, which will be much smaller and later than when it was [first announced ](https://www.woodside.com/docs/default-source/media-releases/woodside's-h2perth-to-make-western-australia-a-hydrogen-powerhouse.pdf?sfvrsn=3857b154%5F2&ref=boilingcold.com.au)four years ago. Australia's biggest oil and gas company has shelved plans to produce hydrogen in Tasmania and Oklahoma but is persevering with a proposal near its hometown of Perth. On Thursday, Woodside [signed a memorandum of understanding](https://www.woodside.com/docs/default-source/media-releases/2025/woodside-jse-and-kepco-embark-on-development-of-liquid-hydrogen-supply-chain.pdf?sfvrsn=e46584ab%5F1&ref=boilingcold.com.au) (MOU) with Japanese power utility Kansai Electric Power (KEPCO) and liquid hydrogen specialist Japan Suiso Energy (JSE) to "pioneer the development of a liquid hydrogen supply chain between Australia and Japan." Woodside's [new plan](https://www.woodside.com/docs/default-source/our-business---documents-and-files/new-energy/h2perth/h2perth-general-information-sheet---august.pdf?sfvrsn=f30ca038%5F10&ref=boilingcold.com.au) for a hydrogen plant in Rockingham and Kwinana is substantially different from what it proposed four years ago. The company has dropped so-called green hydrogen, produced by splitting water into hydrogen and oxygen with electrolysers powered by renewable energy, from its plan. Many other companies, including Fortescue, which vociferous green hydrogen advocate Andrew Forrest chairs, have also recently canned plans to produce the clean fuel. Instead, the Woodside facility will only produce blue hydrogen, made from natural gas (methane), with much of the CO2 produced being captured and buried underground. Other emissions would be offset with carbon credits. In the 2021 plan, most of the hydrogen would be combined with nitrogen to make ammonia, which is much easier to transport. A major market was expected to be burning the ammonia with coal in Japanese coal-fired power stations to lower carbon emissions. Now the focus may be on lowering emissions from gas-fired power generation. KEPCO executive vice president Satoshi Kuwano said the utility was conducting [Japan's first trial](https://www.woodside.com/docs/default-source/our-business---documents-and-files/new-energy/h2perth/h2perth-event/20250925%5Fspeech-by-satoshi-kuwano-ke-%28english%29.pdf?sfvrsn=bcc39cbe%5F1&ref=boilingcold.com.au) of burning hydrogen and gas together to drive a large-scale gas turbine generator. To liquefy hydrogen to get it to Japan, it must be cooled to -253 degrees, almost 100 degrees cooler than liquefied natural gas, itself an extraordinarily energy-intensive product. The third signatory to the MOU, JSE, developed the world's first liquid hydrogen carrier that had fire[ on its maiden voyage](https://www.offshore-energy.biz/investigation-reveals-cause-of-fire-incident-on-worlds-1st-lh2-carrier-suiso-frontier/?ref=boilingcold.com.au) in 2022 when it was docked at Hastings, Victoria. The diesel-powered vessel later delivered the world's first cargo of liquid hydrogen to Japan. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/09/h2perth-mou-signing-ceremony-1.jpg) ****Federal resources minister Madeleine King and WA Premier Roger Cook were in Japan to witness the downsizing of investment plans in and adjacent to their respective electorates.** **Image: Woodside* Two years ago, Woodside and Kansia Electric [signed another MOU](https://www.woodside.com/docs/default-source/media-releases/woodside-and-kepco-collaborate-on-carbon-capture-and-storage%5F.pdf?sfvrsn=84592100%5F3&ref=boilingcold.com.au) to investigate a potential carbon capture and storage value chain from Japan to Australia. Kansai would capture CO2 from its coal and gas-fired power stations in Japan and ship it to Australia, where Woodside would store it underground. ## A pipedream to nowhere? If both value chain studies were to come to fruition, it could result in an integrated circular value chain that burns Australian methane and collects and stores some of the resultant CO2. First, Woodside could produce and process methane at its gas-fired facilities in the Pilbara, then have gas-fired pipeline compressors pump it 1500km south to H2Perth. The methane would then be mixed with steam from gas-fired boilers to produce hydrogen and carbon dioxide, a process known as reforming. Most of the CO2 produced by reforming could be captured and injected underground. In its initial plan, Woodside aimed to capture 85 per cent of the CO2 within five years of first production. The hydrogen would then be cooled to a liquid, probably by gas-fired compressors, to be loaded onto a specialised diesel or gas-powered vessel bound for Japan. In parallel, other methane from Woodside's facilities would be liquified in LNG plants that are among Australia's top carbon polluters and be shipped northwards in a gas-powered LNG vessel. [Hydrogen to Perth homes a pointless distraction on the road to net-zeroPutting a sliver of hydrogen into a tiny fraction of Perth’s gas network has no practical benefit but allows its owner to appear acceptably green, just don’t look too close.![](https://static.ghost.org/v5.0.0/images/link-icon.svg)WAtodayPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/2ec660a5a8fd7470922a6ba5ba71048db5fa84d1)](https://www.watoday.com.au/environment/climate-change/hydrogen-to-perth-homes-a-pointless-distraction-on-the-road-to-net-zero-20221205-p5c3uu.html?ref=boilingcold.com.au) To be used, the two ultra-chilled liquid fuels need to be turned back into gases, itself an energy-intensive process, and then mixed and fed to the gas turbine. Unfortunately, burning a given volume of hydrogen releases significantly less heat than the same volume of gas, so a greater volume of the blended gas needs to be burned to produce the same amount of energy as pure methane. For this reason, a hydrogen blend of say 10 per cent would reduce carbon pollution from the power plant by much less than 10 per cent. Much, but not all, of the CO2 from the power plant burning methane could be captured using more energy, cooled to a liquid (more energy), shipped south in a different specialised fossil-fuel burning vessel, offloaded in WA and injected underground by gas-powered compressors. Only a detailed analysis of all these activities would show whether the blending of hydrogen increases or decreases greenhouse gas emissions, and if there is any hope of it being economically viable. The complexity of the value chain and its numerous carbon pollution sources suggest it may fail both the financial and environmental tests. At the signing ceremony in Japan, Woodside executive vice president for strategy Andy Drummond said the MOU "sends a clear signal to our international partners that Australia and Japan are seeking to make a meaningful contribution to global decarbonisation." > We believe we can unlock new opportunities to enable a lower-carbon future, one that continues to support LNG, while also advancing new energy sources such as hydrogen. The proposal performs better as a signal (to the uninformed) than it is likely ever will as an investment. --- If you think [mainstream media coverage](https://thewest.com.au/business/energy/woodside-energy-seals-new-hydrogen-deal-with-japan-power-giants-for-1b-h2perth-exports-c-20139521?ref=boilingcold.com.au) of this issue and the broader energy transition in WA gives you and the community the whole picture, good luck to you. Otherwise, please chip in to keep *Boiling Cold* going: [![Want energy and climate news to hold gas giants to account? Support Boiling Cold.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/07/CTA-donate-big-gas-1.png)](https://www.boilingcold.com.au/support-cta/) ### WA needs Bluewaters coal-fired power until 2028, but the dollars do not add up URL: https://www.boilingcold.com.au/wa-needs-bluewaters-coal-fired-power-until-2028-but-the-dollars-do-not-add-up/ Last updated: 2025-09-22T23:50:35.000Z ANALYSIS WA's South West power grid needs Bluewaters Power Station for at least three more years, but its insolvent fuel supplier, Griffin Coal, loses vital state government support in 2026\. Money has to appear from somewhere to keep the lights on. Last week, the Australian Energy Market Operator (AEMO) told power generators how much capacity it would pay to be available for the 12 months to October 2028\. [Bluewaters was allocated 434 megawatts](https://www.aemo.com.au/-/media/files/electricity/wem/reserve%5Fcapacity%5Fmechanism/certification/2025/certified-reserve-capacity-assigned-for-the-2027-28-capacity-year.pdf?rev=955e91976a464bd9bfadada3b58d88ae&sc%5Flang=en&ref=boilingcold.com.au), seven per cent of the reserved capacity on the South West Interconnected System (SWIS). That makes Bluewaters, WA's only privately-owned coal-fired power station, vital for keeping the lights on for 1.2 million customers. Opposition energy spokesman Steve Thomas said AEMO's move was "an embarrassment to the Labor Government and its flailing transition plan." "AEMO has come to the obvious conclusion that it needs to provide peak reserve capacity to Bluewaters to ensure the lights stay on and business continues to run during the summer peak of 2027-28," he said. Bluewaters gets most of its fuel from Griffin Coal, which the WA Government is keeping alive with $308 million of support over 2½ years to June 2026\. For Griffin to remain open for a further two years and four months, while AEMO needs Bluewaters, on a pro rata basis, it needs $287 million of additional support. The true cost could be more as each year Collie's coal miners - Griffin and Premier - have to remove more material to access each tonne of coal, driving operating costs up. WA government statistics show that more is being paid for each tonne of coal in the mines' last few years, but how much is subsidy versus customers paying more is unclear. The WA Government is adamant it will not put its hand in its pocket for Griffin after June 2026. “Its future beyond that date is a matter for the relevant commercial parties," a WA government spokesman said. “If the relevant commercial parties can adequately arrange to support the mine’s operation before that date, the government will facilitate an appropriate outcome." [WA gas users launch Mia Davies at Woodside Pluto projectWoodside’s Pluto project is delivering a tiny sliver of gas to WA compared to other exporters, but the Domgas Alliance wants to change that.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-191.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Pluto-LNG-Plant--onshore-web.jpg)](https://www.boilingcold.com.au/wa-gas-users-launch-mia-davies-at-woodside-to-pry-more-supply-from-pluto/) ## Is Bluewaters a going concern? Can Bluewaters, Griffin Coal's biggest customer, afford to pay Griffin Coal more for its fuel, and why would they? The commercial structure of Bluewaters, owned by Japan's Sumitomo and Kansai Electric, is complex. There are at least six companies, with numerous loans within the Bluewaters group and with the parent companies. Only three of the companies cross the threshold of having to submit annual reports to the corporate regulator, ASIC. Two of these are Bluewaters Power 1 and Bluewaters Power 2, which each own one of Bluewaters' steam turbines. The accounts of the two operating companies for the 12 months to March 2025 both note: > "In the absence of a long-term sustainable solution for coal and water supply and the extension to the mining rights of the coal supplier by the West Australian State Government beyond July 2026, or a restructure of the coal supplier, there exists material uncertainty as to whether Bluewaters can continue as a going concern." However, the directors, perhaps based on Bluewaters still being essential to keeping the light on, see a way forward. > "Despite the prevailing sentiment towards coal-fired power generation and continued issues with the financial stability of the coal supplier to Bluewaters the directors have a reasonable expectation that a sustainable solution can be achieved." The operating companies were in the black, making a $22 million profit. Coal purchased from heavily subsidised Griffin cost $84 million. An increase in coal price sufficient to keep Griffin afloat would immediately push Bluewaters into the red. Revenue came from $158 million in capacity payments for having the generation capacity available and $98 million from energy sales. Hanging over Bluewaters is a monstrous $804 million of borrowings. While $551 million is owed to "related parties" Sumitomo and Kansai Electric, $245 million is borrowed from a syndicate of banks that [bought the debt in 2020](https://www.afr.com/street-talk/nab-sells-bluewaters-power-debt-20200728-p55g66?ref=boilingcold.com.au) at a discount of 71¢ in the dollar. [Alcoa lied about jarrah forest rehabilitation: ad watchdogThe Ad Standards decision has demolished a key plank of the US miner’s expensive campaign to win public support for expanded mining in WA.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-192.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Alcoa-forest-rehabilitation-ad-1-4.jpeg)](https://www.boilingcold.com.au/alcoa-lied-about-jarrah-forest-rehabilitation-advertising-watchdog/) ## Who else can help Griffin? Bluewaters alone cannot sustain Griffin Coal, but the government subsidy to Griffin has benefited more parties than the coal miner and Bluewaters. South32's Worsley Alumina takes coal from Griffin to fuel three of its five boilers. The business, which had underlying earnings before interest, tax and depreciation of $US1.1 billion last financial year, would have had to pay more for that coal without the government subsidy. Another winner has been Boddington Gold, Bluewater's biggest customer, whose owner, US-based Newmont, returned $US2.3 billion to shareholders in 2024. In May, Newmont contracted to buy the entire output of Collgar's Merredin wind farm for 15 years*,* but *Business* News reported it has also quietly [extended its Bluewaters contract](https://www.businessnews.com.au/article/Mining-giant-Newmont-shapes-WA-power-market-with-two-deals?ref=boilingcold.com.au) to 2031. The WA government may be waiting to see if Newmont or South32 step in to keep Griffin going. With Griffin's subsidy expiring in less than 12 months, the machinations behind the scenes must be furious. [![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/01/support-CTA-for-posts-1.png)](https://www.boilingcold.com.au/#/portal/signup) --- CORRECTIONS: 22 September 2025: AEMO assigned Bluewaters 434 megawatts of reserved capacity, not the 479 MW initially reported. 23 September 2025: South32 does not purchase power from Bluewaters for its Worsley alumina refinery, as originally reported. ### WA gas users launch Mia Davies at Woodside to pry more supply from Pluto URL: https://www.boilingcold.com.au/wa-gas-users-launch-mia-davies-at-woodside-to-pry-more-supply-from-pluto/ Last updated: 2025-09-19T02:08:47.000Z The Domgas Alliance of major WA gas users has chosen high-profile ex-National Party politician Mia Davies to relaunch their campaign for local supply not to suffer from gas exports. The Australian Energy Market Operator has forecast that gas supply in WA could be tight in 2028 and [increasingly not meet demand from 2030](https://www.boilingcold.com.au/wa-faces-gas-shortfalls-from-2030-aemo/). That is bad news for the viability of gas-dependent manufacturers that set up in WA when the fuel was plentiful and cheap, and even before a shortage had hit, have already suffered enormous price increases this decade. The Alliance's members - including alumina refiner Alcoa, Wesfarmers' fertiliser and chemicals arm WESCEF, Norwegian fertiliser giant Yara, Cockburn Cement, Coogee Chemicals and titanium producer Tronox - account for 60 per cent of WA's gas demand. Davies, now the Alliance's official spokesperson, said the group's three priorities were to immediately begin working with the State Government to get Woodside to supply more gas from its Pluto project, for the Federal Government to strengthen the "use it or lose it" provisions of offshore retention leases in Commonwealth waters and to increase market transparency. Davies, working for lobbyists GRA Partners, wants urgent action from the WA Government. "When you think about the businesses that are involved in investment decisions and in energy policy, 2028 is literally tomorrow, 2030 is next week," she said on Thursday. Davies is clear that her immediate focus is Woodside's Pluto project. "I would think they'd be wanting to uphold the agreement in the spirit in which it was made," she said. WA's [domestic gas policy](https://www.wa.gov.au/government/wa-domestic-gas-policy?ref=boilingcold.com.au) is that gas exporters must reserve gas equivalent to 15 per cent of exports for local use, have the infrastructure to supply the gas to WA, and market it in good faith. Nineteen years ago, Alan Carpenter gave Woodside the go-ahead to build the Pluto gas plant in the Pilbara in exchange for a [generous domestic gas obligation](https://www.watoday.com.au/national/western-australia/wa-s-looming-domestic-gas-shortage-how-a-good-faith-argument-left-wa-short-20240207-p5f35z.html?ref=boilingcold.com.au) that did not apply to the first five years of gas exports, but also appears legally unenforceable. The lack of supply from Pluto is stark when compared to Chevron's Wheatstone project. In the five years to 2024, Wheatstone, with less than double the export capacity of Pluto, has supplied ten times more gas to WA. A year ago, the WA Labor Government [responded](https://www.wa.gov.au/system/files/2024-09/0172%5Fdomgas%5Fjtsi%5Fsubmission%5Fto%5Fparliamentary%5Finquiry.pdf?ref=boilingcold.com.au) to a [comprehensive Parliamentary Inquiry](https://www.parliament.wa.gov.au/Parliament/commit.nsf/%28Report+Lookup+by+Com+ID%29/27F837EAB987BD9548258B790020F885/$file/20240814%20-%20RPT%20-%20DOMGAS%20FINAL%20updated%20for%20web.pdf?ref=boilingcold.com.au) into WA's domestic gas policy, adopting 11 of its 30 recommendations. One of those was for the government to "work with Woodside to develop a plan to acquit the Pluto domestic gas obligations, including the modernisation of arrangements." ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/09/image.png) ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/09/image-2.png) ****Woodside advertisements in** ***The Nightly** **, July and September, 2025.** Davies said that Woodside might say they are meeting its obligation, but she is not sure everyday Austrlaians would agree. "I would think they'd be wanting to uphold the agreement in the spirit in which it was made," she said. Extra gas from Pluto may be able to help the market in the short term but other problem will emerge next decade. Chevon's Gorgon's project does not have an obligation to reserve for local use the equivalent to 15 per cent of exports. Instead, it is reserving a fixed amount that will be sold in about a decades time, meaning the facility not supplying a quarter of WA' sgas could then export all its gas. [The Gorgon deal that could up the stakes on WA’s looming gas shortageWestern Australia’s biggest gas plant may be able to export for 30 years with no obligation to supply the state, thanks to an agreement struck two decades ago.![](https://static.ghost.org/v5.0.0/images/link-icon.svg)WAtodayPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/c4dccdaa803c5ccb30462c9129a6ac3ec5fc9eae-3)](https://www.watoday.com.au/national/western-australia/the-gorgon-deal-that-could-up-the-stakes-on-wa-s-looming-gas-shortage-20240702-p5jqic.html?ref=boilingcold.com.au) Davies said the Alliance would discuss Gorgon with the goverment. "We need to make sure that whilst there are agreements in place .. we need to go back to first principles, which is that those agreements were struck with the clear principle of making sure that there was domestic gas delivered into the West Australian market," she said. ### Regulator slams Jadestone Energy for dangerous corrosion in oil vessel off WA URL: https://www.boilingcold.com.au/regulator-slams-jadestone-energy-for-dangerous-corrosion-in-oil-vessel-off-wa/ Last updated: 2025-09-17T03:34:53.000Z Offshore regulator NOPSEMA has ordered UK-listed Jadestone Energy to urgently fix corrosion on its Montara Venture oil vessel in the Timor Sea that "may pose significant safety and environmental risks." Jadestone has 90 days to convince NOPSEMA that "the residual risk from operating an aged, single-hulled oil facility is reduced to a level that is as low as reasonably practicable" and that its management of corrosion meets the standard of common industry practice. More modern floating production, storage and offloading vessels (FPSOs) have double hulls to reduce the risk of oil spilling into the ocean. The £100 million ($204 million) company must also get the safety of the vessel confirmed by an independent party. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/09/Montara-water-ballast-tank-inspection-2022.png) ****Inspection of a water ballast tank on the Montatra in 2022**. **Image: Jadestone Energy* More urgently, Jadestone has 30 days from 8 September to satisfy NOPSEMA that the vessel is safe for its workers until the degraded hull is fixed. Jadestone has 60 days to produce a plan to fix the problems that include not inspecting for corrosion as often as it promised in the vessel's safety case, leaving a significant number of temporary repairs in place for too long without doing a permanent fix, and "restoring" proper processes to manage corrosion. [The direction](https://www.nopsema.gov.au/sites/default/files/2025-09/General%20Direction%202043%20-%20Montara%20Venture%20Hull%20Integrity.pdf?ref=boilingcold.com.au) published on Monday comes 4½ years after the £100 million ($204 million) company was first [ordered to improve](https://www.nopsema.gov.au/sites/default/files/2021-05/A769881.pdf?ref=boilingcold.com.au) its management of corrosion on the 274m-long vessel. That action was completed, but it appears Jadestone's maintenance has since slipped below acceptable levels. In July, Jadestone chief executive Mitch Little [told investors](https://www.jadestone-energy.com/trading-statement-for-the-half-year-ended-30-june-2025/?ref=boilingcold.com.au) the company was cutting operating expenses across its assets, which include the Stag oil vessel off WA, an interest in Woodside-operated oil production, and projects in Malaysia, Indonesia and Vietnam. [How Chevron will ship Aussie engineering jobs to IndiaDespite local content requirements and a fat profit from Australia, Chevron will now export jobs as well as gas.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-189.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/3-7.jpg)](https://www.boilingcold.com.au/how-chevron-will-ship-aussie-engineering-jobs-to-india/) In the first half of 2025, Jadestone's operating expenses were 10 per cent less than the corresponding period in 2024. The belt tightening was in part driven by a cost blowout on drilling a new well at Montara that was estimated to cost $US70 million but eventually cost about $US100 million. In 2022 and 2023, Jadestone shut down production from Montara numerous times to fix corrosion issues. In one incident, oil leaked into the ocean through a hole in the bottom of a tank. The current action from NOPSEMA is its sixth against the Montara since 2021. In August, NOPSEMSA ordered Jadestone to fix cylinders containing nitrogen at 300 times atmospheric pressure in a high-traffic area that were "in a [severely corroded state](https://www.boilingcold.com.au/r/f803ffa7?m=3dff8ebd-b09c-496c-beac-a196125985fb)." Jadestone was asked: - Why is its corrosion management still unsatisfactory 4.5 years after NOPSEMA directed it to be improved? - Why is operating expenditure being cut, given the poor state of the Montara Venturer? The company said it would not comment. --- UPDATED 17 September: Questions to Jadestone and its decision not to respond added. ### Alcoa’s WA mining plan draws unprecedented opposition URL: https://www.boilingcold.com.au/alcoas-wa-mining-plan-draws-unprecedented-opposition/ Last updated: 2025-09-09T03:37:33.000Z *By Jamie Wiggan, Public Source* *This story was originally published by PublicSource, a nonprofit newsroom serving the Pittsburgh region where Alcoa has its headquarters. For more of its journalism, visit* [*www.publicsource.org*](http://www.publicsource.org/?ref=boilingcold.com.au)*.* A public review of Alcoa’s plans to mine deeper into Australia’s endangered Northern Jarrah Forest garnered 59,000 submissions from citizens, advocacy groups and local governments concerned about its impacts. The Pittsburgh-based aluminium giant has been active in Western Australia for more than 60 years, and now wants to clear [an additional 150 square miles](https://peel-harvey.org.au/wp-content/uploads/2025/08/Alcoa-PERs-Position-Statement.pdf?ref=boilingcold.com.au) of forest to reach the aluminium ore, known as bauxite, that lies beneath it. Those plans, [central to the company’s strategy](https://www.publicsource.org/alcoa-mines-threaten-australia-forest-part-3/?ref=boilingcold.com.au), are under review by the state’s Environmental Protection Authority (EPA). A 12-week public comment window preceding the review concluded last week, and a final determination is expected sometime next year. “This is (the) largest number of submissions the EPA has ever received and clearly indicates a high level of public interest,” EPA chair Darren Walsh said in a statement. Right as the review period concluded, Alcoa chief executive William Oplinger flew from Pittsburgh to Perth to meet with stakeholders including WA Premier Roger Cook. [Labor breaks vow and risks WA’s water supply for AlcoaRoger Cook granting Alcoa greater access to mine near Perth’s dams risks could cost taxpayers billions of dollars and result in water restrictions![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-185.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Alcoa-Cook-Water-feature-pic-15.png)](https://www.boilingcold.com.au/wa-labor-puts-alcoa-before-water-supply/) In a statement to Pittsburgh’s *Public Source*, the company downplayed the significance of the timing. Oplinger "is currently in Australia as part of his regular program of visiting the regions where Alcoa operates around the world,” wrote Courtney Boone, vice president of global communications. “These visits can include time at our operations, meeting with employees and engaging with a range of stakeholders including government representatives.” During Cook's meeting with Oplinger, “the Premier reiterated there is an expectation that Alcoa meets its environmental obligations,” according to a government spokesperson. Boone also noted that approximately 90 per cent of the 59,000 submissions were from multiple signatories attached to the same letter. “We welcome this participation as public consultation and comment is an important part of the process,” the statement continued. “Stakeholder engagement has, and will continue to be, a fundamental part of Alcoa’s core operating principles.” ![Two people sit on white chairs by a fence, watching horses with blue saddlecloths walk along a dirt track in an outdoor setting.](https://www.publicsource.org/wp-content/uploads/2025/09/L1006365.jpg) ****The horse race track in Pinjarra, in the Shire of Murray, in March. The town rests closest to Alcoa's piles of residue that residents say spread red dust throughout the community.** (Photo by Quinn Glabicki/Pittsburgh's Public Source) ## **Shires, First Nations opposed** Alcoa, with a market value above $US8 billion, has gradually centred its global operations in Western Australia, where it mines bauxite and refines it into alumina – a white, powdery oxide that can be smelted into aluminium. The bauxite is extracted from the ground below the unique Northern Jarrah Forest, which experts say is on the [brink of collapse from forestry, mining and climate change](https://apps.publicsource.org/alcoa-mines-threaten-australia-forest-part-1/?ref=boilingcold.com.au). The forest, anchored by [centuries-old jarrah trees](https://www.westernaustraliagianttrees.com/jarrah.html?ref=boilingcold.com.au), supports thousands of unique plant and animal species, including three types of cockatoo, which are either endangered or close to extinction. In the towns, away from the forest, the refining process generates [harmful airborne emissions and mountains of toxic waste](https://apps.publicsource.org/alcoa-mines-threaten-australia-forest-part-2/?ref=boilingcold.com.au) that locals fear will far outlive the company’s time there. These concerns have prompted mounting criticism from environmental advocates, government regulators and the Noongar – a First Nations population who have inhabited the area for nearly 50,000 years. ![A dense forest with tall trees stands behind a dry, rocky, and partially cleared area marked by a line of small white posts.](https://www.publicsource.org/wp-content/uploads/2025/09/mine-deforestation-jarrah.jpg) ****Jarrah trees stand at the edge of Alcoa's Willowdale Mine site in March**. (Photo by Quinn Glabicki/Pittsburgh's Public Source) Among those who filed objections to the EPA are seven of the eight local government bodies that fall within the company’s Western Australia footprint. The Shire of Murray, which encompasses Alcoa’s largest refinery, filed a 370-page document outlining concerns, including: - Clearing of native vegetation - Disturbance and removal of fauna and fauna habitat - Disturbance to the quality of land and soils - Disturbance to local and regional hydrology - Air and greenhouse gas emissions - Disturbance to areas of cultural heritage significance - Detrimental noise, dust and visual impact. “Our role is to represent the community, advocate for environmental responsibility, and ensure that due process is followed,” a spokesperson for the shire said in an email statement. ![](https://www.publicsource.org/wp-content/uploads/2025/09/first-nation-fishing-2.jpg) ****Young Noongar men cast fishing lines at a reserve near Pinjarra in March.** (Photo by Quinn Glabicki/Pittsburgh's Public Source) Voices from the First Nations Noongar community also weighed in on the application. The Bibbul Ngarma Aboriginal Association wrote [in an online statement](https://www.linkedin.com/posts/bibbul-ngarma-aboriginal-association%5Fmassive-expansion-of-alcoa-operations-activity-7353306691502788608-Wbet/?ref=boilingcold.com.au) that Alcoa's plan could "have devastating and irreversible impacts", including "risks to our drinking water and the loss of social and recreational values that will affect future generations long after we are gone." ## **Alcoa ads flagged by ethics agency** One concern voiced in the debate over Alcoa’s application: The company’s track record on restoring mined areas of the forest. Shortly after Public Source published a [three-part investigation](https://www.publicsource.org/alcoa-mines-threaten-australia-forest-series/?%5Fgl=1%2A1huppa9%2A%5Fgcl%5Fau%2AMTQwMzk2NzgzLjE3NTMyOTI1Mzk.%2A%5Fga%2AMTE5OTU0MDYyLjE3NTE5ODcxMTg.%2A%5Fga%5FCCLXQK5C14%2AczE3NTY4NDU2NjEkbzYkZzAkdDE3NTY4NDU2NjEkajYwJGwwJGgw&ref=boilingcold.com.au) of Alcoa’s impact in Western Australia, the company posted a paid advertisement in an Australian newspaper, headlined, “Is Jarrah Forest rehabilitation possible? We’re here with the facts.” Among other things, the discontinued ad claimed Alcoa had rehabilitated 75% of the forest uprooted for bauxite mining. Alcoa’s rehabilitation program is disputed by [many prominent scientists](https://www.abc.net.au/news/2023-11-27/the-leeuwin-group-scientists-stop-alcoa-mining-wa-jarrah-forests/103155496?ref=boilingcold.com.au), including a world-renowned botanist who began his career trying to help the company rehabilitate. The claims in the paid newspaper article were reported to Ad Standards, an independent watchdog for the Australian ad industry, which released a [report](https://adstandards.com.au/wp-content/uploads/2025/09/0182-25.pdf?ref=boilingcold.com.au) Monday, finding it in breach of four of the five sections of the organisation’s environmental code. "The panel considered that the overall impression created by the advertisement was inaccurate and likely to mislead or deceive target consumers," the report concluded. ![](https://www.publicsource.org/wp-content/uploads/2025/09/scientist-rehabilitation-forest.jpg) ****Australian botanist Kingsley Dixon inspects a restoration site near Alcoa's Willowdale Mine in March**. (Photo by Quinn Glabicki/Pittsburgh's Public Source) In its response to the complaint, Alcoa maintained it intended a broader definition of "rehabilitation," and as such, the ad "is not misleading or deceptive and does not overstate the benefit of rehabilitation to the environment." ## **Shielded status ‘unraveling’?** Alcoa launched in Australia [through a government deal](https://www.publicsource.org/alcoa-mines-threaten-australia-forest-part-3/?ref=boilingcold.com.au) that until recently shielded it from key environmental regulations. The pending applications are the first the company has had to submit to the independent EPA process, largely in response to mounting public scrutiny. The two applications under EPA review seek permissions to mine more forest and increase the capacity of Alcoa’s Pinjarra refinery. The state government, which has tended to show leniency toward Alcoa and other mining interests, will have the final say on how to implement the EPA’s recommendations. [Perth’s water supply at ‘high risk’ from Alcoa bauxite mining, expert study findsExclusive: GHD identified contamination threats to dams inland of Perth from sewage, oil spills, and soil erosion![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/apple-touch-icon-512-3.png)The GuardianPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/2532-2.jpg)](https://www.theguardian.com/australia-news/2025/aug/20/perth-water-supply-risk-alcoa-bauxite-mining?ref=boilingcold.com.au) A spokesperson said the government “remains committed to transitioning Alcoa to a modern approvals framework under the Environmental Protection Act and has implemented strict controls on the company’s mining operations during this transition.” Brad Pettit, one of four Green Party members in the state parliament, said the local government opposition submissions make “a powerful statement, but not binding as the state government will be the decision maker. But we are seeing an extraordinary unravelling of Alcoa’s social licence at a key time.” ![](https://www.publicsource.org/wp-content/uploads/2025/09/alcoa-refinery-night.jpg) ****Alcoa's Wagerup Refinery in March.** (Photo by Quinn Glabicki/Pittsburgh's Public Source) Boone said Alcoa “regularly respond(s) to interest and feedback from stakeholders,” citing as an example the introduction of mining avoidance zones around the towns of Jarrahdale and Dwellingup, which she said demonstrate “how community feedback can contribute to operations co-existing with important social values and public amenity. “Alcoa respects that we operate in areas of high value to the community, and we are committed to undertaking a comprehensive review of the feedback and responding in a thorough and timely manner.” Walsh said reports containing “assessments and recommendations” will be published during “the first half of 2026,” at which point a three-week window will open for appeals. *Jamie Wiggan is deputy editor at PublicSource. He can be reached at* *jamie@publicsource.org*. *This story was fact-checked by Rich Lord.* This [article](https://www.publicsource.org/alcoa-australia-jarrah-forest-mining-expansion/?ref=boilingcold.com.au) first appeared on [Pittsburgh's Public Source](https://www.publicsource.org/?ref=boilingcold.com.au) and is republished here under a [Creative Commons Attribution-NoDerivatives 4.0 International License](https://creativecommons.org/licenses/by-nd/4.0/?ref=boilingcold.com.au). ![](https://i0.wp.com/www.publicsource.org/wp-content/uploads/2025/07/cropped-ps_circle_favicon_blue.png?resize=150%2C150&ssl=1) ![](https://www.publicsource.org/?republication-pixel=true&post=1322655&ga4=G-CCLXQK5C14) ### Fortescue slashes electric train program but insists zero emissions 'on track' URL: https://www.boilingcold.com.au/fortescue-slashes-electric-train-program-but-insists-zero-emissions-on-track/ Last updated: 2025-09-03T21:00:33.000Z Three years after Andrew Forrest pressed go to develop an electric "Infinity Train," most of the experienced engineers who joined Fortescue's zero-emissions crusade are laid off as the miner goes back to the drawing board on how to have fossil-fuel-free locomotives by 2030. The engineers concluded that battery electric locomotives may be able to haul vast amounts of iron ore, eliminating 10 per cent of Fortescue's emissions, but the knock-on effects on its immense $21 billion a year integrated mine to rail to port iron ore business were unacceptable. On June 3, Fortescue project delivery director Warren Harris told Fortescue's battery electric locomotive (BEL) team the bad news at a "town hall" at their base near Perth Airport. Harris told the engineers that Fortescue's effort to develop its own BEL was over, as was an agreement to work with Australian engineering firm Downer. They were told to work from home that day and wait for further contact to learn their fate. Well over 100 staff and contractors - mainly in highly skilled technical roles - supporting the BEL programme were let go, according to numerous people familiar with the programme who are not authorised to talk to the media. Some workers were redeployed elsewhere within the company. Fortescue now has just a small team investigating the feasibility of battery electric locomotives. 🔢 KEY NUMBERS: TWIGGY LOCOMOTION · About 70 locomotives operate on 760km of track · 198 million tonnes of iron ore are railed to Port Hedland a year · Several locos pull a 34,000 tonne load, 2.8km long · Diesel burnt produces about 10 per cent of Fortescue's emissions · $2.4 million worth of iron ore an hour · 1944 days until zero carbon emissions deadline It was a bitter end for many who had left long-term employment to join Fortescue chair Andrew Forrest's crusade for the $59 billion miner to have no carbon emissions by 2030\. Forrest may have had locomotives in mind when he penned his message for Fortescue's annual report released in August. > "Our people have put their hearts and minds into finding solutions," Forrest wrote. > "No new industry or transformational shift has ever been linear – or easy, > "We haven’t always got it right, but we learn every day from advances and setbacks. Success now depends on Fortescue finding the right solution and then deploying it in the next 5½ years. Otherwise, it will continue to burn 80 million litres of diesel a year on its railways. ## Infinity Train hits its limits Each Fortescue train to Port Hedland, pulled by several locomotives, moves about [34,000 tonnes of iron ore](https://www.fortescue.com/en/articles/fortescuewilliamswaesettlementpowersdevelopmentofworldfirstinfinitytrain20220301?ref=boilingcold.com.au) in 244 ore cars stretching over 2.8km of railway. The iron ore trains of the Pilbara push the boundaries of conventional diesel-electric train technology, which burns fuel to generate electricity that powers electric motors moving the train forward. Fortescue has investigated two ways to power its locomotives with renewable energy: green ammonia as a fuel instead of diesel, or carrying batteries. The vast majority of the effort has gone towards electrification. In March 2022, Forrest announced Fortescue would develop what [sounded like a perfect solution](https://www.fortescue.com/en/articles/fortescuewilliamswaesettlementpowersdevelopmentofworldfirstinfinitytrain20220301?ref=boilingcold.com.au) \- a train that charged itself - the Infinity Train. The idea was not as crazy as some thought: it sought to harness the Pilbara terrain and how electric vehicles - cars and locomotives - brake. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/08/1024px-Iron_ore_Pilbara_2.svg.png) ****Fortescue's railways (blue) move 200 million tonnes of iron ore to Port Hedland every year.** Map: Peter Christener,[ CC BY-S](https://creativecommons.org/licenses/by-sa/3.0?ref=boilingcold.com.au) via Wikimedia Commons Overall, the heavily-loaded trip from pit to port is downhill - Fortescue's furthest mine, Eliwana, is 500m above sea level - and for much of the trip, the train's brakes are engaged. Currently, the energy produced from the train rolling downhill is turned into useless heat in the brakes. However, electric vehicles use regenerative braking, where the motors instead act as generators to produce electricity that a battery can store. Fortescue and its high-tech new acquisition, Williams Advanced Engineering, were to spend $US50 million ($77 million) over the next two years on the concept. [Alcoa lied about jarrah forest rehabilitation: ad watchdogThe Ad Standards decision has demolished a key plank of the US miner’s expensive campaign to win public support for expanded mining in WA.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-180.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Alcoa-forest-rehabilitation-ad-1-1.jpeg)](https://www.boilingcold.com.au/alcoa-lied-about-jarrah-forest-rehabilitation-advertising-watchdog/) Fortescue chief executive at the time, Elizabeth Gaines, hailed the move. "The regeneration of electricity on the downhill loaded sections will remove the need for the installation of renewable energy generation and recharging infrastructure, making it a capital-efficient solution for eliminating diesel and emissions from our rail operations,” she said. That was the hope. The reality - so far - is different. The engineering studies revealed that insufficient power was generated on the downhill leg to return the train to the mine, according to numerous engineers who have not been authorised to speak to the media and have informed this story. The team developed two solutions to the problem, but they both had unacceptable implications for Fortescue's core business of shipping vast quantities of iron ore to Asia. ## Maybe doable, definitely difficult Extra locomotives would allow more electrical power to be stored; however some routes required up to nine units and Fortescue wanted no more than two. There are limits on the length and weight of a so-called consist: the combination of locomotives and the ore cars they pull. Longer or heavier consists are more at risk of the couplings between ore cars failing from pressure waves that go from car to car up and down the consist, causing derailment. Some sidings are also too short. These limits meant that Fortescue could only add locomotives if the consist had less ore cars, and on its heavily used railway that would cut total production and hence revenue. [![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/01/support-CTA-for-posts-1.png)](https://www.boilingcold.com.au/#/portal/signup) Fortescue also investigated installing a 65km-long stretch of overhead cables on the rail line to Port Hedland to charge the locomotives. However, the gantries to support the cables were large and expensive as they had to be some distance from the rail line for safety reasons and be able to withstand cyclones. Also, the gantries and overhead lines could not be installed without at times closing the line to Port Hedland, adding massive amounts of lost revenue to the financial burden of the high capital cost. ## Still on track? Fortescue's target to eliminate carbon emissions by 2030 is by far the most ambitious and publicised corporate climate effort in Australia. A Fortescue spokeswoman said decarbonising heavy haul rail was complex, particularly in remote areas like the Pilbara, and an ambitious effort required new technologies to be developed and tested. "Any suggestion that we are off-track is simply incorrect," she said. "Our trials and studies to date have confirmed that zero-emissions rail is technically feasible – it is now a matter of delivering it in a way that maintains productivity and cost-efficiency." [Labor breaks vow and risks WA’s water supply for AlcoaRoger Cook granting Alcoa greater access to mine near Perth’s dams risks could cost taxpayers billions of dollars and result in water restrictions![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-184.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Alcoa-Cook-Water-feature-pic-14.png)](https://www.boilingcold.com.au/wa-labor-puts-alcoa-before-water-supply/) The spokeswoman said Fortescue had already identified solutions to profitably eliminate the majority of emissions from its Pilbara operation and is actively working on the remainder. "As with any ambitious decarbonisation effort, it is normal to encounter areas where new technologies are still being developed or tested," she said. "We have not yet settled on a single rail decarbonisation solution – and that is by design, "To date, we have progressed several pathways in parallel, including extensive work to assess and trial both battery and green ammonia options." More than three years ago Fortescue and the three other major Pilbara iron ore miners Rio Tinto, BHP and Hancock, all ordered battery electric locomotives to trial in the Pilbara. However, the established manufacturers Progress Rail and Wabtec, have [struggled to deliver](https://www.boilingcold.com.au/fortescue-still-looking-for-zero-emissions-train-for-2030/) the novel technology. In June, Fortescue [shipped a prototype](https://im-mining.com/2025/06/17/fortescue-to-start-testing-prototype-battery-electric-locomotive/?ref=boilingcold.com.au) battery electric locomotive developed with Downer to the Pilbara and plans to test it on its railway by December. However, according to engineers familiar with the Fortescue BEL program, there is still work to be done on the locomotive and a safety case must be developed and then approved by regulators before it can operate. ### Alcoa lied about jarrah forest rehabilitation: advertising watchdog URL: https://www.boilingcold.com.au/alcoa-lied-about-jarrah-forest-rehabilitation-advertising-watchdog/ Last updated: 2025-09-01T11:53:14.000Z Australia's advertising watchdog has ruled that Alcoa's claims to have rehabilitated 75 per cent of the WA jarrah forest it had strip-mined are unclear, overstated, without a reasonable basis, and not truthful or factual. The decision, made after a referral to Ad Standards by three environmental groups, is a crushing blow to the US miner's expensive public relations blitz in WA to shore up support for its current mining and a planned expansion that the state's Environmental Protection Authority is assessing. A month ago, the WA Forest Alliance (WAFA), the Conservation Council of WA, and The Wilderness Society lodged complaints with industry body Ad Standards alleging Alcoa has breached its [Environmental Claims Code](https://aana.com.au/self-regulation/codes-guidelines/environmental-claims/?ref=boilingcold.com.au) with claims about forest rehabilitation and the water supply. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/09/Kinglsley-Dixon-on-land-rehabilitated-by-Alcoa.jpg.webp) ****Curtin University rehabilitation expert Kingsley Dixon on land Alcoa has been falsely advertising as rehabilitated.** **Image: Quinn Glabicki. ©*[PublicSource](https://www.publicsource.org/?ref=boilingcold.com.au) Ad Standards upheld the rehabilitation complaint on August 20 and [published it ](https://adstandards.com.au/wp-content/uploads/2025/09/0182-25.pdf?ref=boilingcold.com.au)on Monday. WA senior campaigner Jason Fowler said West Australians love the Northern Jarrah Forest. "It’s such a unique and special place," he said. “Ongoing clearing of the Northern Jarrah Forest is recognised internationally as reducing the resilience and adaptive capacity of the forest, increasing the risk of collapse in a changing climate, "Alcoa wants to continue with its destruction, and has tried to deceive us while it does so.” The watchdog found individual claims in Alcoa's advertising combined to "form an impression that 75 per cent of the cleared jarrah forest has already been rehabilitated into a self-sustaining forest and has recovered from mining" and that "these efforts are above what is required to achieve compliance with government regulation." It concluded Alcoa had breached four of the five sections of its Environmental Claims Code: 1 - Claims were not truthful and factual and likely to be misleading or deceptive to the targeted audience. 2 - Alcoa did not have reasonable grounds to make the claims. 3 - Claims were not clear, specific and failed to include important limitations. 4 - The environmental claims were overstated. Alcoa did not breach a fifth section requiring environmental claims about future objectives to be based on reasonable grounds, as its debunked claims were about past performance. ****Text of the deceptive ad** **The West Australian 24 May 2025* ****Is Jarrah Forest rehabilitation possible?** ****We’re here with the facts.** It’s a critical question. So, we’re here with the facts. We’re proud to confirm, the answer is yes – it’s not only possible, it’s happening. Studies have confirmed that the Jarrah Forest can, and does, recover after mining. Research over the past 50 years guides our rehabilitation program which is resulting in self-sustaining forest. And while some features of the forest naturally take time to mature, the results are clear. Since 1963, only 2% of WA’s Northern Jarrah Forest has been cleared for mining, of which 75% has already been rehabilitated. We don’t clear old growth forest or mine in national parks. Our clearing is carefully planned through biological pre-mining surveys and we are committed to protecting stream-zones, granite outcrop communities and threatened species including black cockatoo and their nesting trees. With a long-term responsibility that goes beyond compliance, a $15 million Forest Research Centre furthering our decades long research program and the planting of more than 500,000 native seedlings last year alone, Alcoa is doing the work right. The rehabilitation is real, and that’s the fact. [alcoa.com/australia](http://alcoa.com/australia?ref=boilingcold.com.au) Alcoa has been making the now-rebutted claim since at least early 2023 and chief executive Bill Oplinger [repeated the rehabilitation lie to investors](https://www.boilingcold.com.au/alcoa-ceo-says-bauxite-miner-can-handle-later-wa-approvals/) as recently as July. Alcoa's response in the published decision was that the advertisement "had already been discontinued per the original schedule, and there are no plans for the advertisement to be used again in future." An Alcoa spokesman said it used the language of mining industry-accepted definitions "though acknowledges that some people may have interpreted this differently." "Based on the Ad Standards decisions, future advertising material will be updated accordingly," he said. [Alcoa in WA: 60 years, 28,000 hectares of forest cleared, zero rehabilitation completedThe department of conservation says Alcoa has not met the rehabilitation completion criteria, but the miner claims it has rehabilitated 75 per cent of the forest it has cleared.![](https://static.ghost.org/v5.0.0/images/link-icon.svg)WAtodayPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/1fc3c4542a87b69e9fafca81413dcee1763752eb-2)](https://www.watoday.com.au/environment/sustainability/alcoa-in-wa-60-years-28-000-hectares-of-forest-cleared-zero-rehabilitation-completed-20230307-p5cq4j.html?ref=boilingcold.com.au) The decision comes 2½ years after *WAtoday* exposed the truth of Alcoa's rehabilitation performance: after 60 years of mining that had destroyed 280 square kilometres of jarrah forest, Alcoa had not completed rehabilitation on a single hectare. Alcoa has been completing the first 18 months of work in rehabilitating a forest - replacing top soil, contouring the land, and planting seeds and seedlings - and advertising it as "rehabilitated." Ads that have been [found to breach the code](https://www.boilingcold.com.au/r/05ed36c6?m=3dff8ebd-b09c-496c-beac-a196125985fb) in the past include Hancock Energy, oil and gas lobby group Australin Energy Producers, and the owner of Perth's retail gas network ATCO, who all made claims about the benefits of gas. [![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/01/support-CTA-for-posts-1.png)](https://www.boilingcold.com.au/#/portal/signup) ## Water unaffected so far but at high risk The environmental groups also lodged a complaint about Alcoa advertising that it had never impacted Perth's water supply. Ad Standards ruled in favour of the miner on this issue. Since the risk from Alcoa's clearing to the dams inland of Perth that supply the city drinking water [became public knowledge in 2023](https://www.watoday.com.au/environment/sustainability/alcoa-mining-threatens-perth-s-drinking-water-20230207-p5cijm.html?ref=boilingcold.com.au), the miner's standard response to the issue has been that it has not caused any problems to date. This factual statement is not particularly relevant as in recent years the area of cleared forest has grown substantially and is much closer to Serpentine Dam - Perth's largest. The miner is also increasingly mining in hilly areas where runoff that could contaminate the dam is more likely. However, Alcoa did commission engineering consultancy GHD to consider the risk its mining posed to the water supply to more than two million people. The global firm identified 22 ways that Alcoa's strip mining of bauxite could contaminate the water supply, and concluded that 21 of these pathways were high risk. [Perth’s water supply at ‘high risk’ from Alcoa bauxite mining, expert study findsExclusive: GHD identified contamination threats to dams inland of Perth from sewage, oil spills, and soil erosion![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/apple-touch-icon-512-2.png)The GuardianPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/2532-1.jpg)](https://www.theguardian.com/australia-news/2025/aug/20/perth-water-supply-risk-alcoa-bauxite-mining?ref=boilingcold.com.au) In the past 12 months, Alcoa has also [breached conditions imposed on it](https://www.boilingcold.com.au/alcoa-fail-tests-for-protecting-cockatoos-and-drinking-water/) designed to protect the water catchments and endangered cockatoos. The demolition of Alcoa's defence of its forest rehabilitation has come just when the company needs public support in the state that provides more than 70 per cent of its global bauxite and alumina production. The EPA has received a [record 59,000 submissions](https://www.boilingcold.com.au/record-59-000-submissions-to-epa-on-alcoa-as-us-boss-flies-in/) on Alcoa's plans for its current mining and an expansion that needs another 114 square kilometres of jarrah forest to be destroyed. --- UPDATED 8PM: Alcoa and WAFA comments added. ### Record 59,000 submissions to EPA on Alcoa as US boss flies in URL: https://www.boilingcold.com.au/record-59-000-submissions-to-epa-on-alcoa-as-us-boss-flies-in/ Last updated: 2025-09-03T04:10:07.000Z The US miner's plans to strip mine the jarrah forest have attracted more than 59,000 submissions to WA's independent environment watchdog amid a widening public backlash against its activities. The large volume of feedback, with more than 10 per cent of submissions being singular documents, not proformas, is understood to be the highest number of submissions ever received by the WA Environmental Protection Authority (EPA). The public focus on Alcoa in WA has grown in the past two years, with revelations that its mining [threatens Perth's water supply](https://www.watoday.com.au/environment/sustainability/alcoa-mining-threatens-perth-s-drinking-water-20230207-p5cijm.html?ref=boilingcold.com.au), it has [failed to complete](https://www.watoday.com.au/environment/sustainability/alcoa-in-wa-60-years-28-000-hectares-of-forest-cleared-zero-rehabilitation-completed-20230307-p5cq4j.html?ref=boilingcold.com.au) any forest rehabilitation, and, without permission, it [piped toxic PFAS](https://www.watoday.com.au/environment/sustainability/alcoa-piped-toxic-waste-over-drinking-water-dam-and-asked-for-approval-afterwards-20230223-p5cn5u.html?ref=boilingcold.com.au) over a drinking water dam. This week, Alcoa chief executive Bill Oplinger will visit Perth and meet with WA Premier Roger Cook. Oplinger's visit comes a week after two more revelations about Alcoa's mining in the jarrah forest. A report by global engineering consultancy GHD for Alcoa concluded that there were [21 high-risk pathways](https://www.theguardian.com/australia-news/2025/aug/20/perth-water-supply-risk-alcoa-bauxite-mining?ref=boilingcold.com.au) through which its mining operations could contaminate Perth's water supply. Additionally, Alcoa was [found ](https://www.boilingcold.com.au/alcoa-fail-tests-for-protecting-cockatoos-and-drinking-water/)[to be ](https://www.boilingcold.com.au/alcoa-fail-tests-for-protecting-cockatoos-and-drinking-water/)non-compliant with conditions imposed on its mining operations, including drilling too close to trees used by endangered cockatoos for nesting and failing to complete vital plans to make its mining activities safer for the environment. [Alcoa lied about jarrah forest rehabilitation: ad watchdogThe Ad Standards decision has demolished a key plank of the US miner’s expensive campaign to win public support for expanded mining in WA.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-179.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Alcoa-forest-rehabilitation-ad-1.jpeg)](https://www.boilingcold.com.au/alcoa-lied-about-jarrah-forest-rehabilitation-advertising-watchdog/) It is the first time Alcoa's mining, which has already removed 280 square kilometres of jarrah forest, has been subject to an independent and public environmental review. For the past sixty years, its mining operations have been exempt from regular environmental laws and instead have been approved by a committee of bureaucrats led by the department responsible for economic development. A spokeswoman for the Premier said his government remained committed to moving Alcoa to a modern approvals framework under the Environmental Protection Act and had implemented strict controls in the meantime. 'The Premier will reiterate there is an expectation that Alcoa meets its environmental obligations," she said of his scheduled meeting wth Oplinger. EPA chair Darren Walsh said the authority would consolidate the submissions into a summary for Alcoa to respond to. It would publish those responses before delivering its report on Alcoa's current and planned mining to the environment minister. Walsh said he expected the EPA would finish assessing Alcoa's proposals in the first half of 2026. The public can then lodge appeals against the EPA's recommendations, which the Environment Minister, Matthew Swinbourn, will consider before he makes a decision. ## Time to wind Alcoa up? Greens upper house member and environment spokeswoman Jess Beckerling said the number of submissions reflected an overwhelming opposition to Alcoa's strip mining of the jarrah forest. "Alcoa's plans would destroy another 11,458 hectares of forest, which [cannot be regrown](https://www.abc.net.au/news/2024-10-16/alcoa-mining-worlds-only-jarrah-forests-not-rehabilitating-them/104293240?ref=boilingcold.com.au), risk our water and the extinction of Black Cockatoos, and add [1.3 billion tonnes of emissions ](https://www.abc.net.au/news/2025-08-14/wa-alcoa-expansion-drinking-water-concerns/105651722?ref=boilingcold.com.au)to the atmosphere," she said. "It's an absolute no-brainer that it cannot go ahead. "There is only one appropriate course of action for the EPA and the Cook Government to take, and that is to heed the evidence and the overwhelming community opposition and wind Alcoa up." The WA Labor government may take little notice of the Greens, but will be sensitive to wider community concerns, evidenced by the number of submissions and recently, unusually strong moves by local governments. [Alcoa fail tests for protecting WA cockatoos and waterThe US miner has held back findings that it drilled near Cockatoo nesting trees and has had its plans for protecting Perth’s water supply rejected.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-176.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/IMG_0604.jpg-1.png)](https://www.boilingcold.com.au/alcoa-fail-tests-for-protecting-cockatoos-and-drinking-water/) WA Forest Alliance campaigner Jason Fowler said the community had made its opposition clear. "Further destruction of the jarrah forest is unacceptable, and maintaining safe drinking water and public access to our forest must be upheld," he said. "The WA government should listen to the community, refuse Alcoa's plans and start planning for a just transition for affected workers." In the past few weeks, the Cities of [Kalamunda and Armadale](https://www.abc.net.au/news/2025-08-14/wa-alcoa-expansion-drinking-water-concerns/105651722?ref=boilingcold.com.au), and the shires of Mundaring and Serpentine-Jarrahdale have all voted unanimously against Alcoa expanding its mining operations. ## Costly delays for Alcoa The Pittsburgh-headquartered firm depends on its distant WA operation for more than 70 per cent of its total production of bauxite and alumina. Until Alcoa receives approval to move into new areas of the jarrah forest, it is returning to previously mined areas to extract lower-grade ore that it had rejected the first time. It is forcing the company to mine more ore but produce less alumina, reducing the profitability of its WA operation, so investment analysts have closely watched the approval schedule. A year ago, the EPA had [planned to publish](https://www.epa.wa.gov.au/media-statements/epa-sets-public-review-timeline-alcoa-assessments?ref=boilingcold.com.au) the environmental review documents in January, and Alcoa expected the environment minister to make a decision in the first quarter of 2026. However, Alcoa did not supply the review documents until May, and in the past few days, Alcoa has [removed any estimate](https://www.alcoa.com/australia/en/sustainability/environmental-assessments/approvals-process?ref=boilingcold.com.au) of when it will receive approval from its website. [![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/01/support-CTA-for-posts-1.png)](https://www.boilingcold.com.au/#/portal/signup) Alcoa chief executive Bill Oplinger said in July that even if approval for a mining expansion was not received until mid-2027, the company [could keep its Pinjarra refinery operating](https://www.boilingcold.com.au/alcoa-ceo-says-bauxite-miner-can-handle-later-wa-approvals/). Oplinger is now in Australia and will meet state and federal government ministers to discuss its WA mining and alumina refining and its aluminium smelter in Victoria, a company spokesman said. In meetings with governments, Oplinger is likely to stress the 4000 employees it has in WA and the importance of aluminium to many clean energy technologies. The Alcoa spokesman said the company appreciated the level of interest in the important process of public consultation. "Community participation strengthens the assessment process, and we look forward to receiving a summary of the comments from the EPA," he said. "Alcoa respects that we operate in areas of high value to the community and commits to undertaking a comprehensive review of the feedback. We will prepare responses in a thorough and timely manner." The State Government has been asked if Premier Roger Cook will meet Oplinger. --- UPDATE: 27 August, 2PM - Comments from Premier Roger Cook added. ### Setting Australia’s 2035 emissions target is a daring tightrope act URL: https://www.boilingcold.com.au/setting-australias-2035-emissions-target-is-a-daring-tightrope-act/ Last updated: 2025-09-09T03:42:45.000Z [Frank Jotzo](https://theconversation.com/profiles/frank-jotzo-167?ref=boilingcold.com.au), [*Australian National University*](https://theconversation.com/institutions/australian-national-university-877?ref=boilingcold.com.au) Any week now, Australia will set its 2035 emissions target. It must signal the nation’s strong ambition on climate action, to drive policy and investment. And it must avoid being seen as either unrealistic or too costly. The decision is not an easy one for Prime Minister Anthony Albanese and his cabinet. If any Australian government has had a clear runway for ambitious climate policy, it is this one. A successful first term, and a landslide win in an election partly fought over climate and energy policy, gives the Albanese government an opportunity for a lasting legacy. But the tightrope the government must walk spans a wide gulf. The Climate Change Authority’s draft advice floated [emissions reduction of 65-75% by 2035](https://www.climatechangeauthority.gov.au/2035-emissions-reduction-targets?ref=boilingcold.com.au). Environment groups are gunning for the high end of the range; some business groups agree, but others won’t. Yet even a 65% target, at the low end of the range, would mean [halving Australia’s current emissions](https://www.dcceew.gov.au/climate-change/publications/australias-emissions-projections-2024?ref=boilingcold.com.au). The challenge is formidable – but now is not a time for timidity on Australia’s climate policy. ![A red and white bus driving down a street next to tall buildings](https://images.unsplash.com/photo-1720445614124-7417e6e5537a?crop=entropy&cs=tinysrgb&fit=max&fm=jpg&ixid=M3wxMTc3M3wwfDF8c2VhcmNofDExMXx8YXVzdHJhbGlhJTIwfGVufDB8fHx8MTc1NjExMTg4Mnww&ixlib=rb-4.1.0&q=80&w=2000) ****A 65% target would mean halving Australia’s current emissions**. Photo by [Henry Chen](https://unsplash.com/@misoto22?ref=boilingcold.com.au) / [Unsplash](https://unsplash.com/?utm%5Fsource=ghost&utm%5Fmedium=referral&utm%5Fcampaign=api-credit) ## A huge task ahead Under the Paris Agreement, Australia’s 2035 emissions target is due by the end of September. Our 2030 target is a 43% emissions reduction, based on 2005 levels. Australia is far from reaching that goal. It can still be achieved, but quick, drastic change is needed. Australia’s national emissions are at around 28% below 2005 levels. They [fell 1.4% over the last year](https://www.dcceew.gov.au/sites/default/files/documents/quarterly-update-australia-national-greenhouse-gas-inventory-march-2025.pdf?ref=boilingcold.com.au), to almost the same level as three years ago. Any emissions reduction target of 60% or more for 2035 will be highly ambitious. It would require deep, rapid emissions cuts across the economy. But it’s technically possible. And it’s desirable economically – to attract investment and position Australia for long-term success. ## It’s all about follow-through The main question is not precisely what 2035 target the government sets. Rather, it’s whether the government follows through – with stronger and extra policies – and if business will get on board. Useful policies were enacted during the last term of government – for industry, renewables supply and cars. But these are tender beginnings compared to what’s needed. An economy-wide [carbon price](https://theconversation.com/economists-want-a-carbon-price-comeback-but-does-australia-have-the-political-courage-262127?ref=boilingcold.com.au) at a sizeable level would be ideal. However, the eternally adverse politics under the “carbon tax” label seem to rule it out. Instead, the government could deploy and calibrate a range of policies in all sectors to achieve a comparable effect. These include emissions markets, regulation, tax and subsidies. The Productivity Commission has called for a nationally consistent emissions-reduction approach guided by a set of “[national carbon values](https://www.pc.gov.au/inquiries/current/net-zero/interim/net-zero-interim.pdf?ref=boilingcold.com.au)”, representing the implied carbon prices needed to meet Australia’s net-zero goals. The higher the implied carbon price, the greater the incentive for businesses and others to reduce emissions. These benchmarks would be used by government to ensure efforts are efficient, coordinated and on-target. Any implied carbon price would need to rise far beyond levels in Australia’s carbon credit markets – currently about [A$30-40 per tonne of carbon dioxide](https://cer.gov.au/markets/reports-and-data/quarterly-carbon-market-reports/quarterly-carbon-market-report-september-quarter-2024/australian-carbon-credit-units-accus?ref=boilingcold.com.au). The European Union’s emissions trading price, for example, has recently been [around €70 or A$130 per tonne](https://tradingeconomics.com/commodity/carbon?ref=boilingcold.com.au). Australia’s [fuel excise](https://climateenergyfinance.org/wp-content/uploads/2025/08/CEF%5FTransition-Tax-Incentive-Report-FINAL%5F20August2025.pdf?ref=boilingcold.com.au), converted to carbon terms, is about $190 and rising. Infrastructure Australia, which now requires greenhouse gas emissions to be valued in project proposals, pegs the carbon value at [more than $200 a tonne for the 2030s](https://www.infrastructureaustralia.gov.au/sites/default/files/2025-03/24IA%5FGreenhouse-Gas-Emissions.pdf?ref=boilingcold.com.au), and rising. ## Clean energy gridlock Old coal power plants [are being replaced](https://www.dcceew.gov.au/energy/renewable?ref=boilingcold.com.au) by wind, solar and energy storage. But progress in the clean energy transition is much slower than what’s needed. The [government’s underwriting scheme](https://www.dcceew.gov.au/energy/renewable/capacity-investment-scheme?ref=boilingcold.com.au) takes care of investor worries about low wholesale power prices in future, by guaranteeing a base level of revenue. But proposed power line and clean energy projects are stuck in the quicksand of objections and assessments. State and federal governments must snap out of the business-as-usual approach to regulation and approval, which is not geared for rapid change. The tightrope here is between jumping in to rebuild the power supply system as an urgent national priority, and bowing to fears and grumbles – some amplified by politicians – about higher electricity bills, power lines and wind turbines. ## Balancing emissions and industry pain For industry, the tightrope spans necessary modernisation on one side, and the risk of industrial closures on the other. The Safeguard Mechanism encourages businesses to cut emissions, by requiring them to buy carbon credits if they exceed a certain limit. But the credit market prices are far too low to drive the required investment. Reform is needed. It could mean tightening rules for carbon credits produced by projects that [store carbon in the land sector](https://cer.gov.au/schemes/australian-carbon-credit-unit-scheme/managing-risk-and-integrity-accu-scheme?ref=boilingcold.com.au). It might mean limiting industry’s use of carbon credits and increasing the rates of emissions reduction by each facility. Or it might involve setting a minimum price for carbon credits in the market, and increasing the maximum price. ## Land sector lagging on climate action In land use, forestry and agriculture, very little is being done to reduce emissions. Much could and should be done. The [current carbon credit scheme](https://cer.gov.au/schemes/australian-carbon-credit-unit-scheme?ref=boilingcold.com.au) is inherently limited. Governments must get much more active. That may mean buying [marginal lands](https://clear.ucdavis.edu/explainers/cattle-and-land-use-differences-between-arable-land-and-marginal-land-and-how-cattle-use?ref=boilingcold.com.au) for conservation. It might mean regulating land use and forestry more actively, and combining [biodiversity projects with carbon storage](https://theconversation.com/if-we-do-it-right-we-can-replant-trees-and-shrubs-to-store-carbon-and-restore-biodiversity-216734?ref=boilingcold.com.au). It might also mean subsidising new green practices in agriculture. The tightrope is between creating greener and more efficient land-based industries, and fears of leaving farmers and rural communities stranded. ![herd of cows in green pasture](https://images.unsplash.com/photo-1558152761-aee570eb5cb0?crop=entropy&cs=tinysrgb&fit=max&fm=jpg&ixid=M3wxMTc3M3wwfDF8c2VhcmNofDQ2fHxjb3dzfGVufDB8fHx8MTc1NjE2NzgxNnww&ixlib=rb-4.1.0&q=80&w=2000) ****Reform might mean subsidising new green practices in agriculture..** Photo by [Geronimo Giqueaux](https://unsplash.com/@ggiqueaux?ref=boilingcold.com.au) / [Unsplash](https://unsplash.com/?utm%5Fsource=ghost&utm%5Fmedium=referral&utm%5Fcampaign=api-credit) ## Shifting gears on transport reform The government’s [new vehicle emissions standards](https://theconversation.com/at-last-australia-has-fuel-efficiency-standards-but-theyre-weaker-than-they-could-have-been-230302?ref=boilingcold.com.au) will help make electric cars and smaller cars cheaper. But low-carbon transport policy is not all about the price of cars. Australia urgently needs an extensive, reliable electric vehicle (EV) charging network, better urban public transport, and more and better rail lines. We should start using carbon-neutral aviation fuels, and charge carbon levies on jet fuel. And mining and agricultural machinery must electrify and become more efficient. To that end, the fuel excise could ultimately be extended to all fuel use in the economy, covering also aviation, mining and agriculture. The government’s mooted [road user charge](https://theconversation.com/stop-the-free-ride-all-motorists-should-pay-their-way-whatever-vehicle-they-drive-262950?ref=boilingcold.com.au) should be merely the beginning of reform in this area. The challenge here is to do tax reform that can fund future public transport infrastructure, when there are many competing budget priorities. ## A crossroads for Australia’s climate future If things go well, Australia’s 2035 emissions target will be strong and broadly accepted as a desirable ambition by the community and by business. This will give a licence for much stronger emissions reduction policies across the economy, spurring investment and economic modernisation. If things go badly, a strong political constellation for meaningful progress towards net zero emissions would be squandered. Against the backdrop of Australia’s climate wars, most actions needed to meet an ambitious 2035 target will be seen as politically difficult. But now is the time for decisiveness in the nation’s long-term interest. --- [Frank Jotzo](https://theconversation.com/profiles/frank-jotzo-167?ref=boilingcold.com.au), Professor, Crawford School of Public Policy and Director, Centre for Climate and Energy Policy, [*Australian National University*](https://theconversation.com/institutions/australian-national-university-877?ref=boilingcold.com.au) This article is republished from [The Conversation](https://theconversation.com/?ref=boilingcold.com.au) under a Creative Commons license. Read the [original article](https://theconversation.com/no-room-for-the-timid-setting-australias-2035-emissions-target-is-a-daring-tightrope-act-263802?ref=boilingcold.com.au). ### Chevron boss misled Australian deputy Prime Minister to push its policy agenda URL: https://www.boilingcold.com.au/chevron-boss-misled-australian-deputy-prime-minister-to-push-its-policy-agenda/ Last updated: 2025-08-22T00:58:22.000Z ANALYSIS Chevron is falsely linking its failure to expand its two Australian gas export plants with the tax and employment policies of the current Australian Labor government to push back against policies it opposes. However, Chevron chief executive Mike Wirth's spin ignored that his oil and gas major has had the opportunity to commit to additional liquefied natural gas trains for five or more years before Labor took office in 2022. Wirth's confirmation that Chevron has no expansion plans in Australia, despite having massive gas reserves, raises the question of whether the $490 billion company should be able to control so many retention leases off the WA coast that are awarded on the basis that they are "[likely to become commercially viable within 15 years](https://www.nopta.gov.au/%5Fdocuments/guidelines/Retention-Lease-Guideline.pdf?ref=boilingcold.com.au)." ## Wirthless spin The 43-year company veteran made the deceptive pitch in both of his media appearances when visiting Australia last week. Wirth told Deputy Prime Minister Richard Marles that Australia was now uncompetitive with the United States and the Middle East as a destination for investment in gas exports, [according to The Australian](https://www.theaustralian.com.au/nation/politics/chevron-delivers-gas-warning-to-labor-with-australian-investment-souring/news-story/2dc35d7bdef435332e6d1e9364c3a1ec?ref=boilingcold.com.au), which described it as a "blunt message." "Australia has changed and it has changed pretty significantly over the last few years,” Wirth said, in a seeming reference to the past three years of Labor Government. He blamed "Labor’s petroleum resource rent tax reforms, the use of 'lawfare' challenges by environmental groups to drag out approval times and 'same job, same pay' wage demands that have lifted the company’s costs in Australia," *The Australian* wrote. “Further expansion investment is off the table,” Wirth said of the idea that Chevron would add more LNG trains to its Gorgon and Wheatstone gas plants. “There’s plenty of gas, but the US has become more attractive." The Chevron boss doubled down on the spin in his [only other media appearance](https://www.skynews.com.au/business/energy/chevron-energy-ceo-mike-wirth-rules-out-additional-investment-in-australia-as-the-nation-struggles-to-compete-globally/news-story/298d5e73854d1358d0a83b40eed4eb00?ref=boilingcold.com.au) in Australia on *Sky News*, which, like *The Australian*, is part of Rupert Murdoch's News Corp. "It is unsettling to investors when significant changes are made after massive investments are committed," Wirth said. Given "global competitive dynamics," Chevron will invest elsewhere, he said. It is all bull. Chevron has no intention of building more LNG trains in WA, regardless of the party in power in Canberra. [![Want energy and climate news to hold gas giants to account? Support Boiling Cold.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/07/CTA-donate-big-gas-1.png)](https://www.boilingcold.com.au/support-cta/) ## No new trains are leaving the station Chevron spent $54 billion ($84 billion) building three LNG trains on Barrow Island for its Gorgon project, and months after exports started in 2016, it received environmental approval to build a fourth train. In 2011, the company received environmental approval to build five trains at Wheatstone and went on to construct the initial two for $US34 billion ($53 billion) that started production in 2017. So between initial production and the election of a Federal Labor Government in 2022, Chevron had six years to commit to expanding Gorgon and five years to decide to invest at Wheatstone. But, despite "plenty of gas", nothing happened. That is because the investments did not stack up. Wirth misused the courtesy of time with the deputy leader of Chevron's second-biggest investment destination to falsely imply that Labor's policies were at fault for its lack of investment. That is not the case. Chevron's potent blend of arrogant and incompetent project management completely botched the Gorgon project, going an eye-popping $US17 billion ($26 billion) over budget. A major problem was the lack of sufficient laydown area. Building a fourth train with less space next to three operating trains would be even more difficult and expensive. The Chevron board is more likely to vote for Al Gore to be US President than build on Barrow Island again. [Chevron quotas push Australian engineering jobs overseasThe US giant, which made $8 billion in Australia in 2024, is forcing its subcontractors to follow its example and send Australian engineering jobs overseas.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-171.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Chevron-Elizabethy-Quay-Australian-headquarters-1-4.JPG)](https://www.boilingcold.com.au/chevron-pushes-contractors-to-send-australian-engineering-jobs-overseas/) ## Decades of gas Wirth got one thing right - Chevron has plenty of gas. In February, Chevron Australia director of operations Danny Woodall said there was about 40 trillion feet of gas (Tcf) [set aside for the Gorgon project](https://thewest.com.au/business/oil-gas/gorgon-stage-3-multibillion-dollar-project-on-the-agenda-amid-leadership-shakeup-c-17846905?ref=boilingcold.com.au). A quick calculation, assuming eight per cent is burnt to run the LNG trains and supply to the domestic market is 15 per cent of exports, leaves 32 Tcf of gas in the so-called Greater Gorgon area. Gorgon's three LNG trains (and remember expansion is "off the table") can produce 15.6 million tonnes a year of LNG. [Another calculation](https://www.santos.com/conversion-calculator/?ref=boilingcold.com.au) tells us that 32 Tcf of gas can produce 690 million tonnes of LNG, so Chevron has enough gas to export from Gorgon for 44 years. The gas sits in 19 retention leases held by the Gorgon joint venture of Chevron, ExxonMobil and Shell. However, retention leases, which give exclusive rights to develop a resource owned by the Australian people, should only be granted if the resource is likely to become commercially viable within 15 years. That cannot be the case for most of Chevron's gas. Chevron's recent [offshore development plan](https://www.nopsema.gov.au/sites/default/files/documents/Gorgon%20Gas%20Development-%20Backfill%20Fields%20OPP%20-%20Submission%20%2303%20-%20Revision%202%20-%2011%20July%202024.pdf?ref=boilingcold.com.au#page102) for seven fields makes the timeline clear: the fields will be developed in stages, lasting between ten and thirty years each, and produce until about 2070. WA is facing a [serious shortage of gas](https://www.boilingcold.com.au/western-australia-faces-growing-gas-shortfall/) next decade, and last year the state government urged the Federal Government to use its "use it or lose it" powers to force producers to develop fields or hand the leases back so others can have a go. After Wirth took expansion off the table, perhaps Chevorn is the first door the Federal Government should knock on. [Gas seeping to surface from Chevron’s Barrow Island oil operationThe WA environment regulator is investigating unknown amounts of hydrocarbons rising to the surface on the Class A nature reserve.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-172.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Screenshot-2025-07-11-at-10.59.27---am-1-1-1-2.png)](https://www.boilingcold.com.au/gas-seeping-to-surface-from-chevrons-barrow-island-oil-operation/) ## Chevron's promise hypocrisy Wirth is playing a game that all foreign investors do with what they call host nations (note: if Australia is the host, is Chevron the parasite?). They want to pit nations against each other, leading to an escalating scramble of incentives, lower standards, and loopholes offered to attract investment. They achieved all three on Gorgon: a $60 million subsidy for underground CO2 injection, the WA government ignored advice from the EPA that the plant should not be built on Barrow Island, and Gorgon's domestic gas obligation is much less than the notional 15 per cent that is WA government policy. But this trick only works if there is investment on offer, and Chevron has no investment planned for Australia beyond keeping its two LNG plants full of gas. The company will do that regardless of government policy, as the alternative is two hugely expensive stranded assets. So, Wirth pulls out Plan B from the foreign investors' bag of whinges: any change is a sovereign risk. > "These investments last for decades, so stability of policy and predictability and continuity of policy are fundamental," Wirth told Sky News. > We need predictable processes; we need to understand the rules of the road. However, when Chevron committed to Gorgon in 2009, no government, state or federal government had promised that nothing would change. How could they? If Chevron operates Gorgon until 2070, as it plans, that is six decades from the final investment decision. Wirth implies Chevron is the victim of broken promises, but those promises were never made. However, Chevron has made plenty of promises that it has broken. Chevron promised to look after the unique ecosystem of Barrow Island. Instead, we have PFAS contamination, [eroded turtle nesting beaches](https://www.watoday.com.au/national/western-australia/turtles-toxic-pfas-and-quarantine-probes-target-chevron-s-gorgon-20231016-p5ecrv.html?ref=boilingcold.com.au), quarantine failures and [gas bubbling to the surface](https://www.boilingcold.com.au/gas-seeping-to-surface-from-chevrons-barrow-island-oil-operation/). Chevron promised to bury at least 80 per cent of the CO2 from the offshore reserves feeding the Gorgon plant. Instead, the system [struggles to reach 30 per cent](https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://www.abc.net.au/news/2024-11-18/chevron-gorgon-fails-to-deliver-on-carbon-capture-promises/104587894&ved=2ahUKEwi7x6CGh5yPAxUKr1YBHfEPIYYQxfQBKAB6BAgMEAE&usg=AOvVaw3kdAGejc%5FZsERGXsA3sYS9), leading to many millions of tonnes of extra greenhouse gas emissions. Chevron promised to take specific actions to boost local content. Instead, it is blatantly flouting those requirements and sending Australian [engineering jobs to India](https://www.boilingcold.com.au/how-chevron-will-ship-aussie-engineering-jobs-to-india/). The problem is not Chevron suffering from sovereign risk; it is Australia suffering corporate risk. So thank you, Mike, your spin has raised lots of interesting questions. [$500m government bill looms for Chevron oil field cleanupThe $2.3 billion-plus decommissioning on Barrow Island will be part-funded by the Federal and WA governments returning about half the royalties they received over six decades.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-173.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Screenshot-2025-07-22-at-11.52.56---am-1-4.png)](https://www.boilingcold.com.au/governments-set-to-refund-chevron-500m-for-barrow-island-oil-field-clean-up/) ## ### Alcoa fail tests for protecting cockatoos and drinking water URL: https://www.boilingcold.com.au/alcoa-fail-tests-for-protecting-cockatoos-and-drinking-water/ Last updated: 2025-08-20T02:08:21.000Z EXCLUSIVE Alcoa's mining of WA's jarrah forest has not complied with numerous conditions to protect endangered cockatoos, Perth's water supply and Aboriginal heritage, according to an independent report revealed by *Boiling Cold*. The US miner has kept the completed report under wraps for two months while the public has been commenting on its current mining and a planned expansion that are both under assessment by the WA Environmental Protection Authority (EPA). In late 2023, the WA Government[ gave special permission](https://www.wa.gov.au/service/environment/environment-information-services/alcoa-transitional-approvals-framework-and-assurance-program?ref=boilingcold.com.au) for Alcoa to continue strip mining the forest for bauxite while WA's environmental watchdog assessed the environmental impact. The go-ahead was conditional on the US miner meeting a [long list of conditions](https://appprodnoaaaaacomsa.blob.core.windows.net/australia/pdfs/Ministerial%20Approval%20Conditions%20for%20the%202023-2027%20Mining%20and%20Management%20Program.pdf?ref=boilingcold.com.au) that would be assessed by an independent company whose monthly and annual reports would be published. ## Alcoa fails to meet government conditions In the past 12 months, Alcoa has drilled six exploration holes within 10m of a Black Cockatoo nesting tree, where, under the 2023 conditions, it is prohibited from undertaking any activity at all. Ramboll, the company that produced the independent compliance report, found the trees had not been damaged, but Alcoa was non-compliant with a condition of its continued mining. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/08/cockatoo-minesite.jpg) ****Cockatoos fly above an area mined by Alcoa**. Image: Quinn Glabicki. ©[PublicSource](https://www.publicsource.org/?ref=boilingcold.com.au) The $12 billion company also failed to lodge on time three vital documents to govern its day-to-day mining activities: how it would assess the risk to Perth's water supply from its mining, build drainage works to stop runoff from its mines from contaminating dams; and rehabilitate the forest after mining was completed. The finalised documents were due in December 2024, but Alcoa only submitted draft documents to the state development minister, Premier Roger Cook, on 29 May - five months late. In February, Alcoa had requested to extend its deadline to 31 May but received no response from the Premier. Two other essential reports on how Alcoa would manage its operations in the longer term are also in limbo. The WA Government's Independent Technical Advisory Group (ITAG) rejected Alcoa's methodology for assessing cumulative risks from mining in water catchments in November 2024, as it did not meet the requirements of Water Corporation, which operates the dams. Alcoa submitted significantly revised work to ITAG in early December and again in March, missing the December 31 deadline for having agreed methodologies for full mining cycle planning and cumulative catchment scale risk assessment. According to the compliance report, almost six months after the deadline, the government and Alcoa have not agreed on appropriate methodologies for the two studies. An Alcoa spokesman said the company continued to work collaboratively with ITAG to deliver the two documents. [![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/01/support-CTA-for-posts-1.png)](https://www.boilingcold.com.au/#/portal/signup) ****Boiling Cold: always keeping an eye on Alcoa for you.** Ramboll also found Alcoa was non-compliant for not completing on time a plan to protect Aboriginal cultural heritage. The Alcoa spokesman said the report, which covers the 12 months to 31 May 2025, identified six non-compliances, including four that were administrative in nature, such as submission deadlines. He said Alcoa has reported the drilling near the Cockatoo nesting trees itself, no harm was caused, and operational practices and monitoring have since been improved. ## A convenient delay? Alcoa is required to publish the independent report that it accepted two months ago, but on Tuesday, its website only linked to the older 2024 report. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/08/image-3.png) ****Alcoa website on the afternoon 19 August** [****only displaying the old 2024 report**](https://www.alcoa.com/australia/en/sustainability/reports-publications?ref=boilingcold.com.au#accordionSection-r1%5Fc0-9) **just before this story was published. Alcoa updated its website that evening.** The [current report](https://appprodnoaaaaacomsa.blob.core.windows.net/australia/pdfs/Alcoa-2025-MMP-Compliance-Assessment-Report.pdf?ref=boilingcold.com.au), located by *Boiling Cold*, was uploaded to Alcoa's website file storage, but there were no links to it from web pages the public could access. The December 2023 conditions it mines under require the report to be made public within sixty days of being provided to the State Development Minister. The conditions do not prohibit an earlier release. [Alcoa ceo repeats spin about jarrah forest rehabilitationBill Oplinger reassured investors that a 15-month delay would not affect operating rates at its Pinjarra alumina refinery but misled them about Alcoa’s record of rehabilitating the jarrah forest.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-170.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Myara-2023-1-6.JPG)](https://www.boilingcold.com.au/alcoa-ceo-says-bauxite-miner-can-handle-later-wa-approvals/) When a senior Alcoa executive signed the report off on June 20, it was the third of 12 weeks for the public to comment on its current mining and planned expansion, which are both under assessment by the EPA. The Alcoa spokesman said it had not withheld the document, and it was published on the evening of 19 August in line with the required reporting timeframe. The EPA is [accepting comments ](https://consultation.epa.wa.gov.au/open-for-submissions/pinjarra-alumina-revised-bauxite-mining-per/?ref=boilingcold.com.au)on Alcoa's plans until Thursday 21 August. --- UPDATED 10am, 20 August Alcoa comments added. Section on late reports rewritten to improve clarity. CORRECTION 10am, 20 August Alcoa's report was rejected once, not twice. ### Off-the-charts marine heat severely damages Ningaloo and other pristine coral reefs URL: https://www.boilingcold.com.au/marine-heat-severely-damages-ningaloo-and-other-coral-reefs/ Last updated: 2025-09-09T03:43:20.000Z [James Paton Gilmour](https://theconversation.com/profiles/james-paton-gilmour-730898?ref=boilingcold.com.au), [*Australian Institute of Marine Science*](https://theconversation.com/institutions/australian-institute-of-marine-science-1086?ref=boilingcold.com.au) 🐟 WHY IT MATTERS · Up to 60 per cent of coral has died in parts of Ningaloo Reef. · When the coral bleaches or dies, other species are threatened. · Heat has been building since late 2024 along 1500km of coast. · "Giving these hard-hit coral reefs a chance will require rapid, meaningful action to cut greenhouse gas emissions." Until now, many of Western Australia’s most pristine coral reefs have avoided the worst bleaching brought by marine heatwaves. But their luck has now run out. The state’s longest lasting, largest and most intense underwater heatwave has hammered them. The unusual heat began late last year off the northwest coast, before spreading south, eventually affecting seas along more than 1,500km of coastline. Surface temperatures hit up to 4°C above average in places. For coral, sustained heat stress is measured using [degree heating weeks](https://www.aims.gov.au/research-topics/environmental-issues/coral-bleaching/coral-bleaching-events?ref=boilingcold.com.au) (DHW). At 4 DHW, coral bleaching is likely. At 8 DHW, many corals are at risk of bleaching and dying. The data so far suggests heat stress on most reefs was more than double that. Central Ningaloo hit 20 DHW. Off some parts of the Pilbara coast, heat stress hit an almost unthinkable 30 DHW. My colleagues and I have [recorded the result](https://www.aims.gov.au/information-centre/news-and-stories/worst-bleaching-event-record-wa-coral-reefs-following-long-lasting-and-widespread-marine-heatwave?ref=boilingcold.com.au): intense bleaching at iconic Ningaloo reef, as well as across the spots we hoped would be more resilient, such as the [Rowley Shoals](https://www.australiasnorthwest.com/explore/kimberley/kimberley-coast/rowley-shoals-marine-park/?ref=boilingcold.com.au) well offshore, and the vast but little-known reefs of the [northern Kimberley](https://www.marineconservation.org.au/great-kimberley-marine-park/?ref=boilingcold.com.au). It’s undoubtedly the most widespread coral bleaching event yet recorded in WA. For the worst-hit reefs, it’s hard to see how recovery to their previous glory is possible, given temperatures will continue to rise in the coming years. ## Sustained heat over a huge area The heat started building towards the end of 2024\. In the absence of monsoonal storms and cyclones, the unprecedented heat stress continued to rise throughout December 2024 and January 2025\. Soon, reefs and other ecosystems off the Kimberley coast [began to suffer](https://theconversation.com/a-marine-heatwave-in-northwest-australia-is-killing-huge-numbers-of-fish-its-heading-south-248139?ref=boilingcold.com.au). Ningaloo was [feeling the heat](https://theconversation.com/synchronised-bleaching-ningaloo-and-the-great-barrier-reef-are-bleaching-in-unison-for-the-first-time-252906?ref=boilingcold.com.au) by February. A late monsoon gave a slight reprieve, but the heat was back on in March and April. By then, the underwater heatwave had swept across the northwest coast between Ningaloo and remote offshore reefs such as Ashmore and the Rowley Shoals. It took until May for the heat to begin to dissipate. [![figure showing devastating marine heatwave Western Australia](https://images.theconversation.com/files/685025/original/file-20250812-64-8uh2zc.png?ixlib=rb-4.1.0&q=45&auto=format&w=754&fit=clip)](https://images.theconversation.com/files/685025/original/file-20250812-64-8uh2zc.png?ixlib=rb-4.1.0&q=45&auto=format&w=1000&fit=clip&ref=boilingcold.com.au) This figure shows the maximum degree heating from January 1 May 31 2025\. The dark purple running from the central Pilbara coast down the south coast of WA is used for 20 DHW – the maximum threshold used by the NOAA Coral Reef Watch. During this marine heatwave, many WA reefs went well past 20, such as the central Pilbara reefs where DHW hit a maximum of 30\. NOAA Coral Reef Watch, [CC BY-NC-ND](http://creativecommons.org/licenses/by-nc-nd/4.0/?ref=boilingcold.com.au) Because unusually warm water sat in place for months in some regions, corals had no reprieve. Worse, the heat spread far down into the ocean. Our surveys of coral 20–30 metres below the surface found similar levels of heat stress and bleaching as those in shallower water, while higher temperatures were documented hundreds of metres deep in some places. While cyclones and other storms often offer temporary cooling by churning up the sea and mixing warm water with cooler, there was very little reprieve this time. The seas were simply too hot. It will take months for scientists to understand the full extent of what’s happened underwater. Many of these reefs are remote. What we do know is coral reefs over a 1,500km span of ocean are bleaching at levels ranging from medium (11–30% of all corals) up to extreme (more than 90%). [![map of Western Australia's coral reefs.](https://images.theconversation.com/files/685026/original/file-20250812-64-iaxv7h.png?ixlib=rb-4.1.0&q=45&auto=format&w=754&fit=clip)](https://images.theconversation.com/files/685026/original/file-20250812-64-iaxv7h.png?ixlib=rb-4.1.0&q=45&auto=format&w=1000&fit=clip&ref=boilingcold.com.au) Intense underwater heatwaves hit many of Western Australia’s coral reefs this year, from Ashmore Reef to the Rowley Shoals to Ningaloo. AIMS, [CC BY-NC-ND](http://creativecommons.org/licenses/by-nc-nd/4.0/?ref=boilingcold.com.au) At the Rowley Shoals’ Mermaid and Clerke Reefs, field surveys in April found very high (61–90%) death rates across most coral types. Bleaching had hit every type of habitat, from sheltered lagoons to the 30m-deep outer reef slope. At Ningaloo, coral bleaching and death was at high levels (31–60% of corals) in the northern and central regions in May, with southern Ningaloo less affected, while reefs across the vast Kimberley ranged from high (31–60%) to very high levels. One way to measure marine heatwaves is by using satellites to monitor sea surface temperatures. But when our researchers arrived at the remote Ashmore Reef, they found the temperatures in shallow lagoons were even hotter in real life than they were in satellite data. ➕ ****WA is the only state with rising carbon emissions** · WA environment minister Matthew Swinbourne said the government was [“obviously” concerned](https://thewest.com.au/politics/state-politics/environment-minister-says-global-action-is-needed-to-save-was-ningaloo-reef-rejects-2030-target-c-19655622?ref=boilingcold.com.au) about the bleaching. · "We remain committed to dealing with our carbon emissions," he said. · He said global action was more important than a 2030 emissions target proposed by the Greens. · "We need to be careful in terms of what we ... can achieve." · WA is the only state without legislated emissions reduction targets. **Boiling Cold* It’s often said coral reefs are the tropical jungles of the sea due to their wealth of species. When the coral bleaches or dies, it threatens many other species. Our scientists saw this clearly. The most obvious change was a drop in the numbers of colourful coral-eating butterflyfish. There are some small silver linings to the event. WA coral reefs still remain among the world’s healthiest. Bleaching damage can be patchy. Some coral species are less susceptible, and some parts of the reef can escape the worst of the heat. Bleaching hasn’t been spotted this year at Shark Bay, the Houtman Abrolhos Islands, or WA’s southernmost reefs at Rottnest Island. ## Will coral have a future? Witnessing this silent devastation has taken a toll on our scientists and everyone in the reef community in WA. It is very hard to see these natural marvels suffering. What makes it worse is that we know this isn’t a single event. On the contrary: climate change gets steadily worse, year after year. As ocean temperatures rise and rise, the destruction underwater can only increase. The bleaching in WA is only a small part of the spate of underwater heatwaves that has swept through coral reefs globally [since 2023](https://en.wikipedia.org/wiki/2023%E2%80%932025%5Fglobal%5Fcoral%5Fbleaching%5Fevent?ref=boilingcold.com.au) – the fourth event of its kind to affect all the world’s coral reefs. More than 80% of the world’s reefs have [suffered bleaching](https://www.theguardian.com/environment/2025/apr/23/coral-reef-bleaching-worst-global-event-on-record?ref=boilingcold.com.au), including the [Great Barrier Reef](https://www.bbc.com/news/articles/cvg3pp52m65o?ref=boilingcold.com.au). It’s not the end of WA’s coral reefs. Reefs can recover, given enough time. Not all reefs, sites on a reef or types of coral are affected equally. While some will be devastated, others will escape the worst damage, and others still may prove resistant to future conditions or adapt faster. Only time will tell what their path to recovery might look like. But giving these hard-hit coral reefs a chance will require rapid, meaningful action to cut greenhouse gas emissions. Good management of local issues and trialling ways of helping coral reefs cope with the heat will also be essential. [Woodside spills 16,000 litres of oil into Indian OceanThe company that thinks a damaging oil spill from its planned drilling near Scott Reef is “only a mere theoretical possibility” weeks ago accidentally released a cocktail of hydrocarbons, chemicals and water into the Indian Ocean.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-169.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Mia-Yellagonga-signed-cropped-5.jpg)](https://www.boilingcold.com.au/woodside-spills-16-000-litres-of-oil-into-ocean-north-of-ningaloo/) --- [*James Paton Gilmour*](https://theconversation.com/profiles/james-paton-gilmour-730898?ref=boilingcold.com.au)*, Research Scientist: Coral Ecology,* [*Australian Institute of Marine Science*](https://theconversation.com/institutions/australian-institute-of-marine-science-1086?ref=boilingcold.com.au) *This article is republished from* [*The Conversation*](https://theconversation.com/?ref=boilingcold.com.au) *under a Creative Commons license. Read the* [*original article*](https://theconversation.com/safe-no-more-off-the-charts-marine-heat-has-severely-damaged-ningaloo-and-other-pristine-coral-reefs-263028?ref=boilingcold.com.au)*.* ### Western Australia faces 'growing shortfall' of increasingly expensive gas: EnergyQuest URL: https://www.boilingcold.com.au/western-australia-faces-growing-gas-shortfall/ Last updated: 2025-08-11T04:08:39.000Z 🔥 WHY IT MATTERS · Gas is vital for power generation and minerals processing. · Prices doubled in five years, and rises are forecast to continue. · Is gas displacing coal and diesel, or keeping out renewable energy? · The days of attracting industry with cheap gas are over. Western Australia is heading toward a gas supply crunch, with prices more than doubling since 2019 and further tightening looming as two coal-fired power stations close by 2029, according to new analysis from energy consultancy EnergyQuest. Additional supply, such as Woodside's Browse, will only temper the price increases, according to gas industry consultancy EnergyQuest. EnergyQuest head of consulting Matt Paull said Western Australia's major gas users - including mining companies and power generators - face limited alternatives to gas for at least the next decade, but supply will begin to decline in a few years. "So you have a growing potential shortfall," he told *Boiling Cold*. The outlook is the reverse of then WA premier Mark McGowan touting an "[abundant supply of cheap gas](https://www.smh.com.au/business/companies/wa-premier-dangles-cheap-gas-carrot-to-lure-east-coast-companies-west-20190527-p51rj0.html?ref=boilingcold.com.au)" to lure eastern states industry westwards in 2019. Any investor who accepted McGowan's sales pitch would now feel misled - the price has more than doubled since then, according to WA's Department of Mines, Petroleum and Exploration. Paull, speaking after the release of EnergyQuest's third annual [outlook for the WA gas market](https://www.energyquest.com.au/west-coast-gas-outlook-2025/?ref=boilingcold.com.au) to 2050, said the wholesale price of gas into the Dampier to Perth Natural Gas Pipeline has been heading upwards since 2020\. However, since a state parliamentary inquiry heard complaints from users in 2023, the market has been more balanced. Paull said that Woodside's promise to supply an additional 50 terajoules a day in 2024 and 2025, and Alcoa closing its Kwinana alumina refinery in 2024, helped. However, there is more trouble ahead. "The market is going to get tighter," Paull said. "You're looking at a likelihood of shortfalls and fewer supply options at a higher cost to develop, that's putting pressure on gas prices." 🔢 KEY NUMBERS · Gas prices doubled between 2019 and 2024. · Two coal plants are closing in 2027 and 2029. · Scarborough to add 225 terajoules daily from late 2026. · Perth Basin could supply 20 per cent of the market post-2030. ## Coal and diesel phase-out to drive up gas demand Despite the gloomy outlook for gas buyers, Paull expects gas demand to grow for several reasons. The WA government has committed to closing the two coal-fired power stations in Collie owned by its energy utility Synergy by 2029. There are doubts about whether the privately owned Bluewaters coal-fired power station will continue beyond then. Coal from Collie is becoming increasingly difficult to extract, driving up the price required for the town's two coal mines to remain viable. Paull said renewable energy was not being built fast enough to replace coal generation, and either coal-fired power would have to run for longer or the South West would need more gas generation, further pushing up demand for gas. Advocates for renewable energy and more rapid emission reductions worry that a temporary need for more gas generation could embed a greater amount of fossil fuel in the system for decades. While replacing coal may need more gas in the south of WA, Paull thinks the big iron ore miners switching from diesel to battery-powered vehicles will have the same effect in the north. The renewable energy used to charge the batteries likely needs to be supplemented by gas. ## Alumina is the biggest gas user Alcoa's two remaining alumina refineries in Pinjarra and Wagerup make it the biggest gas customer in WA. South32's Worsley refinery is now adding to gas demand after converting two of its five boilers from coal to gas. Paull said in some months, Worsely now consumes more gas than any other facility in WA. Both Alcoa and South32 are [pursuing new technologies](https://www.south32.net/news-media/latest-news/worsley-to-investigate-electrification-options-in-alumina-refining-with-support-from-arena?ref=boilingcold.com.au) to allow the processing of bauxite into aluminium to be electrified, but development is in its early stages. > Paull sees a scenario where WA's miners, mineral processors and the South West power grid all need more gas at the same time. > "That may be a difficult equation for WA to balance," Paull said. South32 seems to be keeping its options open, with timing for converting the three other boilers to gas dependent on "considerations around domestic coal and gas supply," according to its [2024 sustainability report](https://www.south32.net/docs/default-source/annual-reporting-suite/2024/sustainable-development-report-2024.pdf?sfvrsn=ddc11e46%5F1&ref=boilingcold.com.au). ## Limited new supply won't meet growing demand The WA gas market is dominated by a small number of large producers and users, and actions from just a few players can swing the market between balance and shortage. Over the past half-decade, supply from the North West Shelf has diminished since the project fulfilled its original obligation to supply gas to WA, and Santos' Devil Creek processing plant has delivered no gas in 2025 after the Reindeer field was depleted. That has been countered by increased output from Chevron's Gorgon. Woodside plans to start its Scarborough field in late 2026, which will eventually supply a significant 225 terajoules a day of gas to WA through its Pluto plant. However, [more than half will](https://www.woodside.com/docs/default-source/media-releases/long-term-domestic-gas-sale-between-woodside-and-perdaman-becomes-unconditional.pdf??ref=boilingcold.com.au) go to the adjacent Perdaman urea plant under construction. Paull said the Perth Basin in the Mid West had the potential to supply more than 20 per cent of the market after 2030 when the WA Government's ban on exporting onshore gas becomes fully effective. However, a lot depended on successful exploration drilling, which has not been the case recently. From about 2036, the Chevron-led Gorgon project that supplies about 25 per cent of the WA market will [no longer be obliged to supply the local market](https://www.watoday.com.au/national/western-australia/the-gorgon-deal-that-could-up-the-stakes-on-wa-s-looming-gas-shortage-20240702-p5jqic.html?ref=boilingcold.com.au) as its fixed volume domestic gas supply obligation would have been met. Paull said he would not necessarily assume Gorgon would then cease serving the market. If Woodside develops the Browse field, its domestic gas reservation obligation would force some of that gas to the local market, giving supply a significant boost. However, EnergyQuest does not include the project in its base case. Large new supplies could help dampen price rises, but cannot support a return to low gas prices. Paull said the more cost-efficient fields have logically been developed first, and those that may follow, like Browse, will be more expensive. Woodside's Pluto project garnered attention during the 2023 parliamentary inquiry into WA's domestic gas policy, as it has [delivered only a sliver](https://www.watoday.com.au/national/western-australia/wa-s-looming-domestic-gas-shortage-how-a-good-faith-argument-left-wa-short-20240207-p5f35z.html?ref=boilingcold.com.au) of the 15 per cent of gas exports to the local market expected. Time may be running out for the project to catch up. Paull said production from the field is expected to decline in the not-too-distant future. [![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/01/support-CTA-for-posts-1.png)](https://www.boilingcold.com.au/#/portal/signup) ## Tough times ahead for WA's fuel of choice Since Sir Charles Court enabled the North West Shelf project in his decade as WA premier to 1982, many of his successors have at times been fixated on repeating the act, ushering in more gas export projects with obligations of varying success to supply the local market. Generations of politicians, bureaucrats, lobbyists and journalists in Perth have come to believe that gas and economic growth are synonymous west of the Nullarbor. Paull makes the point that gas prices in WA are still low compared to the rest of the world and the East Coast, whilst significantly higher than they have been in past. His advice to potential investors in gas-consuming projects in WA is that EnergyQuest expects supply to fall short of demand and that the gap will widen with time. "And they'd want to be listening to what the government is saying and doing," Paull added. "The future of the WA gas market looks quite different to the last few decades." As Western Australia transitions towards renewable energy, it faces a challenging period where gas demand may peak just as supply becomes scarcer and more expensive. For a state that built its industrial advantage on cheap energy, this is a fundamental shift in WA's economic landscape. ### Alcoa and Japan investigate if WA can break China's gallium stranglehold URL: https://www.boilingcold.com.au/alcoa-and-japan-investigate-if-wa-can-break-chinas-gallium-stranglehold/ Last updated: 2025-08-06T03:28:29.000Z Alcoa will soon decide whether to extract gallium from the bauxite it processes in WA after the dominant producer, China, banned exports of the critical mineral. The move comes three decades after French company Rhone Poulenc closed a gallium plant that used bauxite processing waste from Alcoa's Pinjarra refinery. This time, the US miner will be an active participant. It has agreed with Japanese trading house Sojitz and the Japan Organisation for Metals and Energy Security to explore the feasibility of a gallium project at either its Pinjarra or Wagerup alumina refineries in WA's south west. The companies have signed a joint development agreement and are targeting a [final investment decision in 2025 ](https://news.alcoa.com/press-releases/press-release-details/2025/Alcoa-Explores-Feasibility-of-Gallium-Critical-Mineral-Production-in-Western-Australia/default.aspx?ref=boilingcold.com.au)to support production starting in 2026. Gallium is on Australia's [critical minerals list](https://www.industry.gov.au/publications/australias-critical-minerals-list-and-strategic-materials-list?ref=boilingcold.com.au), as it is for the European Union, the United States, India, Japan, South Korea and the United Kingdom. Critical minerals are those essential to modern technology, economies and national security that are vulnerable to supply chain disruption. Gallium is crucial for high-speed semiconductors and LEDs, and is also used in solar panels and high-performance electronic devices used by the military. However, it is used in small quantities, with just [700 tonnes consumed in 2023](https://www.csiro.au/en/news/all/articles/2024/june/critical-mineral-gallium-germanium?ref=boilingcold.com.au), and demand is expected to reach about 1200 tonnes by 2030. Gallium only occurs in ores in [tiny concentrations](https://pubs.usgs.gov/periodicals/mcs2024/mcs2024-gallium.pdf?ref=boilingcold.com.au), with bauxite typically yielding just 50 parts per million. China produced an extraordinary [98 per cent of world ](https://pubs.usgs.gov/periodicals/mcs2024/mcs2024-gallium.pdf?ref=boilingcold.com.au)output[ in 2023](https://pubs.usgs.gov/periodicals/mcs2024/mcs2024-gallium.pdf?ref=boilingcold.com.au), and has a significant capacity to produce more. In December, it [banned exports to the United States](https://www.reuters.com/markets/commodities/china-bans-exports-gallium-germanium-antimony-us-2024-12-03/?ref=boilingcold.com.au), confirming the unreliability of the gallium supply chain. [![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/01/support-CTA-for-posts-1.png)](https://www.boilingcold.com.au/#/portal/signup) ### Second time lucky? An Alcoa spokesman said using the old Rhone-Poulenc refinery was not under consideration. He said another company owns it, and Alcoa's only involvement was to supply it a bauxite-alumina liquor stream from which gallium was extracted. Norwegian critical minerals consultancy Rovjok recently [analysed what went wrong ](https://rovjok.com/the-pinjarra-gallium-plant-lessons-for-todays-critical-minerals-landscape/?ref=boilingcold.com.au)with the first attempt to produce gallium in WA. The $50 million plant - a significant amount at the time - only operated from 1989 to 1991, and again briefly in 1996 and 1997. Rovjok identified lessons learned from the failed investment One was the importance of timely environmental approvals. The major problem was not the initial gallium plant, but a plan to also extract rare earths that would have produced radioactive waste. While Alcoa and its partners are only looking to extract gallium, a final investment decision (FID) in the next five months is a very tight schedule if the companies want to follow the usual cautious practice of having major approval in place before FID. The commitment would also come before Alcoa has received approval for a massive expansion of its mining in the jarrah forest that is necessary to keep the Pinjara refinery at full production in the long term. The Alcoa spokesman said approval pathways would be investigated as part of the feasibility study. [Alcoa ceo repeats spin about jarrah forest rehabilitationBill Oplinger reassured investors that a 15-month delay would not affect operating rates at its Pinjarra alumina refinery but misled them about Alcoa’s record of rehabilitating the jarrah forest.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-165.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Myara-2023-1-5.JPG)](https://www.boilingcold.com.au/alcoa-ceo-says-bauxite-miner-can-handle-later-wa-approvals/) The French company's revenue was hit when the spot price for gallium halved the day it reopened the plant in 1996\. The dramatic dip was caused by the extra volume a new producer brings to a small market and China ramping up its output. While Alcoa and its partners have not said what production capacity they are considering, both price-crushing effects could recur. A lack of processing and testing capability in Australia also drove up the delivered price of the product, according to Rovjok. Gallium concentrate was shipped to France before the final product went to Japan, and accurate analysis of the product could only be done in Canada. The complexity drove up costs, and the six months from extraction to delivery made it impossible to easily alter production to meet demand. However, the critical importance of gallium, growing tension between China and Australia's other major trading partners, and the backing of the Japanese government-owned JOGMEC may mean the investment attracts support not tied to commercial returns. Alcoa of Australia president Elsabe Muller said gallium could deliver additional value from its established operations. "And further demonstrate how Alcoa's longstanding mineral processing capabilities can be significant in supporting state, national and global objectives in technology and national defence,” she said. Sojitx said in a statement that it aimed to secure a long-term and stable supply of gallium. ### Green legal push for Santos decommissioning guarantee URL: https://www.boilingcold.com.au/green-legal-push-for-santos-decommissioning-guarantee/ Last updated: 2025-08-04T21:00:56.000Z The Wilderness Society is taking the offshore oil and gas regulator to court, claiming it should ensure Santos has enough money to decommission the Reindeer gas field off the Pilbara coast, which it will close in coming months. The environmental group is seeking a judicial review in the Federal Court of a [decision in May](https://info.nopsema.gov.au/activities/554/show%5Fpublic?ref=boilingcold.com.au) by regulator NOPSEMA to allow Santos to delay decommissioning the field while it considers whether to use the offshore infrastructure for carbon storage. In the meantime, a 2000-tonne platform remains in the Indian Ocean, with three wells 60m below water and a 91 km-long pipeline to shore, half of which is in WA waters, outside the jurisdiction of NOPSEMA. To approve Santos' plan to ensure the environment is protected while the Reindeer infrastructure lies idle, NOPSEMA must be satisfied that the Adelaide-based company has the financial capacity to do anything required of it under the Offshore Petroleum and Greenhouse Gas Storage Act. The regualtor's [guideline for applying the financial assurance provision](https://www.nopsema.gov.au/sites/default/files/documents/Financial%20assurance%20for%20petroleum%20titles%20guidelines.pdf?ref=boilingcold.com.au) \- section 571(2) - is confined to the costs associated with any possible oil spill. The Wilderness Society will argue that the legislation also requires NOPSEMA to ensure Santos can afford to decommission the Reindeer field. [![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/01/support-CTA-for-posts-1.png)](https://www.boilingcold.com.au/#/portal/signup) Wilderness Society fossil fuel campaigner Fern Cadman said it is running the case to ensure Santos sets aside the funds for decommissioning so that it gets done if the carbon storage project does not go ahead. "Our analysis of the financial reports of companies, including Santos, is that these companies aren't setting aside sufficient funds, or planning to deliver their decommissioning," she said. "There's a big risk that they'll cut and run and leave all of this infrastructure and mess in the ocean." A Federal Government-backed study in 2021 estimated that $US40.5 billion ($62 billion) would be [spent by 2050 removing oil and gas infrastructure](https://www.boilingcold.com.au/australian-offshore-oil-and-gas-industry-has-a-52b-clean-up-bill/) from Australian waters. Cadman told *Boiling Cold* that if the case was successful, Santos would have to submit a revised environment plan that demonstrated its financial capacity to decommission Reinder. "But the much broader implication is that any future environment plan being assessed would require NOPSEMA to assess that companies have the money to do their decommissioning at the end of life," she said. Such a result would concern Australia's offshore oil and gas sector, as revised environment plans must be submitted for NOPSEMA's approval every five years, even for ongoing projects where operations have not significantly changed. A NOPSEMA spokeswoman said the regulator was aware that the Wilderness Society had launched the action, and it was not appropriate to comment further on the proceeding. [Woodside slammed for preventable offshore incidentsRegulator NOPSEMA has directed Woodside to properly plan its work after a series of preventable safety incidents off the WA and Victorian coasts.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-163.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Griffin-Venture-FPSO.jpg-1.webp)](https://www.boilingcold.com.au/woodside-slammed-for-preventable-offshore-decommissioning-incidents/) ### Offshore carbon storage - a business or an excuse? Santos's plan to store carbon dioxide under the seabed at Reindeer is not unique. The company is also considering using the Bayu Undan gas reservoir in Timor Leste waters; Woodside is promoting its Angel field in WA's north west; north of Perth, ASX juniors Triangle Energy and Pilot Energy want to repurpose their Cliff Head platform near Dongara; and ExxonMobil is chasing an opportunity in the Bass Strait. Cadman said some of the carbon capture and storage (CCS) proposals may go ahead, but she suspects many will not. "In the meantime, while decommissioning is delayed, while companies think about CCS, all this infrastructure is left corroding and degrading in the ocean," she said. "We believe we're seeing companies systematically using CCS to delay decommissioning." Santos has signed a memorandum of understanding with an ammonia manufacturer, understood to be Yara, to develop a carbon storage project at Reindeer. Yara is [also considering Woodside's Angel field](https://www.watoday.com.au/national/western-australia/woodside-and-pilbara-fertiliser-plant-look-at-storing-emissions-underground-20240405-p5fhqk.html?ref=boilingcold.com.au) for CCS. According to its approved environmental plan, Santos plans to complete sufficient engineering and approvals work to be ready to make a final investment decision on Reindeer CCS in 2026, while in parallel studying how to decommission Reindeer. If Reindeer CCS does not go ahead, Santos will decommission the field in 2030 or 2031, according to its approved plan. The Reindeer legal action comes to light in the final week of ADNOC, the Abu Dhabi National Oil Company, performing due diligence on Santos ahead of a possible $36 billion takeover. Reports suggest that ADNOC sees a risk that Santos could have a [higher than expected decommissioning liability](https://www.afr.com/companies/energy/santos-bidders-run-ruler-over-billion-dollar-rehabilitation-costs-20250715-p5mf1q?ref=boilingcold.com.au). [Gas is escaping near Santos wells offshore WAThe company is monitoring the leaks that add to its problems at Varanus Island.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-164.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Varanus-Island-1.jpg)](https://www.boilingcold.com.au/gas-is-escaping-near-santos-wells-offshore-varanus-island/) ### Federal reform on the way In a few years, actions similar to the Wilderness Society suing NOPSEMA may not be required to give the community greater confidence that the ocean will be cleared at the company's expense. The Federal Government plans to implement financial assurance requirements and more closely monitor the finances and operations of companies to ensure they can pay for their decommissioning obligations, [according to a 2024 plan](https://www.industry.gov.au/publications/australias-offshore-resources-decommissioning-roadmap?ref=boilingcold.com.au) from the Department of Industry, Science and Resources. Such a change may align the oil and gas sector with the much more stringent obligations imposed on offshore wind farm developers, who must assure the Federal Government that they [can cover decommissioning](https://www.dcceew.gov.au/sites/default/files/documents/financial-security-guidance.pdf?ref=boilingcold.com.au) costs before installing anything in the ocean. The bar is set high for offshore renewable energy, with the Federal Government seeking cash, bank guarantees, or an insurance policy. Less onerous mechanisms seen in other regulatory structures, such as self-insurance and parent company guarantees, have been ruled out. Santos did not respond to an invitation to comment. ### Woodside slammed for preventable offshore decommissioning incidents URL: https://www.boilingcold.com.au/woodside-slammed-for-preventable-offshore-decommissioning-incidents/ Last updated: 2025-08-01T14:02:22.000Z Prompted by numerous preventable incidents, the offshore safety regulator NOPSEMA has ordered Woodside to plan its offshore decommissioning work better, just days after the company announced it would take control of ExxonMobil's sprawling Bass Strait operation. A NOPSEMA spokeswoman said it took action after a number of health, safety and environmental incidents at the three projects that the regulator had investigated. The directions for the [Stybarrow](https://www.nopsema.gov.au/sites/default/files/documents/General%20Direction%202022%20-%20Stybarrow.pdf?ref=boilingcold.com.au) and [Griffin](https://www.nopsema.gov.au/sites/default/files/documents/General%20Direction%202017%20-%20Griffin.pdf?ref=boilingcold.com.au) fields off WA's Pilbara coast and the [Minerva](https://www.nopsema.gov.au/sites/default/files/documents/General%20Direction%202016%20-%20Minerva.pdf?ref=boilingcold.com.au) field in Victoria, issued on Thursday, listed incidents that NOPSEMSA regarded as preventable. These included plastic saddles from the Minerva pipeline that [washed up onto nearby beaches](https://www.watoday.com.au/environment/conservation/how-parts-of-a-dead-gas-rig-washed-up-on-our-beaches-20250514-p5lz1t.html?ref=boilingcold.com.au); a [16,000-litre oil spill](https://www.boilingcold.com.au/woodside-spills-16-000-litres-of-oil-into-ocean-north-of-ningaloo/), and a worker nearly exposed to dangerous hydrogen sulphide on the Griffin work; as well as "preventable safety incidents resulting in injury" [at Stybarrow](https://www.boilingcold.com.au/woodside-cleanup-off-wa-plagued-by-injuries-and-incidents-2/). On Stybarrow, *Boiling Cold* understands a worker suffered broken ribs and potentially a punctured lung after US firm McDermott, working for Woodside, "failed to take all reasonably practicable steps" to secure heavy equipment to the deck safely. [$500m government bill looms for Chevron oil field cleanupThe $2.3 billion-plus decommissioning on Barrow Island will be part-funded by the Federal and WA governments returning about half the royalties they received over six decades.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-161.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Screenshot-2025-07-22-at-11.52.56---am-1-3.png)](https://www.boilingcold.com.au/governments-set-to-refund-chevron-500m-for-barrow-island-oil-field-clean-up/) The troubled decommissioning work started after a 2021 NOPSEMA direction to then-owner BHP to decommission the three fields by mid-2025 after [years of “limited action”](https://www.boilingcold.com.au/tardy-bhp-ordered-to-clean-up-three-oil-and-gas-fields-offshore-wa-and-victoria/) and equipment sinking to the seabed. Woodside became responsible when it bought the miner's petroleum business in 2022 and has made substantial progress. A company spokesman said wells at all three fields are now permanently plugged, and from those fields, and Enfield off the WA coast, it has brought to shore more than 25,000 tonnes of infrastructure, including 140km of pipelines and 100 subsea structures. According to the NOPSEMA directions, Woodside is yet to retrieve from the ocean 63km of flexible pipelines at Griffin; ten wellheads, nine other structures and 17km of flexible pipeline at Stybarrow; and 2km of steel pipeline at Minerva. The new directions allow Woodside more time to complete the work: Griffin by 2027, Minerva by 2028 and Stybarrow by 2029. The NOPSEMA spokeswoman said its directions allowed time for thorough planning so that the work does not endanger workers or the environment, mandated specific measures Woodside had to take, and required the company to identify where things had gone wrong and use those lessons in future work. Until the work is complete, Australia's largest oil and gas company must furnish reports to NOPSEMA every six months detailing its progress on the three projects, "signed by a company officer of Woodside confirming its accuracy and completeness." Australia's Corporations Act defines a company officer as a director or a manager of a substantial part of the business. A Woodside spokesman said the new directions from NOPSEMA had provided it with more time and clarity to prepare for the final decommissioning work with a continued focus on safety and the environment. ### **Woodside told to do its homework** The regulator's directions unusually included a detailed list of planning activities Woodside must do before recommencing work. The mandated steps are standard industry practice, so not generally mentioned in a NOPSEMA direction, indicating the regulator was dissatisfied with Woodside's previous level of preparation. Last week, Woodside [told investors](https://www.woodside.com/docs/default-source/asx-announcements/2025/second-quarter-2025-report.pdf?sfvrsn=9b5c687e%5F1&ref=boilingcold.com.au) that in the coming years, decommissioning the three fields would cost between $US400-500 million ($620-775 million) more than it had expected. The increased costs for later years came just five months after the company surprised investors with the news it would spend up to $US1 billion ($1.5 billion) on decommissioning this year. Woodside chief executive Meg O'Neill said the work on the three fields had been "impacted by unexpected challenges, with further engineering and alternative solutions required." [![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/01/support-CTA-for-posts-1.png)](https://www.boilingcold.com.au/#/portal/signup) The company pointed the finger at BHP, saying "the as-left condition on some closed sites has continued to present challenges for safe and efficient execution of decommissioning." O'Neill said Woodside was "applying learnings to improve planning and execution." Those learnings will be made public as NOPSEMA has directed Woodside to review its past planning for the three jobs and publish the lessons it has learned. NOPSEMA highlighted the project budget, choice of vessels and contractors, and measures to protect the environment and the health and safety of workers as focus items for the reviews. The clear message from the regulator that Australia's largest oil and gas company has to lift its game on decommissioning came just two days after Woodside announced it would assume operatorship of the Bass Strait facilities it owns with ExxonMobil. The company said the move reflected its "[long history of operating excellence.](https://www.woodside.com/docs/default-source/asx-announcements/2025/woodside-strengthens-its-australian-operations.pdf?sfvrsn=4cb49c70%5F1&ref=boilingcold.com.au)" From 2026, Woodside will be responsible for the biggest decommissioning scope in Australia in Bass Strait, with an initial ten platforms to be removed in the coming years. --- UPDATES August 1 AM - comments from Woodside and NOPSEMA added. August 1 PM - clarified that Woodside's guidance for 2025 decommissioning spending is unchanged and the increased costs of the three projects will be incurred in later years. ### Barnaby Joyce's reasons for Australia to abandon net-zero don’t stack up URL: https://www.boilingcold.com.au/barnaby-joyces-reasons-for-australia-to-abandon-net-zero-dont-stack-up/ Last updated: 2025-09-09T03:43:50.000Z [Ella Vines](https://theconversation.com/profiles/ella-vines-1520694?ref=boilingcold.com.au), [*Monash University*](https://theconversation.com/institutions/monash-university-1065?ref=boilingcold.com.au) One-time Nationals leader Barnaby Joyce sought to dominate the first sitting week of the current federal parliament by proposing a [divisive plan](https://www.theguardian.com/australia-news/2025/jul/11/barnaby-joyce-vows-to-wind-back-net-zero-private-members-bill-australia?ref=boilingcold.com.au) to reverse Australia’s net zero emissions target. The campaign, [backed by fellow former Nationals leader Michael McCormack](https://www.theguardian.com/australia-news/commentisfree/2025/jul/23/coalition-net-zero-barnaby-joyce-michael-mccormack-sussan-ley-liberal-party-nationals?ref=boilingcold.com.au), aims to repeal what Joyce calls Australia’s “lunatic crusade” of net zero by 2050\. It comes as Opposition Leader Sussan Ley [convenes a working group](https://www.abc.net.au/news/2025-06-25/sussan-ley-marks-a-tone-shift-for-liberals-in-press-club-address/105458470?ref=boilingcold.com.au) to set a way forward on climate and energy policy following the Coalition’s historic election defeat. Meanwhile, the Albanese government is considering Australia’s [next round of emissions reduction targets](https://www.climatechangeauthority.gov.au/2035-emissions-reduction-targets?ref=boilingcold.com.au). And scientists [warn just three years](https://www.bbc.com/news/articles/cn4l927dj5zo?ref=boilingcold.com.au) remain for the world to keep global warming below the vital 1.5°C threshold. If Australia is to take meaningful climate action, federal parliament must engage with the facts honestly and without distortion. So let’s take a closer look at whether Joyce and McCormack’s latest claims withstand scrutiny. ## Claim 1: Australia’s net-zero policy will not address climate change Joyce [describes as](https://barnabyjoyce.com.au/net-zero-and-environment-virtues?ref=boilingcold.com.au) “perverse” the notion that Australia’s net-zero goal can meaningfully help address global climate change. This claim is not backed by [science](https://www.ipcc.ch/report/ar6/wg1/downloads/report/IPCC%5FAR6%5FWGI%5FSPM.pdf?ref=boilingcold.com.au). Every tonne of greenhouse gas emissions adds to global warming. What’s more, Joyce’s claim ignores the near-universal agreement of nations signed up to the [Paris Agreement](https://unfccc.int/files/essential%5Fbackground/convention/application/pdf/english%5Fparis%5Fagreement.pdf?ref=boilingcold.com.au) – including Australia – to pursue efforts (including domestic measures) to limit the average global temperature rise to 1.5°C. It’s true that collective national efforts to curb warming have so far been [insufficient](https://unfccc.int/topics/global-stocktake/about-the-global-stocktake/outcome-of-the-first-global-stocktake?ref=boilingcold.com.au). But that doesn’t mean they should be abandoned. [How Chevron will ship Aussie engineering jobs to IndiaDespite local content requirements and a fat profit from Australia, Chevron will now export jobs as well as gas.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-157.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/3-5.jpg)](https://www.boilingcold.com.au/how-chevron-will-ship-aussie-engineering-jobs-to-india/) ## Claim 2: Global support for net zero is waning McCormack [claims there is a growing global shift](https://www.theaustralian.com.au/nation/politics/nationals-knives-are-out-for-net-zero/news-story/b9922701cd7f4a3cfd79d46466d997e6?ref=boilingcold.com.au) against net zero, and Joyce describes it as “[a peculiar minority position](https://www.facebook.com/BarnabyJoyceMP)”. This statement is not backed by evidence. In fact, the number of countries, cities, businesses and other institutions pledging to get to net-zero [is growing](https://www.un.org/en/climatechange/net-zero-coalition?ref=boilingcold.com.au). In the United States, President Donald Trump has [dismantled climate policy](https://www.carbonbrief.org/chart-trumps-big-beautiful-bill-blows-us-emissions-goal-by-7bn-tonnes/?ref=boilingcold.com.au), damaging that nation’s progress towards net zero. But many US states have [retained the target](https://www.esgtoday.com/24-u-s-states-commit-to-paris-agreement-goals-after-trump-exits-accord/?ref=boilingcold.com.au#:%7E:text=In%20addition%20to%20New%20York,to%20Guam%20and%20Puerto%20Rico.), and global climate action [will continue regardless](https://theconversation.com/trump-has-withdrawn-the-us-from-the-paris-agreement-heres-why-thats-not-such-a-bad-thing-248109?ref=boilingcold.com.au) of Trump’s actions. A landmark court ruling this week is likely to further strengthen global pressure for nations to ramp up emissions reduction. The [advisory opinion](https://www.icj-cij.org/sites/default/files/case-related/187/187-20250723-adv-01-00-en.pdf?ref=boilingcold.com.au) by the International Court of Justice observed countries are legally obliged to prevent harms caused by climate change – including by regulating the fossil fuel industry. As [others have noted](https://theconversation.com/worlds-highest-court-issues-groundbreaking-ruling-for-climate-action-heres-what-it-means-for-australia-261842?ref=boilingcold.com.au), Australia must now reconsider its stance on approving new fossil fuel projects – including those geared to export markets. ## Claims 3: the net-zero goal is a security threat Joyce claims a net zero policy agenda is “treacherous” for Australia’s security and will “inflame our incapacity” to contend with geopolitical threats. But [evidence](https://www.sciencedirect.com/science/article/pii/S2949753124000523?ref=boilingcold.com.au) suggests the opposite is true. There is a significant link between climate change and certain types of military conflicts. [Research](https://researchcentre.army.gov.au/library/australian-army-journal-aaj/volume-20-number-1/climate-change-and-future-character-war?ref=boilingcold.com.au) predicts the Australian Defence Force will become involved in more wars as the climate crisis escalates, and respond to more frequent climate-related disasters inside our borders. ![soldiers load items onto a truck](https://images.theconversation.com/files/682174/original/file-20250725-56-cm8m2.jpg?ixlib=rb-4.1.0&q=45&auto=format&w=754&fit=clip) ****Australia’s military will increasingly be called on to help after domestic climate-fuelled disasters.** Pictured: soldiers help clear a street in Chinderah, New South Wales, after a 2022 flood. WO2 MAX BREE/Department of Defence ## Claim 4: net zero is bad for regional Australia Both Joyce and McCormack say the net zero target and associated renewable energy rollout is [devastating regional Australia](https://www.theaustralian.com.au/nation/politics/nationals-knives-are-out-for-net-zero/news-story/b9922701cd7f4a3cfd79d46466d997e6?ref=boilingcold.com.au). The Institute of Public Affairs, a prominent right-wing think tank, this week [launched a documentary](https://www.youtube.com/watch?v=%5FpgLyiFpTnc&ref=boilingcold.com.au) making similar claims. Joyce cited division in rural communities over renewable energy. In reality, there is significant support in regional Australia for such technology. A [poll last year](https://www.theguardian.com/australia-news/2024/nov/26/australian-farmers-support-renewable-energy-transition?ref=boilingcold.com.au) by Farmers for Climate Action found 70% of regional Australians in [renewable energy zones](https://www.energyco.nsw.gov.au/renewable-energy-zones?ref=boilingcold.com.au) support the development of renewable energy projects on local farmland. Joyce also pointed to “the removal of agricultural land from production” to support his stance. However, analysis shows [very little farmland](https://theconversation.com/no-threat-to-farm-land-just-1-200-square-kilometres-can-fulfil-australias-solar-and-wind-energy-needs-223183?ref=boilingcold.com.au) is required for the clean energy transition. What’s more, the cost of inaction is high. Climate change is [disproportionately affecting](https://australiainstitute.org.au/post/climate-crisis-escalates-cost-of-living-pressures?ref=boilingcold.com.au) cost of living for regional households – for example, due to higher insurance premiums. Joyce also appears deaf to the myriad regional voices calling for stronger climate action. The Mackay Conservation Group, for example, is challenging Whitehaven’s Winchester South coal mine in [Queensland’s Land Court](https://www.edo.org.au/2024/04/04/conservationists-challenge-approval-of-qld-coal-climate-disaster/?ref=boilingcold.com.au). Similarly, an environment group based in the NSW Hunter Valley this week [successfully appealed](https://www.caselaw.nsw.gov.au/decision/198358b0f4e9e10f2b50c718?ref=boilingcold.com.au) the expansion of MACH Energy’s Mount Pleasant coal mine. [$500m government bill looms for Chevron oil field cleanupThe $2.3 billion-plus decommissioning on Barrow Island will be part-funded by the Federal and WA governments returning about half the royalties they received over six decades.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-156.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Screenshot-2025-07-22-at-11.52.56---am-1-2.png)](https://www.boilingcold.com.au/governments-set-to-refund-chevron-500m-for-barrow-island-oil-field-clean-up/) ## Only facts can stop a new wave of climate wars Clearly, the efforts of Joyce and McCormack to undermine Australia’s net zero goal are not backed by evidence. The Coalition must heed the facts – not backbench pressure – as it weighs its climate and energy policy. Only then can Australia avoid reigniting the divisive [climate wars](https://wires.onlinelibrary.wiley.com/doi/10.1002/wcc.458?ref=boilingcold.com.au) that stalled progress and positioned Australia as a global laggard. Likewise, the Albanese government must not be distracted from the climate action task. Australia’s next round of climate targets should be based on the best available science, and make a meaningful, credible contribution to the objectives of the Paris Agreement. --- [Ella Vines](https://theconversation.com/profiles/ella-vines-1520694?ref=boilingcold.com.au), Post-doctoral researcher, Green Lab, [*Monash University*](https://theconversation.com/institutions/monash-university-1065?ref=boilingcold.com.au) This article is republished from [The Conversation](https://theconversation.com/?ref=boilingcold.com.au) under a Creative Commons license. Read the [original article](https://theconversation.com/barnaby-joyce-wants-australia-to-abandon-net-zero-but-his-4-central-claims-dont-stack-up-261837?ref=boilingcold.com.au). ### Gas is escaping at 13 spots near Santos wells offshore Varanus Island URL: https://www.boilingcold.com.au/gas-is-escaping-near-santos-wells-offshore-varanus-island/ Last updated: 2025-07-25T04:06:22.000Z Gas is seeping from at least 13 locations on the seabed near Santos facilities around Varanus Island off the Pilbara coast, but the $25 billion company is not answering questions. The problem was revealed in a [consultation fact sheet](https://www.documentcloud.org/documents/26028414-consultation-information-sheet-varanus-island-hub-operations-environment-plan-state-2025/?ref=boilingcold.com.au) released by Santos in recent months, which stated, "There are 13 known gas seepages which are subject to a gas monitoring program." ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/07/Screenshot-2025-07-24-at-8.21.27---pm.png) ****Santos has 14 platforms around Varanus Island**. Source: [Santos fact sheet](https://www.santos.com/wp-content/uploads/2025/06/Consultation-Information-Sheet-Varanus-Island-Hub-Operations-Environment-Plan-State.pdf?ref=boilingcold.com.au) WA's Department of Mines, Petroleum and Exploration (DMPE)is aware of the bubbles detected by Santos in the coastal waters surrounding Varanus Island following decommissioning activities. A DMPE spokesman said Santos had observed bubbles coming from well locations and the seabed. He said Santos had developed a program for monitoring the gas seeps, which the regulator understood included the rate of gas escaping, checking the integrity of the wells and considering ways to manage the problem. "Santos has not yet submitted the results of the monitoring program to the department," he said. *Boiling Cold* asked Santos four days ago how long it had been aware of the seeps, how long it had been monitoring them, was the rate of seepage increasing, and how many wells in WA waters it still had to plug and abandon? No response was received. Santos is preparing a new environment plan for managing its operations in State waters around Varanus Island. The [current environment plan](https://www.documentcloud.org/documents/26028415-varanus-island-state-waters-ep-summary-approved-nov-2024/?ref=boilingcold.com.au) accepted by the regulator in late 2024 makes no mention of gas seeps. ### Reports of gas seepages grow For over a decade, [gas has leaked from wells ](https://www.watoday.com.au/national/western-australia/santos-wells-have-been-leaking-gas-into-the-ocean-off-wa-for-a-decade-20230612-p5dg0d.html?ref=boilingcold.com.au)at Santos' shuttered Legrendre field 10km north of Dampier. Two weeks ago, *Boiling Cold* revealed [gas was seeping to the surface](https://www.boilingcold.com.au/gas-seeping-to-surface-from-chevrons-barrow-island-oil-operation/) on Barrow Island near oil facilities that closed in May, which Chevron operates and Santos has an interest in. Wilderness Society fossil fuel campaigner Fern Cadman said three cases of gas escaping from the ground in the same region pointed to systemic failures in the oversight of oil and gas production in Australia. She said the area included habitats for humpback whales, turtles and dugongs and was near the Ningaloo World Heritage-listed marine park. "Our oil and gas regulators need to undertake a comprehensive investigation of oil and gas infrastructure across the country to determine the full extent of our leaky gas problem.” [Alcoa ceo repeats spin about jarrah forest rehabilitationBill Oplinger reassured investors that a 15-month delay would not affect operating rates at its Pinjarra alumina refinery but misled them about Alcoa’s record of rehabilitating the jarrah forest.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-152.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Myara-2023-1-4.JPG)](https://www.boilingcold.com.au/alcoa-ceo-says-bauxite-miner-can-handle-later-wa-approvals/) All three seepage locations are where old facilities are being decommissioned. The problems add to a trend of bad news and rising costs for the industry as more fields near the end of production. On Wednesday, Woodside announced that its decommisioning of three oil fields it bought from BHP - Stybarrow and Griffin in WA and Minerva in Victoria - had been "[impacted by unexpected challenges](https://www.woodside.com/docs/default-source/asx-announcements/2025/second-quarter-2025-report.pdf?sfvrsn=9b5c687e%5F1&ref=boilingcold.com.au), with further engineering and alternative solutions required." The company said BHP had left some of the facilities in a state that "continued to present challenges for safe and efficient execution." It now estimates the cost to decommission the three fields to be up to $US500 million ($760 million) more expensive than it had allowed for. [Danger Island: Santos’ fifth safety incident off WA coast revealedSafety concerns have forced regulators to step in five times over the past two years at Santos’ Pilbara operations. The latest issue came just days after a gas leak forced the closure of a platform and curtailed WA’s supply.![](https://static.ghost.org/v5.0.0/images/link-icon.svg)WAtodayPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/bb35d2a9bcaeb68a49806f606f609f9485402fa0-1)](https://www.watoday.com.au/business/companies/danger-island-santos-fifth-safety-incident-off-wa-coast-revealed-20230220-p5clwx.html?ref=boilingcold.com.au) The gas seeps add to the sorry record of Santos' operations near Varanus Island in recent years. - The WA safety regulator branded ten platforms as unsafe to access due to high levels of corrosion. - Two workers had to scramble for their lives when a disused platform swung out of control as it was lifted. - Gas supply to WA being restricted for two months due to a leaking gas pipeline. - The Federal offshore safety regulator stopping drilling on a Santos field as a crucial safety device was "unfit for service." - A 25,000 litre oil spill from a leaking loading hose, after which three dead dolphins were found nearby. Santos denied any connection between the two events. Santos' current environmental plan recognises a leak from a loading hose 100 times the volume of the dolphin incident as a "credible" risk. ### BP pulls out of $55b mega-scale Pilbara hydrogen project URL: https://www.boilingcold.com.au/bp-pulls-out-of-mega-scale-pilbara-hydrogen-project/ Last updated: 2025-07-24T10:39:36.000Z BP will exit both ownership and leadership of a vast solar and wind-powered hydrogen project north of Port Hedland just two years after it [bought a 40.5 per cent stake](https://www.bp.com/en/global/corporate/news-and-insights/press-releases/bp-to-lead-and-operate-one-of-the-worlds-largest-renewables-and-green-hydrogen-energy-hubs-based-in-western-australia.html?ref=boilingcold.com.au) in the venture. In an update to BP's Australian Renewable Energy Hub (AREH) team on Thursday afternoon, BP country president Lucy Nation wrote, "BP has made the difficult decision to exit the Australian Renewable Energy Hub project in WA's Pilbara region, both as an equity participant and as an operator." The move caps off a brutal week for Australia's hydrogen hopes after both Woodside and Fortescue dropped major projects, mirroring a worldwide drop in enthusiasm for the product. It is understood that many in BP's AREH team of 40 have already been told they will be made redundant. At one stage, BP had assigned more than 100 staff to the sprawling project. The move completes BP's near-complete exit from alternative fuel projects in WA after it put its Kwinana [hydrogen and biofuel plants on ice](https://www.boilingcold.com.au/bp-puts-1b-kwinana-hydrogen-and-clean-fuel-projects-on-ice/) in February. Workers were told the projects would be "recycled", but *Boiling Cold* understands there is little likelihood of them going ahead. A BP spokeswoman said it had advised its partners of its intention to exit both operatorship and ownership of the 6500 square kilometre project. "This decision reflects BP’s recent strategy reset, which will see BP grow its upstream oil and gas business, focus its downstream business, and invest with increasing discipline into the transition," she said. "While AREH no longer aligns with BP’s strategy, it continues to present an important opportunity for WA to decarbonise the Pilbara, "BP will work with its AREH partners to ensure a safe and efficient transition of operatorship." [$500m government bill looms for Chevron oil field cleanupThe $2.3 billion-plus decommissioning on Barrow Island will be part-funded by the Federal and WA governments returning about half the royalties they received over six decades.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-148.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Screenshot-2025-07-22-at-11.52.56---am-1.png)](https://www.boilingcold.com.au/governments-set-to-refund-chevron-500m-for-barrow-island-oil-field-clean-up/) The $131 billion company owns 64 per cent of AREH after it [bought out Macquarie's stake](https://www.watoday.com.au/business/companies/macquarie-exits-bp-s-55-billion-wa-green-energy-project-20240226-p5f7y6.html?ref=boilingcold.com.au) in early 2024\. InterContinental Energy and CWP Global own a 26 per cent and 10 per cent stake, respectively. InterContinental Energy will take the helm until the effort is moved into a project company, instead of the current joint venture model with one owner acting as operator. InterContinental Energy chief executive Tancock said BP had played a vital role in advancing the project. "We remain committed to working closely with the Government of WA and all stakeholders to drive the next phase of development," he said. "We believe strongly in the project’s potential to decarbonise the Pilbara and diversify the State’s economy, and we look forward to delivering on this shared vision.” Beyond AREH, InterContinental Energy holds a majority stake in the Western Green Energy Hub in the remote south east of WA and Green Energy Oman in partnership with Shell and others. ### The many shapes of AREH In 2017 the motivation behind installing wind turbines and solar panels over a vast area, remote even by Pilbara standards, was not to produce hydrogen, but to supply Indonesia with clean electricity through a subsea cable. However, a lack of credit-worthy customers in Java who could support long-term power purchase agreements for what was then called the Asian Renewable Energy Hub was a significant problem. Three years later, that plan was dropped in favour of using the emission-free electricity [to make green hydrogen](https://www.watoday.com.au/business/companies/plan-to-run-power-cable-between-australia-and-indonesia-scrapped-as-giant-pilbara-power-project-takes-shape-20201028-p569gh.html?ref=boilingcold.com.au) by splitting water into hydrogen and oxygen using power-hungry electrolysers. The hydrogen was then to be combined with nitrogen to produce liquid ammonia, which is more easily transportable than hydrogen gas. A jetty was required to load 10 million tonnes of ammonia a year onto ships. However, in 2021, then-federal environment minister Sussan Ley rated its impact on wetlands and migratory birds as "[clearly unacceptable](https://www.boilingcold.com.au/feds-shoot-rare-green-arrow-at-us36b-pilbara-ammonia-hub/)." The conclusion, applied to less than one in 500 projects assessed by the federal government, was a shock to the proponents, but they expressed confidence that it could be overcome. *Boiling Cold* understands that in recent years, the focus has shifted to selling power to the vast Pilbara mining region to the south, with Korean POSCO's planned green iron plant and Andrew Forrest's Fortescue's decarbonization drive being prime targets. [Woodside spills 16,000 litres of oil into Indian OceanThe company that thinks a damaging oil spill from its planned drilling near Scott Reef is “only a mere theoretical possibility” weeks ago accidentally released a cocktail of hydrocarbons, chemicals and water into the Indian Ocean.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-149.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Mia-Yellagonga-signed-cropped-4.jpg)](https://www.boilingcold.com.au/woodside-spills-16-000-litres-of-oil-into-ocean-north-of-ningaloo/) ### Australian hydrogen hopes fading quickly BPs move is just one of many reversals this week in either Australian hydrogen projects, or Australian hydrogen investments overseas. Hours before BP's AREH team learned their fate, Andrew Forrest's Fortescue [told investors](https://content.fortescue.com/fortescue17114-fortescueeb60-productionbbdb-8be5/media/project/fortescueportal/shared/documents/regulatory/asx-announcements/2919488-june-2025-quarterly-production-report.pdf?ref=boilingcold.com.au) it would not proceed with its Arizona Hydrogen project or the PEM50 project in Gladstone, Queensland. Fortescue Energy chief executive officer Gus Pichot said the company - a leading hydrogen evangelist - has in the past year applied a "sharpened focus on commercial outcomes." "That’s meant making some tough decisions," he said. The day before Woodside announced it had [exited its H2OK Project](https://www.woodside.com/docs/default-source/asx-announcements/2025/second-quarter-2025-report.pdf?sfvrsn=9b5c687e%5F1&ref=boilingcold.com.au) in Oklahoma, citing higher costs and lower demand than hoped for, with a $US140 million ($212 million) impairment expected. That reversal raise questions about Woodside's H2Perth project in Kwinana that was understood to be less viable than the Oklahoma plant. When it was announced in 2021, [constructionon of the $1billion plant was to begin in 2024](https://www.watoday.com.au/business/companies/woodside-eyes-1b-gas-and-renewable-hydrogen-plant-near-perth-20211025-p592yq.html?ref=boilingcold.com.au). ### Governments set to refund Chevron $500m for Barrow Island oil field clean-up URL: https://www.boilingcold.com.au/governments-set-to-refund-chevron-500m-for-barrow-island-oil-field-clean-up/ Last updated: 2025-07-22T21:33:42.000Z In May, Chevron stopped producing oil on Barrow Island off the WA coast, and the clock on a 40-year-old agreement started ticking which will likely require the Federal and WA governments to pay more than $500 million towards the clean-up bill. After drilling about 900 wells over six decades, it will cost Chevron more than $2.3 billion to clean up the offshore nature reserve, according to a [WA government minute](https://www.documentcloud.org/documents/25964060-barrow-island-meeting-points-28-sep-2022/?ref=boilingcold.com.au) obtained by a *Boiling Cold* freedom of information request. During that time, Chevron produced 335 million barrels of oil and paid [more than $1 billion ](https://australia.chevron.com/what-we-do/barrow-island?ref=boilingcold.com.au)in royalties, or about $3 per barrel. In the coming years, about half of those royalties will flow back to Chevron and its partners to offset their clean-up costs, diminishing the total value Australia got from the extraction of its resources. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/07/Screenshot-2025-07-22-at-11.52.38---am.png) ****Oil pipelines cross a beach to where tankers were loaded.** Image: [WA DBCA](https://www.dbca.wa.gov.au/management/plans/barrow-group-nature-reserves?ref=boilingcold.com.au). ## The calculation that will cost Australian taxpayers Since 1985, royalties paid for extracting oil from under Barrow Island have been calculated [under a WA Act](https://www.legislation.wa.gov.au/legislation/statutes.nsf/main%5Fmrtitle%5F78%5Fhomepage.html?ref=boilingcold.com.au) written especially for the project. The royalty - 40 per cent of the difference between Chevron's sales revenue and operational costs - has been paid 75 per cent to the Federal Government and 25 per cent to WA. However, under the Act, from May 2025, when production ended, and for the following three years, the calculation operates in reverse. Chevron and its partners will be refunded 40 per cent of what they spend on decommissioning the oil field infrastructure before 31 December 2028, with the two governments paying in the same ratio they received royalties. The total refund is capped at the value of all royalties received. In the absence of any information from Chevron, in 2022, the WA mining regulator used [a media report](https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://www.smh.com.au/business/the-economy/taxpayers-on-the-hook-for-500m-to-clean-up-chevron-oil-field-and-that-is-just-the-start-20220826-p5bd5v.html&ved=2ahUKEwjJs%5FfSjNCOAxWRRmcHHYlhOl4QFnoECBgQAQ&usg=AOvVaw1UHDmP3Vxde2ZKy1q5KsCL) that $1.29 billion of a total bill $2.3 billion would be spent in the royalty refund period to calculate that the state would refund about $129 million in royalties. This implies the Federal Government would pay $387 million, with Chevron and its partners receiving a total of $516 million. However, the refund could be higher, as the cost is now estimated to be more than $2.3 billion. Additionally, there is a considerable incentive for Chevron to do as much work as possible before 2029 to maximise the refund. [![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/01/support-CTA-for-posts-1.png)](https://www.boilingcold.com.au/#/portal/signup) In May, the same month production ended, Chevron informed its regulator, the Department of Mining, Petroleum and Exploration (DMPE), that an unknown amount of [gas was seeping to the surface](https://www.boilingcold.com.au/gas-seeping-to-surface-from-chevrons-barrow-island-oil-operation/) near its old oil wells. The seeps add to widespread contamination of Barrow Island by Chevron. A Chevron spokesman said while some costs would be refunded, it and its partners, Santos and ExxonMobil, would bear the vast majority of the total cost. "We will continue to engage with state and federal governments in relation to the WA Oil decommissioning project and the administration of the royalty regime,” he said. Neither government seems to know what it might have to pay to Chevron. A DMPE spokesman said the cost was not included in its forward estimates, but the potential liability was "recognised as a non-quantifiable contingent liability" in the [Annual Report on State Finances](https://www.wa.gov.au/system/files/2024-09/2023-24-arsf.pdf?ref=boilingcold.com.au). The report acknowledged that "a significant amount of royalties will need to be refunded," but only after Chevron pays the costs and the state verifies and audits them. It is understood that the Federal Government is waiting on WA to determine the total refund, as the state administers the royalty regime. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/07/Screenshot-2025-07-11-at-10.54.36---am-1-1.png) ****The southern half of Barrow Island is covered in well pads, access roads and oil pipelines.** **Source:* [Google Maps](https://www.google.com/maps/place/Barrow+Island/@-20.8068109,115.3763096,4724m/data=!3m1!1e3!4m6!3m5!1s0x2bf811ea0176a741:0xe7a33e37111c6248!8m2!3d-20.7804342!4d115.4022706!16zL20vMDd0NXEy?entry=ttu&g%5Fep=EgoyMDI1MDcwOC4wIKXMDSoASAFQAw%3D%3D&ref=boilingcold.com.au) ## A complex job in an extraordinary nature reserve The scope of the clean-up is enormous and complicated. About 700 of the almost wells 900 are more than 40 years old, according to the WA Government's [database of wells](https://wapims.dmp.wa.gov.au/WAPIMS/Search/Wells?ref=boilingcold.com.au). At the start of 2025, 316 wells were still producing about 3600 barrels of oil a day, according to an [environment plan](https://www.documentcloud.org/documents/26024665-barrow-island-environment-plan-summary-dec-2024/?ref=boilingcold.com.au) lodged by Chevron. Up to four drilling rigs will plug and abandon the wells—a procedure that permanently seals the oil and gas underground, typically using cement. Two rigs may operate 24 hours a day. Then, the wellheads are removed, as well as almost all other equipment and their concrete foundations. Sixteen areas contaminated with hydrocarbons require attention. All this must be done on a hot, exposed island 70km of the north-west coast of WA while not causing further contamination, managing fire risk and protecting the vast array of native species that flourish on the island due to a lack of introduced weeds and predators so common on the mainland. Afterwards, the giant Gorgon gas export plant, also operated by Chevron, will remain on the island. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/07/Screenshot-2025-07-22-at-11.53.13---am.png) ****Oil tanks on the east coast of Barrow Island.** Image: [WA DBCA](https://www.dbca.wa.gov.au/management/plans/barrow-group-nature-reserves?ref=boilingcold.com.au). ## Barrow bill is a fraction of the work ahead The shuttered oil asset on Barrow Island is owned by Chevron (57 per cent), Santos (29 per cent), and ExxonMobil (14 per cent). If cleaning up Barrow Island does cost $2.3 billion, Santos will have to contribute $667 million. The work has begun as the Abu Dhabi National Oil Company conducts due diligence on Santos in preparation for a potential takeover. Whether the $6 billion decommissioning liability Santos reports on its balance sheet is adequate to cover the work it must do across its operations is reportedly a [focus of due diligence](https://www.afr.com/companies/energy/santos-bidders-run-ruler-over-billion-dollar-rehabilitation-costs-20250715-p5mf1q?ref=boilingcold.com.au) underway to support the $36 billion takeover. In WA, Santos will soon start decommissioning the Ningaloo Vision oil production vessel and has substantial ongoing work around the Varanus Island gas hub. The Adelaide-based company plans to use its shuttered Reindeer and Bayu Undan gas platforms in WA and Timor-Leste waters to store CO2 under the seabed. If these projects do not eventuate, it may have to decommission them decades earlier than planned. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/07/Screenshot-2025-07-22-at-12.32.24---pm.png) ****Almost 600 oil wells, connected by pipelines and tracks, cover Barrow Island**. Image: [WA DBCA](https://www.dbca.wa.gov.au/management/plans/barrow-group-nature-reserves?ref=boilingcold.com.au). The other equity holder in Barrow Island - ExxonMobil - is under instructions from the offshore regulator NOPSEMA to [plug 180 wells and dismantle ten platforms](https://www.boilingcold.com.au/regulator-blasts-exxonmobils-bass-strait-maintenance-orders-massive-decommissioning-effort/) in the Bass Strait. The cost - likely to be in the billions of dollars - will be shared with its 50 per cent partner Woodside. ExxonMobil, like Santos, had hoped to [delay some of the expense](https://www.boilingcold.com.au/exxon-drops-plan-to-reuse-bass-strait-oil-platform-for-carbon-storage/) by using a platform for carbon storage but withdrew an application for environmental approval in March. The total bill to 2050 to clean up after Australia's offshore oil and gas industry was estimated to be [$52 billion](https://www.boilingcold.com.au/australian-offshore-oil-and-gas-industry-has-a-52b-clean-up-bill/) four years ago, with onshore operations, such as those on Barrow Island, incurring additional costs. However, decommissioning is inherently unpredictable as it involves old equipment with uncertain levels of contamination and structural integrity, and costs are often more than expected. Decommissioning just one oil field - the Northern Endeavour vessel and its wells and pipelines on the seabed - is [expected to cost $1 billion](https://www.abc.net.au/news/2021-04-14/northern-endeavour-oil-vessel-could-cost-taxpayers-1-billion/100044914?ref=boilingcold.com.au). Woodside surprised investors earlier this year when it announced it could spend up to [$1.6 billion on decommissioning this year](https://thewest.com.au/business/oil-gas/woodside-energy-big-bill-for-restoration-work-in-2025-spooks-analysts-c-17750757?ref=boilingcold.com.au), well above the expectations of analysts. --- ### Read the freedom of information documents ### Alcoa ceo repeats misleading spin about its jarrah forest rehabilitation URL: https://www.boilingcold.com.au/alcoa-ceo-says-bauxite-miner-can-handle-later-wa-approvals/ Last updated: 2025-07-17T23:51:33.000Z Alcoa chief executive Bill Oplinger has reassured investors it could keep its Pinjarra alumina refinery running even if the WA government did not approve a major mine expansion until mid-2027. As recently as a May update to its website Alcoa had been targeting to receive approval for its current mining and a massive expansion to the north of Serpentine Dam by March 2026. Oplinger said the miner had contingency plans to maintain bauxite production levels for up to a 15-month delay to receiving approval, including digging deeper pits in areas where it is currently allowed to mine. However, he told Wall Street analysts on Thursday morning that delays beyond that could impact throughput at its Pinjara alumina refinery. "We'll work through that when we get there," he said. The Pittsburgh-based chief executive said the earlier schedule was no longer feasible due to the complexity of progressing two mine approvals simultaneously, the volume of documentation the company released in May [for public comment](https://www.boilingcold.com.au/alcoas-plans-to-mine-was-jarrah-forest-for-20-more-years-released/) and the anticipated effort to review and respond to those comments. These issues are not new, but Alcoa's acceptance of a more realistic approval timeline and admission that there would be no production impacts from a 15-month delay undermines the credibility of any future claims that so-called "green-tape" is killing jobs. Oplinger said he expected the Environmental Protection Authority to publish a revised approval timeline sometime after public consultation closes on August 21\. [Alcoa in WA: 60 years, 28,000 hectares of forest cleared, zero rehabilitation completedThe department of conservation says Alcoa has not met the rehabilitation completion criteria, but the miner claims it has rehabilitated 75 per cent of the forest it has cleared.![](https://static.ghost.org/v5.0.0/images/link-icon.svg)WAtodayPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/1fc3c4542a87b69e9fafca81413dcee1763752eb-1)](https://www.watoday.com.au/environment/sustainability/alcoa-in-wa-60-years-28-000-hectares-of-forest-cleared-zero-rehabilitation-completed-20230307-p5cq4j.html?ref=boilingcold.com.au) ## Rehabilitation spin continues Oplinger said Alcoa was "supporting" the public consultation "through a comprehensive communication and engagement campaign". "The focus of the campaign is to ensure that the public has access to accurate information and facts about our environmental performance in Australia, and understands our commitment to responsible mining in the northern jarrah forest," he said. Oplinger then repeated one of Alcoa's key lines of misinformation that has featured in its recent saturation advertising in WA, saying "75 per cent of cleared forests has been rehabilitated." However, after 60 years of mining that has destroyed more than 260 square kilometres of jarrah forest, not a single hectare has met the rehabilitation completion criteria agreed between Alcoa and the WA Government. Alcoa's claim that 75 per cent of the forest is rehabilitated is not based on the agreed rehabilitation completion criteria or the public's perception of what a rehabilitated forest would look like. A footnote in tiny font in the presentation accompanying the second-quarter results that cryptically added, "with per cent rehabilitated based upon stages of maturity and forest restoration", points to how Alcoa's public relations ruse works. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/07/Screenshot-2025-07-17-at-8.40.03---am.png) Image: [Alcoa investors presentation 16 July 2025](https://s29.q4cdn.com/945634774/files/doc%5Ffinancials/2025/q2/2Q25%5FAlcoa-Earnings-Presentation.pdf?ref=boilingcold.com.au) Alcoa can report a high percentage as it classifies an area as rehabilitated after “landscaping, overburden and topsoil return, contour ripping, fauna habitat return, and seeding” is completed, just the first 12 to 18 months of work towards a return to a forest ecosystem. This clear definition, consistent with industry usage but unknown to the public, never accompanies the 75 per cent claim. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/07/ae6a8360be38e9260d92109f7664749491561d57.webp) ****Some of the 75 per cent of jarrah forest "rehabilitated" by Alcoa near Nanga Brook.** Photo taken near Nanga Brook in 2021\. Source: ARC Centre for Mine Restoration. Alcoa is counting the area where it has just started to return a forest, and knowingly allowing the public to believe the job is done. Oplinger said Alcoa was committed to working collaboratively to achieve ministerial approval as soon as possible. "We will continue to engage with stakeholders to fulfil our responsibilities as a trusted miner and to sustain our right to mine for decades to come," he said. --- ### Read the in-depth investigation of Alcoa in WA by PublicSource of Pittsburgh, the miner's headquarters: [How Alcoa is undermining a rare forest to fuel its empireTwo journalists from Alcoa’s hometown flew to Perth to look at its mining of WA’s jarrah. A brilliant look at a slow-moving tragedy.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-132.png)Boiling ColdJamie Wiggan![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/First-nation-man-mining-site-2.jpg)](https://www.boilingcold.com.au/how-pittsburghs-alcoa-is-undermining-a-rare-forest-to-fuel-its-global-aluminum-empire/) [Will Alcoa refineries drive people from a third WA town?Kwinana and Yarloop have suffered from Alcoa’s toxic dust - is Pinjarra next?![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-133.png)Boiling ColdQuinn Glabicki![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Alcoa-refinery-jarrah-forest-pinjarra-3.jpg)](https://www.boilingcold.com.au/alcoas-australian-refineries-drove-flight-from-two-towns-and-its-waste-threatens-a-third/) [Will WA revisit the deal that Alcoa depends on?Destroyed forest. Threatened water supply. Toxic towns. Mountains of residue. Will the WA Government demand better?![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-134.png)Boiling ColdJamie Wiggan![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/L1007563.jpg-4.webp)](https://www.boilingcold.com.au/will-australia-revisit-the-deal-that-led-a-pittsburgh-firm-to-depend-on-the-ore-beneath-its-trees/) ### Five reasons Australia's green hydrogen dream has foundered URL: https://www.boilingcold.com.au/five-reasons-australias-green-hydrogen-dream-has-foundered/ Last updated: 2025-09-09T03:44:19.000Z [Alison Reeve](https://theconversation.com/profiles/alison-reeve-1260701?ref=boilingcold.com.au), [*Grattan Institute*](https://theconversation.com/institutions/grattan-institute-1168?ref=boilingcold.com.au) As the world looks for ways to tackle climate change, Australia has [invested heavily](https://international.austrade.gov.au/en/news-and-analysis/news/australia-one-of-the-worlds-largest-hydrogen-suppliers-by-2030?ref=boilingcold.com.au) in green hydrogen. Green hydrogen is shaping as the best option to strip carbon emissions from some industrial processes, such as iron-making and ammonia production. But making the dream a reality in Australia is proving difficult. Two recent announcements are a case in point. This month, the Queensland government withdrew financial support for the [Central Queensland Hydrogen Hub](https://www.abc.net.au/news/2025-02-04/bowen-disappointed-as-queensland-pulls-hydrogen-funding/104893618?ref=boilingcold.com.au). It came weeks after energy company [Fortescue cut 90 green hydrogen jobs](https://www.abc.net.au/news/2025-05-14/fortescue-green-hydrogen-job-losses/105291962?ref=boilingcold.com.au) in Queensland and Western Australia. I led the development of Australia’s National Hydrogen Strategy in 2019, in my previous job as a federal public servant. I also co-authored a [Grattan Institute report](https://grattan.edu.au/report/hydrogen-hype-hope-or-hard-work/?ref=boilingcold.com.au) on how hydrogen could help decarbonise the Australian economy. Here, I explain the main challenges to getting the industry off the ground. ![black and gray metal pipe](https://images.unsplash.com/photo-1613970351372-9804e380bd09?crop=entropy&cs=tinysrgb&fit=max&fm=jpg&ixid=M3wxMTc3M3wwfDF8c2VhcmNofDF8fHN0ZWVsfGVufDB8fHx8MTc1MjQ1MTk0NXww&ixlib=rb-4.1.0&q=80&w=2000) ****Green hydrogen is shaping as the best option to strip carbon emissions from some industrial processes, such as iron-making. But there are challenges afoo**t. Photo by [yasin hemmati](https://unsplash.com/@yasinb3da?ref=boilingcold.com.au) / [Unsplash](https://unsplash.com/?utm%5Fsource=ghost&utm%5Fmedium=referral&utm%5Fcampaign=api-credit) ## But first, what is green hydrogen? Hydrogen is the [lightest and most abundant element in the universe](https://theconversation.com/new-plan-shows-australias-hydrogen-dream-is-still-alive-but-are-we-betting-on-the-right-projects-237227?ref=boilingcold.com.au). It’s usually found as a gas, or bonded to other elements. It’s used to make products such as fertilisers, explosives and plastics. In future, it may also be a zero-emissions replacement for fossil fuels in industries such as steel and chemicals manufacturing. Australia currently makes very low volumes of hydrogen using natural gas, which produces greenhouse gas emissions. We are well-placed to produce “green” or zero-emissions hydrogen, through a process powered by renewable energy which releases hydrogen from water. But creating a large green hydrogen industry won’t be easy. These are the main five challenges. ## 1\. The learning curve is steep About 15 facilities in Australia are currently producing green hydrogen, all at low volumes – between 8 kilograms and [one tonne a day](https://www.vivaenergy.com.au/energy-hub/hydrogen-refuelling-in-australia/about-our-project/about-our-site?ref=boilingcold.com.au) (see chart below). By contrast, most recently cancelled projects would have produced hundreds of tonnes of green hydrogen daily. The [Central Queensland Hydrogen Hub](https://research.csiro.au/hyresource/central-queensland-hydrogen-project/?ref=boilingcold.com.au), for example, would initially have produced about 200 tonnes a day, scaling up to 800 tonnes in the 2030s. The failure of these big projects shows Australia has much to learn about planning, building, commissioning and operating large green hydrogen facilities. ![A chart showing the daily production capacity of hydrogen projects in Australia. Values range from 8kg per day to 1000 kg per day](https://images.theconversation.com/files/679250/original/file-20250710-56-1mutni.jpg?ixlib=rb-4.1.0&q=45&auto=format&w=754&fit=clip) The hydrogen projects currently operating in Australia are orders of magnitude smaller than those proposed. Grattan Insitute, [CC BY-NC-SA](http://creativecommons.org/licenses/by-nc-sa/4.0/?ref=boilingcold.com.au) ## 2\. Demand is limited Very little hydrogen is currently used in Australia – [around 500,000 tonnes a year](https://grattan.edu.au/wp-content/uploads/2023/12/Hydrogen-hype-hope-or-hard-work-Grattan-Institute.pdf?ref=boilingcold.com.au). This is less than 1% of national energy consumption. Most of this hydrogen is produced using natural gas, and is produced on site at existing industrial operations that require hydrogen, such as oil refiners and ammonia plants. Using hydrogen from a different source would require major – and costly – engineering changes at these facilities. So, how do new green hydrogen producers create demand for their product? The first option is to convince a company to spend money changing their operations to bring in green hydrogen from outside. This is not an easy prospect. The second is to find big new markets – which leads to the next challenge. [Gas seeping to surface from Chevron’s Barrow Island oil operationThe WA environment regulator is investigating unknown amounts of hydrocarbons rising to the surface on the Class A nature reserve.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-127.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Screenshot-2025-07-11-at-10.59.27---am-1-1-1.png)](https://www.boilingcold.com.au/gas-seeping-to-surface-from-chevrons-barrow-island-oil-operation/) ## 3\. The chicken-and-egg problem Renewable hydrogen isn’t a direct substitute for conventional fuels. You can’t burn hydrogen in your gas stovetop without changing the pipes in the house and the burners on the stove. Likewise, you can’t use hydrogen as a [substitute for coal when making steel](https://theconversation.com/red-dirt-yellow-sun-green-steel-how-australia-could-benefit-from-a-global-shift-to-emissions-free-steel-179286?ref=boilingcold.com.au)without changing the smelting process. This creates [a chicken-and-egg problem](https://www.forrs.de/backend/uploads/Chicken%5FEgg%5FDilemma%5Ffactsheet%5F84e90284ee.pdf?ref=boilingcold.com.au). Green hydrogen proponents won’t invest in high-volume production unless there are large users to buy the product. But large users won’t invest in changing their processes unless they are assured of supply. ## 4\. Green hydrogen is expensive Green hydrogen is much more expensive than conventional hydrogen. And as yet, there’s little evidence buyers are [willing pay more for it](https://www.dcceew.gov.au/sites/default/files/documents/national-hydrogen-strategy-2024.pdf?ref=boilingcold.com.au). So for green hydrogen to compete with conventional production, it needs government subsidies. The huge expense is largely due to the [electricity used to make green hydrogen](https://grattan.edu.au/wp-content/uploads/2023/12/Hydrogen-hype-hope-or-hard-work-Grattan-Institute.pdf?ref=boilingcold.com.au) – prices of which are currently high. As renewable energy expands, electricity prices in Australia [are expected to fall](https://theconversation.com/renewables-are-cheap-so-why-isnt-your-power-bill-falling-252391?ref=boilingcold.com.au). But building more large-scale renewable generation in Australia is itself [a difficult prospect](https://www.abc.net.au/news/2024-02-29/renewable-approval-delays-slowing-cleanenergy-transition/103517718?ref=boilingcold.com.au). ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/07/WWF-drone.JPG) ****The push to expand renewable energy generation in Australia is facing challenges of its own.** Image: Synergy. ## 5\. Economic and political turmoil Recent turmoil in global markets has made companies more cautious about investing outside their core business. And global inflation has helped drive up the cost of electricity needed to produce green hydrogen. Globally, governments have scrambled to keep national economies afloat, which has led to cuts in green hydrogen in several [countries](https://www.argusmedia.com/en/news-and-insights/latest-market-news/2703561-germany-cuts-funds-for-hydrogen-in-new-budget?ref=boilingcold.com.au). In Australia, green hydrogen is still key to the Albanese government’s [Future Made in Australia](https://treasury.gov.au/policy-topics/future-made-australia?ref=boilingcold.com.au) policy. And hydrogen has been a rare area of agreement between the two major parties, at both federal and state levels. But there are signs this is changing. The federal opposition last year [fought the government’s hydrogen tax credits](https://www.abc.net.au/news/2024-05-15/coalition-criticises-tax-breaks-for-critical-minerals-projects/103851012?ref=boilingcold.com.au), and the withdrawal of support for the Central Queensland Hydrogen Hub came from the Queensland LNP government, which won office in October last year. ## What next? There is a long road ahead if green hydrogen is to help Australia reach its goal of net-zero emissions by 2050\. So what have we learned so far? Many scrapped projects tried to implement a “hub” model – combining multiple users in one place, which was designed to make it more attractive to suppliers. But this was difficult to co-ordinate, and vulnerable to changing global conditions. The green hydrogen industry should focus on the most promising uses for its product. For example, if it could successfully make enough green hydrogen to supply ammonia production, it could build on this to eventually support a bigger industry, such as iron-making. It’s also time to [rethink how subsidies are structured](https://theconversation.com/new-plan-shows-australias-hydrogen-dream-is-still-alive-but-are-we-betting-on-the-right-projects-237227?ref=boilingcold.com.au), to reflect the fact some sectors are better bets than others. At present, the federal government’s Hydrogen Headstart program and the hydrogen tax credit are agnostic as to how the hydrogen is used, which does little to help demand emerge in the right places. Finally, political unity must be renewed. Hydrogen projects require a lot of capital, and investors get nervous when an industry does not have bipartisan support. The hype around green hydrogen in Australia is fading. There are some reasons for hope – but success will require a lot of hard work. --- ![The Conversation](https://counter.theconversation.com/content/260634/count.gif?distributor=republish-lightbox-advanced) [Alison Reeve](https://theconversation.com/profiles/alison-reeve-1260701?ref=boilingcold.com.au), Program Director, Energy and Climate Change, [*Grattan Institute*](https://theconversation.com/institutions/grattan-institute-1168?ref=boilingcold.com.au) This article is republished from [The Conversation](https://theconversation.com/?ref=boilingcold.com.au) under a Creative Commons license. Read the [original article](https://theconversation.com/whats-happened-to-australias-green-hydrogen-dream-here-are-5-reasons-the-industry-has-floundered-260634?ref=boilingcold.com.au). ### Gas seeping to surface from Chevron's Barrow Island oil operation URL: https://www.boilingcold.com.au/gas-seeping-to-surface-from-chevrons-barrow-island-oil-operation/ Last updated: 2025-07-24T09:14:07.000Z An unknown amount of gas is seeping to the surface on Barrow Island, where Chevron's six decades of oil production ceased in May. In addition to any local effects the pollution may have, methane has more than 80 times the climate-warming effect of carbon dioxide over a 20-year period. A Chevron spokesman said the company has informed relevant regulators of the problem and will work with them to implement a comprehensive investigation. “As part of detailed planning for the decommissioning of WA oil infrastructure, data analysis has indicated an environmental risk from the subsurface migration of hydrocarbons, primarily gas, to groundwater and the surface," he said. Chevron has drilled 895 oil wells on Barrow Island since 1964, according to the WA Government's [database of wells](https://wapims.dmp.wa.gov.au/WAPIMS/Search/Wells?ref=boilingcold.com.au), with 696 more than 40 years old. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/07/Screenshot-2025-07-11-at-10.54.36---am.png) ****The southern half of Barrow Island is covered in well pads, access roads and oil pipelines.** Source: [Google Maps](https://www.google.com/maps/place/Barrow+Island/@-20.8068109,115.3763096,4724m/data=!3m1!1e3!4m6!3m5!1s0x2bf811ea0176a741:0xe7a33e37111c6248!8m2!3d-20.7804342!4d115.4022706!16zL20vMDd0NXEy?entry=ttu&g%5Fep=EgoyMDI1MDcwOC4wIKXMDSoASAFQAw%3D%3D&ref=boilingcold.com.au) A spokesman for the Department of Mines, Petroleum and Exploration (DMPE) said Chevron told it the gas was coming from the Gearle Formation, but the company had not determined the extent of the flow. The Gearle Formation is a layer about 300m to 700m below the surface of Barrow Island, where some oil has been produced from, but most oil has been extracted from deeper areas. Since 1967, 335 million barrels of oil produced on Barrow Island have produced more than [$1 billion in royalties](https://australia.chevron.com/what-we-do/barrow-island?ref=boilingcold.com.au) for the WA and Federal governments. The DMPE spokesman said it could not provide details on any possible legal action it may take as its investigation is ongoing, but it has required Chevron to update its environmental plan "as an initial step in possible compliance action." Conservation Council of WA executive director Matt Roberts said Chevron was privileged to be allowed to operate on a Class A Reserve and should work to the highest environmental standards. The 235-square-kilometre island is home to more than 100 species of birds, 13 mammal species, 44 different reptiles and almost 4000 different plants. These include 24 animal and plant species found nowhere else. "Chevron continues to fall short in its duty to manage its operations in a way that protects the unique environment of Barrow Island," Roberts said. "This news is unsurprising given the history of Chevron on Barrow Island." ## Barrow Island no longer pristine The gas seepage adds to numerous other environmental problems on Barrow Island caused by Chevron's long-term oil production and the more recent Gorgon gas export plant. The entire island is classified as a contaminated site under WA legislation, with public records listing [sixteen areas contaminated with hydrocarbons](https://www.documentcloud.org/documents/25995489-barrow-island-contaminated-sites-act-basic-summary-of-records12423/?ref=boilingcold.com.au) and one area contaminated with asbestos. The worst area near oil storage tanks is estimated to have contaminated the water table with up to 900,000 litres of crude oil, reaching depths of 11m, caused by numerous spills over many years up to 2006\. Remediation work over almost 20 years has stabilised the 18-hectare plume, and an independent audit found the hydrocarbons were naturally breaking down. The $US54 billion ($82 billion) Gorgon project built between 2009 and 2017 is under investigation by the WA environmental regulator for PFAS contamination, erosion of beaches where vulnerable flatback turtles nest and quarantine failures. [Turtles, toxic PFAS and quarantine: Probes target Chevron’s GorgonThe US gas giant’s operation on Western Australia’s Barrow Island is being investigated for beach erosion, contamination and biodiversity-threatening breaches.![](https://static.ghost.org/v5.0.0/images/link-icon.svg)WAtodayPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/7a456a108ee37e11e668b4bfbd13d8859984f4a9-2)](https://www.watoday.com.au/national/western-australia/turtles-toxic-pfas-and-quarantine-probes-target-chevron-s-gorgon-20231016-p5ecrv.html?ref=boilingcold.com.au) Freedom of information requests revealed the [existence of 111 documents](https://www.documentcloud.org/projects/221992-barrow-island-environmental-investigations/?ref=boilingcold.com.au) from three investigations that the Department of Water and Environmental Regulation (DWER) would not release so as not to "prejudice an investigation relating to contravention or possible contravention of the laws.” The regulator was sufficiently concerned to prepare contentious issue briefing notes for the environment minister in late 2022 for all three issues. A DWER spokesman said the investigations into quarantine, beach erosion and PFAS issues on Barrow Island remain ongoing. "There is no scheduled completion date for these investigations," he said. The [environmental license](https://www.der.wa.gov.au/component/k2/itemlist/filter?fitem%5Fall=gorgon&moduleId=94&Itemid=175&ref=boilingcold.com.au) governing the Gorgon project was amended in February to include regulation of PFAS contamination. The Conservation Council of WA has [appealed the conditions](https://www.watoday.com.au/national/western-australia/state-must-crack-down-on-chevron-s-toxic-soil-use-in-wa-say-advocates-20250407-p5lpr3.html?ref=boilingcold.com.au), arguing that they focus on monitoring the risk rather than reducing it. [![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/01/support-CTA-for-posts-1.png)](https://www.boilingcold.com.au/#/portal/signup) Roberts said Chevron continued to fall short in its duty to protect the unique environment of Barrow Island, and DWER was not meeting its obligations as regulator. "We continue to hold grave concerns about unresolved issues relating to quarantine, beach erosion and PFAS contamination," he said. Chevron was only allowed to build the huge Gorgon gas plant on Barrow Island so it could inject underground the millions of tonnes of carbon dioxide that flow to the island with gas from offshore fields every year. However, despite costing[ more than $3 billion](https://www.watoday.com.au/national/western-australia/chevron-s-troubled-carbon-capture-and-storage-at-gorgon-set-to-worsen-in-2023-20230711-p5dngj.html?ref=boilingcold.com.au), the CO2 injection effort has failed, with it operating at only one-third of its design capacity eight years after gas exports began. The shuttered oil asset on Barrow Island is owned by Chevron (57 per cent), Santos (29 per cent), and ExxonMobil (14 per cent). The Gorgon joint venture consists of Chevron (47 per cent), Shell and ExxonMobil, each owning 25 per cent, and three Japanese energy utilities with small stakes. ### Westport bill may jump $1b to keep desalination plant working URL: https://www.boilingcold.com.au/westport-bill-may-jump-1b-to-keep-desalination-plant-working/ Last updated: 2025-07-14T00:29:03.000Z *EXCLUSIVE* The Cook government may have to spend an additional $1 billion to build its controversial Westport container terminal in Kwinana to avoid shutting down an adjacent desalination plant that provides [15 per cent of Perth's water](https://www.watercorporation.com.au/Our-water/Desalination/Perth-Seawater-Desalination-Plant?ref=boilingcold.com.au). In March, Water Corporation engineers were told the utility would need to close the Perth Seawater Desalination Plant as soon as dredging for Westport commenced, as the churned-up water would not be clear enough to supply the desalination plant. For 20 years, the desalination plant has sucked in about [1 million cubic metres of seawater a year](https://www.epa.wa.gov.au/sites/default/files/Referral%5FDocumentation/App%20D%5FMarine%20Model%20Validation%20Report%20-%20Part1.pdf?ref=boilingcold.com.au) to produce 450,000 cubic metres of fresh water and return 550,000 cubic metres of brine to Cockburn Sound. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/05/image.png) ****The water intake and outfall for the Perth Seawater Desalination Plant (PSDP) is on the northern boundary of Westport (bright green line).** **Image:* [**Westport*](https://www.epa.wa.gov.au/sites/default/files/Referral%5FDocumentation/REVISED%5FWestport%20Proposal%20Content%20Document%20%28EP22-120%2803%29--027A%20ADB%29.pdf?ref=boilingcold.com.au)**.* A Water Corporation employee not authorised to speak to the media told *Boiling Cold* that attendees at the utility's annual water quality forum heard it would cost about $1 billion to extend the plant's intake and outfall pipelines further into Cockburn Sound to be clear of the proposed port. An [indicative schedule](https://westport.wa.gov.au/planning/timing-and-transition/?ref=boilingcold.com.au) for Westport shows that work on marine infrastructure is scheduled to begin in 2028, allowing the port to start operations late in the next decade. If this schedule held, there is little time for Water Corporation to design, obtain environmental approval and then construct the longer pipelines. The outfall pipeline must be sufficiently clear of the port to allow currents to safely disperse the brine, preventing excessively salty water from damaging the environment or entering the intake pipeline. The cost for the longer pipelines is an added impost for Westport's current cost estimate of [$7.2 billion](https://www.watoday.com.au/politics/western-australia/price-tag-revealed-for-wa-s-biggest-ever-infrastructure-project-20241111-p5kpp8.html?ref=boilingcold.com.au), which is already $2.5 billion more than the original price of $4.7 billion. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/05/Perth-SDP.jpg) ****The Perth Seawater Desalination Plant in Kwinana produces enough water a year to fill Optus Stadium 50 times.** *Image:* [**Water Corporation*](https://www.watercorporation.com.au/Our-water/Desalination/Perth-Seawater-Desalination-Plant?ref=boilingcold.com.au) *Boiling Cold* sent questions to the Minister for Transport Rita Saffioti*,* and the Minister for Water Simone McGurk. In a joint response, a state government spokesman said Westport and Water Corporation worked closely together and the consultation had resulted in the port facilities being moved one kilometre south to minimise impact on the desalination plant. He said the two agencies and the Department of Treasury will further refine the cost estimate for the work required to keep the desalination plant operating and ensure the port works also allow for a [proposed expansion](https://www.epa.wa.gov.au/proposals/perth-seawater-desalination-plant-2?ref=boilingcold.com.au) of the desalination plant. It is understood the plant will not be shut down under any circumstances. Perth water users will not bear the burden of the extra work caused by Westport. "Government will fund any additional investments that may be required, and will not impose additional levies to fund those works," the spokesman said. ### 🗡️ Who murdered the Murujuga rock art science? URL: https://www.boilingcold.com.au/who-murdered-the-rock-art-science-2/ Last updated: 2025-07-07T01:05:19.000Z ### 🏙️ The crime scene: Perth, Western Australia, late May 2025 Late on Friday, May 23rd, the WA Government and the Murujuga Aboriginal Corporation (MAC) released a major scientific study into whether emissions from industry on the Burrup Peninsula are damaging the area's more than one million rock art engravings. WA's Cook Labor government [welcomed the finding](https://www.wa.gov.au/government/media-statements/Cook%20Labor%20Government/World-leading-monitoring-program-informs-new-standards-for-protecting-Murujuga-Rock-Art-20250523?ref=boilingcold.com.au) that current levels of industrial pollution - mainly from Woodside's two gas plants, Yara's facilities and ships exporting Rio Tinto's iron ore - were safe for the rock art. It was exactly a week before federal environment minister Murray Watt's deadline to decide whether Woodside's North West Shelf (NWS) plant could operate until 2070. By law, Mr Watt's only environmental concern was the protection of the Murujuga rock art that is up to 50,000 years old. Woodside's NWS plant is by far the dominant source of the [pollutant of most concern](https://www.boilingcold.com.au/un-set-to-reject-murujuga-world-heritage-listing-due-to-industrial-pollution/): nitrous oxides, or NOx. The output of the Murujuga Rock Art Monitoring Program (MRAMP) was a crucial input into Mr Watt's decision. It seems the WA government [eventually gave a version](https://www.afr.com/politics/federal/indigenous-rock-art-report-at-centre-of-north-west-shelf-delay-20250220-p5ldv4?ref=boilingcold.com.au) of the study to Mr Watt's predecessor Tanya Plibersek in February. However, its public release three months later gave little time for the media or experts to digest this work before Mr Watt made his decision, but within days, its credibility was severely tarnished. > **Who killed the credibility of the rock art science?** > > Was it Mr Cook 🧑‍🍳 from Dumas House with his dodgy executive summary? > OR > Professor Benjamin Smith 👨‍🏫 from the ivory tower with a media conference? Unlike conventional Cluedo™️, the Murujuga edition involves not one professor, but three. However, first, let's examine three crucial documents. ### 📄 Late documents: a study, safe limits and a summary The study produced a raft of documents, but the three most important are: - the 678 pages of the [main scientific study](https://www.wa.gov.au/government/publications/murujuga-rock-art-monitoring-program-monitoring-studies-report-2024?ref=boilingcold.com.au), - a report on limits to the level of industrial pollution to protect the rock art called [environmental quality criteria](https://www.wa.gov.au/government/publications/murujuga-rock-art-monitoring-program-interim-environmental-quality-criteria?ref=boilingcold.com.au) (EQC), - and a glossy eight-page [executive summary](https://www.wa.gov.au/system/files/2025-05/murujuga%5Frock%5Fart%5Fmonitoring%5Fprogram%5Fresearch%5Fsummary%5Fyear%5F2.pdf?ref=boilingcold.com.au) The revision pages of the two substantial reports indicate that by late January 2025, all peer review comments had been incorporated, and the scientific work was essentially complete. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/05/Screenshot-2025-05-30-at-9.12.58---am.png) ****🔍 Exhibit A - history of the main study** ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/06/Screenshot-2025-06-04-at-11.49.07---am.png) ****🔍 Exhibit B - history of the EQC study** In November 2024, [parliament was told](https://www.parliament.wa.gov.au/parliament/pquest.nsf/viewLAPQuestByDate/E905F417E0DAD93548258BE8002E308F?opendocument&ref=boilingcold.com.au), "When the peer review process is finalised, the documents will require joint approval by DWER and the Murujuga Aboriginal Corporation prior to publication". Publication was expected in "early 2025," but the Department of Water and Environmental Regulation and MAC took four months to approve the documents and produce a very brief executive summary. 📝 **Conclusion - The reports could have been finished and released much earlier if there was the will.** ### 🤯 An impossible interview On the Tuesday after the release, University of WA Professor of Archaeology Benjamin Smith praised the main scientific work as "brilliant" but said the executive summary was "clearly written by the WA government and contradicts directly the findings of the report." ****🔍 Exhibit C - Prof. Smith in front of Parliament House to "blow the whistle" on the WA government.** Before Prof. Smith's press conference, I'd already approached the lead scientist of the study, Professor Ben Mullins of Curtin University, for an interview. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/06/Screenshot-2025-05-30-at-9.20.13---am-1.png) ****🔍 Exhibit C - Prof. Mullins not allowed to speak to the media without approval from DWER and MAC** Speaking to Prof. Mullins was the perfect way for a journalist to sort through claim and counterclaim, as he appeared to be respected on both sides: the WA government has awarded his team the $26 million research contract, and Prof. Smith spoke highly of him. So, I waited for DWER and MAC to respond, then twice followed up with both organisations the next day. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/05/Screenshot-2025-05-30-at-11.29.57---am-1-1.png) ****🔍Exhibit D - DWER and MAC do not respond to repeated requests for an interview** At this stage, DWER and MAC must have realised I was going to keep bugging them, so the simplest plan to deal with an unwanted question - ignore it - would not work. Then, within an hour, I got my answer - but from Curtin University, whom I had not contacted and who are not a party to the contract gagging Prof. Mullins. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/05/Screenshot-2025-05-30-at-11.34.15---am-1.png) ****🔍 Exhibit E - Mullins' employer, Curtin University, who I did not contact, tells me he "is unavailable for interview."** 📝 **Conclusion - The WA Government and/or MAC will not allow Prof. Mullins to talk to the media but do not want to say this on the record.** 👀 Observation - I naively thought Universities stood for free and open debate. Sad to see Curtin help obscure the fact that the WA government is gagging one of its academics by doing its communications dirty work for them. ### 😫 More concerns about the executive summary Befitting of an investigation into science, we now have a third professor - detected by the ABC's Rhiannon Shine - statistician Emeritus Professor Adrian Baddeley. [Gagged scientist speaks out over WA government’s claims in rock art reportA leading scientist expresses “grave concern” about “unacceptable interference” in a major study of the impacts of industrial emissions on ancient Aboriginal rock carvings.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/favicon-1.svg)ABC NewsRBy Rhiannon Shine![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/6a181783e5926ea7ecd8311720569a0d-1)](https://www.abc.net.au/news/2025-05-28/scientists-say-wa-government-interfered-with-rock-art-study/105344536?ref=boilingcold.com.au) ****🔍 Exhibit F - A senior scientist on the Curtin team berates DWER.** Prof. Baddeley had signed off both the main study and the EQC report as "approved", but was less than happy with the executive summary. Ms Shine had obtained an email that Prof. Baddeley had sent to DWER last Tuesday, in which he complained that the executive summary had altered a crucial graph against his advice and without his knowledge. "In my opinion, this constitutes unacceptable interference in the scientific integrity of the project," he said. Prof. Baddeley's concern about the graph (see next section) was identical to one of the concerns Prof. Smith had aired hours earlier. To clear all this up, two days later, our old friend from the Curtin communications team wades in again with a statement from Prof. Baddeley: ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/06/Screenshot-2025-06-04-at-2.44.17---pm.png) ****🔍 Exhibit G - Prof. Baddeley strongly backs the contents of the main report but merely "respects the process" that produced the executive summary** (highlighting is mine) Note that Baddeley retracted none of his allegations in this statement. Presumably, this convoluted word salad was the most the powers that be could extract out of him. He did, however, confirm that DWER and MAC were involved in producing the executive summary. And I appreciated hearing about a commitment to "questioning and discussion" from the same email address that had denied me an interview with Prof. Mullins two days earlier. 📝 **Conclusion - Two noted scientists have expressed on the record their concerns that a vital graph in the executive summary is misleading.** ### 📊 The missing teal on a contentious graph The scientific work on the Murujuga rock art is about answering whether industrial pollution is affecting the incredibly thin coloured patina of the rocks at Murujuga that is the basis for the rock art, and, if so, what to do about it. The full ECQ report presented two safe levels of NOx pollution (left-hand graph, the yellow and teal lines) using different methods, and plotted these against NOx measurements taken from around the Burrup Peninsula. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/05/Screenshot-2025-05-30-at-10.29.37---am.png) ****🔍 Exhibit H - The rock art appears less at risk in the summary report.** However, the similar plot in the executive summary (right-hand side), which at only eight pages will be much more widely read, omits the more stringent EQC. Prof. Baddeley told DWER the missing teal-coloured line shows "that five of the monitoring sites were experiencing pollutant levels above the interim guideline, and again these are the five sites closest to industry," he wrote. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/06/Screenshot-2025-06-04-at-3.46.23---pm-1.png) ****🔍 Exhibit I - The two emissions monitors closest to industry had operated for less than 12 months, so are shown as grey dots.** A close look shows that two sites - the two closest to Woodside's two gas plants - have unsafe levels of NOx even by the more lenient limit in the executive summary. Consequently, according to Prof. Baddelly, the executive summary was incorrect when it said, "The research indicates that the current levels of the pollutants of most concern for the rock art are lower than the interim guideline levels". 📝 **Conclusion - Not only did the executive summary include, against the advice of a senior scientist, a plot that makes the pollution look less worrying, but it also makes a sweeping statement that is unsupported by that altered plot.** ### 🪨 A rock in a cupboard (& Meg O'Neill's scientific insight) In addition to the altered plot, another concern of Prof. Smith's was the conclusion that while some rock surfaces had become porous due to pollution, this was due to a power station that had operated on particularly dirty fuel until 1986. The conclusion absolved current industry from blame for the damaged rock surfaces. However, separate from Curtin's work for DWER and MAC, Prof. Smith had an independent team conducting research on the rock art. One investigation examined the condition of a rock collected by an archaeologist in the damaged area in 1994, which had since spent decades in a cupboard. Prof. Smith's team looked at the rock under a microscope and found none of the damage present in the area now. "We have direct proof that this problem of elevated porosity - in other words, that the rock has become like a Swiss cheese - has happened since 1994," he said. "It's happened with the current pollution levels and by the current industry that we have operating at Murujuga, "We have a serious problem." Ah, but do we? The next day, Woodside chief executive Meg O'Neill shot back: "People who seem to be [pulling rocks out of cupboards](https://thewest.com.au/business/oil-gas/woodside-energy-meg-oneill-knocks-back-fresh-concerns-about-murujuga-rock-art-c-18831714?ref=boilingcold.com.au), really, I find it hard to give that any credibility,” she opined. Now we have to decide who to trust - Prof. Smith and his team, or Ms O'Neill's scientific insight, based on the untrustworthiness of things that come from cupboards? For those who choose the latter, please, for your own safety, immediately empty the contents of your pantry into the bin. 📝 **Conclusion - There seems to be strong evidence that a key finding of MRAMP, that the rock surface damage it did find was due only to past industry, may be wrong.** ### ❓But would the Cook government distort science to protect a major resource company? It's fair to be sceptical when claims are made that people are colluding behind closed doors to effect an outcome. In this case, it is the Labor Party that prides itself on having a greater commitment to Indigenous empowerment than the other mob. So would Mr Cook and his government distort science to protect a major resource company? Absolutely and unequivocally yes. They are doing it now to protect Alcoa's profits at great risk to Perth's water supply, and it is all documented through numerous freedom of information requests. [Labor breaks vow and risks WA’s water supply for AlcoaRoger Cook granting Alcoa greater access to mine near Perth’s dams risks could cost taxpayers billions of dollars and result in water restrictions![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-122.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Alcoa-Cook-Water-feature-pic-12.png)](https://www.boilingcold.com.au/wa-labor-puts-alcoa-before-water-supply/) ****🔍 Exhibit J - Roger Cook rearranged governance of bauxite mining to ensure he only gets advice that supports continued mining.** 📝 **Conclusion - Mr Cook has form.** > 🕯️🗡️🪢🪈🔫🔧 This story demonstrates the extent of work required by a journalist when major players employ delay and vague replies to try to kill legitimate stories. > All I wanted to do was interview Prof. Mullins. **If you want to back WA's most independent journalism, please sign up for**[ **monthly support**](https://www.boilingcold.com.au/support/#/portal/signup) **or make a** [**one-off donation**](https://www.boilingcold.com.au/support/#/portal/support)**. Thank you.** --- This story was originally published in the *Boiling Cold* newsletter on June 4. ### How the North West Shelf expansion risks Murujuga’s 50,000-year-old rock art URL: https://www.boilingcold.com.au/how-the-north-west-shelf-expansion-risks-murujugas-50-000-year-old-rock-art/ Last updated: 2025-09-09T03:46:10.000Z [Benjamin Smith](https://theconversation.com/profiles/benjamin-smith-425236?ref=boilingcold.com.au), [*The University of Western Australia*](https://theconversation.com/institutions/the-university-of-western-australia-1067?ref=boilingcold.com.au) and [John Black](https://theconversation.com/profiles/john-black-418333?ref=boilingcold.com.au), [*University of Sydney*](https://theconversation.com/institutions/university-of-sydney-841?ref=boilingcold.com.au) Yesterday, new environment minister Murray Watt [approved an extension](https://theconversation.com/green-light-for-gas-north-west-shelf-gas-plant-cleared-to-run-until-2070-257008?ref=boilingcold.com.au) for the North West Shelf liquefied natural gas project. The gas plant at Karratha, Western Australia, will run until 2070. This expansion – and the pollution it will release – has led to a recommendation by the International Council on Monuments and Sites to [defer UNESCO’s decision](https://www.smh.com.au/politics/western-australia/watt-accuses-un-related-organisation-of-deferring-world-heritage-bid-using-factual-inaccuracies-20250528-p5m2w3.html?ref=boilingcold.com.au) on the world heritage listing of the nearby Murujuga rock art. Two of the recommendations prior to renomination of the site are to “ensure the total removal of degrading acidic emissions” and “prevent any further industrial development adjacent to, and within, the Murujuga Cultural Landscape”. Murujuga has more than one million petroglyphs, some up to 50,000 years old. It has the oldest depictions of the human face in the world and records the lore and traditions of Aboriginal Australians since the [first human settlement of this continent](https://westernindependent.com.au/2023/06/02/western-australias-louvre/%20https://murujuga.org.au/world-heritage/world-heritage-listing/?ref=boilingcold.com.au). It is strikingly beautiful and is of enormous cultural and spiritual importance to the Traditional Owners. Despite the immense significance of the site, a large industrial precinct has been built at its centre. ## Concerns about the Murujuga Rock Art report On Friday, the Western Australian Government released the long-awaited [Murujuga Rock Art Monitoring Program Year 2 report](https://www.wa.gov.au/government/publications/murujuga-rock-art-monitoring-program-monitoring-studies-report-2024?ref=boilingcold.com.au). This report examines the effect of industrial pollution upon one of the world’s most significant rock art sites. We have conducted our own independent project into the impact of industrial emissions on Murujuga since 2018\. Many of our findings support the details in this report but the government’s [report summary](https://www.wa.gov.au/system/files/2025-05/murujuga%5Frock%5Fart%5Fmonitoring%5Fprogram%5Fresearch%5Fsummary%5Fyear%5F2.pdf?ref=boilingcold.com.au) and [subsequent political commentary](https://www.abc.net.au/news/2025-05-28/scientists-say-wa-government-interfered-with-rock-art-study/105344536?ref=boilingcold.com.au) downplays the ongoing impacts of acidic emissions from industry on the world unique rock art. The most significant findings are the Weathering Chamber results. These subjected all rock types from Murujuga to the air pollutants released by industry. The results showed that all were degraded, even with relatively low doses of sulphur dioxide (SO₂) and nitrogen dioxide (NO₂). The second highly significant finding is that “there is statistically significant evidence of elevated porosity of granophyre rock surfaces”. This is centred on the industrial precinct in Murujuga. The report acknowledges industrial pollution is the most likely cause. This degradation and elevated porosity of the rocks puts the survival of the petroglyphs at risk. [Woodside spills 16,000 litres of oil into Indian OceanThe company that thinks a damaging oil spill from its planned drilling near Scott Reef is “only a mere theoretical possibility” weeks ago accidentally released a cocktail of hydrocarbons, chemicals and water into the Indian Ocean.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-120.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Mia-Yellagonga-signed-cropped-3.jpg)](https://www.boilingcold.com.au/woodside-spills-16-000-litres-of-oil-into-ocean-north-of-ningaloo/) On our research team, Jolam Neumann’s still to be published PhD thesis at the University of Bonn, Germany, considered the impacts of industrial pollution on Murujuga rocks. He used actual samples of gabbro and granophyre rock collected from Murujuga and simulated six years of weathering under current pollution conditions. He found elevated porosity in both rock surfaces. He also collected the residue to understand what was eroded from the rock and how. He found there was significant degradation of birnessite (manganese) and kaolinite (clay) from the surface. The dark red/brown surface of the rock became porous and started to break down. His work confirms industrial emissions are the cause of the elevated porosity in the report. His work shows the seriousness of the porosity: it is symptomatic of a process causing the rapid disintegration of the rock surface. ## Damage is ongoing With Murujuga Rock Art Monitoring Program report showing evidence of damage to the art from pollution, the state government chose to emphasise in their [report summary](https://www.wa.gov.au/system/files/2025-05/murujuga%5Frock%5Fart%5Fmonitoring%5Fprogram%5Fresearch%5Fsummary%5Fyear%5F2.pdf?ref=boilingcold.com.au) that a defunct power plant from the 1970s and 1980s was likely the culprit. The report’s data suggests this power plant produced about 3,600 tonnes of NO₂ per year, and less than 400 tonnes of SO₂ per year. Current industry in the immediate area [produces more than](https://www.dcceew.gov.au/environment/protection/npi?ref=boilingcold.com.au) 13,000 tonnes of NO₂ per year and more than 6,500 tonnes of SO₂. If the old power plant damaged the art then contemporary industrial emissions will be damaging the rock art at least five times faster. [Industry slams Woodside’s ‘bare minimum’ supply of PlutoAlcoa, Wesfarmers and other big gas users in WA want Woodside to deliver what it agreed with the state government.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-121.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Pluto-LNG-Plant--onshore-gas-plant-web.jpeg)](https://www.boilingcold.com.au/industry-slams-woodsides-bare-minimum-supply-of-gas-to-wa-from-pluto/) Neumann also gained access to a piece of rock collected in 1994 by archaeological scientist Robert Bednarik, and stored in his office in Melbourne for the past 30 years. The area where this rock came from now has elevated porosity, but the Bendarik rock shows no signs of it. This means the bulk of the industrial damage is likely more recent than 1994 – and is ongoing. ## Losing 50,000 years of culture The rock art was formed by engraving into the outer thin red/brown/black surface of the rock, called rock varnish, exposing the blue-grey parent rock beneath. This rock varnish was made in a process that [involved the actions](https://www.ifrao.com/wp-content/uploads/2021/10/39-1-Murujuga.pdf?ref=boilingcold.com.au) of specialised microbes called cyanobacteria. They concentrate manganese and iron from the environment to form an outer sheath to protect themselves from the harsh desert environment. The rock varnish forms at an incredibly slow rate: 1 to 10 microns in 1,000 years (a human hair is about 100 microns). These organisms can only thrive when the rock surface acidity is [near neutral (pH 6.5–7)](https://www.ifrao.com/wp-content/uploads/2021/10/39-1-Murujuga.pdf?ref=boilingcold.com.au). Their manganese sheaths are crucial to the integrity of the rock varnish, it binds it together and holds it to the underlying rock. If you lose the manganese you lose the rock varnish and the rock art. Neumann found the proportion of manganese in the Bednarik rock sample was 18.4% by weight. In samples collected in the same area in 2021, the manganese content had fallen to 9.6%. The depth of the varnish was reduced, and the varnish layer was full of holes where the manganese had been degraded. The damage by industry over the last 26 years was clearly visible. Increased porosity is reducing the density of the rock varnish layer and leading to its eventual degradation. There is also an absence of cyanobacteria close to the industrial sites, but not at more distant sites, suggesting industrial emissions are eliminating the varnish-forming microbes. ## Where to next? Industrial pollution has degraded the rock art and will continue to do so until the industrial pollution levels at Murujuga are reduced to zero. There are two well-recognised ways to eliminate NO₂ emissions. One uses [selective catalytic reduction](https://en.wikipedia.org/wiki/Selective%5Fcatalytic%5Freduction?ref=boilingcold.com.au) to convert NO₂ to nitrogen and water. The second method is to replace all gas-burning heat production processes with electricity. The use of such technologies should form part of the conditions to the ministerial approval of the North West Shelf extension. --- [Benjamin Smith](https://theconversation.com/profiles/benjamin-smith-425236?ref=boilingcold.com.au), Professor of Archaeology (World Rock Art), School of Social Sciences, [*The University of Western Australia*](https://theconversation.com/institutions/the-university-of-western-australia-1067?ref=boilingcold.com.au) and [John Black](https://theconversation.com/profiles/john-black-418333?ref=boilingcold.com.au), Adjunct Professor Emeritus, School of Veterinary Science, [*University of Sydney*](https://theconversation.com/institutions/university-of-sydney-841?ref=boilingcold.com.au) This article is republished from [The Conversation](https://theconversation.com/?ref=boilingcold.com.au) under a Creative Commons license. Read the [original article](https://theconversation.com/how-the-north-west-shelf-expansion-risks-further-damage-to-murujugas-50-000-year-old-rock-art-257615?ref=boilingcold.com.au). ### Alcoa's plans to mine WA's jarrah forest for 20 more years released URL: https://www.boilingcold.com.au/alcoas-plans-to-mine-was-jarrah-forest-for-20-more-years-released/ Last updated: 2025-05-29T05:12:54.000Z Alcoa's plans to expand mining around Serpentine Dam to feed its Pinjarra alumina refinery until 2045 have been released for public comment by WA's environmental watchdog. The WA Environmental Protection Authority also released details of Alcoa's current mining, and the public now has 12 weeks to comment on both plans. Alcoa started the approval process for the [expansion of its Huntly mine](https://www.epa.wa.gov.au/proposals/pinjarra-alumina-refinery-revised-proposal?ref=boilingcold.com.au) in 2020 and four years ago agreed on the scope of the Environmental Review Document released on Thursday. The US company's [current mining plan out to 2027](https://www.epa.wa.gov.au/proposals/bauxite-mining-darling-range-southwest-wa-years-2023-2027?ref=boilingcold.com.au) will also be assessed by the EPA after it accepted a referral from the WA Forests Alliance. Alcoa's expansion would clear 75 square kilometres of jarrah forest and increase the volume of caustic tailings stored each year at the Pinjarra refinery by 1.6 million tonnes a year to 11.6 million tonnes. EPA chair Darren Walsh said they were both complex environmental impact assessments with many thousands of pages submitted by Alcoa for review. “The sheer volume, the unique biodiversity of the Northern Jarrah Forest, and the number of environmental factors to consider means a 12-week public consultation period is entirely appropriate,” he said. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/05/Alcoa-Pinjarra-refinery-and-tailings.JPG) ****Bauxite from the expanded Huntly mine will be processed at the Pinjarra refinery, inland from Mandurah**. **Image: Peel Environmental Protection Alliance.* Strong opposition to both proposals is expected due to concerns about the future of the northern jarrah forest, which is [at risk of collapse](https://www.ipcc.ch/report/ar6/wg2/downloads/outreach/IPCC%5FAR6%5FWGII%5FFactSheet%5FAustralasia.pdf?ref=boilingcold.com.au) from hotter, drier conditions with more fires, according to the Intergovernmental Panel on Climate Change. Alcoa has strip-mined more than 280 square kilometres of jarrah forest since 1963, but [no area has yet been rehabilitated](https://www.watoday.com.au/environment/sustainability/alcoa-in-wa-60-years-28-000-hectares-of-forest-cleared-zero-rehabilitation-completed-20230307-p5cq4j.html?ref=boilingcold.com.au) to the completion criteria agreed with the WA government. Despite this, in the past week, Alcoa has been advertising that "75 per cent has already been rehabilitated." The truth is that Alcoa has started, not finished, the rehabilitation process on 75 per cent of its cleared area. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/05/Screenshot-2025-05-29-at-12.45.49---pm-1.png) ****Misleading Alcoa advertisement in The West Australian, Saturday 24 May, 2025.** Alcoa's large area of cleared land threatens Perth's water supply as it increases the risk of water in Serpentine Dam - Perth's largest - being contaminated by PFAS and hydrocarbons spilled by Alcoa.. Even uncontaminated soil washing into the dam after heavy rainfall could render the water undrinkable, as the current water treatment plant is ineffective above a certain level of sediment. State-owned utility Water Corporation ranks bauxite mining as "the [single most significant risk to water quality](https://www.watoday.com.au/national/western-australia/worries-of-irreversible-damage-to-jarrah-forest-by-alcoa-revealed-20240621-p5jnpj.html?ref=boilingcold.com.au) in Perth and the South West”. [Labor breaks vow and risks WA’s water supply for AlcoaRoger Cook granting Alcoa greater access to mine near Perth’s dams risks could cost taxpayers billions of dollars and result in water restrictions![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-119.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Alcoa-Cook-Water-feature-pic-11.png)](https://www.boilingcold.com.au/wa-labor-puts-alcoa-before-water-supply/) Alcoa Australia president Elsabe Muller said that since 2020, the company has refined its plans on environmental and social grounds. The company's expansion plan has deferred mining in Reservoir Protection Zones that cover forest within two kilometres of a dam. This does not exclude Alcoa wanting access to those areas later. Muller said Alcoa had a long and successful track record of responsible operation in the northern jarrah forest. Alcoa employs about 3800 people in WA. The Greens spokeswoman on Forests Jess Beckerling said Alcoa's proposals were outrageous. "This would be the final nail in the coffin for the forest’s climate resilience and the endangered wildlife who rely on these forests," she said. "It simply cannot proceed." The EPA is working towards publishing a single assessment report by March 2026, with sets of recommendations for both the current mining operations and the expansion. That report would then be open for public comment for three weeks. The comments are then considered by the Appeals Convenor, who makes a report to the environment minister, who decides whether the two proposals can go ahead, and if so, under what conditions. In 2024, a ministerial decision for the similar but less controversial expansion of bauxite mining for South32's Worsley Alumina took five months after appeals closed. ### Industry slams Woodside's 'bare minimum' supply of gas to WA from Pluto URL: https://www.boilingcold.com.au/industry-slams-woodsides-bare-minimum-supply-of-gas-to-wa-from-pluto/ Last updated: 2025-07-11T04:05:28.000Z WA industry heavyweights, including Alcoa and Wesfarmers, want Woodside to meet its obligation by supplying more gas to the local market from its Pluto project. “The era of Woodside doing the bare minimum is over,” said Richard Harris, spokesman for the Domgas Alliance of major WA gas users. “Gas producers have a responsibility to earn and maintain a social licence to operate," he said. "Woodside must honour its obligations and ensure the benefits of WA’s gas reserves stay in WA, not just flow offshore." Woodside's Pluto project, which has exported gas since 2012, has supplied less than three per cent of its export volumes to the local market, according to the Alliance. This is well short of the 15 per cent required under an agreement with the WA government that allowed the project to proceed. [WA’s looming domestic gas shortage: How a ‘good faith’ argument left WA shortA shortfall in gas from exporters could shut WA businesses and deter new investment and Woodside’s Pluto project is the biggest problem.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/watoday-2024-21.png)WAtodayPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/539c96c6bfde0bbbad3d6ef2c7508cb91a6879af-1)](https://www.watoday.com.au/national/western-australia/wa-s-looming-domestic-gas-shortage-how-a-good-faith-argument-left-wa-short-20240207-p5f35z.html?ref=boilingcold.com.au) ****How WA Labor and Woodside have delivered a gas shortage for WA** The blunt call from the Alliance that includes WA's largest gas consumer Alcoa, Wesfarmers, Coogee Chemicals, Norway's Yara, titanium processor Tronox and cement manufacturer Adbri is a rare display of disunity in the normally coordinated and seamless lobbying by WA industry. In the past, Woodside has argued that it was not commercially viable to install the expensive equipment necessary to remove the high amount of nitrogen in Pluto gas, which makes it unacceptable for the domestic gas system. The Australian Energy Market Operator predicts WA will experience a [gas shortage from about 2030](https://www.boilingcold.com.au/wa-faces-gas-shortfalls-from-2030-aemo/). Harris said that if the gas cannot be delivered from Pluto, Woodside must supply it from its other projects. "It’s time for Woodside to step up and ensure Pluto operates in line with community expectations and domestic supply obligations,” he said. In addition to its 90 per cent stake in Pluto, the Perth-based company owns one-third of the North West Shelf project that on Wednesday won federal approval to operate until 2070, 13 per cent of the Wheatstone gas export project, and a 71 per cent stake in the Macedon domestic gas project. Woodside has been asked for comment. ### Green light for gas: North West Shelf gas plant cleared to run until 2070 URL: https://www.boilingcold.com.au/green-light-for-gas-north-west-shelf-gas-plant-cleared-to-run-until-2070/ Last updated: 2025-09-09T03:46:54.000Z By [*Samantha Hepburn*](https://theconversation.com/profiles/samantha-hepburn-5327?ref=boilingcold.com.au)*,* [*Deakin University*](https://theconversation.com/institutions/deakin-university-757?ref=boilingcold.com.au) In a decision surprising very few people, Australia’s new environment minister Murray Watt has signed off on an extension for the gas plant at Karratha, part of the enormous North West Shelf liquefied natural gas project. The decision had [been deferred](https://www.afr.com/policy/energy-and-climate/labor-poised-to-approve-nw-shelf-gas-project-20250526-p5m2ak%5D%28https://www.afr.com/policy/energy-and-climate/labor-poised-to-approve-nw-shelf-gas-project-20250526-p5m2ak?ref=boilingcold.com.au) until after the federal election, given significant environmental concerns around the project. This approval means the gas plant at Karratha can now keep running until 2070\. The Woodside-operated project has helped to shape Australia’s reputation as one of the biggest suppliers of LNG [in the world](https://espace.library.uq.edu.au/view/UQ:0c98f67?ref=boilingcold.com.au). Watt did not have to consider climate impacts, but rather what damage the extension might do to ancient rock art as well as economic and social matters. His approval is “subject to strict conditions”, which largely focus on air emissions from the project. Critics claim the extension [will threaten](https://www.theguardian.com/environment/2025/may/27/the-spin-has-been-wrong-rock-art-expert-raises-concerns-over-critical-report-ahead-of-woodside-decision?ref=boilingcold.com.au) irreplaceable 50,000 year old rock carvings and petroglyphs. The decision will enrage environmentalists. If the project continues to operate, it has been estimated to generate [four billion tonnes](https://australiainstitute.org.au/wp-content/uploads/2022/10/Australia-Institute-submission-NWS-extension-proposal-WEB.pdf?ref=boilingcold.com.au) of greenhouse gas emissions over 50 years. Australia [has committed](https://www.dcceew.gov.au/climate-change/emissions-reduction/net-zero?ref=boilingcold.com.au) to reach net zero emissions by 2050\. But the majority of the gas extracted from the North West Shelf will be exported, meaning the huge emissions generated from its extraction, liquefaction, transportation and burning will not be counted domestically. But while the Karratha plant now has a lifeline, there’s still an [open question](https://www.abc.net.au/news/2025-05-28/what-the-woodside-north-west-shelf-decision-means/105326014?ref=boilingcold.com.au) about where the gas will come from. For decades, the plant has processed gas from the North Rankin, Perseus and Goodwyn gasfields offshore. These are now running out. The main purpose of extending the Karratha plant’s lifespan would be to process gas extracted from giant new gasfields lying underneath the pristine [Scott Reef](https://www.smh.com.au/environment/climate-change/rare-glimpse-at-stunning-reef-beside-woodside-s-gas-drilling-ambitions-20241210-p5kxcl.html?ref=boilingcold.com.au). Approval to open these gasfields has not yet been given because of the [significant concerns](https://theconversation.com/huge-gas-fields-under-a-coral-reef-will-a-rejection-on-environmental-grounds-stop-woodsides-browse-project-236145?ref=boilingcold.com.au) extraction will damage the reefs. ![rock art and gas plant.](https://images.theconversation.com/files/670736/original/file-20250528-62-b56yl7.jpg?ixlib=rb-4.1.0&q=45&auto=format&w=754&fit=clip) ****The Burrup Peninsula is home to about two million ancient rock carvings – and a large gas plant.** **Image: Save our Songlines* ## What is the North West Shelf Project? The North West Shelf development has been operational since the 1980s. Gas is extracted from huge basins located off the Pilbara coast and processed at the Karratha plant on the Burrup Peninsula. To date, only a third of the 33 trillion cubic feet of gas in this basin [has been extracted](https://discoveryalert.com.au/news/north-west-shelf-extension-2025-energy-future?ref=boilingcold.com.au). Woodside Petroleum is the project operator, holding a one-third shareholding along with Chevron and Shell in what is known as the [North West Shelf Joint Venture](https://consultation.epa.wa.gov.au/open-for-submissions/nws-project-extension-per/?ref=boilingcold.com.au). The project is the largest producer of domestic gas in Western Australia, providing almost two-thirds of the state’s consumption. In the 2023-2024 financial year, it produced gas worth [about A$70 billion](https://www.wa.gov.au/system/files/2025-03/wa%5Fstatistics%5Fdigest%5F2023%5F2024%5Fweb.pdf?ref=boilingcold.com.au). Domestic consumers are paying much more for this gas than their international counterparts. For example, a $25 billion contract entered into with China in 2002 includes a guarantee prices will remain the same [until 2031](https://www.wa.gov.au/government/media-statements/Gallop%20Labor%20Government/Western-Australia-wins-huge-Chinese-gas-contract-20020808?ref=boilingcold.com.au#:%7E:text=8/8/02%20Western%20Australia's,gas%20%28LNG%29%20to%20China.&text=8/8/02-,Western%20Australia's%20North%20West%20Shelf%20Venture%20has%20won%20a%2025,gas%20%28LNG%29%20to%20China). With the rapid escalation of gas prices, this means China is paying a third of the price paid by domestic consumers. Other markets for the gas include Japan and South Korea, which lack domestic gas resources. ## The ‘transition fuel’ worse than coal Gas has long been touted as a [transition fuel](https://www.eurogas.org/resource/eurogas-statement-us-lng-exports-to-europe-contribute-to-security-of-supply-the-energy-transition-and-both-economies/?ref=boilingcold.com.au#:%7E:text=US%20LNG%20is%20also%20very,to%20decarbonise%20the%20energy%20sector) in a decarbonising economy. But this is questionable on several fronts. Rather than replacing coal, LNG may actually be [displacing renewables](https://reneweconomy.com.au/woodsides-claim-that-gas-displaces-coal-not-borne-out-by-evidence-instead-it-displaces-renewables?ref=boilingcold.com.au). Worse, a [recent study](https://scijournals.onlinelibrary.wiley.com/doi/10.1002/ese3.1934?ref=boilingcold.com.au) showed emissions from LNG are 33% higher than coal over a 20 year period when extraction, piping to a processing facility, compression, shipping, decompression and burning for energy are considered. “Ending the use of LNG should be a global priority,” the report concludes. Turning methane-heavy natural gas into a liquid to allow it to be shipped overseas is energy intensive. Large leaks of methane from wells and pipes are common during extraction and transport. When the gas is finally burned to generate energy, it produces carbon dioxide. In China, coal’s share of electricity production has been eroded by renewables but not by LNG, [according to](https://ieefa.org/resources/lng-not-displacing-coal-chinas-power-mix?ref=boilingcold.com.au) the Institute for Energy Economics and Financial Analysis. From a big picture point of view, climate commitments can’t be met if high-emitting infrastructure keeps being commissioned. Alongside stopping the expansion of fossil fuel projects, existing fossil fuel infrastructure must be [retired or retrofitted](https://www.nature.com/articles/s41586-019-1364-3?ref=boilingcold.com.au) with cleaner technology. [Woodside spills 16,000 litres of oil into Indian OceanThe company that thinks a damaging oil spill from its planned drilling near Scott Reef is “only a mere theoretical possibility” weeks ago accidentally released a cocktail of hydrocarbons, chemicals and water into the Indian Ocean.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-118.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Mia-Yellagonga-signed-cropped-2.jpg)](https://www.boilingcold.com.au/woodside-spills-16-000-litres-of-oil-into-ocean-north-of-ningaloo/) ## Eroding ancient rock art The project’s processing plant is located on the Burrup Peninsula, also known as Murujaga. But this peninsula also has about 500,000 rock carvings by First Nations groups, the densest concentration [in the world](https://www.theguardian.com/australia-news/2023/feb/10/remote-wa-peninsula-with-rock-art-nominated-for-world-heritage-listing?ref=boilingcold.com.au). In 2023, former environment minister Tanya Plibersek [announced a bid](https://www.theguardian.com/australia-news/2023/feb/10/remote-wa-peninsula-with-rock-art-nominated-for-world-heritage-listing?ref=boilingcold.com.au) to give this area World Heritage listing. In a new [draft decision](https://whc.unesco.org/document/221040?ref=boilingcold.com.au), the United Nations World Heritage Committee flagged concerns over the bid and referred it back to the Australian government to “ensure the total removal of degrading acidic emissions” and “prevent any further industrial development” near the petroglyphs. Gas production and ancient rock art are poorly matched. Research suggests processing plant gases such as nitrogen dioxide, sulphur dioxide and ammonia have been gradually eroding the fragile petroglyphs [for decades](https://www.abc.net.au/news/2023-04-11/emissions-damage-to-indigenous-rock-art-at-murujuga/102196718?ref=boilingcold.com.au). Successive state and federal governments have failed to act to safeguard this area. ## Gas projects seem untouchable Approving the North West Shelf extension is a disaster for the environment, our climate commitments and the fragile and irreplaceable rock art in Murujuga. It would seem that despite well-founded concerns on many fronts, big gas projects in Australia are all but untouchable. --- [Samantha Hepburn](https://theconversation.com/profiles/samantha-hepburn-5327?ref=boilingcold.com.au)*, Professor, Deakin Law School,* [*Deakin University*](https://theconversation.com/institutions/deakin-university-757?ref=boilingcold.com.au) *This article is republished from* [The Conversation](https://theconversation.com/?ref=boilingcold.com.au) *under a Creative Commons license. Read the* [original article](https://theconversation.com/green-light-for-gas-north-west-shelf-gas-plant-cleared-to-run-until-2070-257008?ref=boilingcold.com.au)*.* ### UN set to reject Murujuga World Heritage listing due to industrial pollution URL: https://www.boilingcold.com.au/un-set-to-reject-murujuga-world-heritage-listing-due-to-industrial-pollution/ Last updated: 2025-05-28T05:54:55.000Z The UN is set to reject World Heritage listing for the Murujuga rock art on the Burrup Peninsula due to the damage caused to approximately two million rock art engravings, or petroglyphs, by industrial pollution. An [agenda for a meeting in July](https://whc.unesco.org/document/221040?ref=boilingcold.com.au) of the body assessing World Heritage nominations located on the UNESCO website by *Boiling Cold* shows that the draft decision is to send the nomination back to the Australian Government to, among other things, remove "degrading acidic emissions" from the area. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/05/Screenshot-2025-05-28-at-8.32.22---am.png) Murujuga agenda item to be discussed in Paris in July. The largest source of these emissions by far is Woodside's North West Shelf LNG plant. On Wednesday, Federal Environment Minister Murray Watt decided to allow it to operate for an additional 40 years. The revelation comes a day after respected University of Western Australia Professor of World Rock Art, Benjamin Smith, said the WA government had misleadingly presented research it sponsored as concluding that emissions from nearby heavy industry were not damaging the rock art. Smith said the research was world-class, but an executive summary he understood had been written by state bureaucrats, not the scientific team that did the research, was misleading. The report from the Murujuga Rock Art Monitoring Program (MRAMP) was released late last Friday when events are less likely to receive heavy media attention. Campaigners for the preservation of the rock art and against Woodside's plans to operate its adjacent North West Shelf gas export plant until 2070 have long called for the release of the study. "There's good reasons why they held this report for a year, and that's because this report contains very serious evidence that industrial emissions are currently damaging the rock out of Murujuga," Smith said. Josie Alec, a Traditional Owner at Murujuga, said the UNESCO World Heritage nomination of the rock art is completely inconsistent with more years of acid pollution damaging the petroglyphs at Murujuga. “Environment Minister Watt should do everything in his power to protect the rock art, not protect the gas industry.” [![Want energy and climate news to hold gas giants to account? Support Boiling Cold.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/07/CTA-donate-big-gas-1.png)](https://www.boilingcold.com.au/support/) The draft decision was [based on a report](https://whc.unesco.org/document/221034?ref=boilingcold.com.au) by the International Council on Monuments and Sites (ICOMOS) that assesses cultural heritage nominated for World Heritage listing. Piper Rollins, a climate campaigner with the Australian Conservation Foundation that released the report on Wednesday, said the peak expert international body on cultural heritage matters has clearly identified Woodside’s North West Shelf gas hub as the primary risk to the ancient rock art at Murujuga. “UNESCO is essentially saying to the Albanese government: you can’t have your cake and eat it," she said. "You are going to have to choose between World Heritage or Woodside’s toxic gas extension, the two cannot coexist. “Woodside’s facility is scheduled to shut down in a few years. That’s what should happen, it should not be extended.” The MRAMP research was conducted by a team led by Curtin University Professor Ben Mullins for WA's Department of Water and Environmental Regulation (DWER) and the Murujuga Aboriginal Corporation (MAC). On Tuesday, *Boiling Cold* requested an interview with Mullins, and he responded, "Contractually, I need to get approval from MAC and DWER to do any media. I understand they will be in touch." Neither body has responded. --- UPDATE 1PM, 28 May, to reflect that the North West Shelf project has received Federal Government approval. ### Woodside spills 16,000 litres of oil into ocean north of Ningaloo URL: https://www.boilingcold.com.au/woodside-spills-16-000-litres-of-oil-into-ocean-north-of-ningaloo/ Last updated: 2025-05-27T02:44:51.000Z *EXCLUSIVE* Woodside spilled an estimated 16,000 litres of hydrocarbons into the ocean off the Pilbara coast on May 8 while cleaning up the Griffin oil and gas field abandoned by BHP in 2009. A Woodside spokeswoman said that while a pipeline was being flushed to remove any residual gas before it was recovered to the surface, engineers saw fluids released into the ocean and stopped the pumps. She said about 64,000 litres of water, hydrocarbons and chemicals - the volume of a backyard swimming pool - were released into the ocean. The offshore safety and environment regulator, NOPSEMA, has estimated from its monitoring of the spill that 16,000 litres of the released fluid were hydrocarbons. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/05/Screenshot-2025-05-26-at-5.19.49-pm.png) ****The Griffin field is northeast of Exmouth and the Ningaloo Marine Park**. **Figure: Woodside Griffin decommissioning report* The spill occurred after 18 of a total of 21 pipelines on the seabed had been flushed. Woodside's spokeswoman said that since the incident, a team of environmental scientists has monitored the discharge, with tracking buoys and spill modelling showing it was heading away from the coast. "The risk to the marine environment is very low with no anticipated impact to shorelines or sensitive marine habitats," she said. A NOPSEMA spokeswoman said the incident was under investigation and it could not comment further. ## Ill-timed news for Woodside The spill at Griffin occurred on the same day Woodside held its annual general meeting in Perth, where chief executive Meg O'Neill and chair Richard Goyder had defended the environmental credentials of Australia's largest oil and gas company. At issue was the carbon pollution associated with gas, extending the life of Woodside's North West Shelf gas export plant that federal environment minister Murray Watt will decide on this week, and Woodside's proposed Browse development near Scott Reef. In early 2024, the WA Environmental Protection Authority informed Woodside that its preliminary view was to reject Browse, and one of the main reasons was the [risk of an oil spill](https://www.watoday.com.au/national/western-australia/unacceptable-red-flag-for-woodside-s-browse-gas-project-poses-problem-for-federal-government-20240725-p5jwjm.html?ref=boilingcold.com.au) affecting the pristine Scott Reef. Just four days after the Griffin spill, Woodside's revised Browse plans were [released by the EPA](https://www.boilingcold.com.au/woodside-rejigs-its-near-rejected-browse-gas-plans/). It included the use of novel equipment to stop oil spills that 18 months earlier, Woodside had described as "emerging technology." Now it was so confident of the equipment that the potential of significant long-term consequences from an oil spill had "a probability of lower than remote and should be considered as only a mere theoretical possibility." [![Want energy and climate news to hold gas giants to account? Support Boiling Cold.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/07/CTA-donate-big-gas-1.png)](https://www.boilingcold.com.au/support-cta/) ## Earlier trouble during Griffin decommissioning Recovery of a Griffin pipeline to the surface also went awry in 2024. On 31 July 2024, when a flexible pipeline was lowered onto the deck of the Technip Deep Orient construction vessel, water shot out about six metres into the air with a rotten egg smell, according to a person familiar with the incident but not authorised to speak to the media. The Woodside spokeswoman said there was an unexpected discharge of water and gas for about 30 seconds. The source said high levels of hydrogen sulphide were detected and some crew members experienced headaches following the incident. Woodside was asked whether the health of crew members was affected. It did not provide an answer. "All personnel were behind designated barriers and moved inside when the discharge was observed," the Woodside spokeswoman said. "The flowline was subsequently lowered to the seabed and the activity suspended." The NOPSEMA spokeswoman said it was not advised of any adverse effects on the crew by Woodside or the vessel operator. The regulator's investigation determined that BHP, the previous operator of the Griffin field, had inadequately prepared for decommissioning when production ceased in 2009. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/05/Screenshot-2025-05-26-at-5.01.28-pm.png) ****BHP left a huge amount of equipment in the ocean when Griffin production ended in 2009.** Figure: Woodside [environment plan](https://docs.nopsema.gov.au/A1031055?ref=boilingcold.com.au). ## Tardy BHP's dim ocean legacy Woodside became responsible for the Griffin field when it bought BHP's petroleum business in 2022\. A year earlier, NOPSEMA had "[given the limited action to date](https://www.boilingcold.com.au/tardy-bhp-ordered-to-clean-up-three-oil-and-gas-fields-offshore-wa-and-victoria/)" ordered BHP to decommission three fields: Griffin which closed in 2009, Stybarrow also off WA that ceased production in 2015, and the Minerva field off the Victorian coast that closed in 2019. Four years after Griffin closed its floating riser turret mooring sank to the seabed, making recovery more difficult. Woodside [completed the task](https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://www.youtube.com/watch%3Fv%3Dc2I5P5f6YZo&ved=2ahUKEwihtvr7hcGNAxWMmlYBHchjFqkQtwJ6BAgFEAI&usg=AOvVaw0UulK%5F8Q-0C%5FHOKCVQ7BFj) in December 2024. BHP did not plug the subsea wells at Griffin to make them permanently safe until 2017, eight years after production ended. Woodside has struck trouble decommissioning all three of the closed-down offshore fields that it took over from BHP. Griffin has had two significant incidents involving the recovery of pipelines. Earlier this year at nearby Stybarrow, there were [three serious safety incidents](https://www.boilingcold.com.au/woodside-cleanup-off-wa-plagued-by-injuries-and-incidents-2/) in two months. In March, Woodside told its Minerva partner, Amplitude Energy, that the cost to decommission the field has jumped by $240 million, more than doubling the earlier estimate. While Minerva pipelines were being retrieved, about 200kg of plastic parts fell off and washed up on Victorian beaches. Woodside [did not report the incident](https://www.watoday.com.au/environment/conservation/how-parts-of-a-dead-gas-rig-washed-up-on-our-beaches-20250514-p5lz1t.html?ref=rss&utm%5Fmedium=rss&utm%5Fsource=rss%5Ffeed) to NOPSEMA until weeks later. Woodside is also exposed to half the decommissioning cost of the Exxon-operated Bass Strait fields that BHP held a 50 per cent stake in. The company surprised analysts in February with an estimate that it could spend [up to $1US billion](https://www.woodside.com/docs/default-source/asx-announcements/2025/woodside-releases-reserves-statement-and-sangomar-update.pdf?sfvrsn=a67fb391%5F3&ref=boilingcold.com.au) ($1.5 billion) this year on decommissioning, much higher than they had expected. --- UPDATE 27 May: Plastic pollution from Minerva decommissioning added. ### Santos to shut Bayu Undan gas project: next steps are crucial URL: https://www.boilingcold.com.au/santos-to-shut-bayu-undan-gas-project-next-steps-are-crucial/ Last updated: 2025-05-26T07:43:31.000Z Santos aims to end gas production from its Bayu Undan project in the Timor Sea this week and plans to use it to store CO2 under the seabed, which would allow it to delay an enormous decommissioning bill. A formal end to production planned for about this Friday was communicated to Santos staff last week. A Santos spokeswoman said it was working with Timor-Leste authorities to repurpose Bayu-Undan for Carbon Capture and Storage (CCS). If CCS is not viable, Santos and its partners will have to decommission the platforms in Timor-Leste waters and the pipeline to Darwin that Australia regulates. ![Santos map of gas fileds off northern Australia includiing Barossa, Bayu Undan, Prelude, Ichthys, Sunrise and Evans Shoal and Blacktip.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/05/Santos-northern-Australia-map-annotated.jpg) ****Offshore gas in northern Australia.** Source: Santos with annotation by Boiling Cold Bayu Undan has been the mainstay of Timor-Leste's economy for two decades since US major ConocoPhillips started producing oil and later gas from the field 500km northwest of Darwin. Santos took control in 2020 when it acquired ConocoPhillips' northern Australian assets: the Bayu Undan offshore facilities in Timor Leste waters, a gas pipeline to Darwin, the Darwin LNG plant, and the then undeveloped CO2-rich Barossa gas field. At the time, the Bayu Undan field was due to stop production in 2022, and Santos planned to get value from its $US1.465 billion ($2.25 billion) purchase by exporting Barossa gas through the Darwin LNG plant. A pipeline from Barossa would connect to the existing Bayu Undan pipeline to get the gas to shore. That plan required the 18 per cent CO2 content of the Barossa field to be vented offshore, making Barossa LNG Australia's most carbon-intensive gas export by a wide margin. Those emissions were accepted by Australia's environment regulators, but were problematic for companies that Santos wanted to sell gas or project equity to. In response, Santos pursued storing the CO2 in the Bayu Undan field after production was finished. Gas and CO2 would be piped to Darwin processing the gas for export and the CO2 would be piped to Bayu Undan using the existing pipeline. To keep open the option of storing CO2 later, Santos[ added $622 million ($953 million) to the cost](https://www.santos.com/news/darwin-pipeline-duplication-project-go-ahead/?ref=boilingcold.com.au) of Barossa to allow the new pipeline to go all the way to Darwin and leave the existing Bayu Undan pipeline for CO2 transport. [Santos $US1.6B Bayu-Undan CCS: low return high complexityAustralian LNG producers are under pressure on emissions and decommissioning, and Santos wants to tackle both problems in one swoop at Bayu Undan, but it needs everyone to play along.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-116.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/bayu-undan.jpg)](https://www.boilingcold.com.au/santos-internal-analysis-us1-6b-bayu-undan-carbon-storage-is-low-return-and-high-complexity/) ****When Santos first examined Bayu Udan CCS the economic returns were poor.** According to a [confidential Santos 2021 study](https://www.boilingcold.com.au/santos-internal-analysis-us1-6b-bayu-undan-carbon-storage-is-low-return-and-high-complexity/), for CO2 storage at Bayu Undan to be economically viable, the company needed to store not just the 2.3 million tonnes of CO2 a year from Barossa but also another four million tonnes from the Ichthys project. However, INPEX, the operator of Ichthys, plans to store CO2 in an area east of Darwin and has commenced [preliminary front-end engineering design](https://www.inpex.com.au/media/1vplxgvm/inpex-bonaparte-ccs-announcement.pdf?ref=boilingcold.com.au) in April. Another possible customer for carbon storage at Bayu Undan was ENI, which in 2023 revived plans to develop the [Evans Shoal gas field](https://www.abc.net.au/news/rural/2023-05-11/eni-verus-evans-shoal-gas-field-carbon-emissions/102331674?ref=boilingcold.com.au) with a huge 27 per cent CO2 content. However, the Italian firm put the project on the back burner 12 months later. Santos has almost completed the front-end engineering design for Bayu Undan CCS. If the work does not reveal a way to develop Bayu Undan CCS economically with just the CO2 from Barossa, then Santos has unnecessarily spent about $1 billion to extend the Barossa pipeline all the way to shore and faces a $1 billion-plus bill to decommission Bayu Undan. ## ### Will Australia revisit the deal that led a Pittsburgh firm to depend on the ore beneath its trees? URL: https://www.boilingcold.com.au/will-australia-revisit-the-deal-that-led-a-pittsburgh-firm-to-depend-on-the-ore-beneath-its-trees/ Last updated: 2025-09-09T03:38:13.000Z *By Jamie Wiggan & Quinn Glabicki, PublicSource* *Photographs by Quinn Glabicki. This story was supported by the Pulitzer Center.* As Alcoa zeroes in on the [bauxite beneath Australia’s endangered Northern Jarrah Forest](https://apps.publicsource.org/alcoa-mines-threaten-australia-forest-part-1/?ref=boilingcold.com.au), the Pittsburgh metals giant faces new resistance in a country that once wooed it through an advantageous political agreement. Since landing on the continent in 1961, Alcoa’s Western Australian division has grown into one of the biggest alumina producing operations in the world, and it generates more than three-quarters of the powdery white oxide the company exports raw or smelts into aluminum. Alcoa’s growing dependence on Australia is reflected in the [$650 million share price plummet](https://www.theage.com.au/national/western-australia/alcoa-says-no-wa-job-losses-as-share-price-plunges-7pc-20230719-p5dpmf.html?ref=boilingcold.com.au) that followed news in late 2023 of regulatory delays to its plans to mine new forest tracts. CEO William Oplinger recently highlighted the “paramount importance” of those pending approvals in a shareholders meeting from the company’s Pittsburgh boardroom. Western Australia’s state government has historically supported Alcoa along with the state’s vast mining sector. Even now, critics, including the [auditor general](https://audit.wa.gov.au/reports-and-publications/reports/compliance-with-mining-environmental-conditions/?ref=boilingcold.com.au), charge the government with troubling leniency toward Alcoa and other mining companies. But opposition is mounting from state agencies, scientists, local politicians and residents as reports warn of irreparable harm to the environment and mining contamination risks that could cost the state billions and leave hundreds of thousands of Perth-area residents without drinking water. ![](https://www.publicsource.org/wp-content/uploads/2025/05/IMG_6887.jpg) ****ARC Centre for Mine Site Restoration Director Kingsley Dixon walks through a recently rehabilitated Alcoa mine site near Waroona, a small town about 60 miles south of Perth.** Image: Quinn Glabicki. ©[PublicSource](https://www.publicsource.org/?ref=boilingcold.com.au) “One thing to remember in the Alcoa story is that back in the ’60s and the ’70s when it started, Perth was a very different place,” said Travis Robinson, a former chief of staff to the state mining minister. “There’s a consciousness or awakening that’s happening because [it’s starting to be in people’s backyards](https://apps.publicsource.org/alcoa-mines-threaten-australia-forest-part-2/?ref=boilingcold.com.au).” Alcoa did not respond to multiple requests for comment. ## **Built on mining** When Alcoa first arrived in Perth, Western Australia’s capital was a modest town of some [400,000 people](https://populationstat.com/australia/perth?ref=boilingcold.com.au), supported mostly by cattle and sheep farming. The five-fold growth that’s since turned it into a major metro owes a large part to a booming mining sector extracting aluminum, copper, iron, nickel and more from the resource-rich continent. Western Australia is now the wealthiest state in the country relative to its population. In 2023, the per capita gross domestic product was around U.S. $101,000 or 62% above the national average. Mining accounted for just under half of its total U.S. $287 billion annual output. “It’s the significant driver of the Western Australian economy,” said Robinson. “And I would almost suggest of the Australian economy.” ![](https://www.publicsource.org/wp-content/uploads/2025/05/IMG_0085.jpg) ****Alcoa's idled Kwinana refinery is located south of Perth along the Western Australian coas**t. Image: Quinn Glabicki. ©[PublicSource](https://www.publicsource.org/?ref=boilingcold.com.au) Alcoa is one of the industrial players that benefited from 64 unique state agreements passed since 1952 by acts of parliament to attract overseas investment. “Most people understand the reason for \[state agreements\] originally was to bring a big entity, create this economic prosperity, give them some privileges,” said Mike Walmsley, president of Waroona shire, a local government encompassing Alcoa’s Wagerup refinery. “This was a long time ago when Perth was like a small city really.” Alcoa’s three agreements — one for each of its refineries — extend rights to scarce water along with low royalty and taxation rates. And because they predate the Environmental Protection Act, the company has historically been able to claim exemption from the purview of the Environmental Protection Authority’s \[EPA\] independent advisory board as it has cut deeper into the fragile jarrah forest. Growing scrutiny of Alcoa’s plans, fronted by a grassroots petition with more than 2,000 supporters, means that the company is under review from the EPA for the first time. The state government is working to bring Alcoa under a “contemporary” regulatory framework and “has implemented strict controls over the company’s mining operations during the transition period,” a government spokesperson wrote to PublicSource. ![](https://www.publicsource.org/wp-content/uploads/2025/05/IMG_6961.jpg) ****George Walley, a Noongar elder, stands at the edge of an Alcoa mining site near Jarrahdale, Western Australia.** Image: Quinn Glabicki. ©[PublicSource](https://www.publicsource.org/?ref=boilingcold.com.au) Still, critics of Alcoa said government leadership hasn’t caught on to the calls for change. The belief that mining interests wield excessive power over the Western Australian government was shared by many of the more than 50 scientists, advocates, First Nations people, mineworkers and residents that PublicSource journalists spoke to during 16 days of early spring reporting in the state. “The right to mine reigns supreme,” said Martin Brueckner, a researcher at Murdoch University in Perth who wrote a book about Alcoa’s impact on rural communities. “There is no justice and there is no deterrence.” ## **Alcoa’s plans vs. water needs** A test of Alcoa’s clout in Western Australia emerged in 2023, when public concern mounted that the company could contaminate the drinking water supply for Perth, a metro of 2.3 million people. At the time, Alcoa sought higher quality bauxite, which it could refine and export for greater profit. The company was pushing for an aggressive new mining plan that would allow it to mine in previously restricted “high-risk” areas, including inside protected water catchment zones. That March, the state-owned Water Corporation [reported](https://www.documentcloud.org/documents/25524109-board-presentation-impact-update-alcoa-mining-operations-230328/?ref=boilingcold.com.au) that Alcoa’s plan posed “a significant increase in risk,” potentially endangering drinking water for all of Perth’s reservoirs. The Water Corporation warned of a potential $1.7 billion cost, and that the long-term development of the city and region could be stunted due to “financial impacts and water shortages.” The Department of Water and Environmental Regulation rejected Alcoa’s plan “in its entirety.” In a December 2023 [letter](https://www.documentcloud.org/documents/25912712-alcoa-letter-to-roger-cook-231208/?mode=document&ref=boilingcold.com.au) to Western Australian Premier Roger Cook, Alcoa leadership wrote that “it is not economically viable” for the company to retreat from those “higher-risk” areas, including those close to reservoirs. The company committed to new measures to “mitigate and minimise any risks to public drinking water." Six days later, the government issued a [special exemption](https://www.legislation.wa.gov.au/legislation/prod/filestore.nsf/FileURL/mrdoc%5F46761.pdf/$FILE/Environmental%20Protection%20%28Darling%20Range%20Bauxite%20Mining%20Proposals%29%20Exemption%20Order%202023%20-%20%5B00-00-00%5D.pdf?OpenElement&ref=boilingcold.com.au): Alcoa would be allowed to mine the areas it proposed in its new plan, bypassing the Environmental Protection Act that normally prohibits doing so while a proposal is under review. According to the government, the exemption sets limits to the areas in which Alcoa can explore, clear and mine and requires the company to make regular reports for compliance. “Any breach of conditions would see the exemption order immediately cancelled, and the state government retains the right to withdraw or amend the exemption at any point,” the spokesperson added. The state government said it secured a $100 million financial guarantee from Alcoa should the company affect Perth’s drinking water dams, according to a spokesperson. The Water Corporation reported internally that the exemption affords “little to no ability for protection of drinking water.” The government pointed to the roughly 6,000 jobs (direct and contracted) and nearly U.S. $1 billion per year that Alcoa sustains in the Western Australia economy as justifying the exemption. ![](https://www.publicsource.org/wp-content/uploads/2025/05/IMG_0604.jpg) ****Alcoa has mined near drinking water reservoirs, including the Serpentine Dam that feeds Perth and its suburbs**. Image: Quinn Glabicki. ©[PublicSource](https://www.publicsource.org/?ref=boilingcold.com.au) Two years later, the EPA review is still underway, and Alcoa continues to mine deeper into the jarrah forest, even where camping, fishing, boating, biking, swimming and dogs are prohibited to prevent pollution to drinking water. Meanwhile, the Water Corporation is still raising alarm, [reporting internally](https://www.documentcloud.org/documents/25524115-cfo-report-to-water-corporation-board-241021/?mode=document&ref=boilingcold.com.au) in October a “clear and consistent” warning that Alcoa’s mining “risks water supply to millions of households and businesses across Perth” and the surrounding regions “for a prolonged, indefinite period.” ## **‘Rapid exit’ and rehabilitation** Many, including Alcoa, believe the terms of the company’s 60-year-old agreements with Western Australia must be revisited to ensure the company is appropriately regulated. But it’s unclear what a new agreement would look like, when it might be codified or what that would mean for the company from Pittsburgh. Alcoa has said it is committed to modernization, including assessment by the EPA for “all new major mining areas.” PublicSource repeatedly approached Alcoa with questions about its global business strategy, its relationship with the Australian government and its environmental and public health responsibilities. The company declined all requests. In August, the Western Australian government published a review of state agreements and began to discuss a “new governance structure.” Alcoa’s agreement, the report said, has “no provision” for a formal approval of the company’s mining plans. Rather, a review and approval process has “evolved” over many years, and “presents a significant and legally uncertain diversion” from Alcoa’s statutory obligations. The government proposed a new structure, which calls for Alcoa’s “rapid exit from all reservoir protection zones,” accelerated rehabilitation of mine sites and increased oversight from the state Department of Health in ensuring public safety and the regulation of Perth’s drinking water. Premier Cook [endorsed](https://www.documentcloud.org/documents/25537022-bauxite-state-agreements-administrative-framework-review-premier-endorsed-final-position-paper-august-2024/?mode=document&ref=boilingcold.com.au) this position last August. The new structure also called for the formation of a new body that would consider risks and “help government ensure there is a clear path of where mining is preferred into the future.” ## **A new vision?** Walmsley, who leads a coalition of local governments called the Peel Alliance, said he’s “made countless approaches to say, ‘\[Alcoa’s agreement\] needs to be amended, it needs to be modernized,’ and even Alcoa are at the point of saying that they’d like to see it modernized because it’s antiquated.” ![](https://www.publicsource.org/wp-content/uploads/2025/05/IMG_1377.jpg) ****Mike Walmsley, president of Waroona shire, at a park built by Alcoa in Waroona.** Image: Quinn Glabicki. ©[PublicSource](https://www.publicsource.org/?ref=boilingcold.com.au) The Peel Alliance, which encompasses five local governments and several nonprofit groups active in Alcoa’s footprint, published a position statement on “mining and extractive industries” intended to promote and protect the region’s natural resources and the industries such as farming and ecotourism they can support. The statement: - Calls for changes to the existing “regulatory landscape,” including updates to existing state agreements - Seeks protections for the region’s environment and natural resources, which, the group contends, form the basis of its economic security - Requests increased engagement with “host communities” and mechanisms to ensure compliance and transparency. High on Walmsley’s list is protecting the local water supply of which Alcoa, through its water-intensive refining process, is a major consumer. “There would be significantly more horticultural pursuits in the area if water was available to them,” he said. While he’s pushing for tighter regulation, Walmsley acknowledged the jobs hinging on the company, which he says he doesn’t want to eliminate. “I think we've got the community support to say, look, we understand the importance of what they're doing, but we've gotta protect what we've got left.” ![](https://www.publicsource.org/wp-content/uploads/2025/05/L1003882.jpg) ****Children cross a suspension bridge above the Murray River in Pinjarra, home to Alcoa's largest refinery in Western Australia.** Image: Quinn Glabicki. ©[PublicSource](https://www.publicsource.org/?ref=boilingcold.com.au) ## **Seeking to save the jobs while going greener** Just as leaders in Southwestern Pennsylvania grapple with the harms of extractive industry like fracking and the economic consequences of its regulation, navigating the push and pull between mining jobs and environmental destruction is a central tension for Australian officials. Robinson, though, doesn’t see them as fundamentally incompatible. “There's an assumption that jobs have to win or the environment has to win,” said the former chief of staff who now manages a Perth-based investment fund with mining interests in its portfolio. “Both of those can coexist. You can have environmentally sensitive development that provides the economic activity that a state or an economy needs, that families need for jobs and employment, while also protecting critical aspects of the environment.” ![A man wearing a hat drives a vehicle near a pond with several black cows walking along the opposite bank. Trees and sky are visible in the background.](https://www.publicsource.org/wp-content/uploads/2025/05/L1007549.jpg) ****Lorry Ierace, a former Alcoa miner, drives along his property that shares a border with Alcoa's Willowdale mine on three sides.** Image: Quinn Glabicki. ©[PublicSource](https://www.publicsource.org/?ref=boilingcold.com.au) A government spokesperson said the decision to exempt Alcoa “considered a range of factors, including the need to protect WA’s environment and Perth’s drinking water sources, while also safeguarding the jobs of the thousands of workers employed by Alcoa.” Western Australia’s two main parties (Labour and Liberal) have historically stuck by mining interests because of the economic leverage the sector commands, according to Green Party lawmakers Jess Beckerling and Brad Pettit. Beckerling recently entered parliament as part of a modest Green Party groundswell that carried them to four of the upper chamber’s 37 seats. And because neither major party has a simple majority, either side would need Green support to pass bills, according to Pettit, the party’s lone elected lawmaker prior to the March election. Beckerling, who headed the referral process that brought Alcoa’s expansion under review, hopes the heightened scrutiny may now cut through. “We can hope that the EPA will give us some strong recommendations about changes that need to be made. And then the spotlight will really be on \[elected government leaders\], if they ignore the EPA after all of this.” Pettit said Alcoa uses the threat of job losses to secure concessions from the government. “Now is the right time for Alcoa to wind down,” he said “… Alcoa needs WA more than WA needs Alcoa.” ![Industrial mining facility with illuminated conveyor belts operating at dusk against a darkening sky.](https://www.publicsource.org/wp-content/uploads/2025/05/IMG_5443.jpg) ****A conveyor belt supplies Alcoa's Wagerup refinery around the clock with bauxite from its sprawling mines.** Image: Quinn Glabicki. ©[PublicSource](https://www.publicsource.org/?ref=boilingcold.com.au) *The Fund for Investigative Journalism also contributed funding to support this project.* *Jamie Wiggan is deputy editor at Pittsburgh’s PublicSource and can be reached at* *jamie@publicsource.org* *.* *Quinn Glabicki is the environment and climate reporter at Pittsburgh’s PublicSource and a Report for America corps member. He can be reached at* *quinn@publicsource.org* *and on Instagram* [*@quinnglabicki*](https://www.instagram.com/quinnglabicki?ref=boilingcold.com.au)*.* *This story was fact-checked by Matt Maielli.* *Photo editing by Stephanie Strasburg.* *This* [*article*](https://www.publicsource.org/alcoa-mines-threaten-australia-forest-part-3/?ref=boilingcold.com.au) *first appeared on* [*PublicSource*](https://www.publicsource.org/?ref=boilingcold.com.au) *a nonprofit newsroom serving the Pittsburgh region where Alcoa has its headquarters and is republished here under a* [*Creative Commons Attribution-NoDerivatives 4.0 International License*](https://creativecommons.org/licenses/by-nd/4.0/?ref=boilingcold.com.au)*.* ![](https://i0.wp.com/www.publicsource.org/wp-content/uploads/2021/11/cropped-ps_initials_logo-1.png?resize=150%2C150&ssl=1) ![](https://www.publicsource.org/?republication-pixel=true&post=1318962&ga4=G-CCLXQK5C14) ### *Read the rest of PublicSource's investigation of Alcoa in WA:* [How Alcoa is undermining a rare forest to fuel its empireTwo journalists from Alcoa’s hometown flew to Perth to look at its mining of WA’s jarrah. A brilliant look at a slow-moving tragedy.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-104.png)Boiling ColdJamie Wiggan![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/First-nation-man-mining-site.jpg)](https://www.boilingcold.com.au/how-pittsburghs-alcoa-is-undermining-a-rare-forest-to-fuel-its-global-aluminum-empire/) [Will Alcoa refineries drive people from a third WA town?Kwinana and Yarloop have suffered from Alcoa’s toxic dust - is Pinjarra next?![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-107.png)Boiling ColdJamie Wiggan![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Alcoa-refinery-jarrah-forest-pinjarra-1.jpg)](https://www.boilingcold.com.au/alcoas-australian-refineries-drove-flight-from-two-towns-and-its-waste-threatens-a-third/) ### Labor MP lashes "untrustworthy, grubby" Chevron for sending Aussie engineering jobs to India URL: https://www.boilingcold.com.au/labor-mp-lashes-untrustworthy-grubby-chevron-for-sending-aussie-engineering-jobs-to-india/ Last updated: 2025-05-21T04:22:41.000Z Labor upper house member Kyle McGinn has lashed US gas giant Chevron for its plans to move Australian engineering jobs to India despite its Gorgon and Wheatstone gas export projects being required to use local labour whenever practical. McGinn, a member for the mining and pastoral region, told the Legislative Council that Chevron's plans to [transfer Australian engineering roles overseas](https://www.boilingcold.com.au/chevrons-jobs-to-india-plan-to-face-wa-government-scrutiny/) were shameful. The US oil and gas giant is spending $US1 billion ($1.6 billion) to have 600 engineering and other professionals working in India [by the end of 2025](https://www.chevron.com/-/media/chevron/newsroom/2024/Q3/news-release-chevron-engineering-and-innovation-center.pdf?ref=boilingcold.com.au) to "support projects across Chevron’s enterprise." "Chevron are flying in the face of the Barrow Island Act 2003, which requires Chevron to employ local workers wherever possible," he said. The Barrow Island Act governs Chevron's Gorgon project. A State Development Agreement imposes almost identical local content provisions on Chevron's Wheatstone project. For work on both projects, Chevron is required to use local labour when practical and to impose similar conditions on its contractors. McGinn said it was clearly practical for Chevron to employ Australian engineers: "They have been doing it for two decades." "I am sick and tired of hearing companies like Chevron gloating about their profits, pretending that sponsoring an event and putting your badge on something is a social license" he said. Chevron, which made an $8 billion profit in Australia in 2024, plans to [cut its global workforce ](https://www.reuters.com/business/energy/chevron-announces-15-20-layoff-global-workforce-source-says-2025-02-12/?ref=boilingcold.com.au)by 15 to 20 per cent by 2026, which, if applied to its about 2000 employees in WA, would result in 300 to 400 redundancies. Chevron is expected to tell its WA employees within weeks which roles will go with the global job cull. Engineering roles transferred to India will result in further job losses in Australia later in the year. However, this week, *Boiling Cold* revealed that the US major is not just ignoring the requirement to use local labour, it is insisting its contractors send a minimum level of work - as high as 55 per cent - [to low-cost countries](https://www.boilingcold.com.au/chevron-pushes-contractors-to-send-australian-engineering-jobs-overseas/). "Chevron are fixated on the bottom line, on maximizing short-term profits and exploiting our natural resources without putting much back into developing job opportunities or improving the lives of West Australian workers," McGinn said on Tuesday evening. McGinn, a worker and union member in offshore oil and gas before his election in 2017, also took a shot at Liberal Senator Michaelia Cash for "demonising unions." 'The real law breakers are the white collar elites with their armies of HR bosses, accountants and lawyers," he said. 'These companies use their unlimited resources to avoid paying tax, cut corners on OHS and rip off workers, and the best in the business is Chevron." McGinn also lashed Chevron for its attempt to use excessive interest rates on inter-company loans [to minimise tax paid in Australia](https://www.boilingcold.com.au/chevron-surrenders-in-1b-tax-fight-with-ato/) and for allowing the use of [sham contractors](https://www.abc.net.au/news/2023-10-03/how-chevrons-sham-workforce-spotlights-shadowy-oil-gas-companies/102916234?ref=boilingcold.com.au) on its work sites. McGinn, whose term in Parliament will end this month, said he looked forward to action being taken against "untrustworthy grubby companies like Chevron." [![Want energy and climate news to hold gas giants to account? Support Boiling Cold.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/05/CTA-donate-big-gas-1.png)](https://www.boilingcold.com.au/support/) **Read all of *Boiling Cold*'s exclusive coverage of Chevron offshoring Australian engineering jobs:** 1. Revealed that Perth-based Chevron engineers will have to train their Indian counterparts before losing their jobs to offshoring, which appears to disregard WA's local content provisions. [Chevron’s jobs to India plan to face WA government scrutinyWA Premier Roger Cook’s core “Made in WA” election policy will be tested by his use of local content provisions to keep Chevron’s WA engineers working in WA.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-93.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Screenshot-2025-04-28-at-6.05.08-am-2.png)](https://www.boilingcold.com.au/chevrons-jobs-to-india-plan-to-face-wa-government-scrutiny/) 1. Chevron documents show that jobs from across the company's WA operation will be sent to India, and the criteria used have no regard for local content obligations. [How Chevron will ship Aussie engineering jobs to IndiaDespite local content requirements and a fat profit from Australia, Chevron will now export jobs as well as gas.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-94.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/3-4.jpg)](https://www.boilingcold.com.au/how-chevron-will-ship-aussie-engineering-jobs-to-india/) 1. More Chevron documents reveal the company is enforcing quotas on their contractors to push more engineering work overseas, again seemingly contrary to local content requirements. [Chevron quotas push Australian engineering jobs overseasThe US giant, which made $8 billion in Australia in 2024, is forcing its subcontractors to follow its example and send Australian engineering jobs overseas.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-105.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Chevron-Elizabethy-Quay-Australian-headquarters-1-3.JPG)](https://www.boilingcold.com.au/chevron-pushes-contractors-to-send-australian-engineering-jobs-overseas/) Since the first story: - The scale of Chevron's exporting of WA jobs, its criteria for choosing which activities go to India that ignore local content requirements, and its forcing of engineering contractors to follow suit have all been made public. - The previously confidential local content provisions for Wheatstone have been tabled in Parliament. - WA Premier Roger Cook has told Chevron it must adhere to the commitments it agreed to in exchange for permission to construct two LNG plants in WA. ### Alcoa’s Australian refineries drove flight from two towns, and its waste threatens a third URL: https://www.boilingcold.com.au/alcoas-australian-refineries-drove-flight-from-two-towns-and-its-waste-threatens-a-third/ Last updated: 2025-09-09T03:40:47.000Z *By Quinn Glabicki and Jamie Wiggan, PublicSource* *This story was supported by the Pulitzer Center. Photographs by Quinn Glabicki.* Collette Sheridan ran her fingers along the stone countertop, collecting a small heap of red particles in her palm. The skin from her wrist to her elbow was pinkish and splotchy — a condition, she said, that began with the dust that plagues the property. She and her husband, Richard, sunk their savings into transforming their 10-acre lot into lodging for tourists and workers entering the town of Pinjarra, where Pittsburgh metal maker Alcoa has operated its largest Australian refinery since 1972. The couple built the first nine chalets six years ago and had planned for 80 more. But the work ground to a halt when they discovered the dust was there to stay. ![A woman in a striped shirt leans on a wooden post in a yard with green modular homes and a corrugated fence in the background.](https://www.publicsource.org/wp-content/uploads/2025/05/woman-dust-home.jpg) Collette Sheridan stands among the chalets plagued by red dust in Pinjarra. ![Aerial view of industrial ponds with red, brown, and white deposits, separated by earthen barriers and surrounded by roads.](https://www.publicsource.org/wp-content/uploads/2025/05/Aerial-alcoa-toxic-residue.jpg) Toxic residue is stored in vast piles of mud that have grown bigger than the nearby town of Pinjarra, home to Alcoa’s third and largest refinery. Residents say winds whip the residue into clouds of red dust that reach homes and lungs for miles around. ![a man writes letters in dust covering a table with two chairs indoors](https://www.publicsource.org/wp-content/uploads/2025/05/dust-man-house.jpg) Richard Sheridan traces his initials in the red dust that blankets his property near Alcoa's Pinjarra refinery. Since 2003, the Sheridans and their three children have battled a cocktail of symptoms: frequent nosebleeds, headaches, breathing difficulties and hair loss. They suspected the Alcoa refinery that looms behind their live-in business may be the cause of their problems, and in 2013, they began to investigate. Lab testing showed dioxins in their blood, they said, and recent urine and hair samples revealed a slew of toxic heavy metals. When their chalets began collecting dust, they assumed it came from the 150-foot mounds of bauxite residue next door. The company said there’s no proof. An email from an Alcoa lawyer identified the company’s residue “fingerprints” — which include the radioactive elements thorium and uranium. The Sheridans sent dust from their chalets to the lab and found high levels of both. Testing at the nearby elementary school and homes as far as 12 miles away also returned the company’s signature, raising questions about the extent to which Alcoa’s waste has encroached on surrounding communities. Six years on, the Sheridans’ chalets have never hosted a sunseeker or a mineworker. The couple is convinced the liability is too great and the dusty rooms too inhospitable. “We worked really hard to make this a success, and it was just taken all away from us,” said Richard Sheridan. Alcoa has mined and refined bauxite in Western Australia since 1963\. The company owns sprawling industrial facilities along the southwestern coast, including its largest, at Pinjarra; Wagerup, near the town of Yarloop; and a recently idled facility at Kwinana, a suburb of Perth. Public health complaints surrounding Alcoa’s Kwinana and Wagerup refineries led to lawsuits, settlements and home buyouts. In Pinjarra, locals describe the physical and mental toll of the dust that blankets the town. “The last three years is the worst I’ve seen it in a long time,” said one former contractor, Clint Smith, who worked in dust suppression for Alcoa until last April. “They’re environmental vandals.” Like U.S. Steel is to Pittsburghers, Alcoa is familiar to the people of Pinjarra — a town of [around 5,000](https://www.abs.gov.au/census/find-census-data/quickstats/2021/SAL51247?ref=boilingcold.com.au). Grievances over red dust and concerns about deforestation are common. So are pickup trucks with workers in fluorescent jumpsuits, destined for Alcoa’s mines or the refinery up the road. Streets are named after the company and its operations. Swim teams, racetracks and galleries accept Alcoa sponsorship. ![Three women in colorful dresses stand at the edge of a race track as horses race on grass in front of a line of trees](https://www.publicsource.org/wp-content/uploads/2025/05/horse-race-pinjarra.jpg) The annual Pinjarra Cup, a horse race held at a track sponsored by Alcoa, rests just outside the company’s property in Pinjarra. While locals are quick to point to the jobs the company has employed for generations, they are also steadfast that Alcoa’s legacy — mountains of red sludge totaling nearly 100 billion gallons — will remain far longer than the Americans do. Those vast piles, which have grown longer and taller each year since Alcoa arrived in the ‘60s, have come under increased scrutiny. Retaining walls holding tens of billion gallons of waste reportedly failed to be certified as stable, stoking concern about the possibility of a breach. Alcoa did not respond to repeated requests for comment for this story. For now, public opposition in the country town is limited to pockets of concerned residents like the Sheridans. They argue that the historic fates of Yarloop and the idled Kwinana refinery offer a cautionary tale. ![A person carries a child on a beach in bright sunlight, surrounded by vegetation and an industrial port in the background behind blue ocean water.](https://www.publicsource.org/wp-content/uploads/2025/05/beach-refinery-australia.jpg) Alcoa’s Kwinana refinery sits along the Western Australian coast. From 2008 through 2010, the sleepy hamlet of Yarloop in Western Australia inspired a book, intervention from American activist Erin Brockovich and a class-action lawsuit in Allegheny County. At the center of it all was Alcoa’s nearby Wagerup refinery, driving heated debates about risks posed to workers and residents since opening in 1984\. The plant continues to pump out 3 million tons of alumina per year, though a planned expansion was halted amid the outcry, and the Pittsburgh company claims to have taken steps to mitigate pollution. Janine Quicke was one of the company’s first female refinery workers when she started at Wagerup in 1994\. She said she worked hard to prove her value — that is, until a series of progressive health issues, starting in 1999, forced her to leave the job six years later. Quicke was working on the top of the mills when she saw a plume of smoke waft over her. The smell hit her immediately, but she was back on the ground before the symptoms set in: headaches, nausea, dizziness, rapid heart rate. “I’ve never felt so violently ill,” she said. The sickness passed, but it marked the beginning of a long struggle with shifting symptoms, medical visits, mandated sick leave and ultimately a medical buyout. It took several years after leaving the plant in 2005 for Quicke to feel she’d made a full recovery. “I was an angry, angry person for a long time,” she said. ![A metal car wash is rusted and stands beneath a green tree at dusk in a parking lot.](https://i0.wp.com/www.publicsource.org/wp-content/uploads/2025/05/car-wash-dust-refinery-819x1024.jpg?ssl=1) ![A woman with long brown hair wearing a red shirt and white smartwatch stands in a kitchen with jars on a shelf and an oven in the background.](https://i0.wp.com/www.publicsource.org/wp-content/uploads/2025/05/woman-home-sickness-819x1024.jpg?ssl=1) Left: A jet wash at Alcoa’s Wagerup refinery cleans caustic from employees’ vehicles. Right: Janine Quicke at home in Harvey, the next town south of Yarloop. Others tried to claim redress through the courts. Nearly 250 plaintiffs — workers and residents — filed a total of five civil claims in Allegheny County court, aided by Brockovich, in 2009\. The cases ended up in federal court, where a judge declined them, effectively saying the matter belonged to the Australian justice system. Back at Wagerup, the Pittsburgh company had attempted to address the outcry by establishing a buffer zone through the middle of Yarloop and buying out the homes that fell within it. This, according to some locals, only added to the strife, as neighbors on opposite sides of the dividing line disputed the extent of the impact. Years of attrition following the buyouts, compounded by a devastating 2016 bushfire, have left a declining community, according to one longtime resident. “It's not a town,” said John Harris. “I wouldn't call it a town, there's just nothing there.” ![View through a window showing outdoor tables and chairs on grass, with a fence, trees, and small buildings in the background; patterned circular decoration in the foreground.](https://www.publicsource.org/wp-content/uploads/2025/05/town-bar-empty.jpg) The bowling club in Yarloop is sponsored by Alcoa. In Kwinana, neighborhoods that once bustled with homes and businesses around Alcoa’s oldest refinery now resemble a post-industrial wasteland. The area was cleared in the early 2000s under a state-led initiative to promote an industrial corridor with a protective buffer zone. But planning setbacks and court rulings upended the vision. Twenty years on, a patchwork of empty brownfields occupy a prime slice of suburban Perth, which the government said should be left uninhabited. A planned housing development was blocked by the courts in 2016 on the basis of public health risks. Last year, Alcoa shuttered its refinery, contributing a hulk of aging machinery and vast piles of residue to the area’s uncertain future. “If they think the area is safe, why is nothing being built there?” asked Peter Horn, whose former home in Wattleup, beside Kwinana, was bought out by the government. Peter’s son, Kane Horn, was five when a spinal tumor left him paralyzed from the waist down. Kane, now 31, was being treated for leukemia right as public health concerns peaked around the Alcoa refinery, joining a number of former residents who say the refinery caused long-term health problems. The Horn family has always wondered whether it may have factored into his rare diagnosis. ![A man with tattoos sits in a wheelchair indoors, looking to the side.](https://www.publicsource.org/wp-content/uploads/2025/05/man-wheelchair-home.jpg) Kane Horn at the family home in the suburbs of Perth. [Government data](https://atlasesaustralia.au/ahpc/atlas%5Fsingle/atlas.html?indicator=i38&ref=boilingcold.com.au) shows Kwinana and Wattleup, positioned in an industrial corridor, have some of the highest cancer rates in the region. Residents [have sought for decades](https://www.smh.com.au/national/western-australia/dozens-of-cancer-cases-perth-community-renews-push-for-answers-over-pollution-20181023-p50bhp.html?ref=boilingcold.com.au) to get the government to examine the possible industrial causes, though no formal studies have been conducted. “I’ve kind of just learned to live with it,” Kane Horn said. “You can’t really do much when there are big companies that don’t really care what they do.” In early 2024, the company announced it was shuttering the Kwinana facility, citing “a long period of operating losses.” PublicSource journalists spoke with 19 current and former Alcoa employees and contractors in March. Many described a work environment that was physically dangerous and environmentally irresponsible. Older workers pointed to a shift in workplace culture around the mid-1990s, when they say Pittsburgh began exerting more control from afar, imposing a numbers-first approach on a workforce formed by rural community values. Some added that the company paid well, affording lifestyles that would have been otherwise unattainable for blue-collar workers in small-town Australia. ![An older man in a navy shirt stands in front of shelves filled with organized binders and files, looking at the documents.](https://www.publicsource.org/wp-content/uploads/2025/05/man-home-records.jpg) Former Alcoa worker Vince Puccio stands at home among shelves of records he's collected on the company. Vince Puccio, a former Alcoa worker of 25 years, stood at home among the shelves of records he’s collected on the company. Puccio grew up and lived in Yarloop until his retirement. He founded Community Alliance for Positive Solutions to push for more stringent regulation of the Pittsburgh firm. “I have no issues with any industry here, no issue with companies making a decent profit – what I have an issue with is greed, and that’s what this company is all about.” ![A man with a beard and a neck tattoo is shown in profile against a dark background.](https://www.publicsource.org/wp-content/uploads/2025/05/man-portrait-alcoa.jpg) Former Alcoa worker Wayne Hyatt worked at the Pinjarra refinery for 10 months. Wayne Hyatt took a job at the Pinjarra Refinery in 2022\. He lasted 10 months. “It was just a horrible, dirty, nasty place,” he said, describing frequent caustic spills that flowed down the roadways of Alcoa’s property on the outskirts of town. The company, he said, could not keep up with the pace of failing infrastructure, and he described co-workers who were frequently burned by caustic acid. ![Aerial view of industrial waste ponds with red, white, and black coloration, separated by embankments, surrounded by farmland and sparse trees.](https://i0.wp.com/www.publicsource.org/wp-content/uploads/2025/05/aerial-toxic-residue-819x1024.jpg?ssl=1) ![A woman and a man stand side by side in front of a white corrugated metal wall, both with tattoos and casual summer clothing.](https://i0.wp.com/www.publicsource.org/wp-content/uploads/2025/05/workers-portrait-alcoa-819x1024.jpg?ssl=1) Left: Alcoa’s mud lakes in Pinjarra. Right: Former Alcoa workers Krista-lea Hayward and Shawn Jose, photographed in Pinjarra. Couple Shawn Jose and Krista-lea Hayward both recently left jobs at Alcoa’s Pinjarra refinery because of poor workplace conditions — caustic “overflowing for days on end.” Protective gear was insufficient, they said, and both said they were frequently burned on the job. “You couldn’t pay me enough to go back there,” Jose said. “It’s too dangerous.” ![A middle-aged man with a shaved head and stubble is seen in low lighting, looking thoughtfully into the distance with a soft yellow light visible in the background.](https://i0.wp.com/www.publicsource.org/wp-content/uploads/2025/05/L1007628-819x1024.jpg?ssl=1) ![An industrial facility lit up at night, with trees and dark branches framing the brightly illuminated plant against a deep blue sky.](https://i0.wp.com/www.publicsource.org/wp-content/uploads/2025/05/L1004282-819x1024.jpg?ssl=1) Left: Former Alcoa worker Dave Puzey photographed at home in Binningup. Right: Alcoa’s Wagerup refinery. Dave Puzey started battling fatigue a few years into his 11-year stint at Alcoa. The lethargy was soon joined by coughing and debilitating chemical sensitivity, all of which gradually worsened until he was laid off during a long leave of absence from the Wagerup refinery. Puzey, who remains a mining contractor, said he refuses to work for alumina companies after his time at Alcoa. “It's not just the atmosphere that's toxic in that place ... It’s the culture.” ![A man in a cowboy hat steers a farm vehicle in a pasture next to a herd of cows in bright sunlight.](https://www.publicsource.org/wp-content/uploads/2025/05/farmer-cows-australia.jpg) Former Alcoa worker Greg Sudholz at his biodynamic farm in Harvey. Even as workers openly criticized Alcoa, most acknowledged the good pay that the company provided. “Alcoa gave us a lifestyle that we never could have afforded,” said Greg Sudholz, who worked for the company for about 40 years until retiring in 2008 and now runs a small farm. “They were a good company to work for, when you were a name, then when the Americans started putting the pressure on, we just became a number.” ![A dry, grassy field with scattered branches and trees in the foreground; a flat-topped mound of red mud glows in the sunset light under a clear sky.](https://www.publicsource.org/wp-content/uploads/2025/05/mountain-red-dust.jpg) Mounds of Alcoa residue at the Pinjarra refinery. In Pinjarra, the reddish mounds of waste overlooking the town grow taller each year. ![A woman cleans the wall below a sunlit window with a cloth while a man stands nearby, watching her.](https://www.publicsource.org/wp-content/uploads/2025/05/L1005435.jpg) Collette and Richard Sheridan clean dust from their property in Pinjarra. Locals say perpetual dust is a daily disruptor. ![Two people sit at a picnic table in a landscaped park surrounded by trees, with a dirt path and stairs leading up a hill in the background.](https://www.publicsource.org/wp-content/uploads/2025/05/town-park-picnic.jpg) People picnic in Pinjarra. Some have moved away altogether. Just outside the buffer zone, beyond the line of trees that surrounds Alcoa’s Pinjarra mud lakes and across from Alcoa Road, a small community called Carcoola is the closest to the refinery. Originally built by the company to house employees, it is now a working-class neighborhood, complete with its own school and scores of cul-de-sacs. There, residents say the roofs are layered in red dust, rendering rain collectors unusable. The caustic, chemical odor creeps through windows, and the refinery alarm is heard from the back stoop. “There’s a lot of people that have problems in Carcoola,” said Kathy O’Connor, who lived there with her two adopted children until last year. She had brought the twins, Aaliyah and Jonathan, home to Carcoola from the hospital 11 years ago, and by the time they were six months old, the children had trouble breathing. Doctors never offered a diagnosis, but prescribed an inhaler and medication to open the children’s airways. Both children used an inhaler daily, and Kathy, an asthmatic, used three. The family made regular trips to the doctor when the children began to wheeze, O’Connor said. ![Two children stand in front of an ice cream freezer in a store; one wears a blue soccer jersey, and the other wears a blue plaid school uniform.](https://www.publicsource.org/wp-content/uploads/2025/05/twins-icecream-illness.jpg) Twins Jonathan and Aaliyah shop for ice cream in Pinjarra. “You can see it in the air,” Aaliyah, 11, said of the dust. Shortly after receiving toxicology results showing elevated levels of heavy metals, the family decided to move to Mandurah, a small city near the coast. Immediately, their breathing improved. They haven’t had to go to the doctor since. “I feel good,” Aaliyah said. “I do sports and it's really, really easier when you can breathe,” no medications required. Dust tests, though, conducted by the Peel Environmental Protection Alliance, a local advocacy group, found Alcoa’s dust signature at sites 12 miles from Pinjarra, nearly all the way to Mandurah and its population of nearly 100,000 people. That has residents like O'Connor concerned. “I won’t be there for long,” she said. “I’m going to move far away. All because of Alcoa.” ![Trees stand behind a multicolored fence in afternoon sunlight.](https://www.publicsource.org/wp-content/uploads/2025/05/carcoola-neighborhood-alcoa.jpg) Carcoola is the neighborhood nearest Alcoa’s Pinjarra refinery. Several blocks away, Grant McKinnon recalled the caustic odor at the family’s home in Carcoola. “It’s just overwhelming,” he said. “It makes your eyes water,” forcing the family indoors several times a week behind closed windows. His two boys, Taz, 10, and Tyler, 6, have lived in Carcoola their entire lives. They underwent toxicology tests, too, which also showed elevated levels of metals. “Of course we're concerned,” McKinnon said. “At 10 years old, they've got heavy metals in them. … I mean, geez, it can't be good, can it?” Medical experts offer a variety of perspectives on the effects of bauxite residue and refinery emissions on workers and residents. A group of five doctors and health experts opposing Wagerup expansion plans in 2005 wrote that Yarloop residents “have suffered acute and chronic adverse health consequences” from living near the refinery. A clinic founded by the state health department a few years prior to address public health concerns catalogued more than 70 patient visits presenting industrial health concerns. ![A man in a blue shirt stands behind a dark horse wearing a halter, with a fence, trees, and a shipping container in the background.](https://www.publicsource.org/wp-content/uploads/2025/05/race-horse-heavy-metals-2.jpg) Richard Sheridan stands with his horse, Newsboy, which tested for elevated levels of heavy metals. “You can’t train horses here,” Sheridan said. “There are toxins here.” In Pinjarra, after years of resident concerns, the state government in 2023 conducted a study assessing a potential cancer cluster, finding “no clear or consistent evidence.” The government also tested for dust levels in Pinjarra last year, concluding they did not exceed national guidelines. Dr. Maureen Phillips, a medical practitioner based in Perth, has spent time with the Sheridans and others around Pinjarra concerned by the dust. She said she’s sympathetic to their plight. “If I lived there and that dust was coming on to me, I would be very distressed as well,” she said. She said she was disappointed by the results of the studies, though she has no reason to doubt their validity. “When you look at what goes into the \[refining\] process, it’s a bit horrifying,” she added. Residents, though, remain convinced that Alcoa deserves greater scrutiny and continue to press for accountability. “I'm all for making a living and having someone here in our community that supplies so many jobs,” McKinnon said. “But they need to be held accountable for the toxins and the toxic dust and stuff like that that they're allowing to just fly around. “… I mean are we going to be able to sue the shit out of them when my kid gets leukemia in 10 years?” ![A group of people with backpacks walk down a rocky slope toward the edge of a calm, forested lake.](https://www.publicsource.org/wp-content/uploads/2025/05/kids-swim-woods.jpg) Locals descend to a swimming hole in the woods overlooking Alcoa’s Pinjarra refinery. Local governments are concerned that their communities will be permanently marred by Alcoa. Mining, said Mike Walmsley, president of the Waroona shire, has overtaken a once-thriving farming economy and threatens a precious natural inheritance. “We’ve got to protect what we have left.” Locally, it’s not a fringe perspective. An alliance of five municipalities at the heart of Alcoa’s operations released a position statement seeking to limit mining and its impact in their communities. The fate of the company’s mountains of red waste is a looming anxiety. “The residue is Alcoa’s legacy,” said Walmsley, who chairs the local alliance of governments. “We will be custodians of that legacy if and when they leave.” If the retaining walls broke, as happened at mines in [Hungary in 2010](https://www.theguardian.com/world/2010/oct/05/hungary-toxic-sludge-spill?ref=boilingcold.com.au) and [Brazil in 2019](https://www.theguardian.com/world/2019/jan/25/brazil-dam-collapse-news-latest-mining-disaster-brumadinho?ref=boilingcold.com.au), Walmsley said it could cause “a catastrophic environmental disaster.” *The Fund for Investigative Journalism also contributed funding to support this project.* *Jamie Wiggan is deputy editor at PublicSource and can be reached at jamie@publicsource.org.* *Quinn Glabicki is the environment and climate reporter at PublicSource and a Report for America corps member. He can be reached at quinn@publicsource.org and on Instagram and X*[*@quinnglabicki*](https://www.instagram.com/quinnglabicki/?ref=boilingcold.com.au)*.* *This story was fact-checked by Matt Maielli.* *Photo editing by Stephanie Strasburg.* *This story was originally published by PublicSource, a nonprofit newsroom serving the Pittsburgh region where Alcoa has its headquarters. For more of its journalism, visit* [*www.publicsource.org*](http://www.publicsource.org/?ref=boilingcold.com.au)*.* ![](https://i0.wp.com/www.publicsource.org/wp-content/uploads/2021/11/cropped-ps_initials_logo-1.png?resize=150%2C150&ssl=1) ### *Read the rest of PublicSource's investigation of Alcoa in WA:* [How Alcoa is undermining a rare forest to fuel its empireTwo journalists from Alcoa’s hometown flew to Perth to look at its mining of WA’s jarrah. A brilliant look at a slow-moving tragedy.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-104.png)Boiling ColdJamie Wiggan![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/First-nation-man-mining-site.jpg)](https://www.boilingcold.com.au/how-pittsburghs-alcoa-is-undermining-a-rare-forest-to-fuel-its-global-aluminum-empire/) [Will WA revisit the deal that Alcoa depends on?Destroyed forest. Threatened water supply. Toxic towns. Mountains of residue. Will the WA Government demand better?![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-108.png)Boiling ColdJamie Wiggan![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/L1007563.jpg.webp)](https://www.boilingcold.com.au/will-australia-revisit-the-deal-that-led-a-pittsburgh-firm-to-depend-on-the-ore-beneath-its-trees/) ### Can Murray Watt fix Australia’s broken nature laws? First stop, WA URL: https://www.boilingcold.com.au/can-murray-watt-fix-australias-broken-nature-laws-first-stop-wa/ Last updated: 2025-05-20T06:00:07.000Z [Justine Bell-James](https://theconversation.com/profiles/justine-bell-james-39245?ref=boilingcold.com.au), *[The University of Queensland](https://theconversation.com/institutions/the-university-of-queensland-805?ref=boilingcold.com.au)* New federal [Environment Minister Murray Watt](https://theconversation.com/view-from-the-hill-albanese-shifts-tanya-plibersek-from-environment-in-favour-of-can-do-murray-watt-255963?ref=boilingcold.com.au) is in [Western Australia this week](https://www.abc.net.au/news/2025-05-17/murray-watt-wa-nature-positive-woodside-gas/105300342?ref=boilingcold.com.au) to reboot nature law reform. [Reform stalled](https://theconversation.com/labors-dumping-of-australias-new-nature-laws-means-the-environment-is-shaping-as-a-key-2025-election-issue-248872?ref=boilingcold.com.au) in the Senate last term, following stiff opposition from the state’s Labor government and mining sector. Watt has a big task ahead of him. Labor came into power in 2022 promising [large-scale law reform](https://theconversation.com/australia-desperately-needs-a-strong-federal-environmental-protection-agency-our-chances-arent-looking-good-239099?ref=boilingcold.com.au) to reverse Australia’s alarming rate of biodiversity loss. But former environment minister Tanya Plibersek’s tenure ended with Australia’s nature laws in even worse shape than when she started. A [last-minute amendment](https://theconversation.com/protecting-salmon-farming-at-the-expense-of-the-environment-another-step-backwards-for-australias-nature-laws-252814?ref=boilingcold.com.au) intended to protect salmon farming in Tasmania now limits the government’s power to reconsider certain environment approvals, even when an activity is harming the environment. But a new leader for the Greens and the Liberals in this term of parliament means Labor’s important push for reform may have better prospects. ## What went wrong in Labor’s last term? When Plibersek announced Labor’s “[Nature Positive Plan](https://www.dcceew.gov.au/sites/default/files/documents/nature-positive-plan.pdf?ref=boilingcold.com.au)” in 2022, she committed to a massive overhaul of Australia’s Environment Protection and Biodiversity Conservation Act (EPBC Act). The ambitious plan involved creating an independent national environment protection agency to enforce national environmental standards. Setting such standards was recommended by the 2020 Samuel Review of the EPBC Act. If legislated, the standards would shift decision-making under the act from [being a highly discretionary process to one focused on outcomes](https://theconversation.com/get-the-basics-right-for-national-environmental-standards-to-ensure-truly-sustainable-development-201092?ref=boilingcold.com.au) for the environment. An early draft of the new legislation was presented to key stakeholders at [closed-door consultation sessions](https://www.ashurst.com/en/insights/overhaul-of-australian-environmental-laws-begins-in-earnest/?ref=boilingcold.com.au). They included environmental non-government organisations, research groups and peak bodies for the minerals and development sectors. [The draft](https://consult.dcceew.gov.au/australias-new-nature-positive-laws?ref=boilingcold.com.au) did a pretty good job of capturing the components of the Nature Positive Plan. However, Plibersek’s proposal was unpopular with some, including [WA Premier Roger Cook and the mining lobby](https://www.theguardian.com/environment/2024/apr/16/labor-national-environment-laws-australia-wildlife-threatened-species?ref=boilingcold.com.au). Freedom of Information laws revealed [major players in the mining sector wrote to Prime Minister Anthony Albanese](https://www.smh.com.au/environment/climate-change/mining-groups-lobbied-pm-to-weaken-environment-laws-documents-show-20240717-p5jud3.html?ref=boilingcold.com.au) asking him to intervene. In the face of these difficulties, Plibersek pivoted. In April 2024, [she announced](https://www.abc.net.au/news/2024-04-16/environmental-enforcer-but-little-progress-on-laws-overhaul/103729652?ref=boilingcold.com.au) nature reforms would instead be delivered in three phases. The first was the [Nature Repair Market](https://theconversation.com/can-the-governments-new-market-mechanism-help-save-nature-yes-if-we-get-the-devil-out-of-the-detail-218713?ref=boilingcold.com.au), which had already been legislated. The second was three bills to be introduced to parliament. The third phase would happen at some point in the future. The bills sought to create two new bodies, Environment Protection Australia and [Environment Information Australia](https://www.dcceew.gov.au/environment/environment-information-australia?ref=boilingcold.com.au), to inform decision-making. A third bill contained some improved compliance and enforcement mechanisms. However, the centrepiece of the initial reforms – the new environmental standards themselves – were missing. [This sparked criticism](https://theconversation.com/australias-long-sought-stronger-environmental-laws-just-got-indefinitely-deferred-its-back-to-business-as-usual-228090?ref=boilingcold.com.au), as the EPA would simply be enforcing the same ineffective laws that currently exist, and would not have project approval powers until some later amendments were passed. Presumably, Plibersek switched to a three-stage process hoping the stage-two bills would pass through parliament with a minimum of dissent. This would leave the more contentious standards as a problem to be dealt with further down the track. However, even the watered-down proposal was unpopular. The bill stalled in the Senate, criticised as both too weak and too strong [by opposite sides of the political spectrum](https://www.aph.gov.au/Parliamentary%5FBusiness/Committees/Senate/Environment%5Fand%5FCommunications/NaturePositivebills/Report?ref=boilingcold.com.au). And once again, the mining lobby intervened. Albanese signalled a [willingness to remove approval powers](https://www.abc.net.au/news/2024-09-02/albanese-offers-to-water-down-environmental-watchdog/104301898?ref=boilingcold.com.au) from the EPA, leaving decisions with the minister. Plibersek eventually managed to secure support from the Greens to get the bills through the Senate, but [Albanese killed the deal](https://www.thesaturdaypaper.com.au/news/politics/2024/11/30/why-anthony-albanese-killed-the-nature-positive-deal-with-the-greens?ref=boilingcold.com.au) at the eleventh hour in November last year. At the time, Labor’s prospects for the federal election were looking shaky, and Albanese saw the decision as a way to shore up support in WA. ## What are the chances of success now? The failure of the Nature Positive Reforms in Labor’s first term came down to one crucial factor: politics. With a fresh election win, a decisive majority, and a new environment minister, will things be different? In his first interviews after winning the election, Albanese said he wants a federal environmental protection agency that “[supports industry, but also supports sustainability](https://www.sbs.com.au/news/article/this-is-what-anthony-albanese-will-prioritise-now-hes-back-in-office/l1o63wyg7?ref=boilingcold.com.au)”. This suggests there may be a green light for Watt to at least push for this aspect of the reforms to be revived. What about the more ambitious parts of the reform, including National Environmental Standards? This is something Watt could potentially push for. In [an interview on Monday](https://minister.dcceew.gov.au/watt/transcripts/interview-sally-sara-abc-radio-national-breakfast?ref=boilingcold.com.au), Watt said both options are on the table: widespread reform, or the pared-down version Plibersek took to parliament. Watt said he wants “to approach the reforms in the spirit of Graeme Samuel’s recommendations”, which suggests he’s open to new standards. Indeed, when new Opposition Leader Sussan Ley was environment minister, she tried to push through [legislation incorporating similar standards](https://theconversation.com/from-nuclear-to-nature-laws-heres-where-new-liberal-leader-sussan-ley-stands-on-4-energy-and-environment-flashpoints-256106?ref=boilingcold.com.au). Watt could use this to garner crossbench support. Watt also has a new Greens leader with whom to negotiate. Senator Larissa Waters, a former environmental lawyer, understands the complexity of the EPBC Act better than most. With the Greens holding the balance of power in the Senate, Waters might push for any proposed laws to be strengthened – perhaps by bringing back the standards. Watt said [he will](https://minister.dcceew.gov.au/watt/transcripts/interview-sally-sara-abc-radio-national-breakfast?ref=boilingcold.com.au) reach out to Ley and the Greens to see if they’re “prepared to work with us to get these reforms passed”. ## Watch this space At this stage, Watt is resisting pressure to rule out giving a future EPA the [power to approve major resources projects](https://www.afr.com/politics/federal/watt-won-t-rule-out-giving-epa-veto-over-resources-projects-20250519-p5m0hd?ref=boilingcold.com.au). Everything is still up for discussion. Ahead of Tuesday’s meeting, Cook [said](https://www.afr.com/politics/federal/watt-won-t-rule-out-giving-epa-veto-over-resources-projects-20250519-p5m0hd?ref=boilingcold.com.au) he would push Watt to consult widely before making any decisions and avoid duplicating existing state laws. Watt says his job now is to listen, before finding a way forward. But “the [very biggest priority is to pass these reforms](https://minister.dcceew.gov.au/watt/transcripts/interview-sally-sara-abc-radio-national-breakfast?ref=boilingcold.com.au)”, this term, whatever it takes.![The Conversation](https://counter.theconversation.com/content/257000/count.gif?distributor=republish-lightbox-basic) --- *By* [*Justine Bell-James*](https://theconversation.com/profiles/justine-bell-james-39245?ref=boilingcold.com.au)*, Professor, TC Beirne School of Law,* [*The University of Queensland*](https://theconversation.com/institutions/the-university-of-queensland-805?ref=boilingcold.com.au) *This article is republished from* [*The Conversation*](https://theconversation.com/?ref=boilingcold.com.au) *under a Creative Commons license. Read the* [*original article*](https://theconversation.com/can-murray-watt-fix-australias-broken-nature-laws-first-stop-western-australia-257000?ref=boilingcold.com.au)*.* ### How Pittsburgh’s Alcoa is undermining a rare forest to fuel its global aluminum empire URL: https://www.boilingcold.com.au/how-pittsburghs-alcoa-is-undermining-a-rare-forest-to-fuel-its-global-aluminum-empire/ Last updated: 2025-09-09T03:40:04.000Z *By Jamie Wiggan and Quinn Glabicki, PublicSource* *This story was originally published by PublicSource, a nonprofit newsroom serving the Pittsburgh region where Alcoa has its headquarters. For more of its journalism, visit* [*www.publicsource.org*](http://www.publicsource.org/?ref=boilingcold.com.au)*.* *This story was supported by the Pulitzer Center. Photographs by Quinn Glabicki.* ![](https://www.publicsource.org/wp-content/uploads/2025/05/alcoa-australia-pittsburgh-series-bug-1.jpeg) PublicSource investigates — The future of a Pittsburgh-based metals icon collides with the survival of a unique and fragile forest. It took four Noongar men to hoist the warm, lifeless kangaroo onto the hooked limb from which they skinned and gutted their kill. Working the carcass with an agile knife, 28-year-old Christopher Nannup carved lean chunks from the tangle of fur and sinew. Ribs, thighs, torso and tail were loaded onto the truck to be shared among family and friends. “I’m just hoping that he’s tender,” said Franklin Nannup, Christopher’s uncle and a respected local elder who assisted the hunt. Christopher and his nephews represent the next generation of the Noongar, who have inhabited Australia’s southwestern tip for 50,000 years. Their local corporation recently acquired rights to occupy and manage the land on which they shot three kangaroos and netted 20-something mullet fish during an afternoon in late March. But this amounts to a small gain in a story of colonization, dislocation and recurring threats to the land now fronted by a Pittsburgh corporation mining the Northern Jarrah Forest, named for a distinctive slow-growing gum tree. “I’m going to be opposing (Alcoa’s planned expansion) all the time for the simple fact that there’s only one place in the world where the jarrah trees grow — and that’s my country,” said Franklin Nannup. ![Three people sit inside a red vehicle; one person in the passenger seat is aiming a rifle out the window, while the driver looks forward. Road signs and trees are visible outside.](https://www.publicsource.org/wp-content/uploads/2025/05/noongar-kangaroop-hunt.jpg) Christopher Nannup aims a rifle from the driver's seat of a pickup truck while hunting kangaroo on a reserve near North Dandalup, Western Australia, on March 24. At the reserve on the outskirts of Alcoa's mining lease, the land provides — as it has for generations of Noongar people. ![A person in a black shirt and red shorts walks through dry grassland, dragging a kangaroo by its tail; trees are visible in the background.](https://www.publicsource.org/wp-content/uploads/2025/05/noongar-kangaroo-hunt-2.jpg) Mark Penny drags a kangaroo during a hunt with friends and family at a reserve near North Dandalup, Western Australia, on March 24. But as the company's footprint has grown, land for hunting and fishing has been lost. ![Three people stand by a riverbank, working together to untangle a fish from a fishing net.](https://www.publicsource.org/wp-content/uploads/2025/05/first-nation-fishing.jpg) Franklin Nannup, Christopher Nannup and Mark Penny pull fish from a net in the Serpentine River at a reserve near North Dandalup, Western Australia, on March 24. Guided by elders, a younger generation works to preserve tradition, and to conserve a fractured land. ![Two people are skinning a kangaroo hanging from a tree branch as others watch from a red vehicle in a dry, grassy area.](https://www.publicsource.org/wp-content/uploads/2025/05/first-nation-kangaroo-hunt-3.jpg) Christopher Nannup skins a kangaroo with the help of Jamal Kearing during a hunt near North Dandalup, Western Australia, on March 24. More mining further erodes it. Since 1963, Alcoa has mined bauxite from the foothills of Australia’s Darling Range under a special political agreement that skirts regulation, guarantees access to scarce water and assures low royalty rates. What was once a modest mining operation has become one of the global industry’s leading operations. Australian ore now generates about three-quarters of Alcoa’s total production of alumina — an oxide refined from bauxite and smelted into aluminum to make smartphones, computers, skyscrapers, electric vehicles, solar panels and wind turbines. And as global climate goals stress building more to emit less, the North Shore-headquartered metal maker seeks more to keep up with [surging](https://rmi.org/our-work/climate-intelligence/horizon-zero/aluminum-sector/?ref=boilingcold.com.au#:~:text=The%20aluminum%20sector%20is%20currently,to%2080%20percent%20by%202050.) demand — to build, [Alcoa says](https://www.alcoa.com/global/en/stories/releases?id=2021/10/advancing-sustainably-alcoas-2050-net-zero-ambition&ref=boilingcold.com.au), the green energy future. ![](https://www.publicsource.org/wp-content/uploads/2025/05/australia-map-v3.png) Alcoa’s Australian lease, spanning nearly 5,000 square miles, cuts across much of the remaining Northern Jarrah Forest, with over 8,000 unique plant and animal species. The company’s mining footprint has grown in recent years, and it’s seeking approval for its biggest expansion to date. In 2023, when a former Alcoa boss told Wall Street analysts the company had “no fixed timetable” for securing new mining approvals in the jarrah forest, corporate stock dropped more than 7%, or $650 million. From Alcoa headquarters overlooking the Allegheny River in January, Alcoa CEO William Oplinger told investors clinching the expansion approval is of “paramount importance.” ![The sun shines through dense forest trees with green foliage and undergrowth in a natural woodland setting.](https://www.publicsource.org/wp-content/uploads/2025/05/jarrah-forest-biodiversity-2.jpg) A one-of-a-kind ecosystem lies above the bauxite Alcoa says it needs for its future. The company’s request to expand mining in Australia is drawing objections from scientists and the land’s original inhabitants. Here: Unmined Northern Jarrah Forest, photographed on March 26. ![Aerial view of a large mining operation with cleared land, roads, facilities, and surrounding forested areas.](https://www.publicsource.org/wp-content/uploads/2025/05/minesite-forest-aerial.jpg) From 7,000 feet, the reddish ruts dug by one of the world’s largest bauxite mines cut for miles through an endangered biodiversity hotspot. This aerial view of Alcoa's Huntly Mine, near the Serpentine Dam, in Western Australia's Northern Jarrah Forest, was photographed on March 25. ![A forest with tall trees stands next to a cleared, rocky area of earth under a clear sky at sunset.](https://www.publicsource.org/wp-content/uploads/2025/05/jarrah-tree-minesite.jpg) The ore beneath Australia’s Northern Jarrah Forest fuels Alcoa’s $12 billion global aluminum operation. A jarrah tree stands at the edge of an Alcoa mine site in the forest on March 21. ![An excavator moves dirt on a construction site, creating a large cloud of dust under a clear sky.](https://www.publicsource.org/wp-content/uploads/2025/05/excavator-mining.jpg) As demand surges, the Pittsburgh-based metals giant wants approval to mine more land. Here, an excavator works at an Alcoa mine site near Jarrahdale, Western Australia, on March 28. ![Wide view of a dry, cracked earth crater with scattered boulders and reddish-brown soil, under clear daylight.](https://www.publicsource.org/wp-content/uploads/2025/05/forest-minesite-empty.jpg) The forest has already been taken to its knees by a warming world and decades of deforestation. This Alcoa mine site is near Waroona, Western Australia, on March 22. ![A man with glasses drives a vehicle on a red dirt road, seen through the rearview mirror with a barren landscape in the background.](https://www.publicsource.org/wp-content/uploads/2025/05/scientist-mine-forest.jpg) Scientists say further loss threatens total ecological collapse. Here, botanist Kingsley Dixon surveys an Alcoa mine site that was rehabilitated by the company near Waroona, Western Australia, on March 23. Alcoa’s proposal to mine three vast new jarrah tracts — totaling the approximate square mileage of Pittsburgh — is under review by the state government. The company’s many prior expansions have never undergone this process. Alcoa has, in recent years, sought more and higher quality bauxite. To find it, the company has mined closer to rural communities and within protected drinking water reservoirs. Western Australian authorities have [warned](https://www.smh.com.au/interactive/hub/media/tearout-excerpt/30655/FOI-869---Document-8---Catchment-Risk-Assessment-Framework---Alcoa-2023---2027-MMP.pdf?ref=boilingcold.com.au) that if Alcoa is allowed to expand, contamination of drinking water for the city of Perth, and its population of 2.3 million, is “considered certain,” and could endanger water quality in “most, if not all,” of Perth’s drinking water dams. They cautioned that long-term development of the region could be stunted by resulting costs and water shortages. “The relationship between Alcoa and the Western Australian community is in a period of change,” said Travis Robinson, a former chief of staff to the state environmental minister who now runs a private equity firm in Perth with mining interests among its portfolio. Alcoa did not respond to repeated requests for interviews or comment for this story. The company has long said it effectively rehabilitates the forest that it clears, producing [company-sponsored research](https://www.alcoa.com/australia/en/pdf/WA-Environmental-Research.pdf?ref=boilingcold.com.au) to back its claims. In its most recent sustainability [report](https://www.alcoa.com/sustainability/pdf/2023-Sustainability-Report.pdf?ref=boilingcold.com.au), Alcoa acknowledged increased scrutiny of its forest rehabilitation practices and the company’s “potential impact on Perth’s drinking water supply.” Alcoa said it is “committed to enhance the way it operates in order to comply with stricter environmental requirements, including enhanced protection for drinking water and biodiversity, reduced forest clearing and accelerated forest rehabilitation.” The company’s opponents see the approval process as a possible tipping point. “There’s only been Europeans in this country for 200 years, and the impact that we’ve had on the natural environment is just extraordinary,” said Jess Beckerling, an incoming state legislator who petitioned for the review of Alcoa’s expansion. “And even though we’re not the traditional or the rightful custodians of this country, we have a custodianship responsibility.” A timelapse of satellite imagery shows how Alcoa’s Huntly Mine has expanded into the Northern Jarrah Forest since 1984, the first year satellite data is available. (Google Earth) In 2022, the Intergovernmental Panel on Climate Change, the United Nations’ chief climate body, [declared](https://www.ipcc.ch/report/ar6/wg2/chapter/chapter-11/?ref=boilingcold.com.au) the Northern Jarrah Forest critically endangered by a warming world. Hotter, dryer seasons and bushfires plague the forest. Mining, scientists say, threatens to push the forest over the edge. If more is lost, the entire ecosystem could collapse, and with it hundreds of unique species endemic to the Darling Range, including black cockatoos, numbats, quokkas and bandicoots. “The forest has been taken to its knees,” said [Kingsley Dixon](https://staffportal.curtin.edu.au/staff/profile/view/kingsley-dixon-9fb980a0/?ref=boilingcold.com.au), an Australian botanist, and director of the ARC Centre for Mine Site Restoration, who worked with Alcoa for decades to rehabilitate forest ecosystems. ![A person stands in a forest, holding a plant sample and examining a tall blackened tree with grass-like foliage and seed pods.](https://www.publicsource.org/wp-content/uploads/2025/05/scientist-endangered-forest-biodiversity.jpg) Botanist Kingsley Dixon inspects a kingia australis, an ancient plant endemic to Western Australia, in unmined forest near an Alcoa mine site near Waroona, Western Australia, on March 23. The leafy canopy stood 100 feet above Dixon as he inspected the charred, bristly trunk of a kingia australis. Its sharp, grasslike leaves fell like narrow daggers, and the scientist held a seed pod the size of an apple to the afternoon sunlight. “This is an immortal plant,” Dixon, 71, remarked. The species evolved nearly 120 million years ago. The trunks were blackened with charcoal and the pods had begun to flower. The kingia australis grows no more than an inch each year, Dixon said, naturally engineered to thrive in the unrelenting climate of the Darling Range. “They’re just extraordinary,” Dixon said, estimating the plants before him to be no less than 500 years old. Grass trees — “some of the oldest flowering plants in terms of their ancestry on earth,” — stood beneath jarrah and marri trees in a cluster nearby. Underfoot, the small leaves of hibbertia poked through the forest floor. The jarrah forest’s location on the western coast of Australia, surrounded by ocean and desert, is a natural isolating force that has, over millennia, formed a “totally unique system,” Dixon explained. The entire ecosystem, he said, depends on the layer of reddish ore 13 feet beneath the forest floor. “Two things want bauxite: The Aluminum Company of America and the jarrah forest. They both have an utter, total dependence on it. Who wins?” In 1974, Dixon was a 20-year-old summer intern at Alcoa, working to regrow mine sites. "I just thought we could solve the jarrah forest,” he recounted. “That was the vision of the company.” Dixon later founded a research center, discovered that smoke from bushfires could prompt germination, and worked with Alcoa as a contractor from what he called "the leading restoration research group in the world on native ecosystems." But after the turn of the millennium, mining “was starting to skyrocket,” he said, touching areas previously thought off-limits. Rehabilitation could not keep up and his center dissociated from Alcoa. In 2022, the botanist was one of a team of scientists to [develop new international standards for mine site restoration](https://www.ser.org/news/625464/Worlds-first-global-standards-for-mine-site-restoration-launched-at-COP15.htm?ref=boilingcold.com.au), which launched that year in Montreal at the United Nations’ convention on biological diversity. The standards, Dixon explained, are based on a concept of native reference, which marks the forest for how it resembles and functions as its former, native self. ![A man stands next to a large fallen tree trunk in a dry, wooded area with scattered vegetation and trees in the background.](https://www.publicsource.org/wp-content/uploads/2025/05/scientist-minesite-jarrah-tree.jpg) Botanist Kingsley Dixon surveys a felled jarrah tree at an Alcoa mine site that was rehabilitated by the company near Waroona, Western Australia, on March 23. Dixon’s ramshackle Toyota Hilux bounced along a former hauling road cut through the forest, a few hundred yards past where he had stopped to examine the kingia. Soon, the landscape opened into an Alcoa forest restoration site — a flat plain marked by ruts reaching to the crest of the bare hilltop. An 700-year-old jarrah lay felled and charred in the dirt, positioned by Alcoa as a habitat that might one day support plant and wildlife. This forest, Dixon explained, would never be the same. The rows of scattered seedlings poking through the dirt were “ecologically meaningless,” he said, against a backdrop of unmined forest at the perimeter. As a condition of its agreement with the state, Alcoa must rehabilitate the land it mines. In the 1970s, the company developed a mine site restoration program, leading it to be the first mining company recognized by the United Nations Global 500 Roll of Honour for Rehabilitation Excellence in 1990\. In 2001, Alcoa [said](https://www.alcoa.com/australia/en/news/releases?id=2023/11/alcoa-continues-successful-rehabilitation-of-jarrah-forest-ecosystem&year=y2023&ref=boilingcold.com.au) it had achieved 100% plant species return. But the trial, based on Dixon’s research, could not be replicated at scale, he said. Last year, Dixon published [new research](https://onlinelibrary.wiley.com/doi/10.1111/rec.14236?ref=boilingcold.com.au), which found Alcoa’s rehabilitated mine sites lacked the biodiversity that defines unmined jarrah. Crucial plant species were “effectively absent,” and replanted forest would not sustain key animal species. The reason, the researchers posited, could be the removal of the bauxite on which the ecosystem evolved. In November, 154 Australian scientists [published a letter](https://theleeuwingroup.org.au/%5Fdata/papers/ALCOA%5FDESTROYING%5FOUR%5FFORESTS.pdf?ref=boilingcold.com.au) that called on the Australian government to “halt the destruction of one of the world’s most important and biodiverse temperate forests — for future generations, for the sake of the planet and to avert an extinction catastrophe.” “We wanted to put on the table, once and for all, a correction of the mythology that they are putting back a jarrah forest,” Dixon said. “First Nations know it. Bushwalkers know it. Local communities know it. … They all know it’s not coming back.” At Alcoa’s southernmost mining outpost, a dump truck the size of a two-story duplex was loaded with 206 tons of bauxite from a dusty pit, destined for “the crusher” — a hulking rock grinder that feeds rubble ore to an 11-mile conveyor belt supplying the refinery around the clock. The company mines about 34 million metric tons annually to generate about 9 million metric tons of alumina. The bauxite is found 10 to 20 feet below ground in a gravelly layer above the bedrock. To get it, Alcoa rips out the trees and bulldozes the topsoil, using explosives to blast through layers of rock. Once the bauxite is extracted, the dirt is returned and the top layers planted with seeds — beginning the process of rehabilitation. Alcoa employs a team of scientists who continue to study and write about its rehabilitation methods. The company [maintained in 2023](https://www.alcoa.com/sustainability/pdf/2023-Sustainability-Report.pdf?ref=boilingcold.com.au#page=81) that it had rehabilitated 75% of the forest it has mined in Western Australia. A government agency reached a different conclusion. As of 2023, “no areas have been assessed by the state as meeting the completion criteria” for rehabilitation, according to a memo from the Western Australian Department of Biodiversity, Conservation and Attractions. During a public tour of Alcoa’s rehabilitation areas attended by PublicSource journalists, Tanya Patterson, a community education officer at Alcoa, said the company continues to hone its methods and has improved upon original guidance set by the state government when their programming began. “We have done our own research and come up with better ways of rehabilitation,” Patterson said. ![A person standing in a forest with their arms raised, surrounded by tall trees and leafy undergrowth.](https://www.publicsource.org/wp-content/uploads/2025/05/woman-jarrah-forest.jpg) Sharon Parker-Brown stands at the edge of her rural property in Dwellingup, Western Australia, gesturing towards forest that Alcoa sought to mine, on March 22. Among local communities, opposition to Alcoa is mounting. Sharon Parker-Brown got involved in grassroots advocacy when she learned the company planned to mine right up to her property in Dwellingup. ![A person walks down a ramp beside a small, vine-covered shed while another peson stands in the foreground on a dirt path.](https://www.publicsource.org/wp-content/uploads/2025/05/family-rural-jarrah-home.jpg) Amy Parker-Brown steps down from the family chicken coop at their home in Dwellingup, Western Australia, as her father stands nearby on March 22. The company agreed to move back about 2,300 feet after she opposed the plans, though she’s still concerned about the broader effects of deforestation. “We live here for the forest and I can't understand why people wouldn't want a forest,” Parker-Brown said. “They don't understand we actually need that to survive climate change.” ![A man in work clothes and a hat walks beside a utility truck parked near a pond on a rural property, with fields and trees in the background.](https://www.publicsource.org/wp-content/uploads/2025/05/farmer-mine-water.jpg) Lorry Ierace at his farm near Alcoa's Willowdale Mine in Western Australia on March 27. Lorry Ierace, a farmer and former Alcoa miner, has seen two springs run dry at his family farm, which is surrounded on three sides by Alcoa mines. He believes the deforestation has altered the hydrology around his property. “You're talking about the amount of water we get through our streams now? Oh geez, we'll probably get a quarter what we used to.” ![An informational sign about bauxite mining operations in the Jarrah Forest, partially obscured by trees and defaced with graffiti.](https://www.publicsource.org/wp-content/uploads/2025/05/Alcoa-opposition-sign-1.jpg) An Alcoa sign is engraved with the message "Alcoa is cancer to our forest," near Waroona, Western Australia, on March 28. An Alcoa information sign, marked by local opposition. Perhaps bauxite mining’s most emblematic victims are the three black cockatoo species native to the Darling Range. To the Noongar, these birds are valued as totems, channelers of ancestral spirits and carriers of seasonal messages, like the arrival of salmon. The converging threats of climate change, suburban expansion and habitat loss from logging and mining have brought the Baudin’s black cockatoo to the brink of extinction. Experts estimate there could be as few as 2,500 mature adults in the wild. “It’s really sad because you can see the pendulum swinging,” said Sam Clarke, animal management and education officer at the Kaarakin Black Cockatoo Conservation Center. The center on the outskirts of Perth takes in sick and injured birds and nurses them to health before releasing them into the wild. Most are struck by cars or attacked by ravens, but last year they admitted many birds found weak from starvation. Cockatoos depend on the nuts of the jarrah and marri trees and nest in the hollows that form within their trunks once they reach about 200 years of growth. But decades of mining and logging have shrunk the once-sprawling forest, and few remaining trees are old and large enough to support nesting sites. ![A man stands in an aviary with black cockatoos, one perched on his arm and another flying nearby.](https://www.publicsource.org/wp-content/uploads/2025/05/black-cockatoo-rescue.jpg) Dean Autherell, founder of Carnaby's Crusaders, holds a black cockatoo at his home rescue center north of Perth, Western Australia, on March 25. Alcoa claims it takes measures to avoid harming cockatoos by marking trees they’re known to inhabit to indicate they should not be felled. A public tour of Alcoa’s mining and refining facilities included a stop at one such “cockatoo island” — a clump of around 15 trees surrounded by acres of barren mine site. “One of our very special birds is the red-tailed cockatoo,” said tour guide Patterson. “Any trees that are of importance for cockatoos, we will retain those and mine around them.” Dean Autherell, founder of the Carnaby’s Crusaders, constructs large, wooden boxes that he attaches to trees to create artificial nesting sites. In the last few years, nearly 200 birds have nested in his boxes. “This is just a Band-Aid — it’s not a long-term solution. The only long-term solution is restoring the habitat.” ![A woman stands by a riverbank, rubbing red dirt on her hand, with trees and water in the background.](https://www.publicsource.org/wp-content/uploads/2025/05/first-nation-woman-river.jpg) Cheryl Martin, a member of the First Nation Noongar people, rubs dust between her palms at the bank of the Murray River in Pinjarra, Western Australia, on March 28. Cheryl Martin threw a handful of white dust into the dark water of the Murray River where it winds north through the town of Pinjarra. In a parking lot behind her, a weathered monument memorializes an encampment of Noongar slain by colonists in 1834\. Her great-great-great-grandmother, just a young child, slipped away while as many as 80 of her friends and relatives were gunned down around her. In this moment, though, Martin was at peace. “The spirit’s soft, gentle,” she said. The dust Martin scattered pays tribute to her massacred family, as well as a much more ancient benefactor — a serpent-like deity known as “Woggle.” When Martin’s ancestors prayed for rain, tradition maintains, the Woggle slithered inland, drawing water in her wake as she formed the region’s sustaining rivers and tributaries. Humans were then made custodians of the land. Over tens of thousands of years, the Noongar developed methods to protect and nurture their natural surroundings: controlled burns to prevent larger fires from raging, limits on hunting birds during nesting season, totem assignments marking each individual with an animal they must care for and abstain from eating. All this amounts to an intricate system of balance, according to Daniel Garlett, an activist and former manager for the South West Aboriginal Land and Sea Council. “All that’s naturally asked of us, not just First Nations people, is that you take and you give and give and take, living in harmony with Mother Nature,” Garlett said. “You’ve got to love that country like your own mother.” When Martin’s ancestors prayed for rain, tradition maintains, the Woggle slithered inland, drawing water in her wake as she formed the region’s sustaining rivers and tributaries. Humans were then made custodians of the land. Over tens of thousands of years, the Noongar developed methods to protect and nurture their natural surroundings: controlled burns to prevent larger fires from raging, limits on hunting birds during nesting season, totem assignments marking each individual with an animal they must care for and abstain from eating. All this amounts to an intricate system of balance, according to Daniel Garlett, an activist and former manager for the South West Aboriginal Land and Sea Council. “All that’s naturally asked of us, not just First Nations people, is that you take and you give and give and take, living in harmony with Mother Nature,” Garlett said. “You’ve got to love that country like your own mother.” The Noongar continue to shoulder their responsibility as environmental stewards, though many see it as an uphill battle against Alcoa and other industry players. “The bauxite mining activity is taking from Mother Earth … from what is ours,” said George Walley, a Noongar elder. Alcoa engages Indigenous peoples both through voluntary efforts and in ways required by law. It recently concluded its second “[Reconciliation Action Plan](https://www.alcoa.com/australia/en/pdf/Alcoa-Reconciliation-Action-Plan.pdf?ref=boilingcold.com.au)” that laid out steps for supporting and consulting with First Nations communities in light of the continent’s “rich diversity.” ![An older man writes "George Walley and family" on a graffiti-covered concrete surface with a charcoal.](https://www.publicsource.org/wp-content/uploads/2025/05/first-nation-monument-bridge.jpg) George Walley, a Noongar elder, inscribes his name beneath a bridge on the outskirts of Pinjarra, in Western Australia, that has become an unofficial monument for local First Nations people, on March 24. Several Noongar leaders, though, say their relationship with Alcoa has deteriorated in recent years as the pace of deforestation has quickened. Trevor Stack of the Winjan Corporation, a community organization representing Noongar in an area near Pinjarra, said he used to sit at the table with Alcoa when he felt they were operating in good faith. “Over the years we just made a decision that with Winjan — where we’re at and where Alcoa are at, where they come in and they decimate the land, and we as Aboriginal people, we look after the land — we can’t be seen sitting with these guys,” Stack said. “It’s not a good look.” Garlett took a hardline stance against Alcoa when he used to represent Noongar claims under “native title,” a legal principle that gives traditional owners limited rights to weigh in on planned uses of their ancestral land. Garlett felt Alcoa’s offers amounted to “petty things,” like school uniforms, refrigerators and occasional apprenticeships, often accepted out of desperation. “This story is: They preyed on First Nations people’s impoverished lifestyles to do as they please,” Garlett said of the Pittsburgh company. “And I can say that, because I had a firsthand seat at those negotiation tables, that I was disgusted and still am,” he added. Alcoa did not respond to PublicSource questions about its interactions with Indigenous communities. The competition around the limited seats at the company table has brought strife among former friends within the Noongar community, according to Mary Walley, whose father Clary is by birth the most senior Noongar in Pinjarra. “That’s why all the families argue now. It’s because of Alcoa,” she said. The central connection between the Noongar and their country means the fate of the jarrah forest is far more than an aesthetic or lifestyle consideration, said Brad Vitale of the Harvey Aboriginal Corporation, a community organization based 20 miles south of Pinjarra. Vitale believes a lot of the struggles that plague aboriginal communities — such as mental health, self-esteem and unemployment — stem from land destruction and the community’s dislocation from it. “If we can’t connect back to country, it’s going to be a huge health issue for our people.” As a former local government worker he has helped lead river restoration programs and has witnessed some promising signs, including the return of several aquatic species. “We are trying our best to rehabilitate and correct,” said Vitale. “That’s a bit hard when you’re a few people against lots of destruction.” ![Birds fly across a pastel-colored sky over a rocky, desert landscape at dusk or dawn.](https://www.publicsource.org/wp-content/uploads/2025/05/cockatoo-minesite.jpg) Black cockatoos fly above an Alcoa mine site near Waroona, Western Australia, on March 28. *The Fund for Investigative Journalism also contributed funding to support this project.* *Jamie Wiggan is deputy editor at Pittsburgh’s PublicSource and can be reached at [jamie@publicsource.org](mailto:jamie@publicsource.org).* *Quinn Glabicki is the environment and climate reporter at Pittsburgh’s PublicSource and a Report for America corps member. He can be reached at [quinn@publicsource.org](mailto:quinn@publicsource.org) and on Instagram [@quinnglabicki](https://www.instagram.com/quinnglabicki?ref=boilingcold.com.au).* *This story was fact-checked by Matt Maielli.* *Photo editing by Stephanie Strasburg.* This [article](https://www.publicsource.org/?p=1318806&ref=boilingcold.com.au) first appeared on [PublicSource](https://www.publicsource.org/?ref=boilingcold.com.au) and is republished here under a [Creative Commons Attribution-NoDerivatives 4.0 International License](https://creativecommons.org/licenses/by-nd/4.0/?ref=boilingcold.com.au). ![](https://i0.wp.com/www.publicsource.org/wp-content/uploads/2021/11/cropped-ps_initials_logo-1.png?resize=150%2C150&ssl=1) ![](https://www.publicsource.org/?republication-pixel=true&post=1318806&ga4=G-CCLXQK5C14) ![](https://i0.wp.com/www.publicsource.org/wp-content/uploads/2021/11/cropped-ps_initials_logo-1.png?resize=150%2C150&ssl=1) ### *Read the rest of PublicSource's investigation of Alcoa in WA:* [Will Alcoa refineries drive people from a third WA town?Kwinana and Yarloop have suffered from Alcoa’s toxic dust - is Pinjarra next?![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-106.png)Boiling ColdJamie Wiggan![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Alcoa-refinery-jarrah-forest-pinjarra.jpg)](https://www.boilingcold.com.au/alcoas-australian-refineries-drove-flight-from-two-towns-and-its-waste-threatens-a-third/) [Will WA revisit the deal that Alcoa depends on?Destroyed forest. Threatened water supply. Toxic towns. Mountains of residue. Will the WA Government demand better?![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-110.png)Boiling ColdJamie Wiggan![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/L1007563.jpg-1.webp)](https://www.boilingcold.com.au/will-australia-revisit-the-deal-that-led-a-pittsburgh-firm-to-depend-on-the-ore-beneath-its-trees/) ### Chevron pushes contractors to send Australian engineering jobs overseas URL: https://www.boilingcold.com.au/chevron-pushes-contractors-to-send-australian-engineering-jobs-overseas/ Last updated: 2025-08-25T06:29:28.000Z *EXCLUSIVE* Chevron is insisting that engineering companies in Australia send work to low-cost countries like India in a seeming clash with local content obligations imposed by the Western Australian government. The revelation comes after *Boiling Cold* reported the $387 billion company was also sending work once conducted by its own engineers in Perth to India using criteria that [did not have any preference for local content](https://www.boilingcold.com.au/how-chevron-will-ship-aussie-engineering-jobs-to-india/). Chevron is also cutting its global workforce by 15 to 20 per cent, which, if applied to Australia, [would result in 300 to 400 job losses](https://www.boilingcold.com.au/chevrons-jobs-to-india-plan-to-face-wa-government-scrutiny/). The US oil and gas giant has set the minimum amount of work to be done overseas as high as 55 per cent, according to excerpts from a Chevron contract with a major engineering service provider seen by *Boiling Cold*. The targets were not enforced in 2024, but in 2025, "workshare utilisation" is a key performance indicator (KPI) for companies providing engineering services to Chevron, according to an engineer with knowledge of the arrangements who is not authorised to speak to the media. They said the KPI would impact the contractor's financial returns and its chances of securing additional work. "Workshare utilisation" was defined in the contract as the proportion of total hours worked in India or Colombia. The minimum portion of work sent overseas was 40 per cent for small projects and front-end engineering design (FEED), 30 per cent for pre-FEED work and 55 per cent for detailed design. Many Perth oil and gas engineers have contacted *Boiling Cold* with concerns not just about their own jobs, but the future of their profession in WA. Chevron's push to move its contracted engineering work to low-cost countries was regarded as likely more damaging than its plan to cut its own Perth team. Many noted that other mining, as well as oil and gas, companies operating in WA were also actively minimising the amount of engineering done in the state that owns the resources they extract. One engineer was particularly concerned about detailed design going overseas, as performing this work was how many new graduates entered the profession. The local branches of large global firms such as WSP, Wood and Worley perform most of the engineering work done for Chevron in Perth. A Perth-based senior executive with a global engineering firm, not authorised to speak to the media, said these firms had their own incentives to send Chevron's work overseas as they kept much of the savings from lower wages themselves and only allocated a portion to Chevron. ## Local content from a foreign giant? WA is a vital part of Chevron's global business. Its stakes in the two gas export plants it operates in WA - Gorgon and Wheatstone - together with a share of Woodside's North West Shelf project earned it a profit of $US5.2 billion ($8.1 billion) in 2024: 30 per cent of its [global earnings](https://www.chevron.com/-/media/chevron/stories/documents/4Q-2024-earnings-press-release.pdf?ref=boilingcold.com.au). The profits are only possible because of two deals Chevron made with the WA government: The [Barrow Island Act](https://www.legislation.wa.gov.au/legislation/statutes.nsf/main%5Fmrtitle%5F76%5Fhomepage.html?ref=boilingcold.com.au) for Gorgon and the confidential Wheatstone State Development Agreement, whose local content provisions were only made public weeks ago when [tabled in Parliament](https://www.parliament.wa.gov.au/publications/tabledpapers.nsf/displaypaper/4210194c086d5c05a4f63b8748258c7e00028b3e/$file/tp-194.pdf??ref=boilingcold.com.au). Chevron is required to use local consultants such as engineers "when it is commercially practical" for Wheatstone and "as far as it is reasonable and economically practicable so to do" for Gorgon. Chevron was asked whether it would amend its contracts with engineering companies to exclude work for the Gorgon and Wheatstone projects from workshare utilisation targets. A Chevron spokesman said it was committed to meeting its local content obligations and required its contractors to comply with its [Australian industry participation requirements](https://australia.chevron.com/-/media/australia/work-with-us/documents/ABU101200346--Australian-Industry-Participation-AIP-Standard-Operating-Procedure-Rev5--signed.pdf?ref=boilingcold.com.au). “Given our operated assets in WA, Gorgon and Wheatstone, are long-term energy developments, we will continue to depend on the talent of our local workforce for decades to come," he said. “Since 2009, together with our joint venture partners, we have spent more than $80 billion in Australia on our Gorgon and Wheatstone natural gas facilities," "Around 90 per cent of our annual operating expenditure is spent in Australia." A spokeswoman for Premier Roger Cook said he had written to Chevron to remind them of their local content provisions stipulated in State Development Agreements, and his expectation that they would be fulfilled. “Creating local jobs is a priority for the State Government as demonstrated through our Made in WA Plan," she said. “We continue to expect large resource projects to employ Western Australians and use local businesses.” On 18 May, Chevron had [159 jobs advertised](https://careers.chevron.com/search-jobs?acm=ALL&alrpm=ALL&ascf=[%7B%22key%22:%22ALL%22,%22value%22:%22%22%7D]&ref=boilingcold.com.au) in India and only seven in Australia, all of which were 12-week-long summer internships. --- **Read all of *Boiling Cold*'s coverage of Chevron offshoring Australian engineering jobs:** 1. Revealed that Perth-based Chevron engineers will have to train their Indian counterparts before losing their jobs to offshoring that appears to disregard WA's local content provisions. [Chevron’s jobs to India plan to face WA government scrutinyWA Premier Roger Cook’s core “Made in WA” election policy will be tested by his use of local content provisions to keep Chevron’s WA engineers working in WA.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-93.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Screenshot-2025-04-28-at-6.05.08-am-2.png)](https://www.boilingcold.com.au/chevrons-jobs-to-india-plan-to-face-wa-government-scrutiny/) 1. Chevron documents show that jobs from across the company's WA operation will be sent to India, and the criteria used have no regard for local content obligations. [How Chevron will ship Aussie engineering jobs to IndiaDespite local content requirements and a fat profit from Australia, Chevron will now export jobs as well as gas.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-94.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/3-4.jpg)](https://www.boilingcold.com.au/how-chevron-will-ship-aussie-engineering-jobs-to-india/) 1. This story - More Chevron documents reveal the company is enforcing quotas on their contractors to push more engineering work overseas, again seemingly contrary to local content requirements. Since the first story: - The scale of Chevron's exporting of WA jobs, its criteria for choosing which activities go to India that ignore local content requirements, and its forcing of engineering contractors to follow suit have all been made public. - The previously confidential local content provisions for Wheatstone have been tabled in Parliament. - WA Premier Roger Cook has told Chevron it must adhere to the commitments it agreed to in exchange for permission to construct two LNG plants in WA. ## None of this would have happened without Boiling Cold's coverage [Support independent journalism](https://www.boilingcold.com.au/support/) ### Fortescue plans giant 2.1-gigawatt wind farm in Pilbara URL: https://www.boilingcold.com.au/fortescue-plans-giant-2-1-gigawatt-wind-farm-in-pilbara/ Last updated: 2025-05-16T04:14:42.000Z Andrew Forrest's miner Fortescue is seeking environmental approval to install up to 200 wind turbines near Marble Bar to cut its greenhouse gas emissions by at least 1.5 million tonnes a year. The wind power will support Fortescue cutting its emissions by about 70 per cent, so it is essential if the company is to meet its ambitious goal of zero emissions by 2030 set by chair Andrew Forrest. The site, located south-east of Marble Bar, was chosen because it is a large, remote area with high and consistent wind speeds, low vegetation cover, road access, and near Fortescue's existing operations and power grid. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/05/Screenshot-2025-05-16-at-11.16.04-am.png) ****The wind farm located southeast of Marble Bar is connected to IronBridge with a 110km-long transmission line.** Image: **Fortescue.* In a submission to the WA Environmental Protection Authority [published on Friday](https://www.epa.wa.gov.au/proposals/east-pilbara-generation-hub?ref=boilingcold.com.au) the iron ore miner said it opted for wind instead of solar power as it offered 24-hour generation and required less vegetation clearing. The miner is considering various types of foundation for the wind turbines that will have tips as high as 290m. One option is a Nabrawind self-erecting tower with a framed bottom section that requires much less concrete. Up to five substations with battery storage will be built, and a 220kV transmission line will take the power to Fortescue's Iron Bridge mine 110km to the west. Fortescue expects to receive environmental approval in late 2026 and take 32 months to construct the wind farm, indicating a startup around mid-2029\. However, elsewhere in the approval documents, a 42-month construction period is mentioned. The miner will build a 1000-person construction camp and have accommodation for up to 100 workers during operations. It expects the wind farm to operate for 25 to 30 years, but with equipment replacement, it could operate indefinitely. Fortescue began consulting with the native title holder, the Nyamal people, in early 2023. ### Alcoa trims controversial mining plans ahead of public comment URL: https://www.boilingcold.com.au/alcoa-trims-controversial-mining-plans-ahead-of-public-commnet-in-june/ Last updated: 2025-05-19T03:23:46.000Z WA's environmental watchdog expects to release Alcoa's current mining plan and its expansion plan to extract bauxite from WA's jarrah forest for public comment within weeks. Darren Walsh, chair of the WA Environmental Protection Authority, said it received the final documents from Alcoa last week, and after the two parties prepared material for publication, he expected a public release within the month. Both plans will be fiercely resisted by people concerned about Alcoa's [failure to fully rehabilitate](https://www.watoday.com.au/environment/sustainability/alcoa-in-wa-60-years-28-000-hectares-of-forest-cleared-zero-rehabilitation-completed-20230307-p5cq4j.html?ref=boilingcold.com.au) any of the 280 square kilometres of jarrah forest it has cleared over six decades, and the [“foreseeable” risk](https://www.watoday.com.au/national/western-australia/wa-government-overrode-water-supply-warnings-to-approve-alcoa-mining-20240501-p5fo3c.html?ref=boilingcold.com.au) it could render water from Serpentine Dam - Perth's biggest - unusable. However, Alcoa - which employs about 4000 people in WA - is strongly backed by the Cook government, which [knowingly endangered](https://www.boilingcold.com.au/wa-labor-puts-alcoa-before-water-supply/) Perth's water supply by weakening constraints on its mining operations. It is also a crucial decision for the $12 billion US company. Its chief executive, Bill Oplinger, told Wall Street in February that approval to expand its Huntly mine was Alcoa's ["number one" lever ](https://www.boilingcold.com.au/alcoa-spruiks-profit-boost-if-mining-more-wa-forest-approved/)to boost global earnings. This week, the EPA [accepted an Alcoa proposal](https://www.epa.wa.gov.au/sites/default/files/S43A/s.%2043A%20-%20130525.pdf?ref=boilingcold.com.au) to reduce the footprint of its current mining plan out to 2027 and combine two overlapping mining plans referred to the EPA by the WA Forest Alliance into one assessment. ## Timeline to a million tonnes a year decision The approvals process is well behind schedule. In August 2024, the EPA had expected to begin [10 weeks of public consultation](https://www.epa.wa.gov.au/sites/default/files/MEDIA%5FSTATEMENTS/EPA%20Media%20Statement%20-%20Assessment%20update%20on%20Alcoa%27s%20bauxite%20mining%20on%20the%20Darling%20Range.pdf?ref=boilingcold.com.au) for both plans in January. This required Alcoa to supply two Environmental Review Documents, which was only completed this week. On Wednesday, Alcoa chief financial officer Molly Beerman [told investors](https://s29.q4cdn.com/945634774/files/doc%5Fevents/2025/May/14/2025-Bank-of-America-GMMS-Fireside-Chat-Transcript.pdf?ref=boilingcold.com.au) that the mine expansion would allow it to produce an additional one million tonnes a year of alumina and cut its costs by $US15 to $US20 a tonne. "That's how much the poor bauxite quality is hurting us now," she said. "So, we'll have a nice financial uptick, both in terms of volume and the cost profile." [Labor breaks vow and risks WA’s water supply for AlcoaRoger Cook granting Alcoa greater access to mine near Perth’s dams risks could cost taxpayers billions of dollars and result in water restrictions![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-92.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Alcoa-Cook-Water-feature-pic-8.png)](https://www.boilingcold.com.au/wa-labor-puts-alcoa-before-water-supply/) Beerman said the miner had supplied to the EPA all the material it needed to review, and the Authority had delayed the public comment period. However, EPA chair Darren Walsh said it had decided with Alcoa's support to issue for public review the documents for both the near-term mining plan and the mine expansion simultaneously. This was for the sake of efficiency and to allow the combined and cumulative impacts on the northern jarrah forest to be considered. Walsh said that after amending the document four times, Alcoa had supplied the final ERD for the mine expansion in late April. "However, the other ERD relating to Alcoa’s bauxite mining activities on the Darling Range spanning the years 2023 to 2027 had to be returned to the proponent several times to address outstanding issues," he said. Walsh said Alcoa's final ERD for the near-term mining plans had been received last week, and the Authority was reviewing its suitability for public comment release. Beerman said Alcoa was encouraged that the EPA was still working towards approvals in the first quarter of 2026\. However, the EPA makes recommendations, not decisions. These recommendations are published for public comment, an appeals convenor considers these comments and makes a report to the environment minister who then makes a decision. Walsh said the EPA was working towards completing both assessments by March 2026, but the timeline was dependent on a number of factors. "This includes the complexity of information sought by the EPA, the number and length of public submissions made during consultations, potential requests by the proponent to amend the proposal during the assessment, and the amount, suitability, efficiency and quality of information submitted by the proponent," he said. "It should also be noted that the timing between the publishing of the EPA report and the Minister for Environment’s final decision on a proposal is influenced by both the appeals process and the consultation with decision-making authorities." Alcoa's expansion plans share similarities with a 2024 approval for South32 to expand mining operations at its Worsley alumina refinery. However, Alcoa's expansion is much larger than South32's, and crucially, its proximity to Serpentine Dam threatens Perth's water supply. The Worsley Environmental Review Document was released for 10 weeks of public comment in June 2022\. South32's responses to public submissions were published in March 2024, the EPA made its recommendation in July 2024, and the WA environment minister gave approval in December 2024. Even if the EPA can make its recommendations by the first quarter of 2026, it is next to impossible for the environmental minister to make his decision in the same quarter. Despite this, Alcoa still shows a [Q1 2026 ministerial decision](https://www.alcoa.com/australia/en/sustainability/pinjarra-huntly-environmental-assessment/assessment-process?ref=boilingcold.com.au) on its website. ### Northern Endeavour oil vessel without power for weeks in Timor Sea URL: https://www.boilingcold.com.au/northern-endeavour-oil-vessel-without-power-for-weeks-in-timor-sea/ Last updated: 2025-05-14T01:33:09.000Z *EXCLUSIVE* Three weeks ago, a power failure forced the evacuation of the crew on a disused oil vessel owned by the Federal Government in the Timor Sea, and the cause of the problem is not yet known. It is another setback in cleaning up after Woodside sold the ageing oil vessel Northern Endeavour to an inexperienced one-man company that failed, imposing a $1 billion-plus cost on Australia's offshore oil and gas producers. The remote 274 m-long vessel situated 550km northeast of Darwin, "went black" on April 22\. First, the emergency diesel generator, and then hours later, the battery backup failed. The next day, 59 crew were evacuated by helicopters to Truscott Airbase in the far north Kimberley. The Northern Endeavour has not produced oil for six years and became the responsibility of the Federal Government in 2020 when its owner, Northern Oil and Gas Australia, went into liquidation. In 2022, the government awarded UK oil and gas contractor Petrofac the contract for the first phase of decommissioning the vessel, wells and subsea equipment. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/05/northern-endeavour-diagram.png) ****The Northern Endeavour produced oil from the Laminaria and Corallina fields**. *Image: DISER.* A Petrofac spokeswoman said that after the power outage it activated emergency response procedures and notified the offshore safety regulator NOPSEMA. "The FPSO, which is free from hydrocarbons, is secure and there is no threat to people or the surrounding environment," she said. "We are working closely with our client to understand the cause of the initial power loss." It is understood that the 43,000 tonne vessel now has a generator to support a crew of six working on the power problem and to operate essential navigation lighting. NOPSEMA does not have its usual regulatory powers over the Northern Endeavour as the Federal Government owns it, but acts as though it does with the agreement of the government. A NOPSEMA spokeswoman said it was investigating the power loss. [![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/01/support-CTA-for-posts-1.png)](https://www.boilingcold.com.au/#/portal/signup) ## Spiralling clean-up costs Three years ago, when Petrofac was awarded the contract to operate the Northern Endeavour and prepare it for towing away, this "Phase 1" work was estimated to cost $325 million. That cost has now increased to $504 million, and the [total cost of ](https://www.industry.gov.au/mining-oil-and-gas/oil-and-gas/offshore-oil-and-gas/decommissioning-northern-endeavour/offshore-petroleum-cost-recovery-levy?ref=boilingcold.com.au)contracts awarded to deal with the Northern Endeavour is now $851 million. In March, the Hua Rui Long semi-submersible heavy transport vessel was [contracted for the planned 2025 tow](https://www.industry.gov.au/news/northern-endeavour-vessel-be-dry-towed-recycling-facility?ref=boilingcold.com.au) at a cost of $32 million. No contracts have yet been awarded for the Phase 2 work to plug and abandon the wells or for Phase 3 when all equipment is removed from the seabed. The total cost for cleaning up after the failed Northern Endeavour will inevitably exceed $1 billion. However, the burden will fall on the offshore oil and gas industry, not the Australian taxpayer, through a [special production levy](https://www.industry.gov.au/mining-oil-and-gas/oil-and-gas/offshore-oil-and-gas/decommissioning-northern-endeavour/offshore-petroleum-cost-recovery-levy?ref=boilingcold.com.au#how-much-the-ato-has-collected-4) that has collected an estimated $1.15 billion by June 2024. ## Woodside's legacy Woodside, Australia's largest oil and gas company, has won no friends among its competitors over its handling of the Northern Endeavour. US giant Chevron [told a parliamentary inquiry](https://www.theguardian.com/business/2021/nov/19/chevron-attacks-rival-woodside-for-its-failings-over-sale-of-floating-rig?ref=boilingcold.com.au) that it was obvious that the company Woodside sold the Northern Endeavour to did not have the resources to run it properly and eventually decommission it. Woodside and its partners produced [an estimated $16 billion of oil](https://www.thesaturdaypaper.com.au/share/9400/Vdf8wU2m?ref=boilingcold.com.au) from the Northern Endeavour up to 2014, when it announced it would decommission the vessel by 2016 for a then-estimated cost of $230 million. Its engineers began reducing maintenance on the reasonable assumption that the vessel did not have to last long. This move proved disastrous when Woodside switched plans and sold the vessel, and it contributed to a near-fatality under the new owner in 2017. In the wake of the Northern Endeavour, the Federal Government introduced trailing liabilities that make previous owners liable for decommissioning costs if the new owners cannot afford them. The provision has killed plans of major companies including Italian ENI and ExxonMobil in the Bass Strait to sell ageing assets and escape clean-up costs. [How Chevron will ship Aussie engineering jobs to IndiaDespite local content requirements and a fat profit from Australia, Chevron will now export jobs as well as gas.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-91.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/3-3.jpg)](https://www.boilingcold.com.au/how-chevron-will-ship-aussie-engineering-jobs-to-india/) ## A troubled contractor Globally, Petrofac has bigger problems than the Northern Endeavour. After a string of losses related to legacy contracts and payment delays, it [agreed on a financial restructuring](https://www.reuters.com/business/uks-petrofac-binding-agreement-with-creditors-financial-restructuring-2024-12-22/?ref=boilingcold.com.au) with its creditors in December 2024. For the past 12 months, it has been delaying interest payments on $600 million in debt that expires in 2026. This followed an earlier 2021 financial restructuring triggered by its [difficulty in winning contracts](https://transactions.freshfields.com/post/102k8ve/petrofac-restructuring-plans-move-forwards-notice-and-fees-in-the-spotlight?ref=boilingcold.com.au) in key Middle East markets after the UK Serious Fraud Office imposed a £70 million fine for bribery. When the Federal Government awarded Petrofac [a $325 million contract](https://www.petrofac.com/media/news/major-milestone-in-northern-endeavour-decommissioning-contract/?ref=boilingcold.com.au) in October 2022, the company's shares traded for £106 on the London Stock Exchange. They are now worth £4 and have been suspended since 1 May after the company failed to lodge its annual report on time. ### Woodside rejigs its near-rejected Browse gas plans URL: https://www.boilingcold.com.au/woodside-rejigs-its-near-rejected-browse-gas-plans/ Last updated: 2025-05-12T09:03:17.000Z Woodside has revised its controversial plans to develop the Browse gas fields off the Kimberley coast, adding new technology to reduce the impact of an oil spill and measures to lower risks to turtles and whales. On Monday, the WA Environmental Protection Authority released Woodside's proposed changes to its six-year-old proposal for a four-week comment period - a rare action for altering an existing proposal. The $30 billion-plus project is near the Scott Reef marine life hot spot, 270km off Australia's north-west coast. The gas will be produced from three gas fields in the Browse Basin, two of which are entirely in Commonwealth waters. However, the Torosa field, which is the most environmentally sensitive as it lies under the Scott Reef, is mainly in state waters, so the WA government needs to approve that part of the project. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/05/07c5d5dd195f0c12b70861176a4cea4933ee19b8.webp) ****Fish and sea fans at Scott Reef.** **Image: Alex Westover, Greenpeace.* Woodside's [revised plans](https://www.epa.wa.gov.au/proposals/proposed-browse-nws-development-change-proposal-under-s-43a?ref=boilingcold.com.au), submitted to the EPA in March, follow an EPA [letter to Woodside](https://www.watoday.com.au/national/western-australia/unacceptable-red-flag-for-woodside-s-browse-gas-project-poses-problem-for-federal-government-20240725-p5jwjm.html?ref=boilingcold.com.au) in February 2024, which stated its preliminary view was "that the proposal was unacceptable." The stance was unexpectedly strong from a body that rarely rejects projects, instead granting approval with conditions, indicating it had significant concerns. The main concerns were the risk to Scott Reef from an oil spill, the possible subsidence of Sandy Islet where endangered turtles nest, and disturbance to endangered pygmy blue whales. ## New tech to kill the spill Woodside now proposes to move the drilling closest to Sandy Islet, where the Green Turtles lay eggs, slightly further away from the important breeding ground. The company will also utilise new technology on its Torosa wells to prevent an oil spill in the event of a well blowout: explosions will drive rams either side of the drill pipe inward to seal off any flow. Woodside is showing great faith in what it [described 18 months ago](https://www.epa.wa.gov.au/sites/default/files/Proponent%5Fresponse%5Fto%5Fsubmissions/Appendix%20B.3%20-%20Overview%20of%20Browse%20Hydrocarbon%20Spill%20Preparedness%20Approach.pdf?ref=boilingcold.com.au) as an "emerging technology." Woodside [wrote to the EPA](https://www.epa.wa.gov.au/sites/default/files/S43A/Cover%20Letter%5Fs43A%20Application%5FFeb%202025%20%28signed%29%20REDACTED%5FRedacted.pdf?ref=boilingcold.com.au) saying that while its original plans were "were assessed as having significant, long-term consequences" from an oil spill, using new technology meant such outcomes "are now considered to have a probability of lower than remote and should be considered as only a mere theoretical possibility." Woodside now claims the worst credible oil spill scenario is 12 hours of oil and gas flowing into the ocean, down from 77 days it previously estimated. Drilling within State waters will now be done from a rig moored to the seabed instead of using constantly moving propellers that "dynamically position" the rig in place. This will reduce noise that could affect Pygmy Blue Whales. Flaring of excess gas from the drilling rig will now be done in daylight when possible to avoid bright light at night that could impact the behaviour of the Green Turtles. Woodsides' revised proposal did not include any measures to mitigate the risk that gas extraction could cause the seabed to subside, potentially rendering Sandy Islet underwater and unusable for turtle nesting. ## Browse a long way off EPA chair Darren Walsh said that, given the time passed since the original submission and the complexities of assessing many environmental risks in a very sensitive area, public consultation was warranted. “The volume of new technical information accompanying this proposed amendment is also considerable," he said. “Public consultation on a proposed amendment is not (the) usual process for the EPA, but we believe that in this case the circumstances warrant it.” [Woodside bonuses up after switch to easier safety targetA union leader said it was horrifying to see management receive full marks for personal safety after incidents almost tripled in four years.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-90.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/North-Rankin-Complex--North-West-Shelf-Project--Western-Australia-web-SMALL-1-5.jpeg)](https://www.boilingcold.com.au/woodside-bonus-boost-after-switch-to-a-more-attainable-safety-target/) Woodside's initial submission attracted more than 20,000 submissions. Walsh said the EPA will consider submissions and then decide whether to accept the Woodside's changes. A positive response from the EPA means it has agreed to Woodside changing some aspects of its submission. It does not mean the EPA has determined those changes to be acceptable. A Woodside spokeswoman said the changes had been informed by collecting scientific data and monitoring industry developments since its original Browse proposal. She said Woodside was committed to further avoiding and minimising risks to the environment for the Browse project. Woodside and its partners BP, PetroChina, Mitsui and Mitsubishi want to pipe the gas 1000km to Woodside's ageing North West Shelf gas export plant near Karratha. Newly appointed Federal Environment Minister Murray Watt is due to decide by May 30 whether the plant's end date can be extended from 2030 to 2070\. His decision hinges on the threat from the plant's emissions to the adjacent World Heritage-nominated rock art. Even if the North West Shelf gets the green light, the Browse project is many years away. Last week at Woodside's annual general meeting, chief executive Meg O'Neill said she wanted to secure the main environmental approvals for Browse before committing to expensive preliminary engineering work and then front-end engineering design. The main outstanding approvals include those from the State and Federal governments for Browse, which will now be slowed by the consideration of the changes released today. Woodside also needs Federal approval for its plans to store the high level of carbon dioxide in the Browse reservoirs [under the seabed](https://www.boilingcold.com.au/woodside-plan-to-bury-co2-a-step-to-browse-gas-go-ahead/), which were lodged in January. Just three years ago, Woodside had described carbon storage as a "high risk, high cost" option. ### Safety regulator halts drilling at Santos' Barossa gas project URL: https://www.boilingcold.com.au/safety-regulator-halts-drilling-at-santos-barossa-gas-project/ Last updated: 2025-05-12T05:36:14.000Z The offshore safety regulator has halted drilling of the Barossa gas field 300km north of Darwin because vital safety equipment may not work in an emergency. NOPSEMA ordered London-based Valaris to stop work on its MS-1 drilling rig on May 5 due to concerns about the blowout preventer (BOP) that is designed to quickly stop the flow of oil and gas from a well in an emergency. The failure of a BOP to seal a well was central to the 2010 Deepwater Horizon disaster that killed 11 workers and caused a devastating oil spill in the Gulf of Mexico. The regulator's direction, [published on Monday](https://www.nopsema.gov.au/sites/default/files/documents/Prohibition%20Notice%20VMS-1%20ID%202003%20-%20Redacted%20version.pdf?ref=boilingcold.com.au), stated that "the BOP system is degraded and may not function as intended in an emergency scenario, such as a well blowout, resulting in a potential major accident event with serious or fatal health consequences to workers. [How Chevron will ship Aussie engineering jobs to IndiaDespite local content requirements and a fat profit from Australia, Chevron will now export jobs as well as gas.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-89.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/3-2.jpg)](https://www.boilingcold.com.au/how-chevron-will-ship-aussie-engineering-jobs-to-india/) A set of hydraulic rams failed a pressure test conducted after the BOP had been installed underwater. The safety standard Valaris had told NOPSEMA it would follow requires two pairs of rams to be operable. Prior to NOPSEMA issuing the legally enforceable stop work order, it had told Valaris it considered the state of the BOP to be unacceptable, and the company had not advised it whether it had taken any action. Valaris must secure the well it is drilling as safely as possible and return the BOP to the surface to be fixed. A Santos spokeswoman said the regulator ordered repairs to the BOP after a routine inspection. "There was no safety incident and there is no threat to people, property or the environment," she said. "Valaris is making the repair and expects to resume drilling later this week, "The rig’s remaining work is to complete two of six wells, with the four completed wells already sufficient to achieve Barossa’s nameplate capacity." Last week, Santos [told investors](https://www.santos.com/wp-content/uploads/2025/05/2025-Santos-Macquarie-Conference-Presentation.pdf?ref=boilingcold.com.au) that gas is scheduled to start flowing to Darwin in the September quarter. --- UPDATED 12 May 1:35 PM - Santos comments added. ### Greenpeace grates Richard Goyder and other Woodside AGM highlights URL: https://www.boilingcold.com.au/greenpeace-grates-richard-goyder-and-other-woodside-agm-highlights/ Last updated: 2025-05-09T03:12:16.000Z *ANALYSIS* Australia's largest oil and gas company's annual verbal stoush with its detractors on Thursday produced a few chinks of light amidst the performative heat of its annual general meeting. ## Whistling in the wind Chief executive Meg O'Neill's speech was interrupted about ten times by an individual protestor loudly blowing a whistle, being pulled away, allowing O'Neill to resume, and then another protestor repeated the process. Woodside was ready with short videos to webcast while security did its job. The rest of the two-hour event, short by recent standards, had few interruptions. Most likely, the only result from the whistling was less time for questions later. ## Safety last Safety may be "a top priority at Woodside," but being honest about it is not. It was only mentioned once, in [O'Neill's speech](https://www.woodside.com/docs/default-source/asx-announcements/2025/032-agm-address-by-chair-richard-goyder-and-ceo-meg-o'neill.pdf?sfvrsn=68446ee8%5F3&ref=boilingcold.com.au): "We are seeing positive results against key metrics," she said. "Our growing business saw a large increase in total hours worked in 2024, without experiencing any permanent injuries or Tier 1 process safety events." A more accurate statement would be: "We are seeing positive results against **some** **secondary** ~~key~~ metrics, **but the main metric we have used for more than a decade is a disaster**." For 2024, Woodside switched the safety metric it uses to calculate bonuses from the industry standard total recordable incidents per million hours worked (TRIR) to what seems to be a new metric unique to Woodside: no more than one "high consequence injury" a year. [Woodside bonuses up after switch to easier safety targetA union leader said it was horrifying to see management receive full marks for personal safety after incidents almost tripled in four years.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-86.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/North-Rankin-Complex--North-West-Shelf-Project--Western-Australia-web-SMALL-1-4.jpeg)](https://www.boilingcold.com.au/woodside-bonus-boost-after-switch-to-a-more-attainable-safety-target/) The switch put more dollars into the pockets of every director and senior executive. It also allowed O'Neill and Woodside chair Richard Goyder to avoid the delicate task of explaining how safety got significantly worse. When the going gets tough, the powerful dodge responsibility and boost their pay packets. To do this, when the tragic 2023 fatality on the North Rankin platform is still under investigation, is a true low in corporate morality. ## Q & A minus the questions and answers Goyder clamped down on shareholders for making statements rather than asking questions. On face value, that is fair enough. However, what the meeting also needs is someone to clamp down on questions that have not been answered. Time and time again, specific questions were met with generic waffle. Presumably, many attendees have given up hope of getting a reasonable answer, so instead, they use the opportunity to have a dig. The end result is a bit of a mess, but the fault lies on both sides. ## Meg dives into context, coal and Collie For years, the Australian gas export industry has marketed its climate credentials by claiming that its product displaces dirtier coal. In April O'Neill, as [first reported by *Boiling Cold*](https://www.boilingcold.com.au/email/3bf15d2b-04d8-4af9-8b71-9c6ef3de72cb/?ref=boiling-cold-weekly-newsletter), undermined the case when asked if she could show that sending more gas to Asia reduced total emissions. "Trying to definitively prove that our cargo of LNG displaced coal that would have otherwise been burned is a very difficult strategy,” she responded. Dr Fiona Stanley, with the standing of a distinguished medical career and a huge hospital named after her, tackled O'Neill on the issue. "Now I think you're taking a quote that I made a bit out of context," O'Neill said. "Can I definitively prove that a certain ship of LNG is burned in Japan in lieu of a different ship of coal? Obviously, not." O'Neill switched to an example closer to home: "If North West Shelf is not able to provide domestic gas into the market in 2030, Collie will stay online longer." Yes, WA's South West power system may need more gas when its three coal-fired power stations close this decade, but it is hard to see how the North West Shelf plant will help, and it may make the local gas supply worse. Production is in decline, and, as comments at the AGM made clear, future supplies from Browse are far off. More likely, after 2030, the plant will be used to ship out onshore gas when the WA Labor government inevitably caves into lobbying and lifts its ban on exporting onshore gas after 2030. ## Rock art science avoided It is seldom mentioned, but the only thing Tanya Plibersek, or her successor federal environment minister, has to consider regarding extending the life of the North West Shelf plant is its impact on Aboriginal heritage. The plant sits next to the one to two million ancient engravings that form the World Heritage-nominated Murujuga rock art. O'Neill was asked about recent research led by UWA professor of world rock art Ben Smith that showed emissions were already damaging the rock art. Interestingly, O'Neill did not repeat a line from a previous AGM that no peer-reviewed research had identified a problem. Instead, O'Neill downplayed what is widely accepted as the biggest threat to the rock art by describing nitrous oxides (NOx) as "theorised as potentially being harmful." Why downplay NOx? Perhaps because almost all of it emitted near the rock art comes from the North West Shelf plant. ## Woodside under investigation for breaching Federal environmental law The big reveal at the AGM is that Woodside is under investigation for breaching federal government environmental law. Greenpeace chief executive David Ritter said the Department of Climate Change, Energy, the Environment and Water was investigating whether Woodside's export of third-party gas from its North West Shelf had breached the EPBC Act. "Why does Woodside believe that it is above our nation's environmental laws?" Ritter said. Goyder said he thought the company had nothing to say on the investigation. However, O'Neill did: "I'd just like to say that before we started processing third-party gas, we received appropriate approvals from the WA state government." Not really a reassurance on Woodside's position under federal law. ## Richard Goyder ❤️ Greenpeace (not) Ritter had just started his question when Goyder interrupted with a one-minute time limit: "This is not a Greenpeace function." Ritter then listed what he termed Woodside's "Faulty Towers environmental record: explosions, oil spills, chemical spills, gas leaks, corroded high-pressure equipment and "years of failing to remove and decommission a more than 2000-tonne riser tower that reportedly contained toxic fire retardant." "You did nothing about that one, by the way, until we dropped the banner off it, saying, 'please pick up your mess'." The actual message was less polite. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/05/9cdca884-greenpeaceframe-000029-media.webp) ****Woodside's Nganhurra Riser Turret Mooring**. Image: Greenpeace. Goyder was distinctly unimpressed, comparing Woodside's observance of the law to Greenpeace activists hanging off cranes near the company's Perth headquarters and trespassing on its property. O'Neill said Woodside had great support from the Exmouth community for its original plan to use the Nganhurra riser turret mooring as part of an artificial reef near Ningaloo. She did not mention that federal government scientists had concluded “it would be difficult to exclude potential risks to humans through ingestion” of fish caught near the reef. Goyder shut down a later question from a Greenpeace representative almost as soon as he started. "We don't need a Greenpeace advocacy," he said. It is a far cry from a few years ago when, after Ritter asked a question, Goyder praised the organisation and invited Ritter to meet with him. ## Yep, total shareholder return is pretty rubbish Woodside has been accused of failing to deliver decent returns to its owners by the environment-focused investor advocacy group the Australasian Centre for Corporate Responsibility. The [ACCR argument](https://www.accr.org.au/news/members%E2%80%99-statements-for-resolutions-relating-to-the-re-election-of-woodside-directors/?ref=boilingcold.com.au) was based on an independent comparison of Woodside with benchmarks, using the well-recognised metric of total shareholder return (TSR). ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/05/Screenshot-2025-05-08-at-1.28.08-pm.png) **Source:* [**ACCR Woodside resolution*](https://www.accr.org.au/news/members%E2%80%99-statements-for-resolutions-relating-to-the-re-election-of-woodside-directors/?ref=boilingcold.com.au) In [its published response](https://www.woodside.com/docs/default-source/investors/2025-04-accr-response-document.pdf?ref=boilingcold.com.au), Woodside failed to mention TSR. On returns, like safety, Woodside addresses its poor performance by changing the metric, not its behaviour. However, Goyder was clear when quizzed at the meeting. "On total shareholder return, I acknowledge that our share price performance hasn't been as we would like," he said. 'There are a range of factors around that: there are external factors and then there are the questions ... around does the balance sheet have the capacity to deal with these investments." Goyder pointed out that no ratings agencies downgraded Woodside after its expensive final investment decision on its Louisiana LNG project last week. ### A hot summer pushed WA power demand to record highs URL: https://www.boilingcold.com.au/a-hot-summer-pushed-wa-power-demand-to-record-highs/ Last updated: 2025-05-12T04:27:49.000Z Hot summer nights in WA's South West helped push power demand to a record high in the March quarter when the share of power from wind and solar was more than 41 per cent. Increased use of renewable energy and less coal-fired power cut the average carbon pollution per unit of power by five per cent, according to the Australian Energy Market Operator's [Quarterly Energy Dynamics Report](https://aemo.com.au/-/media/files/major-publications/qed/2025/qed-q1-2025.pdf?la=en&hash=B77CD787D2D2FB67E4B74FA8BC9B6973&ref=boilingcold.com.au) released on Wednesday. Burning coal generated 28 per cent of the power consumed on the South West Interconnected System in the three months to March, down from 30 per cent a year ago. AEMO attributed the change to state-owned Synergy's Muja C unit 6 generator only being made available when required. It was called on four times in the quarter when temperatures soared, but was retired on April 1 and will not be available next summer. In March, Peter Kerr from energy advisory ATA Consulting said there will be a significant amount of extra battery storage on the South West grid before next summer, and if required, greater use of gas could help. "The grand faith in solar, batteries, and gas-fired generation is potentially still skating close to the wind," he said. Kerr said the big question for the next few years is whether the system has enough spare capacity to handle a coal-fired generator becoming unavailable earlier than planned or if demand grows more quickly than expected. "If you had to pull an emergency lever, maybe it's more gas-fired generation capacity," he said. [Will WA’s coal exit be a green dream or lights out?The Liberals predict by 2027 WA’s south-west power system will be in crisis while Labor backs batteries, wind and gas.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-85.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/election-energy-debate-graphic.jpg-3.webp)](https://www.boilingcold.com.au/will-was-coal-exit-be-a-green-dream-or-lights-out/) More gas generation is coming, but not in time for the summer of 2025-26. Last week, east coast energy giant AGL applied for environmental approval to add [250 megawatts of gas turbine](https://www.boilingcold.com.au/agl-to-build-new-gas-fired-power-station-in-kwinana/)s to its existing plant in Kwinana, targeting a 2029 start-up. In November 2024, Strike Energy [committed to building](https://strikeenergy.com.au/announcements/6663908?ref=boilingcold.com.au) an 85 megawatt gas peaking plant in the Mid West using gas from its South Erregulla field. There is also a substantial pipeline of [new grid-scale batteries](https://www.boilingcold.com.au/was-south-west-grid-to-be-boosted-by-four-new-batteries/) under construction, with storage projects in Collie owned by Neoen and Synergy due to become operational before next summer. An AEMO spokesman said each year, it works with industry to prepare the power system for summer's high demand and, if necessary, can run competitive tenders to procure supplementary reserves. The system was pushed hard on January 20 when the temperature in Perth hit 43.6 degrees, when operational demand - total demand less rooftop solar - hit an all-time record of 4486 megawatts, just as solar generation disappeared in the early evening. Earlier that day, a record total demand of 5385 megawatts was recorded. The average wholesale energy price for the quarter was $89 a megawatt hour, up 11 per cent in 12 months. Homes and small businesses in WA are not directly affected by this price as the WA government sets their power tariff. The hike in average price was in part caused by more gas being burned due to lower winds and hot nights pushing demand into the evening when solar is not available. ### AGL to build new gas-fired power station in Kwinana URL: https://www.boilingcold.com.au/agl-to-build-new-gas-fired-power-station-in-kwinana/ Last updated: 2025-05-07T03:34:45.000Z AGL is seeking environmental approval to build a 250 megawatt open-cycle gas turbine power station in Kwinana to operate from 2029 when coal-fired power is expected to disappear from the South West grid. The WA Environmental Protection Authority [released AGL's plans](https://www.epa.wa.gov.au/proposals/k2-project?ref=boilingcold.com.au) on Friday for seven days of public comment on whether it should review the proposal. The "K2" power station would operate as a peaking power station, supplying additional power during periods of peak and high shoulder load demands. It will run on gas but be capable of burning other fuels, including hydrogen and diesel. Open-cycle gas-fired power stations are less efficient than closed-cycle power stations that use the waste heat from the turbines to generate additional steam power. However, they are more suitable for the fluctuating loads required to support variable renewable energy. [Will WA’s coal exit be a green dream or lights out?The Liberals predict by 2027 WA’s south-west power system will be in crisis while Labor backs batteries, wind and gas.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-78.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/election-energy-debate-graphic.jpg-2.webp)](https://www.boilingcold.com.au/will-was-coal-exit-be-a-green-dream-or-lights-out/) AGL estimates the plant will emit an average of 196,000 tonnes of CO2 a year for 30 years from 2029 and consume about 50 terajoules of gas a day. In its submission to the EPA, AGL said greenhouse gas emissions were the only aspect of the project that would have a significant impact on the environment. It will be built on the site of its existing 120 megawatt Swift Power Station 40km south of Perth. The $7 billion ASX-listed company that is a major electricity generator and power and gas retailer in the eastern states entered the WA power market in 2019 when it bought Perth Energy which owned the existing Kwinana power station. AGL has not yet chosen the type and number of gas turbines. Globally, there is a shortage of gas turbines, with costs rising and delivery times growing. In March, John Ketchum, chief executive of US power generator NextEra Energy, said that the cost of a gas-fired power station in the US had tripled in three years. “When you look at gas as a solution…you’re really looking at 2030 or later,” he said. ### Doctors' enviro group launches legal challenge to Woodside's Scarborough URL: https://www.boilingcold.com.au/doctors-enviro-group-launches-legal-challenge-to-woodsides-scarborough/ Last updated: 2025-05-12T09:03:40.000Z Doctors for the Environment Australia (DEA) has gone to the Federal Court seeking to overturn the final approval for Woodside's Scarborough gas project, citing concerns about its resultant greenhouse gas emissions. The offshore environment regulator NOPSEMA accepted Woodside's plan to operate the Scarborough project in February after 18 months of consultation. The action launched on Wednesday by the DEA, which has 2000 doctors and medical students as members, sees a judicial review of NOPSEMA's decision. ## Is gas good or bad? DEA executive director Dr Kate Wylie said NOPSEMA may have acted unlawfully by accepting the environment plan without fully understanding how the impacts of the $US12.5 billion ($19.6 billion) project would be managed. Australia's gas exporters argue their product is good for the climate as it lowers overall emissions by displacing coal and supporting renewable energy, but environmental groups dispute this. “Woodside acknowledges that there is uncertainty about whether gas from the Scarborough project will displace even dirtier fuels," Wylie said in a statement. In April, Woodside chief executive Meg O’Neill was given an opportunity to sell the role of Australian gas exports in cutting emissions in Asia when she was asked: "in terms of the coal-to-gas switching story in Asia, do you have any comfort or any insights from counterparties or from the market to show that gas going into Asia is replacing coal, or to what extent is it additional energy and additional emissions." O'Neil answered: “Trying to definitively prove that our cargo of LNG displaced coal that would have otherwise been burned is a very difficult strategy.” In 2019, a [Woodside-commissioned CSIRO report](https://www.woodside.com/docs/default-source/sustainability-documents/climate-change/modelling-the-emissions-impact-of-additional-lng-in-asia.pdf?sfvrsn=fb147f13%5F3&ref=boilingcold.com.au) analysed the complex interactions within Asian energy markets to determine the effect of importing Australian gas, but the company did not release it. Woodside eventually published the report in 2022 after inquiries from the Nine mastheads, which summarised its findings as “Increasing Australian gas supply could prolong coal, displace renewables, and increase emissions in Asia without a global carbon price.” There is no global carbon price. ## David and Goliath Wylie told *Boiling Cold* her organisation, as doctors, believed we need a healthy environment for human health. She said NOPSEMA accepted the DEA as a"relevant person" to be consulted ahead ot its decision, and that gives it the legal standing to seek a judicial review. "We're a registered charity taking on one of Australia's most profitable companies, so this is a David and Goliath battle," she said. "This is not a decision we've taken lightly, but we feel compelled to do what we can to protect human health from climate change." Wylie, who continues to practise as a GP in South Australia, said the DEA will seek a protective cost order to cap its liability to pay its opponents' costs if they lose. The non-profit law firm Environmental Defenders Office (EDO), which represents the DEA, was ordered to [pay Santos $9 million](https://www.theguardian.com/environment/2024/nov/28/santos-barossa-gas-project-edo-costs-payment-ntwnfb?ref=boilingcold.com.au) in costs after the judge in its case against the Barossa gas project found it had subtly coached witnesses and used an expert witness whose testimony was a "confection." [Woodside bonuses up after switch to easier safety targetA union leader said it was horrifying to see management receive full marks for personal safety after incidents almost tripled in four years.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-77.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/North-Rankin-Complex--North-West-Shelf-Project--Western-Australia-web-SMALL-1-3.jpeg)](https://www.boilingcold.com.au/woodside-bonus-boost-after-switch-to-a-more-attainable-safety-target/) Wylie said its challenge to the final approval for Scarborough was in the public interest. "The Scarborough gas project is set to unleash approximately 878 million tons of carbon dioxide over its lifetime," she said. "This is a significant source of carbon dioxide amid an already deteriorating climate, "The science tells us that there can be no new sources of carbon if we are to pursue Paris Agreement ambitions to limit global warming to 1.5 degrees and limit warming to below two degrees, "It is in the public interest that the regulator's assessment of impacts in the final approval for this polluting project be reviewed by the courts." A Woodside spokesman said its operations environment plan was assessed in accordance with the law and it will defend its position in the proceedings. "Woodside looks forward to a swift resolution," he said. "The Scarborough Energy Project is generating thousands of jobs throughout the construction phase, has committed more than $3.6 billion in spend in Western Australia and is expected to pay more than $50 billion in direct and indirect taxes." Woodside has completed 82 per cent of the work on Scarborough and plans to start exporting gas in the second half of 2026. A NOPSEMA spokeswoman said the regulator was aware the EDO had filed judicial review proceedings in the Victorian Registry of the Federal Court regarding its decision to accept Woodside's Scarborough [operations environment plan](https://docs.nopsema.gov.au/A1174403?ref=boilingcold.com.au). She said the decision and a [statement of reasons](https://docs.nopsema.gov.au/A1196156?ref=boilingcold.com.au) were publicly available, and it was not appropriate to comment on court proceedings. --- UPDATE 2 May 2024 12:20PM: NOPSEMA comments added. ### Alcoa boss Oplinger: little chance of Kwinana refinery restart URL: https://www.boilingcold.com.au/alcoa-boss-oplinger-little-chance-of-kwinana-refinery-restart/ Last updated: 2025-05-08T08:58:15.000Z Restarting Alcoa's alumina refinery in Kwinana, which closed in 2024, would be a big challenge and unlikely anytime soon, according to chief executive Bill Oplinger. "It's high cost, it's complex, it has proximity to Perth, it's landlocked ... and it's old technology," Oplinger told the Melbourne Mining Club on Thursday. "There are no indications that it would be restarted anytime soon." Alcoa announced the closure of the 60-year-old refinery in January 2024\. By June, processing of bauxite mined in the jarrah forest into alumina - the feedstock for aluminium smelters - had ceased. Oplinger said production had been curtailed, but the plant could be restarted. "However, with that said, the majority of the workforce has left, has gone on to better jobs," he said. "We have found that when we restart facilities, we tend to underestimate how important the knowledge of that workforce is, and bringing back a workforce at Kwinana to restart, I think, would be a big challenge." While Oplinger has ruled out a restart soon, a later restart would only have greater difficulty dealing with old technology and rehiring experienced workers. [Labor breaks vow and risks WA’s water supply for AlcoaRoger Cook granting Alcoa greater access to mine near Perth’s dams risks could cost taxpayers billions of dollars and result in water restrictions![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-76.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Alcoa-Cook-Water-feature-pic-7.png)](https://www.boilingcold.com.au/wa-labor-puts-alcoa-before-water-supply/) Alcoa's benefit from saying the refinery is curtailed rather than closed is that it delays what will be an [extraordinarily costly rehabilitation](https://www.watoday.com.au/national/western-australia/when-will-alcoa-clean-up-in-kwinana-20240110-p5ewcw.html?ref=boilingcold.com.au) of the site. In addition to the vast refinery, Alcoa has to manage 140 million cubic metres of toxic red mud tailings piled as high as 85m inland from the refinery, most of which have [failed stability checks](https://www.watoday.com.au/national/western-australia/alcoa-s-mountains-of-red-mud-fail-to-pass-stability-checks-20240830-p5k6qy.html?ref=boilingcold.com.au). Even just curtailing the refinery is expensive, with Alcoa booking a $342 million charge in 2024 for water management at the site, according to Alcoa of Australia's 2024 filing to corporate regulator ASIC. In early 2024, the refinery employed 780 workers. By the end of the year, this had dropped to about 250 to manage the closure process until the end of 2025\. After that, about 50 people will be employed at the site, which will still be used to import raw materials and export alumina. In addition to jobs lost at Kwinana, Alcoa retrenched about 290 other employees in 2024. In Australia, Alcoa owns the Pinjarra and Wagerup alumina refineries in WA and the bauxite mines that feed them, as well as a substantial share of an aluminium smelter in Portland, Victoria. Oplinger, who visited Perth earlier in the week, said Australia was a good place for Alcoa to invest due to the availability of yof bausite and "a fantastic workforce, not inexpensive by any stretch, but a fantastic workforce." "We have two of the lowest cost refineries in the world here in Western Australia," he said. "Once those get back to better bauxite quality, which will happen over the next couple of years, they will be in the lowest 10 per cent of the cost curves in the world." To achieve better bauxite grades, Alcoa needs approval to extend its Huntly mine that feeds the Pinjarra refinery northwards, past Serpentine Dam. It is due to soon issue the environmental review documents for public comment. Oplinger was concerned about the price of energy in Australia. "The piece that you have to get right is this balance of energy, and for us that means a domestic gas policy," he said. "We will be big users of gas for a long time into the future." Oplinger said Alcoa would look at renewable energy, but hydrogen was "not on the cards" as it was not close to being economic. ### How Chevron will ship Aussie engineering jobs to India URL: https://www.boilingcold.com.au/how-chevron-will-ship-aussie-engineering-jobs-to-india/ Last updated: 2025-08-26T02:00:41.000Z *EXCLUSIVE* In early September 2024, engineers at Chevron's Elizabeth Quay headquarters in Perth gathered to hear how a new engineering centre in India would affect them. They knew change was coming. A couple of weeks before, Chevron announced it would spend US$1 billion to establish an Engineering and Innovation Excellence Centre (ENGINE) in Bengaluru, India. It will [employ 600 professionals](https://www.chevron.com/-/media/chevron/newsroom/2024/Q3/news-release-chevron-engineering-and-innovation-center.pdf?ref=boilingcold.com.au) by the end of 2025 to "support projects across Chevron’s enterprise." The highly experienced employees who waited to hear their future are responsible for the safe and reliable operation of the vast Gorgon and Wheatstone gas export projects, which together cost $US88 billion ($137 billion). They are two of the company's most complex and valuable assets, requiring significant and sophisticated engineering support. The engineers heard that engineering work from across the business unit would leave Australia: ![Excerpt from Chevron Australia presentation detailing areas where it will send work to India](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/04/Chevron-engineering-functions-for-India.png) ****Excerpt from Chevron Australia presentation detailing areas where it will send work to India.** To make matters worse, some engineers will have to do "parallel runs" of remotely working with a new Indian engineer for three months, who may then, in part, replace them. The news was not well received. Beyond the immediate concern about their jobs, many Chevron engineers who have contacted *Boiling Cold* also worry about the future of their profession in Australia. Many of the tasks to go to India require less experience. They cut their teeth on this sort of work as young engineers, and they wonder how future graduates can have the same learning path. ## **Job move criteria show no preference for WA** *Boiling Cold* has obtained the breakdown of what work Chevron will send to India for one of the nine areas targeted for "transition" - engineering support for ongoing operations. ![Chevron document detailing what engineering work supporting operations in Australia will go to India.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/04/Chevron-plan-operations-engineering-to-India.png) ****Chevron document detailing what engineering work supporting operations in Australia will go to India**. **Work to go to India**: *“Technical delivery of activities that can be done remotely, are routine and non-urgent in nature, can be standardised, are scalable, and will produce efficiency through consolidation."* **Work staying in Perth:** *“Safe, reliable operations. Activities that require field execution, strategic direction, prioritisation and business planning."* The criteria for what work leaves Australia show no sign of incorporating the [legislated local content requirement](https://www.legislation.wa.gov.au/legislation/prod/filestore.nsf/FileURL/mrdoc%5F47123.pdf/$FILE/Barrow%20Island%20Act%202003%20-%20%5B01-d0-00%5D.pdf?OpenElement=&ref=boilingcold.com.au) that Chevron must follow for all work on Gorgon: > "Except in those cases where the Joint Venturers can demonstrate it is not reasonable and economically practicable so to do, use labour available within Western Australia." As the engineering to be "transitioned" to India is currently done in Perth, it could be difficult for Chevron to demonstrate that it is not reasonable and practicable for it to remain in WA. Chevron's 2024 profit of $US5.2 billion ($8.1 billion) in Australia may factor into any assessment about whether it is economic to keep local jobs. Chevron was asked how its split of engineering work for supporting operations between India and Australia complied with the local content requirement. The question was not answered. [Chevron’s jobs to India plan to face WA government scrutinyWA Premier Roger Cook’s core “Made in WA” election policy will be tested by his use of local content provisions to keep Chevron’s WA engineers working in WA.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-79.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Screenshot-2025-04-28-at-6.05.08-am-1.png)](https://www.boilingcold.com.au/chevrons-jobs-to-india-plan-to-face-wa-government-scrutiny/) A Chevron spokesman said the company was committed to meeting its local content obligations. "Given our operated assets in WA, Gorgon and Wheatstone are long-term energy developments, we will continue to depend on the talent of our local workforce for decades to come,” he said. Unlike Gorgon, which is governed by the Barrow Island Act, the WA Government applied local content provisions to Wheatstone in a State Development Agreement that is not publicly available. ## Endless cuts It has been an uncertain time for Chevron's 2000 employees in Australia. Throughout 2024 "Project Forge" searched the Australian business unit for possible headcount reductions, only to be overtaken by a global effort [announced in February](https://www.reuters.com/business/energy/chevron-announces-15-20-layoff-global-workforce-source-says-2025-02-12/?ref=boilingcold.com.au) to slash 15 to 20 per cent of Chevron's total workforce by 2026. *Boiling Cold* undertsands within weeks Chevron's Australian employees will see a new organisation chart naming the senior managers that have survived the cull. Soon after, a full organisation chart will reveal what roles are still required and employees will be asked to apply for three of them. The workers are expected to hear by the end of June about their new role or be told they have been made redundant. If the global target is applied to Australia between 300 and 400 Western Australians will lose their jobs. That is not the end of the turmoil for the surviving engineers, who later in the year will learn if they have been displaced by the new Indian employees, adding to the 2025 redundancy tally. Those left will not be able to relax for long, because the 600 engineers to be working in India by the end of 2025 are only the "initial recruitment wave." --- **Read all of *Boiling Cold*'s coverage of Chevron offshoring Australian engineering jobs:** 1. Revealed that Perth-based Chevron engineers will have to train their Indian counterparts before losing their jobs to offshoring that appears to disregard WA's local content provisions. [Chevron’s jobs to India plan to face WA government scrutinyWA Premier Roger Cook’s core “Made in WA” election policy will be tested by his use of local content provisions to keep Chevron’s WA engineers working in WA.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-93.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Screenshot-2025-04-28-at-6.05.08-am-2.png)](https://www.boilingcold.com.au/chevrons-jobs-to-india-plan-to-face-wa-government-scrutiny/) 1. This story - Chevron documents show that jobs from across the company's WA operation will be sent to India, and the criteria used have no regard for local content obligations. 2. More Chevron documents reveal the company is enforcing quotas on their contractors to push more engineering work overseas, again seemingly contrary to local content requirements. [Chevron quotas push Australian engineering jobs overseasThe US giant, which made $8 billion in Australia in 2024, is forcing its subcontractors to follow its example and send Australian engineering jobs overseas.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-97.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Chevron-Elizabethy-Quay-Australian-headquarters-1-1.JPG)](https://www.boilingcold.com.au/chevron-pushes-contractors-to-send-australian-engineering-jobs-overseas/) Since the first story: - The scale of Chevron's exporting of WA jobs, its criteria for choosing which activities go to India that ignore local content requirements, and its forcing of engineering contractors to follow suit have all been made public. - The previously confidential local content provisions for Wheatstone have been tabled in Parliament. - WA Premier Roger Cook has told Chevron it must adhere to the commitments it agreed to in exchange for permission to construct two LNG plants in WA. ## None of this would have happened without Boiling Cold's coverage [Support independent journalism](https://www.boilingcold.com.au/support/) ### Chevron's jobs to India plan to face WA government scrutiny URL: https://www.boilingcold.com.au/chevrons-jobs-to-india-plan-to-face-wa-government-scrutiny/ Last updated: 2025-08-26T02:00:14.000Z Due to legislated local content provisions, Chevron has to demonstrate to the WA government that it is impractical to keep performing engineering in Australia before it proceeds with moving many roles from Perth to India. Chevron's plan is an early test of whether WA Premier Roger Cook, who is the responsible minister for Chevron's agreements with the state, can deliver on the "Made in WA" slogan that dominated his recent successful re-election campaign. The US oil and gas giant is spending $US1 billion ($1.6 billion) to have 600 engineering and other professionals working in India [by the end of 2025](https://www.chevron.com/-/media/chevron/newsroom/2024/Q3/news-release-chevron-engineering-and-innovation-center.pdf?ref=boilingcold.com.au) to "support projects across Chevron’s enterprise." In February, Chevron announced it would [cut its global workforce ](https://www.reuters.com/business/energy/chevron-announces-15-20-layoff-global-workforce-source-says-2025-02-12/?ref=boilingcold.com.au)by 15 to 20 per cent by 2026, aiming to slash its annual operating costs by up to $US3 billion ($4.7 billion). Chevron employs 2000 people to operate its Gorgon and Wheatstone gas projects in WA, according to its recent annual filing to corporate regulator ASIC. If Australia suffers the same headcount cut as the global operation, between 300 and 400 local workers will lose their jobs. A Chevron Australia spokeswoman said the cost savings would come from optimising its portfolio, using technology to increase productivity, and changing how and where work is performed. She said the new centre in India would provide engineering and artificial intelligence solutions to its global operations, including Australia. “We’re working through what changes will be required for our Australian operations," she said. "We will communicate further with our people when decisions have been made." *Boiling Cold* understands the communication has already started. Its Perth-based engineers were told earlier this year that some of their roles would be moved to the Engineering and Innovation Excellence Center (ENGINE) in Bengaluru. However, the [Barrow Island Bill 2003](https://www.legislation.wa.gov.au/legislation/prod/filestore.nsf/FileURL/mrdoc%5F47123.pdf/$FILE/Barrow%20Island%20Act%202003%20-%20%5B01-d0-00%5D.pdf?OpenElement&ref=boilingcold.com.au), which allowed Chevron to build its Gorgon gas export plant on the secluded nature reserve, has provisions to protect local content. Chevron must "use labour available within WA" except where it can demonstrate "it is not reasonable and economically practicable to do so," according to Schedule 1, Section 15(1)(a) of the Act. As the work is already done in Australia, it could be difficult for Chevron to argue it is unreasonable for that to continue. In 2024, Chevron made a profit of $US5.2billion ($8.1 billion) in Australia from revenue of $US11.2 billion (17.7 billion): about $2 million an hour. If 100 Australian engineering jobs moved to India saving $200,000 a role, the total saving of $20 million a year is equal to ten hours of revenue. If the work is not performed in WA, the Act requires it to be done in Australia, and only if that "is not reasonable and economically practicable" can the work be done overseas. Another clause in the Barrow Island Act applies similar local contact provisions to Chevron's use of consultants and suppliers. Chevron's other WA gas export project, Wheastone, is governed by a confidential State Development Agreement that has local content provisions, but the details are not publicly available. [Woodside bonuses up after switch to easier safety targetA union leader said it was horrifying to see management receive full marks for personal safety after incidents almost tripled in four years.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-73.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/North-Rankin-Complex--North-West-Shelf-Project--Western-Australia-web-SMALL-1-2.jpeg)](https://www.boilingcold.com.au/woodside-bonus-boost-after-switch-to-a-more-attainable-safety-target/) A spokeswoman for Premier Roger Cook said the US company had informed it of its plan to cut jobs globally and move some engineering roles to India. "The State Government expects Chevron will continue to fulfil its obligations, including local content provisions, as stipulated in its relevant State Development Agreements," she said. "Creating local jobs is a priority for the State Government as demonstrated through our Made in WA Plan, "We expect large resource projects to employ Western Australians and use local businesses.” The Chevron spokeswoman said since 2009, the company and its joint venture partners have spent more than $80 billion in Australia on the Gorgon and Wheatstone natural gas facilities. "Around 90 per cent of our annual operating expenditure is spent in Australia," she said. --- **Read all of *Boiling Cold*'s coverage of Chevron offshoring Australian engineering jobs:** 1. This story - Revealed that Perth-based Chevron engineers will have to train their Indian counterparts before losing their jobs to offshoring that appears to disregard WA's local content provisions. 2. Chevron documents show that jobs from across the company's WA operation will be sent to India, and the criteria used have no regard for local content obligations. [How Chevron will ship Aussie engineering jobs to IndiaDespite local content requirements and a fat profit from Australia, Chevron will now export jobs as well as gas.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-94.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/3-4.jpg)](https://www.boilingcold.com.au/how-chevron-will-ship-aussie-engineering-jobs-to-india/) 1. More Chevron documents reveal the company is enforcing quotas on their contractors to push more engineering work overseas, again seemingly contrary to local content requirements. [Chevron quotas push Australian engineering jobs overseasThe US giant, which made $8 billion in Australia in 2024, is forcing its subcontractors to follow its example and send Australian engineering jobs overseas.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-96.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Chevron-Elizabethy-Quay-Australian-headquarters-1.JPG)](https://www.boilingcold.com.au/chevron-pushes-contractors-to-send-australian-engineering-jobs-overseas/) Since the first story: - The scale of Chevron's exporting of WA jobs, its criteria for choosing which activities go to India that ignore local content requirements, and its forcing of engineering contractors to follow suit have all been made public. - The previously confidential local content provisions for Wheatstone have been tabled in Parliament. - WA Premier Roger Cook has told Chevron it must adhere to the commitments it agreed to in exchange for permission to construct two LNG plants in WA. ## None of this would have happened without Boiling Cold's coverage [Support independent journalism](https://www.boilingcold.com.au/support/) ### Vessel problems delay Woodside cleanup of oil field near Ningaloo Reef URL: https://www.boilingcold.com.au/vessel-problems-delay-woodside-cleanup-of-oil-field-near-ningaloo-reef/ Last updated: 2025-05-01T00:07:13.000Z Just 50km from Exmouth, oil production equipment attached to a tangled mess of pipelines remains on the seabed after an offshore construction vessel with a string of safety incidents returned to Singapore. Woodside engaged the advanced offshore construction vessel DLV 2000 owned by US firm McDermott to clean up the non-producing Stybarrow oil field it inherited when it bought BHP's petroleum division in 2022. However, the decommissioning work was plagued by at least [three serious safety incidents](https://www.boilingcold.com.au/woodside-cleanup-off-wa-plagued-by-injuries-and-incidents-2/) involving lifting equipment, and now the biggest lift - of a disconnectable turret mooring (DTM) weighing more than 700 tonnes - will have to wait for another expensive mobilisation of a heavy lift construction vessel to Australia's north west. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/04/Screenshot-2025-04-23-at-2.02.49-pm.png) ****Sonar image of the DTM and tangled flexible pipelines on the seabed**. **Source:* [**Woodside*](https://docs.nopsema.gov.au/A1046921?ref=boilingcold.com.au) The early April departure of the DLV 2000 pushes the completion of Stybarrow decommissioning past the [March 2025 deadline](https://www.nopsema.gov.au/sites/default/files/2021-09/A781218.pdf?ref=boilingcold.com.au) set by offshore safety and environment regulator NOPSEMA in 2021. BHP produced oil at Stybarrow from 2007 to 2015, then removed the floating production vessel, flushed the pipelines, shut in and capped the wells. The next year, the DTM that had connected the production vessel to pipelines on the seabed unexpectedly sank to the seabed 825m below, with the pipelines still attached. A NOPSEMA spokeswoman said the agency was aware that the removal of some equipment, including the DTM, had been delayed and was monitoring Woodside's progress to ensure its removal. A Woodside spokeswoman said it had made substantial progress at Stybarrow, including making 10 disused oil wells safe, and would continue the work detailed in plans accepted by NOPSEMA. "Across all activities, our priority remains the safety of people and the environment," she said. [Woodside bonuses up after switch to easier safety targetA union leader said it was horrifying to see management receive full marks for personal safety after incidents almost tripled in four years.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-72.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/North-Rankin-Complex--North-West-Shelf-Project--Western-Australia-web-SMALL-1-1.jpeg)](https://www.boilingcold.com.au/woodside-bonus-boost-after-switch-to-a-more-attainable-safety-target/) The work on Stybarrow is part of a surge in offshore decommissioning in Australia that started in 2021 when the regulator NOPSEMA started issuing legally enforceable directions rather than just waiting for companies to do the right thing. When Woodside completed its purchase of BHP's petroleum division in 2022, it inherited equity in four assets with decommissioning directives: [Stybarrow](https://www.nopsema.gov.au/sites/default/files/2021-09/A781218.pdf?ref=boilingcold.com.au) and [Griffin](https://www.nopsema.gov.au/sites/default/files/2021-09/A781707.pdf?ref=boilingcold.com.au) in WA; and [Minerva](https://www.nopsema.gov.au/sites/default/files/2021-09/A781846.pdf?ref=boilingcold.com.au) and [ExxonMobil's operations](https://www.nopsema.gov.au/sites/default/files/2021-06/A783674.pdf?ref=boilingcold.com.au) in the Bass Strait. In recent years, Woodside has successfully performed two major lifts to decommission oil fields off the WA coast. The Griffin riser turret mooring, made of 14500 tonnes of steel, was raised in December 2024 and is now being deconstructed in WA in preparation for recycling. The Griffin riser turret morring was lifet ti the surface in In 2023 Woodside removed the [2500-tonne Nganhurra Riser Turret Mooring](https://www.youtube.com/watch?v=Gk-62Njg40I&ref=boilingcold.com.au) that, like Stybarrow, had sunk to the seabed off the Pilbara coast. The biggest decommissioning expences for Woodside will be its 50 per cent share of the cost of ExxonMobil [plugging 180 wells and dismantling ten platforms](https://www.boilingcold.com.au/regulator-blasts-exxonmobils-bass-strait-maintenance-orders-massive-decommissioning-effort/) in the Bass Strait by 2027. In February, Woodside spooked some investors when it revealed it may [spend up to $US1 billion](https://www.woodside.com/docs/default-source/asx-announcements/2025/woodside-releases-reserves-statement-and-sangomar-update.pdf?sfvrsn=a67fb391%5F3&ref=boilingcold.com.au) ($1.6 billion) this year on decommissioning, [double](https://thewest.com.au/business/oil-gas/woodside-energy-big-bill-for-restoration-work-in-2025-spooks-analysts-c-17750757?ref=boilingcold.com.au) what some analysts were expecting. ### Who are WA's 'Trump dump' losers and winners so far? URL: https://www.boilingcold.com.au/who-are-was-trump-dump-losers-and-winners-so-far/ Last updated: 2025-04-24T04:42:02.000Z Big players in the WA resources sector have had a grim time on the share market since US President Donald Trump's nonsensical "Liberation Day" tariff announcement on April 2. In the seven trading days that have followed, there has been a global crash in share prices, a brief reprieve when many tariffs were delayed for 90 days and then further falls on Friday. For the big operators in WA, it has been terrible to be Chris Ellison, great to be a gold miner, and varying degrees of pain in between. The mayhem caused by Trump's tariffs is greater than shown in the chart, as many companies experienced significant slips in their share prices in the nervous days before "Liberation Day". Chris Ellison's Mineral Resources has fared the worst, with a share price already trashed by governance concerns and a disintegrating road from its new iron project falling a further 28 per cent. Stock in the diversified lithium, iron ore and mining services conglomerate is now down motr tham 50 per cent this year. Miners of lithium were a mixed bag. US giant Albemarle - which has stakes in the Greenbushes and Wodgina mines and the Kemerton processing plant, had an enormous 28 per cent drop. Shareholders in China's Tianqi and locals Pilbara Minerals and IGO suffered much less with drops in the 7 to 11 per cent range. And while hindsight is an unfair judge, many long-term holders of IGO scrip must now rue its big switch from gold to battery minerals a few years ago. [Labor breaks vow and risks WA’s water supply for AlcoaRoger Cook granting Alcoa greater access to mine near Perth’s dams risks could cost taxpayers billions of dollars and result in water restrictions![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-68.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Alcoa-Cook-Water-feature-pic-6.png)](https://www.boilingcold.com.au/wa-labor-puts-alcoa-before-water-supply/) The share price in US aluminium specialist Alcoa, that sources more than 70 per cet of its bauxite and alumina from WA, has dropped 19 per cent since the tariff announcement and is down 37 per cent this year on the ASX. The Pittsburgh-based firm was not helped by one Wall Street analyst switching his recommendation from buy to sell, missing the usual intermediary step of a hold. Bank of America now thinks $US26 is a fair value for a share in Alcoa, less than half the previous target of $58\. The price for its US-listed shares is currently $US24 a share. The next worst-hit miner was South32, which has a diversified portfolio but still sources 68 per cent of its revenue from alumina and aluminium sales. While Trump loves fossil fuels, the market has thought differently, with major gas players in WA experiencing drops of between 13 and 19 per cent. With White House-induced global economic uncertainty likely to dampen demand and massive deregulation designed to increase US production, oil and gas prices can only go one way. [![CTA Image](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/04/rough-square-logo.jpg)](https://www.boilingcold.com.au/support/#/portal/signup) Embracing the opportunities of the energy transition and preparing for climate change are too important to be derailed by vested interests. [Support WA's most independent journalism ](https://www.boilingcold.com.au/support/#/portal/signup) Less than two weeks into Trump's oscillating tariff moves, China remains the biggest victim with an impost of more than 100 per cent placed on its exports to the US. Oddly, this has had little effect on the iron ore players so dependent on construction and manufacturing in Australia's biggest trading partner. The pure iron ore play Fortescue has dropped just two per cent. The two more diversified but still iron ore-dominated multinationals BHP and Rio have had share price drops in just single figures. At times like this, that is almost a win. Norwegian fertiliser manufacturer Yara, which has ammonia and explosives plants near Karratha, is about even so far. Perhaps because we still need food, and its gas feedstock may be much cheaper for a while. However, the only unambiguous winners of the current shambles are the gold miners. If only then-WA Treasurer Ben Wyatt had not dropped his [quest for increased royalties](https://www.afr.com/companies/wa-gold-royalty-bid-falls-flat-again-20171121-gzq3q0?ref=boilingcold.com.au) in 2017. ### Fortescue still looking for zero-emissions train for 2030 URL: https://www.boilingcold.com.au/fortescue-still-looking-for-zero-emissions-train-for-2030/ Last updated: 2025-04-27T23:31:58.000Z WA's big four iron ore miners who committed to battery-powered trains more than three years ago are all waiting on late deliveries of the emissions-savings technology. Climate sceptic Gina Rinehart's Roy Hill, renewable energy evangelist Andrew Forrest's Fortescue, and mining giants BHP and Rio Tinto all want to reduce their consumption of expensive diesel and production of greenhouse gases from moving more than 800 million tonnes of iron ore to port every year. It is understood one technical challenge has been to increase the batteries' "energy density" so they can deal with the long distances and massive loads of Pilbara iron oremining . BHP uses four locomotives to pull 270 ore cars carrying 38,000 tonnes of iron ore. In the Pilbara alone, BHP has 180 locomotives, and Fortescue uses 70. There is a vast market for whatever company cracks the technology. WA's miners are waiting on deliveries from Caterpillar-owned Progress Rail in Brazil and US firm Wabtec. The miner under most pressure is Fortescue, which aims to eliminate its greenhouse gas emissions by 2030—just 5½ years away. Its trains burn 82 million litres of diesel a year. Unlike its competitors the Andrew Forrest-chaired company is developing its own battery-electric locomotive technology as well as wanting to trial equipment from established manufacturers. Three years ago, Fortescue announced it would develop an "Infinity Train" that would not require charging. Energy stored on the mainly downhill, fully loaded run from mines to port would be sufficient to drive the empty train back to the mine 600m above sea level. However, a charge-free train may have proven difficult to achieve. Fortescue is now collaborating with Australian firm Downer. A Downer video said the technology would be "backed up with overhead line dynamic charging for operational flexibility, " indicating that energy stored from regenerative braking may be insufficient to power a return trip in the Pilbara. A Fortescue spokeswoman said the miner's commitment to "Real Zero by 2030" was steadfast. "We see electrification as being well-suited for the high-capacity, heavy-haul nature of our rail operations, and we are actively engaging with multiple potential technology providers," she said. Fortescue's spokeswoman said its collaboration with Downer was just one example of its progress towards decarbonising rail operations with a prototype currently under construction. ## The green train ~~shopping~~ waiting list: ### **Roy Hill** purchased - [September 2001](https://www.royhill.com.au/gina-rineharts-roy-hill-to-make-history-with-first-battery-powered-electric-locomotive-to-operate-in-pilbara/?ref=boilingcold.com.au) \- one Wabtec 7 megawatt-hour FLXdrive battery-electric locomotive for delivery in 2023. plan - Replace one of four diesel locomotives used to pull a 2.7 km-long train carrying 33,000 tonnes of iron ore. The locomotive would recharge during the trip from regenerative braking to achieve a "double-digit" percentage reduction in fuel costs and emissions for the entire train. Includes unique liquid cooling to control battery temperature in the Pilbara heat. status - In October 2023, Wabtec announced it was to be shipped to Australia in 2024\. No further news has been released. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/04/HERO-1-1600x900.jpg.webp) ****Roy Hill's locomotive was** [****"unveiled" in the US**](https://www.wabteccorp.com/newsroom/press-releases/wabtec-and-roy-hill-unveil-the-first-flxdrive-battery-locomotive?ref=boilingcold.com.au) **in October 2023.** **Image: Wabtec.* ### **Fortescue** Progress Rail purchased - [January 2022](https://www.fortescue.com/en/articles/newmilestoneforfortescuesdecarbonisationstrategywithpurchaseoftwonewbatteryel?ref=boilingcold.com.au) \- 2 x Progress Rail eight-axle 14.5 megawatt-hours BE14.5 battery-electric locomotives for first delivery in 2023. plan - Zero emissions by 2030 status - Locomotives are currently under construction and are due to be delivered for mainline rail testing in 2025, according to a Fortescue spokeswoman. In-house design started developing - [March 2022](https://reneweconomy.com.au/fortescue-starts-work-on-world-first-infinity-train-a-regenerating-battery-on-rails/?ref=boilingcold.com.au) \- A world-first "Infinity Train" that would not need recharging, to possibly be deployed by 2024. plan - To be developed by Williams Advanced Engineering, which was bought by Fortescue in January 2022 and is now called Fortescue Zero. status - Fortescue Zero and Australia's Downer agreed in [September 2024](https://www.downergroup.com/downer-and-fortescue-zero-to-design-and-devel?ref=boilingcold.com.au) to jointly develop a battery-electric locomotive. "Trials are underway." ammonia-powered train started developing - [October 2022](https://ammoniaenergy.org/articles/fortescue-deutsche-bahn-to-develop-ammonia-powered-trains-in-germany/?ref=boilingcold.com.au) \- with German rail company Deutsche Bahn modifications to existing diesel engines, allowing them to run on hydrogen or ammonia. plan - [key technology](https://nachhaltigkeit.deutschebahn.com/en/measures/climate-protection-research?ref=boilingcold.com.au) was a German-developed "cracker" to be installed on the train to separate hydrogen from a small amount of ammonia to be used to help ignite the ammonia. status - trials of a dual-fuelled prototype ammonia-powered locomotive were completed at Fortescues's Solomon operation in the Pilbara. ### **Rio Tinto** purchased - [January 2022](https://www.riotinto.com/en/news/releases/2022/rio-tinto-purchases-first-battery-electric-trains-for-the-pilbara?ref=boilingcold.com.au) \- four Wabtec 7 megawatt-hour FLXdrive battery-electric locomotives with initial trials in the Pilbara planned in early 2024. plan - Contribute to Rio's goal of reducing carbon emissions by 50 per cent by 2030\. Locomotives emit 30 per cent of Rio's diesel-related emissions in the Pilbara. status - Rio Tint0 and Wabtec are continuing to work together ### **BHP** purchased - [January 2022](https://www.bhp.com/news/media-centre/releases/2022/01/bhp-orders-four-battery-electric-locomotives-for-waio-rail-network?ref=boilingcold.com.au) \- purchased four battery-electric locomotives four delivery in late 2023: \- two Progress Rail 8-axle, 14.5-MWh battery capacity \- two Wabtec FLXdrive locomotives plan - trial technology to "be better informed as we prepare for the planned replacement of our diesel-powered iron ore rail fleet." status - In 2024, Tim Day, who leads BHP's WA iron ore operation, said the company will test Wabtec and Progress Rail battery electric locomotives "from 2025.” ### Woodside bonus boost after switch to a more attainable safety target URL: https://www.boilingcold.com.au/woodside-bonus-boost-after-switch-to-a-more-attainable-safety-target/ Last updated: 2025-07-11T04:04:59.000Z Woodside marked itself as achieving acceptable worker safety in 2024 after switching from an industry-standard metric that it had massively exceeded. Woodside's "personal safety performance was on target," according to its 2024 annual report, as it had just one "high consequence injury" where recovery took more than 180 days. However, Woodside's performance judged by the measure it had used for at least the past decade - the number of injuries recorded per million hours worked, or TRIR - was terrible, with a rate of 2.44, well above its target in previous years of 1.0. ## A dangerous decline Woodside's safety performance, as measured by the industry-standard TRIR, has seriously deteriorated this decade. In 2019 and 2020, Woodside achieved a TRIR well within its target of 1.1, giving it the confidence to set a more difficult benchmark of 1.0 in 2021. Unfortunately, the rate of injuries then almost doubled, a performance Woodside chairman Richard Goyder labelled "disappointing." "Improving this performance is a priority in the year ahead," he said. But the TRIR also increased in 2022 and again in 2023 when, tragically, there was the fatality of rope access technician Michael Jurman. After the fatality, O'Neill said Woodside’s safety performance over the past two years had been [below the standard it sets](https://www.woodside.com/docs/default-source/asx-announcements/2023-asx/half-year-2023-report.pdf?sfvrsn=3f3622d8%5F5&ref=boilingcold.com.au) for itself. > "We know we must do better and are resolved to strive for a return to leading safety performance," O'Neill said. In Woodside's 2023 annual report, O'Neill and Woodside chairman Richard Goyder both said safety must improve. "To ensure a focus on our aim to prevent all injuries", safety was made a separate measure in the 2024 corporate scorecard used in determining management bonuses. The contribution of safety to the total score was increased from 10 to 15 per cent. It encompassed personal safety as well as measures to avoid major process or environmental incidents. ## Scoring differently However, when Woodside calculated the revised scorecard with a heavier emphasis on safety for the first time in 2024, the industry-standard TRIR, which at 2.44 well exceeded the target of 1.0, was not used. Instead, the target used was no more than one high-consequence injury where the worker did not return to full health in 180 days. The new - and it appears unique - HCI metric does not measure Woodside's "aim to prevent all injuries" or allow it to determine if it had "leading safety performance" by comparing itself to other companies. However, with one HCI in 2024, the new measure did allow Woodside to meet its target for personal safety. [![CTA Image](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/04/Mia-Yellagonga-signed-cropped.jpg)](https://www.boilingcold.com.au/support/) ****Woodside quietly changed its main safety metric and avoided a 4th year of failure.** ****Who noticed?** ****Boiling Cold.** [Support WA's most independent journalism ](https://www.boilingcold.com.au/support/) At a [presentation to analysts](https://www.woodside.com/docs/default-source/asx-announcements/2025/021-sustainability-briefing-2025-transcript.pdf?sfvrsn=91b6b681%5F3&ref=boilingcold.com.au) last week, O'Neill acknowledged, "we continue to experience a number of recordable injuries" but did not mention the incident rate jumped more than 30 per cent in 2024. "The top priority for me as Woodside CEO is that all of our people are safe at work and go home in the same condition in which they arrived," she said. However, the new personal safety metric only tracks if workers are healthy six months after they go home after an incident. According to Woodside's 2024 annual report, it introduced HCI to measure personal safety "to focus attention on the highest risks to people and promote learning through more transparent reporting." ## **Bonus bump** Woodside's 2024 safety performance, contributing 15 per cent to the scorecard, was marked a "mid-point" performance as while "personal safety performance was on target," one of the two process targets was not met. If the previous TIRR metric had been used, exceeding the target by a factor of 2.44, the 2024 safety score, and hence management bonuses, would certainly have been lower. Chris Donovan, spokesman for the Offshore Alliance of two unions that represents many WA oil and gas workers, said Woodside effectively diluting its metric measuring worker safety was hugely concerning. > "Did they think no one would notice?” Donovan said. "To see that such a dilution has the effect of ensuring Woodside executives receive full bonuses for safety when Woodside’s safety record is only getting worse – including a fatality at a Woodside-operated facility in the past 18 months – is horrifying.” Woodside was asked why its TRIR had increased so much in recent years and if shifting the goalposts to something more achievable was a bad look. The company did not provide a response. ### What are Labor and the Coalition offering on energy, emissions and climate? URL: https://www.boilingcold.com.au/what-are-labor-and-the-coalition-offering-on-energy-emissions-and-climate/ Last updated: 2025-04-07T21:35:24.000Z *By Johanna Nalau, Madeline Taylor and Tony Wood* Australia’s 2022 federal election was seen as the [climate election](https://www.abc.net.au/news/2022-05-26/climate-change-election-what-are-labors-plans/101094986?ref=boilingcold.com.au). But this time round, climate policy has so far taken a back seat as the major parties focus on cost-of-living issues. Despite this, climate change remains an ever-present threat. Last year was the world’s [hottest on record](https://wmo.int/news/media-centre/wmo-confirms-2024-warmest-year-record-about-155degc-above-pre-industrial-level?ref=boilingcold.com.au) and extreme weather is [lashing Queensland](https://www.theguardian.com/australia-news/2025/apr/02/queenslands-floods-flooding-recovery-months-years-outback-interior?ref=boilingcold.com.au). But there are hints of progress. Australia’s emissions have [begun to fall](https://www.abc.net.au/news/2024-11-29/australia-records-modest-emissions-reduction/104660586?ref=boilingcold.com.au) and the main power grid is now [40% renewable](https://minister.dcceew.gov.au/bowen/media-releases/massive-economic-benefits-households-and-businesses-reliable-renewable-electricity-grid?ref=boilingcold.com.au). So before Australians head to the polls on May 3, it’s worth closely examining the climate policies of the two major parties. What are they offering on cutting emissions, preparing for climate-boosted disasters and future-proofing our energy systems? And where are the gaps? ## Energy transition - Tony Wood, Grattan Institute Cost-of-living pressures, escalating damage from climate change and global policy uncertainty mean no election issue is more important than transforming Australia’s economy to achieve net zero. But our energy supply must be reliable and affordable. What should the next government [prioritise](https://grattan.edu.au/report/orange-book-2025/?ref=boilingcold.com.au)? There is great pressure to deliver power bill relief. But the next government’s priority should be reducing how much a household spends on energy, rather than trying to bring down the price of electricity. Far better to give financial support for battery storage and better home insulation, to slash how much power consumers need to buy from the grid. The Liberal-led Senate inquiry has [just found](https://www.aph.gov.au/Parliamentary%5FBusiness/Committees/Senate/Economics/ResElectrification/Report?ref=boilingcold.com.au) supporting home electrification will also help with cost of living pressures. The electricity rebates [on offer](https://www.abc.net.au/news/2025-03-22/labor-promises-to-shave-150-off-energy-bills/105084994?ref=boilingcold.com.au) from Labor and the [temporary cut](https://www.abc.net.au/news/2025-03-27/peter-dutton-fuel-excise-cut-explained/105102732?ref=boilingcold.com.au) to fuel excise from the Coalition aren’t enough. Federal and state governments must maintain their support and investment in the new transmission lines necessary to support new renewable generation and storage. Labor needs to do more to meet its 2030 target of reaching 82% renewables in the main grid. Currently, the figure is around 40%. The Coalition’s plan to slow down renewables, keep coal going longer and burn more gas while pushing for a nuclear future carries alarmingly [high risks](https://www.theaustralian.com.au/business/renewable-energy-economy/the-coalitions-nuclear-plan-depends-on-many-bold-assumptions/news-story/db95c56e83b75b2caabd9bc7dbaf7685?ref=boilingcold.com.au) on reliability, cost and environmental grounds. Gas shortfalls are looming for Australia’s southeast in the next few winters and the price of gas remains stubbornly high. Labor does not yet have a workable solution to either issue, while the Coalition has [an idea](https://theconversation.com/dutton-unveils-plan-to-force-more-gas-into-australian-market-and-expand-production-in-major-pre-election-pitch-253228?ref=boilingcold.com.au) – more and therefore cheaper gas – but [no clarity](https://www.theguardian.com/commentisfree/2025/mar/31/australian-election-2025-peter-dutton-gas-power-plan-comment?ref=boilingcold.com.au) on how its plan to keep more gas for domestic use would work in practice. So far, we have been offered superficially appealing ideas. The field is wide open for a leader to deliver a compelling vision and credible plan for Australia’s net-zero future. ## Climate adaptation – Johanna Nalau, Griffith University You would think adapting to climate change would be high on the election agenda. Southeast Queensland just weathered its first cyclone in 50 years, estimated to have caused A$1.2 billion [in damage](https://theconversation.com/cyclone-alfred-to-cost-budget-1-2billion-hit-growth-and-push-up-inflation-chalmers-252171?ref=boilingcold.com.au), while outback Queensland is enduring the worst flooding in [50 years](https://www.abc.net.au/news/2025-04-01/outback-flooding-worsening-more-rain-for-queensland/105116402?ref=boilingcold.com.au). But so far, there’s little to see on adaptation. Both major parties [have committed](https://www.abc.net.au/news/2025-04-02/flooded-queenslanders-call-for-bom-weather-radar-river-gauges/105116038?ref=boilingcold.com.au) to building a weather radar in western Queensland, following [local outcry](https://www.abc.net.au/news/2025-04-02/flooded-queenslanders-call-for-bom-weather-radar-river-gauges/105116038?ref=boilingcold.com.au). While welcome, it’s a knee-jerk response rather than good forward planning. By 2060, damage from climate change will cost Australia $73 billion a year under a low emissions scenario, according to a [Deloitte report](https://www.deloitte.com/au/en/services/economics/perspectives/building-australias-natural-disaster-resilience.html?ref=boilingcold.com.au). The next federal government should invest more in disaster preparation rather than throwing money at recovery. It’s cheaper, for one thing – longer term, there are [significant savings](https://australianbusinessroundtable.com.au/assets/documents/Report%20-%20Building%20Resilient%20Infrastructure/Report%20-%20Building%20resilient%20infrastructure.pdf?ref=boilingcold.com.au) by investing in more resilient infrastructure before damage occurs. Being prepared requires having enough public servants in disaster management to do the work. The Coalition has promised to cut 41,000 jobs from the federal public service, and has [not yet said](https://www.theguardian.com/australia-news/2025/apr/02/australia-election-peter-dutton-abc-cuts-kim-williams-meeting?ref=boilingcold.com.au) where the cuts would be made. While in office, Labor has been developing a [National Adaptation Plan](https://www.dcceew.gov.au/climate-change/policy/adaptation/nap?ref=boilingcold.com.au) to shape preparations and a [National Climate Risk Assessment](https://www.dcceew.gov.au/climate-change/policy/adaptation/ncra?ref=boilingcold.com.au) to gather evidence of the main climate risks for Australia and ways to adapt. Regardless of who takes power, these will be useful roadmaps to manage extreme weather, damage to agriculture and intensified droughts, floods and fires. Making sure climate-exposed groups such as farmers get necessary assistance to weather worse disasters, and manage new risks and challenges stemming from climate change, is not a partisan issue. Such plans will help direct investment towards adaptation methods that work at scale. New [National Science Priorities](https://www.industry.gov.au/publications/national-science-and-research-priorities-2024?ref=boilingcold.com.au) are helpful too, especially the focus on new technologies able to sustainably meet Australia’s food and water needs in a changing climate. ## Emissions reduction – Madeline Taylor, Macquarie University Emission reduction has so far been a footnote for the major parties. In terms of the wider energy transition, both parties are expected to announce policies to encourage [household battery uptake](https://www.afr.com/policy/energy-and-climate/coalition-flags-household-battery-plan-in-election-push-20250218-p5ld4q?ref=boilingcold.com.au) and there’s a bipartisan focus on speeding up energy planning approvals. But there is a clear divide in where the major parties’ policies will lead Australia on its net-zero journey. Labor’s policies largely continue its approach in government, including bringing more clean power and storage into the grid within the [Capacity Investment Scheme](https://www.afr.com/policy/energy-and-climate/coalition-flags-household-battery-plan-in-election-push-20250218-p5ld4q?ref=boilingcold.com.au) and building new transmission lines under the [Rewiring Australia Plan](https://www.rewiringaustralia.org/?ref=boilingcold.com.au). These policies are leading to lower emissions from the power sector. Last year, total emissions [fell by 0.6%](https://www.dcceew.gov.au/about/news/nggi-march-2024-quarterly-update?ref=boilingcold.com.au). Labor’s [Future Made in Australia](https://treasury.gov.au/policy-topics/future-made-australia?ref=boilingcold.com.au) policies give incentives to produce critical minerals, green steel, and green manufacturing. Such policies should help Australia gain market share in the trade of low-carbon products. From January 1 this year, Labor’s [new laws](https://www.aph.gov.au/Parliamentary%5FBusiness/Bills%5FLegislation/bd/bd2324a/24bd068?ref=boilingcold.com.au) require some large companies to disclose emissions from operations. This is positive, giving investors essential data to make decisions. From their second reporting period, companies will have to disclose Scope 3 emissions as well – those from their supply chains. The laws will cover some companies where measuring emissions upstream is incredibly tricky, including agriculture. Coalition senators issued a [dissenting report](https://parlinfo.aph.gov.au/parlInfo/search/display/display.w3p;query=Id%3A%22committees%2Freportsen%2FRB000367%2F0005%22?ref=boilingcold.com.au) pointing this out. The Coalition has [now vowed](https://www.afr.com/policy/economy/coalition-vows-to-scrap-emissions-reporting-as-trump-prepares-rollback-20241231-p5l1d3?ref=boilingcold.com.au) to scrap these rules. The Coalition has not committed to Labor’s target of cutting emissions 43% by 2030\. Their flagship plan to go nuclear will [likely mean](https://theconversation.com/duttons-nuclear-plan-would-mean-propping-up-coal-for-at-least-12-more-years-and-we-dont-know-what-it-would-cost-239720?ref=boilingcold.com.au) pushing out emissions reduction goals given the likely 2040s completion [timeframe](https://theconversation.com/more-coal-and-gas-less-renewables-what-a-nuclear-power-plan-for-australia-would-really-mean-245948?ref=boilingcold.com.au) for large-scale nuclear generation, unless [small modular reactors](https://theconversation.com/small-modular-reactors-have-promise-but-we-found-theyre-unlikely-to-help-australia-hit-net-zero-by-2050-235198?ref=boilingcold.com.au) become viable. On gas, there’s virtually bipartisan support. The Coalition promise to reserve more gas for domestic use is a response to [looming shortfalls](https://www.afr.com/companies/energy/winter-gas-threat-pushed-out-but-shortages-loom-20250317-p5lk3w?ref=boilingcold.com.au) on the east coast. Labor has [also approved](https://theconversation.com/expanding-coal-mines-and-reaching-net-zero-tanya-plibersek-seems-to-believe-both-are-possible-241007?ref=boilingcold.com.au) more coal and gas projects largely for export, though Australian coal and gas burned overseas aren’t counted domestically. Opposition Leader Peter Dutton has promised to [include gas](https://www.theguardian.com/australia-news/2025/mar/27/peter-dutton-budget-reply-speech-gas-reservation-scheme-public-service-cuts?ref=boilingcold.com.au) in Labor’s renewable-oriented Capacity Investment Scheme and [has floated](https://www.afr.com/politics/federal/libs-mull-changes-to-emissions-plan-promise-more-gas-20250323-p5llqm?ref=boilingcold.com.au) relaxing the Safeguard Mechanism on heavy emitters. The Coalition has vowed to [cancel plans](https://www.abc.net.au/news/2025-03-30/illawarra-offshore-wind-farm-misinformation-in-federal-election/105097852?ref=boilingcold.com.au) for three offshore wind projects and are very critical of [green hydrogen funding.](https://www.theguardian.com/environment/2025/mar/24/green-hydrogen-stalled-australia-government-still-revving-it-up?ref=boilingcold.com.au) Both parties will likely introduce emission reduction measures, but a Coalition government would be less stringent. Scrapping corporate emissions reporting entirely would be a misstep, because accurate measurement of emissions are essential for attracting green investment and reducing climate risks. --- ![The Conversation](https://counter.theconversation.com/content/253430/count.gif?distributor=republish-lightbox-basic) [Johanna Nalau](https://theconversation.com/profiles/johanna-nalau-377495?ref=boilingcold.com.au), Senior Lecturer, Climate Adaptation, *[Griffith University](https://theconversation.com/institutions/griffith-university-828?ref=boilingcold.com.au)*; [Madeline Taylor](https://theconversation.com/profiles/madeline-taylor-509252?ref=boilingcold.com.au), Associate Professor of Energy Law, *[Macquarie University](https://theconversation.com/institutions/macquarie-university-1174?ref=boilingcold.com.au)*, and [Tony Wood](https://theconversation.com/profiles/tony-wood-2993?ref=boilingcold.com.au), Program Director, Energy, *[Grattan Institute](https://theconversation.com/institutions/grattan-institute-1168?ref=boilingcold.com.au)* This article is republished from [The Conversation](https://theconversation.com/?ref=boilingcold.com.au) under a Creative Commons license. Read the [original article](https://theconversation.com/this-election-what-are-labor-and-the-coalition-offering-on-the-energy-transition-climate-adaptation-and-emissions-253430?ref=boilingcold.com.au). ### Alcoa spruiks profit boost if mining more WA forest approved URL: https://www.boilingcold.com.au/alcoa-spruiks-profit-boost-if-mining-more-wa-forest-approved/ Last updated: 2025-04-11T06:52:54.000Z US miner Alcoa has told investors that expanding its strip mining into new areas of jarrah forest near Perth is its main lever to boost corporate profits. Alcoa chief executive Bill Oplinger [told Wall Street in February](https://s29.q4cdn.com/945634774/files/doc%5Fevents/2025/Feb/25/2025-BMO-Fireside-Chat-Transcript.pdf?ref=boilingcold.com.au) that he expects the WA government to approve an expansion of its Huntly mine, which feeds bauxite to the Pinjarra alumina refinery, by the first quarter of 2026. For the past few years, Alcoa has experienced [delays in gaining approval](https://www.watoday.com.au/business/companies/alcoa-wears-240m-mining-approval-delay-to-keep-critical-wa-onside-20230119-p5ce0a.html?ref=boilingcold.com.au) to mine new areas of jarrah forest as its activities moved northwards towards Serpentine Dam where forest clearing for [Alcoa's mining threatens Perth’s drinking water](https://www.watoday.com.au/environment/sustainability/alcoa-mining-threatens-perth-s-drinking-water-20230207-p5cijm.html?ref=boilingcold.com.au) Perth's water supply. Instead, it has mined areas with lower ore grades, which increases its costs and cuts production of alumina, the feedstock for aluminium smelters. "It's important to remember, the bauxite quality that we're running today is bauxite that we literally threw away five years ago," Oplinger said. However, the company, which in 2024 mined 72 per cent of its bauxite in WA, is still competitive. Currently, Alcoa's cost to produce both bauxite and alumina is in the cheapest 25 per cent of global production. Its alumina production cost may drop out of the "first quartile" until it moves to the new area, according to a [recent company presentation](https://s29.q4cdn.com/945634774/files/doc%5Fevents/2025/Mar/12/March-2025-Investor-Presentation-vF.pdf?ref=boilingcold.com.au). ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/04/Proposed-Future-Mine-Regions.jpg) ****The expansion into Holyoake and Myara North will be assessed by the EPA.** **Image:* [**Alcoa*](https://www.alcoa.com/australia/en/sustainability/pinjarra-huntly-environmental-assessment/project-update?ref=boilingcold.com.au)**.* Oplinger said mining the new area, which he expects to start as early as 2027, would raise the average alumina content in the bauxite Alcoa mines from 27.5 per cent to 32 per cent. "It has massive knock-on impacts," he said, describing it as the "number one" lever the global company has to boost earnings. Oplinger estimated the mine approval could lift production from its Pinjarra and Wagerup alumina refineries by up to one million tonnes a year. This would increase revenue by $US472 million ($750 million) a year based on the alumina price Alcoa received in the December 2024 quarter. Reduced costs applied to all production would further boost the bottom line. Pittsburgh-based Alcoa now fully owns the Australian operations it manages after buying its 40 per cent joint venture partner ASX-listed Alumina Limited in 2024. The transaction increased the proportion of Alcoa's activities in the early stages of the aluminium value chain - mining and refining - as opposed to the subsequent smelting. "That's been a really smart move," Oplinger said. "I think that (in) the value chain, most of the value over time will accrete closer to the ore body and the refining than necessarily in smelting." Two weeks later, Alcoa chief financial officer Molly Beerman reiterated to[ investors](https://s29.q4cdn.com/945634774/files/doc%5Fevents/2025/Mar/12/2025-JPM-Industrials-Fireside-Chat-Transcript-vF.pdf?ref=boilingcold.com.au) the importance of the mine expansion. "When we complete those mine moves no earlier than 2027, we will pick up additional alumina volume as well as have a lower cost per tonne, so that's the most sizable improvement we have," she said. The expansion, which would destroy [75 square kilometres](https://www.epa.wa.gov.au/sites/default/files/S43A/CMS17836%20-%20s43A%20Notice%20of%20Approval%20-%2017%20February%202025.pdf?ref=boilingcold.com.au) of jarrah forest, will be assessed by the WA Environmental Protection Authority before new environment minister Matthew Swinbourn makes a decision. [Labor breaks vow and risks WA’s water supply for AlcoaRoger Cook granting Alcoa greater access to mine near Perth’s dams risks could cost taxpayers billions of dollars and result in water restrictions![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-66.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Alcoa-Cook-Water-feature-pic-5.png)](https://www.boilingcold.com.au/wa-labor-puts-alcoa-before-water-supply/) Beerman said the approval process was progressing well, and she expected Alcoa's environmental review documents to be released for public comment early in the June quarter. As well as risks to water quality, threats to biodiversity and Alcoa's [failure to fully rehabilitate](https://www.watoday.com.au/environment/sustainability/alcoa-in-wa-60-years-28-000-hectares-of-forest-cleared-zero-rehabilitation-completed-20230307-p5cq4j.html?ref=boilingcold.com.au) any of the 280 square kilometres of the jarrah forest it has strip-mined over six decades will attract significant interest. Beerman said regulators were checking Alcoa's mining and rehabilitation daily and giving "very favourable feedback" to the company. As well as assessing Alcoa's proposed expansion, the EPA will also consider the environmental effects of much of its current mining after the independent authority accepted a [referral from environmental group](https://www.watoday.com.au/environment/conservation/environmental-watchdog-called-on-to-probe-alcoa-s-mining-of-wa-forests-20230227-p5co0g.html?ref=boilingcold.com.au) WA Forests Alliance. It is expected Alcoa will release environmental review documents for its expansion and its existing mining at the same time. Alcoa has 4100 direct employees in WA. ### Woodside cleanup off WA plagued by injuries and incidents URL: https://www.boilingcold.com.au/woodside-cleanup-off-wa-plagued-by-injuries-and-incidents-2/ Last updated: 2025-04-09T09:00:55.000Z A Woodside effort to clear the seabed of remnants of an old oil field near Ningaloo Reef was halted in early March after one of three serious safety breaches in two months. A worker was crushed by a generator that was not properly secured to the deck of the DLV 2000 construction vessel, according to the offshore safety regulator NOPSEMA. *Boiling Cold* understands the worker suffered broken ribs and potentially a punctured lung. He received immediate treatment, then was evacuated to hospital by helicopter and is still recovering. The regulator said the vessel operator, US firm McDermott, "had failed to take all reasonably practicable steps" to safely secure the heavy equipment to the deck. According to a [NOPSEMA improvement notice](https://www.nopsema.gov.au/sites/default/files/documents/OHS%20Improvement%20Notice%201989.pdf?ref=boilingcold.com.au) issued to McDermott, it failed to follow industry-standard fastening procedures and did not provide the regulator with the documents it asked for, including procedures and engineering calculations. The March 20 notice requires McDermott to improve its training for and oversight of securing cargo on the vessel within 30 days. [Labor breaks vow and risks WA’s water supply for AlcoaRoger Cook granting Alcoa greater access to mine near Perth’s dams risks could cost taxpayers billions of dollars and result in water restrictions![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-61.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Alcoa-Cook-Water-feature-pic-3.png)](https://www.boilingcold.com.au/wa-labor-puts-alcoa-before-water-supply/) A NOPSEMA spokeswoman said it sent inspectors to the vessel immediately after the incident and McDermott ceased all operations on the DLV 2000 until its procedures could be reviewed. Woodside is decommissioning the Stybarrow oil field 50km from Exmouth, which BHP operated until 2015\. Woodside became responsible for the cleanup after it bought BHP's petroleum division in 2022. The [work includes](https://www.woodside.com/docs/default-source/current-consultation-activities/consultation-information-sheet---stybarrow-decommissioning-environment-plans.pdf?sfvrsn=90bebf19%5F1&ref=boilingcold.com.au) plugging ten wells so they never leak, removing subsea equipment, and raising from the 810m-deep seabed a turret mooring that sank soon after BHP closed Stybarrow. The NOPSEMA spokeswoman said it had been notified about two other incidents on the DLV 2000: failed lifting equipment and a damaged subsea remotely operated vehicle (ROV). "It would not be appropriate for NOPSEMA to comment further on those investigations," she said. There have been ongoing problems with operating cranes on the DLV 2000, according to an industry source not authorised to speak to the media. *Boiling Cold* understands on March 21, an ROV and its launch and recovery system, together weighing more than ten tonnes, fell to the deck during recovery, causing serious structural damage to the expensive vehicle. *Boiling Cold* also understands the lifting equipment incident occurred on the night of February 17 when a polyester sling rated to withstand a load of 150 tonnes failed and a worker was injured. In the coming decades, Australia's offshore oil and gas producers are predicted to spend more than $50 billion plugging wells and clearing the ocean of their equipment. In some ways, decommissioning is potentially more dangerous than construction as the physical condition of the structures being moved can be very poor. Additionally, companies may be less willing to spend money on activities that do not create revenue. The NOPSEMA spokeswoman said it had increased its focus on reviewing the details of decommissioning plans. "NOPSEMA encourages titleholders to plan for decommissioning throughout the life cycle of a project, with the expectation that the level of detailed planning increases as projects get closer to the end of operations," she said. Woodside, McDermott and the union Offshore Alliance have been contacted for comment. ### Alcoa fined $400,000 for chemical burn to Kwinana school student URL: https://www.boilingcold.com.au/alcoa-fined-400-000-for-chemical-burn-to-kwinana-school-student/ Last updated: 2025-04-03T01:18:27.000Z Alcoa has been fined $400,000 over a 2022 incident in which five people were sprayed with hot caustic liquid after a rushed operation at the Kwinana refinery went badly wrong. One high school student was harmed but eventually recovered. On Tuesday at Rockingham Court House, Magistrate Mahon said it was extremely fortunate that the harm was much less than it could have been, but the lawyer for Alcoa disputed that point. Alcoa pleaded guilty to breaching the Work Health and Safety Act 2020 by failing to - as far as reasonably practicable - ensure the health and safety of workers, which placed them at risk of death, injury or harm to their health. The maximum penalty is $1.8 million. WorkSafe Commissioner Sally North said the workers and students were extremely lucky not to have sustained more serious injuries. North said companies must have robust safety controls in place and monitor them to ensure continued effectiveness. ## The incident On September 16, 2022, Alcoa operators smelt burning and spotted a pump that moves caustic liquor from a tank "smoking and spitting embers." Magistrate Mahon said there was an increasing risk of detonation with potentially catastrophic consequences. Two workers rushed to switch to another pump, mainly because they were concerned it may explode, but - according to the prosecution lawyer - also to maintain production. Alcoa denied commercial issues influenced decisions. Switching between the two pumps was a routine event done on every night shift by a single operator who would first follow a procedure to shut down the operating pump and then follow another procedure to start the standby pump. This time, two operators were changing over the pumps when one noticed people enter the area and rushed off to warn them to keep their distance. The remaining operator continued working and switched on the standby pump without knowing that their colleague had not shut all the valves on the burning pump. Hot caustic liquor spurted out at pressure into an open drain that crossed a thoroughfare and sprayed five people, including two high school students. Those affected were rushed to nearby safety showers to strip and wash off the liquor and were then treated at the refinery's medical centre. The students had been receiving work experience at the refinery workshop and were on a guided tour of the refinery. [Labor breaks vow and risks WA’s water supply for AlcoaRoger Cook granting Alcoa greater access to mine near Perth’s dams risks could cost taxpayers billions of dollars and result in water restrictions![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-60.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Alcoa-Cook-Water-feature-pic-2.png)](https://www.boilingcold.com.au/wa-labor-puts-alcoa-before-water-supply/) ## A history of caustic spills In recent years, all three of Alcoa's refineries have been plagued by excessive leaks and spills of caustic liquor pumped around them in massive volumes and at high temperatures. The September 2022 incident contributed to ten injuries from chemicals that year at the Kwinana alumina refinery and 82 such injuries across Alcoa's three refineries over the past three years. Alcoa reported 574 chemical spills at its refineries in those three years, according to Worksafe data, 42 of which posed a serious risk. Speaking before today's sentencing, a spokesman for WorkSafe Mines Safety and Dangerous Goods said Alcoa's refineries are subject to an "enhanced program of regulatory oversight." Its inspectors perform regular planned and unplanned inspections and regularly meet with senior executives to discuss safety performance and regulatory compliance. "All chemical spills and burns are of concern to the department, and we continue to work with Alcoa towards improving safety performance," he said. "Alcoa has allocated resources to implement a Chemical Burns Elimination Project across its refineries, resulting in a significant reduction in caustic burn injuries, with work continuing towards further improvements." [Alcoa unpunished for illegally piping PFAS-contaminated water across WA damThe $13 billion company will just get a warning letter for secretly creating “an unacceptable risk to drinking water quality.”![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-59.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/pipeline-over-dam-1.jpg)](https://www.boilingcold.com.au/alcoa-unpunished-for-illegally-piping-pfas-contaminated-water-across-wa-dam/) ## The penalty The maximum penalty for a category two offence under the Work Health and Safety Act 2020 is $1.8 million. The prosecution argued that Alcoa's penalty should be in the mid-range or higher, while the company said it "was at the lower end of seriousness." Magistrate Mahon said the handling of caustic was at the heart of Alcoa's operation. He concluded the incident was "just shy of mid-range" and prescribed a penalty of $400,000, 22 per cent of the maximum. Among the mitigating factors he cited were Alcoa pleading guilty and that it was "a good corporate citizen." Alcoa shut down the Kwinana refinery in 2024. ### Ningaloo and Great Barrier Reefs bleach in unison for the first time URL: https://www.boilingcold.com.au/ningaloo-and-great-barrier-reefs-bleach-in-unison-for-the-first-time/ Last updated: 2025-03-25T05:55:22.000Z *Zoe Richards, Curtin University* This summer, an [intense marine heatwave](https://theconversation.com/a-marine-heatwave-in-northwest-australia-is-killing-huge-numbers-of-fish-its-heading-south-248139?ref=boilingcold.com.au) struck off northwestern Australia, driving sea surface temperatures up to 4°C above the summer average. The large mass of warm water has slowly moved south from the Kimberley region and through the Pilbara, leaving a wave of underwater destruction behind. Now Ningaloo Reef is bleaching in earnest. The Great Barrier Reef is [bleaching too](https://www.theguardian.com/environment/2025/mar/23/ningaloo-and-great-barrier-reef-hit-by-profoundly-distressing-simultaneous-coral-bleaching-events?ref=boilingcold.com.au) in the waters from Cape York down to Townsville. This appears to be the first time these two World Heritage-listed reefs have bleached in unison. Bleaching may also hit the World Heritage reef at Shark Bay in Western Australia. How bad is it? I have just returned from Ningaloo Reef, where I saw widespread bleaching and the first signs of coral mortality. Up to 90% of the coral found in shallow areas of the northern lagoon had bleached. Bleaching doesn’t automatically mean death, but it severely weakens the coral and jeopardises survival. At Ningaloo and further south, the heatwave is still unfolding. In coming months, we can expect to see some coral mortality, while other corals will survive the bleaching in poor health only to succumb to disease or other threats such as *Drupella* (coral-eating snails). Other corals may survive but struggle to reproduce, but some particularly hardy corals with the right combination of genes for surviving this event are expected to live on. Why is this happening? No surprises here: our greenhouse gas emissions trap more heat in the atmosphere. [Over 90%](https://www.climate.gov/news-features/understanding-climate/climate-change-ocean-heat-content?ref=boilingcold.com.au) of the heat pours into the oceans, pushing surface and deep water temperatures higher for longer periods of time. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/03/Brooke-Pyke-1.jpg) **Image: Australian Marine Conservation Society/Brooke Pyke* ## How bad has the heat been? Coral can tolerate brief periods of higher temperatures. But in response to prolonged heat stress, coral polyps expel their symbiotic zooxanthellae algae. They appear to do this to avoid further tissue damage from toxic reactive oxygen molecules which build up as the coral begins to stress. But these microalgae supply sugary food to the coral polyps in exchange for a home. Without these nutrients, the coral can starve. Heat stress is tracked [using a measure](https://coralreefwatch.noaa.gov/product/5km/index%5F5km%5Fdhw.php?ref=boilingcold.com.au) called “degree heating weeks” (DHW) – essentially, how much above-average heat has built up in an area over the previous three months. Bleaching can begin at four DWH, while eight DHW can kill some corals. At Ningaloo, the heat has been off the charts – levels of up to 16 DHW have been recorded, the highest on record for this location. On the Great Barrier Reef, [bleaching is underway](https://www.theguardian.com/environment/2025/mar/23/ningaloo-and-great-barrier-reef-hit-by-profoundly-distressing-simultaneous-coral-bleaching-events?ref=boilingcold.com.au) in the northernmost section. This is the sixth bleaching event on the Great Barrier Reef this decade. Early data suggests there is severe heat in places, ranging from six to 13 DHW in intensity and alerts remain for more heat and bleaching to come. Bleaching is usually worst for corals growing in shallow water, such as the calm lagoons created by fringing or barrier reefs. Lagoons often have clear waters with high light penetration and limited flushing of water. ## Ningaloo in hot water Over ten days, we recorded the health and type of every coral we saw at 21 sites along Ningaloo Reef, from Coral Bay to the northern tip of North West Cape and into Exmouth Gulf. The worst affected area that we observed was a 30 km stretch at the [northern end](https://exploreparks.dbca.wa.gov.au/sites/default/files/2021-10/ningaloo-coast-world-heritage-area-visitor-map-and-zones.pdf?ref=boilingcold.com.au) of the North West Cape, the peninsula along which Ningaloo Reef runs. Here, we saw mass bleaching – up to 90% of corals partly or fully bleaching and some corals were already dying. Fast-growing corals from the Acroporid and Pocilloporid families were hard hit, as often seen in other bleaching events. But we also saw slower-growing and normally hardy corals bleaching, such *Lobophyllia*, *Favites* and *Goniastrea*. Even the massive *Porites* corals in the lagoons were suffering. These giant boulder-like corals are the old growth and sentinels of the reef. Many of these ordinarily resilient corals are hundreds of years old and have survived past smaller bleaching events. But this time, they too are severely suffering. [2024’s extreme ocean heat breaks records again, leaving 2 mysteries to solveThe oceans have been much warmer than average for the past two years, and the planet just set another global heat record. What’s going on?![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/web-app-logo-192x192-2d05bdd6de6328146de80245d4685946.png)The ConversationAnnalisa Bracco![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/file-20250109-19-4cps5m.jpg)](https://theconversation.com/2024s-extreme-ocean-heat-breaks-records-again-leaving-2-mysteries-to-solve-246843?ref=boilingcold.com.au) Not even ocean-facing corals exposed to more water flow were safe. We found 30 to 50% of the corals on the reef slope were bleached to some degree. Coral diseases such as white band disease were already affecting many flat plate corals. These diseases often follow marine heatwaves, as they take advantage of coral’s weakened immune systems and the disruption of the symbiotic relationship between coral polyps and their algae. The timing is especially bad for Ningaloo’s corals, which usually spawn around five days after the March full moon, which fell on March 19 this year. By contrast, corals on the Great Barrier Reef tend to spawn between October and December. For the reef to recover quickly, it needs yearly influxes of new coral recruits. But if corals are struggling to survive, there is a risk they will not be fit enough to reproduce. Corals take three to six years to become reproductively viable and if bleaching impedes reproduction, it could greatly reduce the number of larvae available to replenish the reef. In addition to that, if immature corals bleach and die, there’s a risk several generations of corals could be lost before reaching maturity. Fortunately we did observe healthy and reproductive corals along the outer rim of the lagoon at Coral Bay, and locals have recently reported seeing spawning near Coral Bay. This suggests some coral were indeed healthy enough to spawn. ## What will happen next? As the southern hemisphere heads towards winter, the oceans will begin to cool off. That doesn’t mean the threat is over – oceans are [only getting hotter](https://theconversation.com/2024s-extreme-ocean-heat-breaks-records-again-leaving-2-mysteries-to-solve-246843?ref=boilingcold.com.au). If we continue on our current path, simultaneous east and west coast bleaching events could become the new normal – and that would be devastating for our reefs, marine biodiversity, the blue economy and the wellbeing of Australians. --- [Zoe Richards](https://theconversation.com/profiles/zoe-richards-5341?ref=boilingcold.com.au), Senior Research Fellow in Marine Biology, [*Curtin University*](https://theconversation.com/institutions/curtin-university-873?ref=boilingcold.com.au) This article is republished from [The Conversation](https://theconversation.com/?ref=boilingcold.com.au) under a Creative Commons license. Read the [original article](https://theconversation.com/synchronised-bleaching-ningaloo-and-the-great-barrier-reef-are-bleaching-in-unison-for-the-first-time-252906?ref=boilingcold.com.au). ### Exxon drops plan to reuse Bass Strait oil platform for carbon storage URL: https://www.boilingcold.com.au/exxon-drops-plan-to-reuse-bass-strait-oil-platform-for-carbon-storage/ Last updated: 2025-04-04T09:46:19.000Z ExxonMobil has withdrawn an application to store carbon dioxide under the seabed of the Bass Strait but says it will continue to pursue the idea. The US major started a feasibility study two years ago into using an old platform to store up to two million tonnes of CO2 a year in the depleted Bream oil and gas field and planned to [start operating as early as 2025](https://www.afr.com/markets/commodities/exxon-mobil-begins-study-of-gippsland-carbon-capture-facility-20220415-p5adni?ref=boilingcold.com.au). Last week, the US giant withdrew its application for Commonwealth environmental approval. An ExxonMobil spokesman said its South East Australia Carbon Capture and Storage (CCS) Project initially considered utilising the Bream A platform. "Whilst we believe that the Bream field could provide a suitable CO2 storage location, we have determined that the Bream A platform is not required to support any CCS project and will proceed with decommissioning the facility in accordance with our regulatory obligations," he said. In 2021 offshore regulator NOPSEMA [ordered ExxonMobil](https://www.nopsema.gov.au/sites/default/files/2021-06/A783674.pdf?ref=boilingcold.com.au) to plug 180 wells and commence dismantling ten platforms, including Bream A, by September 2027\. The regulator said the deterioration of facilities from delayed decommissioning threatened ExxonMobil's ability to do the job without increasing safety and environmental risks. [ExxonMobil Bass Strait maintenance & decommissioning blastedBass Strait partners ExxonMobil and BHP must plug 180 wells, dismantle ten platforms and tackle life-threatening corrosion after intervention by offshore safety regulator NOPSEMA.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-58.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Offshore-Platform-West-Tuna.jpg)](https://www.boilingcold.com.au/regulator-blasts-exxonmobils-bass-strait-maintenance-orders-massive-decommissioning-effort/) , If the Bream A platform had been helpful for carbon storage, ExxonMobil would likely have been able to delay the expense of removing it. In December, ExxonMobil contracted European firm Allseas to [remove up to 12 platforms](https://allseas.com/company/?ref=boilingcold.com.au) with its Pioneering Spirit vessel that can lift up to 48,000 tonnes. A three to four-month campaign will start in late 2027. The ExxonMobil spokesman said the Gippsland Basin was a world-class oil and gas basin and had all the characteristics to be the same for CCS. "We continue to explore opportunities to utilise the Bream reservoir for CCS, as well as screening other larger gas fields and associated infrastructure still involved in producing gas," he said, ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/03/Bass-Strait-map.jpg) ****Bass Strait facilities** *. Source: ExxonMobil Environmental Plan* Kevin Morrison, energy finance analyst with the Institute for Energy Economics and Financial Analysis, said Exxon's decision underlined the difficulty of developing CCS projects. "They have a history of failing to capture the volumes of CO2 they target as they are plagued by technical issues," he said. ExxonMobil owns a 25 per cent stake in Chevron's Gorgon project off WA, where a carbon storage system is operating at only one-third of its design capacity nine years after gas exports began. Morrison said Exxon's lack of progress with its CCS project contradicted the narrative of some promoters who gave the impression that replacing gas in the reservoir with CO2 was a straightforward process. "Hopefully, the move by ExxonMobil will increase scrutiny on CCS projects that plan to repurpose existing production infrastructure and defer their decommissioning responsibilities," he said. Other depleted offshore oil and gas fields around Australia where CCS is being investigated are: - Cliff Head platform off Dongara, WA - Triangle Energy and Pilot Energy - Reindeer platform off the Pilbara coast - Santos - Angel platform off the Pilbara coast - Woodside, BP, Mitsubishi and Mitsui - Bayu Undan platform in Timor Leste waters north of Darwin - Santos The ExxonMobil-operated oil and gas facilities in the Bass Strait are 50 per cent owned by Woodside. ### WA's South West grid to be boosted by four new batteries URL: https://www.boilingcold.com.au/was-south-west-grid-to-be-boosted-by-four-new-batteries/ Last updated: 2025-03-25T05:55:38.000Z The South West power grid will have an additional 654 megawatts of battery storage before late 2027 after four projects were successful in WA's first tender under the Federal Government's Capacity Investment Scheme The batteries in Boddington, Merredin, Muchea and Waroona are scheduled to be operational by October 2027 - just when state-owned utility Synergy will shut down its Collie coal-fired power station. The batteries will be able to store excess solar generation during the day and in the evening discharge enough power for 600,000 households for up to four hours. The tender launched in September 2024 assessed the ability of projects to reduce the wholesale price of electricity and boost reliability. A second tender for generation and storage is planned for mid-2025. [Will WA’s coal exit be a green dream or lights out?The Liberals predict by 2027 WA’s south-west power system will be in crisis while Labor backs batteries, wind and gas.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-54.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/election-energy-debate-graphic.jpg-1.webp)](https://www.boilingcold.com.au/will-was-coal-exit-be-a-green-dream-or-lights-out/) Climate Change and Energy Minister Chris Bowen said investors and developers were competing to provide the cheapest form of power - renewables - to WA. “Peter Dutton wants to stop the renewable rollout and squander Australia’s natural advantages, the sun and wind resources that are the envy of the world,' he said. “Instead, Peter Dutton will cut critical services to fund a $600 billion nuclear scheme, and extend aging, unreliable coal fired power stations for decades with Australians paying the price with higher bills and reduced reliability.” PGS Energy will build a 324-megawatt/four-hour battery near Boddington and eventually [wants to expand the facility](https://pgsjv.com.au/projects/?ref=boilingcold.com.au#boddington-giga-energy) to a 1200MW battery coupled with 400MW of renewable generation. ASX-listed Frontier Energy plans to [build a 120MW solar farm](https://frontierhe.com/waroona-project/?ref=boilingcold.com.au) with its 80MW/four-hour battery near Waroona. Atmos Renewables plans to have its 100MW battery near Merredin [operational by late 2026](https://atmosrenewables.com.au/project/merredin-bess/?ref=boilingcold.com.au). Neoen's 150MW/four-hour battery near Muchea, just north of Perth, will add to its [huge Australian portfolio](https://australia.neoen.com/en/?ref=boilingcold.com.au), including Australia's first grid-scale battery in Hornsdale SA, the 300MW Victorian Big Battery and its battery at Collie south of Perth. --- ### WA's battery charge - Synergy Kwinana - 100 megawatts for two hours - operational - Synergy Kwinana 2 - 200 megawatts for four hours - undergoing operational testing - Synergy Collie - 500 megawatts for four hours - to be completed 2025 - Neoen Collie stage 1 - 219 megawatts for four hours - operating since October 2024 - Neoen Collie stage 2 - 341 megawatts for four hours - under construction, expected to be operational Q4 2025 - Alinta Wagerup - 100 megawatts for two hours - start-up planned for early 2025 - Alinta Wagerup 2 - 300 megawatts - approved - expected completion October 2027 - Naturgy Energy - Cunderdin - 55 megawatts for four hours combined with solar farm - operational - Atmos Renewables/Nomad Energy - Merredin Big Battery - 100 megawatts for four hours – **successful in Capacity Investment Scheme** - Frontier Energy - Waroona - 80 megawatts for four hours with solar farm - **successful in Capacity Investment Scheme** - PGS Energy - Boddington Giga Battery - 324 megawatts for four hours with solar farm - **successful in Capacity Investment Scheme** - Neoen - Muchea Battery - 150 megawatts for four hours - **successful in Capacity Investment Scheme** ### Kalbarri green hydrogen project gets $814m in Federal backing URL: https://www.boilingcold.com.au/kalbarri-green-hydrogen-project-gets-814m-in-federal-backing-2/ Last updated: 2025-03-24T06:39:07.000Z The Murchison Green Hydrogen project has secured $814 million from the Federal Government's Hydrogen Headstart program towards building a massive wind and solar-powered ammonia production plant on WA's Mid-West coast. Danish firm Copenhagen Infrastructure Partners plans to install about 1.2 gigawatts of solar panels, 1.7 gigawatts of wind turbines, and a 600 megawatt/two-hour battery about 15km north of Kalbarri. The renewable energy will power electrolysers that split hydrogen from water, which is then used to make liquid ammonia. The annual production of 1.3 million tonnes of ammonia would mainly be exported to Asia. CIP aims to make a final investment decision on the project in late 2026, allowing phase one to enter production three years later. The funding is a reduction-based credit that can offset income tax for the first ten years of operation to bridge the gap between current production costs and what the market is willing to pay. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/03/Screenshot-2025-03-20-at-11.12.20-am-1.png) ****The extent of the project north of Kalbarri.** **MGH* Murchison is the first project to receive any of the $2 billion of Hydrogen Headstart funding from a [short list of six announced in 2023](https://arena.gov.au/news/six-shortlisted-for-2-billion-hydrogen-headstart-funding/?ref=boilingcold.com.au). BP put its [Kwinana green hydrogen project](https://www.boilingcold.com.au/bp-puts-1b-kwinana-hydrogen-and-clean-fuel-projects-on-ice/), which was also shortlisted, on ice in February. Minister for Climate Change and Energy Chris Bowen said Australia has one of the largest renewable hydrogen project pipelines in the world. “This support is about unlocking that private capital to help realise our potential, not only to become a renewable energy superpower but create a 'Future Made in Australia' with real jobs right now," he said. CIP estimates the project will create 3600 jobs during construction and need 600 workers for operations. Some people in Kalbarri are concerned that a 140,000-hectare lease from the WA government for the project will mean they are [locked out of the vast area](https://www.abc.net.au/news/2025-03-05/fears-land-deal-will-lock-people-out-of-popular-holiday-hotspot/104990248?ref=boilingcold.com.au) to the north of the town. The project needs environmental approval from the WA government, abd CIP plans to submit an Environmental Review Document to WA's Environmental Protection Authority by mid-2025. --- March 20, 2024.12:30PM: Updated project description to the latest data [published by ARENA](https://arena.gov.au/news/murchison-green-hydrogen-project-given-a-headstart/?ref=boilingcold.com.au). ### Woodside’s bid to extend a huge gas project is testing both parties' environmental credentials URL: https://www.boilingcold.com.au/woodsides-bid-to-extend-a-huge-gas-project-is-testing-both-parties-environmental-credentials/ Last updated: 2025-03-20T04:18:48.000Z Opposition Leader Peter Dutton has indicated a Coalition government would [quickly approve a giant gas project](https://peterdutton.com.au/dutton-duniam-mcdonald-media-release-coalition-to-fast-track-north-west-shelf-approval-introduce-national-interest-test-to-approvals-and-limit-activist-ability-to-stall-projects/?ref=boilingcold.com.au) off Western Australia which will release billions of tonnes of greenhouse gases until around 2070\. Woodside Energy is leading the joint venture, which would dramatically expand [offshore drilling](https://www.abc.net.au/news/2024-12-12/wa-environmental-minister-approves-north-west-shelf-extension/104654110?ref=boilingcold.com.au) and extend gas production at the North West Shelf project – already [Australia’s largest](https://www.woodside.com/docs/default-source/current-consultation-activities/australian-activties/nws-project-extension-fact-sheet.pdf?ref=boilingcold.com.au) gas-producing venture. In a statement [on Wednesday](https://www.theguardian.com/australia-news/2025/mar/19/peter-dutton-fast-track-woodside-gas-expansion-approval-could-be-illegal-plibersek-says-ntwnfb?ref=boilingcold.com.au), Dutton said a Coalition government would “prioritise Western Australian jobs and the delivery of energy security” by directing environment officials to fast-track assessment of the extension, later saying “we will make sure that this approval is arrived at in 30 days”. Federal Environment Minister Tanya Plibersek is currently considering the proposal. [Mining](https://thenightly.com.au/business/energy/wa-chamber-of-minerals-and-energy-piles-on-pressure-for-tick-on-woodsides-north-west-shelf-extension--c-18024114?ref=boilingcold.com.au) and [business](https://www.bca.com.au/time%5Fto%5Fquit%5Fdawdling%5Fon%5Fimpending%5Fnorth%5Fwest%5Fshelf%5Fmove?ref=boilingcold.com.au) interests have been pushing her to make a decision this month. Dutton’s support for the project is deeply concerning. Evidence suggests extending the project would undermine global efforts to curb carbon emissions and stabilise Earth’s climate. The extension also threatens significant Indigenous sites and pristine coral reef ecosystems. Federal approval of the project puts both natural and heritage assets at risk. ## What’s this debate all about? The North West Shelf project [supplies](https://www.woodside.com/docs/default-source/current-consultation-activities/australian-activties/nws-project-extension-fact-sheet.pdf?ref=boilingcold.com.au) domestic and overseas markets with gas extracted off WA’s north coast. The [project currently comprises](https://www.epa.wa.gov.au/sites/default/files/EPA%5FReport/EPA%20Report%201727%20-%20North%20West%20Shelf%20Extension%20Project%20-%20assessment%20report.pdf?ref=boilingcold.com.au) offshore extraction facilities and an onshore gas-processing plant at Karratha. Its approval is due to expire in 2030\. Woodside’s proposed extension would allow the project to operate until 2070\. It would also permit expanded drilling in new offshore gas fields and construction of a new 900km underwater gas pipeline to Karratha. In 2022, the WA Environment Protection Authority recommended a 50-year extension for the plant, if Woodside reduced its projected emissions by changing its operations or buying carbon offsets. This paved the way for the [state government approval](https://www.abc.net.au/news/2024-12-12/wa-environmental-minister-approves-north-west-shelf-extension/104654110?ref=boilingcold.com.au) in December last year. [Greenpeace wants Woodside gas approval delayed for BrowseAny further delay would enrage the oil and gas industry, but process shortcuts could lead to any approval being challenged in court.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-53.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/GP1T6J5O_Medium-res--1200px-.jpg)](https://www.boilingcold.com.au/greenpeace-wants-nws-gas-approval-paused-to-consider-woodsides-browse-project/) ## Gas: a major climate culprit Under the 2015 Paris Agreement, the world is aiming to keep planetary heating to no more than 1.5°C above the pre-industrial average. Greenhouse gas emissions must fall to net zero to achieve the goal. But instead, [global emissions are rising](https://globalcarbonbudget.org/fossil-fuel-co2-emissions-increase-again-in-2024/?ref=boilingcold.com.au#:%7E:text=The%202024%20Global%20Carbon%20Budget,in%20fossil%20CO2%20emissions.). Greenhouse gases – such as methane, nitrogen oxide and carbon dioxide – are [emitted throughout](https://www.ipcc-nggip.iges.or.jp/public/gp/bgp/2%5F6%5FFugitive%5FEmissions%5Ffrom%5FOil%5Fand%5FNatural%5FGas.pdf?ref=boilingcold.com.au) the gas/LNG production process. This includes when gas is extracted, piped, processed, liquefied and shipped. Emissions are also created when the gas is burned for energy or used elsewhere in manufacturing. Australian emissions [increased 0.8% in 2022–23](https://www.csiro.au/en/research/environmental-impacts/climate-change/climate-change-qa/sources-of-co2?ref=boilingcold.com.au) – and coal and gas burning were the [top contributors](https://www.csiro.au/en/research/environmental-impacts/climate-change/climate-change-qa/sources-of-co2?ref=boilingcold.com.au). However, Australia’s greatest contribution to global emissions occurs when our [coal and gas is burned overseas](https://climateanalytics.org/publications/australias-global-fossil-fuel-carbon-footprint?ref=boilingcold.com.au#:%7E:text=Australia%20has%20a%20global%20carbon,from%20its%20fossil%20fuel%20exports.). The North West Shelf project is [already a major emitter](https://ca1-clm.edcdn.com/assets/climateanalytics-burruphubwacarbonbudget-report-feb2020.pdf?v=1679478194&ref=boilingcold.com.au) of greenhouse gases. The proposed extension would significantly increase the project’s climate damage. Woodside estimates the expansion will create 4.3 billion tonnes of greenhouse gases over its lifetime. [Greenpeace analysis puts the figure](https://www.greenpeace.org.au/news/risky-business-greenpeace-report-reveals-woodsides-history-of-environmental-neglect?ref=boilingcold.com.au) much higher, at 6.1 billion tonnes. Increasing greenhouse gas emissions at this magnitude, when the window to climate stability is fast closing, threatens [major damage to Earth’s natural systems](https://www.noaa.gov/education/resource-collections/climate/climate-change-impacts?ref=boilingcold.com.au#:%7E:text=Climate%20change%20affects%20the%20environment,%2C%20ecosystems%2C%20and%20human%20health.), and [human health and wellbeing](https://www.nature.com/articles/s41467-021-24487-w?ref=boilingcold.com.au). Woodside says it will use [carbon-capture and storage](https://www.woodside.com/docs/default-source/our-business---documents-and-files/burrup-hub---documents-and-files/browse---documents-and-files/browse-ccs-summary-information-sheet.pdf?sfvrsn=f59870dd%5F14&ref=boilingcold.com.au) to reduce emissions from the project. This technology is widely regarded as unproven at scale. Indeed, it has a history of [delays and underperformance](https://theconversation.com/1-in-5-fossil-fuel-projects-overshoot-their-original-estimations-for-emissions-why-are-there-such-significant-errors-177714?ref=boilingcold.com.au) in similar gas operations in WA. Woodside [proposes to reduce](https://www.epa.wa.gov.au/media-statements/north-west-shelf-extension-recommended-environmental-approval?ref=boilingcold.com.au) the project’s climate impacts by [buying carbon offsets](https://www.epa.wa.gov.au/sites/default/files/EPA%5FReport/EPA%20Report%201727%20-%20North%20West%20Shelf%20Extension%20Project%20-%20assessment%20report.pdf?ref=boilingcold.com.au). This involves compensating for a company’s own emissions by paying for cuts to greenhouse gas emissions elsewhere, through activities such as planting trees or generating renewable energy. However, there [are serious doubts](https://www.unsw.edu.au/newsroom/news/2024/10/failures-beyond-belief--carbon-offset-projects-failing-to-delive?ref=boilingcold.com.au) over whether carbon offset projects [deliver](https://australiainstitute.org.au/post/here-are-23-times-carbon-offsets-were-found-to-be-dodgy-2/?ref=boilingcold.com.au)their [promised benefits](https://www.theguardian.com/environment/2024/mar/27/australias-carbon-credits-system-a-failure-on-global-scale-study-finds?ref=boilingcold.com.au). [Woodside doubling its WA gas price in 5 years evidence of a tight marketLocal industy in Australia’s largest gas-exporting state is concerned gas producers are prioritising exports at their expense.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-52.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Pluto-LNG-Plant--Karratha-web-2.jpg)](https://www.boilingcold.com.au/woodside-has-doubled-its-wa-gas-price-in-5-years/) ## Threats to marine life and Indigenous heritage Damage from the proposal could extend beyond climate harms. The approval would enable increased drilling in the Browse Basin, including around the pristine Scott Reef. The reef is home to [thousands of plant and animal species](https://www.aims.gov.au/sites/default/files/Discovering%20Scott%20Reef%20-%20Biological%20Communities.pdf?ref=boilingcold.com.au). Scientists say [the project threatens](https://www.theguardian.com/environment/article/2024/aug/05/woodside-gas-drilling-plan-browse-basin-epa-scott-reef?ref=boilingcold.com.au) migrating whales and endangered turtles, among other marine life. Also, the onshore infrastructure is located near the [50,000-year-old Murujuga rock art precinct](https://whc.unesco.org/en/tentativelists/6445/?ref=boilingcold.com.au) on the traditional lands of five [Aboriginal custodial groups](https://murujuga.org.au/about/who-we-are/?ref=boilingcold.com.au). The site contains more than one million petroglyphs [said to depict](https://www.ifrao.com/wp-content/uploads/2021/10/39-1-Murujuga.pdf?ref=boilingcold.com.au) more than 50,000 years of Australian Indigenous knowledge and spiritual beliefs. Traditional Owners suffered severe cultural loss in the 1980s when about 5,000 rock art pieces were [damaged or removed](https://www.ifrao.com/wp-content/uploads/2021/10/39-1-Murujuga.pdf?ref=boilingcold.com.au) during [construction of Woodside’s gas plant](https://www.afr.com/policy/energy-and-climate/pressure-on-woodside-over-threat-to-ancient-art-20060908-jf5n4?ref=boilingcold.com.au). The Traditional Owners and scientists [fear increased acid gas pollution](https://www.pilbaranews.com.au/news/pilbara-news/expert-warns-pollution-will-destroy-worlds-biggest-collection-of-rock-art-at-murujuga-national-park-c-17629538?ref=boilingcold.com.au)from the proposed expansion will [further damage](https://www.ifrao.com/wp-content/uploads/2021/10/39-1-Murujuga.pdf?ref=boilingcold.com.au) the rock art. ## Acting in Australia’s interests The Albanese government has failed to deliver its promised [reform of Australia’s national environment laws](https://www.dcceew.gov.au/environment/epbc/epbc-act-reform?ref=boilingcold.com.au). This means nature [lacks the strong laws needed](https://www.dcceew.gov.au/sites/default/files/documents/epbc-act-review-final-report-october-2020.pdf?ref=boilingcold.com.au) to protect it from harmful development. At [federal](https://www.industry.gov.au/publications/future-gas-strategy?ref=boilingcold.com.au), [state](https://www.wa.gov.au/organisation/energy-policy-wa/gas-industry?ref=boilingcold.com.au) and [territory](https://territorygas.nt.gov.au/gas-plan?ref=boilingcold.com.au) levels, both major parties support expansion of the [gas industry](https://onlinelibrary.wiley.com/doi/10.1111/ajph.12986?ref=boilingcold.com.au). This takes the form of [policy inertia](https://www.afr.com/politics/federal/plibersek-launches-epa-but-delays-overhaul-of-environment-act-20240416-p5fk4y?ref=boilingcold.com.au), [tax breaks](https://australiainstitute.org.au/post/australian-governments-suck-up-to-japanese-fossil-fuel-companies-again/?ref=boilingcold.com.au) and [subsidies](https://australiainstitute.org.au/wp-content/uploads/2024/05/P1543-Fossil-fuel-subsidies-2024-FINAL-WEB.pdf?ref=boilingcold.com.au) for the fossil fuel industry. In the current term of government, Plibersek has green-lit numerous polluting projects. This includes [approving](https://theconversation.com/expanding-coal-mines-and-reaching-net-zero-tanya-plibersek-seems-to-believe-both-are-possible-241007?ref=boilingcold.com.au) several [coal mine expansions](https://envirojustice.org.au/press-release/albanese-government-approves-three-more-massive-coal-mine-expansions/?ref=boilingcold.com.au) last year. What’s more, Australian governments support offshore gas developments in the [Tiwi Islands](https://australiainstitute.org.au/post/statement-on-approval-of-santos-barossa-pipeline-and-sea-dumping/?ref=boilingcold.com.au), new onshore shale gas extraction in the [Northern Territory](https://theconversation.com/health-evidence-against-gas-and-oil-is-piling-up-as-governments-turn-a-blind-eye-212459?ref=boilingcold.com.au) and the [Kimberley](https://nit.com.au/31-10-2024/14607/kimberley-land-council-raises-alarm-over-wa-governments-fracking-commitments?ref=boilingcold.com.au) and a new [coal seam gas pipeline and wells](https://www.theguardian.com/australia-news/article/2024/jun/26/senex-energy-tanya-plibersek-coal-seam-gas-project-gina-rinehart?ref=boilingcold.com.au) in Queensland. Approval of the North West Shelf expansion is not in the best interests of Australia and future generations. No federal government should prioritise short-term economic gain over Earth’s climate and human health. --- [Melissa Haswell](https://theconversation.com/profiles/melissa-haswell-95299?ref=boilingcold.com.au), Professor of Practice (Environmental Wellbeing), Indigenous Strategy and Services, Honorary Professor (Geosciences) at University of Sydney & Professor of Health, Safety and Environment, Queensland University of Technology, [*University of Sydney*](https://theconversation.com/institutions/university-of-sydney-841?ref=boilingcold.com.au) and [David Shearman](https://theconversation.com/profiles/david-shearman-1924?ref=boilingcold.com.au), Emeritus Professor of Medicine, [*University of Adelaide*](https://theconversation.com/institutions/university-of-adelaide-1119?ref=boilingcold.com.au) This article is republished from [The Conversation](https://theconversation.com/?ref=boilingcold.com.au) under a Creative Commons license. Read the [original article](https://theconversation.com/woodsides-bid-to-expand-a-huge-gas-project-is-testing-both-labor-and-the-coalitions-environmental-credentials-247340?ref=boilingcold.com.au). ### Greenpeace wants NWS gas approval paused to consider Woodside's Browse project URL: https://www.boilingcold.com.au/greenpeace-wants-nws-gas-approval-paused-to-consider-woodsides-browse-project/ Last updated: 2025-08-12T06:37:40.000Z Greenpeace has made a last-minute pitch to Federal Environment Minister Tanya Plibersek to consider the effect of Woodside's Browse gas project when deciding whether to approve the North West Shelf gas plant operating until 2070. The environmental group is arguing that Woodside's development of the Browse gas fields near the pristine Scott Reef would be a consequence of letting its NWS plant continue to operate, so Plibersek must consider that environment as well. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/03/Screenshot-2025-01-05-at-5.38.07-pm.png) ****Gas from Browse will be pumped 1000km to the North West Shelf gas export plant.** **Woodside* Currently, Plibersek is only considering "national heritage values" around the NWS plant - particularly the more than one million examples of [ancient rock art](https://www.watoday.com.au/environment/conservation/ancient-west-australian-rock-art-up-for-world-heritage-nomination-20230201-p5ch5k.html?ref=boilingcold.com.au) on the peninsula called Murujuga by traditional custodians. The oil and gas industry, Federal Coalition opposition and conservative media outlets have been pressing her to make a decision ever since her WA counterpart granted approval in December 2024 after a six-year assessment. The tempo rose in February after Plibersek pushed the decision out to March 31 to allow her department to consider the latest science about the effect of industrial emissions on the World Heritage-nominated rock art. On Wednesday Greenpeace wrote to Plibersek requesting she reconsider a 2019 decision that narrowly defined the scope of the Federal Government environmental assessment due to "substantial new information" about the impacts of the decision. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/03/GP1T6IB8_Medium-res--1200px-.jpg) ****Green turtles mating at Scott Reef.** **Wendy Mitchell / Greenpeace* Greenpeace has presented two legal arguments to Plibersek. The first is that Browse is a direct consequence of the life of the NWS plant being extended because they are both managed by Woodside, which describes them as a single project. Alternatively, Browse is an indirect consequence of the NWS plant staying open, as there is no other way the gas can be economically developed. In May 2024, Woodside chief executive Meg O'Neill confirmed the strong link between the two projects after news reports that Browse gas may instead be sent north to the Ichthys project run by Japan's INPEX. "Our focus with Browse is sending the gas to the North West Shelf," she said, [according to *Energy News Bulletin*](https://www.energynewsbulletin.net/operations/news-articles/4213283/woodside-energy-quashes-icthys-rumours-leaves-job-cuts-open?ref=boilingcold.com.au). "We've worked on environmental approvals for that concept for over five years, "We view that as the most efficient use of capital." [Woodside and Chevron WA gas mega-deal paves the way for Browse LNGWoodside will buy Chevron’s one-sixth stake in the North West Shelf project and relinquish its stake in the Wheatstone LNG project to the US major.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-50.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Karratha-Gas-Plant--North-West-Shelf-Project-web--1--1.jpeg)](https://www.boilingcold.com.au/woodside-and-chevron-wa-gas-mega-deal-paves-the-way-for-browse-lng/) In 2023, Woodside told a WA parliamentary inquiry that if Browse gas could not be processed at the North West Shelf plant, the project was "commercially challenged." If either of Greenpeace's arguments are valid, then under the Environmental Protection and Biodiversity Conservation Act, Plibersek will have to consider a range of issues that last year saw WA's independent Environmental Protection Authority [close to recommending Browse not go ahead](https://www.watoday.com.au/national/western-australia/unacceptable-red-flag-for-woodside-s-browse-gas-project-poses-problem-for-federal-government-20240725-p5jwjm.html?ref=boilingcold.com.au). The EPA wrote to Woodside a year ago saying its preliminary view was that Browse was unacceptable. It cited concerns over pygmy blue whales, the possible subsidence of a sand bank where endangered turtles nest, and the risk of an oil spill. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/03/GP1T6JNF_Medium-res--1200px-.jpg) ****Scott and Seringapatam reefs 270km off the WA coast**. Alex Westover / Greenpeace Any further delay to Plibersek's decision would almost certainly push it past the calling of the next federal election when under caretaker conventions, the issue would be parked for the new government. Greenpeace sent its letter on the same day Federal opposition leader Peter Dutton vowed that if elected, a Coalition government would make a decision on the North West Shelf within 30 days of taking office. Resources Minister Madeleine King called the move "[reckless and moronic](https://www.afr.com/politics/federal/dutton-s-moronic-nw-shelf-pledge-raises-legal-risk-says-government-20250319-p5lknm?ref=boilingcold.com.au)" as not following the required processes would open up any decision to legal challenges. Greenpeace Australia Pacific head of climate and energy Joe Rafalowicz said Australians expect their elected representatives to make decisions following due process, independent of pressure from vested interests, and based on the best evidence. "Woodside plans to fuel its North West Shelf gas facility out to 2070 by drilling up to 50 gas wells near Scott Reef as part of its proposed Browse project," he said. "Woodside’s reckless plans risk threatened species like Green Sea Turtles and Pygmy Blue Whales, while also jeopardising fragile coral reef habitats with noise, light pollution, and the potential for oil spills." [Woodside plan to bury CO2 a step to Browse gas go-aheadCarbon storage has gone from “high-risk” to the preferred option at the controversial gas export mega-project.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-51.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Mia-Yellagonga-signed-cropped-1.jpg)](https://www.boilingcold.com.au/woodside-plan-to-bury-co2-a-step-to-browse-gas-go-ahead/) The WA EPA is still considering its recommendation on the Browse project that will inform the decision of WA's new environmental minister, Matthew Swinbourn. In the Federal system, a decision on Woodside's original Browse proposal may be clos.. However, the addition of capturing the high level of carbon dioxide in the Brose gas and storing it under the seabed has requires new approval that was only lodged in October 2024. ### Australia's biggest gas buyer JERA warns of lean times ahead URL: https://www.boilingcold.com.au/australias-biggest-gas-buyer-jera-warns-of-lean-times-ahead/ Last updated: 2025-03-27T11:04:30.000Z Japanese gas giant JERA will demand cheaper Australian LNG when contracts expire next decade to match "fierce competition" from new projects in Qatar and the US. JERA senior vice president for liquefied natural gas (LNG) Hitoshi Nishizawa said Qatar was already expanding its production and the United States under President Trump was expected to follow. Nishizawa said that, in contrast to Australia, the US had abundant supplies of gas for export, lower costs, and faster approval times, meaning the fuel could be cheaper. Nishizawa was speaking at the WA government-sponsored Energy Exchange oil and gas conference in Perth on Tuesday. "Some key contracts for Australian LNG will end around the same time the cheaper supplies of gas are due to come to the market," he said "So Australian LNG faces fierce competition with other global supplies." In addition to lower prices, Nishizawa wants more flexible terms in JERA's Australian contracts, including the right to take delivery in Australia (free on board) and no restrictions on where the gas is sent. This destination flexibility would support the trend for Japanese gas buyers to become traders. In Japan's 2023 fiscal year, the country [resold 37 percent of the LNG it bought](https://ieefa.org/resources/japans-lng-resales-overseas-markets-hit-record-high-fy2023-domestic-demand-plummeted?ref=boilingcold.com.au), up from 16 percent five years ago. JERA sources fuel and generates power for the electricity utilities serving Tokyo and Chubu in Japan. It handles about 35 million tonnes of LNG a year, making it one of the market's biggest players. About 40 per cent of its LNG comes from Australia where it has equity in all the offshore LNG projects except the North West Shelf and Prelude (see list below). The first Australian LNG contract JERA will be able to renegotiate is with fellow Japanese company INPEX for supply from 2033\. The next major contract to feel a push for lower prices from JERA would be with Chevron's Wheatstone from 2037. [INPEX seeks Australia’s help to blow the Paris AgreementThe Japanese energy giant is cherry-picking data to justify its gas growth plans.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-48.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Ichthys-LNG-plant-3.jpg)](https://www.boilingcold.com.au/inpex-chief-executive-expects-australias-help-to-blow-the-paris-agreement/) Nishizawa's prediction of a more competitive LNG market came a week after Shell - one of the world's biggest producers - forecast demand for LNG would [jump 60 per cent by 2040](https://www.shell.com/what-we-do/oil-and-natural-gas/liquefied-natural-gas-lng/lng-outlook-2025.html?ref=boilingcold.com.au). However, the gas giant's optimism was [labelled a contradiction](https://www.reuters.com/markets/commodities/shells-lng-optimism-asia-has-volume-vs-price-conundrum-russell-2025-03-03/?ref=boilingcold.com.au), as the low prices needed to achieve a greater market share for LNG would not support the massive capital investment required to produce and liquify the gas. Nishizawa also repeated the standard gas industry positions, calling for less regulation, faster approvals, and government support for carbon capture and storage. He said it was "no secret that Japanese confidence in Australia was shaken by the retrospective application of the safeguard mechanism" to gas projects. JERA bought 12.5 per cent of Santos' [carbon-intensive](https://www.boilingcold.com.au/santos-dirty-big-2b-barossa-bet/) Barossa LNG project in December 2021\. The transaction occurred five months before the current Federal Labor government was elected with a platform that included cutting emissions in line with Australia's Paris Agreement commitments. For Japanese confidence to be shaken, its companies must have assumed Australia would never comply with an international agreement. --- **JERA's Australian LNG interests** (mtpa - million tonnes per annum) INPEX's 8.9 mtpa Ichthys LNG project owns less than one percent from 2018 buys 1.54 mtpa for 15 years Chevron's 8.9 mtpa Wheatstone LNG project owns 8 per cent (with Mitsubishi and Nippon Yusen) from 2017 buys 5.2 mtpa for up to 20 years Chevron's 15.6 mtpa Gorgon LNG project owns less than one per cent from 2016 buys 1.44 mtpa for 25 years Santos' 3.4 mtpa Barossa LNG project owns 12.5 per cent from late 2025, will receive 0.4 mtpa from its equity share Woodside's 8 mtpa Scarborough LNG project owns 15 per cent from 2026 will receive 1.2 mtpa from its equity share and 0.5 mtpa from a [10-year contract](https://www.woodside.com/docs/default-source/media-releases/woodside-and-jera-sign-agreement-for-long-term-lng-supply.pdf?sfvrsn=1e6b022f%5F1&ref=boilingcold.com.au) with Woodside [reference](https://www.jera.co.jp/en/corporate/business/projects?ref=boilingcold.com.au) --- ### Alcoa unpunished for illegally piping PFAS-contaminated water across WA dam URL: https://www.boilingcold.com.au/alcoa-unpunished-for-illegally-piping-pfas-contaminated-water-across-wa-dam/ Last updated: 2025-03-20T02:07:11.000Z WA's environment regulator will not prosecute US miner Alcoa for secretly and illegally pumping toxic "forever chemical" PFAS over a drinking water dam in the state's South West. Instead, in December 2024, the regulator sent Alcoa a warning letter for an action Water Corporation labelled "an unacceptable risk to drinking water quality." In 2022, Alcoa built a pipeline over Water Corporation's Samson Brook Dam near Waroona to move PFAS-contaminated water from its Willowdale bauxite mine. After the pipeline was used, Alcoa [applied for permission to build it](https://www.watoday.com.au/environment/sustainability/alcoa-toxic-chemical-plan-an-unacceptable-risk-to-wa-water-supply-20230211-p5cjqz.html?ref=boilingcold.com.au), without mentioning the work was already done. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/03/pipeline-along-road.jpg) ****The PFAS pipeline was laid along the edge of a road.** **Anon.* In early 2023, after [a media report](https://www.watoday.com.au/environment/sustainability/alcoa-piped-toxic-waste-over-drinking-water-dam-and-asked-for-approval-afterwards-20230223-p5cn5u.html?ref=boilingcold.com.au) revealed Alcoa's actions, then-Deputy Premier Roger Cook labelled the miner's actions "[a very disturbing development](https://thewest.com.au/business/mining/alcoas-latest-drinking-water-supply-controversy-very-disturbing-concerning-deputy-premier-roger-cook-says-c-9925920?ref=boilingcold.com.au)." “It reflects poorly on the performance of the company," Cook said. The Department of Water and Environmental Regulation quickly [ordered Alcoa to purge the pipeline](https://www.wa.gov.au/system/files/2023-03/s.73A%20EP%20Act%20Prevention%20Notice%20202302%20Alcoa%20Willowdale%20020323%5Fv3.pdf?ref=boilingcold.com.au) with clean water within two days. The regulator said there was "a real and not remote possibility" of PFAS-contaminated water leaking through pipeline joints or "through loss of pipeline integrity." This was made more likely as Alcoa laid the pipeline along the edge of a road where it could easily be damaged by a vehicle. A leak near the causeway crossing Samson Dam could allow the contaminated water to flow into the dam and then enter the integrated water supply system that serves the South West of WA. Alcoa's bauxite mines in WA are contaminated by PFAS contained in firefighting foam that it no longer uses. [Labor breaks vow and risks WA’s water supply for AlcoaRoger Cook granting Alcoa greater access to mine near Perth’s dams risks could cost taxpayers billions of dollars and result in water restrictions![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-46.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Alcoa-Cook-Water-feature-pic-1.png)](https://www.boilingcold.com.au/wa-labor-puts-alcoa-before-water-supply/) ## The logic of the leniency A DWER spokesman said its investigation concluded there was evidence Alcoa breached section 53(2)(a) of the Environmental Protection Act by constructing the pipeline without its approval. He said its decision to send a letter rather than launch a prosecution was made in accordance with its [Compliance and Enforcement Policy](https://www.wa.gov.au/service/environment/business-and-community-assistance/compliance-and-enforcement-policy?ref=boilingcold.com.au). Considerations in the policy include the seriousness and environmental impact of the alleged offence and the behaviour of the alleged offender, such as cooperation with DWER, compliance with notices and implementation of mitigation measures. DWER declined to supply a copy of the warning letter or give details on how consideration of its policy led to a decision not to prosecute. Alcoa declined to comment on the pipeline it built. It has now been removed after a directive from DWER. The miner now trucks the contaminated water to a treatment plant it has built. An Alcoa spokesman said the plant was commissioned on January 31 and will produce water with PFAS levels more than 300 times lower than required by the Australian Drinking Water Guidelines. These are the same guidelines that last week *Boiling Cold* revealed the WA government had [abandoned when assessing Alcoa's mining](https://www.boilingcold.com.au/wa-labor-puts-alcoa-before-water-supply/) in water catchments to avoid restricting its bauxite production. The treated water is disposed of in McKnoes Brook. Environment minister Reece Whitby was asked if he supported the decision of his department not to prosecute Alcoa. His spokesman said a decision to prosecute was entirely for the agencies involved, and it would be inappropriate for him to comment. ### WA Labor promised to protect the water supply but instead unleashed Alcoa's dangerous mining URL: https://www.boilingcold.com.au/wa-labor-puts-alcoa-before-water-supply/ Last updated: 2026-01-27T02:21:24.000Z *EXCLUSIVE INVESTIGATION* Why it matters: \- Dams are vital to Perth's water supply \- Contamination from Alcoa’s mining could shut them down \- Widespread water restrictions could result \- The government promised to prioritise the water supply \- Instead, it ignored expert advice, lowered the level of protection and allowed mining in areas where it had been forbidden The WA government has endangered the water supply to Perth and the South West while pretending to do otherwise. Roger Cooks’ government has allowed US miner Alcoa into high-risk areas, lowered protection standards and ordered its environmental regulator to put mining jobs before water quality. The public was unaware bauxite mining threatened its water supply until a [confidential government briefing](https://www.watoday.com.au/environment/sustainability/alcoa-mining-threatens-perth-s-drinking-water-20230207-p5cijm.html?ref=boilingcold.com.au) reported two years ago revealed that if dams were contaminated from Alcoa’s mining, it could take up to five years and $2.6 billion to fix. In response, then WA Premier Mark McGowan was adamant, “We’re not going to jeopardise the state’s water supply.” In recent years, Alcoa’s strip mining of the jarrah forest has moved closer to Serpentine Dam, Perth’s largest. Sediment flowing into the dam from cleared areas after heavy rainfall could render its water treatment plant useless, shutting down the vital facility. Toxic PFAS and oil spilt by Alcoa are added problems. McGowan [laid down the law](https://www.watoday.com.au/national/western-australia/mcgowan-to-alcoa-no-mining-that-threatens-perth-s-water-supply-20230404-p5cy3r.html?ref=boilingcold.com.au) to the US miner: "They need to satisfy our regulatory agencies, which are very, very cautious that the measures they put in place will prevent any runoff of that nature into our water supply.” However, WA Labor’s deeds have been the opposite of its words. ## Take the risk The board of the state-owned Water Corporation was [briefed on the bad news](https://www.documentcloud.org/documents/25524112-board-paper-wc-response-to-alcoas-mine-and-management-plan-2023-27-231213/?ref=boilingcold.com.au) in December 2023. Premier Roger Cook – who, as state development minister, has had principal responsibility for Alcoa since early 2021 - was about to jeopardise the utility’s ability to provide a safe and reliable water supply. For some years, Alcoa was not allowed to clear the jarrah forest where contamination of the water supply was most likely. Steep slopes, clearing more than 30 per cent of a valley, and areas where groundwater was near the surface - called constrained areas - were all off-limits. These restrictions were [costing Alcoa money](https://www.watoday.com.au/business/companies/alcoa-wears-240m-mining-approval-delay-to-keep-critical-wa-onside-20230119-p5ce0a.html?ref=boilingcold.com.au). The miner had to extract lower-grade ore from other areas, driving up the cost to produce alumina from its refineries in Pinjarra and Kwinana. The US miner was pushing for its 2023-2027 mining plan that included the constrained areas to be approved. Water Corporation advised contamination of the water supply [would be a certainty](https://www.watoday.com.au/national/western-australia/worries-of-irreversible-damage-to-jarrah-forest-by-alcoa-revealed-20240621-p5jnpj.html?ref=boilingcold.com.au). In October 2023, the Department of Water and Environmental Regulation (DWER) [rejected the plan](https://www.watoday.com.au/national/western-australia/wa-government-overrode-water-supply-warnings-to-approve-alcoa-mining-20240501-p5fo3c.html?ref=boilingcold.com.au) “in its entirety.” The Cook government ignored the experts. Alcoa would be given almost unlimited access to the forest south of Serpentine Dam, except for within one kilometre of the water’s edge. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/02/Screenshot-2025-02-26-at-3.15.28-pm-1.png) ****Water Corporation board told the bad news a week before Alcoa is allowed into previously forbidden high-risk areas**. *(*[**WC board paper 6 Dec 2023*](https://www.documentcloud.org/documents/25524112-board-paper-wc-response-to-alcoas-mine-and-management-plan-2023-27-231213/?ref=boilingcold.com.au)**)* The utility was left with little ability to protect key assets, so management suggested work be done to build spare capacity before a dam was contaminated. Replacing Serpentine Dam with additional desalination capacity would cost $1 billion. Contamination of the smaller Serpentine Pipehead Dam below the main dam would cause chaos as it connects to many parts of the water system. Laying pipelines to bypass it would cost $200 million. In May 2024 Water Corporation chief executive Pat Donavan gave his board more detail about the ramifications of a contaminated Serpentine Pipehead Dam. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/02/Screenshot-2025-02-26-at-7.51.13-pm-1.png) ****The effect of contamination can grow from 1000 people in an hour to water restrictions across the South West weeks later.** **(*[**Water Corp, CEO report to the board 28 May 2024*](https://www.documentcloud.org/documents/25524116-ceo-report-to-water-corporation-board-240528/?ref=boilingcold.com.au)**)* The contamination could push the quality and reliability of the main water supply system in Australia’s richest state to third-world standards. The utility was concerned water shortages could [stem the long-term growth of the entire Perth and Peel regions](https://www.documentcloud.org/documents/25524109-board-presentation-impact-update-alcoa-mining-operations-230328/?ref=boilingcold.com.au#document/p13/a2624794). Despite all of this, Water Corporation was unsure if Roger Cook’s Department of Jobs, Tourism, Science and Innovation understood the ramifications of what it was doing. ## Push the spin In December 2023, Cook launched a “[new framework](https://www.wa.gov.au/government/media-statements/Cook-Labor-Government/New-framework-to-strengthen-Alcoa%27s-environmental-approvals-20231214?ref=boilingcold.com.au) to strengthen Alcoa’s environmental approvals". The Premier said it strengthened the protection of the environment. Environment minister Reece Whitby said, "We've made it clear to Alcoa that protecting Perth's drinking water remains paramount,” adding that the government had limited where Alcoa could mine. That wasn’t true. While some areas mined to date – especially within 1000m of a reservoir – would now be untouched, a vastly greater area was opened up for strip mining. Most importantly, slopes greater than 16 per cent had been off-limits. Now, that restriction only applied within 2000m of a reservoir. Clearly, the government had the same view as Water Corporation: “This relaxation is likely to be highly contentious to the community.” The government solved the problem by misleading the community. It used langauge to portray the relaxation of restrictions on Alcoa’s mining as a tightening. An Alcoa spokesman said it continued to comply with the strict conditions put in place by the State Government. The company had also [deferred plans](https://www.boilingcold.com.au/epa-refuses-to-consider-alcoa-expanding-mining-near-dams/) to mine in the Reservoir Protection Zone in its [mining expansion proposal](https://www.epa.wa.gov.au/proposals/pinjarra-alumina-refinery-revised-proposal?ref=boilingcold.com.au) with the Environmental Protection Authority. “The community can continue to have confidence in Alcoa’s muti-decade track record of operating in WA without ever negatively impacting drinking water supply,” he said ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/02/20231008-NMT_6869Credit_MilesTweediePhotography.jpg) ## The truth matters A deep understanding from two years of coverage Months unearthing new documents Building trust with sources Checking the facts All needed for this one story Free to read but not free to produce [Support independent journalism](https://www.boilingcold.com.au/support/) ## Lower the hurdle The Water Corporation used the Australian Drinking Water Guidelines (ADWG) to determine that Alcoa’s planned mining was an unacceptable risk to Perth’s water supply. The DWER website describes it as [a preventative approach](https://www.wa.gov.au/system/files/2022-04/WQPN-11-Assessing-and-managing-risks-in-public-drinking-water-source-areas.pdf?ref=boilingcold.com.au) that aims to prevent risks in the first place rather than reduce or mitigate them, in a [note on how to protect public drinking water](https://www.wa.gov.au/system/files/2022-04/WQPN-11-Assessing-and-managing-risks-in-public-drinking-water-source-areas.pdf?ref=boilingcold.com.au) source areas (PDWSA). In fire terms, it’s better to stop an arsonist than build a fire break. The note lauds WA’s approach. > “Our drinking water source protection program here in WA is world’s best practice. > “We use the preventive risk-based approach because prevention is a key feature of best practice drinking water quality management. > “Other risk-based approaches can be appropriate outside PDWSAs, but they are not best practice within PDWSAs." The note is wrong. The ADWG is no longer applied where Alcoa wants to mine. Protection of WA’s water supply is no longer “world’s best practice.” The move away from world best practice was an unspoken part of Cook’s new approach to managing Alcoa – the Alcoa Transitional Approvals Framework (ATAF) – that he announced in December 2023. Two months later, a Department of Health committee on the protection of drinking water sources noted, “The ATAF [shifted the risk approach for Alcoa](https://www.documentcloud.org/documents/25524257-drinking-water-source-protection-subcommittee-report-240219/?ref=boilingcold.com.au#document/p2/a2624840) from a preventative to a a reasonable practicable approach which is not consistent with … Australian Drinking Water Guidelines.” Donavan told his board the Water Corporation would no longer participate in government decision-making regarding Alcoa as it carried “the reputational risk of being party to approving mining activity which ultimately impacts its operations.” There was no seat at the table if you were not willing to drop your standards. ## Tame the messengers Cook cemented his government’s position that Alcoa’s access to the jarrah forest was more important than protecting the water supply on August 10, 2024, when he signed off on WA’s [new approach to regulating bauxite mining](https://www.documentcloud.org/documents/25537022-bauxite-state-agreements-administrative-framework-review-premier-endorsed-final-position-paper-august-2024/?ref=boilingcold.com.au). The ATAF was “designed to mitigate social and economic impact of curtailment of Alcoa’s mining and afford a reasonable level of risk mitigation (to the water supply).” A new group – the Bauxite Strategic Executive Committee (BSEC) – would advise Cook on all issues involving Alcoa and WA’s other bauxite miner, South32’s Worsley. Its responsibilities include: “Consider risks to public drinking water resulting from the mining operations and help Government ensure there is a clear path of where mining is preferred into the future for both Alcoa and Worsley.” Not content with lowering the level of protection for the water supply, Cook has also told his advisers not to give him advice that is bad for the miners. It is an awkward position for staff from the Department of Water and Environmental Regulation who sit on BSEC to be told water and the environment are not a priority. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/02/Screenshot-2025-02-26-at-2.42.12-pm.png) ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/02/Screenshot-2025-02-26-at-2.42.45-pm.png) ****Drainage failure that could allow a dam to be contaminated and a 3000-litre spill of diesel in the water catchment**. ([**Presentation to Water Corporation board March 2023*](https://www.documentcloud.org/documents/25524109-board-presentation-impact-update-alcoa-mining-operations-230328/?ref=boilingcold.com.au)**)* ## The political calculation Cook has to balance the future of Alcoa’s 4100 direct employees in WA (about 0.25 per cent of the state’s workforce) and indirect jobs against the risk to the water supply for most of WA’s population. For now, he has gone with Alcoa, but without telling the community the cost may be their water supply. Alcoa has much more at stake. In 2024, it sourced 72 per cent of its bauxite - the ore that produces aluminium - from WA. The 3000 tonnes of bauxite it strips from the jarrah forest every hour is the foundation of the $14 billion company’s business. It is understood from numerous sources that Alcoa has frequently threatened shutdowns and significant job losses in negotiations with the WA government. Its share price [plunged seven per cent in a day](https://www.watoday.com.au/national/western-australia/alcoa-says-no-wa-job-losses-as-share-price-plunges-7pc-20230719-p5dpmf.html?ref=boilingcold.com.au), wiping $650 million off its value, in mid-2023 when it said some WA environmental approvals were running late. The market reaction to a shutdown would be much greater, making it a very dangerous negotiation ploy. Jason Fowler, senior campaigner at the WA Forest Alliance, said the WA government had been weak and unprincipled. “Its promise to prioritise Perth's drinking water was an empty one,” “Instead, bauxite miners are being given pretty much carte blanche in where they clear our irreplaceable Northern Jarrah Forest.” The economic benefits for WA from Alcoa have resulted in an environmental imprint that goes beyond threatening the water supply. After six decades of mining it has [not fully rehabilitated a single hectare](https://www.watoday.com.au/environment/sustainability/alcoa-in-wa-60-years-28-000-hectares-of-forest-cleared-zero-rehabilitation-completed-20230307-p5cq4j.html?ref=boilingcold.com.au) of the 28,000 hectares of jarrah forest it has felled. Near its refineries, most of its 368 million cubic metres of towering toxic red mud processing waste – enough to fill Perth’s Optus stadium 350 times – has [failed stability checks](https://www.watoday.com.au/national/western-australia/alcoa-s-mountains-of-red-mud-fail-to-pass-stability-checks-20240830-p5k6qy.html?ref=boilingcold.com.au). Now, there is the cost of preparing the water system for contamination from its mining. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/02/Screenshot-2025-02-26-at-2.25.06-pm.png) ****There are no cheap options for the Water Corporation** **(*[**Presentation to Water Corporation Board Sept 2024*](https://www.documentcloud.org/documents/25524101-board-presentation-iwss-and-perths-next-water-source-240924/?ref=boilingcold.com.au)**)* ## Questions unanswered Water Corporation was asked: - How concerned was it about the lowering of the level of protection for its dams from mining? Water Minister Simone McGurk was asked: - Do you support the replacement of the Australian Drinking Water Guidelines with a lower level of protection for Perth drinking water dams? - If so, why? The Department of Water and Environmental Regulation was asked: - How can DWER be a credible regulator of water and the environment when these issues affect bauxite mining, as it has accepted membership of a group instructed by the government to always support continued mining? Premier Roger Cook was asked: - Why has the government not been honest about its acceptance of greater risk to the water supply so Alcoa can keep its Pinjarra refinery full? - Has the government done an assessment weighing up the increased risk to the water supply against the benefits of Alcoa’s Pinjarra operation? If so, please provide details. - Will the government fund the Water Corporation to undertake the expensive capital works required to prepare the water supply system for the contamination of a dam, or will it take the risk and see what happens? - The ATAF could be in place until 2028\. It clearly increases the risk to the water supply. Will the government consider tightening restrictions on Alcoa before 2028? - How can people trust the Cook government to protect the environment, given its actions on Alcoa? A 555-word response from a spokesman for the Premier to answer all these questions answered none of them. It can be read below. --- #### Response from a spokesman for Premier Roger Cook “The protection of our drinking water sources has always been paramount. “We are committed to transitioning Alcoa to a contemporary approvals regime under the **Environment Protection Act*, and have implemented the strictest possible controls over the company’s mining operations during the transition period. “In December (2023), Cabinet approved Alcoa’s 2023-2027 Mining and Management Program, and at the same time imposed strict additional conditions on Alcoa’s operations through section 6 of the Environmental Protection Act. “That decision took into account a range of factors, including the need to protect WA’s environment and Perth’s drinking water sources, while also safeguarding the jobs of the many thousands of workers employed by Alcoa. “The conditions of the Exemption Order itself limit the physical areas in which Alcoa can explore, clear and mine, and require regular compliance reporting to the State Government. Any breach of conditions would see the exemption order immediately cancelled, and the State Government retains the right to withdraw or amend the exemption at any point. “The Alcoa Transitional Approvals Framework (ATAF), through the application of the section 6 exemption from the **Environment Protection Act* and the associated Mining Management Program (MMP) Approval, included an increase to the conditioning and oversight of Alcoa’s ongoing operations. “The ATAF includes a provision requiring Alcoa to provide a $100 million guarantee to indemnify the State against any impacts to Perth’s drinking water as a result of Alcoa’s operations. “The Department of Water and Environmental Regulation and JTSI, as regulation agencies, maintain oversight of Alcoa’s ongoing operations and ensure that it transitions to an approvals regime aligned with the requirements of the **Environmental Protection Act.* “The Environmental Protection Authority’s independent assessment of Alcoa’s current and future mining operations will provide the foundation for Government’s regulatory oversight of Alcoa that supersedes all other approvals, including the State Agreements. “As part of the transition to contemporary environmental approvals, Alcoa has agreed to the State Government’s contemporising of its State Agreement Act to ensure that they meet the expectations of the Western Australian Government and community. “The State Government has provided clear expectations for Alcoa for the quality of rehabilitation as determined by the agreed completion criteria and the conditions accompanying the approval of the 2023-2027 MMP. “The State Government will continue to closely monitor Alcoa’s activities to ensure compliance with the conditions in the MMP and the section 6 exemption. “The State Government is also investing $10.5 million to implement Alcoa’s assurance plan, which will secure the staff and resources needed to support monitoring and compliance. This will ensure Alcoa will continue to be adequately monitored and help maintain our State’s high standard of environmental protection. “The Advisory Committee for the Purity of Water, which includes the Department of Health, Department of Water and Environment Regulation and Water Corporation, continues to monitor drinking water catchment areas such as the Perth Hills to ensure the quality of Perth’s drinking water supply aligns with the Australian Drinking Water Guidelines. “Proposed mining activities in drinking water catchment areas have a comprehensive risk management framework in place with the primary goal being the protection of public health. “The Department of Health will continue to monitor the performance of all parties involved in managing any public health risks. “Water Corporation continues to work constructively with stakeholders in the interest of maintaining effective catchment controls and protecting drinking water quality.” --- ### All Freedom of Information documents available *All documents obtained from freedom of informtion requests for researching this story can be read here, with important excerpts highlighted and annotated.* [Alcoa in Western Australia![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/favicon.png)](https://embed.documentcloud.org/projects/219996-alcoa-in-western-australia/?embed=1&ref=boilingcold.com.au) ### Woodside CEO laments red tape over gas project approval URL: https://www.boilingcold.com.au/woodsides-profit-more-than-doubles-to-5-6-billion/ Last updated: 2025-02-26T15:55:47.000Z *By Derek Rose* Years of red tape have clouded the future of Australia's biggest oil and gas company's mammoth offshore project, its boss has lamented. Woodside received a 50-year extension to continue operating its North West Shelf offshore gas project from the WA government in December following a six-year approval process. Yet the federal government has pushed back its own decision on the controversial project until March 31, potentially after a federal election. As Woodside reported its full-year profit had more than doubled to over $5.6 billion, chief executive Meg O'Neill spoke of long delays and disappointment. "Look, I continue to be pretty frustrated that it's taken more than six years to grant approval to extend the life of an asset that's been operating for 40 years, when we're not planning to do anything that the outside the fence line that we've already established," she said on Tuesday. The uncertainty has a chilling effect on Woodside's decision-making process, according to Ms O'Neill, including whether to invest in further drilling to bring more gas to Australia's east coast. "We're having to ask ourselves, can we make that decision with confidence, not knowing whether federal approval is going to be granted," she said. "We're disappointed that they continue to request more time - I think it's proof of some of the challenges that Australia faces in the approvals environment, that you've got things like reconsideration requests that come in at the 11th hour, where proponents who have no skin in the game can ask the minister to review decisions that were made 40 years ago." "We think 'what does this mean for our workforce up in Karratha?'," she said, referring to the Pilbara region port city where Woodside has processed gas since 1954 and employs more than 4500 people. "What does this mean for the workforce at the mine sites that depend on our gas to keep going. There are families whose lives are at stake - so, very frustrated. I'll leave it there. Hopefully we'll get an approval before the election." Further delays, Ms O'Neill added, would mean more coal in the energy mix for longer. "So if you're serious about the environment, you'd approve this." That is, of course, a conclusion hotly disputed by environmental groups and others. An analysis by the Australia Institute released on Tuesday said the project was driving up WA energy prices, threatening the state's domestic gas reserves and wrecking the climate. "Extending it for another 50 years would be grossly irresponsible, with emissions equivalent to opening another 12 new coal power stations," said Mark Ogge, principal adviser at the institute. "It will make WA, and the rest of the world hotter and floods and fires more frequent and extreme." Woodside also reported that its Scarborough project, 375km off the Pilbara coast, is now 80 per cent complete and on track for its first LNG cargo in 2026. Saxo Asia Pacific senior sales trader Junvum Kim said it had been a strong production year for Woodside despite softer prices. Late on Tuesday afternoon, Woodside shares were up 3.0 per cent to a nine-day high of $24.09, on a generally down day for the market. ### The promise of green iron, steel and ammonia keeps the green hydrogen dream alive URL: https://www.boilingcold.com.au/the-promise-of-green-iron-steel-and-ammonia-keeps-the-green-hydrogen-dream-alive/ Last updated: 2025-02-24T23:44:14.000Z *By Changlong Wang and Stuart Walsh, Civil and Environmental Engineering, Monash University.* Hydrogen was once sold as a universal climate fix — a clean, green [wonder fuel](https://www.smh.com.au/politics/federal/australia-s-top-scientist-calls-for-hydrogen-revolution-to-replace-fossil-fuels-20181009-p508mj.html?ref=boilingcold.com.au) for cars, homes, power grids and even global export. But reality has cooled that buzz. This week, the South Australian government [shelved plans for a A$593 million hydrogen power plant](https://www.abc.net.au/news/2025-02-20/hydrogen-plant-plans-on-ice/104961150?ref=boilingcold.com.au), in favour of injecting that money into the $2.4 billion Whyalla steelworks rescue package. Premier Peter Malinauskas [said](https://www.pm.gov.au/media/doorstop-interview-whyalla-0?ref=boilingcold.com.au) there was “no point in producing hydrogen” without a customer: the steelworks. It’s the latest in a series of setbacks for hydrogen. Last year, Australian mining and energy giant [Fortescue](https://theconversation.com/fortescue-has-put-its-ambitious-green-hydrogen-target-on-hold-but-australia-should-keep-powering-ahead-235007?ref=boilingcold.com.au) pared back its green hydrogen projects as a result of [increasing costs](https://www.bloomberg.com/news/articles/2024-07-17/fortescue-cuts-700-jobs-and-appoints-new-chief-financial-officer?ref=boilingcold.com.au) and [changing financial circumstances in the United States](https://reneweconomy.com.au/fortescue-sees-billion-dollar-windfall-from-electric-truck-deal-but-trump-throws-spanner-into-green-timelines/?ref=boilingcold.com.au). Then, gas and oil heavyweight Woodside [withdrew plans for two large-scale green hydrogen projects](https://www.pv-magazine-australia.com/2024/09/02/woodside-halts-two-large-scale-green-hydrogen-projects/?ref=boilingcold.com.au) and [Origin Energy dropped out](https://www.abc.net.au/news/2024-10-03/energy-giant-origin-walks-away-from-green-hydrogen/104429206?ref=boilingcold.com.au) of the Hunter Valley Hydrogen Hub. Meanwhile, the Hydrogen Energy Supply Chain project in Victoria, meant to ship hydrogen to Japan, has met with [delays and overruns](https://www.smh.com.au/environment/climate-change/multibillion-dollar-plan-to-convert-coal-into-clean-hydrogen-falters-20241206-p5kwc1.html?ref=boilingcold.com.au). Earlier this month, the new Queensland government chose to halt further investment in the [Central Queensland Hydrogen Project](https://www.pv-magazine-australia.com/2025/02/04/queensland-ends-support-for-3-gw-green-hydrogen-project/?ref=boilingcold.com.au), putting plans to export hydrogen in doubt. These setbacks show hydrogen isn’t the ultimate solution to all our energy needs, especially if we want to export it. But they don’t spell doom. Instead, they nudge us toward where hydrogen really shines: in heavy industry, right where it’s made. ## Heavy industry: where hydrogen makes sense Heavy industries such as steel manufacturing and ammonia production are where hydrogen proves its worth. These sectors are significant contributors to climate change — steel accounts for [about eight per cent of global greenhouse gas emissions](https://www.iea.org/reports/emissions-measurement-and-data-collection-for-a-net-zero-steel-industry/executive-summary?ref=boilingcold.com.au), ammonia a further [two per cent](https://royalsociety.org/news-resources/projects/low-carbon-energy-programme/green-ammonia/?ref=boilingcold.com.au). Most emissions from steelmaking come from burning coal in blast furnaces to convert ore into iron and carbon dioxide. In a cleaner alternative, hydrogen (when produced using renewable energy) can be used to strip oxygen from the ore and make iron, with water as a byproduct. The result is green iron, ready to be turned into steel in an electric arc furnace – with a fraction of the emissions. Ammonia is used to make fertiliser and industrial chemicals, and hydrogen is one of the main ingredients in its production. Hydrogen bonds with nitrogen from the air to form ammonia. No hydrogen, no ammonia — it’s that simple. Conventional ammonia plants get hydrogen from methane, producing CO₂ in the process. Green ammonia uses renewable energy to produce hydrogen by splitting water via electrolysis. Our recent research crunched the numbers on producing these new green commodities. We found making green iron in Australia with hydrogen and shipping it to Europe for steel production could be 21 per cent cheaper than exporting raw iron ore and hydrogen separately. Plus, it could cut emissions by up to 95 per cent [compared to traditional methods](https://stegra.com/the-boden-plant?ref=boilingcold.com.au). There are huge economic opportunities for Australia too. Instead of shipping low-value raw materials, Australia could export ready-to-use green iron or green steel, reshaping global supply chains while cutting costs and carbon. That’s the kind of rethink hydrogen enables. ## Industry hubs: a practical fix Transporting hydrogen long distances is costly and inefficient. The fix? Industry hubs that produce hydrogen right where it’s needed - next to steel mills, ammonia plants, desalination plants, water treatment plants or even aluminium smelters. Putting producers and consumers together [slashes transport costs and unlocks efficiencies](https://theconversation.com/picture-this-green-hydrogen-plants-next-to-green-steelworks-to-boost-efficiency-and-kickstart-both-industries-205845?ref=boilingcold.com.au). We’ve built tools to pinpoint places with the greatest potential to produce these new green commodities. The [Hydrogen Economic Fairways Tool](https://portal.ga.gov.au/persona/heft?ref=boilingcold.com.au) maps where renewable energy, infrastructure and industrial sites align for cost-effective hydrogen production. The [Green Steel Economic Fairways Mapper](https://portal.ga.gov.au/persona/greensteel?ref=boilingcold.com.au) zooms in on prime locations for green steel, spotlighting places such as Eyre Peninsula in SA and the Pilbara in Western Australia, among others (see below). These locations have abundant wind and solar resources alongside an existing industrial base. ![Examples of maps and charts available using the Green Steel Economic Fairways mapping tool](https://images.theconversation.com/files/650502/original/file-20250220-32-gf2p5i.png?ixlib=rb-4.1.0&q=45&auto=format&w=754&fit=clip) The Green Steel Economic Fairways Mapper compares the levelised cost of steel, including production and transport to the port. a) Regional changes across Australia b) Example of how to optimise the system to minimise the levelised cost of producing 1 million tonnes per annum c) Breakdown of costs d) Hourly system performance, in terms of energy flows. [Green Steel Economic Fairways Mapper, Geoscience Australia](https://portal.ga.gov.au/persona/greensteel?ref=boilingcold.com.au) ## Challenges remain Green hydrogen promises to revolutionise heavy industries, but significant hurdles stand in the way of widespread domestic adoption. The biggest challenge comes from the unpredictable nature of renewable energy, which makes it hard to maintain the steady hydrogen supply industries need. The costs remain steep, too. Splitting water into hydrogen using renewable electricity isn’t cheap, particularly when you need backup storage systems to keep production going during cloudy or windless periods. Getting hydrogen where it needs to go poses another major challenge. As hydrogen is both bulky to transport and highly flammable, it requires special handling and infrastructure, driving up costs, especially for facilities far from production sites. Many companies also hesitate to invest in hydrogen-compatible equipment, as retrofitting existing plants or building new ones requires substantial upfront costs without guaranteed returns. ## Government backing: a push in the right direction Thursday’s announcement of [A$2.4 billion investment in the Whyalla steelworks](https://www.abc.net.au/news/2025-02-20/whyalla-financial-support-as-steelworks-in-administration/104958510?ref=boilingcold.com.au) along with plans for a $1 billion [green iron investment fund](https://www.pm.gov.au/media/albanese-government-building-australias-green-iron-future?ref=boilingcold.com.au) are a bold bet on green steel. Furthermore, the landmark [Future Made in Australia](https://futuremadeinaustralia.gov.au/?ref=boilingcold.com.au) [legislation](https://www.aph.gov.au/Parliamentary%5FBusiness/Bills%5FLEGislation/Bills%5FSearch%5FResults/Result?bId=r7219&ref=boilingcold.com.au) introduces a $6.7 billion Hydrogen Production Tax Incentive, offering $2 per kilogram of renewable hydrogen produced between 2027–28 and 2039–40, alongside a 10% tax credit for critical minerals processing. Meanwhile, [tax credits for green aluminium](https://www.energy.gov.au/news-media/news/helping-switch-green-aluminium?ref=boilingcold.com.au) and alumina should help another heavy industry to navigate the energy transition using clean hydrogen. These measures aim to unlock tens of billions in private investment, boost regional economies, and position Australia as a leader in clean energy manufacturing. This isn’t just about one-off projects. It’s laying the groundwork for hubs that link renewable energy and hydrogen production to industrial demand. There’s more in the pipeline. The [Hydrogen Headstart](https://www.dcceew.gov.au/energy/hydrogen/hydrogen-headstart-program?ref=boilingcold.com.au) program pumps funds into hydrogen innovation, and the Future Made in Australia initiative backs clean industry with billions more. Add in policies like carbon pricing or low-interest loans, and the economics tilt even further toward green steel and ammonia. Government buying power — in the form of procurement targets for low-carbon materials — could seal the deal by guaranteeing demand. These policies aren’t just wishful thinking — they’re practical steps that are already working elsewhere. [Sweden’s HYBRIT project](https://www.hybritdevelopment.se/en/?ref=boilingcold.com.au), which paired green steel with government-backed demand, has already led to construction starting on [new industrial-scale green steel facilities](https://stegra.com/the-boden-plant?ref=boilingcold.com.au). At the same time, the [European Union’s hydrogen strategy](https://energy.ec.europa.eu/topics/eus-energy-system/hydrogen/key-actions-eu-hydrogen-strategy%5Fen?ref=boilingcold.com.au) leans on carbon pricing and subsidies to guide industries and suppliers through the energy transition, while [Japan offers incentives](https://www.reuters.com/markets/commodities/green-steel-needs-incentives-work-japan-has-plan-russell-2025-02-18/?ref=boilingcold.com.au#:%7E:text=The%20Ministry%20of%20Economy%2C%20Trade,built%20with%20low%2Demission%20steel.) for the use of green steel in their automotive industry. Australia has the renewable energy and the industrial base to take advantage of these opportunities. With the right leadership, we can turn hydrogen’s stumbles into a global triumph for heavy industry. --- [Changlong Wang](https://theconversation.com/profiles/changlong-wang-161244?ref=boilingcold.com.au), Research fellow in Civil and Environmental Engineering, [*Monash University*](https://theconversation.com/institutions/monash-university-1065?ref=boilingcold.com.au) and [Stuart Walsh](https://theconversation.com/profiles/stuart-walsh-1441631?ref=boilingcold.com.au), Senior lecturer in Civil and Environmental Engineering, [*Monash University*](https://theconversation.com/institutions/monash-university-1065?ref=boilingcold.com.au) This article is republished from [The Conversation](https://theconversation.com/?ref=boilingcold.com.au) under a Creative Commons license. Read the [original article](https://theconversation.com/the-promise-of-green-iron-steel-and-ammonia-is-keeping-the-green-hydrogen-dream-alive-250410?ref=boilingcold.com.au). ### Will WA’s coal exit be a green dream or lights out? URL: https://www.boilingcold.com.au/will-was-coal-exit-be-a-green-dream-or-lights-out/ Last updated: 2025-03-19T13:14:43.000Z All sides of WA politics agree coal-fired power will end and be replaced mainly by onshore wind, but there are stark differences on whether the lights will stay on in the meantime. For Liberal energy spokesman Steve Thomas, 2027 is shaping up to be a crisis year for the power system in south west WA. “In two years’ time, there's not enough new renewables in the system, there's not enough distribution, there's not enough storage, and the system is on the verge of collapse,” he said. “That is my prediction.” The Labor government plans to close state-owned Synergy’s Collie power station in October 2027, taking 340 megawatts of generation capacity out of the South West Interconnected System (SWIS) that powers WA from Kalbarri in the north, down to Albany and east to Kalgoorlie. Before then, many market observers expect the 434-megawatt privately-owned Bluewaters power station will have closed. Its fuel supplier Griffin Coal is only surviving with $220 million of [state government backing](https://www.wa.gov.au/government/announcements/funding-offers-certainty-griffin-workers-and-wa-electricity-system?ref=boilingcold.com.au) that ends in mid-2026\. Synergy, a main customer, [will not renew its contract](https://thewest.com.au/business/energy/bluewaters-power-station-synery-wont-renew-contract-with-collie-coal-plant-c-7201639?ref=boilingcold.com.au) that expires in 2025 and Water Corporation, another big source of revenue, plans to switch to renewable power in coming years. “You basically destroy the business case of Bluewaters,” Thomas told a state election energy and climate forum on Tuesday night The government is in large part relying on upgrading the transmission system to the Mid West to connect more wind generation to the system. However, the $270 million first stage of the Clean Energy Link is scheduled to be [completed in mid-2027](https://www.genus.com.au/projects/clean-energy-link-north?ref=boilingcold.com.au), just months before the Collie power station closes down, leaving little room for error. Labor energy minister Reece Whitby said the government would keep Bluewaters running “until we make a careful and strategic exit.” “It is a tricky dance, getting out of coal, getting out of Collie, the timing has to be right, it's not a sustainable resource.” ## In an election full of media grabs and short on detail one news outlet covered a comprehensive debate on energy and climate policy ~~ABC~~ ~~The Australian~~ ~~The Australian Financial Review~~ Boiling Cold ~~Businsss News~~ ~~WAtoday~~ ~~The West Australian~~ [Support independent journalism](https://www.boilingcold.com.au/support/) Whitby noted that during recent summer demand peaks there was a significant buffer of available generation capacity courtesy of the reserve capacity mechanism that pays generators to be available, not just for the electricity they produce. He said about 250 megawatts of rooftop solar capacity is also added each year, and recent investments in grid-scale batteries by the state and private entities will allow greater use of that resource. The Liberals plan to [extend the life](https://www.libbymettam.com.au/news-media-releases/wa-liberals-to-hit-2050-target-with-prices-down-and-the-lights-on?ref=boilingcold.com.au) of the coal-fired power plants until 300 megawatts of new gas generation capacity can be built. Thomas did not provide any costings. In 2022, when the Labor government announced its plan to close down Synergy’s two coal-fired power stations, then Premier Mark McGowan said business as usual would have pushed an average household’s power bill up by [as much as $3000 a year](https://www.watoday.com.au/politics/western-australia/wa-owned-coal-fired-power-stations-to-close-20220614-p5atk6.html?ref=boilingcold.com.au). Time will tell if WA can exit coal this decade, or be needed for another five years as Thomas predicts. ## Gas stays – but how much and for how long? There was no debate that gas is crucial, including from Greens leader Brad Pettitt. “The cheap shot is to say the Greens want to turn gas off overnight – no one is saying that,” he said. “What we're saying is that the more wind, solar and battery storage you have the less gas you need.” Pettitt said modelling by Sustainable Energy Now, which hosted the policy forum, showed the “sweet spot” for lowest prices was a grid with about 87 per cent renewable energy. Currently the Greens’ sole member of parliament, Pettitt expects in the future gas will be called on only on rare occasions when there are multiple days of low wind and cloud. Pettitt worries that any new gas-fired power stations, such as those planned by the Liberals, will allow the climate-polluting fuel to remain in the system for longer. Surprising some in the audience, Whitby, who frequently repeats the gas export industry’s talking points, agreed that “gas should and does have a use by date.” “It will be around for a long time and eventually be a bespoke source for some industry processes,” he said. [WA power cleaner as coal fails and batteries charge inThe south-west grid shattered numerous records in late 2024 as new batteries and more rooftop solar replaced unavailable coal-fired power.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-42.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/maxresdefault-1-2.jpg)](https://www.boilingcold.com.au/wa-power-cleaner-as-coal-fails-and-batteries-charge-in/) Both major parties shrugged off the idea of interim emissions reductions targets, leading to their common aim of net zero emissions by 2050, with Thomas calling them a distraction. Former Greens senator Jo Valentine asked Whitby how he reconciled net-zero emission by 2050 with his recent approval for Woodside’s North West Shelf gas export plant to [operate until 2070](https://www.watoday.com.au/national/western-australia/woodside-gains-state-approval-for-massive-50-year-karratha-gas-plant-extension-20241126-p5ktqw.html?ref=boilingcold.com.au). The energy and environment minister defended the role of gas but did not address how that argument was valid in a world with net-zero emissions, but thanked Valentine for the question. “Joe, I love your passion, and I voted for you - the only time I didn't vote for Labor Party - when you campaigned for Nuclear Disarmament,” he said. Valentine was scathing about WA Labor’s overall green credentials. “I don’t know how you can sit there and say the EPA is a strong protector of our environment, it has been emasculated during the course of this government,” she said. ### EPA refuses to consider Alcoa expanding mining near dams URL: https://www.boilingcold.com.au/epa-refuses-to-consider-alcoa-expanding-mining-near-dams/ Last updated: 2025-02-26T15:55:13.000Z Within weeks, US miner Alcoa will open to the public what is likely to be one of the most controversial environmental approval processes ever seen in WA, that would see its strip mining expand northwards and consume 75 square kilometres of jarrah forest. However, the assessment will not consider approving more mining in areas that pose the greatest risk to the water supply. On Thursday, the WA Environmental Protection Authority published[ substantial changes](https://www.epa.wa.gov.au/sites/default/files/S43A/CMS17836%20-%20s43A%20Notice%20of%20Approval%20-%2017%20February%202025.pdf?ref=boilingcold.com.au) to Alcoa's plans that were initially lodged almost four years ago. In October, Alcoa told stakeholders it would [defer expanding its Huntly mine into Reservoir Protection Zones](https://www.boilingcold.com.au/alcoa-to-move-future-mining-away-from-dams-for-now-to-speed-approvals-2/) (RPZ) that extend for two kilometres from the top water level of reservoirs and instead add a mine area called O'Neill to the east. The $15 billion company's clearing of forest near Serpentine Dam poses a risk to water supply to the South West of WA. Excessive runoff of sediment into the crucial Serpentine Dam could make its water treatment plant ineffective. The runoff could also contaminate the water with toxic PFAS from firefighting foam once used by Alcoa or hydrocarbons from frequent spills from its heavy machinery. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/02/DJI_0907-A.JPG) ****Alcoa's mining near Serpentine Dam in December 2024**. **Photo: Peel Environmental Protection Alliance* In 2023, the Department of Water and Environmental Regulation opposed Alcoa's current mining "in its entirety" as there was a “foreseeable” risk that water from Serpentine Dam could become unusable. Alcoa wanted an assessment of expanded mining in the RPZs deferred "to allow time for the long-term efficacy of current water management and drainage controls and practices to be determined," according to EPA. The statement shows there are question marks over the effectiveness of the practices Alcoa uses in RPZs in its currently approved mining. However, the EPA considered "mining within the RPZ to have been removed from the proposal’s content for the purposes of this assessment and any associated decisions." If Alcoa wants approval to mine in the RPZs in the future, it may have to start a separate approvals process from scratch. Continued permission to strip mine the jarrah forest is an existential issue for the US aluminium specialist. It mines about 75 per cent of its bauxite and makes about 70 per cent of its alumina in WA where it employs about 4000 people. The $15 billion company is not only seeking a long-term expansion of its mining area but is also faced with an assessment of its current operations. The EPA expects to issue Environmental Review Documents for both the expansion and its review of Alcoa's five-year mine plans to 2026 and 2027 "in the coming weeks" according to an email EPA chair Darren Walsh sent to stakeholders today and seen by *Boiling Cold*. The plans would then be open for public comment for about ten weeks. In December WA's other bauxite miner South32 received approval for a mine expansion for its Worsley alumina refinery 2½ years after it lodged the ERD. Alcoa is [predicting](https://www.alcoa.com/australia/en/sustainability/pinjarra-huntly-environmental-assessment/assessment-process?ref=boilingcold.com.au) to complete the same process in just 12 months despite its activities being more controversial and environmentally sensitive due to the proximity to Perth's drinking water dams. The Worsley process was slowed by South32 changing its plans five times after its ERD was issued. [![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/01/support-CTA-for-posts-1.png)](https://www.boilingcold.com.au/#/portal/signup) Alcoa's amended expansion plan includes an increase in the annual production of toxic bauxite residue from 10.8 to 11.6 million tonnes a year. This is likely due to returning to the previously mined O'Neill area and mining low grade ore that was previously untouched. Alcoa's WA mines already rely on one of the lowest grades of bauxite mined anywhere in the world. The Huntly mine supplies Alcoa's Pinjara refinery and, until it was closed in 2024, its Kwinana refinery. Alcoa's revised plan extended the mining period seven years to 2045 in case the Kwinana refinery does not reopen and it takes longer to remove all the bauxite it has targeted. About 7500 hectares of jarrah forest will be cleared, equivalent in area to almost 19 Kings Parks. After 62 years of mining in WA, Alcoa has yet to get a single hectare of mined land restored to [meet the rehabilitation criteria](https://www.watoday.com.au/environment/sustainability/alcoa-in-wa-60-years-28-000-hectares-of-forest-cleared-zero-rehabilitation-completed-20230307-p5cq4j.html?ref=boilingcold.com.au) it has agreed with the WA government. ### Explainer: what does it mean to ‘firm’ renewables? URL: https://www.boilingcold.com.au/explainer-what-does-it-mean-to-firm-renewables/ Last updated: 2025-02-19T08:06:35.000Z [*Peta Ashworth*](https://theconversation.com/profiles/peta-ashworth-1486283?ref=boilingcold.com.au) *and* [*Ehsan Pashajavid*](https://theconversation.com/profiles/ehsan-pashajavid-2320528?ref=boilingcold.com.au)*, Curtin University* Large power grids are among the [most complicated machines](https://www.smithsonianmag.com/videos/category/history/the-largest-machine-ever-built/?ref=boilingcold.com.au) humans have ever devised. Different generators produce power at various times and at various costs. A generator might fail and another fills the gap. Demand soars in the evenings and on hot days. In Australia, eastern and southern states trade power across borders. Meanwhile, Western Australia has two grids and the Northern Territory has several. But these complicated machines are undergoing major change, as we shift from large fossil fuel plants to cleaner forms of power. Wind and sun are now the [cheapest way](https://doi.org/10.25919/b6nz-t656?ref=boilingcold.com.au) to produce electricity. These renewable sources [will soon](https://reneweconomy.com.au/know-your-nem-the-jaw-tightens-as-wind-and-solar-gets-ready-to-overtake-coal-and-gas/?ref=boilingcold.com.au) overtake coal and gas – they’re already [averaging 40%](https://www.dcceew.gov.au/sites/default/files/documents/annual-climate-change-statement-2024.pdf?ref=boilingcold.com.au) of power flowing through the national grid. Solar and wind are often called “variable” renewable energy sources. Variable, here, refers to the fact the sun doesn’t always shine and the wind doesn’t always blow. On sunny, windy days we get lots of cheap power. But on still nights, we might get little. This is where “firming” comes in. To [firm renewables](https://journals.sagepub.com/doi/10.5547/01956574.44.6.jgil?ref=boilingcold.com.au) is to convert this cheap but variable source of power into what we really want: a reliable supply of electricity, there when we need it. Big battery projects are one way to do it. But there are others. ## Be in the know for free All the info and a bit of comment on WA energy, industry and climate in your inbox every Friday Subscribe Email sent! Check your inbox to complete your signup. No spam. Unsubscribe anytime. ## How does firming work? Storage is the best known way to firm renewables. As floods of cheap power come in, you can store it for later use. Storage can be performed by grid-scale batteries, where the power is stored directly. But it can also be done by pumped hydro, where water is pumped uphill when power is cheap and plentiful and run back downhill, through turbines, when power is harder to source. Firming can also be done by virtual power plants – aggregated fleets of smaller batteries in homes and electric vehicles. Gas peaking plants are another way of firming renewables. In the future, gas plants will go from being a mainstay to the equivalent of a backup generator, fired up only when needed. Generally, energy storage facilities offer either short- or long-term firming. As more renewable power enters Australia’s grids, we will need both. This is because [they offer](https://doi.org/https://doi.org/10.1016/j.energy.2023.128273?ref=boilingcold.com.au) different levels of storage and response times. Short term can be as short as seconds to a few hours. Batteries are a common way to provide short-term firming, because they can ramp up very quickly to tackle sudden fluctuations in supply or demand. These fast-response systems help stabilise the grid by smoothing out spikes caused by changing weather. Long-term firming can be for hours, days or even weeks. This includes large-scale battery storage or back-up generators such as gas plants. Long-term options are crucial to maintain power supply during extended periods of low renewable generation, such as still, cold days and nights in winter. [WA power cleaner as coal fails and batteries charge inThe south-west grid shattered numerous records in late 2024 as new batteries and more rooftop solar replaced unavailable coal-fired power.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-40.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/maxresdefault-1-1.jpg)](https://www.boilingcold.com.au/wa-power-cleaner-as-coal-fails-and-batteries-charge-in/) ## How are we tracking with firming renewables? In recent years, large-scale battery announcements have ramped up. Almost 8 gigawatts of battery capacity is now in progress or anticipated to start construction shortly. But the pipeline of future projects is much larger: 75 gigawatts of [firming will be required](https://aemo.com.au/en/energy-systems/major-publications/integrated-system-plan-isp/2024-integrated-system-plan-isp?ref=boilingcold.com.au). While renewable power is cheap, to make it useful and reliable in addition to storage, we need transmission lines to connect large renewable zones to cities and towns. All this adds extra costs. As the level of renewables in our power grids inches higher, firming costs increase. This is especially true when a grid goes from 95% to 100% renewables, when there’s a [sudden jump](https://www.sciencedirect.com/science/article/pii/S1364032117311310?via%3Dihub&ref=boilingcold.com.au) in cost. This is why experts have [argued for](https://universitiesaustralia.edu.au/media-item/ua-solutions-summit-the-banana-in-the-room/?ref=boilingcold.com.au) keeping a few gas peaking plants. While they are not emission-free, they are flexible and can start up much more rapidly than coal. They will likely play a [key role](https://doi.org/10.1016/j.eap.2022.02.005?ref=boilingcold.com.au) in firming the grid during renewable droughts and extreme demand – an estimated 5% of the year. That sounds small, but they will [be essential](https://doi.org/10.5547/01956574.44.6.jgil?ref=boilingcold.com.au). Eventually, gas peaking plants could switch to hydrogen, if the fuel becomes cost effective. This would cut emissions further. ## Firming – at home? Homes with batteries can also help firm the network by joining a virtual power plant. These networks of batteries can be digitally coordinated to function as a single power plant, helping stabilise the grid. If a home owner signs up to a virtual power plant program, they hand over some control in return for income. Technologies such as this can support grid stability by charging or discharging in response to [supply fluctuations](https://www.synergy.net.au/Our-energy/Pilots-and-trials/Virtual-Power-Plant??ref=boilingcold.com.au). These networks are a flexible energy resource. They can inject power to the grid instantly if there’s a sudden drop in solar or wind generation. They can also soak up surplus energy. These aren’t hypothetical. Several are running or in development in Australia, such as the [AGL virtual power plant](https://www.agl.com.au/residential/solar-and-batteries/virtual-power-plant??ref=boilingcold.com.au) in South Australia, [SolarHub](https://solarhub.net.au/virtual-power-plant/?ref=boilingcold.com.au) in New South Wales and the new ARENA-funded [Project Jupiter](https://arena.gov.au/news/unlocking-a-future-energy-market-in-western-australia/?ref=boilingcold.com.au) in Western Australia, which will commence soon. [WA faces gas shortfalls from 2030: AEMOThe ten-year forecast stops short of when gas could become very scarce and expensive in Australia’s most gas-dependent state.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-41.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Screenshot-2024-12-18-at-9.02.53-am-1.png)](https://www.boilingcold.com.au/wa-faces-gas-shortfalls-from-2030-aemo/) ## Is firming helping? Firming technologies are already helping in high-renewable grids overseas. Big batteries [now allow](https://theconversation.com/big-batteries-are-solving-a-longstanding-problem-with-solar-power-in-california-can-they-do-the-same-for-australia-231063?ref=boilingcold.com.au) California’s grid to absorb more renewables, by soaking up daytime solar and releasing it at evening peak. We’re seeing the benefits of firming locally, too. On January 20 this year, a heatwave in Western Australia triggered a [new record](https://www.linkedin.com/feed/update/urn:li:activity:7288344182371299328/?ref=boilingcold.com.au) for peak electricity demand – 4.4 gigawatts – in the state’s main electricity network, the South West Interconnected System. In response, recently built battery storage at Kwinana, Collie, and Cunderdin stored excess power and discharged it at peak times. The next day, dense clouds swept in, slashing solar output and reducing peak demand. In response, gas generators increased output to firm the grid. Firming technologies are already playing a vital role in keeping our electricity supply stable, reliable and resilient – and it’s just the start. --- By [Peta Ashworth](https://theconversation.com/profiles/peta-ashworth-1486283?ref=boilingcold.com.au) Professor and Director, Curtin Institute for Energy Transition, Curtin University and [Ehsan Pashajavid](https://theconversation.com/profiles/ehsan-pashajavid-2320528?ref=boilingcold.com.au) Senior Lecturer in Electrical Engineering, Curtin University. This article is republished from [The Conversation](https://theconversation.com/?ref=boilingcold.com.au) under a Creative Commons license. Read the [original article](https://theconversation.com/explainer-what-does-it-actually-mean-to-firm-renewables-248134?ref=boilingcold.com.au). ### Critical minerals and hydrogen incentive set to re-energise regional investment URL: https://www.boilingcold.com.au/critical-minerals-and-hydrogen-incentive-set-to-re-energise-regional-investment/ Last updated: 2025-02-11T04:08:38.000Z *By: Andrew Brown and Kat Wong* Billions of dollars of investment are set to flow into regional areas after tax incentives for mining and manufacturing companies passed the Senate. Tax breaks for mining and manufacturing companies will lead to large regions of Australia being reindustrialised with billions of dollars of spending, a federal minister says. Production tax credits for hydrogen production and critical minerals processing all but passed parliament after the government struck a deal with the Greens on the incentives. The laws passed the Senate in a late-night sitting on Monday and will now be sent back to the lower house to be rubber stamped. Hydrogen producers will get a tax incentive of $2 per kilogram of renewable hydrogen produced between 2027/28 and 2039/40, while critical minerals producers will get 10 per cent of processing and refining costs. Assistant Trade Minister Tim Ayres said the measures would spur production in Australia across a range of industries. "It's a smart measure. It's going to drag through tens of billions of dollars of private investment and reindustrialise our regions and suburbs," he told ABC Radio on Tuesday. "It is a core part of diversifying the Australian economy, moving Australian production up the value chain, particularly in the mining sector." The tax incentives form part of the federal government's $22.7 billion Future Made in Australia manufacturing policy, which aims to fund clean energy projects and create jobs for the decarbonisation transition. [BP’s $1B Kwinana hydrogen and clean fuel projects on iceThe two projects will be “recycled” amid BP’s concerns about costs and government policy.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-39.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/kwinana-australia.jpg.img.1024.medium.jpg-1-1.jpeg)](https://www.boilingcold.com.au/bp-puts-1b-kwinana-hydrogen-and-clean-fuel-projects-on-ice/) The Greens added their support after securing an amendment to prevent incentives being offered for uranium mining. The Business Council of Australia welcomed the laws passing the Senate, saying it would make Australia more competitive in manufacturing. "Investments like these are important because they help deliver certainty for industry looking to invest here and enable Australia to seize the opportunities driven by the energy transition," the council said in a statement. "The final design and administration of the production tax credits ... must not be so restrictive or onerous as to undermine their success." ACTU president Michele O'Neil said the scheme would help deliver thousands of new jobs. "Supporting renewables investment has a proven track record in the United States, where Inflation Reduction Act tax credits have channelled more than $370 billion of new investment into clean energy and industrial projects, creating around 330,000 new jobs so far," she said. "Australia's rural and regional communities deserve this economic boost too." Australian Workers' Union national secretary Paul Farrow said the measures would unlock Australia's potential. "Australia's approach to critical minerals and new energy has been constrained by a 'dig and ship' mentality, and this bill tips that on its head," he said. "This bill finally provides what industry has been crying out for: investment certainty to move beyond raw exports and build up our domestic processing and manufacturing capabilities." ### BP puts $1b Kwinana hydrogen and clean fuel projects on ice URL: https://www.boilingcold.com.au/bp-puts-1b-kwinana-hydrogen-and-clean-fuel-projects-on-ice/ Last updated: 2025-03-12T01:40:08.000Z EXCLUSIVE UK oil and gas producer BP has put on ice plans for two clean fuel projects worth about $1 billion at its disused oil refinery in Kwinana, south of Perth. BP informed its employees in meetings on Thursday, followed by telling contractors on Friday, according to people involved who were not authorised to speak to the media. Some BP staff will be made redundant. BP was considering building a biofuel plant, Kwinana Renewable Fuels (KRF), to make sustainable fuel from biomass and a green hydrogen plant dubbed H2Kwinana. Some workers were told the projects were to be "recycled", which likely means BP will return to the early stages of its project assessment process to fundamentally review what, if anything, it wants to do at Kwinana. Factors influencing BP’s decision included rising costs to build the plants, and the lack of a mandate in Australia to use the fuels, leaving BP uncertain if the products would have a ready local market, according to the sources. The cost of the KRF had [been reported](https://www.spglobal.com/commodity-insights/en/news-research/latest-news/agriculture/103024-bp-secures-further-approval-for-a580-mil-kwinana-biorefinery-conversion-in-australia?ref=boilingcold.com.au) to be $580 million while a public [conceptual study](https://www.wa.gov.au/system/files/2023-08/h2kwinana%5Fpublic%5Fsharing%5Fknowledge%5Freport.pdf?ref=boilingcold.com.au) estimated the first stage of H2Kwinana to cost $399 million. A BP spokesman said it had made significant progress in developing the renewable fuels and hydrogen projects at Kwinana over the past three years. "While bioenergy remains a core part of BP’s strategy, BP has decided to rephase the Kwinana Renewable Fuels project," he said. "This involves adjusting the pace of delivery with a focus on improving capital efficiency and better alignment with government policies." The KRF was to be the first of five BP plants worldwide to turn biomass, including used cooking oil, into 10,000 barrels a day of sustainable aviation fuel and renewable diesel. Work was underway refurbishing tanks at Kwinana and an $80-million-plus hydrogen production unit had been ordered from French firm Technip. BP's decision on renewable fuel is not a surprise after *Boiling Cold* revealed two weeks ago that engineering and design contractors [had been stood down](https://www.boilingcold.com.au/bp-puts-brakes-on-kwinana-clean-fuel-plans/). [![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/01/support-CTA-for-posts-1.png)](https://www.boilingcold.com.au/#/portal/signup) ## Hydrogen false start The hydrogen plant was one of six [short-listed in late 2023](https://arena.gov.au/news/six-shortlisted-for-2-billion-hydrogen-headstart-funding/?ref=boilingcold.com.au) to compete for $2 billion of Federal Government funding under its Hydrogen Headstart Program. BP declined to comment on H2Kwinana until the Federal Government announced its decision on the hydrogen funding. That decision is imminent. Two weeks ago, a spokesperson for the Australian Renewable Energy Agency that administers the program told *Boiling Cold* it expected to announce the successful applicants in the coming weeks. The KRF was to be one of the customers for H2 Kwinana, and *Boiling Cold* understands BHP's nearby shuttered nickel refinery was also lined up as a major customer. The $136 billion company started front-end engineering for the hydrogen plant in late 2023 backed by [$70 million from the Federal Government](https://www.minister.industry.gov.au/ministers/king/media-releases/70-million-investment-kwinana-hydrogen-hub-enables-major-step-forward-wa-hydrogen-industry?ref=boilingcold.com.au). The first phase of H2Kwinana, with a 100-megawatt electrolyser to extract hydrogen from water using renewable energy, was expected to provide about 150 jobs in operations. Its annual production of 14,000 tonnes of green hydrogen would have been enough to fuel about 750 heavy vehicles. There was potential to eventually expand the project 15-fold. BP will continue to use its prime 250-hectare waterfront site in Kwinana to import and store fuel. There was bad news for another of those projects on Monday: the Central Queensland Hydrogen project in Gladstone. *The Australian* reported that the Queensland government has [rejected a request](https://www.theaustralian.com.au/nation/politics/queensland-premier-cans-hydrogen-pipe-dream/news-story/b082008dbb726291badfd0a7e803c62e?ref=boilingcold.com.au) for more than $1 billion in government funding from the joint venture led by state-owned power generator Stanwell Corporation. The other shortlisted projects are Korea Electric Power Corporation’s proposal in Newcastle, Origin Energy’s Hunter Valley Hydrogen Hub, a $1 billion synthetic fuels plant in Tasmania backed by Chilean HIF Global, and Copenhagen Infrastructure Partners' Murchison Green Hydrogen near Kalbarri in WA. ### Legal case pushes Federal funding agencies to consider climate impact URL: https://www.boilingcold.com.au/case-win-pushes-federal-funding-agencies-forces-to/ Last updated: 2025-02-02T13:04:49.000Z *By Marion Rae* Fossil fuel development may find it harder to get taxpayer funds in Australia after a "benchmark" case that opens the books on environmental harm, lawyers say. A landmark case is expected to give taxpayers greater transparency on how federal agencies spend their money, climate lawyers say. Human rights and environment organisation Jubilee Australia on Friday announced the "successful conclusion" of legal action against the Northern Australia Infrastructure Facility (NAIF) and its board of directors. A Federal Court action filed in July 2023 alleged the facility and another federal body, Export Finance Australia (EFA), failed to comply with legal obligations to report on the environmental impacts of projects they funded. It was a first attempt to force compliance with environmental laws requiring government agencies to report annually on the impact of their activities on the environment - including communities and people - and what steps, if any, they were taking to minimise harm. The case marks a "step change" in reporting by Australian government entities, Jubilee's director of climate justice Suhailah Ali told AAP. Prior to the legal action, NAIF's environmental reporting was limited to basic operational activities, such as no personal bins and encouraging staff to limit printing, she said. The reporting has since expanded to include the environmental impacts of the projects it funds, Dr Ali said. NAIF has a history of financing fossil fuel projects, including coal and fracking ventures such as the Olive Downs Coking Coal Project, that may not have proceeded without government-backed loans, according to Jubilee. "It now reports on climate change and other environmental impacts, which is an important step towards transparency and climate accountability," she said. Meanwhile, the export credit agency promptly changed its reporting in 2023 to include climate and human rights impacts, including the $4.5 billion Perdaman urea project that will buy new gas from Woodside Energy's contentious Scarborough project. [![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/01/support-CTA-for-posts-1.png)](https://www.boilingcold.com.au/#/portal/signup) "NAIF and EFA have made substantial changes in how they report on environmental impacts and climate risk," said Isobel Blomfield, associate at Equity Generation Lawyers, representing Jubilee. "This reporting sets a benchmark for other agencies and financiers to follow," she said. After the case was filed, Resources Minister Madeleine King amended NAIF's investment mandate requiring it to consider climate change impacts. Public financial agencies face growing pressure to stop funding fossil fuels projects that are causing climate change, director of the Australian National University's Governing Energy Transition Lab Christian Downie told AAP. "These agencies are now better placed to scale up investments in renewable energy projects, which will be vital to ensuring that Australia contributes to limiting greenhouse gas emissions," he said. "The government has already made commitments to cease funding for international oil, gas and coal projects, and this new reporting should be a step toward ending funding for domestic fossil fuel projects as well," he said. ### WA power cleaner as coal fails and batteries charge in URL: https://www.boilingcold.com.au/wa-power-cleaner-as-coal-fails-and-batteries-charge-in/ Last updated: 2025-02-21T05:11:51.000Z WA's south-west power grid shattered numerous records in late 2024 as new batteries and more rooftop solar replaced unavailable coal-fired power. According to the Australian Energy Market Operator's [Quarterly Energy Dynamics report](https://aemo.com.au/-/media/files/major-publications/qed/2024/qed-q4-2024.pdf?la=en&ref=boilingcold.com.au) released on Thursday, the state's three coal-fired stations in Collie generated almost 20 per cent less power in the December quarter than 12 months ago because they were increasingly unavailable. Instead, customers on the South West Interconnected System were served by 20 per cent more output from rooftop solar, a 14 per cent jump in gas-fired generation and a growing contribution from grid-scale batteries. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/01/Screenshot-2025-01-29-at-4.25.39-pm.png) ****Power source changes for an average December quarter day - 2023 v 2024\. Rooftop solar (DPV), gas and batteries are all up**. **AEMO* The switch from coal cut total greenhouse gas emissions to power the south-west by five per cent despite a four per cent jump in demand for the quarter. The power system is having to cope with more extreme demands. On December 11, when Perth was sweltering at 40 degrees, demand hit a record for the December quarter. Conversely, on November 10, a weekend, mild temperatures negated the need to use air conditioning, and sunny skies boosted rooftop solar output and sent operational demand (everything but non-rooftop solar energy) to a record low. Over the three months, 46 per cent of power came from renewable generation, and the average wholesale price of $79.93/megawatt was four per cent cheaper than a year ago. At one time on November 17, renewables supplied 85 per cent of demand. [![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/01/support-CTA-for-posts-1.png)](https://www.boilingcold.com.au/#/portal/signup) Batteries now have a significant role, supplying an average of 103 megawatts in the evening from 5:30 PM to 9:00 PM, compared to just six megawatts a year ago. Without the batteries storing excess solar power during the day, additional coal would have had to be burnt each evening. The role of batteries will continue to grow, with more than 2000 megawatts of capacity [expected to be installed](https://www.abc.net.au/news/2025-01-28/worlds-biggest-island-grid-takes-giant-bet-on-batteries/104830582?ref=boilingcold.com.au) by the end of 2026. --- ### WA's battery charge - Synergy Kwinana - 100 megawatts for two hours - operational - Synergy Kwinana 2 - 200 megawatts for four hours - undergoing operational testing - Synergy Collie - 500 megawatts for four hours - to be completed 2025 - Neoen Collie stage 1 - 219 megawatts for four hours - operating since October 2024 - Neoen Collie stage 2 - 341 megawatts for four hours - under construction, expected to be operational Q4 2025 - Alinta Wagerup - 100 megawatts for two hours - start-up planned for early 2025 - Alinta Wagerup 2 - 300 megawatts - approved - expected completion October 2027 - Atmos Renewables/Nomad Energy Merredin - 100 megawatts for four hours - in a late stage of development - Naturgy Energy - Cunderdin - 55 megawatts for four hours combined with solar farm - operational --- ### Updates 7 February 2025 - Cunderdin added to battery list ### A marine heatwave killing huge numbers of fish in northwest WA is heading south URL: https://www.boilingcold.com.au/a-marine-heatwave-killing-huge-numbers-of-fish-in-northwest-wa-is-heading-south/ Last updated: 2025-01-30T08:05:06.000Z [Sina Pinter](https://theconversation.com/profiles/sina-pinter-2302672?ref=boilingcold.com.au), [*The University of Western Australia*](https://theconversation.com/institutions/the-university-of-western-australia-1067?ref=boilingcold.com.au); [Matt Rayson](https://theconversation.com/profiles/matt-rayson-1228375?ref=boilingcold.com.au), [*The University of Western Australia*](https://theconversation.com/institutions/the-university-of-western-australia-1067?ref=boilingcold.com.au), and [Nicole L. Jones](https://theconversation.com/profiles/nicole-l-jones-689127?ref=boilingcold.com.au), [*The University of Western Australia*](https://theconversation.com/institutions/the-university-of-western-australia-1067?ref=boilingcold.com.au) --- Tens of thousands of fish [have died](https://www.abc.net.au/news/2025-01-28/marine-heatwave-pilbara-mass-fish-deaths/104852574?ref=boilingcold.com.au#:%7E:text=Fisheries%20officials%20say%20a%20marine,at%20Gnoorea%20Beach%20near%20Karratha.) off northwestern Australia, as a large and long-lasting marine heatwave intensifies. The fish kill at Gnoorea Beach near Karratha is concerning our team of scientists, as the hot mass of water heads south towards Ningaloo Reef and the seagrass gardens in Shark Bay. That’s because we’ve seen this before. An [enormous marine heatwave](https://www.per.marine.csiro.au/staff/Ming.Feng/Publications/2013PearceFengJMS.pdf?ref=boilingcold.com.au) in 2010-11 devastated fisheries and ecosystems further down the WA coast. This marine heatwave began in September, with temperatures up to 3°C warmer than usual off Broome. There’s no end in sight. The heatwave comes as oceans worldwide experience [record-breaking heat](https://theconversation.com/2024s-extreme-ocean-heat-breaks-records-again-leaving-2-mysteries-to-solve-246843?ref=boilingcold.com.au), driven by climate change. More than 90% of all heat trapped by greenhouse gases [goes into](https://theconversation.com/in-hot-water-heres-why-ocean-temperatures-are-the-hottest-on-record-204534?ref=boilingcold.com.au) the oceans. The fish kill is a visible way to glimpse a disaster often out of sight and out of mind. But these marine heatwaves do much more, from wiping out seagrass meadows and kelp beds to trashing fisheries. ![](https://images.theconversation.com/files/645453/original/file-20250129-15-1vxx58.jpg?ixlib=rb-4.1.0&q=45&auto=format&w=754&fit=clip) ****Up to 30,000 dead fish have washed up around Gnoorea Beach near Karratha.** [**WA Department of Primary Industries and Regional Development*](https://www.wa.gov.au/government/announcements/investigation-underway-fish-kill-gnoorea-near-dampier?ref=boilingcold.com.au) ## How bad is this marine heatwave? Marine heatwaves [are periods of](https://tos.org/oceanography/article/categorizing-and-naming-marine-heatwaves?ref=boilingcold.com.au) at least five consecutive days when ocean temperatures are significantly higher than the long-term average for the region and season. Since September 2024, temperatures off Australia’s northwest coast have been high enough to be considered a heatwave. In late December, the area of hotter water expanded southward along the Pilbara coast and became more intense. Temperatures hit 4–5°C above normal at the surface. Our research group has gathered data from satellite measurements, which tells us it’s hotter than usual. Data from autonomous ocean gliders [also show](https://oceancurrent.aodn.org.au/gliders/Onslow20241119%5F30d/latest.html?ref=boilingcold.com.au) unusual levels of heat as far down as 200 metres. In January, this heatwave has become bad enough to be classified in some areas as a severe marine heatwave. There’s no relief in sight yet. The Bureau of Meteorology [forecasts](http://www.bom.gov.au/oceanography/oceantemp/sst-outlook-map.shtml?ref=boilingcold.com.au) marine heatwave conditions to continue through February. ![figure showing intensity of marine heatwave in northwest Western Australia](https://images.theconversation.com/files/645457/original/file-20250129-15-itan57.png?ixlib=rb-4.1.0&q=45&auto=format&w=754&fit=clip) ****On the left, the marine heatwave on the Northwest Shelf is visible in dark red. On the right, the intensity of the heatwave is shown over time on the Northwest Shelf and further south in Central Western Australia**. **Author provided,* [**CC BY*](http://creativecommons.org/licenses/by/4.0/?ref=boilingcold.com.au) ## Will it be worse than the 2010 heatwave? The current marine heatwave is, so far, the second-worst in Western Australia’s recorded history. Over the 2010–11 summer, a severe marine heatwave devastated seas off the state. Temperatures hit up to 5°C above average, peaking in February and March. The worst-hit areas were seas off the central West Australian coastline, leaving those to the north largely unaffected. But the heatwave stretched 2,000 kilometres, from the Pilbara all the way down to Denmark in the southwest. The reason the 2010 heatwave spread so far south was due to the [Leeuwin Current](https://marinewaters.fish.wa.gov.au/mwwp/wp-content/uploads/2019/06/leeuwin-current-poster.pdf?ref=boilingcold.com.au), which was stronger than usual due to weak southerly winds linked to a low-pressure system off the coast. ![figure showing the 2010-11 marine heatwave in Western Australia](https://images.theconversation.com/files/645458/original/file-20250129-15-rakgu8.png?ixlib=rb-4.1.0&q=45&auto=format&w=754&fit=clip) ****The 2010-11 marine heatwave hit Central West Australian waters hardest. The Leeuwin Current ferried heat southward.** **Author provided,* [**CC BY*](http://creativecommons.org/licenses/by/4.0/?ref=boilingcold.com.au) The heat led to local extinction of [kelp species](https://wernberglab.org/wp-content/uploads/2019/11/wernberg-2019-wa-mhw-authors-final.pdf?ref=boilingcold.com.au) along a 100km stretch of coastline. Scallop and blue swimmer crab fisheries had to close. Seagrass meadows in Shark Bay [collapsed](https://www.fish.wa.gov.au/Documents/research%5Freports/frr250.pdf?ref=boilingcold.com.au). Tropical species were sighted in new areas. And coral bleached at Ningaloo. By contrast, this current marine heatwave has concentrated on the northern coastline, but may spread south in coming weeks. Unfortunately, there are strong similarities between the 2010–11 heatwave and this one. Both occurred during a [La Niña year](https://www.abc.net.au/news/2025-01-07/australia-la-nina-could-be-back-summer-wet-weather/104787346?ref=boilingcold.com.au). A similar low-pressure system in December 2024 weakened southerly winds during this heatwave, though not as pronounced as in 2010-11\. We can expect to see the Leeuwin Current intensify and carry more warm water than usual south, but perhaps not as far as in 2010–11\. Weather systems at present are developing slightly differently to 2010–11, but they could still lead to weaker southerly winds and produce a stronger current channelling heat. [![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/01/support-CTA-for-posts-1.png)](https://www.boilingcold.com.au/#/portal/signup) ## What does this mean for ocean life? Marine heatwaves at this size and intensity can profoundly damage marine ecosystems and fisheries. The Karratha fish kill is the most visible sign of ecosystem distress. We have already seen signs of bleaching in the coral reefs of the Kimberley region, while corals are experiencing heat stress at world-famous Ningaloo Reef. The heat is now affecting the Gascoyne region between Carnarvon and Exmouth, and is likely to head further south. Damage from the heatwave could threaten valuable industries such as the rock lobster fishery and marine tourism on the Coral Coast. ![bleached coral linked to marine heatwave.](https://images.theconversation.com/files/645459/original/file-20250129-15-kwulc3.jpeg?ixlib=rb-4.1.0&q=45&auto=format&w=754&fit=clip) ****Bleached corals in Cygnet Bay north of Broome. Photo taken on 16th January.** **Kayleigh Foste,* [**CC BY*](http://creativecommons.org/licenses/by/4.0/?ref=boilingcold.com.au) ## More heatwaves will come As the climate changes, [modelling indicates](https://www.nature.com/articles/s41586-018-0383-9?ref=boilingcold.com.au) marine heatwaves will hit more often and to intensify. Worldwide, marine heatwaves have devastated ecosystems. One of the worst, the Pacific “blob” heatwave of 2014-2016, killed [an estimated](https://www.sciencealert.com/scientists-find-what-s-been-fueling-the-murderous-ocean-heatwave-called-the-blob?ref=boilingcold.com.au) 100 million Pacific cod and four million birds from a [single seabird species](https://www.science.org/doi/10.1126/science.adq4330?ref=boilingcold.com.au#:%7E:text=Between%20the%207%2Dyear%20period,event%20in%20the%20modern%20era.), as well as contributing to [the starvation](https://www.smithsonianmag.com/smart-news/7000-humpback-whales-may-have-starved-to-death-during-the-blob-heatwave-180983870/?ref=boilingcold.com.au) of about 7,000 humpback whales. The intense heat killed off cold-loving species and paved the way for tropical species to enter and [even thrive](https://hakaimagazine.com/news/years-after-the-blob-the-pacific-still-doesnt-look-the-same/?ref=boilingcold.com.au). Right now, [28% of the world’s oceans](https://www.marineheatwaves.org/tracker.html?ref=boilingcold.com.au) are in heatwave conditions, based on surface temperatures. [INPEX seeks Australia’s help to blow the Paris AgreementThe Japanese energy giant is cherry-picking data to justify its gas growth plans.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-34.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Ichthys-LNG-plant-2.jpg)](https://www.boilingcold.com.au/inpex-chief-executive-expects-australias-help-to-blow-the-paris-agreement/) While there is a [clear link](https://agupubs.onlinelibrary.wiley.com/doi/full/10.1002/2014GL062509?ref=boilingcold.com.au) between the 2010-11 marine heatwave and climate change, we cannot conclusively say this current heatwave off Western Australia is linked to climate change. That’s because we don’t have enough data about what’s happening under the surface. Temperatures in the ocean vary greatly by depth, and a hot surface doesn’t always mean heat has reached deeper water. So while we know a marine heatwave is in progress, we don’t know how bad it is or how far down the heat has reached in different regions. We need better ways to measure temperatures at depth, to be able to gauge how bad a heatwave is. Installing more temperature sensors along the WA coastline would allow us to better monitor and respond to temperature extremes. The earlier we know about a heatwave, the more we can do to prepare. The 2010-2011 heatwave made many people aware of what damage heat can do to an ocean, as fishing boats sat idle and tourists steered clear of dying coral. More, and worse, is likely to come. Better conservation and management of our oceans can help. But tackling the root cause of intensifying heat – unchecked greenhouse gas emissions – is still far and away the most important challenge. --- [Sina Pinter](https://theconversation.com/profiles/sina-pinter-2302672?ref=boilingcold.com.au), PhD Candidate in Ocean Dynamics, [*The University of Western Australia*](https://theconversation.com/institutions/the-university-of-western-australia-1067?ref=boilingcold.com.au); [Matt Rayson](https://theconversation.com/profiles/matt-rayson-1228375?ref=boilingcold.com.au), Senior Research Fellow in Oceanography, [*The University of Western Australia*](https://theconversation.com/institutions/the-university-of-western-australia-1067?ref=boilingcold.com.au), and [Nicole L. Jones](https://theconversation.com/profiles/nicole-l-jones-689127?ref=boilingcold.com.au), Professor of Physical Oceanography, [*The University of Western Australia*](https://theconversation.com/institutions/the-university-of-western-australia-1067?ref=boilingcold.com.au) This article is republished from [The Conversation](https://theconversation.com/?ref=boilingcold.com.au) under a Creative Commons license. Read the [original article](https://theconversation.com/a-marine-heatwave-in-northwest-australia-is-killing-huge-numbers-of-fish-its-heading-south-248139?ref=boilingcold.com.au). --- ### Woodside doubling its WA gas price in 5 years evidence of a tight market URL: https://www.boilingcold.com.au/woodside-has-doubled-its-wa-gas-price-in-5-years/ Last updated: 2025-04-11T08:32:32.000Z EXCLUSIVE The two largest Australian oil and gas companies, Woodside and Santos, have been able to charge significantly more for the vital fuel in recent years, demonstrating a market shift that has heavy industry worried. Woodside, which supplies 19 per cent of the WA market, charges twice as much for the vital fuel as it did five years ago. Santos, which had a 24 percent market share in the 12 months to June 2024, charges more than Woodside and has increased its price by 83 percent in four years. There is no reason to believe the prices received by WA's second and third biggest suppliers are outliers from their competitors. Chevron, the largest seller with a 26 per cent market share, does not publish its average price. For Woodside, most of the jump has occurred in the past three years, with the average price it fetched for its share of gas from the North West Shelf, Pluto, Macedon and Wheatstone projects rising from $3.70 to $6.50 a gigajoule. Santos sells gas from the Macedon, Varanus Island and Devil Creek processing plants. With most gas sold in WA under long-term contracts, the average price is likely to be a lagging indicator in a rising market, with most new gas contracts most likely signed for considerably more. Just six years ago, then premier Mark McGowan touted WA's "[abundant supply of cheap gas](https://www.smh.com.au/business/companies/wa-premier-dangles-cheap-gas-carrot-to-lure-east-coast-companies-west-20190527-p51rj0.html?ref=boilingcold.com.au)" to lure industry in the eastern states westwards. Since then, that promised abundance in Australia's most gas-dependent state has turned into a likely shortage. In December, the Australian Energy Market Operator predicted a tight market this decade and a [significant shortage in the 2030s](https://www.boilingcold.com.au/wa-faces-gas-shortfalls-from-2030-aemo/). Potential investors need confidence that gas will be both available and affordable for a decade or more to justify projects with long payback periods. The AEMO forecast to 2034 misses further bad news for gas buyers. From about 2036, the Chevron-led Gorgon project that supplies about 25 per cent of the WA market will no longer be obliged to supply the local market. [The Gorgon deal that could up the stakes on WA’s looming gas shortageWestern Australia’s biggest gas plant may be able to export for 30 years with no obligation to supply the state, thanks to an agreement struck two decades ago.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/watoday-2024-16.png)WAtodayPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/c4dccdaa803c5ccb30462c9129a6ac3ec5fc9eae-1)](https://www.watoday.com.au/national/western-australia/the-gorgon-deal-that-could-up-the-stakes-on-wa-s-looming-gas-shortage-20240702-p5jqic.html?ref=boilingcold.com.au) ## Heavy industry wants policy enforced Richard Harris, spokesman for the Domgas Alliance of large WA gas users, said it typically refrained from commenting on gas prices from individual producers. "However, it is important to highlight that the WA domestic gas policy was established to ensure an adequate supply of gas to meet WA's domestic consumer needs at a cost advantage compared to international LNG markets," he said. Harris said there was genuine concern within the industry that some LNG producers may be prioritising the more profitable export market over fulfilling their domestic gas obligations. "This could restrict supply for local WA industries and drive up prices for local consumers," he said. [![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/01/support-CTA-for-posts-1.png)](https://www.boilingcold.com.au/#/portal/signup) The future of investments by Domgas Alliance members - that include WA's biggest gas consumer Alcoa, Wesfarmers Chemicals and Yara Pilbara Fertilisers - or other large gas users could be threatened if gas prices continue to rise. Some large gas users will consider curtailing or ceasing their operations in WA if the gas price hits $7.93/GJ - 22 per cent higher than Woodside's average price in 2024 - according to AEMO's 2024 WA Gas Statement of Opportunities From AEMO's survey of industry, the median price that would cause curtailment or shutdown was $10.75/GJ. Over the past two years, gas contracts above $10/GJ have been agreed in WA, according to a number of industry participants not authorised to speak to the media. Woodside did not answer questions about what factors led to the spike in its WA gas price. The WA gas market is tight in part because Woodside's Pluto LNG has delivered just a fraction of the nominal 15 per cent of gas exports headlined in the state's much-touted domestic gas policy, courtesy of an unenforceable deal made in 2003. [WA’s looming domestic gas shortage: How a ‘good faith’ argument left WA shortA shortfall in gas from exporters could shut WA businesses and deter new investment and Woodside’s Pluto project is the biggest problem.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/watoday-2024-17.png)WAtodayPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/539c96c6bfde0bbbad3d6ef2c7508cb91a6879af)](https://www.watoday.com.au/national/western-australia/wa-s-looming-domestic-gas-shortage-how-a-good-faith-argument-left-wa-short-20240207-p5f35z.html?ref=boilingcold.com.au) A Woodside spokesman said it was in ongoing discussions with the WA Government about how it could support the state’s energy needs from all its assets, including Pluto. "Through these discussions, Woodside agreed to make up to an additional 50 terajoules a day of domestic gas available in WA in both 2024 and 2025 to meet the forecast market shortfall," he said. "We have always said we are willing to play our part, "Flexibility in the WA Domgas Policy enables producers to adjust their supply in response to market conditions. This is exactly what Woodside is doing." Woodside plans to begin production from its Scarbrough gas field in 2026 through an expanded Pluto gas plant. Up to [225 terajoules a day](https://www.woodside.com/docs/default-source/media-releases/long-term-domestic-gas-sale-between-woodside-and-perdaman-becomes-unconditional.pdf??ref=boilingcold.com.au) of gas will flow to the WA market, although more than half will be consumed by the under-construction Perdaman urea plant. Since 2021, the output from Santos' Devil Creek plant has declined significantly due to the natural decline of the Reindeer offshore field. --- #### The data Woodside annual reports gave the average realised price for pipeline gas sold that year in $US/barrel of oil equivalent from 2015 to 2019\. For 2020 and 2021, the price was in the presentation released with the annual results. These were converted to $A/gigajoule using Woodside's 0.1636 boe per terajoule conversion factor and [ATO average annual exchange rates](https://www.ato.gov.au/tax-rates-and-codes/foreign-exchange-rates-overview?ref=boilingcold.com.au) 2015 - 22 $US/boe - $4.58/GJ 2016 - 21 $US/boe - $4.84/GJ 2017 - 20 $US/boe - $4.08/GJ 2018 - 15 $US/boe - $3.13/GJ 2019 - 14 $US/boe - $3.14/GJ 2020 - 14 $US/boe - $3.32/GJ 2021 - 17 $US/boe - $3.70/GJ In 2022, Woodside supplied an average price that included Bass Strait sales from the newly acquired BHP assets, so no WA data is available. In the graph 2022 is represented as the mean value of 2021 and 2023. In 2023 and 2024, Woodside supplied the average realised price for pipeline gas in WA in $A/GJ with its quarterly results. The average of the four quarters was used. 2023 - $6.48/GJ 2024 - $6.50/GJ Santos prices were sourced from its 2024 fourth-quarter report [data tables](https://www.santos.com/wp-content/uploads/2025/01/2024-Fourth-Quarter-Report-Data-Tables.xlsx?ref=boilingcold.com.au), and the $US converted to $A with ATO exchange rates. Prices before 2020 were not available. 2020 - 3.37 $US/GJ - provided - $4.48/GJ 2021 - 4.48 $US/GJ - provided - $5.96/GJ 2022 - 4.15 $US/GJ - provided - $5.97/GJ 2023 - 4.95 $US/GJ - provided - $7.45/GJ 2024 - 5.41 $US/GJ - average of quarterly prices - $8.19/GJ --- ### Corrections and updates 30 January 2025 - The original story omitted that Santos also makes its WA gas prices public. Graph and text have been updated to reflect that. 3 February 2025 - Santos provided WA gas prices in $US/GJ and this was incorectly presented as $A/GJ. Story text has been significantly amended to cover Santos. ### 3 reasons to fear humanity won’t reach net-zero and 4 reasons why we just might URL: https://www.boilingcold.com.au/3-reasons-to-fear-humanity-wont-reach-net-zero-and-4-reasons-why-we-just-might/ Last updated: 2025-01-29T06:02:44.000Z [Nick Rowley](https://theconversation.com/profiles/nick-rowley-10185?ref=boilingcold.com.au), *[Australian National University](https://theconversation.com/institutions/australian-national-university-877?ref=boilingcold.com.au)* Within hours of [taking office last week](https://theconversation.com/trump-promises-a-second-term-focused-on-immigration-and-nationalism-as-well-as-revenge-and-retribution-247773?ref=boilingcold.com.au), President Donald Trump made good on his pledges to wind back the United States’ climate action – including [withdrawing the US](https://theconversation.com/trump-has-withdrawn-the-us-from-the-paris-agreement-heres-why-thats-not-such-a-bad-thing-248109?ref=boilingcold.com.au) from the Paris Agreement. This political show comes barely a week after 2024 was revealed as the world’s hottest year and following the catastrophic Los Angeles fires. The fires directly killed 20 people; potentially [many more](https://yaleclimateconnections.org/2025/01/indirect-death-toll-from-the-l-a-fires-may-end-up-in-the-thousands/?ref=boilingcold.com.au) will die from toxic smoke and other after-effects. The science is clear: achieving net-zero emissions by 2050 is humanity’s only hope of achieving some measure of climate security. It’s time to think deeply on our chances of getting there. Here, I outline a few reasons for pessimism, and for hope. ## Reasons for pessimism **1\. The data doesn’t lie** The landmark Paris Agreement, signed by 196 nations in 2015, aimed to limit global temperature rise to well below 2°C above pre-industrial levels while pursuing efforts to limit it to 1.5°C. Achieving that requires reaching net-zero emissions by mid-century. Yet nearly a decade after the agreement, global emissions continue to rise. The [Global Carbon Budget](https://globalcarbonbudget.org/fossil-fuel-co2-emissions-increase-again-in-2024/?ref=boilingcold.com.au) estimates a record-high 37.4 billion tonnes of CO₂ was emitted last year. And 2024 was not just the hottest year on record – it was the [first year](https://climate.copernicus.eu/copernicus-2024-first-year-exceed-15degc-above-pre-industrial-level?ref=boilingcold.com.au) to exceed the 1.5°C temperature threshold. It’s not too late to change trajectory. But sadly, the data show the bathtub is fast filling, and the tap is still running hard. **2\. Renewable energy rollout is too slow** Renewable energy deployment [is increasing](https://www.iea.org/energy-system/renewables?ref=boilingcold.com.au) and the price is falling. But it’s not happening fast enough. According to the International Energy Agency, clean energy investment must [more than double](https://www.iea.org/reports/net-zero-by-2050?ref=boilingcold.com.au) this decade if the net-zero goal is to be reached by 2050\. In particular, clean energy investment in developing countries must [increase significantly](https://www.bloomberg.com/professional/insights/sustainable-finance/bloombergnef-on-the-emerging-markets-net-zero-challenge/?ref=boilingcold.com.au). Richer nations – which are largely responsible for the stock of emissions in the atmosphere driving the climate problem – are failing to help developing countries make the clean energy shift. At the COP29 climate talks in Baku last year, developed nations [agreed to give only US$300 billion (A$474 billion) a year](https://www.carbonbrief.org/cop29-key-outcomes-agreed-at-the-un-climate-talks-in-baku/?ref=boilingcold.com.au) in climate finance to developing countries by 2035\. It is nowhere near enough. **3\. The net-zero smokescreen** Net-zero emissions is not the same as zero emissions. It allows some industries to keep polluting, if equivalent emissions are removed from the atmosphere elsewhere to keep the balance at zero. This means nations that are purportedly committed to the net-zero goal can continue with business as usual, or worse. In 2023, for example, then-British Prime Minister Rishi Sunak announced 100 new [oil and gas licences](https://www.bbc.com/news/uk-scotland-66354478?ref=boilingcold.com.au) in the North Sea, saying it was “entirely consistent” with his government’s net-zero goal. The same logic has allowed Australia’s environment minister, Tanya Plibersek, to [approve new coal mines](https://theconversation.com/expanding-coal-mines-and-reaching-net-zero-tanya-plibersek-seems-to-believe-both-are-possible-241007?ref=boilingcold.com.au). [INPEX seeks Australia’s help to blow the Paris AgreementThe Japanese energy giant is cherry-picking data to justify its gas growth plans.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-29.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Ichthys-LNG-plant-1.jpg)](https://www.boilingcold.com.au/inpex-chief-executive-expects-australias-help-to-blow-the-paris-agreement/) Both decisions came from governments that have pledged commitment to reaching net-zero – yet both are clearly making the goal harder to achieve. These are just a few of the reasons to feel pessimistic about getting to net-zero – there are many more. Barriers exist to [extracting the critical minerals](https://www.iea.org/reports/the-role-of-critical-minerals-in-clean-energy-transitions?ref=boilingcold.com.au) needed in low-emissions technology. [Differences in human relationships](https://www.sciencedirect.com/science/article/abs/pii/S0272494414000619?ref=boilingcold.com.au) to nature means we will never reach full agreement on how to respond to environmental risk. And globally, there is [rising mistrust](https://www.edelman.com/trust/2024/trust-barometer?ref=boilingcold.com.au) in international agreements and institutions. But it’s not all doom and gloom. Here’s why. ## Reasons for hope **1\. Renewable energy is cheap** Renewable energy has become the [cheapest form of new electricity in history](https://www.iea.org/reports/renewable-energy-market-update-june-2023/executive-summary?ref=boilingcold.com.au). The technologies are now [less expensive](https://www.carbonbrief.org/solar-is-now-cheapest-electricity-in-history-confirms-iea/?ref=boilingcold.com.au#:%7E:text=The%20world's%20best%20solar%20power,Agency's%20World%20Energy%20Outlook%202020.) than coal and gas in most major countries. The International Energy Agency [projects](https://www.iea.org/reports/renewables-2022/executive-summary?ref=boilingcold.com.au) global renewable capacity will increase by more than 5,520 gigawatts between 2024 and 2030\. This is 2.6 times more than the deployment over the six years to 2023. The growth in rooftop solar is expected to more than triple, as equipment costs decline and social acceptance increases. **2\. Commitments to net-zero are many** Global support for the net-zero goal is significant. According to [Net Zero Tracker](https://zerotracker.net/?ref=boilingcold.com.au), 147 of 198 countries have set a net-zero target. Some 1,176 of the 2,000 largest publicly traded companies by revenue have also adopted it. Without seeing the plans, numbers, laws, regulations and investments required to achieve these ambitions, one should be sceptical – but not cynical. **3\. Tech innovation and climate response are in lock-step** Twenty-five years ago, smartphones did not exist, email was new and we “surfed” a new thing called the worldwide web with a slow dial-up modem. Similarly, our technologies will look very different 25 years from now – and many developments will ultimately help deliver the net-zero goal. [Smart electricity grids](https://www.iea.org/energy-system/electricity/smart-grids?ref=boilingcold.com.au), for example, use digital technologies, sensors and software to precisely meet the demand of electricity users – making the system more efficient and reducing carbon emissions. The [European Union](https://energy.ec.europa.eu/topics/energy-systems-integration/digitalisation-energy-system%5Fen?ref=boilingcold.com.au), [United States](https://www.energy.gov/gdo/grid-resilience-and-innovation-partnerships-grip-program?ref=boilingcold.com.au) and [China](https://transformers-magazine.com/tm-news/state-grid-to-invest-77-billion-in-the-power-grid-in-2023/?ref=boilingcold.com.au#:%7E:text=China%3A%20Xin%20Baoan%2C%20chairman%20of,14th%20Five%2DYear%20Plan%20period) are all investing vast sums to support their development. Already, we can [use smart meters](https://www.aemc.gov.au/news-centre/media-releases/aemc-finalises-landmark-reform-accelerate-smart-meter-rollout?ref=boilingcold.com.au) to monitor electricity generation from our roofs to our cars and home batteries. This allows zero-emissions electricity to both be used and sold back to the grid. Tech innovation is not confined to the electricity sector. As Australia’s Climate Change Authority [has stated](https://www.climatechangeauthority.gov.au/sector-pathways-review?ref=boilingcold.com.au), technology offers pathways to reduce emissions across the economy – in [transport](https://www.sciencedirect.com/science/article/pii/S209575642400117X?ref=boilingcold.com.au#:%7E:text=Key%20innovations%2C%20such%20as%20the,to%20mitigate%20emissions%20in%20the), agriculture, industry and more. [New 490MW MidWest WA wind farm plans 2028 start-upThe Parron wind farm could slash the carbon pollution from generating WA’s power by one million tonnes a year.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-30.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/DJI_0316-1-1.jpg)](https://www.boilingcold.com.au/new-490mw-midwest-wa-wind-farm-plans-2028-start-up/) **4\. Human talent and capacity** Many of humanity’s best minds are now focused on reducing climate risk. Climate change mitigation is [attracting remarkable professionals](https://www.irena.org/Digital-content/Digital-Story/2023/Sep/A-decade-of-progress-Renewables-jobs-on-the-rise/detail?ref=boilingcold.com.au) in roles unimaginable 25 years ago - from engineers developing breakthrough renewable technologies to financial experts designing green investment products, policy specialists crafting new regulations, and climate scientists refining our understanding of climate risk. And among much of the public, [global support for climate action](https://www.nature.com/articles/s41558-024-01925-3?ref=boilingcold.com.au) is strong. ## No time for despair The fact that humans caused climate change is an enabling truth: we also have the capacity to make decisions to address the problem. Our choices today will make a difference. It will be a bumpy road – but to achieve some measure of climate security, net-zero is a goal we must achieve.![The Conversation](https://counter.theconversation.com/content/247992/count.gif?distributor=republish-lightbox-basic) [Nick Rowley](https://theconversation.com/profiles/nick-rowley-10185?ref=boilingcold.com.au), Honorary Associate Professor, The Crawford School of Public Policy, *[Australian National University](https://theconversation.com/institutions/australian-national-university-877?ref=boilingcold.com.au)* This article is republished from [The Conversation](https://theconversation.com/?ref=boilingcold.com.au) under a Creative Commons license. Read the [original article](https://theconversation.com/3-reasons-to-fear-humanity-wont-reach-net-zero-emissions-and-4-reasons-we-might-just-do-it-247992?ref=boilingcold.com.au). ### Alcoa's Kwinana closure bill jumps by $131 million URL: https://www.boilingcold.com.au/alcoas-kwinana-closure-bill-jumps-by-131-million/ Last updated: 2025-02-11T01:32:59.000Z Alcoa will spend $US163 million ($260 million) managing water at its mountain of caustic red mud in Kwinana where savings from shutting down its 60-year-old alumina refinery have been slow to materialise. When Alcoa announced the closure in January 2024, it estimated that it would [cost up to $US200 million](https://d18rn0p25nwr6d.cloudfront.net/CIK-0001675149/e4a9dd37-adcc-4ff0-88a5-58cd34f6e8bf.pdf?ref=boilingcold.com.au) ($319 million). The expenses included $US81 million for water management and $US55 million for the 800 employees who would be made redundant or redeployed. Alcoa chief financial officer Molly Beerman said the US bauxite miner and aluminium producer had allocated a further $US82 million to manage water at its Kwinana bauxite residue site. "During the fourth quarter, we completed the technical evaluation of the water management requirements for the residue areas and increased the duration of the transition and related equipment costs for ongoing water treatment," she told Wall Street analysts Thursday morning Perth time. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/01/Alcoa-Kwinana-refinery-and-tailings.png) **Alcoa's Kwinana bauxite residue is stored in a 2km by 3km area.* ****Google Maps.** The Kwinana refinery made a loss of $US130 million in 2023, and Alcoa initially expected to save $US70 million a year once it closed down in mid-2024. "The Kwinana curtailment has been slow to deliver savings due to high transition and holding costs," she said, adding that the company was still chasing the targeted savings. Alcoa refers to the closure as a curtailment, as it may reopen the facility in the future. It continues to use the Kwinana site to export alumina from its Pinjarra refinery. If the site closed permanently, Alcoa would face further significant costs. Alcoa still has $US140 million set aside to spend at Kwinana and expects to outlay a large majority of that this year. Over six decades, Alcoa has piled 140 million tonnes of highly caustic waste inland of the Kwinana refinery as high as 85m. Near its three WA refineries - Kwinana, Pinjarra, and Wagerup - the company stores enough red mud to [fill Optus Stadium more than 350 times](https://www.watoday.com.au/national/western-australia/alcoa-s-mountains-of-red-mud-fail-to-pass-stability-checks-20240830-p5k6qy.html?ref=boilingcold.com.au). In 2024, the company disclosed that 21 storage areas failed stability checks. Alcoa will spend $US70 million in 2024 preparing to move into a new mining area in the jarrah forest, with more significant expenses to follow in 2026. The company has been under pressure in WA since it was revealed two years ago that its strip mining near Serpentine Dam [threatened Perth's water supply](https://www.watoday.com.au/environment/sustainability/alcoa-mining-threatens-perth-s-drinking-water-20230207-p5cijm.html?ref=boilingcold.com.au). In December 2024, the WA government gave it permission to keep mining while the independent Environmental Protection Authority reviewed its operations. It is now under a modified deregulatory regime that WA Premier Roger Cook said [strengthened the protection of the environment](https://www.wa.gov.au/government/media-statements/Cook%20Labor%20Government/New-framework-to-strengthen-Alcoa's-environmental-approvals-20231214?ref=boilingcold.com.au). Alcoa chief executive officer Bill Oplinger said progressing mining approvals in WA was "of paramount importance." The company is expected to release for public comment in coming months a detailed environmental assessment of an expansion of its Huntly mine inland of Pinjarra. "We successfully operated under our new mining conditions in Western Australia (in 2024), which included daily observation of our mining and rehabilitation practices by certain regulators," he said. On Wednesday, the WA Greens, which could hold the balance of power in WA's upper house after the March election, called for an end to mining in WA's forests, phased in over a decade. Greens WA forest spokeswoman Jess Beckerling said the jarrah forest could not be restored after bauxite mining. “It’s staggering that the Cook Government has allowed clearing to continue even in the face of the Water Corporation stating that a contamination event from Alcoa’s strip mining is considered certain and that it constitutes the most significant risk to Perth and the South West’s water quality,” she said. Cook rejected the move as it [threatened 7000 jobs](https://www.watoday.com.au/politics/western-australia/greens-want-ban-on-bauxite-mining-in-wa-forests-20250122-p5l6dp.html?ref=boilingcold.com.au) with Alcoa and fellow bauxite miner South32. "We’re transitioning Alcoa to a modern environmental approvals framework, and we’ve tightened controls over their operations while protecting the thousands of jobs their operations support in WA," he said. ### BP puts brakes on Kwinana clean fuel plans URL: https://www.boilingcold.com.au/bp-puts-brakes-on-kwinana-clean-fuel-plans/ Last updated: 2025-02-03T07:30:47.000Z The UK energy giant has stood down construction and design contractors from its Kwinana Renewables Fuel (KRF) project in recent weeks, according to multiple sources familiar with the project but not authorised to speak to the media. The KRF was to be the first of five BP plants worldwide to turn biomass, including used cooking oil, into 10,000 barrels a day of sustainable aviation fuel and renewable diesel. Work awarded on the KRF has included a $42 million contract to [refurbish 25 tanks](https://saundersint.com/wp-content/uploads/2023/06/Saunders-secures-42m-bp-Kwinana-Renewable-Fuels-Project.pdf?ref=boilingcold.com.au) previously used by the shuttered refinery. French engineering firm Technip was awarded the contract to build a €50 million-plus ($83 million) [hydrogen production unit](https://investors.technipenergies.com/news-releases/news-release-details/technip-energies-awarded-significant-contract-hydrogen?ref=boilingcold.com.au). As recently as late 2023, BP said it planned to start production in 2026\. When asked if this was still its target, the company did not respond. A BP spokeswoman said work was continuing at its Kwinana site. "BP will not respond to rumours about its operation,” he said. ## Verdict on BP's hydrogen plan nears BP is also planning to build a green hydrogen plant - H2Kwinana - at Kwinana on the site where it operated Australia's largest oil refinery for 66 years until it closed in 2021. BP wound down work on the KRF shortly before the Federal Government is expected to announce if it will back H2Kwinana with $1 billion. The project is among six that will share $2 billion of funding from Round 1 of the Federal Government's Hydrogen Headstart program. The funding is expected to be split between two projects. A spokesperson for the Australian Renewable Energy Agency said it expected to announce the successful applicants in the coming weeks. BP started [front-end engineering and design](https://www.bp.com/en%5Fau/australia/home/media/press-releases/govt-support-enables-bp-renewable-hydrogen-project-to-hit-major-milestone.html?ref=boilingcold.com.au) on the hydrogen plant in November 2023, with $70 million in federal government support. The first stage would include an electrolyser to separate hydrogen from water, powered by 100 megawatts of renewable energy. A slightly larger plant was estimated to cost $399 million in a [conceptual study released in 2023](https://www.wa.gov.au/system/files/2023-08/h2kwinana%5Fpublic%5Fsharing%5Fknowledge%5Freport.pdf?ref=boilingcold.com.au). ## Do you like knowing what companies won't tell you? Boiling Cold is here to help [Become a supporter today](#/portal/support) The KRF is a potential customer for H2Kwinana as its green hydrogen would lower the emissions of the biofuel plant by removing the need for it to make hydrogen from gas. Another potential customer for H2Kwinana was BHP's nearby nickel refinery, according to a source not authorised to speak to the media. The miner had considered [building its own hydrogen plant](https://im-mining.com/2020/07/20/bhp-nickel-west-puts-forward-renewable-hydrogen-project-arena-funding/?ref=boilingcold.com.au) in 2020. Unfortunately for BP's hydrogen plans, BHP shut down its nickel business in WA in 2024 for at least three years. ## Tough times for BP's clean fuel projects The two Kwinana projects survived BP's [cull of its alternative fuels portfolio](https://reneweconomy.com.au/bp-dumps-18-early-stage-hydrogen-projects-as-it-retreats-to-oil-and-gas/?ref=boilingcold.com.au) in November when it dumped 18 early-stage hydrogen projects and paused two biofuel projects. At the time, BP also announced it would sell its US onshore wind investments, with the moves widely interpreted as the $135 billion company returning to its oil and gas roots. BP is developing two other hydrogen projects in WA. In WA's Mid West, it is investigating a phased development of [14 gigawatts of wind and solar generation](https://www.bp.com/en%5Fau/australia/home/accelerating-australia/hydrogen/geraldton-export-scale-renewable-investment.html?ref=boilingcold.com.au) to make green hydrogen for local use and export. The WA government has allocated the Geraldton Export-Scale Renewable Investment (GERI) 220 hectares at its proposed Oakagee industrial estate. A 2021 feasibility study into GERI [concluded that it was viable](https://www.boilingcold.com.au/bps-geraldton-green-hydrogen-dream-needs-help/), but only with significant investment in ports, water supply, and electricity networks. Further north, in 2022, it bought a 40 per cent stake in the enormous 26-gigawatt Australian Renewable Energy Hub located on a 6500 square kilometre site between Port Hedland and Broome. BP assumed operatorship of the project that aims to produce 1.6 million tonnes of green hydrogen a year. In the next two years it bought almost half of CWP Global's stake and all of Macquarie Bank's interest to increase its ownership to 64 per cent. Macquarie also partnered with BP on the feasibility study for H2Kwinana. When asked if the Australian bank still had an interest in the project, neither company responded. BP also has a one-sixth share of the North West Shelf gas export project near Karratha and owns the biggest stake in Woodside's proposed Browse gas development off the Kimberley coast. ### Woodside plan to bury CO2 a step to Browse gas go-ahead URL: https://www.boilingcold.com.au/woodside-plan-to-bury-co2-a-step-to-browse-gas-go-ahead/ Last updated: 2025-01-27T23:09:11.000Z Woodside has reversed its attitude to carbon storage and lodged the final major environmental approval in its 50-year quest to develop the remote CO2-rich Browse gas fields off the Kimberley coast. Australia's largest oil and gas company wants to inject millions of tonnes of carbon dioxide produced with the gas back under the seabed to significantly reduce the direct climate pollution from its planned $30 billion-plus development. ## From high-risk to preferred option in two years Woodside regarded underground carbon storage as "presently being a high risk, high cost" option to manage the up to 12 per cent CO2 in the Browse reservoirs in a July 2022 [submission to the federal government](https://www.woodside.com/docs/default-source/our-business---documents-and-files/burrup-hub---documents-and-files/browse---documents-and-files/proposed-browse-to-nws-project---supplement-report-to-the-draft-eis-%28epbc-2018-8319%29.pdf?sfvrsn=231f858b%5F3&ref=boilingcold.com.au), but said it would continue to assess it. Less than a year later, Woodside wanted to [expedite federal approval](https://www.watoday.com.au/national/western-australia/carbon-storage-sets-approval-for-woodside-s-browse-gas-project-back-to-square-one-20240820-p5k3xm.html?ref=boilingcold.com.au) for carbon storage by amending its 2018 environmental approval for gas production at Browse. However, the regulatory shortcut was rejected as carbon storage made the proposal "fundamentally different." “Successful carbon capture and storage programs in offshore environments are complex to execute because the technology is in its infancy,” the federal environment department told Woodside in August 2023. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/01/Screenshot-2025-01-09-at-9.47.13-am.png) ****CO2 will be stored under Calliance, one of three Browse gas fields.** **Woodside.* The regulator's concerns included leaking CO2, making the water more acidic, and noise from regular seismic testing to measure the spread of CO2 under the seabed affecting endangered whales. Instead, Woodside [lodged a separate approval for carbon storage ](https://epbcpublicportal.environment.gov.au/all-referrals/project-referral-summary/?id=13333817-2d90-ef11-8a69-0022481295e6&ref=boilingcold.com.au)in October 2024, which was released on January 2, with the public having two weeks to lodge comments. WA Greens fossil fuels spokeswoman Sophie McNeill said the target of reducing greenhouse gas emissions by 53 million tonnes of CO2 over the project's life was only about three per cent of the total climate pollution from Browse when indirect, or Scope 3, emissions from customers using the gas was included. “Now they are suddenly trying to ram this through in a matter of weeks during the summer holidays," she said, calling for an extended period for public comment. "WA already hosts one of the world's biggest carbon dumping failures, Chevron's Gorgon gas export project and the last thing our climate can afford is another sham CCS project." Carbon dioxide injection at Gorgon is running at less than one-third of its design capacity after almost eight years of gas exports. Woodside told the federal regulator that, after several years of work, it had determined that storing CO2 under the Calliance gas field was a suitable solution. The federal government backed this up by declaring it an [identified greenhouse gas storage formation](https://www.nopta.gov.au/application-processes/greenhouse-gas/ghg-register-dosf.html?ref=boilingcold.com.au) in June 2024. A Woodside spokesman said carbon capture and storage is a mature technology that can play a key role in meeting the world’s emissions reduction requirements. "The Browse Joint Venture has determined that a CCS solution for the Browse to NWS Project is feasible," he said. He said the consultation period was a matter for the department. ## The Browse carbon storage plan Woodside plans to capture at least 85 per cent of the CO2 in Browse gas fields at two floating production vessels and pipe it up to 130km to where it will drill up to six wells to inject the carbon dioxide four kilometres below sea level. It chose the drilling area to minimise the risk of the injected CO2 mixing the gas in the Calliance reservoir, a scenario that could eventually increase the CO2 level beyond what the processing facility could handle and force a cut in production. Five-yearly seismic surveys will determine how far the CO2 plume is spreading underground. An average of three to four million tonnes of CO2 will be injected annually. Without carbon storage, Woodside and its Browse partners would have to purchase carbon offsets for all reservoir CO2 vented to the atmosphere after recent changes to the federal government's safeguard mechanism that allows other emissions to be gradually reduced to net zero by 2050\. Woodside estimates that carbon storage will reduce direct (Scope 1) emissions from the production and processing of Browse gas for export by 31 per cent, or 63 million tonnes, over the project's three-decade life. ## Meg O'Neill's three hurdles for Browse Woodside chief executive Meg O'Neill has consistently laid out three requirements before she commits to the expensive front end engineering design (FEED) required to allow Browse to be fully costed and approved for investment. One was landing on a way to manage the high levels of CO2 in the reservoir, which has now been done. O'Neill also wanted to significantly progress negotiations for the North West Shelf (NWS) joint venture to process Browse gas at its plant near Karratha. The industry widely understood the problem to be the two companies invested in the NWS but not Browse: Chevron and Shell. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/01/Screenshot-2025-01-05-at-5.38.07-pm.png) **Gas from the Browse fields would be pumped 1000km to be chilled for export.** **Woodside* Woodside [removed Chevron from the picture](https://www.boilingcold.com.au/woodside-and-chevron-wa-gas-mega-deal-paves-the-way-for-browse-lng/) in December by swapping its share of the Wheatstone LNG project for Chevron's long-standing one-sixth stake in the NWS. However, Shell remains and will be negotiating for a deal that maximises the value and minimises the risk for the NWS. The third hurdle was to make real headway towards obtaining all the required regulatory approvals. WA government approval in December for the NWS plant to [operate until 2070 ](https://www.boilingcold.com.au/wa-labor-approves-woodsides-north-west-shelf-gas-plant-to-export-to-2070/)was a significant milestone. A report on Thursday that Woodside is gearing up to award a [front-end engineering design contract](https://www.upstreamonline.com/field-development/two-large-fpsos-moving-centre-stage-for-australian-lng-project/2-1-1761100?ref=boilingcold.com.au) for the Browse floating production vessels indicates growing confidence, but the gas major still has a challenge in securing all approvals. ## A long road for Browse approvals The December WA approval for the NWS kicked off a six-week countdown for Federal Environment Minister Tanya Plibersek to make a decision six years after Woodside started the process. The next day, her department extended the deadline to 28 February. Unlike the wide-ranging WA assessment, Plibersek will only consider the effect on the one million ancient rock art images in the adjacent Murujuga National Park as it is a National Heritage Place. If Plibersek needs additional information, she could request more time. This move could put her decision into the caretaker period before the coming federal election, further delaying an outcome. Separately, the minister is also considering an investigation into the rock art under Aboriginal heritage legislation that commenced more than two years ago. A draft report [leaked to the media in April 2024](https://www.theaustralian.com.au/nation/no-proof-of-emissions-impact-on-rock-art-report/news-story/f9a4cbd198b5b52dcdd99ea827239dbc?ref=boilingcold.com.au) concluded that there was “not sufficient evidence to support the claim the specified area is under threat from industrial emissions and chemical discharge”. The Browse offshore development also needs an outcome from the WA process that started six years ago and then federal approval. A year ago, WA's Environmental Protection Authority told Woodside its preliminary view was that [Browse was unacceptable](https://www.watoday.com.au/national/western-australia/unacceptable-red-flag-for-woodside-s-browse-gas-project-poses-problem-for-federal-government-20240725-p5jwjm.html?ref=boilingcold.com.au) due to concerns about whales, turtles and oil spills. When the EPA publishes its recommendation for Browse, which is planned for 2025, there will certainly be appeals to be considered before the WA environment minister can decide. The appeals process took 18 months for the NWS life extension. After the state process is completed, the federal environment minister will decide on Browse. Unlike the gas development, Browse carbon storage does not need state approval as it is located entirely in Commonwealth waters. Woodside operates and has a 31 per cent stake Browse. BP owns 44 per cent, Japan Australia LNG 14 per cent and PetroChina 11 per cent. ### Santos pleads guilty over Varanus Island dead dolphin oil spill URL: https://www.boilingcold.com.au/santos-pleads-guilty-over-varanus-island-dead-dolphin-oil-spill/ Last updated: 2025-01-27T02:19:32.000Z Santos has been convicted of substandard operations leading to an oil spill after a WA government regulator charged it over a 2022 oil spill off the Pilbara coast and fined $10,000. The Adelaide-based company plead guilty in the Karratha criminal court on Monday to a charge of "failing to operate its licensed pipeline in a proper and workmanlike manner, failing to prevent the escape of petroleum." Santos was fined $10,000 and ordered to pay $9700 in court costs, according to the Department of Energy, Mines, Industry Regulation and Safety. In March 2022, three dead dolphins were found floating near an oil slick caused by the leak of 25,000 litres of condensate through a gaping hole in a hose used to load oil tankers. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/01/holed-Varanus-Island-loading-hose.webp) ****The oil poured into the ocean through a holed loading hose.** *Tabled in Federal Parliament* The spill went unmentioned by both WA regulators and Santos and only became public knowledge through a [media report](https://www.smh.com.au/business/companies/environmental-group-disputes-negligible-impact-of-santos-wa-oil-spill-20220329-p5a8ym.html?ref=boilingcold.com.au) two weeks later in *WAtoday*. The report pointed to Santos' failure to replace the hose despite Santos knowing it had a weak point from a kink that developed when it was lifted incorrectly some years beforehand. The Adelaide-based oil and gas producer then said "the impact on the environment is negligible," and failed to mention the dead dolphins. Six months after the incident, when the [dolphin deaths became public knowledge](https://www.watoday.com.au/politics/western-australia/dead-dolphins-spotted-near-wa-oil-slick-not-our-fault-santos-claims-20221115-p5byhk.html?ref=boilingcold.com.au), the company said the carcasses were seen a couple of hours after the spill "in which time no harm would have resulted from this incident." > Whistleblower: "They could not have known the real scale of impact, it was never checked." The dolphins were found within 200m of the slick 17 hours after Santos started pumping oil through the loading hose, according to the regulator DEMIRS. Conservation Council of WA fossil fuels campaigner Anna Chapman said the conviction was a reminder of the environmental impacts of offshore oil and gas production. “This was the second catastrophic oil spill in WA’s ocean in the past 15 years - we can’t risk a third at Scott Reef, where Woodside’s Browse Gas proposal threatens the endangered whales, turtles, sea snakes and other marine life that rely on it for survival," she said. A year after the spill, an anonymous whistleblower accused Santos of a coverup in a statement [tabled in the Federal Parliament](https://www.aph.gov.au/-/media/Estimates/economics/supp2223/18%5FS%5FPocock%5FOil%5FSpill%5FDocuments.pdf?la=en&hash=46681D66A460D5207D1E72693A34D5266F031AF1&ref=boilingcold.com.au). The whistleblower said in addition to dead dolphins, Santos's staff witnessed sea snakes writhing in agony and challenged Santos's claim of negligible environmental damage. "In defiance of their obligations, Santos had not mobilised environmental assessors to the island until a week after the incident," he said. "They could not have known the real scale of impact, it was never checked." He also called Santos' claim that the spill did not harm the dolphins "an outright lie." "I was appalled at the culture and management within Santos, which demonstrated such wilful refusal to accept responsibility." ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/01/Varanus-Island.jpg) ****Oil and gas have been processed on Varanus Island since 1986** *Santos* Crews that lifted the loading line from the seabed to connect it to arriving tankers were unaware of the correct technique to use, according to a statement from DEMIRS. "Santos’ failures ... included insufficient monitoring of condensate loading operations, as well as failing to conduct an adequate investigation of the pipeline’s fitness for purpose." DEMIRS said Santos had improved its practices since the spill. Santos' guilty plea contrasts with the conclusion of its own investigation, released in early 2024: "We did not find any evidence to substantiate the allegations raised, but we identified gaps in our internal control and communication processes." A Santos spokeswoman said it takes its environmental and regulatory responsibilities very seriously and deeply regrets the spill from the loading line. "The incident occurred about two months before that part of the line was scheduled to be replaced," she said. "It had been maintained in accordance with the prescribed service life, "Prior to the rupture, regular surveys showed no damage or deformation of that part of the line." --- *Updated 6 January: Comments from the Conservation Council of WA added.* ### New 490MW MidWest WA wind farm plans 2028 start-up URL: https://www.boilingcold.com.au/new-490mw-midwest-wa-wind-farm-plans-2028-start-up/ Last updated: 2025-01-23T05:05:38.000Z A proposed new wind farm near Badgingarra slated to produce 490-megawatts of power from 2028 could ease concerns about the South West power system ahead of the WA government closing its two coal-fired power stations in 2027 and 2029\. Details of the Parron wind farm were [revealed on Monday](https://epbcpublicportal.environment.gov.au/all-referrals/project-referral-summary/project-decision/?id=b6dfdb56-c1cb-ef11-b8e8-002248978a7f&ref=boilingcold.com.au) as a two-week window for public comments started to kick off the federal environment approval process. The clean energy would be sufficient to power 200,000 homes and reduce greenhouse gas emissions by about one million tonnes a year, according to the submission to the Environment Protection and Biodiversity Conservation Act submission. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/01/Screenshot-2025-01-06-at-10.35.29-am.png) ****Wind power (green) on WA's southwest grid tends to be highest overnight** (megawatts, 24 hrs to 7am 6/1/25). [**Open Electricity*](https://explore.openelectricity.org.au/energy/wem/?range=1d&interval=30m&view=discrete-time&group=Detailed&ref=boilingcold.com.au) The project will also be referred to WA's Environmental Protection Authority. In 2024, Atmos Renewables, the Australian renewables business of global infrastructure manager Igneo, partnered with Parron Developments, which has been developing the project since 2016. Parron Developments director Tim Stephenson said if the project went ahead at its design capacity, the partners would contribute about $500,000 a year into a fund for the local community. Stephenson's family owns the sheep farm that will host the wind turbines, bypassing the need for landowner negotiations. However, the companies are working with the local Yued community to ensure Aboriginal heritage is protected. Stephenson said the Shire of Dandaragan approved the project's enlarged development application in December, and it will be referred to the WA Environmental Protection Authority shortly. Atmos [plans to make a final investment decision](https://atmosrenewables.com.au/project/parron-wind-farm/?ref=boilingcold.com.au) on Parron in early 2026, begin construction later that year, and start its operations in late 2028. Alinta Energy's Yandin 50km, southeast of Parron, is currently WA's largest wind farm, capable of generating 214 megawatts from 51 turbines with a top-of-blade height of 180m, each capable of producing 4.3 megawatts. Larger Vestas V162 turbines with a tip height of 230m capable of producing 6.2 megawatts are proposed for Parron. They will connect to a Western Power 330-kilovolt transmission line that runs along the western boundary of the project area. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/01/Screenshot-2025-01-06-at-9.15.42-am.png) ****The project covers 8527 hectares of mainly agricultural land, and about six per cent will be disturbed**. **EPBC submission* The time and expense involved in gaining a connection to capacity on the state-owned transmission grid have been a concern of WA wind proponents for some years. Western Power has been [allocated $655 million](https://www.westernpower.com.au/resources-education/our-network-the-grid/future-of-the-grid/clean-energy-link-program/?ref=boilingcold.com.au) in the state budget to upgrade its network in the area, under a program tagged the "Clean Energy Link – North Region." The area inland of Jurien Bay is the hot spot for WA wind farms, with the Badgingarra wind farm adjacent to the Parron site. In WA Atmos is also planning to start the construction of a four-hour 100-megawatt battery near Meddedin by mid-2025 and have it operational in late 2026\. In the eastern states, it has interests in 17 operating wind and solar farms. Also on Monday, the WA EPA decided [not to assess](https://www.epa.wa.gov.au/proposals/narrogin-windfarm?ref=boilingcold.com.au) Neoen's Narrogoin Wind Farm, which will have 25 turbines and a grid-scale battery. --- *Updated 6 January: Comments from Tim Stephenson added.* ### Woodside and Chevron WA gas mega-deal paves the way for Browse LNG URL: https://www.boilingcold.com.au/woodside-and-chevron-wa-gas-mega-deal-paves-the-way-for-browse-lng/ Last updated: 2025-01-16T04:01:15.000Z Woodside and Chevron have agreed to an asset swap under which Woodside will acquire Chevron’s interest in the North West Shelf Project, including related oil and carbon storage projects. In return, Woodside will transfer all of its interest in the Wheatstone LNG project to Chevron and receive up to $US400 million in cash from the US major. The deal's announcement comes a week after the [state government approved](https://www.boilingcold.com.au/wa-labor-approves-woodsides-north-west-shelf-gas-plant-to-export-to-2070/) an extension of production at the NWS plant to 2070. The huge shake-up in the WA gas sector provides a clearer path for Woodside to develop its Browse gas fields off the Kimberley coast. Woodside chief executive Meg O'Neill said the transaction created more opportunity to fill the increasing amount of spare capacity at the pat near Karratha. “It also provides greater alignment and improves the commercial prospects for the proposed Browse to North West Shelf Project," she said. Woodside has struggled for years to negotiate an agreement to process Browse gas through the NWS plant, which now has spare capacity due to its declining offshore gas production. It has been widely reported that Chevron, one of only two NWS participants not also an investor in Browse, was driving a hard bargain. Thursday's deal leaves Shell as the only NWS equity holder without a stake in Browse. Extending the life of the North West Shelf plant still needs approval from federal environment minister Tanya Plibersek. Woodside is also awaiting an assessment of the Browse project from WA's Environmental Protection Authority which earlier this year was [leaning towards recommending against it](https://www.watoday.com.au/national/western-australia/unacceptable-red-flag-for-woodside-s-browse-gas-project-poses-problem-for-federal-government-20240725-p5jwjm.html?ref=boilingcold.com.au) due to concerns about whales, turtles and oil spills near the pristine Scott Reef. Like the life extension of the NWS plant, the Browse project also needs federal approval. The Chevron deal indicates Woodside is confident it will receive all these environmental approvals. If it does not, it has forsaken an interest in a modern long-life LNG project for a greater stake in a declining asset with a massive decommissioning liability. Woodside's deal with Chevron is similar in some ways to its purchase of BHP's petroleum division in 2021\. BHP had a small stake in the Scarborough gas field that Woodside was keen to develop and the miner was widely understood to be "stepping on the hose" as its gas-focussed partner tried to push the project forward. The deal cleared the way for Woodside to sanction the Scarborough project months later but left the Perth player with a 50 per cent of the ageing Bass Strait oil and gas operation and its significant decommissioning liabilities. ### The details of the deal Woodside gets from Chevron: - a one-sixth stake in the offshore and onshore gas operations of the NWS project, taking its stake to 50 per cent - a one-sixth stake in the NWS oil project, taking its stake to 66.7 per cent - a 20 per cent increase in the nascent Angel carbon storage project, taking its stake to 40 per cent - up to $US400 million in cash: $US300 million when the deal completes - expected in 2026 - and up to $100 million contingent on the performance of well Woodside drilling to supply Wheatstone In return, Chevron receives: - a 13 per cent interest in the Wheatstone platform, pipeline to shore and gas processing plant near Onslow, taking its total equity to 77 per cent - a 65 per cent stake in the Julimar Brunello fields operated to date by Woodside that supplied gas for its 13 per cent share in Wheatstone's processing capacity The deal will not complete until 2026 as it is subject to Woodside completing its Julimar phase 3 project and handing its operation over to Chevron. The deal is also subject to joint venture partners not exercising their pre-emption rights, clearance by the Foreign Investment Review Board and a review by the Australian Competition and Consumer Commission. The ACCC will be most interested in WA's gas market. In the 12 months to June 2024, Chevron supplied 26 per cent of WA as demand. Santos produced 24 per cent and Woodside was the third biggest producer at 19 per cent, according to the AEMO WA Gas State met of opportunities published on Wednesday. The Woodside share price dropped almost two per cent when the market opened. ### Shares in two Perth Basin oil players plunge after payment dispute URL: https://www.boilingcold.com.au/shares-in-two-perth-basin-oil-players-plunge-after-payment-dispute/ Last updated: 2025-01-09T05:01:27.000Z Investors deserted the owners of the shuttered Cliff Head oil platform off the WA coast after Triangle Energy told the market on Wednesday morning that its venture partner, Pilot Energy, had missed a $900,000 payment. After trading finished, Pilot announced it had advised Triangle on Monday that the payment could not be made until next week. The open disagreement pushed the Triangle share price down by a third, and Pilot scrip plunged 50 per cent, tanking the value of the two companies to $8.4 million and $8.2 million, respectively. Pilot secured $2 million of convertible note funding on December 11\. On Wednesday it said had not yet received the funds but they were due by December 24, which would allow Triangle to be paid. On Thursday morning Pilot requested a trading halt until no later than December 23 to allow it to make an announcement about the convertible note funds. Together, the two companies own the Cliff Head platform off the coast near Dongara and a processing plant in Arrowsmith. Eighteen years of oil production ended in September. The disputed payment is part of a complex and protracted deal for Pilot to buy Triangle's 79 per cent stake in Cliff Head and Arrowsmith and turn it into a carbon storage and ammonia project. Pilot made the first payment of $2.4 million to Triangle in October despite it not having received all the regulatory approvals required to assume full ownership. Pilot is now responsible for all the operating costs of the offshore and onshore facilities it part owns that are no longer producing revenue. Triangle was due a second payment of $4.1 million on November 29, but instead, the two companies halted trading for a few days and then announced a new payment schedule totalling $5.75 million. Wednesday's disputed payment was the first of the agreed payments, with five others to follow in the first half of 2025. If Pilot is awarded a license to inject CO2 into the Cliff Head reservoir, Triangle will receive a further $4 million and could receive up to $7.5 million in royalties if the carbon storage project proceeds. An additional benefit to Triangle from the deal is that it will no longer be directly liable for the cost of decommissioning the Cliff Head platform and oil field. However, due to amendments to federal legislation following the financial failure of the Northern Endeavour oil production vessel in the Timor Sea in 2019, Triangle is liable if the new owner, Pilot, cannot pay. Using the existing Cliff Head facilities, Pilot wants to develop a carbon storage business starting in 2029 and produce clean ammonia. It is negotiating with a group of South Korean companies about possible investment in what it dubs the Mid West Clean Energy Project. Triangle and Pilot shares are down 84 per cent and 81 per cent, respectively since the start of the year. ### INPEX chief executive expects Australia's help to blow the Paris Agreement URL: https://www.boilingcold.com.au/inpex-chief-executive-expects-australias-help-to-blow-the-paris-agreement/ Last updated: 2025-01-06T07:21:39.000Z *ANALYSIS* INPEX chef executive Takayuki Ueda wants Australian governments to regulate less and subsidise more so Australian liquefied natural gas (LNG) exports can help meet a demand forecast based on a dangerous level of global warming. Earlier this month Ueda outlined "what we, as foreign investors, expect from Australia" in light of Russia's 2022 invasion of Ukraine when, according to Ueda, countries and businesses shifted emphasis from emissions reduction to energy security. The $25 billion company expects Australia to subsidise carbon storage, speed up environmental approvals, not alter the tax system, and commit to increasing gas exports. Gas is the "ideal solution" to balancing climate and energy security" due to its cleanliness, abundant supply, and reasonable cost," Ueda [told the Perth USAsia Centre](https://perthusasia.edu.au/events/business-briefing-energy-security-and-decarbonisation-2/?ref=boilingcold.com.au) at the University of WA on December 5. "Demand for LNG will continue to grow strongly," "This view is shared by the International Energy Agency, which in its 2024 World Energy Outlook STEPS scenario forecasts that demand for LNG in Asia will continue to grow post-2040." Yes, the IEA predicts that if governments worldwide do nothing more than implement stated policies - its STEPS scenario - more LNG is burnt. However, the result is not a balance between climate and energy security, but a massive overshoot of the Paris Agreement target of keeping global warming within 1.5℃. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2024/12/Inpex-IEA-scenarios-1.png) ****IEA scenarios and global warming** **Graph and data: IEA 2024 WEO, annotation: Boiling Cold* The IEA described the future Ueda used to support more gas extraction as "entailing ever more severe risks from a changing climate." IEA's analysis shows the future for LNG investors if the world can achieve the Paris goals (its net zero emissions NZE scenario): they will be left with tens of billions of dollars worth of underutilized assets. ### Doublespeak for a gas double-down However, INPEX, like most of its contemporaries, is doubling down on gas investments. It plans to add a third processing train to its Ichthys gas export plant in Darwin, which now provides eight per cent of Japan's gas. The company, 22 per cent owned by Japan's Ministry of Economy, Trade and Industry (METI), is also pursuing the Abadi LNG project in Indonesia, which will be as big as Ichthys. To justify gas growth considered climate-wrecking by the IEA, the 35-year METI veteran before joining INPEX trotted out many of the industry's standard lines. 1. *LNG demand is driven by the need to "transition from coal-based to natural gas power."* NO - Countries need to transfer from coal to a high percentage renewables grid backed up by as little gas as possible. This, however, implies declining gas demand and sits uncomfortably with Ueda's pitch that his product is seen as "not merely as a transition energy but rather as a destination energy." 1. *Australian LNG "helps the region decarbonise by displacing more carbon-intensive options."* NO - Woodside commissioned the CSIRO to look at the effect of increased LNG supply to Asian markets. Woodside released the report only after pressure from the media. [Woodside contradicts CSIRO report debunking key climate claimsWoodside continued to claim its largest gas project would reduce emissions in Asia by replacing coal, despite commissioning a report by the CSIRO that found otherwise.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/watoday-2024-14.png)WAtodayCharlotte Grieve![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/1139a0f3f7b1b460187989d837493a28cf5d2150-1)](https://www.watoday.com.au/business/banking-and-finance/woodside-contradicts-csiro-report-debunking-key-climate-claims-20220307-p5a2d5.html?ref=boilingcold.com.au) The conclusion was clear - in most cases more gas was of no or little benefit in reducing emissions, and in some cases forecast emissions rose as more gas delayed the uptake of renewable energy. Only if a high global carbon price was assumed did the CSIRO analysis predict that additional LNG reduced emissions, but the researchers attributed this to the carbon price, not the gas. The CSIRO report has been public for 2½ years, but industry and supplicant governments continue to spout debunked talking points. 1. *"Carbon capture and storage is currently the only realistic – safe and proven – means of significantly reducing CO2 emissions."* NO - Hardly the "only" solution. Ueda omits the obvious: burn less fossil fuels. NO - And "realistic" is, well, unrealistic. The track record of CCS technology Ueda espouses gives no evidence that it could reduce emissions on a globally significant scale in the time frame required to limit global warming. Almost all attempts to date store clean streams of CO2, like Chevron's underperforming Gorgon CO2 injection, where capture is relatively simple. However, the vast majority of emissions come from burning the gas, where capture is vastly more difficult, expensive, and energy-intensive. 1. *A third LNG train at the Ichthys LNG plant would be "carbon neutral."* NO - Even if the train's compressors were driven by electric motors powered exclusively by renewable energy, the end result would be a significant increase in climate-warming emissions. Other emissions come from producing the gas offshore, pumping it to Darwin, shipping it to Japan and, most significantly, INPEX's customers burning it. 1. *More gas is the path to energy security* NO - The world's dependence on international trade in oil and gas is the cause of energy insecurity. The turmoil in energy markets when Europe moved away from Russian gas after it invaded Ukraine showed the danger of relying on gas imports. Renewable energy is homegrown energy. The more of it a country has, the less dependent it is on the vagaries of commodity markets, risks to shipping as faced by the 20 per cent of global LNG supply that Qatar ships through the politically turbulent Straits of Hormuz, or the arbitrary actions of other countries. ## Do you want journalism that regurgitates spin, or pulls it apart? Support independence [Tip Boiling Cold today](https://www.boilingcold.com.au/support/#/portal/support) ### Japan expects ... a lot INPEX is investigating burying the CO2 in the gas it extracts for Ichthys - about a third of the project's total direct carbon pollution - in the Bonaparte Basin west of Darwin. Ueda points to the US that offers an $US85 tax credit for every tonne of CO2 buried and Japan's payment of 100 per cent of the engineering and drilling costs for an INPEX CCS project in its home country. He wants Australia to up its support "to maintain the competitiveness of Australian LNG in the international market." Australian taxpayers would pay a Japanese company to sell their gas to its home country for less. What a deal! "Streamlining approval processes for environmental plans and improving future predictability regarding regulatory design and taxation is crucial," was also part of Ueda's wish list. "Any retrospective changes to the business environment can greatly perplex businesses," he said Perhaps he was perplexed by minor changes to the Petroleum Resources Rent Tax. Conversely, Australians would be perplexed that without the changes, the Ichthys LNG project [would never have paid Australia](https://www.boilingcold.com.au/inpex-likely-to-never-pay-australia-for-gas-for-ichthys-lng/) for the oil and gas it would extract over decades. Ueda concluded his speech as he began, giving directions to the nation he was visiting. "Australia is both expected, and urgently needed, to play a decisive role in the stability of the energy markets," he said "We believe that this role will pave the way for Australia to be respected globally." It seems Ueda thinks we are not respected now. This is an apt outcome for a nation that allows foreign governments and multinationals to determine its economic, environmental, and energy policies. ### WA faces gas shortfalls from 2030: AEMO URL: https://www.boilingcold.com.au/wa-faces-gas-shortfalls-from-2030-aemo/ Last updated: 2025-01-06T03:49:10.000Z WA's gas supply is forecast to be adequate until 2030 except for a tight 2028 if Alcoa restarts its Kwinana alumina refinery and BHP fires up its shuttered nickel business. However, from the start of the next decade growing demand from industry and minerals processing will overtake supply from depleting reserves, according to the [annual outlook](https://aemo.com.au/-/media/files/gas/national%5Fplanning%5Fand%5Fforecasting/wa%5Fgsoo/2024/2024-wa-gas-statement-of-opportunities.pdf?la=en&ref=boilingcold.com.au) released on Wednesday by the Australian Energy Market Operator ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2024/12/Screenshot-2024-12-18-at-9.23.19-am.png) ****Forecast WA gas supply and demand** **AEMO 2024 GSOO* According to AEMO, "The state’s gas supply adequacy is sensitive to the actions of a handful of key players, who in turn are influenced by external factors such as global commodities pricing, energy policy, decarbonisation targets, and the availability of affordable lower-carbon options." AEMO missed a crucial key player action by not implementing a recommendation from the WA Parliament's inquiry into domestic gas to extend its outlook horizon to 20 years. > "The state’s gas supply adequacy is sensitive to the actions of a handful of key players." In about 2037, Chevron's Gorgon project—which supplied 26 percent of WA's gas last financial year—will no longer be required to supply the local market. In 2003 the then Labor state government did not oblige Chevron and its partners Shell and ExxonMobil to supply WA with the equivalent of 15 per cent of their export, but [instead agreed a fixed reservation](https://www.watoday.com.au/national/western-australia/the-gorgon-deal-that-could-up-the-stakes-on-wa-s-looming-gas-shortage-20240702-p5jqic.html?ref=boilingcold.com.au) of 2000 petajoules that will be exhausted in about 13 years. The timeframe may seem distant, it is crucial for considering any long-term investment in WA that would require gas. [The Gorgon deal that could up the stakes on WA’s looming gas shortageWestern Australia’s biggest gas plant may be able to export for 30 years with no obligation to supply the state, thanks to an agreement struck two decades ago.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/watoday-2024-15.png)WAtodayPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/c4dccdaa803c5ccb30462c9129a6ac3ec5fc9eae)](https://www.watoday.com.au/national/western-australia/the-gorgon-deal-that-could-up-the-stakes-on-wa-s-looming-gas-shortage-20240702-p5jqic.html?ref=boilingcold.com.au) ### Gas demand for power to change Gas will remain an essential element of the power generation system in WA's south-west. AEMO WA manager Nicola Falcon said that as more renewable generation is added, the use of gas-free power generators (GPG) will become more seasonal. This is driven by summer and winter demand peaks and when output from solar and wind farms drops due to clouds or low wind. “In future, gas storage is likely to be used more frequently, and we will need more flexibility in daily domestic gas supply to match this increasingly seasonal and peaky gas demand," she said. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2024/12/Screenshot-2024-12-18-at-9.25.50-am.png) ****Where the gas goes** **AEMO 2024 GSOO* A year ago AEMO forecast a supply shortfall in coming years, but increased output from Chevron's Wheatstone and Woodside's NorthWest Shelf and Pluto plants has bridged the gap. However, most domestic gas plants are now running at capacity, increasing the risk of shortages if there is a supply shortage during times of peak demand. In early 2023, there were simultaneous problems at Santos's Devil Creek and Varanus Island facilities and Chevron's Wheatstone plant. AEMO considered what would happen if Bluewaters coal-fired power station closed earlier than the expected date of 2030\. State government financial support for its fuel supplier, Griffin Coal, ends in 2026\. If this resulted in Bluewater's shutting down, an extra 27 terajoules of gas a day would be needed for power generation until sufficient new wind and solar generation is bought online and the transmission capacity is built for it to connect to. ### BHP, Rio and Woodside back green iron plant in Kwinana URL: https://www.boilingcold.com.au/bhp-rio-and-woodside-back-green-iron-plant-in-kwinana/ Last updated: 2024-12-23T07:41:50.000Z Some of the biggest companies in WA have chosen Kwinana to build Australia's largest ironmaking electric smelting furnace to test technology that could secure the future of Australia's largest export. Iron ore miners BHP and Rio Tinto and east coast steel maker Bluescope announced in February that they were working to find a site to show molten iron can be made from Pilbara ores using renewable power and direct reduced iron process technology. Today, the venture - now badged NeoSmelt - revealed that Kwinana was the chosen site, and gas giant Woodside would join them as an equal partner and energy supplier. Electric smelters are the most likely way that iron and steel can be made without coal to slash carbon pollution, but the low grade and high impurity levels of almost all Pilbara iron ore make it unsuitable for current smelters. Making steel produces seven percent of the world's climate-heating carbon pollution and Australia may lose from the race to lower those emissions without new technology that can use its $100 billion of annual exports. The venture's plan is to complete a pre-feasibility study in March 2025, make a final investment decision in 2026 and potentially commission the plant in 2028. [WA mining giants seek government help to make green ironAustralia’s largest export has a problem - its low grade and high impurities make it unsuitable for producing low emissions iron and steel with current technology![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-17.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/171113_NewmanTruck_HQ-cropped-reduced-1.jpg)](https://www.boilingcold.com.au/wa-iron-ore-giants-look-to-seek-government-backing-to-stop-their-2/) The WA Government will spend $75 million to help the project, including new infrastructure in the area. BlueScope manages the project. Its chief executive of Australia Tania Archibald said it leveraged its iron and steelmaking experience at the Port Kembla steelworks and its unique capability as the operator of the world’s only electric smelting furnace processing direct reduced iron, located in in New Zealand. Woodside chief operating officer Australia Liz Westcott said the company supported NeoSmelt’s goal of exploring lower-emissions steelmaking pathways for Pilbara iron ores. “Natural gas and hydrogen may enable emissions reductions in steelmaking," she said. Last week a report on [developing a green iron industry in the Pilbara](https://www.boilingcold.com.au/wa-iron-ore-giants-look-to-seek-government-backing-to-stop-their-2/) concluded natural gas was a suitable transition pathway until clean hydrogen was available. Woodside is studying building a blue hydrogen plant near the NeoSmelt site that would make hydrogen the conventional way - from gas and producing large amounts of carbon dioxide - but capture and bury much of the carbon pollution. The NeoSmelt investment comes on top of Rio Tinto's announcement in July of a $215 million research effort based in Rockingham's industrial area to trial [making iron with biomass and microwave energy](https://www.watoday.com.au/national/western-australia/rio-tinto-unveils-215m-green-steel-rockingham-research-plant-20240604-p5jj3x.html?ref=boilingcold.com.au) instead of coal. Today's announcement occurred opposite the BHP nickel refinery that was recently shuttered until at least 2027 as it could not compete with cheap Indonesian production. Woodside's participation is subject to the finalisation of commercial arrangements. ### More coal and gas, less renewables: what a nuclear power plan for Australia would really mean URL: https://www.boilingcold.com.au/more-coal-and-gas-less-renewables-what-a-nuclear-power-plan-for-australia-would-really-mean/ Last updated: 2024-12-17T02:34:45.000Z [John Quiggin](https://theconversation.com/profiles/john-quiggin-2084?ref=boilingcold.com.au), *[The University of Queensland](https://theconversation.com/institutions/the-university-of-queensland-805?ref=boilingcold.com.au)* Opposition Leader Peter Dutton’s [plan for nuclear power](https://cdn.prod.website-files.com/663be4ac7ac30a186c2545b2/675b93abd27f2c1457d132ed%5FThe%20Coalition%27s%20Energy%20Plan%20-%20A%20263%20billion%20saving%20for%20Australians.pdf?ref=boilingcold.com.au) in Australia has provoked a great deal of discussion and analysis – most of it critical. Experts point out the Coalition’s [long-awaited modelling](https://www.frontier-economics.com.au/wp-content/uploads/2024/12/Report-2-Nuclear-power-analysis-Final-STC.pdf?ref=boilingcold.com.au) involves [both highly optimistic](https://www.abc.net.au/news/2024-12-14/peter-dutton-coalition-nuclear-power-modelling-expert-opinion/104702664?ref=boilingcold.com.au) costings and a [massively lower demand](https://www.theguardian.com/australia-news/2024/dec/13/australia-nuclear-power-costings-frontier-economics-plan-peter-dutton-coalition-policy?ref=boilingcold.com.au) for electricity than expected in official projections. In the upcoming federal election campaign, debate over the hypothetical costs and benefits of nuclear power will doubtless play a big role. But this conceals the real issue. As in every election over the last 20 years, at stake will be the question of whether Australia chooses a clean energy future, or prolongs the life of coal and gas – an outcome the nuclear plan relies on. In that sense, nuclear energy is shaping up as an election fig leaf like no other. [![nuclear plant sunrise](https://images.theconversation.com/files/638762/original/file-20241216-17-cgg4ux.jpg?ixlib=rb-4.1.0&q=45&auto=format&w=754&fit=clip)](https://images.theconversation.com/files/638762/original/file-20241216-17-cgg4ux.jpg?ixlib=rb-4.1.0&q=45&auto=format&w=1000&fit=clip&ref=boilingcold.com.au) The 2025 election campaign is likely to feature rival energy visions of nuclear, gas, coal and renewables. [Markus Distelrath/Pexels](https://www.pexels.com/photo/low-angle-photo-of-nuclear-power-plant-buildings-emtting-smoke-3044470/?ref=boilingcold.com.au), [CC BY-NC-ND](http://creativecommons.org/licenses/by-nc-nd/4.0/?ref=boilingcold.com.au) ## Decades until first power Even if the Coalition’s plans go ahead, concrete will not be poured for a nuclear plant before the 2030s – three or more elections away. To see why, it’s worth examining recent international experience. In 2006, the United Arab Emirates and other Persian Gulf states commissioned a study on the peaceful use of nuclear power. It was released in 2008 and the following year, Korean firm KHNP was selected to [build four reactors](https://www.khaleejtimes.com/article/timeline-uae-nuclear-development-2?ref=boilingcold.com.au). Final approval was not granted until 2012\. The reactors [began commercial operation](https://www.ans.org/news/article-6366/fourth-unit-at-uaes-barakah-plant-enters-commercial-operation?ref=boilingcold.com.au) between 2020 and 2024\. The UAE has made no further nuclear orders and is, instead, [rapidly expanding solar power](https://www.prnewswire.com/in/news-releases/deputy-ruler-of-abu-dhabi-inaugurates-worlds-largest-single-site-solar-power-plant-ahead-of-cop28-301992286.html?ref=boilingcold.com.au). In 2020, Czechia began the process of replacing its ageing Soviet-era reactors. This year, it reached an agreement with KNHP, though the contract is [yet to be finalised](https://www.world-nuclear-news.org/articles/khnp-starts-contract-negotiations-for-czech-reacto?ref=boilingcold.com.au). Authorities expect the reactors to begin producing power commercially [in 2038](https://ec.europa.eu/commission/presscorner/detail/en/ip%5F24%5F2366?ref=boilingcold.com.au). The Czech deal indicates nuclear is hardly cheap – each reactor will cost A$12.8 billion and produce power at $225 per megawatt hour (mWH). By contrast, CSIRO [has priced](https://reneweconomy.com.au/firmed-wind-and-solar-still-much-cheaper-than-fossil-fuels-even-with-inflation-says-csiro/?ref=boilingcold.com.au) firmed or “backed up” renewable energy – that is, renewables combined with transmission and storage infrastructure – at between $91 and $131 per mWH. France has long been held up as the poster child for nuclear power, because it relies on nuclear for [about 70%](https://world-nuclear.org/information-library/current-and-future-generation/nuclear-power-in-the-world-today?ref=boilingcold.com.au) of its power, far more than any other nation. In 2022, President Emmanuel Macron announced a desire to go further still [by building](https://www.theguardian.com/world/2022/feb/10/france-to-build-up-to-14-new-nuclear-reactors-by-2050-says-macron?ref=boilingcold.com.au) up to 14 new reactors. Construction of the first is due to start [in 2027](https://www.reuters.com/business/energy/france-is-weighing-zero-interest-loan-6-nuclear-reactors-sources-say-2024-11-27?ref=boilingcold.com.au). These examples suggest five years is a realistic minimum period from decision to construction. But Australia is highly unlikely to achieve this minimum. Czechia and France, for example, already had well-established nuclear regulatory regimes. By contrast, Australia would need to establish and staff a nuclear power authority from scratch. Our existing organisation, ANSTO, is [set up](https://www.ansto.gov.au/about/what-we-do?ref=boilingcold.com.au) only to manage tiny research reactors. The UAE was also starting from scratch. But the UAE is a near-absolute monarchy – so courts, environmental impact studies and public consultation did not slow the process. And plants were built by migrant workers without union representation or rights [of any kind](https://www.hrw.org/news/2023/12/03/questions-and-answers-migrant-worker-abuses-uae-and-cop28?ref=boilingcold.com.au). In Czechia and France, the reactors can be located at existing nuclear power plants. Dutton wants to build nuclear on the sites of existing coal plants to take advantage of existing transmission lines, but it’s not that simple. For instance, emergency evacuation systems are needed to deal with the small but real possibility of a catastrophic accident. Then there is the problem of [overriding the wishes](https://www.smh.com.au/business/companies/agl-boss-says-no-to-dutton-s-nuclear-vision-for-coal-power-sites-20240315-p5fct5.html?ref=boilingcold.com.au) of the current owners and of state governments [opposed to the plan](https://www.abc.net.au/news/2024-06-19/premiers-reject-nuclear-proposal-nuclear-bans/103997020?ref=boilingcold.com.au). All this means a Dutton government would need at least two full terms in office before it would be in a position to commit the tens of billions of dollars necessary to fund the proposed publicly owned nuclear industry. Then comes years more of actual construction. ## Coal and gas would fill the gap Based on recent experience in developed countries, nuclear power is unlikely to come online before 2045, by which time our existing coal plants would be well past their expected lifespan. Many would break down. How would this energy gap be filled? The answer is already clear. The core of Dutton’s energy policy – the part that would take effect immediately – is to keep coal plants running as long as possible, and then to switch to gas. It would also likely mean suppressing renewable energy in favour of coal and gas. Dutton has already vowed to scrap the offshore windfarm zone planned for the Illawarra region of New South Wales, despite the fact [his party](https://www.heraldsun.com.au/news/national/peter-dutton-vows-to-scrap-hunter-wind-farm-project-if-elected/video/8927b4b8e64330acb531f916203e807f?ref=boilingcold.com.au) passed laws paving the way for offshore wind in 2021\. Offshore wind is a [missing piece](https://theconversation.com/australia-needs-large-scale-energy-production-here-are-3-reasons-why-offshore-wind-is-a-good-fit-232899?ref=boilingcold.com.au) of the puzzle for renewables in Australia, because winds offshore blow strongly and more consistently than on land. But the nascent sector could easily be destroyed at the stroke of a pen, using the Commonwealth’s powers over Australian waters. Queensland’s newly elected LNP government is already showing what that [might look like](https://reneweconomy.com.au/coalkeeper-queensland-style-lnp-commits-1-4-bn-sets-utility-kpis-to-keep-coal-generators-on-line/?ref=boilingcold.com.au), spending $1.4 billion in propping up coal, while killing off plans for a major pumped-hydro facility. Given Australia’s ageing coal-fired power stations are breaking down [more often](https://aemo.com.au/-/media/files/electricity/nem/planning%5Fand%5Fforecasting/nem%5Fesoo/2024/2024-electricity-statement-of-opportunities.pdf?la=en&hash=2B6B6AB803D0C5F626A90CF0D60F6374&ref=boilingcold.com.au), going nuclear would mean spending billions on extending their lives while discouraging solar and wind. This could easily produce blackouts, or the threat of blackouts in short order. Here, too, Dutton has a solution: more gas. Only two weeks ago, Australia’s major gas producers [paid for](https://www.theguardian.com/commentisfree/2024/dec/02/how-can-news-corp-call-its-gas-splash-exclusive-and-special-report-when-its-paid-for-by-industry?ref=boilingcold.com.au) front-page stories across many Murdoch newspapers claiming gas-fired electricity would be necessary. There is nothing new here. Under the Morrison Coalition government, a taskforce set up to deal with supply chain problems caused by the COVID pandemic produced, instead, a report advocating a [gas-led recovery](https://www.minister.industry.gov.au/ministers/taylor/media-releases/gas-fired-recovery?ref=boilingcold.com.au). ## Wrong way, go back Australia should not be distracted by nuclear power. The Coalition plan for an Australian electricity supply, based on extended reliance on coal and gas, will rule out any chance this nation meets its commitment to reduce greenhouse gas emissions and contribute to the global climate effort. It would also result in [more expensive](https://www.theguardian.com/australia-news/2024/dec/12/building-nuclear-power-plants-australia-cost-csiro-predictions?ref=boilingcold.com.au) and [less reliable](https://reneweconomy.com.au/extended-outages-of-always-on-baseload-power-leaves-coal-states-vulnerable-to-heatwave/?ref=boilingcold.com.au) electricity for Australian households and businesses.![The Conversation](https://counter.theconversation.com/content/245948/count.gif?distributor=republish-lightbox-basic) --- [John Quiggin](https://theconversation.com/profiles/john-quiggin-2084?ref=boilingcold.com.au), Professor, School of Economics, *[The University of Queensland](https://theconversation.com/institutions/the-university-of-queensland-805?ref=boilingcold.com.au)* This article is republished from [The Conversation](https://theconversation.com/?ref=boilingcold.com.au) under a Creative Commons license. Read the [original article](https://theconversation.com/more-coal-and-gas-less-renewables-what-a-nuclear-power-plan-for-australia-would-really-mean-245948?ref=boilingcold.com.au). ### Alcoa's Pinjarra alumina refinery shut down after gas outage URL: https://www.boilingcold.com.au/alcoas-pinjarra-alumina-refinery-shut-down-after-gas-outage/ Last updated: 2024-12-23T07:42:50.000Z An unexpected disruption to gas supply at Alcoa's Pinjarra refinery on Tuesday morning triggered a loss of power and numerous spills of caustic liquid at the refinery with a return to full production expected to take about a week. An Alcoa spokesman said the incident impacted process flow, and clean-up of the spills commenced immediately. "One worker came into contact with a small amount of caustic material and immediately returned to work after onsite medical assessment," he said. Pinjarra is Alcoa's largest alumina refinery, contributing 44 per cent of the $16 billion company's operating capacity. [Alcoa moves future mining away from dams ‘for now’Alcoa has made last minute changes to its planned expansion of mining in WA’s jarrah forest and wants to reenter a previously mined area, potentially triggering a new major federal environmental assessment.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-11.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/DJI_0907-A-3.JPG)](https://www.boilingcold.com.au/alcoa-to-move-future-mining-away-from-dams-for-now-to-speed-approvals-2/) A spokesman for the WorkSafe petroleum safety and dangerous goods section said Alcoa reported the incident immediately. "The spill was contained within the bunded area, and once power was restored, the discharge was returned to the system," he said. "One worker received a minor injury and WorkSafe is making enquiries into this issue." Alcoa is working to restore refining operations at the site investigating the cause of the incident, which occurred a year after five workers at the refinery were [injured in another spill](https://www.watoday.com.au/national/western-australia/five-alcoa-workers-hurt-in-pinjarra-toxic-chemical-spill-20231115-p5ek36.html?ref=boilingcold.com.au), with two requiring hospital treatment. It is understood from sources not permitted to speak to the media that a return to full production is expected to take a further seven to ten days. In June, the US aluminium specialist ended production at its oldest WA refinery in Kwinana, citing poor returns at the 61-year-old facility. --- *Update: Reference to 2023 spill incident added.* --- ### Libs cheaper power bill pledge with nuclear questioned URL: https://www.boilingcold.com.au/libs-nuclear-plan-to-cost-330b-but-modelling-disputed/ Last updated: 2024-12-17T02:35:01.000Z *By Dominic Giannini* The coalition is promising to bring down electricity bills by adding nuclear power to the mix but clean energy groups say it's more expensive than renewables. A $330 billion nuclear energy plan has been criticised by clean energy groups, who are calling the coalition policy a pipedream and a recipe for more expensive bills. Wind and solar will make up 49 per cent of Australia's power grid by 2050, nuclear 38 per cent, hydro and pumped hydro nine per cent and storage four per cent under the opposition blueprint. "What it says to Australians is we have a plan which is a sensible mix of energy sources," leader Peter Dutton told reporters in Brisbane during a 40-minute press conference where neither the cost nor energy mix was mentioned. Mr Dutton promised cheaper power long term but didn't outline a near-term plan after saying bringing down prices was a priority. There was no price modelling for power bills. The issue is politically fraught after Labor pledged to lower electricity bills by $275 by 2025 in opposition which the coalition seized on as bills went up. Coal and gas-fired power plants will stay open longer under the plan, a move criticised as bad for Australia's carbon emissions and unreliable for the energy grid. Coal stations couldn't shut down prematurely if Australia wanted to keep the lights on, opposition energy spokesman Ted O'Brien said. "We need to get prices down, that means we need to pour more gas into the system," he added. But ageing coal-fired plants are already facing daily outages and extending them would be "a recipe for blackouts", Energy Minister Chris Bowen said. The coalition's plan would slow the rollout of low-cost renewable energy, which is set to hit 48 per cent by the end of 2025, the Clean Energy Council said. The nuclear plan was also opposed by unions, with ACTU president Michele O'Neil calling it "a radioactive distraction that is too slow, too dangerous and way too expensive for working people to afford". The first of the seven publicly-owned nuclear plants would come into operation by the mid-2030s, Mr Dutton said, but this timeline has been rubbished by some experts. Labor's plan is to have the grid firmed by just over 80 per cent renewable energy by 2030 and gas is being used as a backup during the rollout. [Renewable energy trounces nuclear on power costs: CSIROAhead of opposition leader Peter Dutton releasing costs for his nuclear policy this week, for the seventh straight year renewables were the lowest-cost new power generation technology.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-15.png)Boiling ColdAustralian Associated Press![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/photo-1517925035435-7976539b920d-1)](https://www.boilingcold.com.au/renewable-energy-trounces-nuclear-on-power-costs-csiro/) An excessive reliance on renewables "is going to cause a lot of grief to the country", Mr Dutton said. Nuclear energy would provide the "always-on" power to back up renewables and lead to cheaper power bills in the long run, he claimed. But nuclear energy does not offer a good deal for Australia, a report released ahead of Mr Dutton unveiling his costings found, while postponing coal power station closures would heighten Australia's carbon emissions in the medium term. For the seventh straight year, the GenCost 2024-25 Report found renewable energy sources are the cheapest of any new-build electricity-generating technology. Nuclear energy generation would be up to twice as expensive as large-scale solar, according to the analysis by the national science agency CSIRO and Australian Energy Market Operator. The coalition's plan was modelled by private sector consultancy Frontier Economics, which also cost Labor's transition around $600 billion. Mr Bowen dismissed this number, saying the government plan would cost $122 billion, citing a forecast by the national energy grid operator. The coalition is pushing for an end to Australia's nuclear ban but has faced opposition from states. Nuclear power doesn't stack up for Australian families or businesses, Fortescue chairman Andrew Forrest said on Friday. "As our national science agency has shown, 'firmed' solar and wind are the cheapest new electricity options for all Australians," he said. ### WA Labor approves Woodside's North West Shelf gas plant to export to 2070 URL: https://www.boilingcold.com.au/wa-labor-approves-woodsides-north-west-shelf-gas-plant-to-export-to-2070/ Last updated: 2024-12-23T07:43:13.000Z WA environment minister Reece Whitby has signed off on continued export of gas from Woodside's North West Shelf natural gas plant until 2070 despite it being surrounded by ancient World Heritage-listed rock art. The decision on Thursday is a big win for Woodside and its joint venture partners BP, Shell, Chevron and Japan Australia LNG. The partners still need approval from Federal environment minister Tanya Plibersek whose decision either way would enrage some voters ahead of a likely May 2025 federal election. Both approvals would allow the NWS partners to push back the expensive decommissioning of Australia's oldest and largest liquefied natural gas plant that started exporting 35 years ago. They will also be able to earn revenue from processing gas from third parties as supply for their original North West Shelf fields continues to decline over this decade. Woodside chief operating officer for Australia Liz Westacott said Woodside looked forward to the finalisation of the federal approval to provide certainty for the long-term operation of the plant. "We are committed to ensuring we continue to meet all environmental requirements," she said. Woodside will have to operate the NWS plant under the [conditions of the Ministerial Statement](https://www.epa.wa.gov.au/sites/default/files/1MINSTAT/1727%20Statement%201233%20for%20publishing%20North%20West%20Shelf.pdf?ref=boilingcold.com.au) signed off by Whitby today. Those conditions will not cover greenhouse gas emissions after the WA government decided to leave that to the federal government. However, emissions of so-called NOx and SOx (nitrous and sulphur oxides) that are linked to the degradation of the rock art are regulated. Woodside is required to reduce emissions of NOx and dangerous volatile organic compounds by 2030 and comply with any requirements from the ongoing Murujuga Rock Art Monitoring Program which is expected to release its next public report in 2025. ### Browse the big prize for Woodside Thursday's decision is also a vital milestone for Woodside's controversial Browse LNG project that would drill for gas near the pristine Scott Reef and then pipe the gas 1000km to the North West Shelf plant on the Burrup Peninsula near Karratha. Greenpeace Australia chief executive David Ritter said over the weekend its full line Browse would result in 6.1 billion tonnes of carbon pollution, mainly from customers burning its gas, which is 13 times bigger than Australia's current annual emissions. “The approval for the North West Shelf extension flies in the face of the clear scientific evidence about the incompatibility of new fossil fuels with a safer climate," he said. "Tanya Plibersek has to now take responsibility for this decision at a Federal level." Browse is owned by three NWS investors - Woodside, BP and Japan Australia LNG - and PetroChina. Whitby's decision allows the Browse field to be developed without building an expensive processing plant to freeze the gas to a liquid for export. The plant was built on top of a portion of the sprawling collection of more than one million ancient rock engravings that cover the peninsula that traditional custodians call Murujuga. There are significant scientific concerns that emissions from the ageing plant may be damaging the 30,000-year-old World Heritage-listed rock art. Other gas producers in WA would welcome the continued operation of the NWS plant as even if Browse goes ahead, it would have significant spare export capacity. Producers of gas in the onshore Perth Basin - Gina Rinehart's Hancock Energy, Kerry Stoke's Beach Energy, Japan's Mitsui and Strike Energy - would all be interested in accessing to the higher price intentional market. Recently, the Cook Labor Government banned the export on onshore gas from 2030 to preserve fuel for the local market, but future governments will come under relentless pressure to reverse the ban. Smaller companies exploring for gas in the remote Canning Basin in the Kimberley, such as Black Mountain, would also be buoyed by the decision as there is a negligible market for their product nearby. They still face the significant hurdle of finding sufficient volumes of gas to justify a pipeline south to Karratha. Unlike the Perth Basin, significant gas production in the Kimberley would require hundreds if not thousands of wells using the controversial fracking, or hydraulic fracturing, technique. In April Woodside chief executive Meg O'Neill said she would welcome the opportunity to help them unlock their gas reserves. Environs Kimberley chief executive Martin Pritchard said such development would transform the landscape into a "fragmented fossil fuel industrial zone " and " would be an environmental and climate disaster for the region, destroying its global reputation as a tourism icon." ### WA mining giants seek government help to turn their low grade ore into green iron URL: https://www.boilingcold.com.au/wa-iron-ore-giants-look-to-seek-government-backing-to-stop-their-2/ Last updated: 2024-12-23T07:43:32.000Z Making steel produces seven percent of the world's climate-heating carbon pollution and Australia may lose from the race to lower those emissions without new technology that can use its $100 billion of annual exports. About three quarters of the world's iron comes from heating iron ore with coal in a blast furnace - a highly polluting process - to make pig iron that is later turned into steel. This is where almost all of Australia's exports go as the process can tolerate the relatively low grade and high impurity levels of the hematite mined in the Pilbara. The rest of the world's steel comes from direct reduced iron from gas-fired shaft furnaces that are still enormously polluting, but 40 per cent better than blast furnaces. Emissions from this process could be slashed by using "low-carbon" hydrogen instead of gas, but almost all Australian iron is unsuitable. A [report by consultants Mandala Partners](https://www.cmewa.com.au/reports/cme-green-iron-report-realising-was-green-iron-potential/?ref=boilingcold.com.au) commissioned by WA's mining and gas lobby group the Chamber of Minerals and Energy has identified the most prospective technology to make low-emissions so-called green iron in the near term with Australian ore A shaft furnace would be fired with hydrogen instead of gas and then impurities removed in an electric smelting furnace. The hydrogen would need to be produced from water with renewable energy to achieve the near total reduction in emissions. Mandala identified using natural gas as a suitable transition pathway until the hydrogen was available. It estimated an alternative technology that can use renewable electricity directly, instead of making hydrogen with it, as a decade away from being ready for use. ### A big green prize for the Pilbara The report outlined an unrealistically ambitious target of WA making 4.5 million tones of green iron by 2030. Mandala estimated $37 billion of investment would be needed in the next six years: $23 billion for renewable energy infrastructure, storage and transmission, $2 billion transport and water infrastructure and$12 billion to build facilities to produce "low-carbon" hydrogen and green iron. Until low carbon hydrogen is available natural gas could be used in the furnaces. Longer-term Mandala estimated WA could supply 14 per cent of the world's green iron by 2050, reducing global emissions by 456 million tonnes a year - almost as much as Australia produces now - and employ close to 20,000 people. However it warned the opportunity could be lost to other competitors, and lowering the cost of generating renewable electricity - the biggest cost in making green iron - was crucial. "Long development timeframes mean investment is needed now, but WA’s fragmented electricity networks, complex State and Federal approval processes, and the high-cost environment are slowing investment," the report said. ### Help wanted The report - endorsed by the heads of the state's three biggest miners of hematite iron ore Fortescue, Rio Tinto and BHP - had a long list of recommended government policy reform and expenditure to safeguard the future of their primary revenue source. The asks included: - redirect existing industry finance schemes to common user transmission investment in WA - significantly increase the $1.9 billion federal Power the Regions Fund to support renewable generation for green metals projects - fund companies' feasibility and front end engineering studies - prioritise regulatory approval for projects that can reduce global emissions - increase investment in Pilbara ports and roads to help the importation of large equipment - increase limits on tax deduction for research and development - add a green iron production tax credit to the one already proposed hydrogen Fortescue chair Andrew Forrest said green iron would help avert the most catastrophic, irreversible impacts of climate change. "It presents a once in a generation economic opportunity to build what could be our largest ever single industry," he said. The report also recommended the federal Safeguard Mechanism designed to reduce industry emissions be made less onerous for magnetite producers and projects not connected to the power grid. Chen Zeng, chief executive of WA's major magnetite producer CITIC Pacific, said the state's emerging magnetite sector was already helping deliver lower emissions steel. “Emissions don’t stop at national boundaries. It’s critical we have policy settings which encourage the high-grading of WA’s very significant endowment of magnetite ore," he said. ### Renewable energy trounces nuclear on power costs: CSIRO URL: https://www.boilingcold.com.au/renewable-energy-trounces-nuclear-on-power-costs-csiro/ Last updated: 2024-12-09T04:14:27.000Z *By: Marion Rae* Solar and big batteries are the cheapest option to power homes and businesses, the nation's experts insist, as the stoush over ending the nuclear ban heats up. Power planners have found nuclear energy does not stack up for Australia even after considering new parameters, with large-scale solar and big batteries still the lowest-cost option. In an [official update released on Monday](https://www.csiro.au/en/research/technology-space/energy/GenCost?ref=boilingcold.com.au), as the federal opposition prepares to release its costings, scientists warn taxpayers will need deep pockets and a lead time of at least 15 years to develop nuclear energy generation. For the seventh straight year, renewables were the lowest-cost of any new-build electricity-generating technology. After a global energy crisis and equipment supply crunch several years ago, large-scale solar and lithium battery storage have weathered the inflationary period the best of all technologies. The cost of batteries recorded the largest annual reduction, with capital costs down by one-fifth. Rooftop solar costs are also coming down. Australian Conservation Foundation nuclear policy analyst Dave Sweeney said four million households with rooftop solar, energy producers and retailers have already voted with their feet and wallets. "Nuclear is not right for Australia, which has some of the best renewable energy resources on the planet," he said. The GenCost 2024-25 Report released for consultation comes as the coalition pushes for an end to Australia's nuclear ban and promises to have reactors online in as soon as 10 years if elected in 2025. Opposition Leader Peter Dutton, eyeing sites in seven regional centres, has pledged to release the coalition's nuclear costings "this week". But nuclear energy generation would be 1.5 to two times more expensive than large-scale solar, according to the analysis by the national science agency CSIRO and the Australian Energy Market Operator. A one-gigawatt nuclear plant has a price tag of roughly $9 billion, but the bill would double to $18 billion as the first of its kind. [Whitby lauds new blood to speed WA environment approvalsThe WA environment minister wanted to tackle bureaucrats “doing the same thing for 15 years, telling people why something can’t be done.”![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-10.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/IMG_7949-1-1.jpg)](https://www.boilingcold.com.au/whitby-lauds-new-blood-to-speed-wa-environmental-approvals/) Operators would also need to establish new connection points to safely supply the national electricity grid, experts warn. Advocates have demanded greater recognition of the potential cost advantages of nuclear's long operating life compared to solar panels and wind turbines, but CSIRO chief energy economist and GenCost lead author Paul Graham said he found none. "Similar cost savings can be achieved with shorter-lived technologies including renewables, even when accounting for the need to build them twice," Mr Graham said. Nuclear's capacity factor - referring to how much of a year a reactor could operate at full tilt - remains unaltered at 53-89 per cent based on verifiable data and consideration of Australia's unique electricity generation needs. Nor would the often-touted United Arab Emirates example of a relatively quick 12-year nuclear construction time-frame be achievable here, the report found, because Australians require consultation. "The facts are laid out very clearly in the GenCost report, and our government respects the work of CSIRO scientists and researchers and listens to that advice," Industry and Science Minister Ed Husic said. "Peter Dutton's nuclear fantasy not only threatens to blow out the budget, it also threatens jobs and household power bills," he said. Energy Minister Chris Bowen said renewables remain the cheapest new-build electricity generation in Australia to 2050, as standalone assets and when also accounting for the required storage, transmission and firming. The report is open for industry, community and political feedback until February 11. --- **Key points:** - ☀️ The capital cost of large-scale solar farms has fallen eight per cent two years in a row. - 💨 Onshore wind generation costs increased 2 per cent (but at a reduced rate from an 8 per cent increase last year), reflecting ongoing but moderate increases in equipment and installation costs. - ➕ Costs for wind and solar energy include the cost of firming such as storage that ensure reliable supply - 🔋 Battery costs recorded the largest annual reduction with capital costs falling 20 per cent. - 🔥 Gas turbine costings increased 11 per cent, reflecting the additional cost of being hydrogen ready which is now an industry standard. - ☢️ Modelling nuclear’s long operational life factor presents no unique cost advantage over other technologies. - 🏗️ Global median nuclear construction times have increased from 6 years to 8.2 years over the last 5 years, placing a development timeframe of between 12-17 years. ### Whitby lauds new blood to speed WA environmental approvals URL: https://www.boilingcold.com.au/whitby-lauds-new-blood-to-speed-wa-environmental-approvals/ Last updated: 2024-12-23T07:43:54.000Z When he became WA's environment minister, Reece Whitby was met by a frustrated "constant wall of noise" about tardy environmental approvals. "As a new minister, you do the rounds, you go to the engagements … we knew there was an issue." Whitby, who is also minister for energy and climate action, said WA not only had to clear a backlog of applications for environmental approvals but also prepare for a greater workload. "Coming down the road is a tsunami of new projects inspired by green energy." He said the scale of the problem required more than investment; it needed a change of culture in the agencies involved. "People that have been at the desk doing the same thing for 15 years telling people why something can't be done instead of telling people how it can be done," he told an Energy Club of WA function on Thursday. All the heads of the main agencies involved in environmental approvals - the Environmental Protection Authority, the Department of Water and Environmental Regulation and the Office of the Appeals Convenor have been replaced in the past 12 months. "They’re bringing in fresh blood, fresh insights, fresh views, so things are changing." [Is Roger Cook right? Can WA save the planet by getting a bit dirty?When is a summit not a summit? When everything has been decided beforehand. Welcome to WA’s pitch to be treated differently from the rest of the country to save the rest of the world.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/watoday-2024-13.png)WAtodayPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/24f17ced0fa566bb104a38a782570722387b103d)](https://www.watoday.com.au/national/western-australia/is-roger-cook-right-can-wa-save-the-planet-by-getting-a-bit-dirty-20231117-p5ekwv.html?ref=boilingcold.com.au) Before that, the government commissioned a "short, sharp" review of approval processes in late 2023 - the Vogel-McFerran Report - that has been criticized for [not consulting conservation groups](https://www.watoday.com.au/politics/western-australia/this-review-could-shape-the-future-of-wa-s-environment-laws-so-were-any-green-groups-consulted-20240925-p5kdby.html?ref=boilingcold.com.au). Three years into the job, Whitby gets a different reception from proponents of new projects. "We get positive feedback all the time from the industry, who've been delighted," he said. Whitby said environmental standards had to be protected, but the process needed to be timely and efficient "without drawn out sagas or huge expense." His comments came after a speech that reiterated the pro-development sales pitch launched by the Cook government a year ago: WA cannot reduce its greenhouse gas emissions because it must produce gas to replace coal and mine materials such as lithium to make the renewable energy infrastructure the world needs. "I think there's a very narrow attitude about everyone having to get to a certain target … we’ll get to 43 per cent (emissions reduction) in 2030 as a national economy, but we won't be getting to 43 per cent in WA." The speech came a week after reports suggested WA Premier Roger Cook influenced Prime Minister Anthony Albanese to quash a deal his environment minister Tanya Plibersek made with the Greens to pass environmental reforms Labor had promised at the last federal election. "We’re working with our friends in the Federal Government because we believe we can assist them to get to good outcomes," he said, "At the leadership (level) in the federal government, there is an appreciation of WA's role in the national economy and how critical that is. "We’ll continue to remind them." --- ## **⚡️WA Labor's rapid-fire green shake-up** **October 2023 - inquiry launched** The government commissions a “short, sharp review” of environmental approvals processes by Dr Paul Vogel and David McFerran. **December 2023 - inquiry completed** Six weeks later, the WA government published[ a list](https://www.wa.gov.au/government/publications/streamline-wa-independent-review-of-wa-environmental-approvals-processes-and-procedures?ref=boilingcold.com.au) of recommendations from the Vogel McFerran. It did not release the full report. **January 2024 - Department of Water and Environmental Regulation** Alistair Jones started as director general of the Department of Water and Environmental Regulation. Jones came from the Department of Treasury, where he was Assistant Under Treasurer of the Economic Business Unit. **July 2024 - Office of the Appeals Convenor** Eve Drain appointed Appeals Convenor. Previously, Drain led BHP Iron Ore’s environmental approvals team. **October 2024 - Environmental Protection Act** Reforms to Act passed in parliament. **October & November 2024 - Environmental Protection Authority** Darren Walsh appointed EPA chair. Walsh was an environmental approvals and planning consultant on the EPA board since November 2023\. After the new legislation increased its size, three new members were appointed to the EPA board. ### 'Climate whiplash': Australia faces growing risk of cascading disasters URL: https://www.boilingcold.com.au/climate-whiplash-australia-faces-growing-risk-of-cascading-disasters/ Last updated: 2024-12-05T08:00:55.000Z *By Poppy Johnston* Australia faces a hot, wet summer, experts say, with bushfires not ruled out either as heavy rain and warm weather put grasslands at risk. Bushfires one day and floods the next - the likelihood of back-to-back severe weather events during Australian summers is increasing in a warming climate. In 2019-2020, the Black Summer bushfires caused widespread destruction that was followed by downpours and flooding over the next two years, complicating the response and recovery efforts. The Climate Council warns there is a growing risk that different parts of Australia may face more than one disaster at once or in quick succession, with cascading severe weather events a live possibility for the summer that's just begun. "We call it climate whiplash," former commissioner of Fire and Rescue NSW Greg Mullins said during a media briefing on Thursday. "We go from heatwaves and fires to floods and storms." Above-average temperatures are predicted for the 2024-25 summer in many parts of Australia, based on the Bureau of Meteorology's [long-range forecasts](http://www.bom.gov.au/climate/outlooks/?ref=boilingcold.com.au#/overview/summary/). Warmer-than-average days can be expected in much of the nation as well as sweatier evenings, with unusually high overnight temperatures predicted for much of northern, eastern and western Australia. --- ## What summer looks like for Western Australia: January to March 2025 ### Chance of exceeding the median maximum temperature ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2024/12/tmax.forecast.median.wa.season1.latest.hr-1-1.png) ### Chance of exceeding the median minimum temperature ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2024/12/tmin.forecast.median.wa.season1.latest.hr-1-1.png) ### Chance of exceeding the median rainfall ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2024/12/rain.forecast.median.wa.season1.latest.hr-1-1.png) --- The summer will also likely be wetter than normal - especially in December - with a greater chance of unusually high rainfall in parts of Australia's east and northwest. But expectations of a wet start to summer do not rule out bushfires, with patches of the country, particularly grasslands in western Victoria and eastern South Australia and parts of New South Wales, already at a higher risk of fires. Mr Mullins said heavy rain was a double-edged sword for firefighters. "If it doesn't rain, we go, 'oh God, here come the fires'," he said. "And if it does rain, we go, 'oh no, the fuel is going to build up'." Grass dries faster than bush and forest vegetation and becomes fuel for fast-moving fires that endanger pasture, stock animals and homes. "It can rain and then two days later, if you have a hot, windy day, it can burn, even if it's muddy and wet underneath, and fire trucks will get bogged," Mr Mullins said. "We've had fires like that." [WA’s EPA speeds emissions deregulation while Chevron environmental inquiry waitsThe environmental watchdog is set to remove restrictions on climate pollution in months but is much slower looking into concerns about quarantine and turtles on the Barrow Island nature reserve.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-6.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/epa-go-slow-feature-021224-2.png)](https://www.boilingcold.com.au/was-epa-speeds-emissions-deregulation-while-chevron-environmental-inquiry-waits/) University of Melbourne climate scientist David Karoly highlighted the risks posed by higher night-time temperatures. Without a cooling reprieve in the evening, sleep is more difficult, weighing on human health, mental wellbeing and productivity. Hotter conditions at night further pose challenges for bushfire management and hazard reduction burning, said Prof Karoly, the former leader of the Earth Systems and Climate Change Hub in the Australian government's National Environmental Science Program. He said predicting summer conditions had become increasingly challenging and erratic. "Even last year, the Bureau of Meteorology had been forecasting drier conditions in spring, which we did experience," he said. "And then it changed in November and in the summer to be actually much wetter conditions, because the ocean temperatures around Australia are much hotter than normal. "Climate pollution from coal, oil and gas have led to hotter global temperatures, but also hotter ocean temperatures." ### Trusted partner to the Pacific or giant fossil fuel exporter? Australia chose the latter URL: https://www.boilingcold.com.au/trusted-partner-to-the-pacific-or-giant-fossil-fuel-exporter-australia-chose-the-latter/ Last updated: 2024-12-05T05:45:10.000Z [Wesley Morgan](https://theconversation.com/profiles/wesley-morgan-1280881?ref=boilingcold.com.au), *[UNSW Sydney](https://theconversation.com/institutions/unsw-sydney-1414?ref=boilingcold.com.au)* and [Liam Moore](https://theconversation.com/profiles/liam-moore-1495235?ref=boilingcold.com.au), *[James Cook University](https://theconversation.com/institutions/james-cook-university-1167?ref=boilingcold.com.au)* Australia has long tried to be two things at once – a trusted friend to Pacific nations in a bid to reduce [China’s influence](https://nsc.anu.edu.au/content-centre/article/opinion/australias-foreign-policy-not-simply-about-containing-china?ref=boilingcold.com.au), and a [giant exporter](https://climateanalytics.org/press-releases/australias-massive-global-carbon-footprint-set-to-continue-with-fossil-fuel-exports?ref=boilingcold.com.au#:%7E:text=In%202023%2C%20Australia%20exported%201.15,total%20to%201.2%20billion%20tonnes.) of fossil fuels. This diplomatic tightrope has become increasingly hard to walk, as Pacific nations see climate change as an [existential threat](https://www.undp.org/asia-pacific/news/asia-pacific-climate-change-poses-existential-threat-extreme-weather-worsening-poverty-and-risks-public-health-says-undp-report?ref=boilingcold.com.au). This week, Australia’s government was forced to make a choice in a very public forum. It chose fossil fuels. Disappointed by the [slow pace](https://www.theguardian.com/world/commentisfree/2024/nov/29/the-cop29-agreement-failed-island-states-now-the-uns-top-court-must-act-on-climate-harm?ref=boilingcold.com.au) of United Nations climate talks, Vanuatu and other Pacific nations launched a case at the International Court of Justice in the Netherlands to clarify the obligations countries have to prevent harm to the Earth’s climate system for current and future generations. While international climate negotiations are often conducted behind closed doors, this case is being broadcast in public. We can clearly see the arguments Australia has laid out and the countries it has aligned itself with. In the courtroom on Monday, Australia sided with major emitters and fossil fuel exporters such as [Saudi Arabia](https://www.icj-cij.org/sites/default/files/case-related/187/187-20241202-ora-02-00-bi%5F0.pdf?ref=boilingcold.com.au), the [United States](https://www.icj-cij.org/sites/default/files/case-related/187/187-20240412-ora-02-00-en.pdf?ref=boilingcold.com.au) and [China](https://www.icj-cij.org/sites/default/files/case-related/187/187-20241203-ora-02-00-bi.pdf?ref=boilingcold.com.au) to try and minimise their legal liability in contributing to climate change. ## What’s at stake in this case? This week marks a milestone in a five-year legal campaign, travelling from a university tutorial in Vanuatu’s capital, Port Vila, through the halls of the United Nations in New York and now to the world’s court in the Hague. The International Court of Justice is the only international court [able to settle disputes](https://news.un.org/en/story/2024/01/1145392?ref=boilingcold.com.au) between United Nations member states. In 2019, 27 law students at the University of the South Pacific were given a challenge: find the [most ambitious](https://www.nature.com/articles/d41586-023-01751-1?ref=boilingcold.com.au) legal pathways towards climate justice. They decided filing a case with the world court fitted the bill. [Alcoa moves future mining away from dams ‘for now’Alcoa has made last minute changes to its planned expansion of mining in WA’s jarrah forest and wants to reenter a previously mined area, potentially triggering a new major federal environmental assessment.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-5.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/DJI_0907-A-1.JPG)](https://www.boilingcold.com.au/alcoa-to-move-future-mining-away-from-dams-for-now-to-speed-approvals-2/) In 2023, Vanuatu and other nations succeeded in [passing a resolution](https://documents.un.org/doc/undoc/ltd/n23/094/52/pdf/n2309452.pdf?ref=boilingcold.com.au) at the UN General Assembly requiring the world court to give an advisory opinion on two questions – what obligations do states have under international law to protect the climate from greenhouse gas emissions, and what are the legal consequences for states causing “significant harm” to the earth’s climate? Ahead of the hearing, the world court has received a record number of written submissions. Justices will hear two weeks of oral submissions. They will then produce an advisory opinion, expected to set a [new benchmark in international law](https://www.rnz.co.nz/international/pacific-news/535607/vanuatu-s-landmark-case-at-icj-seeks-to-hold-polluting-nations-responsible-for-climate-change?ref=boilingcold.com.au), by clarifying the legal obligations countries have to tackle emissions. While an advisory opinion is not binding, the court’s findings will [feed into](https://enb.iisd.org/international-court-justice-climate?ref=boilingcold.com.au) national court cases and UN climate talks. For Australia, this case presents a direct challenge. It has no plans to phase down fossil fuel exports. In fact, [it plans to expand them](https://www.humanrights.unsw.edu.au/sites/default/files/documents/2024%20Escalation%20Report%20%5Bv7%5D.pdf?ref=boilingcold.com.au). If the court’s opinion draws clear lines between fossil fuel exporters and climate damage, it could have severe implications for Australia. It could, for instance, pave the way to compensation lawsuits for climate damage. Since 2000, Australia has approved [more than 700](https://www.climatecouncil.org.au/wp-content/uploads/2023/11/CC%5FMVSA0386-CC-Report-Briefing-ahead-of-COP28%5FV4-FA-Screen-Single.pdf?ref=boilingcold.com.au) oil, gas and coal projects. Dozens more are in the approvals pipeline. Just this week the federal government [cleared the way](https://envirojustice.org.au/press-release/albanese-government-on-the-brink-of-approving-multi-million-tonne-carbon-bombs/?ref=boilingcold.com.au) for three new coal mines. Australia is now one of the world’s largest exporters of coal and gas. This is relatively new. While coal has been exported [since 1801](https://www.abs.gov.au/ausstats/abs@.nsf/featurearticlesbytitle/09E60850418239F6CA2570A80011A395?ref=boilingcold.com.au#:%7E:text=Mining%20began%20in%201799%20with,coal%20was%20despatched%20to%20India.), large-scale exports of liquefied natural gas only began [a decade ago](https://ourworldindata.org/explorers/natural-resources?tab=chart&country=%7EAUS&Resource=Natural+gas&Metric=Exports&Count=Total&ref=boilingcold.com.au). --- --- When burned overseas, emissions from Australia’s fossil fuel exports are now [more than double](https://climateactiontracker.org/blog/highlighting-the-hypocrisy-fossil-fuel-export-emissions/?ref=boilingcold.com.au) those of its entire domestic economy. These emissions damage our global climate, increasing risk of harm to people in [Australia and worldwide.](https://www.humanrights.unsw.edu.au/sites/default/files/documents/2024%20Escalation%20Report%20%5Bv7%5D.pdf?ref=boilingcold.com.au) ## What did Australia argue at the Hague? In bringing the case, Vanuatu has argued actions causing climate change are unlawful under a range of international obligations including the law of the sea, human rights law and environmental law. Australian delegates [commended](https://www.icj-cij.org/sites/default/files/case-related/187/187-20241202-ora-02-00-bi%5F0.pdf?ref=boilingcold.com.au) Vanuatu’s leadership in bringing this case and reiterated Australia’s commitment to working with the Pacific on climate. But after the diplomatic niceties, Australian Solicitor-General Stephen Donaghue got down to business. He [told the court](https://www.icj-cij.org/sites/default/files/case-related/187/187-20241202-ora-02-00-bi%5F0.pdf?ref=boilingcold.com.au) only the Paris Agreement – which requires countries to set targets to cut domestic emissions – should apply when it comes to mitigating climate change. Donaghue also argued greenhouse gas emissions are different to, say, one country’s toxic waste damaging the environment of another. This, he argued, was because emissions have many sources. Donaghue and the Australian delegation [argued](https://cdnapisec.kaltura.com/index.php/extwidget/preview/partner%5Fid/2503451/uiconf%5Fid/43914941/entry%5Fid/1%5F52sh8awd/embed/dynamic?ref=boilingcold.com.au) the court should take a narrow view of obligations to cut emissions and suggested responsibility for harms caused by climate change could not be pinned on individual states. Australia has [also argued](https://www.icj-cij.org/sites/default/files/case-related/187/187-20240815-wri-14-00-en.pdf?ref=boilingcold.com.au) protecting human rights does not extend to obligations to tackle climate change. In 2022, Torres Strait islanders told a UN Human Rights Committee that a failure to address climate change violated their human rights. In response, the Australian government used [very similar arguments](https://www.ejiltalk.org/torres-strait-islanders-united-nations-human-rights-committee-delivers-ground-breaking-decision-on-climate-change-impacts-on-human-rights/?ref=boilingcold.com.au), claiming climate change was best addressed through UN climate negotiations. [![man in courtroom](https://images.theconversation.com/files/636435/original/file-20241204-15-jnfaab.jpg?ixlib=rb-4.1.0&q=45&auto=format&w=754&fit=clip)](https://images.theconversation.com/files/636435/original/file-20241204-15-jnfaab.jpg?ixlib=rb-4.1.0&q=45&auto=format&w=1000&fit=clip&ref=boilingcold.com.au) On Monday, special climate envoy Ralph Regenvanu began testifying for Vanuatu. [International Court of Justice](https://www.icj-cij.org/sites/default/files/multimedia%5Fgalleries/20241202-187-06.jpg?ref=boilingcold.com.au), [CC BY-NC-ND](http://creativecommons.org/licenses/by-nc-nd/4.0/?ref=boilingcold.com.au) ## What does this mean? The court’s opinion will be handed down [next year](https://www.theguardian.com/world/2024/dec/02/icj-un-climate-change-case-pacific-nations?ref=boilingcold.com.au). Despite Australia’s arguments, recent rulings by other courts and tribunals [suggest](https://www.unimelb.edu.au/%5F%5Fdata/assets/pdf%5Ffile/0010/4999627/MCF-Discussion-Paper%5FITLOS-opinion%5Fv.2.pdf?ref=boilingcold.com.au) the court may not decide in our favour. For example in May, the [International Tribunal on the Law of the Sea](https://www.itlos.org/fileadmin/itlos/documents/press%5Freleases%5Fenglish/PR%5F350%5FEN.pdf?ref=boilingcold.com.au) found greenhouse gas emissions were a form of marine pollution (because they acidify and heat the ocean), which countries have obligations to prevent. The tribunal [rejected arguments](https://blogs.law.columbia.edu/climatechange/2024/05/24/unlocking-unclos-how-the-itlos-advisory-opinion-delivers-a-holistic-vision-of-climate-relevant-international-law/?ref=boilingcold.com.au) that state obligations were limited to implementing the Paris Agreement. A ruling on a similar case from the Inter-American Court of Human Rights is expected [before the end of the year](https://www.reuters.com/sustainability/climate-energy/climate-court-cases-that-could-set-new-precedents-around-world-2024-05-21/?ref=boilingcold.com.au). Relationships with Pacific states are likely to come under strain as the proceedings in the Hague roll on. Matters could come to a head next year, when the court will release its advisory opinion. A decision is still pending on whether Australia will [host COP31](https://theconversation.com/the-australia-pacific-bid-to-host-un-climate-talks-in-2026-is-in-limbo-what-now-243719?ref=boilingcold.com.au), the 2026 UN climate talks, alongside Pacific island countries. If our COP bid succeeds, it could give Canberra a chance to [signal a shift](https://www.theguardian.com/australia-news/commentisfree/2024/dec/02/could-the-decline-of-fossil-fuels-be-australias-chance-to-become-into-a-clean-exports-giant?ref=boilingcold.com.au) away from fossil fuel exports in favour of [green exports](https://www.bze.org.au/research/report/export-powerhouse?ref=boilingcold.com.au) such as critical minerals and green iron. Doing so would align Australia’s interests with the Pacific – and present it much more clearly as a partner of choice.![The Conversation](https://counter.theconversation.com/content/245268/count.gif?distributor=republish-lightbox-basic) --- [Wesley Morgan](https://theconversation.com/profiles/wesley-morgan-1280881?ref=boilingcold.com.au), Research Associate, Institute for Climate Risk and Response, *[UNSW Sydney](https://theconversation.com/institutions/unsw-sydney-1414?ref=boilingcold.com.au)* and [Liam Moore](https://theconversation.com/profiles/liam-moore-1495235?ref=boilingcold.com.au), Lecturer in International Politics and Policy, *[James Cook University](https://theconversation.com/institutions/james-cook-university-1167?ref=boilingcold.com.au)* This article is republished from [The Conversation](https://theconversation.com/?ref=boilingcold.com.au) under a Creative Commons license. Read the [original article](https://theconversation.com/trusted-partner-to-the-pacific-or-giant-fossil-fuel-exporter-this-week-australia-chose-the-latter-245268?ref=boilingcold.com.au). ### Renewable hydrogen tech could give green light to jobs URL: https://www.boilingcold.com.au/renewable-hydrogen-tech-could-give-green-light-to-jobs/ Last updated: 2024-12-04T02:53:56.000Z *By Jennifer Dudley-Nicholson* Australia could unlock $1.7 billion and thousands of jobs by 2050 if it seizes the opportunity to create hydrogen-manufacturing equipment, a study has found. Making equipment to produce renewable hydrogen could help Australia lead the world in the clean energy resource and unlock up to 4000 jobs and $1.7 billion by 2050, a study says. The research, [released by CSIRO Futures](https://www.csiro.au/en/news/All/News/2024/December/Hydrogen-Electrolyser-Manufacturing-report-outlines-Australias-opportunity?ref=boilingcold.com.au) on Wednesday, also warned the nation had a small "window of opportunity" to take advantage of its head start before other countries recognised the market's potential. The findings come weeks after the release of the National Hydrogen Strategy 2024, which outlined a target to produce 15 million tonnes of green hydrogen in Australia annually by 2050. The CSIRO research, called the Hydrogen Electrolyser Manufacturing report, investigated opportunities to produce the technology used to create renewable hydrogen. Electrolysers are specialised equipment that use renewable electricity to split water into hydrogen and oxygen, creating hydrogen without producing carbon emissions. [Alcoa moves future mining away from dams ‘for now’Alcoa has made last minute changes to its planned expansion of mining in WA’s jarrah forest and wants to reenter a previously mined area, potentially triggering a new major federal environmental assessment.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-4.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/DJI_0907-A.JPG)](https://www.boilingcold.com.au/alcoa-to-move-future-mining-away-from-dams-for-now-to-speed-approvals-2/) Demand for renewable hydrogen, also known as green hydrogen, was rising worldwide, the study found, as nations sought to cut their greenhouse gas emissions. "The rapid increase in scale, demand from electrolysis projects around the world, and the space for new entrants create a clear window of opportunity for countries like Australia to develop their electrolyser supply chains," the report said. Australia could create $1.7 billion in revenue and 3974 jobs by 2050 if it manufactured hydrogen electrolysers, CSIRO Hydrogen Industry Mission leader Dr Patrick Hartley said. "There is an economic prize out there for jobs and revenue," he said. "We have strengths in Australia around advanced manufacturing in other sectors like aerospace, defence, medical, tech, and some of those technologies are transferable into this area. "Of course, we also have the potential to use a lot of our own raw materials too." Installing the equipment could also create another 1000 jobs, the analysis found, and an additional $1.2 billion. Australian equipment could also support existing plans, with 87 hydrogen projects involving electrolysis already announced locally, most of them in Queensland and Western Australia. "I would love to see Australian-made electrolysers used in Australian projects," Dr Hartley told AAP. "We have a pipeline of hydrogen projects in Australia that could provide a domestic market for electrolysis and that would be a great outcome." Demand for renewable hydrogen is likely to grow, with the International Energy Agency calling for almost one-third (32.8 per cent) of hydrogen to be created by electrolysis by 2030 - up from just 0.1 per cent in 2022. Australia has the second-highest number of renewable hydrogen projects under way, led by India, but the manufacturing industry needed to move swiftly to seize the opportunity, CSIRO Futures energy lead Vivek Srinivasan said. "By leveraging Australia's renewable energy advantages and innovative (research and development) capabilities, Australia can become a player in this rapidly emerging sector," he said. "We must act quickly while the opportunity is available to us." Renewable hydrogen is likely to be used in fields such as heavy freight and long-distance road transport, energy storage, and ammonia production once widely available, the report found. ### Alcoa moves future mining away from dams 'for now' URL: https://www.boilingcold.com.au/alcoa-to-move-future-mining-away-from-dams-for-now-to-speed-approvals-2/ Last updated: 2024-12-23T07:44:19.000Z Alcoa has made last minute changes to its planned expansion of mining in WA's jarrah forest, deferring mining near two dams and applying to reenter a previously mined area that it deems of low risk to the Peel Harvey inlet on the coastal plain below. The changes are a massive rejig of its long term plan to supply bauxite to its Pinjarra alumina refinery that has been in the WA environmental approval system for more than four years. The US miner has deferred mining in reservoir protection zones around Serpentine and South Dandalup "as a result of a recent review" to reduce potential environmental impact, according to communication to stakeholders in October seen by *Boiling Cold*. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2024/12/reservoir-protection-zones-excluded-from-mine-expansion.png) ****Changes to planned mine expansion (blue shade).** *map: Alcoa, graphic: Boiling Cold* To maintain production the $18 billion company plans to revisit an area called O'Neill to the east that it has last mined in 2014\. It told stakeholders the changes and other alteration to its plans would reduce the area of clearing of jarrah forest by about 800 hectares. Reservoir Protection Zones are a two kilometer buffer from the top water level of a reservoir. To protect the water supply with few exceptions the public are not allowed to access the zones. However Alcoa has been allowed to mine within a few hundred meters of the southern edge of Serpentine dam - the largest source of drinking water for Perth and the south west. Alcoa's planned expansion of its sprawling Huntly mine involves extending mining to the north of Serpentine Dam in an area called Myara North and around South Dandalup dam at Holyoake. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2024/12/DSC05752.JPG) ****Alcoa plans future mining to be further from Serpentine Dam.** *Photo: Peel Environmental Protection Alliance.* Contamination of Perth''s water supply from Alcoa's mining was "considered certain" by a 2023 Water Corporation assessment that concluded "mining impacts are persistent and irreversible, with little evidence that mined areas can be effectively returned to an equivalent pre-mining state." A separate assessment by the Department of Water and Environmental Regulation in 2023 opposed Alcoa's current mining "in its entirety" as there was a “foreseeable” risk that water from Serpentine Dam could become unusable. The two reports obtained through freedom of information requests are appended below. The Cook Labor government ignored both warnings and approved Alcoa's mining plan in December 2023. [Welcome back to independent energy and climate news for WABoiling Cold returns - and it needs your support![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-3.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Untitled-design-1.png)](https://www.boilingcold.com.au/welcome-back-to-independent-energy-and-climate-news-for-wa/) WA Forest Alliance director Jess Boyce said Alcoa must permanently exclude, not just defer, its expansion into the precious forested water catchment areas that are off-limits to average Western Australian bushwalkers and campers. "The pressing question to both the Cook Government and Alcoa is when will the forest-destroying bulldozers currently in the Reservoir Protection Zone be stopped," she said. Alcoa was asked in what circumstances it would mine in the reservoir protection zones it has removed from its present plans. A response was not received before publication. ### Mine move sparks questions about Peel estuary Alcoa stopped mining at O'Neill because "all economic ore has been extracted," according to its [application to mine O'Neill](https://epbcpublicportal.environment.gov.au/all-referrals/project-referral-summary/?id=6193b328-a17f-ef11-ac21-000d3acb720f&ref=boilingcold.com.au) submitted to the federal environment regulator a week ago. "However, the region still contains remnant, viable ore deposits," it said. In its federal submission Alcoa acknowledged that mining at O'Neill was in the regulated sub catchment of the Serpentine Dam and could have an indirect effect on the Peel Estuary inland of Mandurah. The estuary is recognized as a wetland of international importance unfortunately the Ramsar Convention, so attracts particular attention under federal environment legislation. Alcoa expected its mining would have "a negligible impact to either water quantity or quality of inflows to the Serpentine Dam and subsequently the Peel Inlet, therefore no tangible impact" to the Ramsar site due to its "preventative risk management processes including the construction and ongoing management of multiple barriers to prevent impacts to drinking water quality." Past failures of these processes and barriers have been a major cause of the concerns of government agencies about Alcoa's mining. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2024/12/DJI_0803-A.JPG) ****Area under rehabilitation west of Lane Poole Reserve.** *Photo: Peel Environmental Protection Alliance.* If the federal government determines mining at O'Neill could have a significant impact on the estuary a more detailed and lengthy assessment process will be triggered. Boyce said scientists were already warning that the Peel-Harvey estuary was "showing signs of trouble" and a claim that mining at O’Neil had unlikely indirect impacts must be cautiously assessed. "We cannot accept the risk that the proposal poses to this internationally important and under-stress system," she said. Alcoa was asked how it could state to the federal environment regulator that it had a high level of confidence its mining at O'Neill would not have a significant impact given the damning independent assessments of its operations by Water Corporation and DWER. An Alcoa spokesman said it was not able to respond before publication. --- ### Water Corporation's assessment of the risk to Perth's water supply from Alcoa's mining --- ### Feedback from the Department of Water and Environmental Regulation on Alcoa's mining plans. ### Green iron a potential $100b annual boost for Australia: report URL: https://www.boilingcold.com.au/green-iron-a-potential-100b-annual-boost-for-australia-report/ Last updated: 2024-12-03T02:00:13.000Z *By Marion Rae* Economic modelling suggests a sovereign green iron industry could make more than $100 billion a year and create thousands of jobs for former steel workers. Australia will lose thousands of jobs to rival resource-rich economies if the federal government fails to kickstart the nascent green iron industry, experts warn. An independent report released on Tuesday by Mandala Partners found the industry could potentially generate more than $100 billion annually for the economy and support 27,500 direct jobs. Australian Workers' Union national secretary Paul Farrow said Australian steel production was "under massive pressure" and there was an opportunity to usher workers into alternative, well-paid, long-term jobs. "If the government doesn't step in, it'll shut down and we'll lose not just thousands of jobs, but the historic opportunity to transition to green iron," Mr Farrow said. "There are clever countries lining up right now to rob Australia of its green metals advantage and it would be a national tragedy if they are successful." Rival iron ore giant Brazil is developing a new green iron province to supply world markets, while Africa is another future source for the United States, Europe and China's automakers and steel furnaces. [Welcome back to independent energy and climate news for WABoiling Cold returns - and it needs your support![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol-1.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/Untitled-design.png)](https://www.boilingcold.com.au/welcome-back-to-independent-energy-and-climate-news-for-wa/) Becoming a green iron titan would also have a greater impact on reducing global emissions than a commitment to net zero by 2050, according to the analysis commissioned by philanthropic organisation Boundless Earth. Ironmaking is the most emissions-intensive part of the steel value chain, contributing up to 90 per cent of the emissions. With the steel industry pumping out up six to nine per cent of global emissions, an Australian production chain for green iron was estimated at reducing global emissions by 1.7 per cent - or more than the official national carbon footprint. "If Australia reaches its green iron potential, it would be a huge contribution to global climate action," Boundless Earth chief executive Eytan Lenko said. "This report clearly shows the importance and strategic opportunity of transforming our iron ore industry to a green iron industry, and its critical role in Australia becoming a renewable superpower." Australia could be a cost-competitive producer of green iron if there was taxpayer support during the "scale-up" phase as high capital requirements and technological risks were deterring private investment. Some $28.8 billion in investment would be needed by 2030 to build production plants, hydrogen facilities, and renewable energy systems, the report found. Mandala Partners' Amit Singh said Australia had an opportunity to position itself as a leader in a new industry where the nation had unique natural advantages, but it wouldn't happen without a big push by governments. "Relying on private investment alone is not going to get us there, especially given the renewable energy infrastructure requirements," he said. Production would require 16 terrawatt hours of renewable energy by 2030 and 775 TWh by 2050, or 2.4 times the nation's 2030 renewable energy target. ### Australia tells international court no more climate responsibility for high emitting countries URL: https://www.boilingcold.com.au/australia-tells-international-court-no-more-climate-responsibility-for-high-emitting-countries/ Last updated: 2024-12-03T00:30:44.000Z *By Katelyn Catanzariti* Australia has told the International Court of Justice it is "resolutely committed" to uphold the Paris Agreement in a landmark hearing brought by Vanuatu. Australia has reiterated its commitment to the Paris Agreement on climate action but does not think high-emitting countries have further legal responsibilities to stave off climate catastrophe. In a landmark case brought before the UN's International Court of Justice (ICJ), Vanuatu is leading an argument brought by several Pacific nations and developing states that developed countries have a legal responsibility beyond the existing UN frameworks. Despite Australia joining more than 100 countries to petition for the ICJ to issue an advisory opinion, it had not been clear how Australia would argue when making its submissions. General Counsel for the Attorney General Jesse Clarke told the court Australia stood by its commitment to the Paris Agreement, was taking "urgent and ambitious climate action" and applauded Vanuatu's leadership in "driving forward" the hearing. [WA’s EPA speeds emissions deregulation while Chevron environmental inquiry waitsThe environmental watchdog is set to remove restrictions on climate pollution in months but is much slower looking into concerns about quarantine and turtles on the Barrow Island nature reserve.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/bc_symbol.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/epa-go-slow-feature-021224.png)](https://www.boilingcold.com.au/was-epa-speeds-emissions-deregulation-while-chevron-environmental-inquiry-waits/) Australia was "resolutely committed" to achieving the objective of the UN Framework Convention on Climate Change and the goals of the Paris Agreement, including by strengthening its emissions reduction targets, legislating a commitment to achieve net zero by 2050 and delivering on its climate finance commitments, Mr Clarke told the ICJ on Monday, the first day of two weeks of hearings. "Climate change is the greatest shared threat to all countries... Indeed, climate change poses the single greatest threat to the livelihoods, security, and wellbeing of the peoples of small island states, including Pacific island states. "Australia acknowledges the extent of the challenge posed by climate change. And recognises that ambitious individual and collective action must be undertaken urgently." Mr Clarke said. "In this regard, the UNFCCC and the Paris Agreement are the central instruments that provide the framework for international cooperation and commitments to tackle the grave challenge of climate change." Vanuatu and other Pacific nations and developing states are arguing there is a legal responsibility beyond the internationally negotiated UN frameworks like the Paris Agreement. But Australia's Solicitor General Stephen Donaghue said the requirement of international laws had already been considered in the negotiation of those frameworks. While most states recognised a responsibility to prevent "transboundary harm", Australia and other parties did not agree that the principle applied to environmental harm caused by greenhouse gas emissions - an issue that had been discussed at the time the Paris Agreement was written. Given the widespread adoption of the UN treaties, customary international law "should not be held to have developed in a way that imposes obligations with a different content", he said. "Australia's view, which it shares with several participants in this proceeding, is that the UNFCCC and the Paris Agreement specify what that standard requires for states party to those treaties. "Equally, compliance with those treaties will also satisfy the procedural aspect of the principle." The world has warmed 1.3 degrees since pre-industrial times, and there are doubts as to whether the biggest nations will meet their Paris Agreement commitments - the key inter-governmental agreement to limit human-induced climate change. ### WA's EPA speeds emissions deregulation while Chevron environmental inquiry waits URL: https://www.boilingcold.com.au/was-epa-speeds-emissions-deregulation-while-chevron-environmental-inquiry-waits/ Last updated: 2025-07-08T02:43:33.000Z WA's environmental watchdog can respond to a government edict to reduce carbon emissions regulation for 20 projects in months but is taking close to two years to complete an initial inquiry into multiple threats to nature from Chevron's Gorgon gas export project. Conservation Council of WA director Jess Beckerling said the WA Labor government was continuing to prioritize industry requests over nature protection. In early 2023 WA environment minister Reece Whitby asked the independent Environmental Protection Authority to look into Barrow Island where Gorgon was built. Chevron was allowed to construct Gorgon on the Class A nature reserve against the advice of the EPA at the time. The 235-square-kilometre island has been a nature reserve for more than a century. It is home to more than 100 species of birds, 44 different reptiles, 13 mammal species, and almost 4000 types of plants. Whitby made two requests amidst investigations by the Department of Water and Environmental Regulation into "contravention or possible [contravention of the laws](https://www.watoday.com.au/national/western-australia/turtles-toxic-pfas-and-quarantine-probes-target-chevron-s-gorgon-20231016-p5ecrv.html?ref=boilingcold.com.au)" concerning quarantine breaches, contamination from "forever chemical" PFAS and beach erosion affecting turtle nesting. First Whitby [requested](https://www.epa.wa.gov.au/sites/default/files/Extract%5Fof%5Fdetermination/MS%20800%20-%20C9%20%26%20C15%20-%20Public%20record%20of%20decision%202367.pdf?ref=boilingcold.com.au) the EPA determine if two panels of experts on quarantine and marine turtles were effective at providing him independent advice. After that he wanted the Authority to ensure the conditions imposed on Chevron's management of quarantine, turtles and beach erosion were [effective and "outcome -based"](https://www.epa.wa.gov.au/sites/default/files/Extract%5Fof%5Fdetermination/MS%20800%20-%20C10%2C%20C16%20%26%20C25%20-%20Public%20record%20of%20decision%20s.%2039%202368.pdf?ref=boilingcold.com.au) rather than just requiring approved plans to be followed. After 21 months the EPA has not reported back on the expert panels, and so has not started the more substantive inquiry into what conditions should be imposed on Chevron. [Turtles, toxic PFAS and quarantine: Probes target Chevron’s GorgonThe US gas giant’s operation on Western Australia’s Barrow Island is being investigated for beach erosion, contamination and biodiversity-threatening breaches.![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/icon/watoday-2024-12.png)WAtodayPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/thumbnail/7a456a108ee37e11e668b4bfbd13d8859984f4a9)](https://www.watoday.com.au/national/western-australia/turtles-toxic-pfas-and-quarantine-probes-target-chevron-s-gorgon-20231016-p5ecrv.html?ref=boilingcold.com.au) In contrast, in past months the EPA has swiftly moved on the most contentious aspect of its recent activities - the regulation of climate-heating greenhouse gas emissions. In mid-October the Cook Labor government [amended its policy](https://www.wa.gov.au/government/publications/greenhouse-gas-emissions-policy-major-projects?ref=boilingcold.com.au) governing greenhouse gas emissions from major projects and now wants to leave the field to the Federal Government's safeguard mechanism. The move was welcomed by the WA Chamber of Minerals and Energy as a removal of duplication of efforts from Canberra but Greens upper house member Brad Pettit blasted the government for "[washing their hands](https://www.watoday.com.au/politics/western-australia/wa-s-environment-watchdog-stripped-of-power-to-assess-big-polluting-projects-20241015-p5kik3.html?ref=boilingcold.com.au)" of responsibility. Six weeks later the independent EPA [revised its own guidance](https://www.epa.wa.gov.au/policies-guidance/environmental-factor-guideline-%E2%80%93-greenhouse-gas-emissions-0?ref=boilingcold.com.au) on greenhouse gas emissions to incorporate the government's policy. Other revisions in recent years involved lengthy consultation with interested parties over many months. In mid-November Whitby - using the same section 46 of the Environmental Protection Act as the Barrow Island inquiry requests - asked the EPA to change the greenhouse gas conditions it had imposed on 20 major projects. > The EPA "is now focused on amendments to processes and project conditions rather than on the critical work of looking after habitats and species." Jess Beckerling, Conservation Council of WA. EPA chair Darren Walsh said he expected all twenty greenhouse gas inquiries to be completed by March 2025. Walsh, who was appointed EPA chair in October, said "there are no specific time requirements" for the Barrow Island inquiries. "The EPA will report once it has determined a suitable and appropriate recommendation," he said. When questioned on the discrepancy in duration of the inquiries Walsh said the greenhouse request has a narrow defined scope compared to the complex Barrow Island inquiries. "Nevertheless, the State Government’s recent additional resourcing commitments to the independent EPA are expected to assist in further progressing ... an expeditious outcome." A spokesman for environment minister Whitby said DWER was working with Chevron to ensure existing regulatory and management requirements address issues of concern on Barrow Island. “While the State Government is satisfied appropriate action is being taken, it is up to Chevron to remedy any issues that may be raised during those inquiries,” he said. Beckerling said the EPA had a statutory responsibility to protect WA's natural environment and the role is becoming increasingly important and complex. "Instead, what we’ve seen this year is the state government implementing industry’s agenda to reduce environmental conditions," she said, "resulting in an EPA which is now focused on amendments to processes and project conditions rather than on the critical work of looking after habitats and species." The three investigations into quarantine, beach erosion affecting turtles and PFAS issues on Barrow Island are ongoing, a DWER spokesman said. "An estimated completion date cannot be provided." In 2023 [*WAtoday* reported](https://www.watoday.com.au/national/western-australia/turtles-toxic-pfas-and-quarantine-probes-target-chevron-s-gorgon-20231016-p5ecrv.html?ref=boilingcold.com.au) that on the island's east coast where about 1400 flatback turtles, a vulnerable species, lay eggs each year nesting had significantly reduced at two beaches where sand has shifted due to jetty built by Chevron. Since construction of the Gorgon plant began a number of introduced species have been found on Barrow Island at different times. Only one species has been declared a quarantine incident. Chevron stopped using firefighting foam containing PFAS in 2023. --- *Clarification - 4 December 2024 -More detail about quarantine incidents on Barrow Island to make clear that only one species has been declared a quarantine incident.* --- ### Santos internal analysis: $US1.6B Bayu-Undan carbon storage is low return and high complexity URL: https://www.boilingcold.com.au/santos-internal-analysis-us1-6b-bayu-undan-carbon-storage-is-low-return-and-high-complexity/ Last updated: 2023-12-18T05:05:38.000Z EXCLUSIVE ANALYSIS Santos' plan to bury CO2 and delay decommissioning at its Bayu-Undan gas project is troubled by low returns and needs a myriad of deals with governments and partners to take off, according to recent internal company documentation seen by *Boiling Cold*. Santos chief executive Kevin Gallagher and his team need a lot to go their way to realise this vital part of the company's net-zero by 2040 plan and not regret buying more of the ageing Bayu-Undan asset. The end of gas production at Bayu-Undan in about 2023 threatened to leave an empty Darwin LNG plant and a massive $US1.1 billion offshore decommissioning bill in Timor Leste. Santos owned 68 per cent of the problem after buying out ConocoPhillips' 57 per cent share for $US1.5 billion in 2019. Santos' solution was to fill the plant with gas from its $US3.6 billion Barossa project sanctioned in March. At the same time, the Adelaide-based company reduced its Bayu-Undan equity to 43 per cent by selling down to South Korean SK E&S. However, with 16 to 20 per cent CO2 in the reservoir, Barossa created another issue: carbon-intensive LNG, which is the opposite of what buyers want and incompatible with Santos' aim of zero net emissions by 2040. Making a tonne of LNG from Barossa gas will [create three times the emissions](https://www.boilingcold.com.au/santos-dirty-big-2b-barossa-bet/#:~:text=Barossa%20LNG%20is%20incredibly%20three%20times%20more%20carbon-intensive%20than%20LNG%20from%20Pluto%2C%20Wheatstone%2C%20or%20Gorgon%20if%20its%20CO2%20injection%20works.) compared to the Pluto and Wheatstone plants, and Gorgon when CO2 injection works, making Barossa LNG Australia's dirtiest. The next move by Santos to ensure the ConocoPhillips purchase is not an expensive dud is to store CO2 from Barossa in the soon to be depleted Bayu-Undan reservoirs, simultaneously offsetting emissions and delaying decommissioning by decades. However, to succeed, Santos must corral a myriad of companies and two governments and overcome technical and economic challenges. Getting carbon dioxide from Barossa to Bayu Undan is not straightforward. The Barossa plan underway is for a mix of methane and CO2 to flow through a new pipeline at least 260km long that connects to the existing Bayu-Undan to Darwin pipeline. ![Santos map of gas fileds off northern Australia includiing Barossa, Bayu Undan, Prelude, Ichthys, Sunrise and Evans Shoal and Blacktip.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/05/Santos-northern-Australia-map-annotated.jpg) Offshore **gas in northern Australia.** Source: Santos with annotation by Boiling Cold Using a section of the existing pipeline saves the Barossa project millions of dollars but cuts off the future route to move CO2 to Bayu Undan. If Santos goes ahead with Bayu Undan CCS a few years after Barossa, it will have to build a pipeline from Darwin to the disused portion of the Bayu Undan pipeline at great expense. In Darwin, the CO2 would be separated and compressed to travel 500km to Bayu Undan and injected underground through modified existing wells. > Santos chief executive Kevin Gallagher told investment analysts in August that he could not disclose the cost of Bayu-Undan CCS "because we're working through all of that, except to say, it looks very competitive." According to documentation seen by *Boiling Cold*, Santos concluded that Bayu-Undan CCS would cost more than $US1.6 billion ($2.2 billion). The internal analysis showed that just storing 2.3 million tonnes of CO2 a year from the Barossa reservoir resulted in an excessive cost per tonne. The project needs additional income from storing four million tonnes of CO2 from Inpex's Ichthys LNG project that has its LNG plant near Santos' Darwin LNG. Unfortunately for Santos, it is understood that Inpex prefers a storage location near the Petrel field west of Darwin and is progressing CCS at a slower pace than Santos. [Inpex moves to clean up Ichthys’ dirty LNGA year after Inpex rejected carbon capture and storage at Ichthys LNG as unaffordable it is an essential element in its new drive to slash emissions by 2030.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/01/Ichthys-LNG-Project-onshore-facilities-May-2018.jpg)](https://www.boilingcold.com.au/inpex-moves-to-clean-up-ichthys-dirty-lng/) Inpex is not the only company Santos has to convince of the merits of Bayu-Undan CCS. All the Barossa and Darwin LNG/Bayu Undan joint venturers must be on board. Because CCS is not covered in the joint venture agreements, all participants have a veto. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/09/image-3.png) An added complication is Japan's JERA that 18 months ago signed a letter of intent to [buy 12.5 per cent of Barossa](https://www.santos.com/news/santos-signs-loi-to-sell-a-12-5-interest-in-barossa-to-jera/?ref=boilingcold.com.au) from Santos and is yet to complete the transaction. The sale is important to reduce the financial load on Santos, but *Boiling Cold* understands any change to the project puts the JERA deal at risk. But the Timor Leste government may be the biggest hurdle. It will want revenue from CCS and assurance there will be money available mid-century when the delayed decommissioning of Bayu Undan occurs. Santos also wants the Australian Government to help. Earlier this week, Gallagher called for the provision of [low-cost financing for CCS](https://thewest.com.au/business/santos-calls-on-government-financiers-to-shoulder-more-of-carbon-capture-and-storage-load-ng-b881997121z?ref=boilingcold.com.au) projects. The two Governments will need to cooperate in developing a unique regulatory solution that would let Santos produce CO2 in Australian waters, bury it under the Timor Leste seabed, and generate Australian Carbon Credit Units. Such bespoke agreements with governments and other companies can take years to conclude. With so many parties involved, the risk of one with less at stake than Santos moving too slowly is high. Simply partially offsetting Barossa and Ichthys' very high emissions is an insufficient economic justification for the $US1.6 billion Bayu-Undan CCS project. The Santos business case included income from selling carbon credits and the economic value of delayed decommissioning and still predicted a rate of return of less than 10 per cent. A delay to decommissioning risks ageing infrastructure and increasing regulatory requirements causing a cost increase greater than the calculated economic benefit of delay. It is understood Santos is finalising an update to the Bayu Undan decommissioning cost to provide to the Timor Leste Government. A higher estimate will increase both the reward and risks of delay. Santos is considering setting up a new company with other BU participants to own and operate the decommissioning project to reduce its perceived abandonment liability. It would be structured so the decommissioning liability is not reflected on the Santos balance sheet. The second helper to the Bayu-Undan CCS business case also has complications. The carbon credits cannot be sold to a third party and then also used to market Barossa LNG as having a lower carbon intensity or contribute to Santos' net-zero by 2040 target. In June, an investment analyst covering Santos said its plans for CCS at Moomba in SA appeared [close to double-counting](https://www.afr.com/companies/energy/double-counting-doubts-cloud-santos-ccs-project-20210622-p58357?ref=boilingcold.com.au) of credits. > Gallagher told analysts in August that there is a "bit of water to go under the bridge" before CCS at Bayu Undan became a possibility. While BU CCS is under investigation, the company can justify assuming a mid-century decommissioning when calculating abandonment liability. The project is also part of Santos' efforts to achieve net-zero emissions by 2040 that shareholder activist group ACCR has taken Santos to court over, claiming [the target was not credible](https://www.theguardian.com/australia-news/2021/aug/26/santos-sued-for-clean-fuel-claims-and-net-zero-by-2040-target-despite-plans-for-fossil-fuel-expansion?ref=boilingcold.com.au). For these two reasons, Santos is unlikely to stop pursuing BU CCS any time soon. But, if it does, Santos has a big clean up bill to pay and a lot of dirty LNG to sell. *Boiling Cold* posed a series of questions to Santos. A spokesman for Santos said the company was still early on in the process and therefore couldn’t comment further. --- *Main image: Bayu Undan offshore gas facilities in the Timor Sea. Source: Inpex.* --- ### MacTiernan defends WA Government backing gas…for now URL: https://www.boilingcold.com.au/mactiernan-defends-wa-government-backing-gas-for-now/ Last updated: 2021-12-31T11:07:05.000Z WA's minister for the hydrogen industry Alannah MacTiernan has backed the McGowan's Government's support for Woodside's Scarborough gas project but has doubts about further projects. MacTiernan said the State Government was committed to taking action on climate change, "but that doesn't mean we're going to close down the gas industry in the next five years; that is not going to happen." "But will there still be a gas industry in 25 (years)? - that is a very different question," MacTiernan last night told a hydrogen seminar hosted by advocacy group Sustainable Energy Now. MacTiernan said large hydrocarbon companies were "absolutely seeing the writing on the wall." > "There will be gas projects that have been talked about, not Scarborough...that I would be quite happy to put a bet on Ladbrokes to say that they will never happen. "I don't want to go in and sell the virtues of Scarborough, but as a transition project there's a lot worse than that." [Inside Woodside’s hall of mirrors Browse LNG is deadCost, climate concerns and delay have killed Woodside’s Browse LNG project and now it must negotiate with its old foes, the North West Shelf partners, to ensure Scarborough is developed.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/07/Mia-Yellagonga--Perth--Western-Australia-web-top-crop.jpg)](https://www.boilingcold.com.au/woodside-browse-lng-is-dead/) "If you're trying to get a Scarborough project up and you haven't got a very credible decarbonisation story, you are going to struggle, not just in terms of government approvals, but it's the financing." Woodside plans to sanction the $US12 billion Scarborough to Pluto LNG project by the end of 2021\. Its recently announced purchase of BHP's petroleum assets with its own scrip will likely allow Woodside to sanction Scarborough without raising funds due to the cash flow boost from BHP's assets. Most large fossil fuel companies are expanding into so-called clean hydrogen, but there is much debate about the relative virtues of green hydrogen made using solar or wind power and blue hydrogen produced from gas with the CO2 emitted captured and stored. Many environmentalists see blue hydrogen as an excuse to continue gas production and doubt that all associated carbon emissions will be stored or offset. The WA Government is only backing green hydrogen. > "When they come and do the blurb on blue hydrogen, I say, well that's lovely, go for it, there is a place for some of this stuff as a transition," MacTiernan said. The hydrogen minister said demonstrating that green, or renewable, hydrogen was a viable industry for WA would build support for transitioning away from gas. "I'm in the business of actually achieving change…we need to bring the bulk of the population with us," MacTiernan said. Today the Government announced that its forthcoming budget would allocate [an additional $50 million](https://www.mediastatements.wa.gov.au/Pages/McGowan/2021/09/61-point-5-million-dollar-boost-for-WAs-renewable-hydrogen-industry.aspx?ref=boilingcold.com.au) to support the development of renewable hydrogen. Three small feasibility studies will be funded. APA will investigate converting its ageing Parmelia gas pipeline to 100 per cent hydrogen, and Global Energy Ventures will consider exporting compressed hydrogen from the Gascoyne. BP received $300,000 to look at establishing a clean fuel hub at the site of its shut down oil refinery in Kwinana. The hub could make green hydrogen for the surrounding industry and combine that hydrogen with waste oil to make low emissions diesel. BP decarbonisation manager Justin Nash said if the hub was viable, BP could make a final investment decision in about two years with production starting mid-decade. Nash said the hub could produce the equivalent of 8 to 10 thousand barrels of oil a day, compared to the shuttered refinery that had an output of 50,000 barrels a day. Today, the State Government announced a [resource development strategy](https://www.dmp.wa.gov.au/Documents/Investors/A-world-leading-resources-sector.pdf?ref=boilingcold.com.au) that included a policy to allow fracking, support for an LNG fuelling hub for ships in the Pilbara, and initiatives to streamline project approvals. While many environmentalists think the WA Government is too supportive of gas, industry lobby group [APPEA was disappointed](https://www.appea.com.au/all%5Fnews/media-release-wa-resources-sector-strategy-misses-the-mark/?ref=boilingcold.com.au). APPEA WA director Claire Wilkinson said the strategy did not acknowledge the critical role of energy, particularly natural gas, in future resource developments. "This document falls short…it is instead a collection of already-announced initiatives, most of which relate only to the minerals sector." --- *Main image: North West Shelf Project's Goodwyn A gas platform. Source: Woodside Energy Limited.* --- ### Tardy BHP ordered to clean up three oil and gas fields offshore WA and Victoria URL: https://www.boilingcold.com.au/tardy-bhp-ordered-to-clean-up-three-oil-and-gas-fields-offshore-wa-and-victoria/ Last updated: 2024-01-26T07:26:21.000Z BHP must clean up three offshore fields after years of “limited action” and equipment sinking to the seabed, adding to the decommissioning burden Woodside will inherit if it absorbs the miner’s oil and gas assets. Offshore environment and safety regulator NOPSEMA directed BHP to fully decommission the Griffin and Stybarrow fields off WA and the Minerva field in Victoria’s Otway Basin. The directions published today require all work to be done within five years or less, and fines could be levied if the schedule is not met. At the Griffin field, 68km north-east of Exmouth BHP, [must remove wellheads and Christmas trees from 15 wells](https://www.nopsema.gov.au/sites/default/files/2021-09/A781707.pdf?ref=boilingcold.com.au) and numerous infield pipelines and umbilicals, a riser turret mooring lying on the seabed, and a 60km long concrete coated pipeline to shore. The Griffin field produced [167 million barrels of oil](https://www.bhp.com/-/media/documents/environment/2021/210528%5Fgrffindecomm%5Freferencebooklet%5Ffinal.pdf?la=en&ref=boilingcold.com.au) and 62 billion cubic feet of gas from 1994 to 2009\. Two months after production ended, BHP disconnected the Griffin Venture oil production vessel from the floating riser turret mooring that is chained to the seabed. In 2013 the RTM “unexpectedly sank to the seabed and now sits upright with its bottom resting on the seabed and its top 40 metres below the surface,” [according to BHP](https://www.bhp.com/-/media/documents/environment/2021/210528%5Fgrffindecomm%5Freferencebooklet%5Ffinal.pdf?la=en&ref=boilingcold.com.au). BHP did not plug Griffin’s wells to make them permanently safe until 2017, eight years after production finished, and removed mid-depth buoys that supported flexible pipelines and umbilicals in 2018. Legislation requires offshore oil and gas producers to remove all infrastructure they have installed unless, [according to BHP](https://www.bhp.com/-/media/documents/environment/2021/210528%5Fgrffindecomm%5Freferencebooklet%5Ffinal.pdf?la=en&ref=boilingcold.com.au), NOPSEMA accepts “alternatives to full removal where the titleholder is able to demonstrate that its proposal will deliver equal or better environmental outcomes.” BHP will likely try to gain approval to leave the gas export pipeline on the seabed but will need to demonstrate it has sufficiently cleaned out mercury accumulated in the pipeline. The cost to clean up Griffin, to be completed by the end of 2025, will be borne by owners BHP (45 per cent), ExxonMobil (35 per cent) and Inpex (20 per cent). BHP and Woodside will equally share the cost to decommission the nearby Stybarrow oil field. Twelve years of oil production at Stybarrow ceased in 2015, and again equipment sunk to the seabed before BHP removed it: this time mooring support buoys and the turret mooring in 2016. At Stybarrow, [10 wells are yet to be plugged and abandoned](https://www.nopsema.gov.au/sites/default/files/2021-09/A781218.pdf?ref=boilingcold.com.au), a potentially expensive operation in more than 800m water depth at what, when built, was Australia’s deepest offshore oil field development. Wellheads at these ten wells and a further seven that are plugged must be removed, as do numerous pipelines, umbilicals, and the sunken turret mooring and buoys. BHP must also [plug four wells at the Minerva field](https://www.nopsema.gov.au/sites/default/files/2021-09/A781846.pdf?ref=boilingcold.com.au) off the Victorian coast that produced gas from 2005 to 2019\. BHP must also remove subsea structures, umbilicals, and a gas pipeline to shore. Cooper Energy owns 10 per cent of Minerva. All three NOPSEMA directions to BHP stated that “given the limited action to date,” it would increase its oversight of the three fields. Should Woodside complete the purchase of BHP’s petroleum assets, it will bear all the costs to clean up Stybarrow, 90 per cent of the Minerva bill and 45 per cent at Griffin. Woodside will also inherit 50 per cent of the liability to clean up the ExxonMobil operated Bass Strait assets where in May NOPSEMA ordered that 180 wells be plugged and ten platforms dismantled. [ExxonMobil Bass Strait maintenance & decommissioning blastedBass Strait partners ExxonMobil and BHP must plug 180 wells, dismantle ten platforms and tackle life-threatening corrosion after intervention by offshore safety regulator NOPSEMA.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/05/Offshore-Platform-West-Tuna.jpg)](https://www.boilingcold.com.au/regulator-blasts-exxonmobils-bass-strait-maintenance-orders-massive-decommissioning-effort/) The Perth-based company will also double its exposure to decommissioning the vast North West Shelf project. In February, NOPSEMA ordered Woodside to [decommission its Enfield oil field](https://www.boilingcold.com.au/regulator-tells-woodside-to-clean-up-oil-field-and-may-take-legal-action/) in the same area as Griffin and Stybarrow. NOPSEMA is considering legal action against Woodside for not properly maintaining the riser turret mooring equipment at Enfield that now cannot safely be towed to shore for decommissioning. NOPSEMA also today published a direction that [Cooper Energy must decommission the Basker, Manta and Gummy fields](https://www.nopsema.gov.au/sites/default/files/2021-09/A800345.pdf?ref=boilingcold.com.au) off Victoria, which will require the plugging and abandonment of seven wells by 2026. --- *Main image: Griffin Venture floating production storage and offloading oil vessel. Source: [BHP presentation](https://www.bhp.com/-/media/bhp/documents/investors/reports/2008/petroleumsitepresentation08.pdf?la=en&ref=boilingcold.com.au).* --- ### McGowan won’t rule out favouring Woodside for carbon farming land URL: https://www.boilingcold.com.au/mcgowan-wont-rule-out-favouring-woodside-for-carbon-farming-land/ Last updated: 2026-02-02T08:39:14.000Z EXCLUSIVE WA Premier Mark McGowan declined to say his Government would not give Woodside Petroleum an inside run to access vast areas of State land for carbon farming after the gas giant asked for government help to reduce its climate impact. Woodside wrote to McGowan in May requesting support for three "decarbonisation initiatives": carbon farming, renewable energy, and hydrogen. > "However, for these benefits to be realised, support from government is essential to enable timely and effective investment," the letter said. > "To this end, Woodside is seeking to partner with the Western Australian Government." The author of the [letter](https://www.documentcloud.org/documents/21053062-letter-from-woodside-to-wa-premier-21-may-2021-re-decarbonisation-initiatives?responsive=1&title=1&ref=boilingcold.com.au) obtained by a *Boiling Cold* freedom of information request was redacted but is almost certainly chief executive Meg O'Neill or chairman Richard Goyder. Woodside's renewable energy and hydrogen proposals likely require access to industrial land that the Government can deliver within well-established procedures. However, opening up land to create carbon offsets is not a common practice of WA governments, as evidenced by the level of bureaucratic involvement even before Woodside wrote to McGowan. Woodside first pitched its carbon offset proposal on April 21 and met with the Department of Jobs, Tourism, Science and Innovation and the Department of Primary Industries and Regional Development in early May, two weeks before the letter to McGowan. Three days later, on May 7, the director generals of six Government agencies met to discuss the offset proposal: JTSI, DPIRD and the departments responsible for mines and petroleum, environmental regulation, lands, and conservation, according to a [Woodside email to a Government official](https://www.documentcloud.org/documents/21053063-emails-between-woodside-and-the-office-of-the-wa-premier-21-may-2021?responsive=1&title=1&ref=boilingcold.com.au). Not only is Woodside's ask unique, but it could also be huge. When Woodside's proposed purchase of BHP's petroleum assets was announced in August, O'Neill presented a plan to cut the emissions of the combined group by 30 per cent by 2030. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/09/image-1.png) *Source: [Woodside presentation](https://files.woodside/docs/default-source/asx-announcements/2021-asx/woodside-merger-teleconference-and-investor-presentation.pdf?sfvrsn=653020cf%5F4&ref=boilingcold.com.au) 17 August 2021\.* To succeed, Woodside must offset almost two million tonnes of CO2 a year by 2030. Although there is no need for those offsets to occur in WA the State offers an attractive combination of large tracts with few people and low sovereign risk. To fulfil a requirement to offset CO2 from the Pluto reservoir since 2008, Woodside has paid for [26 million mallee trees](https://www.woodside.com.au/what-we-do/australian-operations/pluto-lng?ref=boilingcold.com.au) to be planted across 17,000 hectares, cancelling out 850,000 tonnes of CO2 emissions. Woodside's unique and potentially huge request for assistance with carbon farming appears well suited to the Market-led Proposals policy [announced by McGowan in 2019](https://www.mediastatements.wa.gov.au/Pages/McGowan/2019/03/Market-led-Proposals-policy-to-drive-innovation-and-create-jobs.aspx?ref=boilingcold.com.au). The policy aimed to create "a clear, consistent and transparent process to manage unsolicited proposals from the private sector that fall outside of the normal competitive processes." *Boiling Cold* asked the Premier if Woodside's offset proposal had been referred to the MLP process, and if not, why? > "The WA Government recognises that local offsets are in demand from WA industry, and we are looking at options to support the creation of more local offsets," the Premier's spokesperson responded, without answering the question. "No individual arrangements have been entered into with any companies." *Boiling Cold* then asked if the Government would put in place a process open to all applicants so Woodside would have to participate in on equal footing with other interested parties? The Premier's spokesperson failed to answer the second question by supplying the same response that did not answer *Boiling Cold's* first question: "The WA Government recognises that local offsets are in demand from WA industry, and we are looking at options to support the creation of more local offsets." Serena Lillywhite, chief executive of anti-corruption group Transparency International Australia, recently described the MLP process as having the feel of "deals being done that [potentially just benefit special interest groups](https://www.watoday.com.au/politics/western-australia/red-flags-hang-over-wa-s-controversial-private-sector-pitches-20210718-p58art.html?ref=boilingcold.com.au) and their commercial interests." Woodside's possible land grab appears to be subject to even less process and transparency than the MLP process that concerned Lillywhite. The McGowan Government's Ministers have been accused of [giving oil and gas producers priority access](https://www.watoday.com.au/national/too-close-to-the-flame-wa-government-accused-of-being-limp-on-climate-change-after-revolving-doors-with-oil-and-gas-giants-20201124-p56hi4.html?ref=boilingcold.com.au). [Ten tales of Woodside’s merry men: Mark, Bill and BenOn the occasion of recent WA treasurer Ben Wyatt joining the Woodside board Boiling Cold reviews the top 10 wins for Woodside from WA Labor’s first term.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/06/Woodside-s-merry-men.jpg)](https://www.boilingcold.com.au/ten-tales-of-woodsides-merry-men-mark-bill-and-ben/) Scrutiny of the closeness of the Government and Woodside in particular heightened after former Treasurer Ben Wyatt joined the Woodside board in June, less than three months after leaving Parliament. A [2018 report by energy and emission consultant Reputex](https://www.reputex.com/wp-content/uploads/2018/11/REPUTEX-REPORT%5FCost-and-availability-of-offsetting-LNG-emissions-in-Western-Australia%5F1118.pdf?ref=boilingcold.com.au) calculated the availability and cost of carbon abatement opportunities in WA. It showed the cost rose significantly with demand as early movers utilised the cheaper options. Early access to large land areas for carbon farming could be a massive saving for Woodside at the expense of other companies that want to offset their emissions later, or are excluded from or unaware of the current process. ![Chart of marginal cost of carbon abatement in WA versus assumed offset demand](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/09/image-2.png) **Cost of carbon offsets in WA increases with demand as cheaper options are exhausted.** Source: [Reputex report 2018](https://www.reputex.com/wp-content/uploads/2018/11/REPUTEX-REPORT%5FCost-and-availability-of-offsetting-LNG-emissions-in-Western-Australia%5F1118.pdf?ref=boilingcold.com.au). The rush to offset emissions is just starting. In 2018 Reputex predicted the European carbon price would rise to more than $60 a tonne by 2025, but last week it hit €60 ($97). Woodside also wants the WA Government to help it pursue renewable energy and hydrogen. In the letter to McGowan, Woodside requested help to set up a hydrogen "new energy technology hub", but all the details of that proposal were redacted. The company also wants to deliver solar power "in the near term" to the Burrup Peninsula, where its Pluto and North West Shelf LNG plants are located. According to the letter, the so-called Woodside Power Project is planned to eventually combine a gas power plant, solar farm, large battery, and a transmission line to the Burrup. Woodside has worked on the concept for some years, with the plant to be located at the Government's Maitland strategic industrial area near Karratha. The initial plan was to replace the old and heavily polluting power plant at the North West Shelf LNG plant when it was refurbished to process gas from Browse, but the idea did not appear in Browse-related environmental approvals lodged by Woodside in 2019. Woodside now proposes to start with just one component of the earlier proposal, with 210,000 solar panels over 200 hectares to deliver 50 megawatts of power to its Pluto LNG plant. Another 50MW could be built to supply the urea plant proposed by Perdaman on the Burrup Peninsular. Woodside said in its letter to McGowan that it was "prepared to move the opportunity forward in the near-term," but "there are a range of matters that will be critical to our ability to progress, for example, with respect to appropriate apportionment of the cost and risk." McGowan's spokesperson said access to land in a Strategic Industrial Area, such as for the hydrogen hub or the power plant, would be allocated by Development WA and JTSI according to long-established processes. Woodside did not respond to questions from *Boiling Cold*. --- *The two documents obtained by Freedom of Information can be [viewed here](https://www.documentcloud.org/projects/woodside-and-the-wa-government-204596/?ref=boilingcold.com.au).* --- *Main image: North West Shelf LNG plant near Karratha. Source: Woodside.* --- ### WA onshore and coastal oil & gas clean up to cost billions URL: https://www.boilingcold.com.au/wa-onshore-and-coastal-oil-gas-clean-up-to-cost-billions/ Last updated: 2021-09-09T07:11:27.000Z Almost 300 oil and gas wells in WA and its coastal waters no longer in production are yet to be made permanently safe, and 700 more wells will require work later, with much of the multi-billion dollar effort to be led by Chevron and Santos. Last week, Federal Parliament [passed legislation](https://www.minister.industry.gov.au/ministers/pitt/media-releases/stronger-oversight-australias-offshore-oil-and-gas-industry?ref=boilingcold.com.au) to ensure the offshore oil and gas industry was held liable for its clean-up costs and avoid a repeat of the failed Northern Endeavour that could cost taxpayers up to $1 billion without a proposed industry levy. However, the new stricter approach does not apply to oil and gas infrastructure on land or within three nautical miles (5.6km) of the coast, where states have jurisdiction. WA's jurisdiction contains 2248 wells, 292 of which are no longer involved in producing oil and gas but are yet to be plugged and abandoned, according to data from the Department of Mines, Industry Regulation and Safety requested by *Boiling Cold*. ![table of the numbr of oil and gas wells in Western Australia grouped into producing, suspended or shut in, and plugged and abandoned](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/08/image-15.png) By law, wells must be plugged and abandoned to be made permanently safe for the oil and gas companies to fulfil their legal obligations. In addition, other infrastructure, such as wellheads and pipelines, has to be removed or left in a state acceptable to DMIRS. Usually, wells are not plugged and abandoned immediately after production stops. A small number could be returned to production later but work on wells is more likely waiting until the operator can decommission a larger number in one campaign to save costs. If the wait to decommission extends excessively, two problems can result. Equipment could fall into a state of disrepair that makes the planned work unsafe to perform, as occurred with the [riser turret mooring](https://www.boilingcold.com.au/regulator-tells-woodside-to-clean-up-oil-field-and-may-take-legal-action/) of Woodside's Nganhurra floating production storage and offloading vessel. With smaller companies, especially those with a single producing asset, the natural decline in production revenue in the years before decommissioning could leave them unable to afford the work. New Standard Energy was [suspended from the ASX](https://www.abc.net.au/news/2019-10-16/exploration-company-new-standard-energy-suspended-by-asx/11600340?ref=boilingcold.com.au) in 2019 for not disclosing the decommissioning liability from its drilling in the Kimberley in its accounts and [does not have the money](https://www.energynewsbulletin.net/environment/news/1385861/new-standard-energy-to-leave-wells-recklessly-forsaken?ref=boilingcold.com.au) to complete work. *Boiling Cold* asked Energy Minister Bill Johnston if he was confident that, apart from New Standard Energy, companies with petroleum decommissioning obligations within WA's jurisdiction had the financial means to complete the required work. A spokesperson for Johnston said DMIRS had the legal power to assess whether a company could afford to meet its legal obligations when it applied for exploration permits and when new entities were transferred onto a title. DMIRS resource and compliance director Karen Caple said the regulator monitored and adapted its regime to ensure companies met their decommissioning obligations. Caple said since mid-2017 DMIRS has issued three directions, apart from those to New Standard Energy, to complete the decommissioning of sites and is monitoring the work until it is complete. However, larger players operate most wells in WA's jurisdiction, particularly Santos offshore and Chevron onshore. ![table of the number of oil and gas wells in Western Australia with Chevron and Santos operated wells highlighted.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/09/image.png) *Source: [WA Petroleum Information Management System](https://wapims.dmp.wa.gov.au/WAPIMS/Search/Wells?ref=boilingcold.com.au)* ### Barrow Island: a half a century of oil production on a nature reserve Chevron operates more than half the onshore wells in WA, almost all on Barrow Island, where it has produced oil for 54 years. Chevron owns 57.1 per cent of the Barrow Island operation, with ExxonMobil owning 14.3 per cent and Santos 28.6 per cent. Chevron's 2020 Australian accounts recorded a $US576 million impairment for Barrow Island after the assumed end of life for the operation was brought forward. This impairment, equivalent to $1US billion ($1.37 billion) for 100 per cent of the asset, is not the cost to decommission Barrow Island, just the decrease in the asset's net present value from assuming decommissioning starts earlier. When the wells are plugged, equipment removed, and land rehabilitated on Barrow Island, the total cost is likely to be much greater than the recent impairment. The scale of the work on Barrow Island is vast, logistics are challenging, and procedures to protect the environment of the Class A nature reserve while ageing equipment is dismantled will be expensive. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/08/image-13.png) **Well pads and roads in a 3km x 5km area on Barrow Island.** Source: Google Earth Total production on Barrow Island averaged 4400 barrels a day in 2020, according to Chevron's report. Santos' share amounts to about 0.5 per cent of its production. For at least the past four years, Santos has reported the value of Barrow Island before decommissioning is allowed for, termed the recoverable amount, as nil. ### Varanus Island Santos is also the 100 per cent owner of oil and gas production assets on and around Varanus Island off the Pilbara coast that first produced in 1986\. The operation has been successively operated by Occidental, Bond Petroleum, Hadson, Apache, Quadrant and since 2018, Santos. ![Map of Santos facilities near Varanus Island off the WA coast.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/08/image-14.png) **Santos facilities near Varanus Island in both State & Commonwealth waters.** Source: Santos' Varanus Island Hub Operations Environment Plan 2019. Santos and its predecessor operators are recorded as responsible for 255 offshore wells in the WA Government's Petroleum Information Management System. Offshore decommissioning is significantly more complex and costly than onshore work. In July, two workers dismantling the Sinbad platform near Varanus Island were nearly killed when control of topsides was lost, highlighting that safety is a significant issue on offshore decommissioning where lifts of old equipment of uncertain condition are necessary. [Out of control lift of platform off WA could have killedTerrifying video shows an offshore lift that went badly wrong off the WA coast in early July endangering workers hanging off a platform and those on the vessel.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/07/sinbad-lift-screenshot-cropped.jpg)](https://www.boilingcold.com.au/out-of-control-lift-of-santos-platform-off-wa-could-have-killed/) --- **Main image: Varanus Island. Source: Santos.* --- *Correction 9 September 2021: DMIRS has issued three directions beyond those to New Standard Energy. The original story incorrectly said these were to three separate companies.* --- ### Gaps hold back EPA’s efforts to reduce carbon emissions from WA industry URL: https://www.boilingcold.com.au/gaps-hold-back-epas-efforts-to-reduce-carbon-emissions-from-wa-industry/ Last updated: 2021-08-31T22:00:00.000Z ANALYSIS WA’s independent Environmental Protection Authority is quietly leading the nation in reducing greenhouse gas emissions from industry. Still, the EPA and State and Federal Governments need to do more to ready WA industry for the future. Infrastructure WA recently noted the State's emissions had increased 30 per cent since 2006, mainly due to the mining and oil and gas sectors. New LNG plants are by far the biggest contributor. > “Unless rapid progress is made, WA stands to risk losing global investment opportunities, as financiers and industry look elsewhere for greater certainty, action and risk mitigation,” Infrastructure WA said in its recent draft strategy. For a year, the EPA has insisted all large new projects plan to cut emissions gradually to zero by 2050. Before then, the only significant regulatory or government effort in WA to curb emissions was a requirement for gas plants to offset all CO2 from reservoirs vented to the atmosphere, resulting in Woodside planting trees for Pluto LNG and Chevron burying CO2 underground for its Gorgon project. The EPA kicked off its new approach in August 2020 with an FMG power station. The following month it recommended Mitsui and Beach Energy’s Waitsia gas project reduce or offset total emissions in roughly a straight line from start up to zero by 2050. No other states have this requirement for new projects, but the EPA's efforts have received little attention. [WA EPA & industry make real moves to net-zero by 2050Fortescue and Mitsui appear to have agreed massive emissions cuts with WA’s environmental watchdog that is now looking at Woodside and Chevron LNG projects.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/09/Screenshot-2020-09-24-160802.jpg)](https://www.boilingcold.com.au/wa-epa-and-industry-make-real-moves-to-net-zero-by-2050/) The EPA’s [guideline for assessing greenhouse gas emissions](https://www.epa.wa.gov.au/sites/default/files/Policies%5Fand%5FGuidance/EFG%20-%20GHG%20Emissions%20-%2016.04.2020.pdf?ref=boilingcold.com.au) requires a GHG management plan with “regular interim and long-term targets that reflect an incremental reduction in Scope 1 emissions over the life of the proposal.” This ask is consistent with climate science but at odds with the Federal Government’s generous fixed baselines under the safeguard mechanism that allow large polluters to continue business as usual. Many businesses also trump a commitment to net-zero emissions by 2050, with little or no commitment to interim reductions. The first gap in reducing emissions from WA industry is that the EPA usually only assesses new investments, so it cannot act on existing facilities. The WA Government’s own emissions policy for major projects weakly requires “proponents to propose their own timeframes and interim targets” provided a second gap that Woodside used for its Pluto LNG plant. The policy allowed Woodside to leave 70 per cent of emission reductions from its expanded Pluto LNG plant to after 2045, as an expansion from one to two LNG trains did not need a new assessment from the independent EPA. [Woodside’s Pluto LNG fudged net-zero plan is much less than it first appearsWoodside’s Pluto net-zero 2050 plan is greenwashing, leaving 70% of cuts to the last five years despite investors telling CEO Meg O’Neill they want tangible speedy progress.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/06/Pluto-Train-1-from-WEL-website.jpg)](https://www.boilingcold.com.au/woodsides-fudged-pluto-net-zero-plan-is-much-less-than-it-appears/) An EPA assessment of Covalent’s proposed lithium refinery in Kwinana released in March revealed another gap in efforts to curb industrial emissions: the Authority only recommends reductions in direct Scope 1 emissions and makes no recommendations about Scope 2 emissions from power purchases. Covalent, half-owned by Wesfarmers, must gradually reduce the 160,000 tonnes a year of CO2 it will initially directly produce, but there is no requirement covering its annual Scope 2 emissions of 158,000 tonnes of CO2. A Wesfarmers Chemicals, Energy & Fertilisers spokesperson said expected reductions in the carbon intensity of power sold on the South West Interconnected System as more renewable generation is connected would drive down the refinery’s Scope 2 emissions. “The SWIS has been decarbonising over time, with the emissions factor for consumption of purchased electricity from the SWIS reducing from 0.76 t CO2e per MWh in 2015 to 0.68 t CO2e per MWh in 2020,” the WESCEF spokesperson said. "There is scope for further significant decarbonisation in the SWIS over time." The fourth gap in efforts to cut emissions from industry is that proponents have little control over the carbon intensity of power they buy, and it may not improve as quickly as they hope. The WA Government’s Whole of System Plan for the next 20 years of power in the South West predicted the emissions factor of power sold would fall to between 0.21 to 0.51 tonnes of CO2e per MWh by 2040, down by 26 to 71 per cent, depending on the scenario studied. The smaller emissions factor cut is a long way short of what companies like Covalent need to head towards net-zero emissions by 2050\. Incredibly, the State Government chose not to target emissions reduction in its 20-year plan. [WA plans a slow move to greener powerRooftop solar will make South-West WA power greener, but there is no path outlined for Collie’s future or to net-zero by 2050, according to a WA Government study.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/10/fre-sonneveld-q6n8nIrDQHE-unsplash-reduced.jpg)](https://www.boilingcold.com.au/wa-plans-a-slow-move-to-greener-power/) An EPA spokesperson said a review of its greenhouse gas guideline now underway would consider how to deal with Scope 2 emissions. The Authority expects to begin public consultation on the revised guideline in the first quarter of 2022. The policy gaps in WA’s attempts to reduce industrial emissions were identified in the recent [draft State Infrastructure Strategy](https://infrastructure.wa.gov.au/foundations-stronger-tomorrow?ref=boilingcold.com.au). With a remit limited to State Government investments, Infrastructure WA recommended the Government introduce interim Scope 1 and Scope 2 targets towards net-zero emissions by 2050 for all State agencies. This would include Synergy, the dominant power generator on the SWIS. If the EPA moved to control Scope 2 emissions and the Government required Synergy to reduce its emissions intensity along a similar trajectory, then new industry would have both the requirement and the means to cut Scope 2 emissions. Increased demand for cleaner energy would provide financial support for new investment by Synergy. However, there will be no substantial decline in total emissions from industry until changes are made at existing facilities. This will require either the Federal Government gradually reducing allowed emissions under the safeguard mechanism, as [recently recommended by the Grattan Institute](https://www.boilingcold.com.au/todays-decisions-lock-in-industry-emissions-for-decades-heres-how-to-get-them-right/), or the WA environment minister asking the EPA to assess operating facilities. It is notable that the most robust calls so far to cut emissions from WA industry come from two independent bodies: the EPA and Infrastructure WA. Federal and State Governments are yet to take meaningful action. *Boiling Cold* asked Environment Minister Amber-Jade Sanderson if the Government would develop interim emissions reduction targets, as recommended by Infrastructure WA. Sanderson’s spokesperson said the Minister understood the importance of setting targets and the need for a credible pathway towards net-zero greenhouse gas emissions by 2050. [WA’s top carbon polluters: LNG, power, iron ore and aluminaWA’s industrial greenhouse gas emissions are dominated by four products and a handful of companies, including a few that have managed to keep a low profile in the climate wars.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/03/CO2-1.jpg)](https://www.boilingcold.com.au/was-top-carbon-polluters-lng-power-iron-ore-and-alumina/) --- *Main image: Woodside-operated North West Shelf LNG plant. Source: BP.* --- ### Woodside Petroleum: doubling down for a dirty decade URL: https://www.boilingcold.com.au/woodside-petroleum-doubling-down-for-a-dirty-decade/ Last updated: 2024-11-21T13:32:24.000Z ANALYSIS BHP shifting its oil and gas assets into Woodside Petroleum in exchange for shares for its shareholders shows two companies tackling the energy transition in very different ways. From what is known so far, here are, coincidentally, 13 key takeaways. The 2020s might be an unlucky decade for Woodside shareholders. ## 1\. Woodside is doubling down on hydrocarbons BHP chief executive Mike Henry is focused on what he calls future-facing commodities essential for the energy transition, such as copper and nickel. Using Henry's logic, Woodside is embracing commodities that may not be of the past but certainly have a limited future. Woodside's view of their opportunity hopper if they swallow BHP's assets supports that view. ![Opportunity hopper for the merged Woodside and BHP Petroleum](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/08/opportunity-hopper.jpg) **Opportunity hopper for the merged company.** Source: [Woodside Petroleum presentation](https://files.woodside/docs/default-source/asx-announcements/2021-asx/woodside-merger-teleconference-and-investor-presentation.pdf?sfvrsn=653020cf%5F4&ref=boilingcold.com.au) All oil production (green circles) in the mix comes from BHP except for Sangomar that Woodside is now developing off the coast of Senegal. As a result, Woodside can no longer argue it is a greener investment than most hydrocarbon producers because it is gas-focussed, and gas supports the energy transition. Its queue of potential projects, except for a small hydrogen project in Tasmania, is all hydrocarbons. There is no indication of any move to a different business model any time soon. ## 2\. Any hydrogen will be blue not green Woodside chief executive Meg O'Neill is pushing blue hydrogen made from gas with emissions buried or offset, instead of green hydrogen, [claiming it is cheaper](https://www.afr.com/companies/energy/new-woodside-ceo-says-she-will-be-running-a-low-carbon-business-20210818-p58jvf?ref=boilingcold.com.au#:~:text=According%20to%20O%E2%80%99Neill%2C%20this%20makes%20blue%20hydrogen%20a%20%E2%80%9Cvery%20natural%20kind%20of%20bridge%E2%80%9D%20between%20LNG%20and%20the%20ideal%20of%20green%20hydrogen%20which%20is%20likely%20to%20end%20up%20being%20more%20expensive.). However, there is growing doubt that blue hydrogen is clean or cheap. A recent analysis showed blue hydrogen could cause [more emissions than burning natural gas](https://www.spglobal.com/platts/en/market-insights/latest-news/natural-gas/081221-blue-hydrogen-20-worse-for-ghg-emissions-than-natural-gas-in-heating-study?ref=boilingcold.com.au) for the same amount of heat. Last week the chief of a UK hydrogen industry association quit because of the "[false claims made by oil companies](https://www.theguardian.com/environment/2021/aug/20/oil-firms-made-false-claims-on-blue-hydrogen-costs-says-ex-lobby-boss?ref=boilingcold.com.au) about the cost of blue hydrogen." Increasingly when blue hydrogen is proposed, customers will ask, are all the emissions captured and stored or offset? If the answer is no, the hydrogen is not blue, just a lighter shade of grey. If the answer is yes, blue hydrogen's claimed cost advantage might disappear very quickly. ## 3\. Big deal with little info Last week Credit Suisse analyst Saul Kavonic asked O'Neill about a graph showing a steeper decline in Woodside production from 2024 than Woodside had previously communicated. ![Production profile of the merged Woodside and BHP Petroleum from 2022 to 2027](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/08/image-11.png) **Production profile for the merged company.** Source: [Woodside Petroleum presentation](https://files.woodside/docs/default-source/asx-announcements/2021-asx/woodside-merger-teleconference-and-investor-presentation.pdf?sfvrsn=653020cf%5F4&ref=boilingcold.com.au) > "I probably wouldn't get my ruler out over that. It's a bit of a stylized cartoon, but it's indicative," O'Neill said. Really? A major ASX-listed company trying to sell a transformational $20 billion transaction provides cartoons? Analysts are now likely to ask, is all the information indicative, or just the bits that are later revealed to be unhelpful? At least the production slide had numbered axes, unlike two other plots in the pack presented to analysts. Graphs without values are typically marked failed from about Year 5 up. Throughout two teleconferences with investment analysts on Tuesday and Wednesday, O'Neill, again and again, dodged answering sensible questions. Analysts rightly queried where the claimed annual synergy savings of $US400million would come from and received little clarity. They should also ask what the transaction will cost and which company is paying those costs. When BHP last spun off assets – into South32 – stamp duty and other transaction costs [were close to $1 billion](https://www.smh.com.au/business/bhps-south32-demerger-maths-look-good-20150317-1m0twy.html?ref=boilingcold.com.au). ## 4\. It's not a done deal Woodside and BHP confirmed a deal was in the offing before the market opened last week. By the time the market closed on Friday, the value of Woodside shares had plunged almost six per cent more than the most similar company, Santos. This early reaction showed Woodside has a job ahead to convince more than 50 per cent of its shareholders to support the deal ahead of a shareholder vote in Q2 2022. Already Allan Gray that owns almost five per cent of Woodside is considering voting no. > "It's impossible to tell at this stage, and [there's a lot of unknowns](https://www.theaustralian.com.au/business/woodside-investors-cautious-on-40bn-bhp-deal/news-story/6c98dcf0d756151e048c478f5c3d0e5a?ref=boilingcold.com.au) and questions that require answering," Allan Gray managing director Simon Mawhinney told *The Australian*. Woodside will need to become more forthcoming on detail to earn the trust of its shareholders. Answering questions would be a good start. ## 5\. Plunging production However, some detail may not assure investors. The production slide may not be exact, but O'Neill said it was indicative. And what does it indicate? A greater than 40 per cent drop in production in three years from 2024! That should scare any investor. It means sharply falling revenue or constant massive expenditure on new projects. And every year, the market, regulatory and financing risks of new hydrocarbon investments will rise. The production decline points to a queue of assets to be decommissioned. Regulator NOPSEMA will require all wells to be plugged within three years of the end of production and all equipment to be removed two years after that. ## 6\. Bass Strait decommissioning questions will not go away Given the production decline, it was no surprise that analysts pushed hard to understand the decommissioning liability last week, especially the 50 per cent equity in the Bass Strait. When O'Neill was asked what decommissioning liabilities Woodside was taking on, the response was nonsensical. "I guess you'd need to ask BHP as to how much they plan to adjust their books with this transaction," O'Neill said. O'Neill's response assumed BHP had a realistic estimate on the books. If that were the case, it would most likely be an industry first. MST Marquee analyst Mark Samter tried again. > "I'm sorry, Meg but I'm going to push you on the remediation costs…because frankly, I don't see how anyone can remotely profess to make a call on the valuation of this transaction without knowing that remediation number," Samter said. "It would probably be premature for us to comment as to how much of that will go onto our books, so that'll be work that will progress over the coming months," O'Neill answered. Woodside is simultaneously claiming the transaction is fully valued, and it has months of work to do on decommissioning costs. Both cannot be true. ## 7\. Don't forget North West Shelf decommissioning While the focus has been on Bass Strait decommissioning, the BHP deal also doubles Woodside's exposure to the costs of cleaning up the North West Shelf. The Northern Carnarvon Basis, where the North West Shelf Project sits, has a decommissioning liability of [$US19.5 billion ($27 billion) between now and 2050](https://12259-console.memberconnex.com/Attachment?Action=Download&Attachment%5Fid=337&ref=boilingcold.com.au), according to a Centre of Decommissioning Australia study released in March. As the oldest and largest project in the Basin, the North West Shelf will bear a good proportion of that cost. The eventual decommissioning costs of BHP's assets in the Gulf of Mexico should not be ignored either. ## 8\. Are Scarborough's returns worth the risk? The plunging production shows why Woodside is so desperate for Scarborough to go ahead. Without it, the merged company's main activity would soon become decommissioning. But just because Scarborough looks good to a company with no other options does not mean it makes sense for investors with unlimited choices to place in their portfolio. Clearly, BHP was not a fan. Woodside claims the $12 billion investment will have a 12 per cent rate of return. This published number will undoubtedly be at the most optimistic end of possible outcomes. Already, Woodside's [claim to have put most of the execution risk onto contractors](https://www.boilingcold.com.au/woodside-limits-scarborough-cost-bump-but-is-silent-on-risk/) does not hold up. The demise of long-term LNG contracts will place the project at constant risk of a deteriorating market well before the $12 billion is paid back. Investors should treat all claims from Woodside about Scarborough with the same scepticism they would apply to the spiel of a car salesman with only one vehicle in the yard. Just because Scarborough is essential to prevent the decline of Woodside as a company does not mean it is a good investment for shareholders. ## 9\. Woodside is unbankable That Woodside's fossil fuel business model is doomed is not the judgment of a bunch of greenies but is now part of mainstream business thinking. As the *AFR's* [Chanticleer column put it](https://www.afr.com/chanticleer/climate-drives-bhp-s-woodside-deal-20210817-p58jkn?ref=boilingcold.com.au): > "The world described last week in the Intergovernmental Panel on Climate Change report on the consequences of global warming will not have room for a company like Woodside, no matter how big it is." Chanticleer went on to explain why the BHP Woodside deal is structured as it is. "The deal had to be an equity swap because equity is the only currency that does not require the sign-off by the world's banks and the endorsement of capital markets." Woodside is a shunned investment, and it will only worsen as climate pressure continually ratchets up over this decade. ## 10\. Woodside needs an awful lot of trees Woodside said its existing plan to cut emissions by 30 per cent by 2030 would apply to the merged entity. All Woodside claims on emissions should be treated with caution, given the duplicity shown by the differences between its headlined plans for the Pluto LNG plant and the reality. [Woodside’s Pluto LNG fudged net-zero plan is much less than it first appearsWoodside’s Pluto net-zero 2050 plan is greenwashing, leaving 70% of cuts to the last five years despite investors telling CEO Meg O’Neill they want tangible speedy progress.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/06/Pluto-Train-1-from-WEL-website.jpg)](https://www.boilingcold.com.au/woodsides-fudged-pluto-net-zero-plan-is-much-less-than-it-appears/) Woodside's wants to offset about two million tonnes of CO2 a year by 2030. This will not be easy or cheap. The price of Australian Carbon Credit Units has [risen 13 per cent in the past 12 months](https://www.reputex.com/research-insights/marketwatch-accu-contracting-heats-up-local-and-international-offset-prices-rise/?ref=boilingcold.com.au), and that is likely just the beginning. ![Emissions reductions plan to 2030 for the merged Woodside and BHP Petroleum.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/08/image-12.png) **Carbon emission reduction plans for the merged company.** Source: [Woodside Petroleum presentation](https://files.woodside/docs/default-source/asx-announcements/2021-asx/woodside-merger-teleconference-and-investor-presentation.pdf?sfvrsn=653020cf%5F4&ref=boilingcold.com.au) In the past, Woodside has said its projects are still economic with a carbon price of $US80 a tonne. By 2030 it will likely need all of that and more. As climate action picks up, offsets will be in short supply. Many argue offsets are best used to negate emissions that cannot be avoided through technology. Woodside plans to use offsets to justify continued hydrocarbon production when the world needs production to decline. And of course, the offsets do not over Woodside's Scope 3 emissions when customers burn its product. ## 11\. The drug dealers' defence Woodside has clearly workshopped its communication strategy and come up with "customer-focused." Expect to hear it a lot. It lays the groundwork for taking no responsibility for Scope 3 emissions, justifies every expansion in production, and pushes back any work on alternative businesses such as hydrogen. It has the same level of morality as a slum drug dealer selling to children because they want it. The drivers are the same: only profit matters. However, Woodside cannot sustain the drug dealing business model because, unlike drugs, hydrocarbon demand will decline. Unfortunately for Woodside shareholders, moving to greener products only when the market matures means that the companies that matured that market will already be there. Woodside will be trapped in hydrocarbons or forced to pay exorbitant amounts to buy into established players in the new energy world. ## 12\. Prepare for a rush to the exit A good number of Woodside shareholders are already unhappy with the deal and their exit last week pushed down the share price. That is a minor movement compared to what will happen when BHP shareholders find themselves owning an unplanned 48 per cent of the merged entity. Concern that Woodside is a lousy investment, moral qualms about the climate and funds mandated to avoid fossil fuel stocks will all drive the sale of Woodside shares. The exit will not be immediate as shareholders try to sell at a good price, but it will put a ceiling on Woodside's share price for some time. ## 13\. Woodside will keep fighting effective climate policy – it has no choice Woodside has consistently failed to find reserves, generally regarded as the core competency of an oil and gas company. However, over the decades, it has consistently managed to persuade governments to do its bidding. The list is long, including the Federal Government bugging the East Timorese during negotiations for over the Sunrise gas field and Labor State Governments approving the Pluto project with a [near unenforceable domestic gas obligation](https://www.boilingcold.com.au/was-near-useless-domestic-gas-deal-with-woodsides-pluto-lng/) agreement and bashing the Environmental Protection Authority to withdraw its emission policy in 2019. A bigger Woodside focused on long-term hydrocarbon production will ramp up its efforts with all governments, especially on climate policy. But why is this piece titled "doubling down for a dirty decade"? Woodside does not influence markets, the IPCC, the IEA, or Australia's trading partners. Given the change in government and investor sentiment in the past two years, by 2031, the world will be a very uncomfortable place for the Woodside its board is now planning. --- ### Decisions now lock in industry emissions for decades: here’s how to get them right URL: https://www.boilingcold.com.au/todays-decisions-lock-in-industry-emissions-for-decades-heres-how-to-get-them-right/ Last updated: 2021-08-25T06:45:47.000Z *[Alison Reeve](https://theconversation.com/profiles/alison-reeve-1260701?ref=boilingcold.com.au), [Grattan Institute](https://theconversation.com/institutions/grattan-institute-1168?ref=boilingcold.com.au)* The [Intergovernmental Panel on Climate Change](https://theconversation.com/ipcc-says-earth-will-reach-temperature-rise-of-about-1-5-in-around-a-decade-but-limiting-any-global-warming-is-what-matters-most-165397?ref=boilingcold.com.au) has made clear there’s little time left to reach net-zero emissions and hold the global temperature rise to 1.5C. If Australia is to do its bit, emissions need to fall across the economy. The states and territories all have net-zero targets for 2050, and the prime minister says the national target is also net-zero emissions, preferably by 2050. 2050 feels a long way off. It’s ten election cycles for prime ministers, seven for state premiers. Does that mean there’s plenty of time to come up with mechanisms to get us there? Unfortunately, no. Here’s why. ## For net-zero, 2050 is sooner than you think Around 30% of Australia’s emissions come from the industrial sector — from facilities such as coal mines, liquefied natural gas platforms, steel smelters, and zinc processing plants. These facilities have long operating lives — up to 30 to 40 years, sometimes more. This means facilities that start up tomorrow will probably still be operating in 2050\. Older facilities have only one replacement cycle between now and 2050. Companies don’t have ten chances to get on the pathway right. They have one. [IPCC says Earth will reach temperature rise of about 1.5℃ in around a decade. But limiting any global warming is what matters mostIPCC authors go beyond the headlines to explain how 1.5℃ warming is measured – and why there’s still reason to hope, and act, if Earth exceeds that limit.![](https://cdn.theconversation.com/static/tc/@theconversation/ui/dist/esm/logos/web-app-logo-192x192-e99834e3a7a551050e9debe6cc925617.png)The ConversationMalte Meinshausen![](https://images.theconversation.com/files/415118/original/file-20210808-90251-10vmpvn.jpg?ixlib=rb-1.1.0&rect=0%2C258%2C2742%2C1371&q=45&auto=format&w=1356&h=668&fit=crop)](https://theconversation.com/ipcc-says-earth-will-reach-temperature-rise-of-about-1-5-in-around-a-decade-but-limiting-any-global-warming-is-what-matters-most-165397?ref=boilingcold.com.au) Planning to replace an ageing asset starts well before it is due to end its life, and companies can only consider realistic options. They can’t assess costs and risks on technologies that are still in the lab. If low-emissions technologies aren’t available or commercially feasible when decisions are made, what firms do install will lock in decades of future emissions. ## Decisions made today will extend beyond 2050 Consider a coal-powered cement plant that will reach the end of its design life in 2030\. The owner is considering three options - like-for-like replacement that still uses coal but is slightly more efficient, with costs and risks well understood - a new plant that uses gas as well as coal, whose costs and risks can be forecast with some certainty - an experimental ultra-low-emissions technology, expected to be commercially ready in 2040, with hard to quantify costs and risks, and bigger upfront cost Taking the third option (waiting) might mean squeezing another 10 years out of an ageing plant, with a risk it might not make the distance. This chart shows emissions between now and the end of the new plant’s life for each option. ![Towards Net Zero: practical policies for the industrial sector](https://images.theconversation.com/files/417163/original/file-20210820-21-k3a7jm.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip) Grattan analysis of public data for various Australian cement facilities. [Towards Net Zero: practical policies for the industrial sector](https://grattan.edu.au/report/towards-net-zero-practical-policies-to-reduce-industrial-emissions?ref=boilingcold.com.au) Like-for-like replacement locks in considerable emissions between 2030 and 2050, and the risk of having to buy carbon offsets between 2050 (when Australia moves to net-zero) and the end of the plant’s life in 2070. A changed fuel mix reduces the lock-in and the likely burden of offsets, but they are still material. Waiting until 2040 (and running the risk that the old plant might not have an extra 10 years life in it) will mean less emissions after 2040 and less liability for carbon offsets, but much more emissions before then. [Top economists call for measures to speed the switch to electric carsEight in ten of these surveyed by the Economic Society of Australia say it’s the role of government to smooth the transition.![](https://cdn.theconversation.com/static/tc/@theconversation/ui/dist/esm/logos/web-app-logo-192x192-e99834e3a7a551050e9debe6cc925617.png)The ConversationPeter Martin![](https://images.theconversation.com/files/407321/original/file-20210620-30-4uzost.png?ixlib=rb-1.1.0&rect=11%2C0%2C3976%2C1988&q=45&auto=format&w=1356&h=668&fit=crop)](https://theconversation.com/top-economists-call-for-measures-to-speed-the-switch-to-electric-cars-162883?ref=boilingcold.com.au) From an emissions perspective, the best decision may be a halfway house — running the old plant for an extra five years, and installing the new technology before it is fully commercial, if someone else is willing to share the risk. Without a signal from either a state or federal government the cement plant owner is likely to go with option one or two. ## Government can help Our report, [Towards Net Zero: practical policies for the industrial sector](https://grattan.edu.au/report/towards-net-zero-practical-policies-to-reduce-industrial-emissions?ref=boilingcold.com.au), outlines three things the federal government can do now to tilt companies’ decisions in favour of something like option three. First, it can signal that it expects all new facilities to avoid locking in long tails of emissions. The best way to do this would be to fulfil its 2015 commitment to set best-practice [benchmarks](https://cdn.theconversation.com/static%5Ffiles/files/1757/hunt2016.pdf?1629435939&ref=boilingcold.com.au) for new facilities. They were meant to be in place by [2020](https://cdn.theconversation.com/static%5Ffiles/files/1757/hunt2016.pdf?1629435939&ref=boilingcold.com.au). Second, it should set up an [Industrial Transformation Future Fund](https://grattan.edu.au/report/towards-net-zero-practical-policies-to-reduce-industrial-emissions?ref=boilingcold.com.au) in order to share the risk of new technologies with industry. [Australia’s economy can withstand the proposed EU carbon tariffWe’d lose coal exports but benefit from a lower Australian dollar.![](https://cdn.theconversation.com/static/tc/@theconversation/ui/dist/esm/logos/web-app-logo-192x192-e99834e3a7a551050e9debe6cc925617.png)The ConversationPhilip Adams![](https://images.theconversation.com/files/396472/original/file-20210422-24-1qmgbal.jpg?ixlib=rb-1.1.0&rect=120%2C76%2C3446%2C1720&q=45&auto=format&w=1356&h=668&fit=crop)](https://theconversation.com/australias-economy-can-withstand-the-proposed-eu-carbon-tariff-159062?ref=boilingcold.com.au) Third, it should adjust its [safeguard mechanism](http://www.cleanenergyregulator.gov.au/NGER/The-safeguard-mechanism?ref=boilingcold.com.au) under which big emitters have to report and adhere to emissions intensity standards to require them to start cutting emissions immediately. This would level the field between new and old facilities. It would mean some older facilities closed earlier than planned, but it would mean they would be replaced by cleaner facilities. It is important these policies start now. Every decision we make from now on will affect our chance of reaching net-zero and escaping catastrophic climate change. --- ![The Conversation](https://counter.theconversation.com/content/166183/count.gif?distributor=republish-lightbox-basic) *[Alison Reeve](https://theconversation.com/profiles/alison-reeve-1260701?ref=boilingcold.com.au), Deputy Program Director, Energy and Climate Change, [Grattan Institute](https://theconversation.com/institutions/grattan-institute-1168?ref=boilingcold.com.au)* *This article is republished from [The Conversation](https://theconversation.com/?ref=boilingcold.com.au) under a Creative Commons license. Read the [original article](https://theconversation.com/todays-decisions-lock-in-industry-emissions-for-decades-heres-how-to-get-them-right-166183?ref=boilingcold.com.au).* --- *Main image: The Inpex-operated Ichthys LNG plant near Darwin. Source: Inpex.* --- ### Santos' oil Dorado is a lode of Scope 3 emissions URL: https://www.boilingcold.com.au/santos-oil-dorado-is-a-lode-of-scope-3-emissions/ Last updated: 2021-08-25T06:46:11.000Z Santos' Dorado oil project off WA would result in 165 million tonnes of carbon emissions, equivalent to 46 years of operation of Collie's Muja power station, according to an environmental approval submission released today. The $US2 billion ($2.8 billion) Dorado project off WA could produce up to 350 million barrels of oil over 20 years from 2025. Direct, or Scope 1, greenhouse gas emissions from operating the wellhead platform and floating oil vessel are estimated to be the equivalent of 15 million tonnes of CO2 during the life of the project, according to the [Offshore Project Proposal](https://www.nopsema.gov.au/offshore-industry/environmental-management/assessment-process/public-comment?ref=boilingcold.com.au) submitted by Santos to the National Offshore Petroleum Safety and Environmental Management Authority. Carbon pollution from customers burning the oil, known as Scope 3 emissions, would create another 150 million tonnes of CO2e. In comparison, Synergy's ageing Muja power station in Collie emitted [3.6 million tonnes of CO2e](https://www.boilingcold.com.au/was-top-carbon-polluters-lng-power-iron-ore-and-alumina/) in the 12 months to June 2020\. The Dorado oil field was discovered by Quadrant Energy in mid-2018 in the then relatively under-explored Bedout Basin north of Port Hedland. Santos bought Quadrant some months later. ![Schematic of Santos' proposed Dorado oil project off the Western Australian coast showing the platform, FPSO and pipelines.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/08/image-10.png) *Source: Santos's Dorado Offshore Project Proposal* Santos chief executive Kevin Gallagher told investors on Tuesday that the oil-only Dorado Phase 1 was on track for a final investment decision in mid-2022. "The second phase of gas development to backfill a domestic gas infrastructure and WA is likely to occur in the second half of the decade," Gallagher said. > "Dorado is a very low CO2 reservoir with approximately 1.5 per cent CO2 and with all gas reinjected in the initial phase, > "This makes it one of the lowest emissions-intensive oil projects in the region." Whether Dorado Phase 1's emissions are considered low or high will be a major influence on its environmental approval process. Conservation Council of WA director Piers Verstegen said proposals like Dorado were alarming. "This is exactly the kind of development that the International Energy Agency and the world’s climate scientists have said cannot proceed if we are to maintain a habitable planet," Verstegen said. > "I expect environment groups will be applying significant scrutiny on the proposal." NOPSEMA grants environmental approval for offshore oil and gas projects, whereas almost all other activities are assessed under the Environment Protection and Biodiversity Conservation Act and decided by the Federal Environment Minister. The three approvals for large oil and gas projects granted to date under NOPSEMA's Offshore Projects Proposal process have all taken more than a year from submission to acceptance. For Santos to sanction Dorado in mid-2022 it will have to navigate the approval process quicker than [Barossa, Scarborough and Crux](https://www.nopsema.gov.au/offshore-industry/environmental-management/assessment-process/public-comment?ref=boilingcold.com.au) despite signs that the legal and scientific opportunities for approval have recently narrowed substantially. ### Hurdles getting higher Barossa, Scarborough and Crux all supply gas to LNG plants. LNG producers argue that their significant Scope 1 emissions in Australia and Scope 3 emissions from customers burning the gas are a net climate benefit as the product displaces even dirtier coal. While this argument is not universally accepted, it certainly does not apply to an oil project. Two oil developments by micro oil and gas company Kato Energy approved in April are a fraction of the size of Dorado and only produce for a handful of years. With a large long-life oil project, Santos is treading a new path through NOPSEMA's approvals process and wants to do it in record time. Part of Kato's[ argument for the acceptance](https://www.nopsema.gov.au/sites/default/files/documents/2021-04/A778560.pdf?ref=boilingcold.com.au) of its Amulet and Corawa developments off WA was that the IEA's sustainable development scenario in its 2020 World Energy Outlook "recognises that there remains a role for oil...for the foreseeable future." NOPSEMA sought the advice of the Department of Industry, Science, Energy and Resources that supported Kato's proposals as "new oil fields will be required at least until 2040 and this is supported by the WEO 2020 SDS." A month after NOPSEMA signed off Kato's projects on April 19 the wheels fell off this argument. In May the IEA released its pathway to net-zero emissions by 2050 that concluded that [success required no new oil or gas projects](https://www.theguardian.com/environment/2021/may/18/no-new-investment-in-fossil-fuels-demands-top-energy-economist?ref=boilingcold.com.au). The next week the Federal Court handed down the historic Sharma decision concerning the approval of a coal mine in NSW by the Federal Environment Minister Sussan Ley. Justice Bromberg found that it was mandatory for the Minister to [consider potential harm to children.](https://www.herbertsmithfreehills.com/latest-thinking/a-climate-change-duty-of-care-sharma-v-minister-for-the-environment?ref=boilingcold.com.au) In particular, Bromberg noted, "a reasonable Minister for the Environment ought to have the children in contemplation when facilitating the emission of 100 million tonnes of CO2 into the earth’s atmosphere.” Dorado's emissions are 65 per cent higher than the coal mine. Lawyers from Allens noted in a [summary of the decision](https://www.allens.com.au/insights-news/insights/2021/06/australian-and-dutch-courts-find-climate-related-duties-of-care-in-sharma-and-shell/?ref=boilingcold.com.au) that "those in charge of approving carbon-intensive projects may now be more alive to climate change-related issues and place greater weight on those risks when making decisions." "Those in charge" includes NOPSEMA, which is an independent authority and will be well are of the Sharma decision and the potential for successful litigation on similar grounds. Ley has appealed the decision. The Federal Court's finding that it was reasonably foreseeable that the coal project's Scope 3 emissions would risk harm to Australian children has been bolstered by the release of the [IPCC update on climate science](https://www.boilingcold.com.au/unless-we-act-now-a-hotter-drier-more-dangerous-future-for-australia-awaits-ipcc/) earlier this month. Dorado's approval could get even more difficult in late October at the UN Climate Change Conference in Glasgow when countries are excepted to strengthen their targeted emissions cuts, leaving even less room for Dorado's 165 million tonnes. Australasian Centre for Corporate Responsibility director of climate and environment Dan Gocher said Santos' pursuit of the Barossa, Dorado and Narrabri projects confirmed its climate commitments were nothing but greenwashing. "Santos intends to rely almost exclusively on unproven carbon capture and storage at Moomba to deliver its 2040 net-zero target," Gocher said. "And Santos has refused to set targets for its Scope 3 emissions, which are by far the largest proportion of its carbon footprint, "The current consolidation in the oil and gas industry is likely to have terrible climate consequences. > "Santos' proposed merger with Oil Search will provide it with the further capital to develop multiple new projects, in defiance of the IPCC's recent 'code red' warning." *Boiling Cold* has asked Santos how Dorado is compatible with net-zero emissions by 2050 and if it expects legal actions that could delay approval. ASX-listed junior Carnarvon Petroleum owns between 20 and 30 per cent of the Santos-operated permits under and around Dorado. --- *Main image: Graphic of the floating production storage and offloading (FPSO) vessel proposed for Santos's Dorado oil project off WA. Source: Santos presentation.* --- ### Australia risks taking the wrong tack at Glasgow climate talks URL: https://www.boilingcold.com.au/australia-risks-taking-the-wrong-tack-at-glasgow-climate-talks/ Last updated: 2021-08-25T06:46:46.000Z *[Peter Martin](https://theconversation.com/profiles/peter-martin-682709?ref=boilingcold.com.au), [Crawford School of Public Policy, Australian National University](https://theconversation.com/institutions/crawford-school-of-public-policy-australian-national-university-3292?ref=boilingcold.com.au)* Buried within the prime minister’s response to the latest report from the [Intergovernmental Panel on Climate Change](https://theconversation.com/this-is-the-most-sobering-report-card-yet-on-climate-change-and-earths-future-heres-what-you-need-to-know-165395?ref=boilingcold.com.au) is just about everything we’re at risk of getting wrong at the Glasgow [climate talks](https://ukcop26.org/?ref=boilingcold.com.au) in October. After slamming China — whose emissions per person are [half](https://data.worldbank.org/indicator/EN.ATM.CO2E.PC?locations=AU-CN&name%5Fdesc=false&ref=boilingcold.com.au) of Australia’s — for not doing more to cut emissions, Scott Morrison said the Glasgow talks were the “biggest multilateral global negotiation the world has ever known”. If he treats the talks as just another (big) negotiation, we’re in trouble. The way the Department of Foreign Affairs and Trade usually treats negotiations is to hold something back, hold out the prospect of “giving it up,” and then only make the concession if the other side gives something in return. Even if holding back damages Australia. Cars are a case in point. From an economic point of view, there is no reason whatsoever to continue to impose tariffs (special taxes) on the import of cars — none, not even in the eyes of those who support the use of tariffs to protect Australian jobs. Australia no longer makes cars. Yet the tariff remains, at 5%, making it perhaps [A$1 billion](https://www.afr.com/politics/federal/time-to-scrap-1b-in-ridiculous-car-taxes-20200218-p541ua?ref=boilingcold.com.au) harder than it should be for Australians to buy new cars (although nowhere near as hard as it was in the days when the tariff was 57.5%). The tariff seems to be in place largely to give the Department of Foreign Affairs and Trade something to negotiate away in trade agreements: for use as what the Productivity Commission calls “[negotiating coin](https://www.pc.gov.au/research/ongoing/trade-assistance/2013-14/trade-assistance-review-2013-14.pdf?ref=boilingcold.com.au)”. Here’s how it worked in the 2014 [Australia-Korea Free Trade Agreement](https://www.dfat.gov.au/trade/agreements/in-force/kafta/fact-sheets/Pages/kafta-outcomes-at-a-glance?ref=boilingcold.com.au). Australia agreed to remove the remaining 5% tariff on Korean cars, “with consumers and businesses to benefit from downward pressure on import prices”. But Australia didn’t remove the tariff on car imports altogether, which would have given us a much bigger benefit but denied the department negotiating coin. The next year the department did it again, agreeing to give up the tariff on imported Japanese cars in the [Japan-Australia Economic Partnership Agreement](https://www.dfat.gov.au/trade/agreements/in-force/jaepa/fact-sheets/Pages/jaepa-fact-sheet-outcomes-at-a-glance?ref=boilingcold.com.au) (but not on other cars) so Australians could “benefit from lower prices and/or greater availability of Japanese products”. Two years later, it did it again, with cars from [China](https://www.dfat.gov.au/trade/agreements/in-force/chafta/fact-sheets/Pages/chafta-outcomes-at-a-glance?ref=boilingcold.com.au). When the UK and European agreements are negotiated, it’ll do it there too. ## Australia holds back reforms Eventually, Australians will get what they are entitled to. But the point is that rather than advancing the cause of free trade, the department has held back, treating a win for the other side as a loss for us, when it wasn’t. The Centre for International Economics believes the much bigger earlier set of tariff cuts lifted the living standard of the average Australian family by [A$8,448](https://www.dfat.gov.au/about-us/publications/trade-investment/Pages/cie-report-on-australian-trade-liberalisation?ref=boilingcold.com.au). Had our trade negotiators been in charge, we would still be waiting. Instead, the Hawke and then the Keating governments pushed through unilateral reductions, asking for nothing in return. [This is the most sobering report card yet on climate change and Earth’s future. Here’s what you need to knowThe Intergovernmental Panel on Climate Change has released its long-awaited report. From accelerating emissions to intensifying disasters to rising sea levels, its authors lay out the new findings.![](https://cdn.theconversation.com/static/tc/@theconversation/ui/dist/esm/logos/web-app-logo-192x192-e99834e3a7a551050e9debe6cc925617.png)The ConversationJoelle Gergis![](https://images.theconversation.com/files/414918/original/file-20210805-24-1pf2brv.jpg?ixlib=rb-1.1.0&rect=0%2C215%2C3982%2C1988&q=45&auto=format&w=1356&h=668&fit=crop)](https://theconversation.com/this-is-the-most-sobering-report-card-yet-on-climate-change-and-earths-future-heres-what-you-need-to-know-165395?ref=boilingcold.com.au) As former Trade Minister [Craig Emerson](https://australianpolitics.com/2010/12/10/future-of-trade-policy-emerson-speech.html?ref=boilingcold.com.au) put it, this gave Australia “credibility in international trade negotiations way beyond the relative size of our economy”. Does that sound like the sort of thing Australia might need at Glasgow, to have enough credibility to urge even bigger emitters to deliver the kind of cuts on which our futures and future temperatures depend? ## It won’t work with China The prime minister is right to say that China is the world’s biggest greenhouse gas emitter, even though its emissions per person are low. Its high population means it accounts for [28%](https://www.ucsusa.org/resources/each-countrys-share-co2-emissions?ref=boilingcold.com.au) of all the greenhouse gases pumped out each year. The next biggest emitter, the United States, accounts for 15% But China’s status is new. Until 2006 it pumped out [less](https://ourworldindata.org/co2-emissions?ref=boilingcold.com.au) per year than the United States. Because the US has had mega-factories and heating and so on for so much longer, it is responsible for by far the biggest chunk of the greenhouse gasses already in the atmosphere: [25%](https://ourworldindata.org/contributed-most-global-co2?ref=boilingcold.com.au), followed by the European Union with 22%. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/08/image-8.png) China might reasonably feel that countries like the US that have done the most to create the problem should do the most to fix it. Like Australia, the US pumps out twice as much per person as China and has much more room to cut back. On the bright side, China knows that being big means it is in a position to make a difference to global emissions in a way that other countries cannot on their own. And that’s a position that can benefit its citizens. China’s latest five-year plan, adopted in March, commits it to cut its “carbon intensity” (emissions per unit of GDP) by [18%](https://www.carbonbrief.org/qa-what-does-chinas-14th-five-year-plan-mean-for-climate-change?ref=boilingcold.com.au). If it beats that five-year target by just a bit (and it has beaten its previous five-year targets) its emissions will turn down from 2025. It is aiming for [net-zero emissions](https://theconversation.com/china-just-stunned-the-world-with-its-step-up-on-climate-action-and-the-implications-for-australia-may-be-huge-147268?ref=boilingcold.com.au) by 2060. ## **Australia needs China’s help** The Intergovernmental Panel on Climate Change finds that Australia is especially [susceptible](https://theconversation.com/climate-change-has-already-hit-australia-unless-we-act-now-a-hotter-drier-and-more-dangerous-future-awaits-ipcc-warns-165396?ref=boilingcold.com.au) to global warming. We’re facing less rain in winter, longer heatwaves, drier rivers, more arid soil and worse droughts. We are right to want China to do more, but the worst way to achieve it is to say “we won’t lift our ambition until you lift yours”. Hardly ever a worthwhile strategy, it is particularly ineffective when we don’t have bargaining power. [Climate change has already hit Australia. Unless we act now, a hotter, drier and more dangerous future awaits, IPCC warnsAustralia may warm by 4℃ or more this century, the IPCC has found. As these IPCC authors explain, there is no going back from some changes in the climate system.![](https://cdn.theconversation.com/static/tc/@theconversation/ui/dist/esm/logos/web-app-logo-192x192-e99834e3a7a551050e9debe6cc925617.png)The ConversationJoelle Gergis![](https://images.theconversation.com/files/414739/original/file-20210805-307-9f8dce.jpg?ixlib=rb-1.1.0&rect=0%2C601%2C2986%2C1493&q=45&auto=format&w=1356&h=668&fit=crop)](https://theconversation.com/climate-change-has-already-hit-australia-unless-we-act-now-a-hotter-drier-and-more-dangerous-future-awaits-ipcc-warns-165396?ref=boilingcold.com.au) The only power we’ve got is to set an example, unilaterally, as we did with tariffs. And to ramp up our ambition. If Australia said it would do more, and didn’t quibble, it might just count for something. It’s all we can do, and it’s the very best we can do. --- *[Peter Martin](https://theconversation.com/profiles/peter-martin-682709?ref=boilingcold.com.au), [Crawford School of Public Policy, Australian National University](https://theconversation.com/institutions/crawford-school-of-public-policy-australian-national-university-3292?ref=boilingcold.com.au)* *This article is republished from [The Conversation](https://theconversation.com/?ref=boilingcold.com.au) under a Creative Commons license. Read the [original article](https://theconversation.com/australia-is-at-risk-of-taking-the-wrong-tack-at-the-glasgow-climate-talks-and-slamming-china-is-only-part-of-it-166154?ref=boilingcold.com.au).* --- *Main image: Bushfires below Stacks Bluff, Tasmania. Source:* [Matt Palmer](https://unsplash.com/@mattpalmer?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) on [Unsplash](https://unsplash.com/s/photos/climate-change-australia?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) --- ### Forrest dumps Kimberley fracking on climate concerns URL: https://www.boilingcold.com.au/forrest-dumps-kimberley-fracking-on-climate-concerns/ Last updated: 2024-11-25T13:06:14.000Z *EXCLUSIVE* Andrew Forrest's Squadron Energy is abandoning plans to frack the Kimberley for gas a year after acquiring new exploration acreage, but Squadron's partner may continue the work. Squadron and its 20 per cent equity partner Goshawk acquired the 5300 km2 EP 499 exploration permit in August 2020\. The partners planned a [six-year $3.75 million work programme](https://pgr.dmp.wa.gov.au/PGR/Titles/DisplayTitle.aspx?d=%2fxafR%2f74B0PcNn%2f9jV%2fwWWZ2D34N6cCUyYC29EXUhCoYZStSUOCCQG7OzpTZCGok0DRc3ownNLQ%3d&ref=boilingcold.com.au) of seismic surveys and two exploration wells. The effort appeared in conflict with Forrest's concerns about climate change and the commitment of iron ore miner Fortescue that he chairs to net-zero emissions by 2030. In June, [Forrest criticised Australia's two largest gas companies](https://www.afr.com/companies/energy/forrest-blasts-santos-woodside-as-fossils-20210614-p580vt?ref=boilingcold.com.au) – Santos and Woodside – for their contribution to greenhouse gas emissions. > "Only a fossil would back long-term fossil fuel in today's world," Forrest said. A spokesperson for Squadron Energy said the company continuously reviewed its investments to ensure they were aligned with its climate policy and actively supported the transition to a low carbon economy. > "As part of this ongoing review, Squadron Energy has made the strategic decision to exit from our limited Canning Basin permits," the spokesperson said. > "This process is in advanced stages." However, Squadron's exit does not necessarily mean the exploration will stop. *Boiling Cold* understands Goshawk, which operates EP 499, continues to progress the work program independent of Squadron's exit. Reprocessing of seismic results costing about $1 million is planned for the next 12 months, followed by a $3.5 million seismic survey. ## Forrest's five years in the Kimberley Squadron first partnered with Goshawk in 2016 [to apply for 220,000km2 of permits](https://www.theaustralian.com.au/business/mining-energy/fortescues-twiggy-forrest-branches-out-into-oil-and-gas/news-story/390560e09f032b0debccba61db0191c5?ref=boilingcold.com.au). "We believe that developing WA's onshore petroleum resources responsibly is a key part of delivering value for WA, such as employment opportunities and energy security," a Squadron spokesperson said in 2015. Squadron and Goshawk had extensive permits in the Kimberley that were [affected by fracking restrictions](https://thewest.com.au/business/energy/andrew-forrests-squadron-energy-hit-by-new-wa-fracking-restrictions-ng-b881033329z?ref=boilingcold.com.au) announced by the McGowan Government in late 2018. The two companies held numerous special prospecting authorities, an early-stage permit, that were excluded from permission to perform hydraulic fracturing, or fracking. These SPAs are now listed as expired on the WA Government's Petroleum and Geothermal Register. Some exploration permits held by the companies were affected by a ban on fracking on the Dampier Peninsula. Privately-owned Goshawk is run by Andrew Leibovitch and Will Barker, who also control Western Gas that is trying to monetise Carnarvon Basin offshore acreage bought from US-major Hess for a nominal amount. [Western Gas, an ineffective regulator and a $US100M clean-up billIf Western Gas’ Equus LNG project does not take off in these tough times neither the small company nor regulator NOPTA have an answer to how making safe the wells is paid for.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/07/W-Gas-schematic.jpg)](https://www.boilingcold.com.au/western-gas-micro-oil-gas-player-with-a-us100-million-clean-up-bill/) Environs Kimberley executive director Martin Pritchard congratulated Forrest on the decision. > "He's recognised that the Kimberley is one of those special places in the world that has to be protected from industrialisation," Pritchard said. > "Other companies would be wise to follow suit, "There is no doubt that the shale oil and gas in the Canning Basin is going to be a stranded asset as opposition to fracking continues to mount, and the world becomes increasingly constrained in terms of carbon and methane emissions." ## Big players leave the Kimberley to small fry Forrest's Squadron Energy has joined a long list of companies that have invested time and money trying to develop oil and gas in the Kimberley and then left the region. ConocoPhillips and PetroChina [withdrew in 2014](https://thewest.com.au/business/finance/conoco-quits-kimberley-hope-ng-ya-378800?ref=boilingcold.com.au), leaving the acreage to junior New Standard Energy that was [suspended from the ASX](https://www.abc.net.au/news/2019-10-16/exploration-company-new-standard-energy-suspended-by-asx/11600340?ref=boilingcold.com.au) five years later for not including rehabilitation liabilities in its financial reports. In 2020 New Standard Energy said it did [not have the money](https://www.energynewsbulletin.net/environment/news/1385861/new-standard-energy-to-leave-wells-recklessly-forsaken?ref=boilingcold.com.au) to plug and abandon four exploration wells. In 2015 South West alumina producer Alcoa, one of the State's largest gas consumers, [killed a $40 million](https://www.perthnow.com.au/business/alcoa-australia-scraps-40-million-deal-with-buru-energy-to-fund-kimberley-gas-project-ng-32f906a3acad5bcbd60dc9422506d70e?ref=boilingcold.com.au) deal with Buru Energy to fund gas exploration and production. Apache Energy farmed into permits held by Buru Energy and Mitsubishi in 2013[, funding two exploration wells](https://thewest.com.au/business/finance/apache-joins-buru-in-search-of-kimberley-riches-ng-ya-360527?ref=boilingcold.com.au). Quadrant Energy bought Apache's Australian interests in 2015 and [pulled out of further involvement](https://thewest.com.au/news/wa/quadrant-opts-out-of-kimberley-ng-ya-165155?ref=boilingcold.com.au) in the Kimberley. In 2017 Buru and Mitsubishi [dissolved their joint venture](https://www.ogj.com/general-interest/article/17290114/buru-energy-mitsubishi-units-to-swap-western-australia-assets?ref=boilingcold.com.au), with Buru taking control of the oil-focussed permits and Mitsubishi retaining gas acreage. Mitsubishi sold exploration permit EP 371 to a subsidiary of Houston-based Black Mountain Oil and Gas in 2018, ending seven years of activity in the Kimberley. In a move counter to the last decade's trend in late 2020, [Origin Energy farmed into two permits](https://www.originenergy.com.au/about/investors-media/media-centre/origin-farms-into-prospective-canning-basin-permits.html?ref=boilingcold.com.au) held by Buru Energy and Rey Resources with a $35 million commitment to fund seismic work and two exploration wells over two years. In August, Black Mountain subsidiary Bennett Resources [submitted initial environmental approval documents](https://www.epa.wa.gov.au/proposals/valhalla-gas-exploration-and-appraisal-program?ref=boilingcold.com.au) for exploration wells that use fracking to the Environmental Protection Authority. The EPA's assessment will be its first since the State Labour Government lifted a complete moratorium of fracking in 2018 and added a requirement for EPA approval. --- *Main image: Andrew Forrest at an FMG iron ore mine in the Pilbara. Source: Fortescue Metals Group.* --- ### BHP and Woodside deal will not escape tougher decommissioning laws URL: https://www.boilingcold.com.au/bhp-and-woodside-deal-will-not-escape-tougher-decommissioning-laws/ Last updated: 2021-08-25T06:47:54.000Z A corroded hulk floating in the Timor Sea and legislation making its way through Parliament in Canberra will loom large in financial assessments of BHP offloading its oil and gas assets to Woodside. Federal Resources Minister Keith Pitt said he was notified of the talks between BHP and Woodside that [the two companies confirmed today](https://www.boilingcold.com.au/bhp-and-woodside-confirm-gid-deal-in-plap/). Pitt said the negotiations were a commercial matter for the two companies. Legislative changes Pitt introduced in response to the Federal Government being landed with an up to $1 billion cost to decommission the Northern Endeavour mean the Minister will not have to directly intervene in this deal to protect the interests of Australian taxpayers. Northern Oil and Gas Australia, the owner of the Northern Endeavour, went into liquidation in early 2020, less than five years after buying the Timor Sea oil project off Woodside. Pitt said any company buying into Australia’s offshore industry should be aware of the Government’s proposed legislative and regulatory changes to strengthen Australia’s decommissioning regime. > “These changes will ensure a higher level of financial scrutiny on transactions relating to title transfers, an extension of existing financial assurance provisions and the introduction of a trailing liability regime as a last resort to ensure decommissioning costs do not fall to Australian taxpayers,” Pitt said. > “Should the amendments pass, the new trailing liability provisions will apply to all titleholders from 1 January 2021 and will capture any changes…after this date but prior to commencement of the new provisions.” With bipartisan support, there is little doubt the proposals will become law. Application from January 1, 2021, will prevent a speedy agreement escaping the measures. ## The multi-billion-dollar liability transfer A successful deal would see Woodside double its stake in the North West Shelf LNG project to a third and take 50 per cent of the ExxonMobil-operated Bass Strait facilities. The two projects were the start of a significant offshore oil and gas industry in Australia. However, both are now sprawling collections of ageing assets with declining production and massive fast-approaching decommissioning bills for both offshore and onshore facilities. In May, the offshore safety regulator NOPSEMSA ordered 180 wells in the Bass Strait to be plugged and the [dismantling of ten platforms](https://www.boilingcold.com.au/regulator-blasts-exxonmobils-bass-strait-maintenance-orders-massive-decommissioning-effort/) within a prescribed schedule. This is just the start of the bill Woodside would have to pay half of. A Federal Government commissioned study released in May estimated [the cost to decommission Australian offshore oil and gas facilities](https://www.boilingcold.com.au/australian-offshore-oil-and-gas-industry-has-a-52b-clean-up-bill/) to be $US40.5 billion ($55 billion). The Gippsland Basin, which is predominantly ExxonMobil/BHP assets, accounted for 26 per cent of this cost, putting BHP or Woodside’s share of the bill at about $7 billion through to 2050. An enlarged Woodside would also bear onshore decommissioning costs in Victoria and double its present exposure to cleaning up the North West Shelf project. ## The bill that must be paid, not delayed or dodged NOPSEMA’s new proactive and prescriptive approach to decommissioning has stopped the constant delay to decommissioning that has been the industry’s default practice to date. The legislative amendments before Parliament will close the other escape route that Woodside used in 2015: selling to a buyer attracted by the upside of a bargain price but unable to afford the downside when things went wrong. A transfer of offshore assets from BHP to Woodside will require Federal Government approval, and Woodside will be scrutinised to ensure it can afford its decommissioning costs over coming decades. Woodside in 2021 is more capable and financially stronger than Northern Oil and Gas Australia, but in the longer term, it may find itself in a similar position. No rational observer now regards hydrocarbon production as a steady-state business. Eventually, production and revenue will fall, and decommissioning costs will rise. When the future value of production falls below the cost of decommissioning, an oil and gas company will be essentially worthless. At that point, there are three ways decommissioning could be paid for. The oil and gas company could have diversified into clean energy and then use part of that revenue to clean up its legacy. Woodside may be in this position next decade if it can completely pivot its business while absorbing the new assets from BHP. If Woodside, or another partner in the joint venture, cannot pay the burden falls on the partners that are still solvent. Alternatively, money may have been put away for decommissioning while the fields were profitable, but Australian legislation does not allow for this. The option of last resort is trailing liabilities that would see the Federal Government chase previous owners of the Bass Strait and the North West Shelf for the bill. For both projects, there will be no juicier company to squeeze than fossil-fuel-free BHP. The energy transition will most likely boost its mining revenue while the cash flow of oil and gas companies shrinks. BHP shareholders of the 2030s will hope Woodside is successful; otherwise Canberra will be diverting some of their dividend stream to clean up the miner’s petroleum past. --- *Update 17 August: Added that other joint venturers are liable if a company cannot meet its decommissioning liability. Only after that do trailing liabilities come into play.* --- *Main image: Federal Government controlled Northern Endeavour oil vessel rusting in the Timor Sea in mid-2021\. Source: Anon.* --- ### BHP and Woodside confirm sale of all BHP Petroleum under negotiation URL: https://www.boilingcold.com.au/bhp-and-woodside-confirm-gid-deal-in-plap/ Last updated: 2021-08-25T06:48:27.000Z BHP and Woodside have both informed the market this morning that they are negotiating the transfer of all of BHP petroleum assets to Woodside in exchange for Woodside shares. BHP confirmed it has a [strategic review underway](https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02407246-3A572826?access%5Ftoken=83ff96335c2d45a094df02a206a39ff4&ref=boilingcold.com.au) of its petroleum business in an announcement issued when the market opened at 8 AM WST. > "One option is a potential merger of the petroleum business with Woodside ...and a distribution of Woodside shares to BHP shareholders," the BHP statement said. > "We confirm that we have been in discussions with Woodside > "While discussions between the two parties are currently progressing, no agreement has been reached on any such transaction." Woodside's [announcement](https://files.woodside/docs/default-source/asx-announcements/2021-asx/037-response-to-media-speculation.pdf?sfvrsn=43882e08%5F4&ref=boilingcold.com.au) ten minutes later had a similar description of the transaction. "These discussions are ongoing," Woodside said. Both companies said further announcements would be made when appropriate. Most industry observers had expected a deal to be announced tomorrow after trading closed when BHP released its full-year results. Woodside's release of its half-year results the next morning would have given both companies the opportunity to present the deal while the market was closed. Speculation centred on an announcement this week after *The Australian* reported three weeks ago that [both companies had slightly altered their reporting dates](https://www.theaustralian.com.au/business/dataroom/woodside-nears-deal-for-bhp-petroleum-assets/news-story/c89c061291da3e86ab10c344c0834408?ref=boilingcold.com.au) to coincide with the same gap in ASX trading. Talk increased over the weekend with reports that BHP petroleum president [Geraldine Slattery was in Perth](https://www.theaustralian.com.au/business/mining-energy/bhps-geraldine-slattery-arrival-sparks-woodside-deal-talk/news-story/d654f29deab29380c23abb6ca2ce261a?ref=boilingcold.com.au). [BHP’s Geraldine Slattery leads pack to replace Peter Coleman at WoodsideThe next Woodside chief executive will be the first to decide what to do apart from gas. Low-profile BHP Petroleum head Geraldine Slattery is a lead contender to take charge of this pivotal WA company.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/03/Mia-Yellagonga--Perth--Western-Australia-web-top-crop.jpg)](https://www.boilingcold.com.au/bhps-geraldine-slattery-leads-pack-to-replace-peter-coleman-at-woodside/) Slattery is regarded as a prime contender for the job of Woodside chief executive currently held on an interim basis by Meg O'Neill. BHP's move this morning to go public with the news that no agreement has been reached less than 36 hours before what appeared to have been the planned announcement could indicate high-level brinksmanship across the negotiation table. The biggest issue likely to divide the two parties is how much of the new enlarged Woodside ends up in the hands of BHP shareholders. [Is Woodside the next South32?Speculation is mounting of a big Woodside-BHP deal next week. There may be lessons from South32, another destination for BHP’s unwanted assets.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/08/Mia-Yellagonga--Perth--Western-Australia-web-top-crop.jpg)](https://www.boilingcold.com.au/is-woodside-the-next-south32/) Both sides have strong drivers to conclude the deal. BHP wants to exit oil and gas to position itself to investors as a supplier of clean green materials with huge growth prospects as the world finally turns to a serious response to climate change. Woodside has a more immediate issue: it must sanction its Scarbrough to Pluto LNG project to have something positive to tell investors against a backdrop of declining production from the North West Shelf with its biggest producer of revenue, Pluto, likely follow mid-decade. Without some sort of deal with BHP, which owns 26.5 per cent of Scarborough, the project cannot proceed. [Woodside: Scarborough or stranded like a beached whaleFor Woodside, it is Scarborough or bust. Incredibly the LNG specialist has no plan B ready if its last chance to develop an LNG project evaporates. And Scarborough is no sure thing.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/04/whale-outside-woodside-HQ.JPG)](https://www.boilingcold.com.au/woodside-scarborough-or-stranded-like-a-beached-whale/) Two hours into the day's trading at 10 AM WST, BHP shares were up 1.0 per cent and Woodside shares were down 3.9 per cent, wiping more than $800 million from the gas company's market capitalisation. --- *Main image: Marlin-B platform in the Bass Strait. Source: ExxonMobil Australia.* --- ### Is Woodside the next South32? URL: https://www.boilingcold.com.au/is-woodside-the-next-south32/ Last updated: 2021-08-25T06:49:03.000Z ANALYSIS Seven years ago, BHP Billiton wanted a simpler life and decided to [spin off miscellaneous mines](https://www.bhp.com/media-and-insights/news-releases/2014/08/creation-of-new-global-metals-and-mining-company/?ref=boilingcold.com.au) into a new ASX-listed entity later called South32. Next Tuesday, when BHP announces its full-year results, many observers expect South 32 Mark II: unwanted oil and gas assets going to an existing ASX company called Woodside. In 2014 the good ship BHP scraped off the barnacles of minor assets to travel fast and lean. Now the miner wants to ditch the smokestack to sail green and clean. The speculation has not settled on the scope of the deal. However, the bare minimum would be BHP selling out of Scarborough so Woodside could progress its only option to stem production decline. [Woodside: Scarborough or stranded like a beached whaleFor Woodside, it is Scarborough or bust. Incredibly the LNG specialist has no plan B ready if its last chance to develop an LNG project evaporates. And Scarborough is no sure thing.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/04/whale-outside-woodside-HQ.JPG)](https://www.boilingcold.com.au/woodside-scarborough-or-stranded-like-a-beached-whale/) However, the most discussed options are Woodside absorbing BHP’s Australian oil and gas assets or its entire global portfolio. BHP’s petroleum business accounts for about 10 per cent of its revenue and earnings. Either way, a deal could have many similarities with the birth of South32 but with two significant differences. From the announcement in August 2014 to birth, when BHP shareholders received one South 32 share for each BHP share they held, the deal took nine months. BHP had a [huge team working on the deal](https://www.afr.com/companies/mining/how-bhp-billitons-debt-decision-set-south32-free-20170331-gvah6l?ref=boilingcold.com.au) for more than a year before it was announced. There was a lot of complexity to manage. BHP is listed in Australia and the UK, so a solution so had to be found for both sets of shareholders. Tax implications are potentially enormous. BHP [spent almost $1 billion of stamp duty and other transactions costs](https://www.smh.com.au/business/bhps-south32-demerger-maths-look-good-20150317-1m0twy.html?ref=boilingcold.com.au) to free itself of any mining assets it did not regard as Tier 1. Goldman Sachs and other advisors picked up $30 million for their advice on South32. The New York-based firm has reportedly been [helping BHP plan its oil and gas exit since 2019](https://www.theaustralian.com.au/business/dataroom/woodside-nears-deal-for-bhp-petroleum-assets/news-story/c89c061291da3e86ab10c344c0834408?ref=boilingcold.com.au). When BHP planned South32, it ensured the newborn company did not have excessive debt to improve its chance of success. As BHP shareholders would become South32 shareholders, the BHP board had an obligation to make South32 a good investment. BHP also kept Nickel West to itself over concerns that decommissioning costs would be too much for South32. Decommissioning costs and ensuring BHP shareholders get value from any shares they receive will be a big part of any Woodside deal, as it was with South32, but the dynamics are very different. ## Too late for a total decommissioning escape In Australia, BHP is exposed to multi-billion dollar clean up costs through its one-sixth share of the North West Shelf and half-ownership of ExxonMobil’s Bass Strait operation. ExxonMobil and BHP have wanted out of the Bass Strait for some years. In mid-2016, they put only the oil assets up for sale but halted the process in early 2018. The two companies then went their separate ways to sell both the oil and the gas assets. ExxonMobil went public in September 2019, and BHP followed in August 2020. BHP’s share of the North West Shelf could also be challenging to dispose of: Chevron has tried to offload its interest for more than a year. However, the Federal Government’s [response to being left with a clean-up bill of up to $1 billion](https://www.boilingcold.com.au/australia-told-exxonmobil-ceo-told-no-easy-exit-before-3b-bass-strait-sale-canned/) from the Northern Endeavour changed the game. Under legislation before Federal Parliament, any seller of oil and gas assets will retain the last resort trailing liability for decommissioning if subsequent owners fail. The Government will also have stricter checks on the financial strength of any buyers. Ensuring an enlarged Woodside-Plus is viable helps BHP discharge its duty to its shareholders who will have a stake in Woodside and also reduces the risk of the new mining-only BHP wearing trailing liabilities in a decade or so. While half the Bass Strait and an additional one-sixth of the North West Shelf will give Woodside an enormous decommissioning bill in the medium term, the immediate cash flow boost could help fund the $US12 billion Scarborough to Pluto project. In turn, later this decade, revenue from Scarborough would flow as the clean-up bills mount. So, both BHP and Woodside management should be aligned in making Woodside-Plus successful, just as BHP was with South32. ## Value split the big decision However, South32 was a newly listed company with initially no shareholders other than from BHP. Woodside-Plus would have the existing Woodside shareholders and holders of new scrip issued to pay for the BHP assets. How much of Woodside-Plus goes to BHP shareholders would be a simple win-lose negotiation between the two companies. BHP needs to get out of oil and gas, and Woodside is desperate for BHP to get out of the way so it can sanction Scarborough. BHP, however, has the leverage in the negotiation as it had more options and less urgency to achieve its aim compared to Woodside. Existing Woodside shareholders may not feel comfortable with how much BHP could dilute their equity, but the no-deal alternative may be worse. Any announcements next week might also reveal who will lead Woodside-Plus. Will BHP petroleum president Geraldine Slattery come with BHP’s assets as a package deal? [BHP’s Geraldine Slattery leads pack to replace Peter Coleman at WoodsideThe next Woodside chief executive will be the first to decide what to do apart from gas. Low-profile BHP Petroleum head Geraldine Slattery is a lead contender to take charge of this pivotal WA company.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/03/Mia-Yellagonga--Perth--Western-Australia-web-top-crop.jpg)](https://www.boilingcold.com.au/bhps-geraldine-slattery-leads-pack-to-replace-peter-coleman-at-woodside/) --- *Main image: Woodside headquarters Mia Yellagonga in Perth. Source: Woodside Energy Limited* --- ### BP’s Geraldton green hydrogen dream needs help URL: https://www.boilingcold.com.au/bps-geraldton-green-hydrogen-dream-needs-help/ Last updated: 2021-08-25T06:50:03.000Z Geraldton could become a global green hydrogen hub but needs government backing to achieve the scale required to drive down costs, according to a study for BP released yesterday. By 2050 total annual demand for green hydrogen and hydrogen as ammonia could reach 62 million tonnes, according to the $4.3 million [study by GHD](https://arena.gov.au/assets/2021/08/bp-ghd-renewable-hydrogen-and-ammonia-feasibility-study.pdf?ref=boilingcold.com.au). The clean fuel could be used in Australia instead of diesel for transport and coal and diesel for power and displace gas for heating but was likely to be more expensive than batteries for passenger cars. “The absence of a carbon price or emissions cap is a key barrier to attracting investment in renewable technologies such as hydrogen,” the report concluded, contradicting the Federal Government’s technology not taxes approach. The power, shipping and fertiliser markets in Japan and Korea offered the best export prospects. The advantages of WA’s Mid-West for green hydrogen production included low-cost access to land, domestic markets, low sovereign risk, and being on the world’s best locations for wind and solar combining to deliver 24-hour renewable energy. BP Australia president Frédéric Baudry said the study confirmed the potential for scaled-up green hydrogen in WA. “This looks particularly promising in the mid-west of WA, which has existing infrastructure, access to land and abundant renewable energy resources such as wind and solar,” Baudry said. “Importantly, our study also confirmed strong demand from potential customers in the hard-to-abate sectors, and for both local and export markets.” GHD advisor Jason Fonti said a pathway to “the magic figure” of producing green hydrogen for $2 a kg was becoming clearer, and WA could become a significant exporter. BP said any plant would need to be supported by significant investment in ports, water supply and electricity networks. Currently, green hydrogen is expensive, and the market is small. Market expansion needs cheaper product, but that can only occur with the economies and learnings from large scale deployment. BP is looking at a two-stage approach in WA: first learn and let technologies develop, then deploy at scale. GHD studied an initial small demonstration plant and a follow-up massive one million tonnes a year ammonia plant, equivalent to 175,000 tonnes of hydrogen. The GHD report made public as it was part-funded by the Australian Renewable Energy Agency contained no cost or schedule details. The 20,000 tonnes a year demonstration ammonia plant 5km from Geraldton would need a 35-megawatt power purchase agreement, primarily to drive the electrolysis that separates water into hydrogen and oxygen. The plant would use various technologies to allow them to be tested before the larger plant is designed. The capacity of Western Power’s network near Geraldton is constrained and, without an upgrade, may not always supply the full power needs of the demonstration plant. The main hurdle for investing in the demonstration plant would be securing customers willing to pay a sufficient price. A commercial-scale plant would require 1370MW of power to run at full capacity. Power from 2000MW capacity of both wind and solar power would allow the electrolysers to average 77 per cent utilisation. The wind power is equivalent to 11 Warradarge wind farms. Two sites were considered: an inland site southeast of Geraldton near the demonstration plant or the proposed Oakajee industrial area north of the town. Both sites require a desalination plant that WA’s Water Corporation could share. Both options need substantial investment in port infrastructure. BP said it would continue developing plans for green hydrogen projects in WA. --- ### Unless we act now, a hotter, drier, more dangerous future for Australia awaits: IPCC URL: https://www.boilingcold.com.au/unless-we-act-now-a-hotter-drier-more-dangerous-future-for-australia-awaits-ipcc/ Last updated: 2021-08-25T06:50:42.000Z *[Michael Grose](https://theconversation.com/profiles/michael-grose-95584?ref=boilingcold.com.au), [CSIRO](https://theconversation.com/institutions/csiro-1035?ref=boilingcold.com.au); [Joelle Gergis](https://theconversation.com/profiles/joelle-gergis-9516?ref=boilingcold.com.au), [Australian National University](https://theconversation.com/institutions/australian-national-university-877?ref=boilingcold.com.au); [Pep Canadell](https://theconversation.com/profiles/pep-canadell-16541?ref=boilingcold.com.au), [CSIRO](https://theconversation.com/institutions/csiro-1035?ref=boilingcold.com.au), and [Roshanka Ranasinghe](https://theconversation.com/profiles/roshanka-ranasinghe-433794?ref=boilingcold.com.au)* Australia is experiencing widespread, rapid climate change not seen for thousands of years and may warm by 4℃ or more this century, according to a highly anticipated [report](https://www.ipcc.ch/report/sixth-assessment-report-working-group-i/?ref=boilingcold.com.au) by the Intergovernmental Panel on Climate Change (IPCC). The assessment, released on Monday, also warns of unprecedented increases in climate extremes such as bushfires, floods and drought. But it says deep, rapid emissions cuts could spare Australia, and the world, from the most severe warming and associated harms. The report is the sixth produced by the IPCC since it was founded in 1988 and provides more regional information than any previous version. This gives us a clearer picture of how climate change will play out in Australia specifically. It confirms the effects of human-caused climate change have well and truly arrived in Australia. This includes in the region of the East Australia Current, where the ocean is warming at a rate more than four times the global average. We are climate scientists with expertise across historical climate change, climate projections, climate impacts and the carbon budget. We have been part of the international effort to produce the IPCC report over the past three years. The report finds even under a moderate emissions scenario, the global effects of climate change will worsen significantly over the coming years and decades. Every fraction of a degree of global warming increases the likelihood and severity of many extremes. That means every effort to reduce greenhouse gas emissions matters. [Ichthys LNG plans to destroy Inpex emissions pledgeInpex pledged in January 2021 to cut its emissions 30 per cent this decade while it was planning to boost CO2 from Ichthys LNG, which accounts for three quarters of its carbon footprint, by 30 per cent.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/04/cpf-from-website.jpg)](https://www.boilingcold.com.au/ichthys-lng-emissions-to-soar-as-inpex-chases-more-gas/) ## Australia is, without question, warming Australia has warmed by about 1.4℃ since 1910\. The IPCC assessment concludes the extent of warming in both Australia and globally are impossible to explain without accounting for the extra greenhouse gases in the atmosphere from human activities. The report introduces the concept of Climate Impact-Drivers (CIDs): 30 climate averages, extremes and events that create climate impacts. These include heat, cold, drought and flood. The report confirms global warming is driving a significant increase in the intensity and frequency of extremely hot temperatures in Australia, as well as a decrease in almost all cold extremes. The IPCC noted with high confidence that recent extreme heat events in Australia were made more likely or more severe due to human influence. These events include: - the Australian summer of 2012–13, also known as the Angry Summer, when [more than 70%](https://theconversation.com/angry-summer-shaped-by-a-shifting-climate-12580?ref=boilingcold.com.au) of Australia experienced extreme temperatures - the [Brisbane heatwave](https://www.abc.net.au/news/2014-11-14/g20-leaders-swelter-as-brisbane-residents-head-to-the-beach/5891494?ref=boilingcold.com.au) in 2014 - extreme heat preceding the [2018 Queensland fires](https://www.abc.net.au/news/2018-11-28/queensland-bushfire-emergency-as-thousands-evacuated/10563834?ref=boilingcold.com.au) - the heat leading into the Black Summer bushfires of 2019-20. The IPCC report notes very high confidence in further warming and heat extremes through the 21st century – the extent of which depends on global efforts to reduce greenhouse gas emissions. If global average warming is limited to 1.5℃ this century, Australia would warm to between 1.4℃ to 1.8℃. If global average warming reaches 4℃ this century, Australia would warm to between 3.9℃ and 4.8℃. ![](https://images.theconversation.com/files/415156/original/file-20210809-17-1lz4fv6.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip) IPCC The IPCC says as the planet warms, future heatwaves in Australia – and globally – will be hotter and last longer. Conversely, cold extremes will be both less intense and frequent. Hotter temperatures, combined with reduced rainfall, will make parts of Australia more arid. A drying climate can lead to reduced river flows, drier soils, mass tree deaths, crop damage, bushfires and drought. The southwest of Western Australia remains a globally notable hotspot for [drying](https://theconversation.com/saving-water-in-a-drying-climate-lessons-from-south-west-australia-28517?ref=boilingcold.com.au) attributable to human influence. The IPCC says this drying is projected to continue as emissions rise and the climate warms. In southern and eastern Australia, drying in winter and spring is also likely to continue. This phenomenon is depicted in the graphic below. ![](https://images.theconversation.com/files/415134/original/file-20210809-25-zca704.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip) IPCC ## Climate extremes on the rise Heat and drying are not the only climate extremes set to hit Australia in the coming decades. The report also notes: - observed and projected increases in Australia’s dangerous fire weather - a projected increase in heavy and extreme rainfall in most places in Australia, particularly in the north - a projected increase in river flood risk almost everywhere in Australia. Under a warmer climate, extreme rainfall in a single hour or day can become more intense or more frequent, even in areas where the average rainfall declines. For the first time, the IPCC report provides regional projections of coastal hazards due to sea level rise, changing coastal storms and coastal erosion – changes highly relevant to beach-loving Australia. This century, for example, sandy shorelines in places such as eastern Australia are projected to retreat by more than 100 metres, under moderate or high emissions pathways. [BHP climate target skips huge Australian oil & gas emissionsBHP’s climate target excludes the Bass Strait, North West Shelf and future Scarborough LNG on the incorrect basis that the operator controls the emissions, not the joint owners.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/05/bhp-scarb-logo-2-1.jpg)](https://www.boilingcold.com.au/bhp-climate-target-skips-massive-australian-oil-gas-emissions/) ## Hotter, more acidic oceans The IPCC report says globally, climate change means oceans are becoming more acidic and losing oxygen. Ocean currents are becoming more variable and salinity patterns – the parts of the ocean that are saltiest and less salty – are changing. It also means sea levels are rising and the oceans are becoming warmer. This is leading to an increase in marine heatwaves such as those which have contributed to mass coral bleaching on the Great Barrier Reef in recent decades. Notably, the region of the East Australia Current which runs south along the continent’s east coast is warming at a rate more than four times the global average. The phenomenon is playing out in all regions with so-called “western boundary currents” – fast, narrow ocean currents found in all major ocean gyres. This pronounced warming is affecting marine ecosystems and aquaculture and is projected to continue. [Woodside’s Pluto LNG fudged net-zero plan is much less than it first appearsWoodside’s Pluto net-zero 2050 plan is greenwashing, leaving 70% of cuts to the last five years despite investors telling CEO Meg O’Neill they want tangible speedy progress.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/06/Pluto-Train-1-from-WEL-website.jpg)](https://www.boilingcold.com.au/woodsides-fudged-pluto-net-zero-plan-is-much-less-than-it-appears/) ## Where to from here? Like all regions of the world, Australia is already feeling the effects of a changing climate. The IPCC confirms there is no going back from some changes in the climate system. However, the consequences can be slowed, and some effects stopped, through strong, rapid and sustained reductions in global greenhouse gas emissions. And now is the time to start adapting to climate change at a large scale, through serious planning and on-ground action. To find out more about how climate change will affect Australia, the latest IPCC report includes an [Interactive Atlas](https://interactive-atlas.ipcc.ch/?ref=boilingcold.com.au). Use it to explore past trends and future projections for different emissions scenarios, and for the world at different levels of global warming. [Santos fails to back up Barossa emissions reduction claimSantos says attacks on its heavily-polluting Barossa LNG project “should be taken with a grain of salt” but will not substantiate its own claims that emissions have reduced.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/06/AMMON-20210615-AIPPEA2021-PCEC-0110.jpg)](https://www.boilingcold.com.au/santos-fails-to-back-up-barossa-emissions-reduction-claim/) --- *[Click here](https://theconversation.com/au/topics/ipcc-report-2021-108383?ref=boilingcold.com.au) to read more of The Conversation’s coverage of the IPCC report* ![The Conversation](https://counter.theconversation.com/content/165396/count.gif?distributor=republish-lightbox-basic) *[Michael Grose](https://theconversation.com/profiles/michael-grose-95584?ref=boilingcold.com.au), Climate projections scientist, [CSIRO](https://theconversation.com/institutions/csiro-1035?ref=boilingcold.com.au); [Joelle Gergis](https://theconversation.com/profiles/joelle-gergis-9516?ref=boilingcold.com.au), Senior Lecturer in Climate Science, [Australian National University](https://theconversation.com/institutions/australian-national-university-877?ref=boilingcold.com.au); [Pep Canadell](https://theconversation.com/profiles/pep-canadell-16541?ref=boilingcold.com.au), Chief research scientist, Climate Science Centre, CSIRO Oceans and Atmosphere; and Executive Director, Global Carbon Project, [CSIRO](https://theconversation.com/institutions/csiro-1035?ref=boilingcold.com.au), and [Roshanka Ranasinghe](https://theconversation.com/profiles/roshanka-ranasinghe-433794?ref=boilingcold.com.au), Professor of Climate Change impacts and Coastal Risk* *This article is republished from [The Conversation](https://theconversation.com/?ref=boilingcold.com.au) under a Creative Commons license. Read the [original article](https://theconversation.com/climate-change-has-already-hit-australia-unless-we-act-now-a-hotter-drier-and-more-dangerous-future-awaits-ipcc-warns-165396?ref=boilingcold.com.au).* --- *Main Image: plane and chimney. Source:* [*Thijs Stoop*](https://unsplash.com/@thijsstoop?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) *on [Unsplash](https://unsplash.com/?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText)* --- ### Equipment failure injures two workers on Woodside's Ngujima-Yin oil vessel URL: https://www.boilingcold.com.au/equipment-failure-injures-two-workers-on-woodsides-ngujima-yin-oil-vessel/ Last updated: 2021-08-25T06:51:35.000Z Two workers have been injured on a Woodside vessel off Exmouth when a crane lifting a half-tonne load failed. The July 24 incident occurred on the Ngujima-Yin oil vessel about 50km northwest of Exmouth. According to a [safety alert issued today](https://www.nopsema.gov.au/blogs/safety-alert-73-lifting-operations?ref=boilingcold.com.au) by offshore safety regulator NOPSEMA a piping spool was being moved with chains suspended from a trolley that travels along an overhead beam when the trolley ran off the end of the beam. NOPSEMA was notified on July 24 that one worker had suffered a leg injury and had been sent onshore for medical treatment, the regulator's spokesperson said. *Boiling Cold* understands the leg of the transferred worker was pinned between the fallen piping spool and another object. It is also understood another worker was hit on the helmet by the falling chain block and knocked out. *Boiling Cold* understands Woodside did not notify the regulator about the worker who was knocked out. NOPSEMA sent inspectors to the Ngujima-Yin to investigate the incident. ![Detail of a beam trolley crane and end stops.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/08/image-5.png) **Detail of a typical beam trolley.** Source: NOPSEMA safety alert. Their preliminary finding is that the end stops on the beam intended to stop the trolley from falling off had unapproved modifications and were not fit for purpose. In addition, a plan to perform the lift safely was not followed. A NOPSEMA spokesperson said the inspectors concluded that multiple system failures led to the incident, and there was an ongoing risk to the workforce. In response, a week ago, the regulator [issued Woodside a prohibition notice](https://www.nopsema.gov.au/sites/default/files/2021-08/A794996.pdf?ref=boilingcold.com.au) that banned the use of beam-and-trolley type lifting appliances on the Ngujima-Yin without the sign off by the offshore installation manager that any risk was managed. The Ngujima-Yin incident occurred less than three weeks after two workers removing Santos' Sinbad platform near Varanus Island were nearly killed when the platform topsides above them moved uncontrollably. Two terrifying videos made clear the danger the workers hanging on the side of the supporting monopod were in. [Out of control lift of platform off WA could have killedTerrifying video shows an offshore lift that went badly wrong off the WA coast in early July endangering workers hanging off a platform and those on the vessel.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/07/sinbad-lift-screenshot-cropped.jpg)](https://www.boilingcold.com.au/out-of-control-lift-of-santos-platform-off-wa-could-have-killed/) In just one month, four workers could have been seriously injured or killed in the waters off WA, highlighting the dangerous nature of offshore work and lifting in particular. NOPSEMA, which regulates activities in Commonwealth waters, has been notified of numerous dangerous incidents involving lifting equipment and cranes and conducted a workshop on crane safety for the industry in July. The Sinbad incident in State waters is additional to the ones notified to NOPSEMA. NOPSEMA was unable to comment on the health of the workers. *Boiling Cold* informed Woodside of its understanding of the incident and asked about the health of the workers, whether the company immediately reported both injuries to NOPSEMA, the cause of the incident and what it had done to prevent a recurrence, Woodside did not respond. The Ngujima-Yin was converted into an FPSO in 2008 to service the Vincent oil fields from a crude oil carrier built in 2000\. During 2018 it was taken off station to a dockyard in Singapore for modifications to enable it to process oil from additional fields that form part of Woodside's great Enfield development. The Greater Enfield project is operated and 60 per cent owned by Woodside. Mitsui, which operates the Waitsia gas project in the Perth Basin, owns the remaining 40 per cent. --- *Main image: Woodside's Ngujima-Yin FPSO (floating production storage and offloading) vessel off Exmouth, WA. Source: Screenshot of Woodside video.* --- ### Woodside limits Scarborough cost bump but is silent on risk URL: https://www.boilingcold.com.au/woodside-limits-scarborough-cost-bump-but-is-silent-on-risk/ Last updated: 2021-08-25T06:52:16.000Z ANALYSIS Woodside has revised the cost of its make-or-break Scarborough LNG project up by a less than expected five per cent to $US12 billion ($16 billion), but investors should be cautious about who wears the risk if the costs blow out. And costs always blow out. Woodside aims to sanction by year-end its Scarborough to Pluto LNG project to replace declining production from the North West Shelf project, and later this decade from its Pluto field. Gas from the Scarborough field, 26.5 per cent owned by BHP, is to be piped 430km to the Burrup Peninsula where it will be liquified for export in a new LNG train to be built at Woodside's Pluto LNG plant. Woodside acting chief executive Meg O’Neill yesterday said the [$US600 million cost increase](https://files.woodside/docs/default-source/asx-announcements/2021-asx/036-scarborough-project-update-and-line-item-guidance.pdf?sfvrsn=c754cdd7%5F4&ref=boilingcold.com.au) included a 20 per cent increase in offshore processing capacity and modifications to Pluto LNG Train 1 to allow it to process more gas from Scarborough. When then chief executive Peter Coleman presented the previous Scarborough to Pluto cost of $US11.4 billion in November 2019 the company planned to export 6.5 million tonnes a year of LNG made from Scarborough gas. A new LNG train at Pluto could process 5 mtpa and Woodside would use 1.5 mtpa of spare capacity at the nearby North West Shelf LNG plant until it filled with gas for the distant Browse project. ![Pihoto of then Woodside chief executive Peter Coleman brief investors in November 2019.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/08/image-2.png) **Then Woodside chief executive Peter Coleman brief investors in November 2019**. Source: [Woodside Energy Limited](https://www.woodside.com.au/media-centre/news-stories/story/annual-investor-briefing-day?ref=boilingcold.com.au). ### More scope for just a bit extra Since then Woodside's design has increased production from Scarborough and put a greater focus on processing additional gas through Pluto Train 1. Containing the cost increase to five per cent is impressive in the circumstances: the scope has increased significantly, there are severe labour shortages in the Pilbara, and the price of a barrel of Brent crude is now $US75, compared to $US63 in November 2019. ![Table of onshore and offshore costs for Woodside's Scarborough to Pluto LNG project.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/08/image-3.png) O'Neill said the new costs reflected refreshed pricing from major contractors and "Woodside’s work with them since 2020 to maximise the value of the project by optimising design and execution planning." Woodside shareholders, BHP and any investors looking to buy into Scarborough or Pluto Train 2 will want to be confident that Woodside can build the project for the new $12 billion budget. Any number of factors can cause a project to go over budget. The late delivery of just one critical item can throw the entire schedule into disarray, as can a shortage of workers. Any poor quality work in the factory or on-site can require extensive rework. COVID presents additional risks. However, perhaps the biggest cause of a project costing more than the estimate is an unrealistic overly optimistic estimate in the first place from a team or company committed to seeing a project go ahead. Most oil and gas projects are joint ventures and cost estimates receive a level of independent assessment from the non-operating partners. In this case, Pluto Train 2 is 100 per cent Woodside so no other company has looked at the work. ### Costs are complex, risky and opaque Within the confidentiality of the operator, the cost estimate is not just the published headline number but a detailed assessment that produces a range of cost outcomes with different probabilities. The most commonly quoted are the P50 cost with an equal chance of being more than or less than the eventual cost, and the high P90 cost estimate with only a 10 per cent chance of being exceeded. There is also a low P10 cost estimate. The final cost of a project should fall between the P10 and P90 estimates 80 per cent of the time. If the P10 and P90 estimates are close then the project cost has a low risk. Conversely, if the P90 estimate is a lot higher than the P50 estimate there is a 10 per cent chance of a truly value-destroying outcome. It is odd that so much importance is placed on a single published number when the reality is so complex. Woodside is no different to other companies in wrapping up years of work by hundreds of people into, in this case, six key strokes: $US12B. Companies often do not state whether the published number is the P50 value, but everyone assumes that is the case. One oil and gas company with a big presence in Perth, but not Woodside, once hid an increase in a P50 cost estimate by publishing the new P40 value. No one was the wiser that apples had been compared to oranges. So a cost has a published number, normally the P50, and an element of risk or variation. The third area of cost an investor should look at is how that cost risk is shared. Who suffers if the project does not go to plan? O'Neill's mentioned cost risk in yesterday's statement to the ASX. > “Woodside’s contracting strategy for Scarborough reduces cost risk, with approximately 90% of total project contractor spend structured as lump-sum and fixed-rate agreements," O'Neill said. A crucial point in negotiations between Woodside and its contractors, Bechtel for Pluto Train 2 for example, is how the risk of cost overruns is allocated. In November 2019 Woodside detailed how most of the burden of any increased costs would fall on the contractors. Lump sum, or fixed-price, contracts covered 79 per cent of the scope and a further 8 per cent of the estimate was so-called provisional sums, that would be translated into lump sums within 12 months of contract award when more information was available. The remaining 13 per cent of the scope was covered by unit rate or frame agreements. On the basis that major companies carefully craft, review and polish every word in important releases to the ASX, the difference in how cost risk is described in the latest announcement is revealing. Now 90 per cent of the scope is lump-sum and fixed-rate agreements, not 100 per cent. There is no detail about how much of that 90 per cent is the much safer (for Woodside) lump sum agreement instead of fixed rates, and how much of the scope "structured as lump-sum...agreement" is actually provisional sums yet to be fixed. *Boiling Cold* asked Woodside to provide a percentage breakdown of today's costs between lump sum, provisional sum, and fixed or unit rates, as it did in 2019. Woodside was also asked if the cost assumes when Pluto Train 2 starts needing significant numbers of workers that COVID restrictions on interstate and international movement of workers could still be in place. Woodside did not respond. "We have commenced the formal processes for selling down our interest in Pluto Train 2 and Scarborough as we target the investment decision later this year," O'Neill said yesterday. "And these processes are supported by the updated cost estimate.” Caveat emptor. --- **Cost talk** - *lump sum - The contractor is paid a fixed amount for an agreed scope. This is the least risky for Woodside but it remains liable for additional costs from scope changes. The scope always changes but this can be minimised by thorough engineering before the investment decision, care with contract details and good project management.* - *provisional sum - A nominal amount placed in a contract when it is signed as the contractor has insufficient detail to provide an accurate price. In Woodside's November 2019 announcement these were to be converted to lump sum in the first 12 months of the contract.* - *fixed rates:* - unit rates - Contractor is paid a fixed amount for a unit of work (e.g. cubic metre of concrete poured) - time rates - Contractor is reimbursed for people at an agreed rate (e.g. $/hour for each class of worker) - *frame agreements - a long term agreement between a buyer and a supplier, in this case probably covering all of Woodside's needs in an area, not just for this project*. --- *Main image: Graphic of the Scarborough and Pluto Train 2 LNG project. Source: Woodside Energy Limited.* --- ### Out of control lift of Santos platform off WA could have killed URL: https://www.boilingcold.com.au/out-of-control-lift-of-santos-platform-off-wa-could-have-killed/ Last updated: 2021-08-25T06:53:46.000Z Workers scrambled to escape a topsides swinging from a crane and wire cables flailing about and snapping when a lift went badly wrong off the WA coast in early July. The incident occurred during the recent decommissioning of Santos’ Sinbad platform near Varanus Island. According to an environmental approval document, Santos planned to remove the topsides from the steel column, or caisson, that supports it in two steps. First, the circumference of the caisson would be partially cut through with a flame cutter. Then a construction vessel’s crane is connected to the topsides and takes its weight while the caisson cut is completed to allow the topsides to be lifted. A terrifying video taken on July 5 from the Allseas Fortitude that was lifting the platform shows how close two or three rope access technicians perched on the side of the caisson came to serious injury or death. The topsides can be seen to be rocking back and forth above the workers, then with a loud bang, the caisson separates at the height of the worker’s heads. Numerous dropped objects fall into the sea but appear to miss the workers. Next, the topsides tilted away from the workers and swung out from the vessel dragging a metal cable past the workers. The topsides then swung wildly back over the workers and towards the vessel, but by this time, the crane has lifted it higher, so it was above the workers. ![Allseas Fortitude in the Tyra field, Denmark](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/07/image-21.png) **Allseas Fortitude in the Tyra field, Denmark.** Source: [Allseas](https://allseas.com/equipment/fortitude/?ref=boilingcold.com.au) The crew on the boat also could have been in the firing line. As the topsides then swung away from the vessel, a cable broke, and a heavy piece of metal with cable attached was flung towards the boat. This happened again on the next swing of the topsides. Experienced offshore construction people told *Boiling Cold* that the lift might have been safer if a jack-up rig that sits on the seabed was used instead of a vessel that moves with the ocean. Some believe the tension in the cables above the platform during the final caisson cut was too high. Santos plans to decommission up to 17 structures in the area over the next five years. The Sinbad and Campbell platforms were installed in 1993 by US-based Apache and ceased production in 2006\. For the past 15 years, they have been inactive. In 2018 Apache’s assets around Varanus Island were sold to Quadrant Energy, which Santos bought in 2018. Santo awarded the contract to decommission the Sinbad and Campbell platforms to Fugro. The Dutch company, in turn, contracted Allseas to supply the Fortitude construction vessel and AusGroup subsidiary MAS for rope access technicians. As the Sinbad platform is near Varanus Island, it is in State Waters and regulated by the Department of Mines, Industry Regulation and Safety. A spokesperson for the Department of Mines, Industry Regulation and Safety said the incident was still under investigation by Santos and the Department. “Until the investigation is completed, a Prohibition Notice has been issued to Santos directing Santos not to conduct any other lifts of this kind,” the DMIRS spokesperson said. ![map of the location of the Sinbad and Campbell oil platforms off the coast of Western Australia](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/07/image-20.png) Source: Santos environmental plan A Santos spokesperson said all activities ceased and the regulator notified as soon as the incident occurred. Sants has provided the results of its investigation to DMIRS. "Following the incident and investigation, work recommenced on the remaining Sinbad offshore structure and the removal of the facilities has now been completed," the Santos spokesperson said. "Santos is working with the regulator to ensure corrective measures are implemented for any future activities to ensure such an incident does not happen again." The Campbell platform was not been decommissioned and, according to vessel traffic monitoring site *MarineTraffic*, the Allseas Fortitude is sailing to Singapore. ![Sinbad offshore gas platform design drawing](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/07/image-22.png) **Sinbad platform design**. Source: [Apache environmental submission](https://www.epa.wa.gov.au/sites/default/files/PER%5Fdocumentation/A1040%5FR0856%5FCER.pdf?ref=boilingcold.com.au) --- *Updates:* *31 July 2021: Santos comments added, contracting companies added, workers identified as rope access technicians, Campbell platform not decommissioned.* *2 August 2021: additional video added.* *Correction:* *13 August 2021: AusGroup subsidiary is MAS, not MAC.* --- *Main image: Screenshot of video.* --- ### Another job cull at Woodside URL: https://www.boilingcold.com.au/another-job-cull-at-woodside/ Last updated: 2021-08-25T06:54:24.000Z Woodside today began what is expected to be a week of redundancies, and employees anticipate another round after the completion of an organisational review. *Boiling Cold* understands from numerous sources that many areas of the LNG player lost employees today, including the logistics, exploration, geoscience, reservoir management and new markets teams. The New Markets team is responsible for creating new business opportunities and has worked on trucking LNG to the Pilbara and hydrogen. There was no official communication from Woodside management to its workforce about the redundancies. ![Screenshot of a June Woodside advertising video: "Part of a better future" with text "creating prosperity and enduring employment."](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/07/image-19.png) **Screenshot of a June Woodside advertising video: "Part of a better future."** Woodside made about 300 permanent employees redundant in October 2020 after ending several hundred contract positions in March 2020 when the COVID pandemic caused oil and gas prices to plummet. In May, Woodside interim chief executive O'Neill told investors Woodside needed a "laser-like focus on cost management" to remain competitive and said she would target a 30 per cent reduction in operating costs. Some employees expect another round of redundancies in late 2021 or early 2022 when a review of Woodside's organisation is completed. Employees contacted by *Boiling Cold* expect the job losses to number at least several hundred. [Woodside: Scarborough or stranded like a beached whaleFor Woodside, it is Scarborough or bust. Incredibly the LNG specialist has no plan B ready if its last chance to develop an LNG project evaporates. And Scarborough is no sure thing.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/04/whale-outside-woodside-HQ.JPG)](https://www.boilingcold.com.au/woodside-scarborough-or-stranded-like-a-beached-whale/) Woodside is cutting its workforce as it faces numerous challenges over the next six months. The company has targeted a final investment decision on the $US11.4 billion Scarborough project this year to offset declining production from the North West Shelf and a fall in Pluto output later this decade. However, it first has to sell down its 100 per cent equity in a second LNG train at Pluto and, ideally, some of its 63.5 per cent interest in the Scarborough gas field. There are several warning flags for potential buyers of equity in Scarborough or Pluto. Last week Japan proposed [slashing its LNG consumption](https://www.boilingcold.com.au/japan-plans-to-almost-halve-lng-for-power-by-2030/) by almost 50 per cent by 2030, a move that BlombergNEF analyst Olympe Mattei estimated could [decrease demand by 25 million tonnes a year](https://thewest.com.au/business/energy/global-lng-market-faces-shake-up-from-japans-green-shift-ng-b881946945z?ref=boilingcold.com.au#:~:text=Japan%E2%80%99s%20LNG%20demand%20could%20fall%20by%20nearly%2025%20million%20tonnes%2C%20according%20to%20BloombergNEF%20analyst%20Olympe%20Mattei.). A softer market will depress prices and give buyers less incentive to sign long-term contracts traditionally used to reduce the risk of investing in new LNG production. The cost of building a second LNG train at the Pluto LNG plant to process the gas from Scarborough is under pressure from one of the tightest labour markets the WA resources sector has seen as a mining boom hits a COVID-driven immigration clampdown. There is also uncertainty about the approvals for the Pluto expansion, with a [Supreme Court challenge](https://www.boilingcold.com.au/the-green-legal-action-that-could-halt-woodsides-scarborough-lng/) by the Conservation Council of WA unlikely to be determined this year. Perhaps the biggest challenge is a perception widely held in the industry that minor Scarborough partner BHP lacks enthusiasm for the project leading to speculation about a [wider deal between the two companies to unblock the impasse](https://www.boilingcold.com.au/woodside-bhp-aussie-oil-gas-inspiration-or-desperation/). The company is navigating these problems without a permanent chief executive after Peter Coleman ended his decade-long tenure unexpectedly early in April. Woodside did not respond to questions from *Boiling Cold*. Chevron, WA's other big LNG operator, [cut its workforce by 20 to 30 per cent](https://www.boilingcold.com.au/chevron-red-tape-for-hr-hunger-games/) in 2020. --- *Main image: Woodside headquarters Mia Yellagonga in Perth. Source: Woodside Energy Limited* --- ### Woodside + BHP Aussie oil & gas: inspiration or desperation? URL: https://www.boilingcold.com.au/woodside-bhp-aussie-oil-gas-inspiration-or-desperation/ Last updated: 2021-08-25T06:56:20.000Z *ANALYSIS* If the adage that where there is smoke, there is fire, applies to oil and gas deals, then Woodside and BHP are definitely up to something. Persistent industry chatter of a Woodside BHP transaction went public this week with a multitude of media reports suggesting various permutations with the common theme that BHP wants out of oil and gas and Woodside is involved. If BHP has been busy planning an escape from hydrocarbons, it may explain the unexpected $US90 million ($123 million) “business development and evaluation expense for Petroleum” revealed in this week’s [end of year operational review](https://www.bhp.com/-/media/documents/media/reports-and-presentations/2021/210720%5Fbhpoperationalreviewfortheyearended30june2021.pdf?la=en&ref=boilingcold.com.au). BHP chief executive Mike Henry has consistently talked up the value of BHP’s petroleum division, but that is no indication that a sale is a change of heart. It makes as much sense to boost assets you want to keep to assure investors as it does to praise them to attract buyers. There are three reasons why Henry may want to offload BHP’s oil and gas interests: have a pure-play green(ish) materials business to pitch to investors, avoid upcoming massive decommissioning costs, and sell out before the hydrocarbon fire sale begins. A retreat from oil and gas is a logical extension to BHP’s [two-year plan to exit thermal coal](https://www.theguardian.com/business/2020/aug/18/bhp-commits-to-selling-its-thermal-coal-mines-within-two-years?ref=boilingcold.com.au) announced a year ago that may have been left too late to maximise returns. The torrent of positive PR from this week’s [nickel supply deal with Tesla](https://www.bhp.com/media-and-insights/news-releases/2021/07/bhp-enters-into-nickel-supply-agreement-with-tesla-inc/?ref=boilingcold.com.au) is a more pleasant experience than protests about emissions from Woodside’s Scarborough to Pluto LNG project that BHP has a stake in. A sale of BHP’s Australian and international petroleum assets, priced at $US14 billion ($19.1 billion) by [RBC Capital Markets](https://www.theaustralian.com.au/business/mining-energy/bhp-considers-exit-from-oil-and-gas/news-story/8860910b9ac0376ac8ae795ffec851cf?ref=boilingcold.com.au), would be an enormous boost to BHP’s coffers already overflowing from the high-margin iron ore wealth it extracts from the Pilbara. The pure-play miner could then fully decarbonise its operations and supply chain for a completely clean and green offering to investors and customers. ## Old assets are a hard sell However, BHP’s most significant petroleum assets in Australia – one-sixth of Woodside-operated North West Shelf and half the Bass Strait operation run by ExxonMobil – are not a buyers delight. Both assets have a sprawling array of ageing facilities and a limited future. Production from the North West Shelf dropped seven per cent in the past 12 months and is in terminal decline. Woodside’s CO2-filled Browse fields were to fill the five-train LNG plant near Karratha, but [the project is unlikely to proceed](https://www.boilingcold.com.au/woodside-browse-lng-is-dead/). Perth Basin gas from Waitsia will provide some help, but the WA Government has banned all further export of onshore gas. In the Bass Strait, BHP has to wear half the bill of constant decommissioning for a decade or more, starting with 180 wells and ten platforms ordered by offshore safety regulator NOPSEMA. [ExxonMobil Bass Strait maintenance & decommissioning blastedBass Strait partners ExxonMobil and BHP must plug 180 wells, dismantle ten platforms and tackle life-threatening corrosion after intervention by offshore safety regulator NOPSEMA.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/05/Offshore-Platform-West-Tuna.jpg)](https://www.boilingcold.com.au/regulator-blasts-exxonmobils-bass-strait-maintenance-orders-massive-decommissioning-effort/) The Federal Government has closed off the easy outs on decommissioning after being saddled with the up to $1billion cost to clean up the Northern Endeavour. NOPSEMA is taking action to stop constant delay; new financial assurance and change of control provisions make a sale to a less financially robust buyer difficult; and trailing liabilities keep the seller exposed to decommissioning costs if a later owner folds. So, BHP must find a buyer acceptable to the Federal Government with interest in two assets on opposite ends of the continent with significant near-term cash flows but costly and questionable futures. ## Woodside needs something – now! So why is there talk of Woodside being interested in BHP’s fossil fuel cast-offs? Chair Richard Goyder has no apparent need to invest in offshore Victoria or double his equity in the North West Shelf. Few companies in Australia have a more explicit objective than Woodside: develop the Scarborough gas field to an expanded Pluto LNG plant. The strategic clarity comes from a decade of failure to develop any other viable replacements for already falling North West Shelf production and output from the Pluto field that could come off plateau as early as 2026. A company with only one option has no choices. [Woodside: Scarborough or stranded like a beached whaleFor Woodside, it is Scarborough or bust. Incredibly the LNG specialist has no plan B ready if its last chance to develop an LNG project evaporates. And Scarborough is no sure thing.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/04/whale-outside-woodside-HQ.JPG)](https://www.boilingcold.com.au/woodside-scarborough-or-stranded-like-a-beached-whale/) Woodside must jump two hurdles to sanction the $US11.4 billion Scarborough to Pluto project this year: sell down its high equity and get BHP, with a 26.5 per cent stake in Scarborough, on board. Last week Woodside [launched a sell-down](https://www.afr.com/companies/energy/woodside-targets-infrastructure-investors-in-pluto-sell-down-20210714-p589ru?ref=boilingcold.com.au) of its 100 per cent interest in Pluto Train 2 and 73.5 per cent share of Scarborough, with some sale of Pluto Train 2 equity required for sanction. However, potential buyers will want to know where BHP stands before making a long-term investment. The miner has been less interested and less hurried about Scarborough than Woodside since early 2019, when [Woodside had to fully fund the front-end engineering and design](https://thewest.com.au/business/energy/woodside-eyes-sweet-spot-costs-for-40b-lng-projects-at-browse-and-scarborough-ng-b881105512z?ref=boilingcold.com.au#:~:text=To%20help%20finalise%20the%20designs%20as%20soon%20as%20possible%20in%20January%2C%20Woodside%20funded%20the%20start%20of%20Scarborough%20FEED%20without%20the%20backing%20of%20partner%20BHP.). Without BHP’s approval, Scarborough cannot proceed. That outcome would save the miner about $US1.4 billion and destroy Woodside’s future. The easy solution for Woodside is to buy BHP out of Scarborough, but that is baby steps for BHP escaping oil and gas. A better outcome for BHP is to agree to sell out of Scarborough only if Woodside buys all its Australian petroleum interests. Making its Australian assets a job lot may be brutal commercial blackmail by BHP, but it could work. ## Is a bigger Woodside better? Credit Suisse head of Australian energy research Saul Kavonic said buying BHP out would allow Woodside to grow, realise cost and JV synergies and solidify its balance sheet. > “Woodside is in an advantaged position to acquire BHP Petroleum’s Australian assets given asset knowledge, cost and JV synergies, pre-emptive rights, and limited buyer pool,” Kavonic said. ![Table of Woodside and BHP Petroleum Australian assets including North West Shelf, Pluto, Scarborough and the Bass Strait](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/07/image-17.png) Kavonic said while Woodside would acquire a significant decommissioning liability in the medium term, the immediate cash flow boost would help fund the construction of Scarborough and Pluto Train 2\. Scarborough revenue would begin to flow before the biggest decommissioning bills came in. However, Kavonic added one requirement for success: Woodside needs to savvily manoeuvre through the negotiation. BHP’s biggest advantage at the negotiation table is that it can wait, and Woodside cannot. More delays to Scarborough diminish the credibility of the project to potential buyers of both equity and LNG. Additionally, the contracts in place to build Scarborough, including a specialised pipelay vessel, will not last forever before they must be renegotiated and rescheduled. Should a deal be agreed, Woodside is in no position to pay cash to BHP as it already needs to sell down just to afford Scarborough and Pluto Train 2. One solution floated in *The Australian* yesterday was that [Woodside pays BHP in shares](https://www.theaustralian.com.au/business/dataroom/woodside-petroleum-looks-to-scrip-deal-for-bhp-assets/news-story/f6f7e6bf98fc494f4af43d0dea9b38f6?ref=boilingcold.com.au) that the miner distributes to its shareholders. BHP is instantly free of its Australian oil and gas assets, and its shareholders add Woodside shares to their portfolio. Whether the Woodside board, which seems unable to manage a chief executive transition, wrangles a good deal for existing shareholders will take many years and hindsight to determine. ## Will BHP be kept on the decommissioning hook? What will be clear from day one is that a significant portion of the $52 billion bill to clean up after Australia’s offshore oil and gas producers would be concentrated in one company. [Australian offshore oil and gas industry has a $52B clean-up billMuch of the $52 billion cost to decommission Australia’s offshore oil and gas infrastructure will fall on the Federal Government via the tax system and work has started to boost industry collaboration and find cost savings.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/03/Offshore-Platform-Snapper-2.jpg)](https://www.boilingcold.com.au/australian-offshore-oil-and-gas-industry-has-a-52b-clean-up-bill/) With oil and gas production set to decline over coming decades, many pure-play hydrocarbon companies will fail when decommissioning liabilities exceed the value of remaining production. Under Australian law, decommissioning is a joint liability, so if one company in a joint venture fails, others have to pick up the tab. The Energy and Resources Law Association earlier this year [submitted to a review of decommissioning arrangements](https://www.ampla.org/News-Resources/Latest-News/submission-diser-consultation-paper-december-2020-enhancing-australias-decommissioning-framework-for-offshore-oil-and-gas-activities?ref=boilingcold.com.au) that “The Government’s real exposure to risks posed by insolvent titleholders, therefore, occurs when the titleholders do not include a strong participant.” If BHP stayed in oil and gas, they would likely eventually be the strongest participant in most of their joint ventures on the back of their unique mining revenue. Legislation before Federal Parliament has trailing liabilities that could, as a last resort, make BHP liable for the entire cost of decommissioning the North West Shelf and the Bass Strait if all other participants failed in coming decades. It may be a low probability outcome, but given the billions of dollars involved, very reassuring for future Australian taxpayers. The scenario is likely to have occurred to BHP’s lawyers, who would prefer arrangements that make such a clawback very difficult. Should a BHP Woodside deal happen, Resources Minister Keith Pitt would be doing future generations a service by insisting on explicit provisions to ensure the taxpayer is no more exposed to offshore decommissioning liability than they are now. --- *Main image: Goodwyn A platform of the Woodside-operated North West Shelf project that BHP has an interest in. Source: Woodside Energy Limited.* --- ### Ichthys flaring casts doubt on carbon-neutral LNG cargo URL: https://www.boilingcold.com.au/ichthys-flaring-casts-doubt-on-carbon-neutral-lng-cargo/ Last updated: 2021-08-25T06:56:53.000Z Satellite monitoring has revealed that Inpex's Ichthys LNG project was burning massive amounts of waste gas while partner TotalEnergies shipped its first carbon-neutral LNG cargo. The French energy giant delivered a cargo of LNG to China in September 2020 that it said had [all emissions from the production and use of the gas offset with carbon credits](https://totalenergies.com/media/news/communiques-presse/total-delivers-its-first-carbon-neutral-lng-cargo?ref=boilingcold.com.au) from a Chinese wind farm and a forest in Zimbabwe. ![Plot of gas flaring from the Inpexioperated Ichthys LNG project](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/07/image-16.png) *Source: [FlareIntel](https://capterio.com/flareintel?ref=boilingcold.com.au)* Analysis of satellite data with UK-based Capterio's [FlareIntel tool](https://capterio.com/flareintel?ref=boilingcold.com.au) showed that until November 2020, the Ichthys offshore facilities were regularly flaring 50 million standard cubic feet of gas a day. Capterio, a flaring reduction project company, estimated this level of flaring could add up to the equivalent of 1.5 tonnes of CO2 emissions for every tonne of LNG produced. Ichthys produces the most carbon-intensive LNG from any Australian offshore project by a wide margin, even without excessive flaring. ![carbon intensity of Australian offshore LNG: North West Shelf, Pluto, Gorgon, Wheatstone, Ichthys and Prelude.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/04/image-10.png) *Source: Boiling Cold from project environmental approval submissions.* Carbon-neutral LNG cargoes are a tiny but growing part of the international LNG trade that produce energy with zero net emissions if done as claimed. A Capterio report [released this week](https://capterio.com/insights/transparency-into-gas-flaring-within-the-global-lng-supply-chain?ref=boilingcold.com.au) questioned whether Ichthys' high level of flaring emissions was allowed for in calculating the offsets required for TotalEnergies' shipment to China. *Boiling Cold* provided the FlareIntel data to TotalEnergies and Inpex TotalEnergies was asked if its carbon-neutral cargo allowed for the significant flaring volumes from Ichthys. The company did not respond. WoodMackenzie vice chair for Asia Pacific energy Gavin Thompson in 2020 said [positive headlines were one motivation](https://www.woodmac.com/news/opinion/what-is-carbon-neutral-lng/?ref=boilingcold.com.au) for the deals. > "For a modest premium, companies have been rewarded with widespread coverage of their green credentials," Thompson said. > "An easy win." There is no transparent standard for certifying if LNG is carbon neutral, according to Capterio. Some cargoes have only offset Scope 3 emissions from burning the gas, while other sales just offset the Scope 1 emissions from producing and shipping the gas. ## Australian LNG starts heavy in flaring The Inpex project is not only a new Australian LNG project that has had excessive flaring last well past the expected first few months after start-up. Flaring at [Chevron's Gorgon LNG](https://thewest.com.au/business/energy/environment-pays-big-price-for-tricky-gorgon-start-up-ng-b881067449z?ref=boilingcold.com.au) plant in 2016 and 2017 produced carbon emissions at a rate of more than 1.5 million tonnes a year of CO2. Shell's Prelude floating LNG vessel flared enough gas to [produce 1.7 million tonnes of CO2](https://www.boilingcold.com.au/eye-in-the-sky-spies-shells-prelude-floating-flare-machine/) in the 12 months to June 2019. Australian regulations do not target emissions from flaring. Additionally, the Clean Energy Regulator has awarded many LNG projects higher emissions limits after producing higher emissions than expected. Inpex has a flaring management plan for Ichthys, according to the [environmental plan](https://docs.nopsema.gov.au/A680699?ref=boilingcold.com.au) submitted to offshore regulator NOPSEMA. Inpex sets the targets. It is understood Inpex does not report the targets and flaring levels to NOPSEMA, but the regulator considers emissions in its regular inspections of the facilities. Inpex was asked why there had been high flaring levels at Ichthys offshore facilities and what was being done to prevent a recurrence. The company did not respond. It is understood Inpex is modifying an off-gas recovery compressor on the Ichthys Explorer central processing platform and a flash fuel compressor on the Ichthys Venturer floating production storage and offloading vessel to reduce flaring. The Ichthys LNG project is operated by Inpex that owns 66 per cent of the $US45 billion ($61 billion) project. Other owners are TotalEnergies (26%), five Japanese utilities (5%), and Taiwan's CPC (3%). --- *Main image: Ichthys Venturer FPSO loading condensate with the Ichthys Explorer central processing facility in the background. Source: [Inpex](https://www.inpex.co.jp/english/ichthys/events.html?ref=boilingcold.com.au).* --- ### Japan plans to almost halve LNG for power by 2030 URL: https://www.boilingcold.com.au/japan-plans-to-almost-halve-lng-for-power-by-2030/ Last updated: 2021-08-25T06:57:28.000Z *ANALYSIS* Japan, the foundation customer for Australia's $36 billion a year LNG industry, plans to slash the fuel's share of power generation from 37 per cent in 2019 to 20 per cent in 2030. The nation's powerful Ministry of Economy, Trade and Industry today issued a draft energy policy that hits gas as hard as coal to meet new emissions reduction targets. ![Japn's planned 2030 fuel mix for power generation: LNG, coal, oil, renewable energy, nuclear and hydrogen/ammonia.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/07/image-14.png) *Data source: [S&P Global](https://www.spglobal.com/platts/en/market-insights/latest-news/electric-power/072121-japan-set-for-60-non-fossil-fuel-power-supply-in-2030-in-ghg-slash-drive?ref=boilingcold.com.au). Graphic: Boiling Cold* Both fossil fuels lost a seven per cent market share in the revised plan. The draft supports the Japanese Government's [decision in April](https://www.reuters.com/business/energy/japan-boosts-renewable-energy-target-2030-energy-mix-2021-07-21/?ref=boilingcold.com.au) to cut 2030 emissions by 46 per cent from 2013 levels, up from the earlier 26 per cent target. The role of gas as a bridge between coal and renewables shrinks when countries adopt more aggressive emissions reductions. Emissions savings between gas and coal are insufficient to meet the targets, and the resultant short period of use cannot justify significant investment in gas infrastructure. In more bad news for gas incumbents, the tiny one per cent share for hydrogen and ammonia planned for 2030 shows the new fuels cannot save the LNG industry. Japan plans for renewables to do almost all the decarbonising work this decade, leaving just a small market for hydrogen. Some of that market will be green hydrogen and ammonia produced from renewable energy. Longer-term, the global hydrogen and ammonia market could become more significant, driven by opportunities such as displacing oil for shipping and coal in steelmaking. However, in the 2030s green hydrogen is more likely to be cost-competitive against the gas and carbon storage blue alternative. The gas producers could face a cashflow crisis before then as their current market shrinks well before an alternative market for hydrogen and ammonia has meaningful scale. Fortunately for Australian LNG exporters, the trade is no longer all about Japan. China has just overtaken Japan as Australia's biggest LNG customer, taking almost 30 million tonnes in the 12 months to June 2021 compared to 28 million tonnes to Japan, according to an [analysis by *EnergyQuest*](https://www.energyquest.com.au/energyquest-australian-lng-monthly-june-2021/?ref=boilingcold.com.au). While China may provide further growth for Australian LNG exports, Japan had two clear advantages for the industry. Japanese buyers are willing to invest in Australian projects, and the Government would never disrupt the trade for political purposes. A slowing of demand in Japan is likely to prod Qatar, the low-cost giant of LNG, to be more competitive in chasing Chinese contracts. The future for Australian LNG is looking to be a low margin, high market risk, climate-exposed business. But, unfortunately, investors looking for that set of attributes in their portfolio are thin on the ground. Less than a week ago, Woodside launched a sale process for equity in its Scarborough gas field and the proposed second LNG train at the Pluto LNG project. For Woodside in 2021, whether it is chief executive transitions or asset sales, timing has not gone its way. --- *Main image: Tokyo street scene. Source: [Jezael Melgoza](https://unsplash.com/@jezael?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) on [Unsplash](https://unsplash.com/s/photos/japan?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText)* --- ### Time’s up on Gorgon’s five years of carbon storage failure URL: https://www.boilingcold.com.au/times-up-on-gorgons-five-years-of-carbon-storage-failure/ Last updated: 2021-08-25T06:58:27.000Z *ANALYSIS* Chevron was allowed to build its $US55 billion Gorgon LNG plant on the Barrow Island nature reserve for one reason only: to bury millions of tonnes a year of carbon dioxide from offshore reservoirs into a formation deep under the island. Since LNG production began in March 2016, Chevron's attempts to meet its commitments to the WA Government to inject CO2 underground have been late, then bungled and now curtailed by a worried regulator. The importance of CO2 injection at Gorgon goes well beyond WA. It is the world's largest carbon capture and storage project dedicated to reducing greenhouse gas emissions, not enhancing oil recovery. If oil and gas giant Chevron backed by its two major partners Shell and ExxonMobil, could not get it right at Gorgon more than a decade after the project was approved, then forecasts of a massive global CCS rollout before 2050 look doubtful. Without significant CCS, the only way to maintain global temperature rise to within 2℃ is an immediate and drastic curtailment of fossil fuel use. The WA Government laid out two clear requirements for CO2 injection at Gorgon in its [environmental approval](https://www.epa.wa.gov.au/sites/default/files/1MINSTAT/Ministerial%20Statement%20800.pdf?ref=boilingcold.com.au) for the project. Before Chevron and its partners Shell and ExxonMobil committed to the project in 2009, they knew they had to: 1. "Implement all practicable means to inject underground all reservoir carbon dioxide removed during gas processing." 2. "Ensure that calculated on a 5-year rolling average, at least 80 per cent of reservoir carbon dioxide removed…is injected." In March 2016, Gorgon produced its first load of LNG two years late after a budget blowout of $US18 billion ($24 billion). Over the next 12 months, the plant's second and third LNG trains entered production. Despite an additional two years of construction, Chevron was not ready to inject CO2 underground. By mid-2016, wells had not been completed, equipment at the top of the wells was not installed, and the CO2 pipeline was not connected, according to Chevron's [annual report to the Federal Government](https://www.documentcloud.org/documents/20509164-gorgon-project-carbon-dioxide-injection-project-low-emissions-technology-demonstration-fund-annual-report-1-july-2015-30-june-2016?responsive=1&title=1&ref=boilingcold.com.au). Being so far behind appears at odds with Chevron's first requirement to "implement all practicable means" to store all the CO2. ## Simply difficult What Chevron was attempting to do was as simple as carbon capture and storage gets but still a complex exercise. The Gorgon LNG plant is supplied with gas from two offshore fields: Jansz-Io containing negligible CO2 and the Gorgon field with about 14 per cent CO2. LNG plants must extract all CO2 from the gas before it is liquified to prevent solid frozen CO2 damaging equipment. Chevron completed that first step, which is required for the plant to produce revenue, on time. The second step of CCS – storage - has cost $3.1 billion to mid-2020 and proved problematic despite Chevron having [studied it since 1998](https://www.documentcloud.org/documents/20440488-foi-2-gorgon-project-2020-letdf-annual-report-rev-1-ar?ref=boilingcold.com.au#document/p21/a2011340). ![Map of CO2 injection facilities on Barrow Island for the Gorgon LNG project, including compressors and wells for CO2 injection, surveillance and pressure management.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/08/BWI-CO2-map.jpg) **CO2 injection facilities on Barrow Island.** Source: Chevron Australia Pty Ltd Up to four million tonnes of CO2 a year extracted at the LNG plant has to be compressed to a so-called super-critical phase with the density of a liquid but flowing freely like a gas. The CO2 is then piped up to 7km and injected into a sandstone layer about 400m thick more than 2000m underground. About 4km away, water is pumped to the surface from the same layer to make room for the CO2\. This water is then pumped into a different layer of rock above the CO2. ## Not working: again, and again and again When Chevron eventually started preparing the equipment for startup it found [a long list of problems](https://www.documentcloud.org/documents/20509165-gorgon-project-carbon-dioxide-injection-project-low-emissions-technology-demonstration-fund-annual-report-1-july-2016-30-june-2017?ref=boilingcold.com.au#document/p11/a2046063) it had missed in the preceding years. The most serious was a design issue with the compressors that could cause water and CO2 to mix and form an acid that would corrode the equipment. In April 2017, Chevron [claimed its third $20 million tranche of funding](https://www.documentcloud.org/documents/20509166-gorgon-project-carbon-dioxide-injection-project-low-emissions-technology-demonstration-fund-annual-report-1-july-2017-30-june-2018?ref=boilingcold.com.au#document/p13/a2046066) from the Federal Government linked to the milestone "ready for startup of the first CO2 compressor." Months later, Chevron reported that CO2 injection would [not start until mid-2018](https://www.documentcloud.org/documents/20509165-gorgon-project-carbon-dioxide-injection-project-low-emissions-technology-demonstration-fund-annual-report-1-july-2016-30-june-2017?ref=boilingcold.com.au#document/p12/a2046064) to allow the compressors to be modified. The compressor modifications were incomplete in mid-2018, and Chevron pushed first CO2 injection[ back to early 2019](https://www.documentcloud.org/documents/20509166-gorgon-project-carbon-dioxide-injection-project-low-emissions-technology-demonstration-fund-annual-report-1-july-2017-30-june-2018?ref=boilingcold.com.au#document/p7/a2046065). However, Chevron also missed that target, and [injection did not begin until August 2019](https://australia.chevron.com/news/2019/carbon-dioxide-injection?ref=boilingcold.com.au). Even when CO2 injection began 3½ years after the first LNG production, the system was not fully operational. The wells designed to remove water to make way for the CO2 were [out of action](https://www.documentcloud.org/documents/20440488-foi-2-gorgon-project-2020-letdf-annual-report-rev-1-ar?ref=boilingcold.com.au#document/p11/a2011332) as they clogged with sand during testing. During 2020 CO2 injection averaged 70 per cent of maximum capacity under a series of permissions from WA's Department of Mining, Industry Regulation and Safety to operate without the water wells working. Finally, in December 2020, the regulator's patience wore out, and it [cut the permitted injection rate](https://www.documentcloud.org/documents/20793746-gorgon-project-carbon-dioxide-injection-annual-operational-report-to-wa-state-government-1-january-2020-31-december-2020?ref=boilingcold.com.au#document/p5/a2043302) to 30 per cent of maximum capacity until Chevron fixed the so-called pressure management system. Without the water being removed there was a risk that the increasing pressure required to pump the CO2 underground would fracture the rock around the injection wells and permanently damage the system's performance. Gorgon has been in production for 5½ years, but there has not been a day when all elements of the CO2 injection system worked at the same time. ## What's the deal? While on Barrow Island engineers were tackling technical problems in Perth Chevron and the Government were at loggerheads over the fine print of what the US giant and its partners Shell and ExxonMobil were obliged to do. In dispute was the start date of the first five-year period when 80 per cent of the CO2 from the reservoir must be injected. Then Environment Minister Stephen Dawson referred the question to the WA Environmental Protection Authority in May 2018, and the EPA finally reported back in September 2019. The EPA concluded that CO2 injection would not be assessed from when production began but from when each LNG train received its operating license: mid-2016 for Train 1 and mid-2018 for Trains 2 and 3. Production from Gorgon's second train started in October 2016, and the third train started in March 2017, yet Chevron did not receive an operating license for these trains until July 2018\. Before then, the two giant trains operated under a works approval usually uses for construction and a short period of commissioning after startup. This licensing arrangement significantly reduced the calculated shortfall in CO2 injection that Chevron and its partners are liable for. The first five-year period ends on Sunday July 18. Chevron is now required to tell the Government how the 80 per cent target could be met or how it will offset the shortfall. Chevron's main options are to propose that the 80 per cent average could be reached over a more extended period, or buy carbon credits to cover the shortfall to date. Given Chevron's continued failure to meet targets for CO2 injection, the Government would be naive to accept a delay in reckoning. ## What's the damage? *Boiling Cold* has collated all available data on Gorgon's emissions and made estimates for the 2020-2021 financial year. Carbon emissions from Gorgon have been terrible on several measures. ![Annual greenhouse gas emissions and CO2 injection at Chevron's Gorgon LNG plant. Analysis by Boiling Cold.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/07/image-4.png) Sources: Clean Energy Regulator emissions figures and Chevron reports to WA and Federal Governments. Analysis: *Boiling Cold*. Total emissions have exceeded what Chevron planned every year except in 2015-2016 when only one train operated for a few months and 2020-2021 when only two out of three trains operated while Chevron repaired cracked propane vessels. Emissions exceeded the generous Federal Government safeguard mechanism baseline for two years, but Chevron was allowed the flexibility to have performance measured over a three-year period. About 26 million tonnes of carbon pollution has been emitted from burning gas to generate power or drive compressors. ![Column chart showing the shortfall in CO2 injection at Chevron's Gorogn LNG project on Barrow island Western Australia.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/07/image-6.png) Source: *Boiling Cold* Almost 15 million tonnes of CO2 has arrived on Barrow Island with the gas produced from the offshore fields, and about 30 per cent has been injected underground, well short of the 80 per cent target. If all reservoir CO2 vented because 80 per cent injection was not achieved counted, then Chevron and its partners would be liable for about seven million tonnes of CO2. However, the EPA's determination that emissions before an operating licence is awarded do not count means the liability is about 4.8 million tonnes. Purchase of Australian Carbon Credit Units to offset the shortfall at the recent spot price of about $20 a tonne would cost about $100 million. Chevron's $47 million share of such a bill would be just over two days of its 2020 Australian revenue of $US5.9 billion ($7.9 billion). Minister for Environment and Climate Action Amber-Jade Sanderson expects Chevron to provide an update regarding CO2 injection at Gorgon once the first five-year measurement period ends on July 18. > "The Minister has called Chevron in for a meeting to discuss her concerns and to seek an explanation of how the company intends to address the issue," a spokesperson said. The Department of Water and Environmental Regulation has requested Chevron provide details regarding its CO2 injection performance by August 9\. Chevron declined to comment. Chevron operates and owns 47 per cent of Gorgon. Shell and ExxonMobil own 25 per cent each, and three Japanese power utilities hold the remaining equity. --- *Updates:* *18 July 2021, 7:00 PM: Added Chevron 2020 Australian revenue and equity shares of the Gorgon project.* *July 2021: Added that Chevron must report to DWER by August 9.* --- ### Solar growth, EV inevitability and emissions drive WA energy transformation URL: https://www.boilingcold.com.au/solar-growth-ev-inevitability-and-emissions-drive-wa-energy-transformation/ Last updated: 2021-08-25T06:59:30.000Z Concern that unconstrained power from rooftop solar could destabilise the South West power grid led Energy Minister Bill Johnston to [launch an energy transformation strategy](https://www.mediastatements.wa.gov.au/Pages/McGowan/2019/03/McGowan-Government-launches-Energy-Transformation-Strategy.aspx?ref=boilingcold.com.au) for the South West of WA in March 2019. A taskforce produced a roadmap for integrating so-called distributed energy resources like rooftop solar and batteries, revamped rules for the electricity market and grid, and a 20-year Whole of System Plan. From July 1, responsibility passed to Coordinator of Energy Kate Ryan and her team at Energy Policy WA, and the challenge will be to implement policy faster than technology supersedes it. Ryan and Minister for Energy Bill Johnston explained to the industry what is coming next at a forum on Wednesday. One constant is the growth of rooftop solar generation that, not slowed by COVID, adds one megawatt of capacity a day to the South West Interconnected System. Ryan said at times, 80 per cent of power in the SWIS has come from renewable energy leading to increasing problems of low demand for the large generators, particularly in spring and autumn when solar output is still high but the need for heating or cooling is low. In March 2019, as Johnston launched the energy reform process, The Australian Energy Market Operator warned that the [power system could begin to become unstable](https://www.aemo.com.au/-/media/Files/Electricity/WEM/Security%5Fand%5FReliability/2019/Integrating-Utility-scale-Renewables-and-DER-in-the-SWIS.pdf?ref=boilingcold.com.au) between 2022 and 2024 unless there were significant changes. On January 10, 2020, 95,000 customers had a taste of instability when NewGen's combined-cycle gas power plant in Kwinana tripped and kicked off a chain of events that saw [12 units across the system trip within 4 minutes](https://www.aemo.com.au/-/media/files/electricity/wem/security%5Fand%5Freliability/2020/aemo-investigation-report---swis-ufls-event-10-january-2020.pdf?la=en&ref=boilingcold.com.au). The system was not fully operational for four hours. In response, the Government tightened the enforcement of performance standards for generators paid to be available as required as part of WA's capacity market. Johnston said the generators had been paid enormous amounts of money since 2005. > "It's not acceptable for the Government for us to pay the capacity payments and then not have the generators perform when required," Johnston said. S**ymphony silently waits for Canberra cash** A future high renewables grid needs every component in front of and behind the meter to work together to balance fluctuating supply and demand. Johnston announced a trial run – [dubbed Project Symphony](https://www.mediastatements.wa.gov.au/Pages/McGowan/2021/02/Virtual-Power-Plants-to-become-a-reality-in-WA-first.aspx?ref=boilingcold.com.au) \- in March: the batteries, solar panels and large appliances like air conditioners and electric hot water systems of 500 homes and businesses in Southern River will be coordinated into a virtual power plant. Unfortunately, little has happened since. The State Government has committed $27 million to the $35 million budget for the Synergy and Western Power effort, but Federal funds for the remained are yet to arrive. Johnston said a detailed announcement would come soon on a project Ryan dubbed as critical to the energy transformation. **Flat tariff questioned** Apart from keeping the lights on, nothing is as politically crucial in energy policy as the 29c/kWhr A1 tariff set by the Government and charged by Synergy to householders. "I try and be a Minister that's got a bit of bravery, but I'm nervous to say that there will be further reform," Johnston said. The trouble is the amount charged does not reflect Synergy's costs. Nor, according to Ryan, is a flat tariff compatible with a future grid high in distributed energy resources that Project Symphony will test. Synergy does have an optional Smart Home Plan that deters consumption charging 56c/kWhr during the evening peak but a low 15c/kWhr at night. Ryan said moire tariffs would be trialled. Johnston said he was not opposed to tariff reform as long as low-income earners were looked after. "What the future holds - who knows - but I can guarantee you that if there is further bill reform, it'll be gentle, loosely coordinated, and it won't leave anybody behind," Johnston said. **Coal closures still on the agenda** One group concerned about being left behind isCollie's miners and power station workers. Two units of Synergy's Muja power station's four generators will close in each of 2022 and 2024. Further closures in Collie are part of any discussion about the future of the South West grid. [Collie wobbles: WA power’s financial messBefore it takes WA to a clean, green renewable energy future the State Government has problems a plenty in still vital coal-fired power.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/07/1d-600x450.jpg)](https://www.boilingcold.com.au/collie-wobbles-wa-powers-financial-mess/) Ryan said the Government had to balance the need to lower emissions, keeping the power system secure and stable, and supporting affected workers. "Government will continue to explore the right time for the transition out of other coal-fired power stations over time," Ryan said. > "The financial viability of some of these older thermal technologies is struggling as the power system transitions." **No cash for EVs** Car buyers waiting for Government help before splurging on a Tesla were left disappointed. Johnston said Hyundai, Mercedes and BMW had all told him they would only be making electric cars in ten years. "The government doesn't need to incentivise anybody to go electric because - guess what - you're going to be buying electric cars," Johnston said. > "It's a bit rich for these car companies to ask the taxpayers to pay for them not to reduce the price of their cars." Johnston said the Government's role was to ready the network for "massive challenge" when 100,000 electric vehicles were connected to the grid. An electric vehicle action plan would be released in a few months. **2023 plan to price carbon** The industry will next see the details of the Government's direction in late 2023, when the second Whole of System Plan is scheduled for release. "It'd be lovely to do one quicker, but the sheer fact is they just take 18 months to two years to do," Ryan told *Boiling Cold* after the event. "We need to engage with the sector on the assumptions, which we did very quickly last time, and we'd like to do better this time." Ryan said green hydrogen projects on the fringes of the grid were now more likely and would feature in some scenarios. The most controversial aspect of the Whole of System Plan was the absence of any carbon emissions targets or a carbon price in the modelling. [WA plans a slow move to greener powerRooftop solar will make South-West WA power greener, but there is no path outlined for Collie’s future or to net-zero by 2050, according to a WA Government study.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/10/fre-sonneveld-q6n8nIrDQHE-unsplash-reduced.jpg)](https://www.boilingcold.com.au/wa-plans-a-slow-move-to-greener-power/) When the WoSP was launched in October 2020, Johnston said the exclusion of a carbon price was "a political question." "If the Federal Government set a price on carbon, then it would be very easy to adjust the modelling," Johnston said at the time. The WA Government's Climate Policy released in December required future Plans to include scenarios to achieve net-zero emissions by 2050. Ryan told *Boiling Cold* the next Plan would effectively include a carbon price, explicitly or implied, but how it would be modelled was not yet determined. > "You have to value the difference between getting the low carbon outcome, and the high carbon outcome, and that translates into an indicative price," Ryan said. **The role of gas** Johnston kicked off the energy reform effort in March 2019, months after AEMO predicted WA [gas supply would exceed gas demand](https://aemo.com.au/-/media/Files/Gas/National%5FPlanning%5Fand%5FForecasting/WA%5FGSOO/2018/2018-WA-GSOO.pdf?ref=boilingcold.com.au) for at least the next 10 years. However, three years later, in December 2020, AEMO was far less optimistic, and its base case expected the market to be [well supplied only until 2026](https://aemo.com.au/-/media/files/gas/national%5Fplanning%5Fand%5Fforecasting/wa%5Fgsoo/2020/2020-wa-gsoo-report.pdf?la=en&ref=boilingcold.com.au). With Woodside's Browse LNG project on life support and its Scarborough project delayed, WA could no longer rely on a continual stream of new LNG projects to keep the State supplied with gas. Ryan said her team would not model the WA gas market but needed to understand how it affected power generation. "I don't know what the future trajectories for gas are," Ryan said. > "At some point, it will be swept up in the decarbonisation agenda, but how and where I think that remains to be seen." Ryan said a review of gas price assumptions was definitely required for the new Whole of System Plan. --- *Correction: 5PM, 18 July 2021: One megawatt of solar capacity is added to the South West Interconnected System every day, not every week.* --- *Main image: WA South West Interconnected System graphic. Source: Energy Policy WA, Whole of System Plan.* --- ### Ex-Woodside boss Peter Coleman joins Schlumberger board URL: https://www.boilingcold.com.au/peter-coleman-joins/ Last updated: 2021-08-25T07:00:08.000Z Former Woodside chief executive Peter Coleman has joined the board of oil services provider Schlumberger a month after ending 10 years at the local LNG player. Schlumberger is an international giant, listed on four stock exchanges, that provides software and on-site services to help oil and gas companies analyse subsurface information and drill wells. Schlumberger's market capitalization of $US41 billion ($55 billion) is about double that of Woodside. Coleman's appointment, [announced by Schlumberger on Tuesday](https://www.sec.gov/ix?doc=/Archives/edgar/data/87347/000119312521213672/d186734d8k.htm&ref=boilingcold.com.au), is effective from July 7 and he will be subject to re-election at the company's next annual general meeting. Schlumberger's statement said under Coleman's leadership from 2011 to 2021 "Woodside diversified its portfolio to include traditional gas projects, liquefied natural gas projects and hydrogen projects." Coleman announced in December 2020 that he intended to retire in the second half of 2020\. However, with a week's notice in April he handed over to Meg O'Neill who is now the interim chief executive. [Peter Coleman exits Woodside with no successor chosenPeter Coleman will end his time as Woodside chief executive next week and Meg O’Neill will take charge until the board appoints a permanent leader.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/04/wel-succession.jpg)](https://www.boilingcold.com.au/woodside-farewells-peter-coleman-early-without-naming-a-successor/) The messy departure occurred amidst industry chatter of a falling out between Coleman and Woodside chair Richard Goyder. Woodside now has an interim chief executive while it prepares for its most important decision in a decade - whether to approve the Scarborough to Pluto LNG project - that will define both the company and the role of a permanent CEO. Other growth prospects pursued by Coleman, such as [Browse ](https://www.boilingcold.com.au/woodside-browse-lng-is-dead/#:~:text=Woodside%20showed%20its%20true%20commitment,suits%20Woodside%20to%20pretend%20otherwise.)and Kitimat in Canada, have fallen from favour. Woodside is now left with just one option to replace LNG production that is falling at the North West Shelf now and will start declining from Pluto later this decade. [Woodside: Scarborough or stranded like a beached whaleFor Woodside, it is Scarborough or bust. Incredibly the LNG specialist has no plan B ready if its last chance to develop an LNG project evaporates. And Scarborough is no sure thing.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/04/whale-outside-woodside-HQ.JPG)](https://www.boilingcold.com.au/woodside-scarborough-or-stranded-like-a-beached-whale/) In April Coleman told the *AFR* he planned to do "something in technology around [new energy and carbon](https://www.afr.com/companies/energy/coleman-calls-time-on-big-new-lng-projects-20210422-p57lii?ref=boilingcold.com.au)." In contrast, Schlumberger is totally focused on providing services to oil and gas companies "from a well’s cradle to grave." In 2019 Woodside signed a [seven-year deal](https://www.slb.com/newsroom/press-release/2019/pr-2019-0820-delfi-slb-woodside?ref=boilingcold.com.au) for about 200 employees to use Schlumberger's DELFI software for subsurface analysis. --- *Main image: Former Woodside chief executive Peter Coleman. Source: Woodside Energy Limited* --- ### $94B green ammonia hub proposed for the Nullarbor URL: https://www.boilingcold.com.au/94b-green-ammonia-hub-proposed-for-the-nullarbor/ Last updated: 2021-08-25T07:00:59.000Z The companies behind the Pilbara's giant Asian Renewable Energy Hub are doubling up on WA with a proposed $US70 billion ($94billion) project on the Nullarbor. The Western Green Energy Hub would produce up to 50GW of wind and solar power to make 3.5 million tonnes a year of green hydrogen for the export of 20 million tonnes of green ammonia. The proposed site stretches more than 200km west of the SA border and in some areas, is more than 100km in the north-south axis. The Trans-Australia railway line forms the site's northern boundary, and the Eyre Highway passes through the coastal part of the site. ![Site of the proposed Western Green Energy Hub wind, soalr, ammonia project in Sourh East Western Australia.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/07/wgeh_map.jpg) **Western Green Energy Hub site**. Source: [InterContinental Energy](https://intercontinentalenergy.com/western-green-energy-hub?ref=boilingcold.com.au) The project proponents InterContinental Energy, CWP Global and Mirning Green Energy Limited have secured a WA government license to collect data and develop a feasibility study. Hydrogen Industry Minister Alannah MacTiernan said the WGEH was a truly massive proposal that would see WA home to one of the world's largest renewable energy projects. > "We look forward to continuing to work with the consortium as they develop their detailed studies and move towards an investment decision," MacTiernan said. The consortium is targeting a final investment decision after 2028, [according to InterContinental Energy](https://intercontinentalenergy.com/western-green-energy-hub?ref=boilingcold.com.au). The 15,000km2 site has access to the coast to allow the ammonia to be exported. Green fuels produced at the site would meet future demand from power generation, shipping, aviation and heavy industry such as steel, chemicals and mining, according to the [WGEH media release](https://intercontinentalenergy.com/announcements/WGEH-PressRelease-20210713.pdf?ref=boilingcold.com.au). The green hydrogen sector is predicted to become a US$2.5 trillion market by 2050. MacTiernan said renewable hydrogen projects were being progressed across the State. "Importantly, this project is a powerful collaboration between the Mirning traditional owners and industry and would be a transformational opportunity for the community," MacTiernan said. The Mirning People have carried equity through Mirning Green Energy Limited - a wholly-owned subsidiary of the Mirning Traditional Lands Aboriginal Corporation - and a permanent board seat. WGEH chair Brendan Hammond said the Hub was working with the Mirning People, the original owners of the land, to create a long-term partnership. Mirning Traditional Lands Aboriginal Corporation chair Trevor Naley said the Mirning People were excited to hold a stake in the Hub. > "These commitments will encourage our young indigenous people to dream big, knowing that these ambitions can be realised," Naley said. "Pride in oneself, in culture and community will end the welfare cycle which has plagued many indigenous families." The $US36 ($48 billion) Asian Renewable Energy Hub is about half the size of today's announcement with an eventual planned build-out to 26WGW of power, 3GW of which is reserved for power sales to the region. [Pilbara green ammonia hub plans to make wind turbinesThe $US36 billion Asian Renewable Energy Hub wants to make wind turbine towers as well as ammonia in the Pilbara to overcome logistics issues.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/06/180508_AREH_Photomontage_Site-E_Final--1-.png)](https://www.boilingcold.com.au/green-ammonia-hub-plans-a-decade-of-wind-turbine-manufacturing-in-the-pilbara/) WGEH investors InterContinental Energy and CWP Global also participate in the AREH with Danish wind turbine manufacturer Vestas and private investment company Pathway Investments. The Pilbara project had a recent setback when Federal Environment Minister Sussan Ley [judged it to be "clearly unacceptable"](https://www.boilingcold.com.au/feds-shoot-rare-green-arrow-at-us36b-pilbara-ammonia-hub/) due to the impact on coastal wetlands. The project plans to resubmit its application. In June, InterContinental Energy project management director Dr Raymond Macdonald said the Asian Renewable Energy Hub was still on track for a final investment decision in 2025. --- *Main image: Eyre Highway on the Nullarbor Plain in South Australia. Source: Photo by [Fiona Smallwood](https://unsplash.com/@thepeoplesdigital?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) on [Unsplash](https://unsplash.com/s/photos/nullarbor?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText)* --- ### Concern over corrosion found at Woodside’s North West Shelf LNG URL: https://www.boilingcold.com.au/concern-over-corrosion-found-at-woodsides-north-west-shelf-lng-plant/ Last updated: 2021-08-25T07:02:01.000Z Woodside is investigating corrosion identified this week on a North West Shelf LNG train, and there are concerns the problem could be more widespread at the plant. Woodside started a [long-planned shutdown](https://www.woodside.com.au/sustainability/working-openly/facility-maintenance-information?ref=boilingcold.com.au) of Train 4 of the NWS LNG plant near Karratha in mid-June. *Boiling Cold* understands earlier this week radiography results revealed several areas on propane pipework were corroded to less than half the original wall thickness. Such a material loss would dramatically increase the risk of flammable propane leaking – a loss of containment in industry terms - when the train is in operation. The pipework was covered in a fire protection coating called Chartek that *Boiling Cold* understands was found to be cracked during a 2017 inspection. Train 4 was to be shut down for maintenance last year, but the work was [pushed back in March 2020](https://files.woodside/docs/default-source/asx-announcements/2020-asx/response-to-market-conditions.pdf?sfvrsn=31d33c3d%5F1&ref=boilingcold.com.au) when Woodside cut costs in response to the COVID-19 driven crash in oil prices. Corrosion under pipework insulation or coatings that allows water to enter due to poor installation or later cracks is a well-known problem in the oil and gas sector and made worse by the difficulty of detecting it. After the discovery on Train 4, it is understood Woodside directed inspectors to urgently look at the Chartek coating on two other NWS LNG trains that, unlike Train 4, are operating. Department of Mines, Industry Regulation and Safety director dangerous goods and petroleum safety Steve Emery said the regulator is aware of potential corrosion concerns at the LNG plant. > “The company advised the department that during routine maintenance as part of a scheduled shutdown, corrosion was found on some of the plant’s components,” Emery said. Emery said that as the train is shut down and there was no loss of hydrocarbons, Woodside was not formally required to report the matter to DMIRS. “Woodside is currently investigating the nature and extent of the corrosion,” Emery said. *Boiling Cold* asked DMIRS what it was doing to ensure the other four NWS LNG trains currently operating were safe. “The department has no plans to take any action at this time but remains in close contact with the company,” Emery said. Woodside planned two NWS train shutdowns in 2021: Train 4 in the March quarter when the Goodwyn platform is being worked on, and Train 2 in the September quarter to coincide with shutdowns on the North Rankin platforms. The planned NWS shutdowns pushed Woodside’s expected 2021 LNG production to 70 to 72 million barrels of oil equivalent, down from 75 MMboe in 2020. *Boiling Cold* asked Woodside how serious the corrosion on Train 4 was, whether the other NWS trains were safe and if the company still expected to meet its 2021 production guidance. Woodside declined to answer any questions. Later Woodside told *Reuters* there was no material impact to current production guidance. "We have discussed with the regulator and are taking all necessary measures to ensure the ongoing safety of our people and operations," the spokesperson said. Train 4 is one of the North West Shelf's newest LNG trains and has been in operation since 2004\. The North West Shelf's first three smaller trains entered service from 1989 and Train 5 started up in 2008\. Chartek is a so-called intumescent technology that expands when heated to provide insulation from heat from a fire. Hydrocarbon fires often cannot be extinguished with water, so it is critical vital structures and piping remain operational during a fire so the fuel source can be switched off to put the fire out. The coating is widely used in the oil and gas industry, including on Woodside’s Pluto LNG plant and Goodwyn A platform. Woodside’s discovery of problems during a planned shutdown comes a year after Chevron’s similar experience at its Gorgon LNG project. At Gorgon, cracks found on propane vessels extended the train shutdown and were sufficiently serious to require Gorgon’s other two trains to be shut for similar repairs. As a result, the $US54 billion project has operated at two-thirds capacity for almost all of the past 12 months. Six equal partners own the North West Shelf project: operator Woodside, BHP, BP, Chevron, Shell, and Japan Australia LNG that Mitsui and Mitsubishi own. --- *Updates* *9 July 2021, 6:20PM: clarified in first para that problem could be more widespread at the plant, not widespread over the industry.* *10 July 2021, 10:00AM: added Woodside comments to Reuters* --- *Main image: North West Shelf project's Karratha Gas Plant. Source: Woodside Energy Limited* --- ### A green Pilbara needs wind and one network: Alinta URL: https://www.boilingcold.com.au/a-green-pilbara-needs-wind-and-one-network-alinta/ Last updated: 2021-08-25T07:02:49.000Z For the Pilbara to decarbonize, miners need to join their transmission grids, add wind and for about a decade use a lot of gas, according to Alinta's Gary Bryant. Alinta Energy general manager asset strategy Gary Bryant said miners could achieve 60 to 70 per cent of renewable energy for their stationary power needs "without really struggling too much, so long as you've got to think about what you're doing first." > "It's overly simplistic, but it's not hard to decarbonize your stationary power system," Bryant told the Pilbara Summit in June. Bryant said miners had to move from diesel to gas, generate solar and wind power, and add storage and network devices to cover the variability of renewables. Solar without wind required a bigger battery and could achieve about a 50 per cent renewable energy share with gas generating the rest of the power. Bryant said this level of renewable penetration might get some miners to their 2030 emissions targets, but cutting deeper required wind. The 15-year Alinta veteran said 100 per cent renewable power was unlikely "anytime soon," and gas would be required in the transition for at least 10 years as economical storage was not yet available to cover extended periods with little wind or solar. Bryant said pumped hydro storage would never work in the Pilbara, as the landscape did not have sufficient elevation differences. > "We're in a bit of a raging street battle at the moment between hydrogen and battery storage as to what's going to be the most economic form of storage." Bryant said current batteries were only suitable for storing up to one day of power. Finding locations for potential wind farms was difficult as a good wind resource had to be inland away from the highest cyclonic winds, near existing infrastructure, not on area likely to be mined, and away from heritage areas. "I'm not going to deny that it's not a problem, but if you can find a spot, that's absolutely the way to go." Bryant said the future of renewable energy in the Pilbara was "dead in the water" without the support of traditional owners. Alinta has found "a couple" of prospective wind farm sites and hoped to progress them over the next 18 months. Sodars, or sonic detection and ranging devices, that use dust particles in the air to measure wind speed have been deployed to some sites. ## Clean and mobile not yet solved Mobile equipment such as haul trucks and trains are more difficult to decarbonize than power generation. Bryant said the electrification of mobile equipment would push up gas consumption until storage technology improves, requiring efficient utilization of gas pipelines. > **"**Gas pipelines just can't carry enough gas for all of the mining activities to be electrified," Bryant said. Bryant said a small miner could use 200 million litres of diesel a year. "That's a pretty substantial amount of carbon that you have to abate in order to get the carbon-neutral targets," Bryant said. "The fact is that technology is just not there yet." Switching a haul truck to LNG or compressed natural gas cuts emissions by only about 27 per cent. The practicality of catenary systems - similar to Melbourne's trams – was heavily dependent on the mine layout. Batteries had insufficient capacity, although the industry was supporting the development of fast charging technology. The use of hydrogen fuel cells lost about 20 per cent of the renewable energy used to make the hydrogen and a further 20 per cent when the hydrogen generated electricity in a fuel cell. An added complication is that loads from mobile equipment were highly variable, such as haul trucks using more coming out of a pit loaded than going down into a pit empty. ## Transmission cooperation key One step to decarbonize the Pilbara has no technical problems but decades of commercial rivalry to overcome. Bryant said the Pilbara has multiple transmission networks: Horizon Power's North West Interconnected System between Port Hedland and Karratha; Rio Tinto's lines from Karratha to Hope Downs; Alinta's network between Newman and Cloudbreak; and soon Fortescue's network for its Ironbridge magnetite project. BHP also transmission lines. > "None of these networks are really connected," Bryant said. > "No one really works well together, > "It's all about producing the power that you need for your mining operations." Bryant said if the Pilbara had one interconnected network like the South West of WA it would "open the door for carbon reductions for the miners." Existing miners could share loads and diversify their renewable generation sources. New entrants could avoid the need to use standalone diesel power plants. Bryant said a combined network would need an independent operator. > "Iron ore miners, I'm not saying they don't trust each other, but they're certainly interested in protecting their commercial position," Bryant said. "And it's unlikely that an iron ore miner controlling the network that they are going to be sharing is going to be palatable, "So, you have to figure out a commercial model where no one has control, but everyone has a say." Bryant said compensating companies that had invested heavily and taken risks to develop their networks would be complex. Until storage and interconnectivity improve, miners are likely to prioritize ensuring they always have sufficient generation capacity over reducing costs and emissions. "Because of the amount of money on the line, capacity is going to stay king," Bryant said. > "I'm pretty sure BHP and Fortescue and Rio aren't going to thank anyone for no power at $200 a tonne of iron ore." --- *Main image: Fortescue Metals Groups Iron Bridge project. Source: Fortescue.* --- ### Review calls for tougher line on offshore safety URL: https://www.boilingcold.com.au/review-calls-for-a-tougher-line-on-offshore-safety/ Last updated: 2021-08-25T07:03:45.000Z A Federal Government review of safety in the offshore oil and gas industry has recommended a closer review of design changes, owner's responsibilities and diving; and a greater focus on worker’s mental health. The Department of Industry, Science, Energy and Resources yesterday released its [offshore oil and gas safety policy](https://www.industry.gov.au/data-and-publications/offshore-oil-and-gas-safety-review-0?ref=boilingcold.com.au) review completed in April. The review found Australia has a “leading practise regulatory framework,” according to the DISER website, but also found areas that needed improvement to ensure the safety of offshore workers. The safety of an Australian offshore oil and gas facility is the responsibility of the operator that must document their plans in a safety case approved by offshore safety regulator NOPSEMA. The safety case document is central to how offshore safety is managed in Australia. Operators are required to update the safety case and resubmit it for approval by NOPSEMA if the safety risk has significantly increased. However, the DISER review found that operators often made changes to facilities that significantly increased the risk to workers without submitting a revised safety case for NOPSEMA’s approval. The review recommended safety cases identify all areas critical to safety, and any changes to these areas trigger a review by the regulator. NOPSEMA should also be involved in concept selection for a new facility so design defects can be addressed early on when it is easier and cheaper. ## Owning the safety problem The review covered the situation when the owner and titleholder contracts another company to operate a facility. This occurred on the Northern Endeavor oil vessel owned by now-liquidated Northern Oil and Gas Australia and operated by Upstream Production Solutions. [Federal Govt regulates poorly and gets $360M Northern Endeavor clean-up billThe Northern Endeavor mess started with Woodside paying to rid itself of a rusty ageing asset, ended with a $362 million liability for the Government and in between was a regulatory shambles.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/09/northern-endeavour.jpg)](https://www.boilingcold.com.au/poor-federal-regulation-allowed-the-360m-northern-endeavor-mess/) Currently, owners have no direct responsibility for safety “although it is the entity in control of the project and cash flow to the operator.” DISER proposed the owner be responsible for ensuring the operator can and does carry out its duties. DISER wants operators to ensure health and safety representatives chosen by the workers to receive training. The HSRs should have the power to request operators review safety procedures and put concerns to NOPSEMA. The review found the COVID-19 pandemic revealed the importance of managing both the physical and mental health of offshore FIFO workers. It proposed the legislated definition of health be expanded to “physical and psychological health” to match the broader definition used in many other safety regimes. DISER wants operators to manage all factors that can fatigue workers, including sleeping arrangements and long travel times not accounted for as work time. The review also recommended stricter legislative measures to protect workers from discrimination and coercion. ## Diving safety a focus The safety of divers has caused NOPSEMA to act several times over the past decade. In 2011 a diver working for Technip on the Woodside-operated Wanaea-Cossack oil fields was injured when a [high-pressure water blaster broke](https://thewest.com.au/news/australia/subsea-diver-suffers-freak-mishap-ng-ya-174454?ref=boilingcold.com.au). Technip was later fined $70,000. After a NOPSEMA investigation of rescue capabilities for divers working near Chevron’s Wheatstone platform in 2015, Technip was charged, and the matter is still working its way through the legal system. DOP Subsea is reported to have paid millions of dollars in compensation to three divers who [received brain damage while diving for Inpex’s Ichthys project](https://thewest.com.au/news/court-justice/brain-damaged-divers-paid-millions-in-legal-settlement-with-dof-subsea-australia-ng-b881779518z?ref=boilingcold.com.au) in 2017\. The Commonwealth Director of Public Prosecutions has commenced legal proceedings against DOF Subsea. The DISER review recommended NOPSEMA have greater powers to request information on diving plans and withdraw approval for dives, and have more time to review the plans of diving companies. The revised policy framework proposed by the review needs approval by the Federal Government and then DISER will develop it in more detail. Separate from the DISER review yesterday, NOPSEMSA released new guidance on [how operators should manage ageing facilities](https://www.nopsema.gov.au/blogs/new-guidance-managing-ageing-assets-and-life-extension?ref=boilingcold.com.au). --- *Main image: Pyrenees Venture oil floating production storage and offloading vessel off the WA coast. Source: BHP.* --- ### Chevron exports jobs with Gorgon $6B subsea compression URL: https://www.boilingcold.com.au/chevron-exports-jobs-with-gorgon-6b-subsea-compression/ Last updated: 2021-08-25T07:04:59.000Z The Gorgon LNG project will spend about $US4 billion ($6 billion) installing gas compressors on the seabed to maintain gas supply from the Jansz-Io field to the LNG plant 135km away. Contrary to the hype, Chevron will spend little of the budget in Australia. Chevron Eurasia Pacific president Nigel Hearne said the project was Chevron's most significant capital investment in Australia since the Gorgon Stage 2 project in 2018. The Gorgon LNG project that cost $US54 billion to build was supplied with gas from 18 wells. Like all LNG projects, spending must continue to maintain gas supply to the LNG trains. The $US4 billion Gorgon Stage 2, nearing completion now, is the drilling and connection of eleven additional wells into the Gorgon and Jansz-Io fields to maintain supply as production reduces pressure in the reservoirs. As reservoir pressure continues to decline, more wells cannot keep the LNG plant full, so Chevron is installing a compressor on the seabed to pump gas from Jansz-Io to Barrow Island. ![Map showing the Gorgon and Jansz-Io gas fields off north west Australia connected to Chevron's Gorogn LNG plant by subsea pipelines.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/06/image-22.png) **Gas fields feeding the Gorgon LNG plant**. Source: [Chevron website](https://australia.chevron.com/our-businesses/gorgon-project?ref=boilingcold.com.au). Subsea compression was first used on the Asgard field off Norway in 2015. The equipment on the seabed, 260m below the surface of the North Sea, is complicated. The raw gas from the wells is cooled, separated into gas and liquid streams that are compressed and pumped respectively, then the gas is cooled, combined with the liquids and flowed through a 40km pipeline. Chevron originally planned a manned semi-submersible compression platform that would require the gas to be piped to the surface facility, compressed, and then piped back to the subsea pipeline to Barrow Island. *Boiling Cold* understands putting compressors on the seabed with an unmanned field control station floating above offered substantial cost savings to Gorgon's partners. The project is still massive, and the 6500t subsea facility, 27,000t 93m-square field control station and 135km power cable will take five years to manufacture and install. ## Minimal local content with maximum local spin Little of the $6 billion budget will be spent in Australia. Chevron described subsea compression as an emerging technology new to Australia and with limited experience elsewhere in its [2018 Australian Industry Participation plan](https://www.industry.gov.au/sites/default/files/aip/chevron%5Fjansz-io%5Fcompression%5Fproject%5Fsummary%5F30may19.pdf?ref=boilingcold.com.au). > "The J-IC Project will need to leverage this international knowledge and experience," the plan said. "Due to the complex design specifications and limited global suppliers of specialist components required for the J-IC Project, some components will need to be fabricated and manufactured outside Australia such as subsea electrical equipment, control system, compression modules, process modules and barrier fluid system; as well as subsea umbilicals, offshore (subsea) HV power cables and (as required) gas turbine generation equipment." ![Graphic of the Jansz-Io subsea compression station to be installed for Chevron's Gorgon LNG project.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/07/J-IC---Subsea-Compression-Station.jpg) **Subsea compression station**. Source: Chevron Aker that designed and built the original subsea compression for Asgard, will likely build its equipment in Europe. The Norwegian company's contract with Chevron is [worth about $US800 million](https://content-app.com/?action=leadgen&id=NjE3NCMjIyNodHRwczovL3d3dy5yZXV0ZXJzLmNvbS9idXNpbmVzcy9lbmVyZ3kvYWtlci1zb2x1dGlvbnMtd2lucy04MDAtbWxuLWNoZXZyb24tY29udHJhY3QtYXVzdHJhbGlhLTIwMjEtMDctMDIv&is%5Fproduct=0&ref=boilingcold.com.au). Chevron's plan states the floating control station will be built overseas. The reality is that most work will be done outside Australia. The low local content, which may be technically and economically justified, was not reflected in the torrent of coordinated but unoriginal public relations that followed today's announcement from Chevron's headquarters in California. Chevron Australia managing director Mark Hatfield said the project was expected to deliver meaningful contracting opportunities for Australian businesses. "Meaningful" is not easily quantified. APPEA WA director Claire Wilkinson also said, "the project is expected to provide meaningful contracting opportunities." > Chamber of Minerals of Energy chief executive Paul Everingham said he knows "Chevron is keen to ensure there will be meaningful contracting opportunities for Australian businesses." Resources Minister Keith Pitt said the $6 billion spend would create about 350 construction jobs over the five years. ## Plenty of homework before the big decision Chevron Jansz-Io compression engineering manager Rob Jones told the AOG Conference in Perth in March that the business case for subsea compression was confirmed in 2014. Jones said when a concept study started in 2015; many people considered subsea compression to be "too much of a technology step out." However, Equinor's success at Asgard and later at its Gullfaks field showed the technology worked. > "We're confident it now has the runs on the board to take us forward as a firm basis for reliably supplying gas to the onshore facilities," Jones said. The principal technology leaps from Asgard that Chevron had to consider carefully were a water depth of 1350m, not 300m and a 30 per cent higher design pressure. The final 2400m of the power cable that rises from the seabed to the field control station required detailed analysis to avoid fatigue issues common on so-called dynamic risers in the area. The concept study concluded that subsea compression was cheaper and better in some health and safety areas. Chevron's chosen option does not have people and hydrocarbons in close proximity, unlike a manned compression platform. The front end engineering for subsea compression ran from March 2019 to July 2020\. *Boiling Cold* understands the 12-month delay from the end of FEED to FID today was partly driven by concerns from Gorgon partner Shell about the new technology. Jones said emissions from subsea compression would be significantly less than a compression platform. The project will receive 50MW of power from Barrow Island. Chevron operates and owns 47 per cent of Gorgon. Shell and ExxonMobil own 25 per cent each, and three Japanese power utilities hold the remaining equity. --- *Update: July 4 2021: added value of Aker contract.* --- *Main image: Jansz-Io field control station and subsea compression station. Source: Chevron Australia Pty Ltd.* --- ### Green ammonia hub plans a decade of wind turbine manufacturing in the Pilbara URL: https://www.boilingcold.com.au/green-ammonia-hub-plans-a-decade-of-wind-turbine-manufacturing-in-the-pilbara/ Last updated: 2021-08-25T07:06:24.000Z The giant $US36 billion Asian Renewable Energy Hub wants to make wind turbine towers as well as ammonia in the Pilbara to overcome difficulties shipping the massive steel structures to the remote site. The project to make up to 10 million tonnes of green ammonia a year will be powered by 1743 wind turbines and 25 million solar panels progressively installed over a decade. The nearest ports to the vast site are Port Hedland 250km to the south and Broome, a 375km drive to the north. InterContinental Energy project management director Dr Raymond Macdonald said the 9 to 10 MW turbines would have a hub height of 175m. > "We can't deliver towers of that size on the Great Northern highway without blocking it for everybody forever," Macdonald said. The project's schedule would require a massive tower trucked in every second day for ten years. ![A map of the location of the Asian Renewable Energy Hub between Port Hedland and Broome in the Pilbara region of Western Australia, inland of Eighty Mile Beach.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/06/image-20.png) **Hub location between Port Hedland and Broome**. Source: AREH presentation at Pilbara Summit Instead, the proponents plan to deliver plate steel to the site, roll it, make tower assemblies and then move these to the turbine installation locations without traversing public roads. Moulding the 100m-long blades on-site is also being considered. Macdonald told the Pilbara Summit in Perth last week that the size and duration of the project provided an incentive to invest in equipment that most renewable projects could not justify. In June, the project received a [shock "clearly unacceptable" decision](https://www.boilingcold.com.au/feds-shoot-rare-green-arrow-at-us36b-pilbara-ammonia-hub/) from Federal Environment Minister Sussan Ley. Macdonald said the project needed to review some of its environmental constraints and resubmit its application. > "It doesn't slow us down; we still anticipate an FID by the end of 2025," Macdonald said. Ley's is concerned about the effect of planned ammonia offloading facilities on wetlands. The facility was added to the project when it switched from selling electricity to Indonesia to producing green ammonia in the Pilbara. ![Detailed map of the site of the Asian Renewable Energy Hub in the Pilbara, Western Australia, showing lines of wind turbines, solar farms, transmission lines, ammonia plant and marine export facilities.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/06/image-19.png) **Hub layout (*long lines: wind turbines, yellow: solar farms, purple: transmission, light blue: ammonia plant)***. Source: AREH presentation at Pilbara Summit Macdonald said the subsea cable to Indonesia proposed in 2014 made the investment dependent on one off-taker and exposed to significant geopolitical risk. > "Energy exported in molecule form, as opposed to electron form, gave us a far better option for various clients that we could go to," Macdonald said. Improved technology and reduced pricing for making green ammonia allowed the switch to ammonia in 2018. The original 15GW subsea cable proposal received environmental approval in October 2020. The revised ammonia-focussed proposal increased power generation to 26GW: 16GW of wind and 10GW of solar. The Hub's capacity exceeds the world's largest energy producer, China's 22.5GW Three Gorges Dam, but larger projects have been announced since the Hub. Stronger winds at night combined with solar energy produce a more constant power output that reduces the requirement for firming of supply with storage. ![Graph of the contribution of wind and solar energy over a typical day at the planned Asian Renewable Energy Hub in the Pilbara region of Western Australia. ](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/06/image-21.png) **Average power output over a day (MEh).** Source: AREH presentation at Pilbara Summit If the proponents sanction the project in 2025 they would install the first wind and solar capacity by 2027, and the first ammonia production would follow in 2029. Ammonia production could reach 8.5 million tonnes by 2037, the maximum amount if 3GW of power is sold to onshore customers. Macdonald said there would be a continual spend on the project as equipment was replaced or refurbished. Wind turbines typically lasted 25 years before refurbishment was needed. Other equipment, such as current designs of electrolysers to produce green hydrogen, may last only 10 years. "So, there's a continuous program of capitalisation through the life of the project," Macdonald said. > "We expect this industry to technologically evolve to technologies which today we probably haven't even considered." Macdonald said the investment was a long-term commitment, and he expected to obtain a 50-year tenure with two 25-year options. As well as InterContinental Energy, the Hub is backed by renewable energy developer CWP Global, Danish wind turbine manufacturer Vestas, and private investment company Pathway Investments. --- *Correction: 4 July 2021: Blades are 100m long, not 110m. The original approval was for a 15GW project, not 16GW.* --- *Main image: Photomontage of future hub site. Source: AREH.* --- ### Chevron's Gorgon CO2 injection fix needs more time, so more emissions URL: https://www.boilingcold.com.au/chevrons-gorgon-co2-injection-fix-needs-more-time-so-more-emissions/ Last updated: 2024-11-28T22:46:38.000Z Chevron’s $3.1 billion carbon storage system will be throttled back for another five months after the US-major again failed to bring a vital system to manage underground pressure fully into operation. Chevron was allowed to build the massive $54 billion ($72 billion) Gorgon LNG project on the Barrow Island nature reserve so it could bury CO2 under the island. Although Gorgon has now produced LNG for more than five years, all components of the CO2 injection system are yet to work simultaneously. *Boiling Cold* estimated that up to mid-2020, [seven million tonnes of CO2 was vented to the atmosphere that should have been buried](https://www.boilingcold.com.au/chevron-faces-little-grief-from-gorgon-lng-emissions-miss/). The plan is that CO2 is pumped into a formation 2000m underground displacing water contained in crevices of the rock. To stop the pressure in the formation from rising, water is pumped to the surface a few kilometres from the CO2 injection wells and then reinjected into a different underground structure. ![Gorgon CO2 plume movement and influence of pressure management wells](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/01/Gorgon-CO2-injection-system-schematic.jpg) *Source: [Chevron presentation](http://www.ga.gov.au/webtemp/image%5Fcache/GA16243.pdf?ref=boilingcold.com.au) 2010* The water wells, known as the pressure management system, were tested in early 2019\. Unexpected amounts of sand in the water coming to the surface clogged the water injection wells that were to dispose of the water underground. The WA Department of Mines, Industry Regulation and Safety allowed Chevron to begin injecting CO2 while the pressure management system was fixed and has since granted four extensions of time. From December 2020, DMIRS allowed a further six months of injection, but this time restricted it to about one-third of design capacity. The regulator considered there was a low risk that the system’s long-term performance would be damaged without control of pressure in the formation. In early 2021 [Chevron reported to DMIRS](https://www.documentcloud.org/documents/20793746-gorgon-project-carbon-dioxide-injection-annual-operational-report-to-wa-state-government-1-january-2020-31-december-2020?responsive=1&title=1&ref=boilingcold.com.au) that it anticipated the system would be operational by mid-2021 but again has missed a deadline. DMIRS resource and environmental compliance director Karen Caple said the regulator granted Chevron another extension to 30 November 2021 as it had made significant progress in remedying the issues. > “Additional time is needed to test the system operating at full capacity and to ensure it is operating in a safe, stable and functional manner,” Caple said. The system is still restricted to one-third capacity, but Chevron is now allowed to increase injection to two-thirds capacity once it can operate all the pressure management wells at the same time. At full capacity, the system can store up to four million tonnes of CO2 a year. Caple said once the system is fully operational and verified as safe, stable and functioning, DMIRS would review the need for restricting injection rates. A Chevron spokesperson said while the injection of greenhouse gas emissions was reduced it continued to work with DMIRS. > “Like any pioneering endeavour, the system, which has injected more than 4.8 million tonnes of greenhouse gas emissions since August 2019, has presented some challenges,” the Chevron spokesperson said. “The system has already resulted in a significant reduction in emissions for Gorgon, with Clean Energy Regulator data released in February 2021 showing a 30% reduction in Gorgon emissions over the last reporting period.” The Chevron spokesperson said an upgrade to the filtration system for the sand was now complete and all pressure management wells had been operated separately. ## Gorgon: the failed showpiece of CCS The oil and gas industry uses the promise of carbon capture and storage to argue it does not have to curtail its production dramatically and urgently to limit global warming. Either CCS can quickly be deployed on a vast scale at an acceptable cost, or oil and gas companies must soon face reserves write-downs, stranded assets and plummeting share prices. Gorgon should be the showpiece of CCS technology as the world’s largest carbon storage project dedicated to reducing greenhouse gas emissions. Most CCS projects boost oil production with high-pressure CO2. The failure of Gorgon is a public relations disaster for the industry that, even in Australia, mentions Gorgon CO2 injection as little as possible, and any discussion usually omits its troubled run. Gorgon should be as easy as CCS gets. The capture of CO2 from the reservoir gas is needed for all LNG plants so was not an additional cost at Gorgon. In addition, the injection site was only a few kilometres away; the geology was known from decades of oil production; and the project backed by three oil and gas giants with prodigious technical and financial resources: Chevron, ExxonMobil and Shell. Chevron struck trouble injecting CO2 under Barrow Island early on. The system was shut in mid-2017 due to [leaking valves and corrosion concerns](https://www.boilingcold.com.au/gorgon-co2-injection-stopped-by-leaks-and-corrosion/). It did not restart for two years. Hydrocarbons have been reported in the water pumped to the surface. Caple said the amounts were relatively small and hydrocarbons are often naturally found in groundwater near oil and gas-bearing formations. The reality is that carbon capture and storage is incredibly complex. Chevron and its partners may soon bear a financial cost for the system’s underperformance. The first five-year period over which the WA Government measures if Gorgon has injected the required 80 per cent of CO2 produced from its offshore reservoirs ends in July. The proportion of reservoir CO2 injected is much less 80 per cent and would have been worse except for other technical issues at Gorgon that have cut production. For almost all of the past 14 months, one of the three LNG trains has been shut down to repair cracks in propane-filled pressure vessels called kettles. The shutdowns were ordered by DMIRS after it learnt of the problem [when the story was broken by *Boiling Cold*](https://www.boilingcold.com.au/cracks-at-chevrons-gorgon-threaten-lng-production/') and *The West Australian*. *Boiling Cold* asked DMIRS if the root cause of the problems with the kettles had been identified. DMIRS director of dangerous goods and petroleum safety Steve Emery said the regulator was satisfied Chevron’s had identified the cause of the defects and addressed any risks associated with these defects. “DMIRS’ officers continue to conduct their routine inspections and audits of the Gorgon plant,” Emery said. In May, four workers on a train shutdown were [drenched in chemicals containing mercury](drenched%20in%20chemicals%20containing%20mercury). A Worksafe spokesperson said tests afterwards showed none of the workers’ exposures were above the guidance values for biological mercury. “The workers involved may require further testing of their mercury levels to confirm that this continues to be the case,” the Worksafe spokesperson said. --- *Update July 2, 2021, 11:15AM. Chevron comment on the filtration system and operation of the wells added.* --- *Main image: Chevron sign at its Perth headquarters. Source: Peter Milne* --- ### Government hurries to tow Northern Endeavor away by mid-2023 URL: https://www.boilingcold.com.au/government-hurries-to-tow-northern-endeavor-away-by-mid-2023/ Last updated: 2021-08-25T07:08:17.000Z The Federal Government is seeking a contractor to safely tow away the Northern Endeavour oil vessel by mid-2023 as it starts what could be a $1 billion decommissioning effort. The Department of Industry, Science, Energy and Resources today [invited expressions of interest](https://www.tenders.gov.au/Atm/Show/13d9cd3c-e66b-4d23-a2ba-707adbc02ace?ref=boilingcold.com.au) to disconnect and tow away the Northern Endeavour that sits in 380m of water 550km northwest of Darwin. ![Laminaria Corallina ](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/07/image-1.png) **Northern Endeavour location in the Timor Sea**. Source EOI document, annotated by *Boiling Cold* The Federal Government's invitation said "schedule is imperative" and that it intends the project "will set the standard for future similar activities in Australian waters." A requirement for both speed and quality usually involves great expense that, in this case, will be borne by Australia's offshore oil and gas producers through a 48c a barrel [production levy announced a week ago](https://www.boilingcold.com.au/oil-and-gas-producers-to-start-paying-up-to-1b-to-decommission-the-northern-endeavour/). The Government seemed cautious of complex joint ventures that are common in the offshore construction industry. "Due to the complexity of the Project and the short timeframes, we do not want EOIs from consortia, joint ventures or alliances unless each member is prepared to collaborate effectively and do everything possible to ensure the project is delivered," the invitation said. "We do not want EOIs from entities that cannot commit to an expedited timeframe." ![Schematic of the Laminaria Corallina oil fields, subsea equipment and Northerm Endeavour oil vessel in the Timor Sea.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/07/image.png) **Vessel, wells and subsea equipment to be made safe and removed**. Source: EOI document. The tight schedule is driven by the Government's desire to minimise operating costs of about [$130 million in 2021](https://www.boilingcold.com.au/northern-endeavour-debacle-hits-209m-with-much-more-to-come/). DISER plans to award the vessel removal contact by March 2022 and for the work to be complete by mid-2023. The second phase of work will plug and abandon the wells and remove wellheads. Other subsea equipment will be either removed or left on the seabed in a third and final phase. These scopes do not include the sale or disposal of the vessel. ### Is the Nothern Endeavour fit to tow? The first phase of work ends with the Northern Endeavour towed unmanned to a designated location. Towing the vessel with no one onboard will reduce the regulatory requirements for a safe tow. This may mean less work is required on a vast list of overdue maintenance, including corroded water ballast tanks [identified by Lloyds](https://classdirect.lr.org/assets/LRV7353/conditions-of-class?ref=boilingcold.com.au). Castleton Commodities International, a lender to failed vessel owner Northern Oil and Gas Australia owed $124 million, took action in the NSW Supreme Court last year to take possession of the vessel in the hope of selling it to offset some of its loss. The Commonwealth's defence lodged in January 2021 said the vessel had structural issues in multiple areas due to advanced corrosion, with about "6200 structural anomalies being actively managed and 138 recommended for repair." The claim also listed numerous safety, utility and power systems with issues that had to be addressed before the Northern Endeavour could be disconnected and towed away. *Boiling Cold* understand some of the maintenance on structures and systems work is underway by Upstream Production Solutions that is operating the vessel for the Government. [Federal Govt regulates poorly and gets $360M Northern Endeavor clean-up billThe Northern Endeavor mess started with Woodside paying to rid itself of a rusty ageing asset, ended with a $362 million liability for the Government and in between was a regulatory shambles.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/09/northern-endeavour.jpg)](https://www.boilingcold.com.au/poor-federal-regulation-allowed-the-360m-northern-endeavor-mess/) **Read the full story of how a quick deal by Woodside resulted in an embarrassing fiasco for the Australian Government and oil and gas industry.** Woodside sold the Northern Endeavour to Northern Oil and Gas Australia in 2016\. The small one-man company new to offshore oil and gas was liquidated in early 2020 after safety issues shut down production in 2019. The sale was legal, but Woodside, which reduced its decommissioning liabilities by $US156 million after the sale, regulators NOPSEMA and NOPTA, and the Federal Government have faced heavy criticism for their roles. --- *Main image: Northern Endeavour oil vessel in the Timor Sea. Source: Anon.* --- ### Yara plans massive Pilbara green ammonia plant by 2030 URL: https://www.boilingcold.com.au/yara-plans-massive-pilbara-green-ammonia-plant-by-2030/ Last updated: 2021-08-25T07:09:26.000Z Yara plans to operate a second WA ammonia plant by 2030 using renewable electricity while Wesfarmers prepares an expansion using traditional heavily polluting gas-to-hydrogen technology. In May, the Norwegian fertiliser and ammonia giant and French energy company Engie received $42 million from the Australian Renewable Energy Agency for a demonstration project. A 10-megawatt solar-powered electrolyser will produce emissions-free hydrogen to be fed into Yara's existing plant and combined with nitrogen to produce ammonia. [ARENA backs ATCO and Engie with $71M for WA green hydrogenWA will be home to two of the largest green hydrogen electrolysers in the world to feed an ammonia plant and inject the clean fuel into the South West gas grid.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/05/Yara-Pilbara.jpg)](https://www.boilingcold.com.au/arena-backs-atco-and-engie-with-71m-for-wa-green-hydrogen/) The demonstration project is powered by about 20 hectares of solar panels on Yara's existing plot on the Burrup Peninsula. It will supply less than one per cent of the hydrogen that is combined with nitrogen from the air to make ammonia. The bulk of the plant's hydrogen is currently produced by the steam methane reforming process that extracts hydrogen from gas and emits carbon dioxide. The plant emitted 1.06 million tonnes of CO2 in the 12 months to July 2020. Yara, along with Japanese power producer and gas buyer JERA, is [investigating carbon capture and storage](https://www.boilingcold.com.au/yara-and-jera-seek-pilbara-carbon-storage-for-blue-ammonia/) for these emissions. Yara Pilbara external relations manager Luke Blackbourn told the Pilbara Summit held in Perth last week that 150 to 500 megawatts of renewable energy and a new renewable hydrogen plant could lift the share of renewable hydrogen to up to 20 per cent by mid-decade. This Phase 1 would be powered by renewable energy generated off the Burrup Peninsula and would require access to vast amounts of land. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/06/image-16.png) **Yara's plan for green ammonia in the Pilbara**. Source: Yara presentation at Pilbara Summit "If you want a large-scale development in the Pilbara, then quite clearly, you're doing that on Aboriginal countries," Blackbourn said. > "You certainly can't come in with a project that's 90 per cent engineered, and the finances lined up, and you just want to appoint a contractor and then start to do Aboriginal engagement." Blackbourn said renewable energy developments had more flexible footprints than mining so could be reconfigured to avoid heritage sites. Yara is working with Horizon Power and others to develop an infrastructure corridor to bring large amounts of power onto the Burrup Peninsula. Corridor design is constrained by existing infrastructure and the surrounding World Heritage-nominated rock art. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/06/image-17.png) **The busy Burrup Peninsula**. Source: Yara presentation at Pilbara Summit Phase 2 would add a gigawatt of renewable energy and a new 800,000 tonnes an hour ammonia plant. Yara's current 850,000 tonnes a year ammonia plant opened in 2006 and cost $700 million. A final Phase 3 would bring the new ammonia plant to close to 100 per cent emission-free feedstock by 2030 with an additional 500MW of solar and wind power. Local fertiliser manufacturer Wesfarmers is also looking to expand its WA ammonia production but without renewable energy. Technip is performing front end engineering design for the local conglomerate to build a new plant next to its existing Kwinana facility. Wesfarmers plans to spend more than $500 million to build a traditional steam methane reforming plant. The plant will be [complete by September 2024](https://www.industry.gov.au/sites/default/files/aip/amonia%5Fexpansion%5Fproject%5Faip%5Fplan%5Fsummary.pdf?ref=boilingcold.com.au), according to an Australian Industry Participation Plan lodged with the Federal Government. The existing Wesfarmers plant can produce 225,000 tonnes of ammonia a year for the production of explosives, fertilisers and sodium cyanide and use nickel processing. Wesfarmers' petrochemical facility in Kwinana emitted 800,000 tonnes of CO2 in the 12 months to June 2020. ## A race for the green dollar Blackbourn said the plan was not a done deal and had to compete with other investment options assessed in the company's headquarters in Oslo. "It's a competition within the company" for projects across the globe wanting a capital allocation from Oslo, Blackbourn said Blackbourn said for Yara, and other investors, the Pilbara offered proximity to markets, long term relationships into Asia, massive renewable energy potential and low sovereign risk. Having just 60,000 people spread over half a million square kilometres was a boon for large scale renewable energy. > "We need to pursue and maintain that competitive edge," Blackbourn said. > "Things are moving so rapidly…the various buckets of capital will be furiously trying to find a home." Blackbourn said the interest in green ammonia as a clean fuel for applications like large shipping where batteries are not suitable is immense. "This is a global opportunity and… it's absolutely a race." --- *Main image: Yara Pilbara's ammonia plant. Source: Yara presentation to the Pilbara Summit.* --- ### Santos’ false-start to Dorado FEED meets a deadline URL: https://www.boilingcold.com.au/santos-false-start-to-dorado-feed-meets-a-deadline/ Last updated: 2021-09-05T05:10:24.000Z Santos today "[announced the launch](https://www.santos.com/news/santos-launches-dorado-feed/?ref=boilingcold.com.au)" of front-end engineering design for its Dorado oil project off WA without any FEED contractors. Santos chief executive Kevin Gallagher said the $US2billion ($2.6 billion) oil-only phase 1 of the project in the Bedout Basin is expected to produce 75,000 to 100,000 barrels a day. > "Entering FEED for the Dorado project is a significant milestone and has the project on schedule for a final investment decision around mid-2022," Gallagher said. The announcement noted that the FEED contracts for a floating production, storage and offloading vessel and a wellhead platform are not finalised but are expected to be awarded "over the next few months." Operators in the offshore oil and gas industry typically begin FEED after they choose engineering companies, agree scopes, finalise costs and sign contracts. Santos' unconventional early announcement of FEED may not expedite the engineering design, but it could be portrayed as meeting promises made to investors. Gallagher made a [presentation to investors](https://www.santos.com/wp-content/uploads/2021/05/210505%5F2021-Macquarie-Australia-Conference.pdf?ref=boilingcold.com.au) in May that stated: "FEED-entry planned for 1H 2021." The prediction was also made in [first-quarter report issued in April](https://www.santos.com/wp-content/uploads/2021/04/2021%5FFirst%5FQuarter%5FReport-%5FFinal.pdf?ref=boilingcold.com.au). At the company's [annual general meeting in April](https://www.santos.com/wp-content/uploads/2021/04/210415-2021-Santos-AGM-addresses.pdf?ref=boilingcold.com.au), Santos chair Keith Spence said Santos "expect to make a FEED decision for Dorado development later this quarter." Gallagher said Dorado "will enter front end engineering and design this quarter." Santos is pursuing four major growth projects: Barossa LNG, Dorado, Narrabri, and Moomba carbon capture and storage. In April, the Santos board offered Gallagher [$6million in share rights in addition to his existing package](https://www.santos.com/news/growth-projects-incentive-for-ceo/?ref=boilingcold.com.au) if he stayed until 2025 and achieved nominated hurdles to deliver the major growth projects and pursue an energy transition strategy. Shortly afterwards, at the AGM, Spence said the project hurdles linked to the bonus would be milestones for the Barossa and Dorado projects. Minor partner Carnarvon Petroleum, which owns 20 per cent of Dorado, said it had [engaged advisers to help it secure funding](https://www.carnarvon.com.au/wp-content/uploads/2021/06/FEED-CVN.pdf?ref=boilingcold.com.au) for its share of the FEED cost. Carnarvon will "formally engage with financiers once FEED contracts for the FPSO and WHP have been finalised." ## Oil first than gas The first phase of Dorado will produce oil and condensate and reinject gas into the reservoir. > "After the initial phase of liquids production, gas export from the development allows for a future source of supply into our domestic gas infrastructure in WA," Gallagher said. Santos operates the Varanus Island and Devil Creek gas processing plants that supply about 40 per cent of WA demand but have rapidly declining reserves. [Santos’ $126M Reindeer gas field write off tightens WA marketSantos’ Reindeer gas field will fill with water sooner than expected and the production loss will add to concerns about the supply of gas to WA this decade.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/02/Devil-Creek-gas-plant.jpg)](https://www.boilingcold.com.au/santos-126m-reindeer-gas-field-write-off/) Gallagher said the nearby Pavo and Apus prospect would be drilled in early 2022 and could be easily tied back to Dorado. "Dorado is on track to be the first development in the Bedout Sub-basin, with its high-quality reservoirs and shallow-water setting, making it a very cost-competitive project globally," Gallagher said. Santos is seeking buyers for some of its equity in Dorado and possibly its other WA oil interests. *Reuters* reported that [Goldman Sachs has the task of offloading 20 to 30 per cent of the project](https://www.reuters.com/article/us-santos-m-a-idUSKBN2BV0VS?ref=boilingcold.com.au) and surrounding exploration acreage. ![Map of Santos' interests offshore Western Australia including the Macedon, Devel Creek and Varanus Island gas plants, Ningaloo Vision and Pyrenees Venturer oil FPSO's and the Dorodo prospect.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/06/image-18.png) **Santos' WA interests**. Source: [Santos presentation](https://www.santos.com/wp-content/uploads/2020/02/santos-wa-nt-site-visit-presentation-2019.pdf?ref=boilingcold.com.au). Santos operates and has a 52.5 per cent interest in the Van Gogh oil field about 40km off the North West Cape that uses the Ningaloo Vision FPSO. It also owns a 29 per cent stake in the nearby BHP-operated Pyrenees project. The Dorado sell down and a planned offloading of 12.5 per cent of Barossa to Japan's JERA are important to Santos as they would lessen the cash it needs to bring the two projects to production. --- *Main image: Graphic of Dorado FPSO. Source: Santos presentation.* --- ### Oil and gas producers to start paying up to $1B to decommission the Northern Endeavour URL: https://www.boilingcold.com.au/oil-and-gas-producers-to-start-paying-up-to-1b-to-decommission-the-northern-endeavour/ Last updated: 2022-01-01T09:45:23.000Z Australia's oil and gas producers will pay 48c for every barrel of oil equivalent they produce to fully cover the Federal Government for the cost of decommissioning the Northern Endeavour. The temporary levy will apply from July 1, 2021 and continue until the Federal Government recovers the cost to decommission the Northern Endeavor oil vessel, its wells, and other infrastructure, which has been estimated at up to $1billion. The Department of Industry, Science, Energy and Resources [issued a discussion paper](https://www.industry.gov.au/news/consultation-open-for-the-laminaria-corallina-oilfields-decommissioning-levy?ref=boilingcold.com.au) last week that called for the industry's views on the details of the levy's introduction but not on its fundamentals. The levy will not be deductible against Commonwealth taxes such as company tax, the North West Shelf royalty and the Petroleum Resources Rent Tax, increasing the financial burden of the levy. The owner of the Northern Endeavour, Northern Oil and Gas Australia, went into liquidation in early 2020, four years after it bought the asset from Woodside. ## Decommissioning defeats for divided oil and gas The transaction was legal but has done enormous damage to Woodside's relationship with the Federal Government, the industry and the community. Woodside has received widespread industry criticism for selling an ageing vessel with declining production to a new under-financed one-man company with no offshore experience. > "Let's be clear Woodside doesn't have an issue on Northern Endeavour," then Woodside chief executive Peter Coleman said after the company's annual general meeting in April. "It was sold as an ongoing business, so I think we need to move away from that," Coleman said. Oil and gas lobby group APPEA labelled the levy as over the top and extreme. APPEA chief executive Andrew McConville said the levy would see a few companies footing a massive bill for a project they had never been involved in. The major payers will include Chevron, Shell, Inpex, ExxonMobil and Woodside. "The Government should not be washing its hands of this through a blunt instrument like a levy but working constructively and collaboratively with industry to minimise costs and explore all options," McConville said. In mid-June APPEA president and Santos chief executive Kevin Gallagher said he struggled with the logic of "paying for someone else's asset that goes under, but I also understand the taxpayer shouldn't be asked to pay for that either." At the time, Gallagher said a proposed levy was the start of a process and "we've got to sit down with government now and see if we can thrash out something that is workable." Less than two weeks later, the levy is a done deal. Santos will not be a significant payer of the levy as much of its production is onshore or, for Bayu Undan, in a zone jointly administered by Australia and Timor Leste. Credit Suisse lead energy analysts Saul Kavonic said at the APPEA Conference in June the industry had been unable to agree on an alternative to the levy to propose to the Government. > "Here was a chance for industry to talk with a unified voice on this issue…[and they stuffed it](https://www.energynewsbulletin.net/environment/news/1412153/decom-time-bomb?ref=boilingcold.com.au)," Kavonic said. "You can see what has happened here, there is one particular party which is probably diametrically opposed to the rest of the industry." Many companies think only Woodside and its partner in the Northern Endeavor paying the levy would be a fairer outcome. The petroleum sector is also divided over trailing liabilities introduced by Pitt to make sellers of assets liable, as a last resort, for decommissioning costs. APPEA chief executive McConville has said his members [do not support trailing liabilities](https://www.theaustralian.com.au/business/mining-energy/stakes-rise-in-ageing-oil-gas-infrastructure-as-50bn-cleanup-bill-looms/news-story/ed1633ad0ad8f7eb89c513d842810aec?ref=boilingcold.com.au) as "it runs the risk of impacting on investment incentives and the further development of the industry." However, McConville's president Gallagher has the opposite view. > "I support trailing liabilities always have done," Gallagher told the APPEA Conference, noting it was not APPEA's position. > "I think it's very logical and the only secure process that can protect assets from the taxpayer being exposed." ## Green group applauds Pitt Wilderness Society corporate campaigner Jess Lerch said the levy was a good thing but called for it to be made permanent. "We know the oil and gas industry still wants to keep its business model of selling off late-life assets, and the risk of the taxpayer picking up the tab for more Northern Endeavour's isn't going away," Lerch said. Lerch said more oil and gas companies would fail due to the world moving away from fossil fuels and their underfunding of decommissioning liabilities. > "There's a string of ticking time bombs that will cost tens of billions of dollars to the taxpayer if these companies fold," Lerch said. The cost of offshore decommissioning in Australia to 2050 has been estimated at $52bilion by a Federal Government-funded report. [Regulator calls time on delays to $52B offshore oil & gas decommissioningRegulator NOPSEMA has wrested control of the schedule for cleaning up Australia’s offshore oil and gas fields from tight-fisted operators in a move that may result in an offshore jobs boom later this decade.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/04/NE-circa-2018-edited-cropped.jpg)](https://www.boilingcold.com.au/regulator-calls-time-on-delays-to-52b-offshore-oil-and-gas-decommissioning/) Wilderness Society policy manager Tim Beshara said Resources Minister Keith Pitt has managed the responsibility for paying for the Northern Endeavour well. > "He could have rolled over to industry so easily on this, but to be honest, this is one issue that the industry have brought upon themselves," Beshara said. "Keith Pitt undertaking a collective punishment approach is also a totally reasonable response in the circumstances where Woodside was simply the first to get busted for an industry-wide practice." ## Decommissioning now happening under orders In the wake of the Northern Endeavour, NOPSEMA has cracked down on delays to decommissioning. The regulator now requires [all wells to be plugged and abandoned within three years of the end of production](https://www.boilingcold.com.au/regulator-calls-time-on-delays-to-52b-offshore-oil-and-gas-decommissioning/) and the seabed to be cleared two years after that. The regulator has also started issuing prescription time-limited directives to operators. [Woodside told to clean up oil field & may face legal actionWoodside’s own lack of maintenance means it cannot dispose of an 83m-long structure onshore as planned and will instead sink it to be an artificial reef near the Ningaloo Marine Park![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/02/Nganhurra-FPSO.jpg)](https://www.boilingcold.com.au/regulator-tells-woodside-to-clean-up-oil-field-and-may-take-legal-action/) Offshore oil and gas safety and environment regulator NOPSEMA today published [plans from Woodside](https://info.nopsema.gov.au/environment%5Fplans/537/show%5Fpublic?ref=boilingcold.com.au) to plug and abandon 18 wells from the Enfield oil project over three years from 2022 to 2024. The plans came after the regulator in February ordered Woodside to do the work. NOPSEMA in May ordered Exxon Mobil to [plug and abandon 180 wells and dismantle 10 platforms](plug%20and%20abandon%20180%20wells%20and%20dismantle%2010%20platforms). --- *Main image: Northern Endeavour floating production storage and offloading vessel in the Timor Sea. Source: Anon.* --- ### Woodside’s real plan for Pluto LNG: delay action, not reduce emissions URL: https://www.boilingcold.com.au/woodsides-fudged-pluto-net-zero-plan-is-much-less-than-it-appears/ Last updated: 2022-01-10T04:14:57.000Z *EXCLUSIVE ANALYSIS* 💡 **Key Points:** • Woodside needs investor and political support for its $US11.4 billion Scarborough to Pluto project. • Carbon emissions from the Pluto LNG plant are a major concern. • Boiling Cold analysis reveals Woodside emissions plan exaggerates early cuts, makes no firm commitments past 2030, and leaves 70% of reductions to 2045 and beyond. Woodside's one chance to arrest its decline is the Scarborough to Pluto LNG project. The $US11.4 billion investment must appear environmentally responsible to attract climate-aware investors and customers, and not lose political support. Woodside acting chief executive Meg O'Neill said all oil and gas companies were feeling pressure from shareholders to respond to climate change. "They are keen to see us decarbonise," O'Neill told the APPEA Conference in Perth last week. > "They need to see tangible progress and they want to see it faster," O'Neill said. A vital step for Woodside towards placating concerned investors was the early June [announcement of a plan](https://files.woodside/docs/default-source/media-releases/media-release-pluto-ggap-june-2021.pdf?sfvrsn=d50d6c34%5F12&ref=boilingcold.com.au) for an expanded Pluto LNG plant to reduce emissions and hit net-zero by 2050. The plan had to be convincing. Woodside wants to build a second LNG train at Pluto so gas from Scarborough can be processed alongside gas from the original Pluto field. ![plot of emissions reductions from the Pluto LNG plant claimed by Woodside](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/06/image-3.png) Woodside would continue planting trees to offset Co2 from the Pluto field that is released to the atmosphere, and from 2026 also offset a small amount of reservoir CO2 from Scarborough as well. The reservoir CO2 makes up about 10 per cent of the plant's emissions. From 2030 emissions would be reduced by 30 per cent, and reductions in the following years eventually take the plant to net-zero emissions by 2050. However, Woodside's commitment to emissions reduction collapses under scrutiny. ### Fudge 1 - wrong starting point Woodside announced a "target to abate 30% of emissions by 2030." Abate, according to the *Macquarie Dictionary*, means "to reduce in amount." Woodside is not reducing Pluto emissions by 30 per cent by 2030. In 2006 Woodside received approval to build two LNG trains at Pluto to produce 12 million tonnes of LNG a year and emit 4.1 million tonnes a year of CO2\. The original second train was never built and Woodside now plans to start up a different second train in 2026 to bring LNG capacity to 10.2 mtpa with predicted emissions of 3.4 mtpa of CO2. But Woodside is counting its reductions from a 20-year-old approval for a plant with 18 per cent greater capacity to emit 4.1 million tonnes of CO2. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/06/image-13.png) The real reduction by 2030 is about half what Woodside claims. Woodside tried to cover itself by stating "the targets are based on...emissions associated with a two-train facility." However, any reader would reasonably assume the "two train facility" was the one being built, not a 20-year old plan that was never completed. ![plot of actual per cent emissions reduction by year at the Pluto LNG project](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/06/image-8.png) When the correct starting point is used Pluto emissions do not come close to a 30 per cent reduction until 2040\. The difference is an additional seven million tonnes of CO2 emitted by 2050\. ### Fudge 2 - no commitments past 2030 In a table at the back of Woodside's Pluto greenhouse gas abatement program, it is revealed that all emissions reductions beyond 2030 outlined at the front of the report are essentially placeholders. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/06/image-9.png) **Post-2030 targets to be decided later.** Source: [*Pluto Greenhouse Gas Abatement Plan*](https://files.woodside/docs/default-source/our-business---documents-and-files/pluto---documents-and-files/pluto-lng-facility-greenhouse-gas-abatement-program.pdf?sfvrsn=7ebd04e3%5F7&ref=boilingcold.com.au) Woodside has made no commitments beyond the misleading 30% by 2030, except to reach net-zero by 2050\. This takes 10 million more tonnes off the tally of emissions reductions. ![plot showing Woodside has not committed to any reductions from 2030 until zero at 2050](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/06/image-6.png) Woodside has promised the WA Government no more than its [overall corporate targets](https://www.woodside.com.au/sustainability/climate-change?ref=boilingcold.com.au) of a 30 per cent cut by 2030 and net-zero by 2050. It can do this due to the State's [Greenhouse Gas Emissions Policy for Major Projects](https://www.der.wa.gov.au/images/documents/your-environment/climate-change/Greenhouse%20Gas%20Emissions%20Policy%20for%20Major%20Projects.pdf?ref=boilingcold.com.au) that allows "proponents to propose their own timeframes and interim targets." When the Government launched the policy in August 2019 it was widely regarded as an industry-friendly move to head off a tougher approach being developed by the WA Environmental Protection Authority. Woodside's Pluto emissions plan has been assessed under the Government policy as it is a so-called secondary approval on an existing project. New projects are assessed by the EPA using its [greenhouse guidance finalised in April 2020](https://www.boilingcold.com.au/carbon-emissions-hurdle-for-wa-projects-finalised-by-epa/). ### Fudge 3 - take it slowly Woodside's homepage urges visitors to act now on cleaner energy for the sake of the future. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/06/image-14.png) Source: [Woodside homepage](https://www.woodside.com.au/?ref=boilingcold.com.au) screenshot 22 June 2021 However, the sense of urgency documented by Woodside's corporate communications team has not greatly affected its Pluto emissions plans. Pluto's emissions reductions are backloaded into two large late cuts that are nominally 25 per cent in 2045 and a final 35 per cent in 2050, but adjusted for the correct starting point are 30 per cent and 40 per cent. Woodside plans to achieve 70 per cent of Pluto's emissions cuts in the five years before 2050\. By then production from the original Scarborough field will be in a decline, leaving even less for Woodside to do. ![Plot comparing planned emissions reductions from five WA projects: Waitsia and West Erregulla gas fields, FMG's Solomon power station, Covalent lithium plant in Kwinana. and Woodside's Pluto LNG project.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/06/image-7.png) The four new projects that have started or completed assessment under the EPA's guidelines do not have Woodside's slow trundle to net-zero. Reservoir CO2 makes up 60 per cent of the emissions from the Waitsia and West Erregulla gas projects and must be offset from day one, like Plutos's 10 per cent, as required in WA since the Gorgon LNG project was approved. FMG's Solomon power station trends to zero emissions by 2040 as that was company policy at the time. Waitsia achieves net-zero in 2043 when the field is expected to be exhausted. Allowing for reservor CO2, emissions from all projects except Pluto track in a roughly straight line from day one to zero emissions. Pluto's delayed emissions reduction trajectory would add millions of tonnes of CO2 to its lifetime emissions. Unlike the WA Government, the EPA's [greenhouse gas approach](https://www.epa.wa.gov.au/sites/default/files/Policies%5Fand%5FGuidance/EFG%20-%20GHG%20Emissions%20-%2010.04.2020.pdf?ref=boilingcold.com.au) is not to accept whatever interim targets a project proponent submits. ### Is the Woodside plan a done deal? The Pluto GGAP was [approved by Environment Minister](https://www.mediastatements.wa.gov.au/Pages/McGowan/2021/06/Strong-emissions-reduction-targets-approved-for-next-stage-of-Pluto-LNG.aspx?ref=boilingcold.com.au) Amber-Jade Sanderson following [advice from the EPA](https://www.documentcloud.org/documents/20972533-epa-advice-to-environment-minister-amber-jade-sanderspon-on-pluto-ggap?responsive=1&title=1&ref=boilingcold.com.au). Sanderson said the plan was "in line with the McGowan Government's Greenhouse Gas Emissions Policy for Major Projects." Sanderson has asked the EPA to update the Ministerial Statement that legally imposes environmental requirements on the Pluto project "to ensure these new targets are enforceable." *Boiling Cold* asked the Minister whether the post-2030 targets would be made enforceable. > “The Minister’s intention in asking the EPA to conduct its s46 inquiry is to ensure the Pluto project is treated consistently with other decisions made since the McGowan Government’s 2019 policy on greenhouse gas emissions for major projects came into effect," Sanderson's spokesperson said. Consistency with other project decisions could imply that Pluto is now reviewed against the EPA's more stringent greenhouse gas guidance “It would be inappropriate for the Minister to speculate on what the EPA might recommend as they are an independent authority, however, questions around the enforcement of both interim and long-term targets are expected to be addressed as part of the EPA’s review process,” Sanderson's spokesperson said. The mention of enforcement of long term targets opens up the possibility that the EPA will mandate targets after 2030, not leave them for a review in five years as Woodside plans. EPA chair Profesor Matthew Tonts said, "the Minister has asked the EPA to inquire into and report on the emissions condition to align it with contemporary GHG conditions." > "Consideration is given to whether the mitigation proposed is plausible, timely, achievable and reasonable and practicable," Tonts said. A Woodside spokesperson said the Pluto greenhouse gas abatement plan is aligned with the goal of net-zero by 2050\. > "It outlines our commitments to reducing emissions from Pluto LNG inclusive of Scarborough, which will deliver one of the lowest carbon sources of LNG globally for our north Asian customers," the Woodside spokesperson said. Woodside acting chief executive Meg O'Neill said investors want to see fast and tangible progress. Much of Woodside's plan to reduce carbon pollution from the Pluto LNG plant is not tangible, and what is left is not fast. --- *Update 25 June: changed headline, edited excerpt, added key points and linked to EPA advice to the Minister.* --- *Main image: Existing one train Pluto LNG plant. Source: Woodside Energy Limited website.* --- ### Santos fails to back up Barossa emissions reduction claim URL: https://www.boilingcold.com.au/santos-fails-to-back-up-barossa-emissions-reduction-claim/ Last updated: 2024-11-28T22:47:22.000Z Santos has not provided any support for a claim by its chief executive Kevin Gallagher that its engineering has reduced the emissions of its Barossa LNG project by 25 per cent. The claim came as Santos was again attacked for high emissions from its project as it attempts to close a long-standing deal to sell 12.5 per cent of the project to Japanese company JERA. Santos' development of the CO2-rich Barossa gas field to supply gas to the Darwin LNG plant was last week [savaged by mining billionaire](https://www.afr.com/companies/energy/forrest-blasts-santos-woodside-as-fossils-20210614-p580vt?ref=boilingcold.com.au) and green hydrogen enthusiast Andrew Forrest. > "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," Forrest said. The attack came hours before Gallagher was due to speak at the annual conference of oil and gas lobby group APPEA in his role as president. When questioned about Forrest's comments at a press conference later that day, Gallagher said Santos was proud of its efforts on Barossa. > "The design changes that Santos drove on that project over the course of the time since we owned it and turned it around prior to FID resulted in a 25 per cent emissions reduction from that project versus what Conoco (did)," Gallagher said. *Boiling Cold* asked Gallagher, who said Santos had included the numbers in submissions to governments, for more information to substantiate the claim. *Boiling Cold* later made several requests to Santos for details of Barossa's emissions and what Santos did to reduce them. A Santos spokesperson yesterday said the company had nothing further to add at this stage. Santos also made the 25 per cent emissions reduction claim in March after another attack on the environmental merits of its project. The Institute for Energy Economics and Financial Analysis released a [report ](https://ieefa.org/ieefa-santos-barossa-gas-field-emissions-create-major-risks-for-shareholders/?ref=boilingcold.com.au)claiming "the unprecedented scale of the Barossa emissions relative to the LNG production creates major risks for shareholders." ![Carbon intensity of Austrlainn LNG projects Barossa, Ichthys, Gorgon, Prelude, North west Shelf, Wheatstone and Pluto.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/06/image-15.png) Source: IEEFA [Barossa emissions report](https://ieefa.org/ieefa-santos-barossa-gas-field-emissions-create-major-risks-for-shareholders/?ref=boilingcold.com.au) In response, Santos said the IEEFA report "[should be taken with a grain of salt](https://www.naturalgasworld.com/santos-defends-barossa-carbon-credentials-86879?utm%5Fsource=engator&utm%5Fmedium=engator&utm%5Fcampaign=engator)," and it had already reduced emissions by 25 per cent. ### 25 per cent emissions cut a tall order ConocoPhillips, that operated the Barossa project until May 2020 when it sold out and Santos took over, detailed the project's emissions in an [offshore project proposal](https://www.nopsema.gov.au/sites/default/files/documents/2021-03/A598152.pdf?ref=boilingcold.com.au) submitted to regulator NOPSEMA in March 2018. [Santos’ dirty big $2B Barossa betBarossa would produce Australia’s dirtiest LNG and if other companies will not back it Santos has a very expensive problem.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/08/Bayu-Undan.jpg)](https://www.boilingcold.com.au/santos-dirty-big-2b-barossa-bet/) The Barossa gas field contains 16 to 20 per cent carbon dioxide. The US major planned to vent about 14 per cent from the offshore vessel and pipe the remaining two to six per cent to Darwin, where it would be released. The US major predicted offshore emissions in millions of tonnes of CO2e a year to be: - reservoir CO2 vented offshore: 1.4 to 2.1 mtpa - CO2 from fuel burnt on the vessel: 0.7 to 1.7 mtpa - total offshore emissions: 2.1 to 3.8 mtpa Design changes would have little effect on the average reservoir CO2, so the claimed 25 per cent reduction of 0.4 to 0.95 mtpa of CO2 would need to be achieved by more efficient equipment on the offshore processing vessel. It would be extraordinary that an experienced operator like ConocoPhillips would produce a design so inefficient that Santos could halve combustion emissions three years later. ### Partners pressured over emissions In April 2020, Japanese gas buyer and power generator JERA signed a non-binding letter of intent to buy 12.5 per cent of the Barossa project from Santos. JERA already owns six per cent of the Darwin LNG plant that will process Barossa's gas. Santos sanctioned the $US3.6 billion project in March without selling down to JERA. At the same time, three Australian environmental groups made a submission to the Japan Bank for International Cooperation, [urging it to not support JERA's acquisition](https://www.gtreview.com/news/asia/94538/?ref=boilingcold.com.au). Without a sale to JERA, Santos will have a much higher financial burden as the Barossa project progresses. The week before Forrest's outburst SK, a wast South Korean industrial conglomerate, [came under fire](https://www.ft.com/content/91285fc4-5c73-4fe1-99e7-43d9645e9209?accessToken=zwAAAXoy6WsgkdORKF%5FEXHNP4dOZ50PZZF6SCQ.MEUCIQD-MWRlHt43VB3eJpc-f5QLGe-MicTuUbiAoQVUDTardgIgeOQsL4knC1oMURAhbIfpcfmOymt6QPLR8lp9J-WWyNk&sharetype=gift?token=0f9f3056-53c6-4771-92f4-1efc7bc13d1b&ref=boilingcold.com.au) from environmental groups for participating in the sanction of Barossa in March. SK chair Chey Tae-won said in November 2020 that the group would make no new fossil fuel investments. SK argued that it had participated in Barossa since 2012, so it was not new investment. > "Our investment was made on the condition that LNG is developed in an eco-friendly, low-carbon way," SK's oil and gas subsidiary E&S told the *FT*. The *FT* reported that SK E&S said carbon capture and storage would deal with nearly all of Barossa's carbon emissions. The environmental groups' letter to Chey said, "any attempt to greenwash fossil fuel development with unverified plans for CCS lacking technological or economic feasibility is unacceptable." Santos plans to sanction a CCS project at Moomba later this year that could store 1.7 million tonnes a year of CO2, much less than the total emissions from the Barossa offshore project and the Darwin LNG plant that will process the gas. In May Santos joined with ENI to investigate CCS opportunities north of Darwin. [Santos & ENI team up to tackle dirty gas and decommissioningSantos and ENI are looking for solutions for CO2 and removing old facilities in the waters north of Darwin. Time will tell if the problems are solved or just delayed.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/05/bayu-undan.jpg)](https://www.boilingcold.com.au/santos-and-eni-team-up-to-tackle-dirty-gas-and-decommissioning/) --- *Main image: Santos chief executive Kevin Gallagher speaks to the APPEA Conference in Perth in June 2021\. Source: APPEA* --- ### Feds shoot a rare green arrow at $US36B Pilbara ammonia hub URL: https://www.boilingcold.com.au/feds-shoot-rare-green-arrow-at-us36b-pilbara-ammonia-hub/ Last updated: 2021-12-27T01:11:09.000Z The Federal Government has judged the environmental impact of Australia’s largest renewable energy project to be “clearly unacceptable,” a conclusion applied to less than 1 in 500 projects. Minister for the Environment Sussan Ley last week determined an expanded proposal by the Asian Renewable Energy Hub was “[clearly unacceptable](http://epbcnotices.environment.gov.au/%5Fentity/annotation/1f5752bc-5bce-eb11-80c8-00505684c563/a71d58ad-4cba-48b6-8dab-f3091fc31cd5?t=1624267905135&ref=boilingcold.com.au)” due to impacts on wetlands and migratory birds, including seven threatened species. AREH received WA Government environmental approval in October 2020 for 15 gigawatts of solar and wind power to be exported to Indonesia by subsea cable and sold in the Pilbara. At the same time, the Federal Government gave the hub major project status to help it fast-track approvals. The hub’s backers then expanded their proposal to 26GW of power and switched to the production and export of green ammonia. [$50B Pilbara energy hub targets 10M tonnes a year of green ammoniaThe giant $50B Asian Renewable Energy Hub proposed for WA’s Pilbara has upsized and switched from providing power to make green ammonia, in Australia’s most ambitious hydrogen play.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/10/180508_AREH_Photomontage_Site-E_Final--1--reduced.jpg)](https://www.boilingcold.com.au/pilbara-energy-hub-targets-10m-tonnes-a-year-of-green-ammonia/) The Minister’s [reasons for the decision](http://epbcnotices.environment.gov.au/%5Fentity/annotation/14a096a2-ebd0-eb11-80c9-00505684c563/a71d58ad-4cba-48b6-8dab-f3091fc31cd5?t=1624267932618&ref=boilingcold.com.au) concern the impact pipelines and a jetty used to export ammonia could have on an area of Eighty Mile Beach. Ley’s action is unusual for its rarity, speed and lack of consultation. Federal Governments have made [6117 decisions under the EPBC Act](https://www.transparency.gov.au/annual-reports/department-agriculture-water-and-environment/reporting-year/2019-20-28?ref=boilingcold.com.au#h346) from when it commenced in 2000 to mid-2020, and it deemed only 11 proposals to be clearly unacceptable. The Department of Agriculture, Water and the Environment conducted its environmental assessment, drafted a 15-page statement of reasons, and had this approved by the Minister within five weeks of AREH submitting the proposal. *Boiling Cold* understands the proponents were not consulted, contrary to how the Federal bureaucracy typically treats proposals with major project status. A spokesperson for the Minister said the marine infrastructure corridor would disrupt tidal movements, and this would seriously impact native species dependent upon the wetland. > “Any future amended proposal would be a matter for the proponent,” the spokesperson said. AREH is working to understand the Minister’s concerns while it continued detailed design and engineering work, an AREH spokesperson said. The AREH spokesperson said it intended to utilise the Pilbara’s solar and wind resources to produce green ammonia for export to Asia and offer green hydrogen and ammonia to Pilbara miners. Conservation Council of WA director Piers Verstegen said the environmental concerns in Ley’s statement appeared to have a sound basis, but they were matters that should be able to be addressed by the proponent. > “It is highly unusual for the Commonwealth to pre-empt a state assessment process like this,” Verstegen said. “It stands in direct contrast to the approach that is being taken to giant new fossil fuel projects like the Woodside Scarborough to Pluto LNG development.” “Despite releasing…carbon pollution and having an irreversible impact on the ancient Murujuga rock art proposed for World Heritage Listing, the Commonwealth has not assessed these impacts at all.” Australasian Centre for Corporate Responsibility director of climate Dan Gocher said the decision followed the Minister for Northern Australia Keith Pitt’s decision last month to veto a $280 million loan to develop a wind and battery storage hub in northern Queensland. > “Once again, the Federal Government has demonstrated that it is unwilling to support projects that would accelerate the transition away from fossil fuels,” Gocher said. The Asian Renewable Energy Hub is backed by renewable energy developers InterContinental Energy and CWP Global, Danish wind turbine manufacturer Vestas, and private investment company Pathway Investments. InterContinental Energy is also pursuing a 25GW solar energy to green hydrogen and ammonia project in Oman. *Boiling Cold* understands some in the industry are concerned that any perception that AREH received adverse attention from Canberra because it is a high-profile renewable project could make Australia less attractive to international renewable energy investors. --- **Main picture: Photomontage. Source: Asian Renewable Energy Hub* --- ### Johnston backs gas for WA power and industry URL: https://www.boilingcold.com.au/johnston-backs-gas-for-wa-power-and-industry/ Last updated: 2026-02-02T08:37:55.000Z WA energy minister Bill Johnston sees a strong future for gas and the closure of more coal-fired power stations in the South West. Johnston told the APPEA Conference in Perth last week that there is no question that the energy sector is being transformed. > "We'll have increasing renewables, but the problem is that there is currently no dispatchable alternative to natural gas," Johnston said. "I know the challenge of operating coal-fired power stations, "Gas is much more flexible; it has a continuing future, but there is a transition on, and the challenge for hydrocarbons is to make sure they can deliver their potential." Johnston said WA's power had a lower carbon intensity than the eastern states due to a higher proportion of gas generation. In the past 12 months, gas generated 33 per cent of WA's power and just seven per cent in the east coast National Electricity Market, according to [database OpenNEM](https://opennem.org.au/energy/wem/?range=1y&interval=1w&ref=boilingcold.com.au). ## Coal closures State-owned generator and retailer Synergy owns the Collie and Muja coal-fired power stations in Collie. Synergy will shut down two of Muja's four turbines in 2022 and 2024. WA's coal generation fleet will then have two 212MW units at Muja, the 318MW Collie station and two 217MW units at the privately-owned Bluewaters Power Station. > "It is clear there will be further coal closures; we're not hiding that," Johnston said about the State-owned stations, adding that any decision would come after an assessment of the power system's stability without the two Muja units. Synergy plans to install a 100MW battery in Kwinana by late 2022, in part to help maintain system stability. "If we then go to another coal closure, we'll have to make a decision about what else goes into the market at that time," Johnston said. Collie's power stations are fuelled by mines run by Premier Coal and Griffin Coal, both of which have struggled financially in recent years. In 2020 Premier Coal reported its first profit in five years, according to *The West Australian*, after [securing a higher price](https://thewest.com.au/business/premier-coal-back-in-the-black-with-higher-prices-ng-b881863250z?ref=boilingcold.com.au) for the 3.5 million tonnes of coal is supplies to Synergy each year. > "We don't have any levers to force an amalgamation of the two operations there, but clearly it would a be a sensible outcome," Johnston said. ## More gas-consuming industries for WA Johnston, who is responsible for the mines and petroleum portfolio, as well as energy, said he did not expect significant additional LNG infrastructure to be built in WA. Woodside's plan for an extra LNG train at Pluto to process gas from Scarborough was "very important to us," Johnston said. The Government is also keen to see Woodside's carbon-intensive Browse fields, which would be processed with spare capacity at the North West Shelf LNG plant, developed. "The real challenge is to make sure that the NWS is kept full, and I certainly urge the investors in the NWS to ensure they make decisions that brings that gas to market," Johnston said. Johnston said recent onshore exploration success in the Mid West "gives us the opportunity to encourage gas-dependent industries to move to WA." > "The good news is that in WA, by the combination of aligning our domestic needs with our export needs and having a very successful onshore industry that we can have plenty of gas at a globally competitive price. "We've had such a success in our minerals processing industry, and we're now moving into the battery processing space." Johnston contrasted WA's domestic gas reservation with the Northern Territory that is home to the giant Ichthys LNG project that supplies no gas to its domestic market. In 2008 the Northern Territory Government signed away any hope of reserving any Ichthys gas for onshore. The project agreement with Inpex and Total requires the NT Government to [compensate Ichthys for any profit lost](https://www.documentcloud.org/documents/20969424-project-development-agreement-ichthys-lng-project-2008?ref=boilingcold.com.au#document/p30/a2041278) if it imposes a domestic gas policy. Johnston told the oil and gas industry forum that WA, like many other jurisdictions, has a net-zero emission by 2050 ambition and "we know that the oil and gas industry is playing their part in that movement." --- *Main image: WA Energy Minister Bill Johnston speaks at the APPEA Conference in Perth, June 2021\. Source: APPEA* --- ### Regulator tells Woodside to fix safety issues on ageing North Rankin A platform URL: https://www.boilingcold.com.au/regulator-tells-woodside-to-fix-safety-issues-on-ageing-north-rankin-a-platform/ Last updated: 2022-01-01T09:53:52.000Z Offshore safety regualtor NOPSEMA has ordered Woodside to check corrosion on 24-tonne caissons that hang under the North Rankin A offshore platform and could fall onto gas and condensate pipelines below. The direction was published a week after Woodside chief executive Meg O'Neill targeted a 30 per cent cut in operating costs, with a focus on maintenance. Woodside reported to NOPSEMA that two caissons on the 37-year old platform were sufficiently corroded to impair their structural integrity and an inspection by the regulator followed. Caissons are pipes open at the bottom and suspended beneath offshore platforms to either dispose of fluids or suck up seawater for use in processing or fire fighting. A NOPSEMA [direction to Woodside](https://www.nopsema.gov.au/sites/default/files/2021-06/A787920.pdf?ref=boilingcold.com.au) published today requires the company to analyse the structural integrity of four operating caissons and ten that are no longer used and then fix any issues it identifies as soon as possible. > "Failure of one or more of the remaining caissons could lead to dropped object damage to the facility structure or loss of containment from the subsea gas and condensate pipelines," the direction started. > > "While the likelihood of pipeline rupture is low, should it occur, loss of hydrocarbon (gas and condensate) from these pipelines may result in a major accident event." A major accident event is an industry term for an accident that could result in multiple fatalities. A Woodside spokesperson said the company has commenced inspection of the final caisson and subsequent analysis and assessment would be completed within several weeks. The caissons are typically 70m long, 900mm in diameter and weigh 24 tonnes. The caissons hang about 70m from the seabed near two pipelines, including a 40-inch gas pipeline that is a main supplier of gas to the North West Shelf's five LNG trains near Karratha. Woodside removed two other caissons in November 2020 and May 2021. The direction, that is legally stronger than more common inspection notices, requires Woodside to report progress to the regulator every month. Unusually, Woodside has been directed to "ensure effective communication with members of the workforce" to reduce risks involved in the caisson work. ### Woodside to slash its maintenance budget A week ago Woodside acting chief executive Meg O'Neill told a conference for investors that Woodside aimed to cut operating costs by 30 per cent within three years. O'Neill told the Credit Suisse 8th Australian Energy Conference that Woodside needed a "laser-like focus on cost management" for its LNG to be competitive and to allow the North West Shelf to attract third party gas for processing revenue. > "A key focus area for us is maintenance which accounts for a significant portion of our production cost," O'Neill said. "We have set up teams to tackle each part of the process to make sure we are identifying the right maintenance required for safe and reliable operations, and then execute that maintenance as efficiently as possible." ![Woodside acting chief executive Meg O'Neill speaking at the APPEA Conference this week](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/06/AMMON-20210615-AIPPEA2021-PCEC-0259.jpg) **Woodside acting chief executive Meg O'Neill speaking at the APPEA Conference this week**. Source: APPEA. The planned cuts to operating and maintenance budgets come despite NOPSEMA recently identifying numerous problems with Woodside's operations. Today's notice is the fifth safety-related action the regulator has taken against Woodside in the last three years. The others were: - July 2019 - [insufficient capacity to fight fires](https://www.nopsema.gov.au/assets/Published-notices/A682500.pdf?ref=boilingcold.com.au) on the Vincent floating, production, storage, and offloading facility. - October 2019 - "Woodside has failed and continues to fail to preserve the condition of the riser turret mooring" used for the Nganhurra FPSO, resulting in the risk of an oil spill and the RTM becoming a [navigation collision hazard](https://www.nopsema.gov.au/assets/Published-notices/A700032.pdf?ref=boilingcold.com.au). - November 2019 - Woodside [did not properly maintain a crane](https://www.nopsema.gov.au/assets/Published-notices/A682305.pdf?ref=boilingcold.com.au) on the North Rankin A platform and "failed to take all reasonably practicable steps: to ensure the crane was "safe and without risk to health." - November 2020 - Woodside [failed to conduct an adequate risk assessment](https://www.nopsema.gov.au/assets/Uploads/A756577.pdf?ref=boilingcold.com.au) of working at heights on the VALARIS DPS-1 drilling rig resulting in "increased exposure to potential for serious injury or death." The Woodside spokesperson said the safety and wellbeing of its people is Woodside’s highest priority. > "We reject claims of poor safety culture or performance on our facilities, the Woodside spokesperson said. > "For example, in 2020 we achieved our best-ever personal safety performance, including no recordable injuries on our offshore gas platforms." ### Rusty caissons a known problem The risk of caisson failure is well known to Woodside and the wider offshore industry. Woodside’s 2019 [operations plan](https://info.nopsema.gov.au/environment%5Fplans/462/show%5Fpublic?ref=boilingcold.com.au) for the North Rankin complex lodged with NOPSEMA identified internal corrosion of caissons as one of seven possible causes of structural failure that could lead to gas being released. > “Structural damage to the platform resulting from the causes listed…could be minor or could in the most extreme situation result in total loss of the platform,” the plan stated. Measures to “maintain structural integrity to…prevent structural failures" was identified as necessary to avoid the possibility of an accident that could result in multiple fatalities. The UK offshore safety regulator has issued a directive that: "Deterioration and failure of caissons, including their supports, has been [a significant problem](https://www.hse.gov.uk/offshore/infosheets/is5-2019.pdf?ref=boilingcold.com.au) [in the UK continental shelf for several decades](https://www.hse.gov.uk/offshore/infosheets/is5-2019.pdf?ref=boilingcold.com.au)." The Bruce platform in the North Sea was [shut down for five weeks](https://www.energyvoice.com/oilandgas/north-sea/227123/serica-restarts-bruce-platform-after-two-month-shutdown-due-to-deteriorated-caisson/?ref=boilingcold.com.au) in early 2020 to fix an unused seawater return caisson that had “parted below the waterline.” In April 2021 the UK regulator [took action against Harbour Energy](https://www.energyvoice.com/oilandgas/north-sea/313300/watchdog-criticises-harbour-energy-armada-platform-condition/?ref=boilingcold.com.au) after one caisson failed, another had “severe corrosion and metal loss” and three more were classed as high risk. The North Rankin A platform has supplied gas to the North West Shelf LNG plant since 1984\. A neighbouring North Rankin B platform commenced operations in 2013\. The two platforms sit 100m apart in about 125m of water 135km from Dampier. The NRA platform receives gas, condensate and water from 29 wells on the platform and two subsea wells over the Persephone field, according to Woodside’s operations plan. The production fluids are piped over a bridge to the NRB platform for processing and compression and then separate streams of gas and condensate flow back to NRA for drying and then are piped to shore. The North West Shelf project is owned by six equal partners: operator Woodside, BHP, BP, Chevron, Shell, and Japan Australia LNG that is owned by Mitsui and Mitsubishi. --- *Update: 6:15PM 18 June: Woodside comments added.* --- *Main image: North West Shelf project's North Rankin A and B platforms. Source: [North West Shelf Gas](http://www.nwsg.com.au/?ref=boilingcold.com.au).* --- ### Doubts grow over WA onshore gas export ban URL: https://www.boilingcold.com.au/doubts-grow-over-wa-onshore-gas-export-ban/ Last updated: 2021-12-27T01:26:35.000Z Just ten months after the State Government banned the sale of onshore gas outside WA, there are increasing indications that it is considering exemptions, and the Government declined the opportunity to say otherwise. When Premier Mark McGowan [announced the ban in August 2020](https://www.mediastatements.wa.gov.au/Pages/McGowan/2020/08/Revised-policy-to-secure-domestic-gas-supply-and-create-jobs.aspx?ref=boilingcold.com.au), he called WA's domestic gas reservation policy "the envy of the nation." > "The updated policy will ensure our State can continue to access reliable and affordable gas," McGowan said. "We have seen what's happened on the east coast with local gas supplies being prioritised for export, and we won't let that happen here," McGowan said. "WA gas will continue to be the bedrock of the WA economy." The ban controversially exempted the Waitsia gas project in the Mid West that influential media owner Kerry Stokes has an interest in. The reasoning was the "exceptional economic circumstances created by the COVID-19 pandemic" and "urgently needed jobs." [McGowan: onshore gas export banned, unless its Stokes’ WaitsiaWA Premier Mark McGowan has extended WA’s successful gas reservation policy to all onshore gas - except Waitsia that is backed by a powerful media boss Kerry Stokes![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/08/Indicative-image-of-proposed-Waitsia-Gas-Plant-looking-east.jpg)](https://www.boilingcold.com.au/mcgowan-onshore-gas-export-banned-unless-its-stokes-waitsia/) With WA now facing widespread labour shortages, a need to create jobs can no longer support further exemptions. However, gas producers seem determined to chip away at the cheap gas that is McGowan's "bedrock of the WA economy" in the hope of accessing more lucrative overseas markets. The first move came from the small producers. Black Mountain Oil and Gas president Ashley Zumwalt-Forbes said in December 2020 that it was working with the Department of Jobs, Tourism, Science and Innovation [to have the ban lifted](https://www.boilingcold.com.au/kimberley-fracker-expects-to-escape-wa-gas-export-ban/) and "feedback has been positive." Last week big gas gave notice it wanted the ban softened. The *AFR* reported that Shell Australia chair Tony Nunan suggested that Shell may be [working behind the scenes](https://www.afr.com/companies/energy/shell-wants-all-options-open-for-nw-shelf-gas-hunt-20210608-p57z8x?ref=boilingcold.com.au) to try to persuade WA's McGowan government to drop its ruling last year to ban onshore gas from being exported as LNG. Nunan said governments have a responsibility to ensure the country's LNG production infrastructure is run as efficiently as possible. Nunan gave no reason for this allocation of responsibility. Shell - along with Chevron, BP, BHP, Japan Australia LNG and operator Woodside - own the five-train North West Shelf LNG plant that [may have to shut two trains by 2025](https://www.afr.com/companies/energy/north-west-shelf-output-could-decline-30pc-20201112-p56dwb?ref=boilingcold.com.au) due to declining gas supply. Gas from the Browse fields was destined to fill the plant, but most industry observers now regard the expensive and carbon-intensive project [effectively dead](https://www.boilingcold.com.au/woodside-browse-lng-is-dead/). The second option for NWS was gas from the Scarborough field, but Woodside is adamant the gas will flow to an additional train at Pluto and has said the gas lacks the heavier components needed for the NWS trains to operate. The NWS owner's third option to avoid being stuck with an ageing and emptying asset with a huge abandonment liability was to sell out, as Chevron announced in June 2020. [Eight huge risks Chevron’s North West Shelf sales pitch missedChevron’s slice of the North West Shelf LNG project is touted as ideal for infrastructure investors. It is the opposite - highly risky, complex and dysfunctional.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/08/Karratha-Gas-Plant--North-West-Shelf-Project-web.jpeg)](https://www.boilingcold.com.au/chevrons-north-west-shelf-sales-pitch-missed-8-key-points/) A sale would always have been challenging but was made much harder in December after the Federal Government tightened financial checks on new owners of offshore assets and introduced trailing liabilities. Trailing liabilities allow the Government to pursue previous owners for decommissioning costs as a last resort and make a sale less attractive. The NWS owners are now left with option four - find gas to fill the NWS - and that means the onshore gas export ban must go. Credit Suisse head of Australian energy research Saul Kavonic said government policy would determine the future of the WA gas market. > "I believe that Government position is not a blanket ban, but instead it is establishing a gambit negotiating position from which to make exceptions to that rule," Kavonic told the APPEA Conference in Perth this week. Kavonic said the NWS participants wanting to fill their plant and Perth Basin gas producers seeking access to export markets are very influential. "The folks down in the Perth Basin who instead of selling their gas at four bucks would love to sell their gas at seven bucks (to overseas markets)," Kavonic said. > "My money is on them in winning the lobbying argument." ![Credit Suisse's Saul Kavonic at the APPEA 2021 Conference](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/06/AMMON-20210615-AIPPEA2021-PCEC-0424.jpg) **Credit Suisse's Saul Kavonic at the APPEA 2021 Conference**. Source: APPEA Kavonic said a scenario that could appease most players was for onshore producers to commit some gas to new job-creating industries in return for the rest of their production receiving an exemption from the export ban. "We're going to see flexible policy from the Government that sees cheap gas go to manufacturing but leaves existing legacy gas buyers competing against LNG netback pricing," Kavonic said. *Boiling Cold* asked Minister for State Development Roger Cook, who is now responsible for WA's domestic gas policy, whether the export ban was under review and if the Government was considering further exemptions. The question was not answered. A State Government spokesperson said there had been no change to the policy since it was announced. One element of McGowan's August 2020 rejig of domestic gas policy – increased transparency – is underway. The spokesperson said the Department of Jobs, Tourism, Science and Innovation is working with LNG exporters to ensure the State has the information it needs to monitor compliance and the market knows when, how and how much gas is available to it. "The department is consulting with industry on the development of an annual statement outlining how much gas is supplied and available for sale under WA Domestic Gas Policy commitments," the spokesperson said. Details of recent domestic gas deals with the [Waitsia](https://www.wa.gov.au/government/publications/wa-domestic-gas-policy?ref=boilingcold.com.au#:~:text=on%2023%20december%202020%2C%20the%20state%20executed%20the%20waitsia%20domestic%20gas%20commitment%20agreement%20and%20project%20development%20deed%20with%20the%20waitsia%20joint%20venture.%20the%20agreements%20secure%20domestic%20gas%2C%20local%20content%2C%20industry%20participation%20and%20community%20development%20benefits%20for%20the%20state.) and [Pluto](https://www.wa.gov.au/government/publications/wa-domestic-gas-policy?ref=boilingcold.com.au#:~:text=on%2027%20january%202021%2C%20the%20state%20executed%20the%20pluto%20acceleration%20domestic%20gas%20commitment%20agreement%20with%20woodside%20for%20the%20processing%20of%20pluto%20gas%20at%20the%20north%20west%20shelf%20lng%20facilities%2C%20as%20well%20as%20the%20pluto%20site%20deed%20and%20additional%20domestic%20gas%20commitment%20agreement.%20) projects have been made publicly available. --- **Main image: Waitsia Stage 1 under construction. Source: Mitsui E&P Australia* --- ### Surging solar making South West power grid hard to manage URL: https://www.boilingcold.com.au/surging-solar-making-south-west-power-grid-hard-to-manage/ Last updated: 2022-01-08T14:07:52.000Z The South West power grid faces a growing risk of instability on some sunny spring and autumn days when power generated on household rooftops forces massive shutdowns of power generators. In 2020 solar panels installed in the South West added the same generation capacity as the WA's largest generation facility, the 331-megawatt Neerabup power station. According to the Australian Energy Market Operator's [2021 Electricity Statement of Opportunities](https://www.aemo.com.au/energy-systems/electricity/wholesale-electricity-market-wem/wem-forecasting-and-planning/wem-electricity-statement-of-opportunities-wem-esoo?ref=boilingcold.com.au) for WA released today, one in three homes on the South West Interconnected System has rooftop solar. AEMO general manager WA Cameron Parrotte said the shift towards large-scale variable renewable energy and increased uptake of rooftop solar presented challenges with managing minimum demand and system security. Rooftop and commercial solar system installations are expected to grow eight per cent a year, or about 220 MW, and reach an estimated 4069 MW of installed capacity in ten years. AEMO expects the increase in behind the meter solar generation to push the minimum demand for electricity from the grid to less than a quarter of the current record low of 954 MW within five years. ![Actual and forecast minimum demand on the South West Inteconected System 2012 to 2026](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/06/image-2.png) **Actual and forecast minimum demand.** Source AEMO WA GSOO 2021. The State Government established an energy transformation taskforce two years ago to develop reforms to the SWIS to better accommodate more renewable energy. "AEMO is supportive of innovative solutions…to help alleviate system security risks under certain conditions such as when minimum operational demand is low," Parrotte said. Actions taken in response to the taskforce's work on better managing the surge in solar include changes to the operation of solar panel inverters installed from July, Western Power's installation of 13 community batteries and the April launch of a register of so-called distributed energy resources such as solar panels and batteries. The WA ESOO AEMO stated that behind-the-meter solar generation was "an uncontrollable generation source and is presenting an increasing challenge for the operators of the SWIS." More solar generation increases the rate of change as demand moves between the daily peaks and troughs, as well as driving minimum operational demand lower during the day. ![Change in ten lowest demand days on the South West Interconected System 2015-16 to 2020-21](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/06/image-1.png) **Minimum operational demand has moved from night to midday** (change in ten lowest demand days 2015-16 to 2020-21) Source AEMO WA GSOO 2021. According to the report, the demand swings "are demanding increasing agility from the generating fleet, and some units are not suited to this growing need." > "When a large generation unit is requested to ramp up quickly from an off-line period, there is a higher risk of the unit failing. "When coupled with tight reserve margins, there may not be adequate time to implement a contingency plan." [Synergy pushes its ageing coal plants to be more flexibleWA will be coal-powered for sometime and Synergy wants its Collie power stations to cope with the new world of intermittent renewable energy.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/07/1701584SYNE_101-smaller-reduced.jpg)](https://www.boilingcold.com.au/synergy-pushes-ageing-coal-plants/) Synergy plans to install a $100 million-plus battery in Kwinana to store surplus solar energy in the middle of the day to reduce the amount of coal and gas-fired generation that has to be turned down. The battery will release the energy late in the day, so less generation is required to supply the evening peak. When the State Government announced the battery in October 2022, it expected to award a contract by May 2021 and the battery to enter service by September 2022. A spokesperson for Energy Minister Bill Johnston said Synergy is assessing tender submissions, and a final decision is expected towards the end of August 2021\. The battery remains on track to be operational towards the end of 2022. [WA plans $100M big battery to balance solarA huge battery in Kwinana will help tame the chaos in the South-West WA power system caused by soaring output from rooftop solar panels and pave the way for more renewable energy.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/10/IMG_1513-cropped.JPG)](https://www.boilingcold.com.au/wa-plans-100m-big-battery-to-balance-solar/) Alinta Energy is investigating installing a similar-sized battery [at its Wagerup power station](https://www.boilingcold.com.au/was-second-big-battery-planned-by-alinta-for-wagerup/). While minimum demand is challenging, the system can cope with maximum demand. > "Our analysis shows that even with the expected staged retirement of coal generators, including Muja C unit 5 in 2022 and Muja C unit 6 in 2024, connected and committed capacity is forecast to meet anticipated demand over the next decade," Parotte said. The Energy Transformation Taskforce was wound up in May as planned and [from July 1, the Coordinator of Energy](https://www.wa.gov.au/government/announcements/changes-western-australias-energy-sector-governance-1-july-2021?ref=boilingcold.com.au) Kate Ryan will take over the development and implementation of further changes to Australia's second-biggest electricity grid. --- **Main Picture: Transmission Tower. Source:* [*Lukas Bato*](https://unsplash.com/@lks%5Fbt?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) *on [Unsplash](https://unsplash.com/s/photos/power-transmission?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText)* --- ### WA geothermal rush causes regulator rethink on titles URL: https://www.boilingcold.com.au/wa-geothermal-rush-causes-regulator-rethink-on-titles/ Last updated: 2021-12-27T01:04:23.000Z Two small companies secured geothermal acreage in WA before a surge in interest caused the WA regulator to pause the award of further rights until it puts a competitive bid system in place. *Boiling Cold* understands several proponents have been unable to progress applications for Geothermal Special Prospecting Authorities. Department of Mines, Industry Regulation and Safety director of resource tenure Fiona Knobel said the department switched to a preference for competitive bids in March. “Due to an increased level of interest in geothermal acreage, DMIRS has recommended the State can achieve better exploration outcomes by running a competitive-bid process for acreage release,” Knobel said. DMIRS has identified a number of areas for geothermal exploration. The regulator is working with other agencies to develop the bid process and then will seek approval to proceed from Minister for Mines and Petroleum Bill Johnston. The targeted areas will be revealed on the first release of geothermal acreage planned for the third quarter of 2021. DMIRS will select successful proponents with criteria similar to those used for the award of Petroleum Exploration Permits that go to the applicant proposing the most comprehensive assessment of the area’s potential. The new system will favour financially stronger applicants. *Boiling Cold* understands some large WA resource companies are considering bidding when the acreage is released. Earlier this year, two small companies were awarded the now unavailable Geothermal Special Prospecting Authorities. Mid West Geothermal Power won an authority over 3500 square kilometres of the Mid-West in March. The company, since bought by ASX-listed gas explorer Strike Energy, has until September to complete a heat flow survey of the area. Strike then has until March 2022 to apply to conduct further exploration or drilling in up to half the area of the GSPA. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/06/mid-west-geothermal-title-1.jpg) **Strike Energy Mid-West tenement.** Source: DMIRS Petroleum & Geothermal Register Privately-owned Good Water Energy received a GSPA covering 425 square kilometres around Kwinana in April. The company will log temperature profiles within existing water bores to gather more data about the area’s geothermal potential. Good Water has until April 2022 to apply for exploration or drilling rights for the entire area of the GSPA. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/06/Kwinana-geothermal-title-1.jpg) **Good Water Energy Kwinana tenement.** Source: DMIRS Petroleum & Geothermal Register --- *Main image: Example of binary cycle power plant, where the hot geothermal fluid is run through a heat exchanger and returned directly to the source reservoir. The turbine is run by a closed-circuit working fluid. Source: DMIRS* [*Western Australia’s Petroleum and Geothermal Explorer’s Guide*](http://www.dmp.wa.gov.au/Documents/Petroleum/PD-RES-PUB-100D.pdf?ref=boilingcold.com.au)*.* --- ### Ten tales of Woodside’s merry men: Mark, Bill and Ben URL: https://www.boilingcold.com.au/ten-tales-of-woodsides-merry-men-mark-bill-and-ben/ Last updated: 2024-11-28T22:47:47.000Z ANALYSIS In May 2017, two months after Mark McGowan became WA Premier, Woodside chief executive Peter Coleman presented his growth vision to investors. Gas from distant Browse would flow to the North West Shelf plant, Pluto LNG would be expanded, and the Scarborough field developed. The reception was cautious, for Browse in particular, with [one analyst commenting](https://www.afr.com/companies/energy/woodside-petroleum-yet-to-convince-on-revamped-browse-gas-plan-20170524-gwbpi2?ref=boilingcold.com.au) the plan was "smacking of desperation rather than strategy." It was a challenging agenda, but, [as the *AFR* noted](https://www.afr.com/companies/energy/woodside-petroleum-makes-commitment-20170525-gwdca4?ref=boilingcold.com.au), "at least the Western Australian government is on side." Four years on, Coleman is gone, [Browse is dead](https://www.boilingcold.com.au/woodside-browse-lng-is-dead/), and Scarborough and Pluto have been continually delayed. But through it all, there was one constant: the WA Labor Government kept backing Woodside. Here are ten short tales of how much effort and focus the WA Government has devoted to just one company. A company that is desperate to get its last big carbon-intensive project up before the green investment tide leaves it stranded without any other options. ## 1 - Promises forgotten Sometimes it is what you don't do that counts. The then opposition's [2017 platform ](https://walabor.org.au/media/5sspa0sd/180216%5F2017walaborplatform.pdf?ref=boilingcold.com.au)said WA Labor would "monitor, publicly advertise and appropriately regulate greenhouse gas emissions, particularly in high emitting industries." If there was any monitoring, it has not been advertised. Independent public information is the most important tool to sort hype from fact. The less data in the public realm, the freer companies are to spin without accountability. And for a proponent of LNG projects with millions of tonnes of emissions a year, nothing is more critical than an uninterrupted green spin cycle. The only attempt to fulfil Labor's promise to regulate high emitting industries came from others (see #2 below). Labor's only role was to follow orders and destroy it as quickly as possible. ## 2- The week McGowan did what he was told On March 7 2019, halfway through Premier Mark McGowan's first term, the WA Environmental Protection Authority proposed that all new large projects [offset all of their carbon emissions](https://www.epa.wa.gov.au/media-statements/epa-releases-revised-guidance-proponents-greenhouse-gas-emissions?ref=boilingcold.com.au). If global emissions have to go to net-zero, the logical first step was to stop adding to the problem. The new guidelines would apply to all projects in the EPA's system, including the assessment of Woodside's Browse to North Shelf plan that had [started just six weeks before](https://www.epa.wa.gov.au/media-statements/epa-assess-proposed-browse-north-west-shelf-development?ref=boilingcold.com.au). Industry opposition was instant and frenzied, led by Woodside's Coleman and Kerry Stokes' *The West Australian*. The next day's *ABC* headline "[Mark McGowan attacks EPA guidelines](https://www.abc.net.au/news/2019-03-08/mark-mcgowan-attacks-epa-carbon-emissions-policy/10882946?ref=boilingcold.com.au)" summarised how quickly and unequivocally the Government had sided with industry. A week later, the supposedly independent EPA capitulated, [withdrawing the proposal](https://www.epa.wa.gov.au/media-statements/further-consultation-environmental-protection-authority-greenhouse-gas-guidance?ref=boilingcold.com.au) for "further consultation." There could have been legitimate problems with the EPA proposal that the Government need to address. But in caving to industry demands completely, the McGowan Government looked subservient. Woodside's Coleman said "[the McGowan Government deserves credit](The%20McGowan%20Government%20deserves%20credit%20for%20acting%20quickly) for acting quickly." ## 3- The Minister for Petroleum launches a climate policy Woodside was not clear of the EPA yet. When the regulator pulled back in March 2019, it said it "does not resile from the need to reduce WA's greenhouse gas emissions." It was not the complete surrender Woodside may have wanted. In May, the EPA started 12 weeks of consultation for its second attempt to control carbon emissions to be released in December as a draft. Industry's complaint in March that it had insufficient involvement in policy development would not wash this time. In August 2019, halfway through the EPA's policy development process, the Minister for Mines, Petroleum and Energy Bill Johnston announced an [emissions policy for major projects](https://www.mediastatements.wa.gov.au/Pages/McGowan/2019/08/State-Government-details-emissions-policy-for-major-projects.aspx?ref=boilingcold.com.au). The policy adopted an "aspiration of net zero by 2050," not a target, and allowed proponents to propose their own targets and timeframes. The Government described it as a "sensible and balanced approach to end uncertainty for the industry." In contrast, the *AFR* headlined it as "[WA moves to muzzle emissions watchdog](https://www.afr.com/policy/energy-and-climate/wa-moves-to-muzzle-emissions-watchdog-20190828-p52ljb?ref=boilingcold.com.au)." The move was widely seen as an attempt to pre-empt the EPA's new policy by laying down an expectation of empty unenforceable words. It was never explained why a climate policy came from the Minister for Petroleum, not the then Minister for Environment Stephen Dawson. ## 4 – Woodside subsidized to sell LNG to ships but fails In May 2020 Premier Mark McGowan announced that any LNG-powered vessel coming into the Pilbara would [save $20,000 in port fees](https://www.mediastatements.wa.gov.au/Pages/McGowan/2020/05/Push-to-create-international-LNG-fuelling-hub-in-the-Pilbara.aspx?ref=boilingcold.com.au) if it bought its fuel there. At the same time the Pilbara Ports Authority awarded Woodside a license to sell LNG to ships in the giant iron ore ports of Dampier and Port Hedland. In short, the sales pitch to big iron ore was if you buy LNG from Woodside the WA taxpayer will halve your port fee. BHP went elsewhere. In December 2020 it agreed to [buy LNG from Shell in Singapore](https://www.bhp.com/media-and-insights/news-releases/2020/12/bhp-awards-lng-supply-agreement-to-shell-for-lng-fuelled-iron-ore-vessels/?ref=boilingcold.com.au) for five new LNG-fuelled carriers that will start carrying iron ore to China in 2022. Even with a subsidy, Woodside failed to beat a competitor that required an extra stop on the voyage and has to buy in LNG from elsewhere. Observers are left to wonder if a less well-connected but perhaps more capable company won the LNG bunkering license Australian iron ore could have been moved with Australian LNG loaded by Australian workers. ## 5 – Onshore gas for WA only, except for powerful friends McGowan banned the export outside WA of gas from the growing onshore sector in August 2020 to ensure the State had enough of the fuel for its future. However, [there was one exception that destroyed the logic of the policy](https://www.boilingcold.com.au/mcgowan-onshore-gas-export-banned-unless-its-stokes-waitsia/). The Waitsia gas project in the Perth basin – WA's largest onshore gas discovery in decades – was allowed to ship its gas overseas. The winners? The main players in the week that killed the EPA emissions policy. Woodside will get a tolling fee for turning the gas from Waitsia into LNG at its NWS plant and less competition in the WA gas market for its own gas. Kerry Stokes, the proprietor of *The West Australian* and owner of a substantial stake in Waitsia, gets access to a market no one else does. The Premier's reasoning was the "exceptional economic circumstances created by the COVID-19 pandemic." ## 6 – Cash for Woodside's favourite customer The day after Waitsia escaped the gas export ban to Woodside's advantage, another business partner of the LNG giant received a State Government boost. Infrastructure required for the Perdaman urea plant that will take a large chunk of gas from Woodside's Scarborough project [received $35 million of support](https://www.mediastatements.wa.gov.au/Pages/McGowan/2020/08/Conditional-support-for-job-creating-gas-manufacturing-project.aspx?ref=boilingcold.com.au). And why is Perdaman a Woodside favourite? Many doubt the small company will get the finance it needs to build the $4.6 billion project. However, in the meantime, it represents additional jobs and investment linked to Scarborough that Woodside can point to when it seeks support for the project. ## 7 – Playing along with a Woodside PR stunt In November 2020, Woodside had to present its much delayed and doubted expansion plans to investment analysis who advise their customers whether to pour more money into the company or dump and run. Woodside's spin kings had one problem – there was no good news. Everything was on hold. The solution? Fast track the award of a government approval that was never in any doubt and portray it as progress. The Federal and WA Government's dutifully signed off the production licences for Scarborough that were not needed until the project was sanctioned. Woodside chief executive Peter Coleman said the licences demonstrated "the strong commitment from both joint venture participants and the State and Federal Governments to taking the project forward." It actually demonstrated diddly-squat, except Government officials wasted time on nonsense work to give a private company a bureaucratic fig leaf to cover its lack of real progress. Fortunately for taxpayers, this favour had no dollars attached. However, somewhere a company with a real and immediate need for Government assistance did not get it because games were being played. ## 8 – A toothless climate policy WA's long-awaited climate policy was [released in November 2020](https://www.mediastatements.wa.gov.au/Pages/McGowan/2020/11/Climate-policy-supports-Western-Australias-low-carbon-future.aspx?ref=boilingcold.com.au#:~:text=%22This%20policy%20demonstrates%20the%20State,in%20a%20low%2Dcarbon%20future.). There was nothing new to reduce the enormous existing emissions from heavy industry such as LNG plants. Little mitigation and lots of adaptation. It was like a bushfire policy that ignored fighting fires and concentrated on fireproof homes. ## 9 – The great $2.3 billion Pluto domestic gas con The WA Government approved a Woodside proposal to build a [pipeline between its North West Shelf and Pluto LNG plants](https://www.mediastatements.wa.gov.au/Pages/McGowan/2021/01/State-Government-approves-Pilbara-gas-project.aspx?ref=boilingcold.com.au) on January 29 2021\. This was just a few working days before the Government entered pre-election caretaker mode when it could no longer make non-urgent decisions. Why the fuss over a bit of pipe? There are two things to understand. First, that pipe can make Woodside a lot of money, but Woodside could not build it without approval from the Government. There is growing spare capacity in the NWS LNG plant. Woodside wants to transfer gas from Pluto to NWS, which would otherwise stay in the ground for years, and use it to produce LNG. Woodside estimated the deal would accelerate $US1.8 billion ($2.3 billion) of revenue. Secondly, Woodside has [not delivered on a 15-year-old deal to supply gas from Pluto](https://www.boilingcold.com.au/was-near-useless-domestic-gas-deal-with-woodsides-pluto-lng/) to the domestic market. Unlike later projects, Pluto had no domestic gas obligation for the first five years of production, courtesy of Labor premier Alan Carpenter in 2006. However, for the past four years, Pluto should have been delivering about 115 terajoules a day of gas to the WA market. To fulfil its obligation, Woodside built a pipeline that carries just 25 terajoules a day of gas and built a facility to load trucks with LNG that has been unreliable and only shipped a handful of loads. Remember, the McGowan Government banned the export of onshore gas because it was concerned about future supply. It now had the perfect opportunity to pressure Woodside to fully deliver on its Pluto gas commitment by linking it to approval for the pipeline that would unlock $2.3 billion of revenue. And what did the State Government achieve? Just an extra 46 petajoules of gas from 2025\. This is a little over one year's worth of the gas supply that Pluto should have delivered constantly since 2017. Given the Government's power with the pipeline approvals, the outcome would be marked failed in any introductory negotiation class. ## 10 – And the best is yet to come After four years of help and not delivering on its Pluto domestic gas commitment, Woodside still wants more from WA Labor in its second term. Despite the best efforts of Woodside and the McGowan Government, the EPA did eventually [implement a greenhouse gas policy with teeth](https://www.boilingcold.com.au/carbon-emissions-hurdle-for-wa-projects-finalised-by-epa/). Instead of offsetting all emissions from day one, project emissions have to trend down in roughly a straight line to net-zero by 2050. In September 2020, the EPA's conditions were [imposed on two projects](https://www.boilingcold.com.au/wa-epa-and-industry-make-real-moves-to-net-zero-by-2050/): the Kerry Stokes-linked Waitsia's gas field and a power station for Andrew Forrest's FMG. Last week the Wesfarmers-backed Covalent lithium refinery [joined the list](https://www.epa.wa.gov.au/proposals/covalent-lithium-hydroxide-refinery?ref=boilingcold.com.au). Three of the most prominent corporate players in the State have now invested in large projects that must continually cut their emissions to zero by 2050. The greenhouse gas management plan for the Pluto LNG plant is now under review by the EPA as part of the approval proves to expand the project to two LNG trains. Consistency would require that Pluto be treated like other investors: cut emissions over the next three decades to be net-zero by 2050. The Scarborough to Pluto project is expected to have just a [marginal financial return](https://www.boilingcold.com.au/woodsides-scarborough-lng-was-uneconomic-before-price-crash-woodmac/). Woodside is only doggedly pursuing it as [it has no plan B](https://www.boilingcold.com.au/woodside-scarborough-or-stranded-like-a-beached-whale/). The fading local LNG giant will fight any imposition of additional costs, despite its "[net-zero by 2050 aspiration](https://www.woodside.com.au/sustainability/climate-change?ref=boilingcold.com.au)." Other approvals for the Scarborough project are [under challenge by the Conservation Council of WA](https://www.boilingcold.com.au/the-green-legal-action-that-could-halt-woodsides-scarborough-lng/) in the Supreme Court. Woodside may well want a Government intervention here as well. If Woodside succeeds in getting special treatment, Premier Mark McGowan should be asked why this one company gets so much from his Government. --- *Main image: Graphic by Boiling Cold. Source: Ben Wyatt and Woodside building pictures: Woodside Energy Limited, Mark McGowan and Bill Johnston pictures: WA Parliament.* --- ### Australia's green steel dream explained URL: https://www.boilingcold.com.au/australias-green-steel-dream-explained/ Last updated: 2021-12-27T13:51:20.000Z *[Jessica Allen](https://theconversation.com/profiles/jessica-allen-406304?ref=boilingcold.com.au), [University of Newcastle](https://theconversation.com/institutions/university-of-newcastle-1060?ref=boilingcold.com.au) and [Tom Honeyands](https://theconversation.com/profiles/tom-honeyands-1229793?ref=boilingcold.com.au), [University of Newcastle](https://theconversation.com/institutions/university-of-newcastle-1060?ref=boilingcold.com.au)* Steel is a major building block of our modern world, used to make everything from cutlery to bridges and wind turbines. But the way it’s made – using coal – is making climate change worse. On average, [almost two tonnes](https://www.mdpi.com/2075-4701/10/9/1117?ref=boilingcold.com.au) of carbon dioxide (CO₂) are emitted for every tonne of steel produced. This [accounts for about 7%](https://ourworldindata.org/emissions-by-sector?ref=boilingcold.com.au) of global greenhouse gas emissions. Cleaning up steel production is clearly key to Earth’s low-carbon future. Fortunately, a new path is emerging. So-called “green steel”, made using hydrogen rather than coal, represents a huge opportunity for Australia. It would boost our exports, help offset inevitable job losses in the fossil fuel industry and go a long way to tackling climate change. Australia’s abundant and cheap wind and solar resources mean we’re well placed to produce the hydrogen a green steel industry needs. So let’s take a look at how green steel is made, and the challenges ahead. ### Steeling for change Steel-making requires stripping oxygen from iron ore to produce pure iron metal. In traditional steel-making, this is done using coal or natural gas in a process that releases CO₂. In green steel production, hydrogen made from renewable energy replaces fossil fuels. Australia exports almost [900 million tonnes](https://minerals.org.au/minerals/ironore?ref=boilingcold.com.au) of iron ore each year, but only makes [5.5 million tonnes](https://www.worldsteel.org/steel-by-topic/statistics/World-Steel-in-Figures.html?ref=boilingcold.com.au) of steel. This means we have great capacity to ramp up steel production. A Grattan Institute report [last year found](https://grattan.edu.au/news/green-steel-is-no-longer-a-fantasy/?ref=boilingcold.com.au) if Australia captured about 6.5% of the global steel market, this could generate about A$65 billion in annual export revenue and create 25,000 manufacturing jobs in Queensland and New South Wales. Steel-making is a complex process and is primarily achieved via one of three processes. Each of them, in theory, can be adapted to produce green steel. We examine each process below. [Australia could fall apart under climate change. But there’s a way to avoid itEminent economist Ross Garnaut says if climate action fails, he fears the consequences ‘would be beyond contemporary Australia’. But zero-emissions iron and aluminium could be the way forward.![](https://cdn.theconversation.com/static/tc/@theconversation/ui/dist/esm/logos/web-app-logo-192x192-e99834e3a7a551050e9debe6cc925617.png)The ConversationRoss Garnaut![](https://images.theconversation.com/files/300007/original/file-20191104-88419-lnffxw.jpg?ixlib=rb-1.1.0&rect=14%2C3%2C2481%2C1238&q=45&auto=format&w=1356&h=668&fit=crop)](https://theconversation.com/australia-could-fall-apart-under-climate-change-but-theres-a-way-to-avoid-it-126341?ref=boilingcold.com.au) ### 1\. Blast furnace Globally, [about 70%](https://www.worldsteel.org/steel-by-topic/statistics/steel-statistical-yearbook.html?ref=boilingcold.com.au) of steel is produced using the blast furnace method. As part of this process, processed coal (also known as coke) is used in the main body of the furnace. It acts as a physical support structure for materials entering and leaving the furnace, among other functions. It’s also partially burnt at the bottom of the furnace to both produce heat and make carbon monoxide, which strips oxygen from iron ore leaving metallic iron. This coal-driven process leads to CO₂ emissions. It’s [feasible](https://www.thyssenkrupp.com/en/stories/sustainability-and-climate-protection/green-steel-review-of-phase-1-of-the-injection-trials?ref=boilingcold.com.au) to replace a portion of the carbon monoxide with hydrogen. The hydrogen can strip oxygen away from the ore, generating water instead of CO₂. This requires renewable electricity to produce green hydrogen. And hydrogen cannot replace carbon monoxide at a ratio of 1:1\. If hydrogen is used, the blast furnace needs more externally added heat to keep the temperature high, compared with the coal method. More importantly, solid coal in the main body of the furnace cannot be replaced with hydrogen. Some [alternatives](https://doi.org/10.1016/j.biombioe.2018.04.021?ref=boilingcold.com.au) have been developed, involving biomass – a fuel developed from living organisms – blended with coal. But sourcing biomass sustainably and at scale would be [a challenge](https://doi.org/10.1016/j.seta.2018.03.001?ref=boilingcold.com.au). And this process would still likely create some fossil-fuel derived emissions. So to ensure the process is “green”, these emissions would have to be captured and stored – a technology that is [currently](https://www.climatecouncil.org.au/resources/what-is-carbon-capture-and-storage/?ref=boilingcold.com.au) expensive and unproven at scale. [Australians want industry, and they’d like it green. Steel is the place to startAustralia could grab a huge chunk of the world’s steel industry, and do it on the east coast, if it gets the technologies right.![](https://cdn.theconversation.com/static/tc/@theconversation/ui/dist/esm/logos/web-app-logo-192x192-e99834e3a7a551050e9debe6cc925617.png)The ConversationGuy Dundas![](https://images.theconversation.com/files/333821/original/file-20200510-49558-130bnc7.jpg?ixlib=rb-1.1.0&rect=603%2C342%2C2827%2C1402&q=45&auto=format&w=1356&h=668&fit=crop)](https://theconversation.com/australians-want-industry-and-theyd-like-it-green-steel-is-the-place-to-start-137999?ref=boilingcold.com.au) ### 2\. Recycled steel [Around 30%](https://www.worldsteel.org/steel-by-topic/statistics/steel-statistical-yearbook.html?ref=boilingcold.com.au) of the world’s steel is made from recycled steel. Steel has one of the highest recycling rates of any material. Steel recycling is mainly done in arc furnaces, driven by electricity. Each tonne of steel produced using this method produces about [0.4 tonnes of CO₂](https://www.bhp.com/media-and-insights/prospects/2020/11/pathways-to-decarbonisation-episode-two-steelmaking-technology/?ref=boilingcold.com.au) – mostly due to emissions produced by burning fossil fuels for electricity generation. If the electricity was produced from renewable sources, the CO₂ output would be greatly reduced. But steel cannot continuously be recycled. After a while, unwanted elements such as copper, nickel and tin begin to accumulate in the steel, reducing its quality. Also, steel has a long lifetime and low turnover rate. This means recycled steel cannot meet all steel demand, and some new steel must be produced. ### 3\. Direct reduced iron “Direct reduced iron” (DRI) technology often uses methane gas to produce hydrogen and carbon monoxide, which are then used to turn iron ore into iron. This method still creates CO₂ emissions, and requires more electricity than the blast furnace method. However, its overall emission intensity can be [substantially lower](https://www.bhp.com/media-and-insights/prospects/2020/11/pathways-to-decarbonisation-episode-two-steelmaking-technology/?ref=boilingcold.com.au). The method currently accounts for [less than 5%](https://www.worldsteel.org/en/dam/jcr:f7982217-cfde-4fdc-8ba0-795ed807f513/World%2520Steel%2520in%2520Figures%25202020i.pdf?ref=boilingcold.com.au) of production, and offers the greatest opportunity for using green hydrogen. Up to 70% of the hydrogen derived from methane could be replaced with green hydrogen [without having to modify](https://www.midrex.com/wp-content/uploads/Midrex-DFM-1stQtr2021-Final.pdf?ref=boilingcold.com.au) the production process too much. However, work on using 100% green hydrogen in this method is [ongoing](https://www.midrex.com/technology/midrex-process/midrex-h2/?ref=boilingcold.com.au). [For hydrogen to be truly ‘clean’ it must be made with renewables, not coalCoal and gas have been proposed as a way to make ‘clean’ hydrogen. But that road is full of challenges.![](https://cdn.theconversation.com/static/tc/@theconversation/ui/dist/esm/logos/web-app-logo-192x192-e99834e3a7a551050e9debe6cc925617.png)The ConversationFiona J Beck![](https://images.theconversation.com/files/304545/original/file-20191201-156116-yomnh0.jpeg?ixlib=rb-1.1.0&rect=0%2C464%2C4452%2C2223&q=45&auto=format&w=1356&h=668&fit=crop)](https://theconversation.com/for-hydrogen-to-be-truly-clean-it-must-be-made-with-renewables-not-coal-128053?ref=boilingcold.com.au) ### Becoming a green steel superpower The green steel transition won’t happen overnight and significant challenges remain. Cheap, large-scale green hydrogen and renewable electricity will be required. And even if green hydrogen is used, to achieve net-zero emissions the blast furnace method will still require carbon capture and storage technologies – and so too will DRI, for the time being. Private sector investment [is needed](https://grattan.edu.au/news/green-steel-is-no-longer-a-fantasy/?ref=boilingcold.com.au) to create a global-scale export industry. Australian governments also have a big role to play, in building skills and capability, helping workers retrain, funding research and coordinating land-use planning. Revolutionising Australia’s steel industry is a daunting task. But if we play our cards right, Australia can be a major player in the green manufacturing revolution. ![The Conversation](https://counter.theconversation.com/content/160282/count.gif?distributor=republish-lightbox-basic) --- *[Jessica Allen](https://theconversation.com/profiles/jessica-allen-406304?ref=boilingcold.com.au), Senior Lecturer and DECRA Fellow, [University of Newcastle](https://theconversation.com/institutions/university-of-newcastle-1060?ref=boilingcold.com.au) and [Tom Honeyands](https://theconversation.com/profiles/tom-honeyands-1229793?ref=boilingcold.com.au), Director, Centre for Ironmaking Materials Research, [University of Newcastle](https://theconversation.com/institutions/university-of-newcastle-1060?ref=boilingcold.com.au)* *This article is republished from [The Conversation](https://theconversation.com/?ref=boilingcold.com.au) under a Creative Commons license. Read the [original article](https://theconversation.com/green-steel-is-hailed-as-the-next-big-thing-in-australian-industry-heres-what-the-hype-is-all-about-160282?ref=boilingcold.com.au).* --- *Main image: Image from a steel mill. Source: Photo by* [*yasin hm*](https://unsplash.com/@yasinb3da?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) *on* [*Unsplash*](https://unsplash.com/s/photos/steel-making?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) --- ### BHP climate target skips massive Australian oil & gas emissions URL: https://www.boilingcold.com.au/bhp-climate-target-skips-massive-australian-oil-gas-emissions/ Last updated: 2021-12-27T01:10:27.000Z ANALYSIS Late this year, BHP's board will meet to determine if Woodside's $US11.4 billion Scarborough LNG project goes ahead. BHP will need to pay about $US1.4 billion for its 26.5 per cent share of offshore construction and make a long-term commitment to process the gas through an expanded Pluto LNG plant. BHP's partner Woodside is desperate for Scarborough to go ahead as production from its current projects will decline this decade, and it has no growth options more viable than the [economically marginal Scarborough](https://www.boilingcold.com.au/woodsides-scarborough-lng-was-uneconomic-before-price-crash-woodmac/#:~:text=scarborough%20gas%20processed%20through%20a%20new%20pluto%20lng%20train%20was%20the%20most%20expensive%20way%20to%20deliver%20lng%20to%20asia%20of%20nine%20proposed%20lng%20projects%20assessed%20by%20wood%20mackenzie.). However, without BHP's consent and money, the Scarborough project cannot happen. [Woodside: Scarborough or stranded like a beached whaleFor Woodside, it is Scarborough or bust. Incredibly the LNG specialist has no plan B ready if its last chance to develop an LNG project evaporates. And Scarborough is no sure thing.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/04/whale-outside-woodside-HQ.JPG)](https://www.boilingcold.com.au/woodside-scarborough-or-stranded-like-a-beached-whale/) Unlike Woodside, the diversified miner has an array of choices of where to invest, including copper and nickel that are on a roll to feed the electric vehicle boom. While climate concerns have left Woodside stuck producing a transition product, it has gifted BHP massive long-term opportunities. The BHP board chaired by Ken MacKenzie will decide on Scarborough based on work by the petroleum business unit led by Geraldine Slattery that would have been carefully reviewed by chief executive Mike Henry. Concerns will include the risk of cost and schedule blowouts, the LNG market outlook and how the investment stacks up against alternatives. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/05/181022_KenMackenzieLowResv2.jpg) ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/05/190808_GeraldineSlattery_LR.jpg) ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/05/200101_Mike-Henry_2019_lowres.jpg) **BHP chair Ken MacKenzie, petroleum president Geraldine Slattery and chief executive Mike Henry**. Source: BHP Incredibly, in 2021, Henry, Slattery and the BHP board will not have to worry about the 3.7 million tonnes of greenhouse gases Scarborough will emit each year, because in BHP's carbon accounting Scarborough does not count. That is fortunate for Henry and Slattery as their bonuses are tied to BHP cutting its operational emissions 30 per cent by 2030. The key word is "operational." ## Gaps in climate responsibility BHP counts all the emissions from projects it operates but ignores the climate impact of its investments in projects managed by other companies. BHP counts all the 2.5 million tonnes a year of emissions from iron ore mining in WA, despite other companies owning about 14 per cent of the operation. Conversely, emissions from the giant North West Shelf LNG project that BHP has a one-sixth stake will not affect BHP's climate metrics as Woodside operates it. BHP target to cut its measured emissions by 30 per cent this decade on the road to net-zero emissions by 2050 needs a reduction of 4.8 million tonnes in annual emissions. This colossal challenge would be incredibly more difficult if BHP added the extra one million tonnes a year of carbon emitted to make its share of LNG from Scarborough that it will sell to the world. To measure their climate impact, companies can either tally the projects they operate, as BHP has done for many years, or total the equity share of all projects they have a stake in. BHP reports its emissions according to [The Greenhouse Gas Protocol](https://ghgprotocol.org/sites/default/files/standards/ghg-protocol-revised.pdf?ref=boilingcold.com.au) that allows both approaches. Neither are perfect when applied to the shared responsibilities in the joint ventures that dominate oil and gas production. In a joint venture, one participant is appointed operator and is paid to manage the asset on behalf of the other companies that cede any involvement in day-to-day activities. However, these non-operating participants still exert significant control as they must approve the operator's annual work program and budget and any significant investments. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/05/image-9.png) For BHP's Australian petroleum assets, the operational control approach results in only the relatively small emissions from the Pyrenees and Macedon projects off WA affecting its climate targets. The huge Bass Strait and North West Shelf projects that BHP has been involved in since they were founded decades ago do not appear on BHP's climate books. Overseas BHP Petroleum has a mix of operated assets it owns less than half of that appear in its carbon accounting and equity in non-operated assets that do not. A BHP spokesperson said reporting emissions and setting reduction targets only for the assets it operates was a common practice across the industry that ensures emissions are not double-counted. In reality, the operational control approach is not close to being an industry standard, and the problem is not excessive counting but the inadequate allocation of responsibility. ## Decisions without consequences BHP has ceded all climate responsibility for the North West Shelf to operator Woodside, but unlike BHP, Woodside bases its targets on its equity share that is only one-sixth of the project. Targets determine decisions, as was demonstrated when Woodside committed to offset its share of CO2 in reservoirs vented to the atmosphere. What about the other five-sixths of reservoir CO2 from the North West Shelf? No action. Lost in the confusion of carbon accounting. Other companies that measure emissions by equity interest, like Woodside, are [Chevron](https://www.chevron.com/sustainability/environment/lowering-carbon-intensity?ref=boilingcold.com.au#:~:text=we%20establish%20our%20upstream%20metrics%20on%20an%20equity%20basis) and [Shell](https://www.shell.com/energy-and-innovation/the-energy-future/what-is-shells-net-carbon-footprint-ambition/faq.html?ref=boilingcold.com.au#:~:text=average%20amount%20of%20greenhouse%20gas%20emissions%20which%20are%20produced%20for%20each%20unit%20of%20energy%20that%20we%20sell%2C). So much for an industry standard. Similarly, in the Bass Strait, BHP's view of the world is that it does not have to worry about emissions because operator ExxonMobil will. Unfortunately, ExxonMobil has no targets to reduce its total emissions, only its emission per unit of production. In 2020 BHP received $US2.2 billion in revenue from the NWS and Bass Strait but passed responsibility for the project's climate impacts onto operators with misaligned objectives. Woodside publicly and clearly only targets its own emissions, and ExxonMobil has climate targets that fall far short of BHP's. A focus on the company that operates an asset does not reflect who really makes the big decisions that determine emissions. The operator can alter how the plant is run and maintained to perhaps change emissions by a few per cent. However, decisions with a significant impact on climate – project go ahead, expansions, major capital expenditure to reduce emissions, and abandonment – are made by all the joint venture participants. Corporate metrics exist to encourage management to make the right decisions. Most metrics push shareholder wealth, but climate metrics should encourage management to minimise the climate damage done by the company. Under BHP's climate targets, the board and management have no incentive to consider climate impact when the miner effectively will decide if the $US11.4 billion Scarborough project goes ahead or not. Conservation Council director Piers Verstegen said the community and shareholders expected greater transparency. "BHP has escaped public attention on these issues to date because they have been able to conveniently hide the full extent of pollution from their fossil fuel investments," Verstegen said. "That is not likely to be a successful strategy for BHP into the future, "Committing to cut carbon pollution from one part of your business while allowing it to increase rapidly in another area is simply not a credible approach to climate change." Australasian Centre for Corporate Responsibility climate director Dan Gocher said BHP cannot continue to sanction projects where it doesn't have operational control, like Scarborough, and think its shareholders will continue to ignore the emissions from those projects. "BHP's climate commitments are already well behind those of its peers, including Fortescue and Glencore, yet it plans to sanction multiple new oil and gas projects," Gocher said. "The [new IEA Net Zero report](https://www.boilingcold.com.au/1-5-needs-halt-to-new-oil-gas-and-coal-projects-now-iea/) confirms that these projects are simply not consistent with a safe climate." --- *Main image: Graphic of the proposed Scarborough offshore facility with text and BHP logo added. Source: Screenshot from [Woodside video](https://www.youtube.com/watch?v=lv1eTKo9gvQ&ref=boilingcold.com.au).* --- ### Ammonia export a hope amidst Australia’s hydrogen hype: BNEF URL: https://www.boilingcold.com.au/ammonia-export-a-hope-amidst-australias-hydrogen-hype-bnef/ Last updated: 2021-12-27T01:29:48.000Z Australia's hydrogen hopes lie with ammonia export and local use, but without strong Federal Government decarbonisation policies, the hype will be unfulfilled, according to Bloomberg NEF. BNEF head of industry decarbonisation Kobad Bhavnagri said it was unclear what technologies apart from electrification will dominate the decarbonised economy, but hydrogen could meet up to 20 per cent of final energy demand. > "The hope really is that hydrogen can become this molecule that powers a clean economy," Bhavnagri told the Australian Hydrogen Conference in Sydney last week. Bhavnagri said green hydrogen production costs could fall substantially. He expected by 2030 Western electrolyser manufacturers would match their Chinese competitors that currently undercut them on price by 80 per cent. Continued falling costs of renewable energy that power the electrolysers that split water into hydrogen and oxygen would add to hydrogen's competitiveness. Australia's competitive advantage lies with the production of cheap renewable energy. BNEF predicts renewable power will cost less than $US20 a megawatt in almost all parts of the world by 2050, but Australian costs will be in the $US10-15/MW range. The alternative to green hydrogen is blue hydrogen that uses the current technology of extracting hydrogen from natural gas and adds the capture and storage of the carbon dioxide produced. BNEF analysis predicts green hydrogen will become cheaper than blue hydrogen everywhere, including the US, Saudi Arabia and Russia that have cheap gas. > "The business case for blue hydrogen looks fundamentally challenging," Bhavnagri said. "It would be very hard to get financed when you have maybe a runway of 10 years of being a low-cost producer before you are undercut by a technology which is rapidly improving." In many parts of the world, including Australia, green hydrogen will also eventually be competitive with natural gas as an energy source. ## What is green hydrogen good for? Bhavnagri said there is strong interest in the US to use hydrogen to generate clean peak and dispatchable power. "We're also seeing that momentum on the equipment side with all of the major gas turbine manufacturers producing hydrogen capable units or units that are able to be retrofitted for the use of hydrogen." Industrial uses for green hydrogen include hard to electrify sectors such as steel and cement, and replacing the hydrogen used in oil refining and methanol and ammonia plants. However, BNEF sees hydrogen playing only a niche role in transport. By 2030 BNEF predicts battery electric vehicles to have a lower total cost of ownership than both hydrogen vehicles and conventional internal combustion engines. The exception is heavy-duty long-haul trucks, as batteries are likely to remain too heavy and costly to store the energy required despite expected technology improvements. ## Australia's potential needs policy push Australia will be able to make green hydrogen for less than half the price of Japan, according to BNEF. However, the product would not be competitive due to the high cost of converting hydrogen to ammonia for ease of transport and then converting it back to hydrogen in Japan. "The economic rationality says any country should try and produce hydrogen onshore first," Bhavnagri said. Japan and Korea have limited onshore renewable potential but could develop significant amounts of offshore wind power. "Australia should really focus on exporting hydrogen derivatives, moving further up the value chain exporting things which are more energy-dense than hydrogen is as a cargo," Bhavnagri said. Australia could export green hydrogen-based steel, synthetic fuels and methanol. Ammonia export markets include fertilisers, shipping and power generation. > "This is difficult because it involves us doing more than just dig and put on a boat, and makes us have to confront some of the challenges we have with the small scale of our market." The hydrogen industry needs to grow to provide the scale required to drive down costs, but the initial growth to launch a viable industry needs policy support. The list of global large scale hydrogen projects to provide the scale to drive costs down is growing, but Bhavnagri described most of them as speculative. "They lack a viable business case; they lack an offtaker who is willing to pay the premium." Bhavnagri said Australia could not "magically" develop a clean hydrogen industry with the Federal Government's mantra of "technology and not taxes." "Scaling up hydrogen requires robust policy, which doesn't exist in Australia to the extent that is required." BNEF identified a suite of policies required for the hydrogen industry to scale up, including legislated net-zero targets, tough heavy vehicle emission standards and mandates for lower emissions products. > "Many of those, unfortunately, are nonstarters at the Federal political level; there is not yet the appetite to do the hard things that we need to." --- *Main image: Graphic. Source: WA Renewable Hydrogen Strategy* --- ### Shell, Exxon and Chevron slammed on climate by court and investors: what it means for Australia URL: https://www.boilingcold.com.au/shell-exxon-and-chevron-slammed-on-climate-by-court-and-investors-what-it-means-for-australia/ Last updated: 2021-12-27T01:12:50.000Z ANALYSIS The three oil and gas supermajors with the biggest presence in Australia were yesterday all forced to hasten their moves away from fossil fuels. Shell, ExxonMobil and Chevron have no plans to expand production in Australia, but the successful climate initiatives could affect operations, asset sales, and the closure of fields. Dutch giant Shell was the first to fall when a court in its home country ruled it must [cut its emissions by 45 per cent by 2030](https://www.reuters.com/business/sustainable-business/dutch-court-orders-shell-set-tougher-climate-targets-2021-05-26/?ref=boilingcold.com.au), including the Scope 3 emissions of its customers. Shell had planned a 20 per cent cut in the carbon intensity, or carbon pollution per unit of energy delivered, of its products by 2030 with a further 15 per cent reduction five years later. However, a lower carbon intensity does not necessarily require a cut in total emissions, as it could be achieved with greater production of slightly less polluting products. Shell wants its fossil fuels to be less dirty. The court wants less fossil fuels. Shell will appeal the ruling. Across the Atlantic, ExxonMobil next felt the heat when [at least two activist investors were elected to the board](https://www.reuters.com/business/sustainable-business/shareholder-activism-reaches-milestone-exxon-board-vote-nears-end-2021-05-26/?ref=boilingcold.com.au) of what was once the world’s largest company. The win at Exxon’s virtual AGM was a colossal rebuff to chair and chief executive Darren Woods, who had battled to keep the status quo of tame directors who support management standard in US oil companies. The [independent directors presented a plan](https://reenergizexom.com/wp-content/uploads/2021/04/Engine-No.-1-Reenergize-ExxonMobil-Investor-Presentation.pdf?ref=boilingcold.com.au) for the US major to accept carbon capture and storage cannot save its business model and only fund new production that can deliver high returns with conservative oil price assumptions. The money freed up by forgoing lower return investments would be returned to investors or channelled to other growth opportunities. Hours later, 61 per cent of Chevron shareholders voted for Chevron to “substantially reduce the greenhouse gas emissions of their energy products in the medium and long term.” Chevron has no targets to reduce the Scope 3 emissions produced by customers burning its products and does not even target a reduction of its own Scope 1 emissions. Australia’s largest foreign investor does aim for a 40 per cent cut from 2016 to 2028 in carbon emissions for each barrel of oil produced, and a 25 per cent reduction for gas. The wording of the resolution gives Chevron management plenty of wriggle room if they choose to keep their current course, but the strength of the vote indicates that it could be a career-limiting move come the 2022 AGM. ![Carbon emissions in Australia from facilities owned by Shell, ExxonMobil and Chevron including North West Shelf, Gorgon, Prelude, Bass Strait and Wheatstone.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/05/image-7.png) Emissions data: Clean Energy Regulator 2019-20 The rebuffs to the three multinational’s plans to navigate the energy transition are all different, but the effect will be similar: a stronger push to cut production, starting with the dirtiest and lowest return assets. Local producers Woodside and Santos will note yesterday’s events. They bucked the global trend and escaped any successful climate-related votes at recent annual general meetings, but their management may not be so lucky in 2022. Shell and Exxon will be keen for Chevron to finally get CO2 injection at the Gorgon LNG project working reliably to reduce the project’s carbon emissions by four million tonnes a year. Injection is now limited to one-third of design capacity until Chevron convinces the regulator it has fixed technical problems that could cause excessive pressure in the underground reservoir. With CO2 injection working, Gorgon produces LNG with a relatively low carbon intensity and would not be a high priority for disposal. Chevron would welcome a buyer of its North West Shelf LNG interest to immediately reduce emissions and escape looming significant decommissioning liabilities. However, with the Browse fields unlikely to ever be developed to fill the NWS plant and the Australian Government making strong moves to ensure decommissioning is done not delayed, the stake is a less than compelling buy. [Eight huge risks Chevron’s North West Shelf sales pitch missedChevron’s slice of the North West Shelf LNG project is touted as ideal for infrastructure investors. It is the opposite - highly risky, complex and dysfunctional.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/08/Karratha-Gas-Plant--North-West-Shelf-Project-web.jpeg)](https://www.boilingcold.com.au/chevrons-north-west-shelf-sales-pitch-missed-8-key-points/) Shell may be similarly keen to dispose of its NWS stake. However, it has the added complication that an exit would be an admission that it sees its 27 per cent stake in Browse as a stranded asset. Shell’s problem child, Prelude floating LNG, is an asset particularly unsuited to the carbon transition: expensive, for two years now incredibly unreliable, and even if Shell gets excessive flaring under control its LNG is highly carbon-intensive. The vessel is almost unsellable due to its unique complexity and poor performance. A decade ago an oil and gas major would do anything to avoid the embarrassment of decommissioning a $US17 billion showpiece asset a few years after startup. In today’s world, it just might be the symbolic move Shell needs to show investors it is serious about discarding its fossil fuel past. --- *Main image: Shell's Prelude floating LNG vessel flaring gas. Source: Anon.* --- ### Alcoa to test new steam tech in WA that could cut emissions 70pc URL: https://www.boilingcold.com.au/alcoa-to-test-new-steam-tech-in-wa-that-could-cut-carbon-emissions-70-per-cent/ Last updated: 2021-12-27T01:29:06.000Z Alcoa will test a technology that could slash emissions from its alumina refineries by 70 per cent by producing steam with renewable energy. The Australian Renewable Energy Agency awarded Alcoa $11.3 million to investigate the feasibility of mechanical vapour recompression that turns waste vapour into steam for the refinery process. The total cost of the feasibility work is $28.2 million. If the feasibility study is successful, Alcoa plans to install a three-megawatt MVR module at its Wagerup alumina refinery by the end of 2023. Refineries typically produce process steam by burning gas or coal in a boiler to heat water. MVR technology involves a compressor that takes in waste water vapour from the refining process and compresses it to produce steam. Alcoa is WA’s largest consumer of gas and the State’s fourth-biggest carbon polluter, emitting the equivalent of 4.7 million tonnes of CO2 from its three WA alumina refineries in the 12 months to June 2020. [WA’s top carbon polluters: LNG, power, iron ore and aluminaWA’s industrial greenhouse gas emissions are dominated by four products and a handful of companies, including a few that have managed to keep a low profile in the climate wars.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/03/CO2-1.jpg)](https://www.boilingcold.com.au/was-top-carbon-polluters-lng-power-iron-ore-and-alumina/) Full implementation of MVR technology at Alcoa’s WA operations could reduce carbon emissions by 3.3 million tonnes a year, which is more than Collie’s Bluewaters power station. Alcoa vice president for continuous improvement Eugenio Azevedo said using lower carbon alumina in the smelting process would reduce the overall carbon footprint of the metal. Alcoa has filed provisional patent applications in Australia for the use of MVR technology to both retrofit existing refineries and build new ones. ARENA chief executive Darren Miller said the project was an important step towards decarbonising metals production. “This technology represents an opportunity to electrify a refining process that is currently powered by fossil fuels using a renewable solution,” Miller said. Australia has 15 per cent of global alumina refining capacity that produces about 14 million tonnes of carbon dioxide a year, or about 24 per cent of Australia’s Scope 1 manufacturing emissions. As MVR uses water vapour currently vented to the atmosphere, it would significantly reduce the volume of water needed to turn bauxite into aluminium oxide. Alcoa used 1.7 tonnes of fresh water for every tonne of alumina it refined in 2019, according to Alumina Limited, the ASX-listed company that owns 40 per cent of Alcoa’s Australian operations. [South32′s Worsley Alumina two-thirds dirtier than AlcoaIf South32’s low profile coal-burning Worsley Alumina operated like Alcoa’s facilities 1.5 million tonnes of carbon emissions a year would be avoided: the same as Alcoa’s Wagerup refinery.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/04/alumina-chimneys.jpg)](https://www.boilingcold.com.au/south32s-coal-fired-worsley-alumina-twice-as-dirty-as-alcoa/) Alcoa’s early steps to move from gas to renewable electricity put it one technology ahead of fellow WA alumina refiner South32. Exclusive analysis by *Boiling Cold* revealed that Perth-based South32’s coal-fired Worsley refinery emits two-thirds more CO2 per tonne of alumina than Alcoa’s gas-fired refineries. This week South32 chief executive Graham Kerr announced a [medium-term target](https://www.south32.net/docs/default-source/exchange-releases/climate-commitment-and-capital-management-program-increase.pdf?sfvrsn=bfeafbf8%5F2&ref=boilingcold.com.au) to halve the company’s operational emissions by 2035\. No short-term target in the next 14 years was announced. Worsley produces 16 per cent of South32’s operational emissions. Kerr told *The Australian* that the company would consider [converting the Worsley coal-fired power station to gas](https://www.theaustralian.com.au/business/mining-energy/south32-says-it-wants-to-halve-carbon-emissions-by-2035-after-exiting-thermal-coal/news-story/8f02a64508001b1c6c9b73b68e71d27a?ref=boilingcold.com.au) as a transition to cleaner technologies, but it was unlikely to happen until later this decade. --- *Main image: Alcoa's Wagerup alumina refinery. Source: Alcoa.* --- ### Regulator blasts ExxonMobil’s Bass Strait maintenance, orders huge decommissioning push URL: https://www.boilingcold.com.au/regulator-blasts-exxonmobils-bass-strait-maintenance-orders-massive-decommissioning-effort/ Last updated: 2025-03-24T03:49:17.000Z Offshore safety regulator NOPSEMA has ordered ExxonMobil to plug 180 wells and start dismantling ten platforms from its vast Bass Strait operation. The operator of the facilities off the coast of Gippsland, Victoria, must also fix dangerous corrosion on two platforms caused by a lack of maintenance. Exxon and its 50 per cent partner BHP have produced oil and gas from the Bass Strait since 1969 and now, after 42 years, must begin a gigantic clean-up. Over four decades, Exxon drilled 421 wells, installed 19 platforms and laid about 600km of pipeline on the seabed. Ten platforms, six pipelines and more than half the wells are no longer used for production. Another six platforms will cease production by 2025. ![map of ExxonMobil's Bass Strait offshore oil and gas facilities](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/05/Bass-Strait-map.jpg) ****Bass Strait facilities**. Source: ExxonMobil Environmental Plan NOPSEMA's [direction](https://www.nopsema.gov.au/sites/default/files/2021-06/A783674.pdf?ref=boilingcold.com.au) lists 180 wells that must be permanently sealed, or plugged, by September 2027. Exxon must start dismantling the topsides of ten platforms "as soon as reasonably practicable" but no later than the deadline for plugging the wells. The regulator said the deterioration of facilities as decommissioning is delayed puts at risk Exxon's ability to do the job without increased safety and environmental risks. NOPSEMA considered Exxon's planning and proposed timing "not commensurate with the scale of decommissioning activities required." The usually hands-off regulator has demanded an independent review of Exxon's decommissioning plans to identify ways to complete the work sooner. NOPSEMA's actions attempt to head off two incentives that drive the current standard response from the industry to decommissioning: constant delay. The owners first benefit by pushing back expenditure, and then if the ageing asset falls into disrepair, they can argue it is too dangerous to decommission fully. NOPSEMA is investigating legal action against Woodside for a lack of maintenance of an 83m-long riser turret mooring at Enfield, which meant it can no longer be safely towed to shore for disposal. [Woodside told to clean up oil field & may face legal actionWoodside’s own lack of maintenance means it cannot dispose of an 83m-long structure onshore as planned and will instead sink it to be an artificial reef near the Ningaloo Marine Park![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/02/Nganhurra-FPSO.jpg)](https://www.boilingcold.com.au/regulator-tells-woodside-to-clean-up-oil-field-and-may-take-legal-action/) The action against Exxon is the second time NOPSEMA has mandated dates for decommission to occur. In February Woodside was told to complete the decommissioning of its Enfield oil field off the WA coast by 2025. The regulator's blast at Exxon's performance is in stark contrast to [the US-major's self-assessment](https://www.exxonmobil.com.au/Energy-and-environment/Energy-resources/Upstream-operations/Decommissioning?ref=boilingcold.com.au#Recentglobaldecommissioningexperience). "ExxonMobil Australia is committed to decommissioning our Bass Strait offshore facilities at the right time, and in the right way… ensuring they stay safe until we're ready to begin the decommissioning process," according to Exxon's website. Exxon has recently [spent more than $300 million](https://www.reuters.com/article/bhp-group-au-results-australia-gas-idINL4N2FK1P0?ref=boilingcold.com.au) "plugging and abandoning a number of wells in the Bass Strait that are no longer producing." The cost of the work mandated by NOPSEMA will be many times that, giving a huge boost to offshore oil and gas employment just as increasing climate concerns cast doubts over future investment in new production. Australia's offshore oil and gas producers are estimated to have a [$52 billion clean-up bill over the next three decades](https://www.boilingcold.com.au/australian-offshore-oil-and-gas-industry-has-a-52b-clean-up-bill/). ## Rusty and dangerous not acceptable The offshore safety regulator also has concerns about the Bass Strait operation that are more immediate than decommissioning. NOPSEMA today published three improvement notices requiring Exxon to fix dangerous corrosion on two platforms. The steel supporting the West Tuna helideck has extensive corrosion that [could cause a fatal failure under the weight of a helicopter](https://www.nopsema.gov.au/assets/Uploads/A782735.pdf?ref=boilingcold.com.au). NOPSEMA concluded Exxon could have prevented the corrosion if it had painted areas of concern identified in 2016. The West Tuna platform also had steel supporting a walkway "[completely corroded away](https://www.nopsema.gov.au/assets/Published-notices/A782747.pdf?ref=boilingcold.com.au)" that could result in the failure of the walkaway "leading to serious injury or death." The corrosion was found in November 2019, and Exxon did not plan to address it until a planned shutdown later this year. In March, NOPSEMA inspectors on the Tuna platform found a section of walkway grating "[only supported by a single severely corroded load bar](https://www.nopsema.gov.au/assets/Published-notices/A782739.pdf?ref=boilingcold.com.au), which if it failed, could result in personnel falling directly to the sea." Exxon identified the problem in 2016\. The company now has 30 days to fix it. The corrosion on the two platforms led NOPSEMA to conclude that Exxon's maintenance [regime could not demonstrate its offshore facilities were "safe and without risk to health."](https://www.nopsema.gov.au/assets/Published-notices/A779669.pdf?ref=boilingcold.com.au) Exxon must now has 30 days to conduct a "fitness for service integrity assessment" of its nine operating platforms and implement at least temporary fixes to all problems identified. NOPSEMA actions against Exxon are extraordinarily strong from a regulator often derided by unions as a toothless tiger. It has found what was once the world's largest company that marketed its petrol a being a "tiger in your tank" to be severely wanting. As climate pressures build on the oil and gas industry and concerns mount about ageing facilities, it seems the US producer has lost some stripes, and the local regulator gained some. ## A hard sell for Australian offshore assets The NOPSEMA decommissioning direction notes that BHP intends to sell its interest and "although such a company sale may not alter the title register, it is important for transparency that all parties understand the obligations" under law. The note is a reference to Woodside's sale in 2015 of a subsidiary that owned the Northern Endeavour oil vessel. The transaction then did not require regulatory approval because the companies listed on the title were unchanged. The new owner later went into liquidation, leaving the Federal Government with a clean-up bill of many hundreds of millions of dollars. [Federal Govt regulates poorly and gets $360M Northern Endeavor clean-up billThe Northern Endeavor mess started with Woodside paying to rid itself of a rusty ageing asset, ended with a $362 million liability for the Government and in between was a regulatory shambles.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/09/northern-endeavour.jpg)](https://www.boilingcold.com.au/poor-federal-regulation-allowed-the-360m-northern-endeavor-mess/) Under changes announced by Resources Minister Keith Pitt in December, a sale similar to Woodside's 2015 effort now needs approval and almost certainly would be rejected due to the inexperience and financial weakness of the proposed buyer. Additionally, trailing liabilities will hold future sellers, not the Australian taxpayer, liable for decommissioning costs if a new owner fails. BHP can still sell its stake in the Bass Strait, but the intersection of the pool of experienced and financially strong buyers acceptable to the Federal Government and companies with an appetite for ageing assets with declining production will be extremely limited. In 2020 Exxon called off its planned exit from the Bass Strait after Pitt wrote to Exxon chief executive Daren Woods and [forewarned him of the introduction of trailing liabilities](https://www.boilingcold.com.au/australia-told-exxonmobil-ceo-told-no-easy-exit-before-3b-bass-strait-sale-canned/). ASX-listed Beach Energy had been reported as a likely buyer of Exxon's interest. Beach has very limited offshore experience and a market capitalisation of less than one per cent of Exxon's. --- *Main image: West Tuna platform, Bass Strait. Source: ExxonMobil Australia.* --- ### UGL pushed spurious safety risks at Chevron’s Gorgon to kill industrial action URL: https://www.boilingcold.com.au/ugl-pushed-spurious-safety-risks-at-chevrons-gorgon-to-kill-industrial-action/ Last updated: 2022-01-01T09:50:09.000Z EXCLUSIVE Maintenance contractor UGL has played a dubious safety card to stop industrial action that threatened the return to full production of Chevron’s troubled Gorgon LNG plant. Internal UGL documents obtained by *Boiling Cold* reveal a plan to use a union pledge for striking workers to be available for safety-critical repairs to portray the industrial action as illegal. Members of four unions representing workers on a scheduled maintenance shutdown, or turnaround, of the third Gorgon LNG train planned a 24-hour strike on Saturday, May 8. Members of the AMWU, ETU and the Offshore Alliance of the AWU and the maritime division of the CFMEU had gone through a protracted process ending in a ballot to achieve the status of a “protected action.” Under Australian law, a strike that is not a protected action is illegal, and unions and individual workers can suffer significant penalties. There was much at stake for all involved. Chevron had operated its $US54 billion Gorgon LNG plant at two-thirds capacity for most of the past 12 months while it shut down one train after another to fix thousands of cracks in gas-filled pressure vessels called kettles. The US major needed the Train 3 turnaround to end as planned in mid-June to stop the $100 million-plus monthly loss of revenue caused by the poorly manufactured kettles. Chevron’s pain gave leverage to the workers after years of stagnant wage growth. A booming market for workers further strengthened the unions’ position in the Pilbara, and COVID-19 blocked the resource giants’ usual practice of importing workers to keep pressure off the price of labour. UGL, a subsidiary of engineering giant CIMIC that is 76 per cent owned by German construction firm Hochtief, was stuck between two competing needs. In the short term, it had to finish the turnaround to keep Chevron happy. The operator of both the Gorgon and Wheatstone LNG plants awarded UGL a [$450 million maintenance contract](https://www.ugllimited.com/en/news/2020/ugl-secures-450m-in-oil-and-gas-maintenance-contracts?ref=boilingcold.com.au) in 2020, and UGL needed to ensure that kept happening. However, if UGL agreed to better pay and conditions at Gorgon, it could set a costly precedent for itself and the wider contracting industry. The idea that higher wages are possible and union action is the way to get them is not an idea that UGL, its competitors, and customers want to take hold in the Pilbara. UGL needed a plan to keep the work on Gorgon going while not conceding improved conditions. The UGL documents obtained by *Boiling Cold* reveal that plan. ## Step 1 – safety, safety, everywhere A condition of the protected action was it would not prevent work in response to urgent safety issues or directions from a regulator. ![Safety provision of the Protected Action Ballot Order. Source: UGL memo to workers May 15](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/05/image-2.png) **Safety provision of the Protected Action Ballot Order**. S*ource: UGL memo to workers May 15* The unions gave UGL a window to safety to open if required. UGL prepared to drive a truck through it. The critical aspect of managing a hazardous facility like Gorgon is avoiding major accident events: the industry term for something that could cause multiple fatalities. The WA safety regulator- the Department of Mines, Industry Regulation and Safety – requires operators to [identify so-called safety-critical elements](https://www.dmp.wa.gov.au/Documents/Safety/Major-accident-events-control-measures-and-performance-standards.pdf?ref=boilingcold.com.au) that could increase the chance or severity of an MAE if they fail. Understandably Chevron classified a vast number of components and systems on Gorgon Train 3 as safety-critical elements. UGL chose to apply Chevron’s assessment of what is critical to safety when the train is processing 600 tonnes of gas an hour to its work on a shut down depressurised train largely empty of hydrocarbons. According to a second document obtained by *Boiling Cold*, the result was that UGL classified 914 of the 1421 work orders it had to complete on Train 3 as safety-critical elements. The experienced engineering contractor conveniently ignored the obvious: the whole point of a shutdown is to make equipment usually critical to safety no longer critical so they could be maintained. ## Step 2 – stick to the script UGL then prepared its supervisors to tell their employees they had to work for safety reasons. A run sheet marked “Strictly Confidential” gave the UGL supervisors a script to read to workers at a debrief on Friday, May 7, the day before the planned 24-hour stoppage. The supervisors were to tell the workers UGL understood some of them might take industrial action the next day and “this is their right.” Then the limitations to that right, as UGL saw it, were outlined. “However, we also have a list of SCE scopes of work and work that the regulator has directed us to do, that must be done even if an eligible employee is otherwise taking industrial action,” the run sheet stated. “You will be told at the end of this debrief if you are required to work on SCE tasks or regulator directed work (i.e. work on kettles).” UGL’s reference to the kettles was a further stretching of what work is required for safety. n September 2020 DMIRS told Chevron it [could keep operating with potentially cracked kettles](https://www.boilingcold.com.au/chevron-gets-final-ok-for-extended-gorgon-fix/), but it must fix them by April 2021 (a deadline that has been missed). So, kettles that the safety regular judged could be operated for many months before being repaired, now, according to UGL, had to be attended to immediately despite being safely shut down. UGL also told the workers they could not stay at their accommodation during the strike but instead must go to the site and stay in the crib room to work on any “unforeseeable health or safety” risks. *Boiling Cold* understands the accommodation is about five minutes from the work site by bus, so the workers were accessible if required to address an emergency. ## Step 3 – get on the bus Gus The UGL supervisors also had a script for the morning of the strike. Worker’s who would not get on the bus from the accommodation block to the worksite were to be told, “if you refuse to do this, you will be taking unprotected action,” and then asked, “are you refusing to do this?” There was another procedure for the supervisors to follow when the workers arrived at the worksite to sign on. ![Instructions to UGL supervisors for workers taking protected action. Source UGL industrial action sign-on checklist](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/05/image-3.png) **Instructions to UGL supervisors for workers taking protected action**. Source UGL industrial action sign-on checklist Even though the turnaround scope had hundreds of work orders that UGL had not designated as safety-critical, all workers taking protected action would selectively be directed to work UGL claimed was not covered by the protected action. The Fair Work Commission can impose a penalty up to $13,320 on a worker taking unprotected action. An employee being repetitively told by their supervisor they are being exposed to such penalties is likely to feel highly stressed. UGL had a plan, and its supervisors delivered the scripts. The contractor had just one problem – no one got on the bus. They posed for a photo instead. ![Offshore Alliance celebrates the one-day strike. Source: Offshore Alliance Facebook page.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/05/image-4.png) **Offshore Alliance celebrates the one-day strike**. Source: Offshore Alliance Facebook page. No work was done for 24 hours. After that, the workers returned but had scheduled two-hour stoppages within each shift. ## Plan B – bring in the lawyers On Tuesday, May 11, three days after the one-day stoppage, UGL made an application to the Federal Court. The contractor wanted a declaration that the unions were organising unprotected actions, damages for the effects on its relationships with Chevron and its employees, and further penalties beyond the damages. Two days later, the Federal Court ordered the unions to pin to the top of their Facebook sites a note that the protected action had ended. ![Court-mandated Facebook post. Source Offshore Alliance Facebook page.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/05/image-5.png) **Court-mandated Facebook post**. Source Offshore Alliance Facebook page. The court order expires on Thursday, May 20 when the parties were due to reappear in the Federal Court. *Boiling Cold* understands the next court appearance is now scheduled for August and the unions are developing alternative strategies to allow protected actions. UGL owner CIMIC declined to respond to *Boiling Cold’s* questions. AWU WA branch secretary Brad Gandy said the Offshore Alliance does not concede the workers took any unprotected industrial action. --- *Update: May 20 12:00 PM: Court hearing deferred to August.* --- *Main image: Chevrons Gorgon LNG plant on Barrow Island. Source: Chevron Australia Pty Ltd.* --- ### Net-zero emissions by 2050 needs immediate halt to new oil, gas and coal projects: IEA URL: https://www.boilingcold.com.au/1-5-needs-halt-to-new-oil-gas-and-coal-projects-now-iea/ Last updated: 2021-12-27T01:13:25.000Z The world has a viable but narrow pathway to net-zero emissions by 2050 that requires an unprecedented transformation of the energy industry, including no new investment in fossil fuel supply projects, according to a report released by the International Energy Agency today. IEA Executive Director Faith Birol said the change required was “perhaps the greatest challenge humankind has ever faced.” “The IEA’s pathway to this brighter future brings a historic surge in clean energy investment that creates millions of new jobs and lifts global economic growth,” Birol said. > “Moving the world onto that pathway requires strong and credible policy actions from governments, underpinned by much greater international cooperation.” The [IEA ](https://www.iea.org/reports/net-zero-by-2050?ref=boilingcold.com.au)roadmap includes: · no more investment in new fossil fuel supply projects · no further final investment decisions for new unabated coal plants. · by 2035 no sales of new internal combustion engine passenger cars To replace fossil fuels the IEA estimated 630 gigawatts of solar PV and 390 GW of wind power must be installed annually by 2030: four times the level of 2020. For the next decade, most emissions reductions will come from current technologies but advanced in areas including batteries, electrolysers for hydrogen, and direct air capture and storage are required in later years. Birol said the transformation of the energy system was a huge economic opportunity. > “The pathway laid out in our Roadmap is global in scope, but each country will need to design its own strategy, taking into account its own specific circumstances,” Birol said. “Plans need to reflect countries’ differing stages of economic development: in our pathway, advanced economies reach net zero before developing economies." ![Global oil supply and LNG exports by region](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/05/image-1.png) **Global oil supply and LNG exports by region**. Source IEA The IEA path to net-zero requires no new oil and natural gas fields beyond those already approved for development. The inter‐regional LNG trade increases from 420 bcm in 2020 over the next five years but it then falls to around 160 bcm in 2050\. Nearly all exports in 2050 come from the lowest cost and lowest emissions producers. A global hydrogen trade develops gradually with large volumes exported from gas and renewables‐rich areas in the Middle East, Central and South America and Australia to Asia and Europe. --- *Main image: Factory chimney smoke. Source: Photo by* [*veeterzy*](https://unsplash.com/@veeterzy?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText)*on* [*Unsplash*](https://unsplash.com/?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) --- ### Clouded future of gas in WA drives Strike Energy to urea URL: https://www.boilingcold.com.au/clouded-future-of-gas-in-wa-drives-strike-energy-to-urea/ Last updated: 2021-12-27T01:14:53.000Z Strike Energy chief executive Stuart Nicholls said concern over big WA resource players fleeing gas to decarbonize was behind the Perth Basin explorer's move into urea manufacturing. Nicholls said companies like Wesfarmers, Alcoa, Rio, BHP and FMG are all transitioning their energy supply to reduce carbon emissions and one day, their boards "will wake up and they will say we are getting out of gas." > "We just recognize that putting all your chips on the domestic gas market is a really dangerous place to be," Nicholls told the WA Energy Club last week. "If you are totally and 100 per cent reliant on that being your customer base, then you're going to be left holding the can. "How can we be very certain that the status quo…of onshore gas producer produces gas, puts it in pipeline, sells it to customer, customer pays a good price, is the right way to go?" Nicholls' concern is backed by leading WA gas consumer Alcoa's statement to *Boiling Cold* in May that it was "[actively seeking to reduce our energy intensity and reliance](https://www.boilingcold.com.au/south32s-coal-fired-worsley-alumina-twice-as-dirty-as-alcoa/)" on gas. In addition to insufficient demand for gas, the ex-Shell commercial manager is worried about too much supply. In stark contrast to the Australian Energy Market Operator's forecast of a [possible gas shortage in WA late this decade](https://aemo.com.au/-/media/files/gas/national%5Fplanning%5Fand%5Fforecasting/wa%5Fgsoo/2020/2020-wa-gsoo-report.pdf?la=en&ref=boilingcold.com.au), Nicholls said he expects "a lot of gas" to be found in the Perth Basin at lifting costs competitive with Qatar, Russia and the United States. Strike's third problem is investors distaste for fossil fuels. > "I can tell you right now, as a public company CEO, no one wants to take a meeting with you if you're talking about an oil and gas investment," Nicholls said. "Oil and gas is a very expensive, highly capital intensive, long payback period, sort of investment, but investors want less carbon now, "So put yourself in my shoes as a greenfield, small business with no balance sheet, no credit rating, out there with your world-class onshore gas asset, and finding that fund managers won't take a meeting with you, because you represent an oil and gas company, "It's a tough place to be." ## Moving downstream to supply farmers, not miners Nicholls said Australian listed oil and gas companies like Woodside and Santos had failed to deliver value to shareholders. > "We have built giant projects that have been overcapitalized and have been invested into optimistic price cycles that have ultimately gone to limit the returns to shareholders," Nicholls said. "So we need to balance capex, cash flow and carbon." Strike surprised the market in January with its solution to its three dilemmas: a urea fertilizer plant near Geraldton to create a new market for gas that is less carbon-intensive than other uses for gas as CO2 is consumed in the process of making urea. ASX-listed Strike - that saw its share price surge after discovering gas at its Perth Basin West Erregulla field in August 2019 – in not leaving the business of selling gas. Strike's 50 per cent share of the 50 terajoules a day first stage of West Erregulla has been bought by Wesfarmers CSBP, and its partner Warrego has [struck a deal with Alcoa](https://www.boilingcold.com.au/alcoa-backs-warregos-west-errugulla-with-gas-buy/). The cashflow from Stage 1 is destined to support a further 150 TJ/day of gas supply and the urea plant. With Australian broadacre farmers importing almost all of their crucial urea needs to pump nitrogen into the continent's depleted soils, Nicholls talks up the benefits of local county and import replacement. Strike danced another pirouette away from the "status quo" gas producer's business model in April with the purchase of the Perth Basin geothermal rights of private company Mid West Geothermal Power. Nicholls said the common need to understand Perth Basin geology, drill onshore wells, liaise with the local community and gain land access make the geothermal business a good match with Strike's gas capabilities. Strike wants to generate power with the earth's heat, return the water to the reservoir, and make hydrogen with the carbon-free electricity to feed into its urea plant. Not short of ambition, the junior explorer later plans to export geothermal-generated power to the South West grid. Strike claims it will be a [net-zero emissions by 2030](https://asx.api.markitdigital.com/asx-research/1.0/file/2924-02374573-6A1032924?access%5Ftoken=83ff96335c2d45a094df02a206a39ff4&ref=boilingcold.com.au) on the basis that its urea will displace more carbon-intensive imports If Strike's urea plant, dubbed Project Haber for marketing pizazz, fails to materialize by 2030, it will not be for lack of salesmanship from its chief executive. --- *Main image: Graphic of proposed urea plant on the outskirts of Geraldton. Source: Strike Energy (screenshot of video).* --- ### Gorgon workers left waiting for mercury contamination results URL: https://www.boilingcold.com.au/gorgon-workers-left-waiting-for-mercury-contamination-results/ Last updated: 2021-12-27T01:26:05.000Z More than two weeks after workers at Chevron's Gorgon LNG plant were first allegedly contaminated with toxic mercury the safety regulator does not know when it will receive results to determine if the exposures were unsafe. Unions have reported three incidents involving four workers to the WA safety regulator WorkSafe. The incidents occurred during a major planned maintenance shutdown, or turnaround, of the third of Gorgon's huge LNG trains on Barrow Island. The Offshore Alliance detailed on social media the drenching in chemicals of a Contact Resources employee working on a slugcatcher on about April 26\. The worker then could not find a nearby operational safety shower. In another incident three days later, a Contract Resources worker was in a vessel affected by mercury for more than an hour with inadequate personal protective equipment, according to the Offshore Alliance. In a third incident reported by the union, two electrical and instrumentation technicians working for UGL were tested on May 1 by a qualified mercury tester and advised they were contaminated. A WorkSafe spokesperson confirmed that four workers were involved in the reported incidents. *Boiling Cold* asked WorkSafe how many of the exposures were above legal and or safe limits. The WorkSafe spokesperson said all the workers had been tested, and the regulator does not know when the full results will be available. "The investigation is in its early stages, and there is no estimated completion date," the WorkSafe spokesperson said. > "WorkSafe is currently ensuring that the employer is instigating appropriate measures and improvements in relation to the alleged events." A Chevron spokesperson said onsite response teams acted immediately after the incidents. The company is also investigating "instances of potential localised mercury exposure" at Gorgon, the Chevron spokesperson said. > "At this time, no adverse health effects from exposure to a hazardous substance have been recorded, "While precautionary health monitoring is ongoing, personnel have resumed duties." "Robust safety procedures are in place in all areas where mercury is handled…and additional protocols have been implemented at Gorgon in response to recent events." The Gorgon plant has mercury removal units at the front end of its processing equipment to filter out the toxic substance that can damage equipment. The MRUs are contained vessels that are only emptied during turnarounds. *Boiling Cold* understands Chevron discovered more mercury than it expected during this turnaround which is the first to work on the inlet area where the incidents occurred. ## Gorgon's continuing problems with mercury Mercury is a common problem in LNG plants, and safely disposing of the metal collected is not straightforward. Woodside was a foundation customer for Contract Resources $20 million [hazardous waste treatment plant in Karratha](https://www.pilbaranews.com.au/news/pilbara-news/largest-mercury-treatment-plant-in-aus-opens-in-karratha-ng-b88904619z?ref=boilingcold.com.au) that opened in 2018\. Before the plant opened, the Pluto and North West Shelf LNG operator sent its mercury waste to Switzerland for treatment and disposal. Department of Mines, Industry Regulation and Safety director dangerous goods and petroleum safety Steve Emery said Chevron was licensed under the Dangerous Goods Storage Act to store and handle quantities of mercuric compounds. "The department regularly inspects Chevron for compliance with the DGSA and its licence," Emery said. The recent incidents on Train 3 are not the first time mercury has troubled the Gorgon project. Gorgon was initially designed to handle lower amounts of mercury in the gas arriving on Barrow Island from the Gorgon and Jansz-Io offshore fields. In 2015, six years after construction commenced, Gorgon's licence was amended to allow for the installation of additional mercury removal units after the mercury level in the gas from the Gorgon field was found to be higher than expected. In 2018 concerns were raised about [vapours containing mercury and toxic BTEX chemicals](https://www.watoday.com.au/national/western-australia/doctors-very-worried-at-chevron-venting-toxic-chemicals-at-gorgon-20190419-p51foy.html?ref=boilingcold.com.au) being vented to the atmosphere for the past two years. The chemicals were meant to be disposed of in Gorgon's carbon dioxide injection system, but that did not operate in the early years of the LNG plant's operation. The $3.1 billion system is now working at less than full capacity due to technical problems. In 2019 Chevron was temporarily permitted to [dispose of the vapours in a gas flare](https://www.der.wa.gov.au/images/documents/our-work/licences-and-works-approvals/Decisions%5F/W6354-2020-1%5Fd.PDF?ref=boilingcold.com.au) further away from workers. Steam cleaning of equipment on Train 2 in April 2019 resulted in up to half a tonne of water containing mercury discharging onto equipment and the ground. Chevron reported the incident to the Department of Water and Environmental Regulation in an annual compliance report. The causes were a faulty level indicator, overly simplistic work instructions and excessive flow rates. --- *Main image: Gorgon LNG plant on Barrow Island. Source: Chevron Australia Pty Ltd* --- ### The budget is a flight of fancy ignoring Australia’s low-emissions future URL: https://www.boilingcold.com.au/the-budget-is-a-flight-of-fancy-ignoring-australias-low-emissions-future/ Last updated: 2021-12-27T13:51:50.000Z [John Quiggin](https://theconversation.com/profiles/john-quiggin-2084?ref=boilingcold.com.au), [The University of Queensland](https://theconversation.com/institutions/the-university-of-queensland-805?ref=boilingcold.com.au) Looking at other nations around the world, the path to cutting greenhouse gas emissions seems clear. First, [develop](https://www.climatecouncil.org.au/11-countries-leading-the-charge-on-renewable-energy/?ref=boilingcold.com.au) [wind and solar energy](https://www.climatecouncil.org.au/11-countries-leading-the-charge-on-renewable-energy/?ref=boilingcold.com.au) and battery storage to replace coal- and gas-fired electricity. Then, replace petrol and diesel cars with electric vehicles running off carbon-free sources. Finally, replace traditionally made steel, cement and other industries with low-carbon alternatives. In this global context, the climate policies announced in Tuesday’s federal budget are a long-odds bet on a radically different approach. In place of the approaches adopted elsewhere, the Morrison government is betting heavily on alternatives that have failed previous tests, such as carbon capture and storage. And it’s blatantly ignoring internationally proven technology, such as electric vehicles. The government could have followed the lead of our international peers and backed Australia’s clean energy sector to create jobs and stimulate the post-pandemic economy. Instead, it’s sending the nation on a fool’s errand. ## Carbon-capture folly The Morrison government is taking a “technology, not taxes” approach to emissions reduction. Rather than adopt a policy such as a carbon price – broadly considered the most [effective and efficient](https://theconversation.com/carbon-pricing-works-the-largest-ever-study-puts-it-beyond-doubt-142034?ref=boilingcold.com.au) way to cut emissions – the government has instead pinned its hopes on a [low-emissions technology plan](https://www.industry.gov.au/data-and-publications/technology-investment-roadmap-first-low-emissions-technology-statement-2020?ref=boilingcold.com.au). That means increased public spending on research and development, to accelerate the commercialisation of low emissions technologies. The problems with this approach are most obvious in relation to carbon capture and storage (CCS). The budget contains A$263.7 million to fund new [carbon capture and storage](https://theconversation.com/hydrogen-and-carbon-capture-receive-extra-funding-as-morrison-prepares-for-biden-summit-159361?ref=boilingcold.com.au) projects. This technology promises to capture some – but to date, not all – carbon dioxide at the point of emission, and then inject it underground. It would allow continued fossil fuel use with fewer emissions, but the process is complex and expensive. In fact, [recent research found](https://iopscience.iop.org/article/10.1088/1748-9326/abd19e/meta?ref=boilingcold.com.au) of 39 carbon-capture projects examined in the United States, more than 80% ended in failure. [The 1.5℃ global warming limit needs political action nowThere are rapidly escalating risks in global warming between 1.5℃ and 2℃ and the focus now must be on governments’ 2030 targets for emissions reduction.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdThe Conversation![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/05/thijs-stoop-A_AQxGz9z5I-unsplash-cropped.jpg)](https://www.boilingcold.com.au/the-1-5-global-warming-limit-is-not-impossible-but-needs-political-action-now/) The government’s CCS funding is focused on capturing CO₂ from gas projects. This is despite the disappointing experience of Australia’s only CCS project so far, Chevron’s [Gorgon gas field](https://www.smh.com.au/national/millions-of-tonnes-of-carbon-added-to-pollution-as-gorgon-project-fails-capture-deal-20210215-p572na.html?ref=boilingcold.com.au) off Western Australia. Some 80% of emissions from the operation were meant to be captured from 2016\. But the process was delayed for three years, allowing millions of tonnes of CO₂ to [enter the atmosphere](https://reneweconomy.com.au/chevron-faces-100m-bill-for-excess-emissions-after-wa-government-refuses-ccs-waiver-42253/?ref=boilingcold.com.au). As of January this year, the project was still facing [technical issues](https://reneweconomy.com.au/sand-clogs-up-australias-only-operating-carbon-capture-project/?ref=boilingcold.com.au). CCS from gas will be expensive even if it can be made to work. Santos, which has proposed a CCS project at its Moomba gas plant in South Australia, [suggests a cost](https://www.santos.com/news/moomba-carbon-capture-and-storage-injection-trial-successful/?ref=boilingcold.com.au) of $A30 per tonne of CO₂ captured. This money would need to come from the government’s [Climate Solutions Fund](http://www.cleanenergyregulator.gov.au/csf/Pages/CSF-home.aspx?ref=boilingcold.com.au), currently allocated about A$2 billion over four years. If Moomba’s projected emissions reduction of 20 million tonnes a year were realised, this project alone would exhaust the fund. ![two men stand over equipment](https://images.theconversation.com/files/400333/original/file-20210512-19-z9mcy.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip) Plans to capture carbon from Chevron’s Gorgon gas project have not gone to plan. Chevron Australia ## What about electric vehicles? There is a striking contrast between the Morrison government’s enthusiasm for carbon capture, and its neglect of electric vehicles. It ought to be obvious that if Australia is to achieve a target of net-zero emissions by 2050 – which Treasurer Josh Frydenberg [this week reiterated](https://www.smh.com.au/politics/federal/treasurer-josh-frydenberg-s-full-budget-speech-20210511-p57qxs.html?ref=boilingcold.com.au) was his government’s preference – the road transport sector must be decarbonised by then. The average age of Australian cars is [about 10 years](https://www.abs.gov.au/statistics/industry/tourism-and-transport/motor-vehicle-census-australia/latest-release?ref=boilingcold.com.au). This implies, given fairly steady sales, an average lifespan of 20 years. This in turn implies most petrol or diesel vehicles sold after 2030 will have to be taken off the road before the end of their useful life. In any case, such vehicles will probably be very difficult to buy within 15 years. Manufacturers including [General Motors](https://www.washingtonpost.com/climate-environment/2021/01/28/general-motors-electric/?ref=boilingcold.com.au) and [Volvo](https://apnews.com/article/volvo-electric-vehicles-only-2030-5ecff5dbf0e3fa01f822a015a5625b9f?ref=boilingcold.com.au) have announced plans to stop selling petrol and diesel vehicles by 2035 or earlier. But the Morrison government has ruled out consumer incentives to encourage electric vehicle uptake – a policy at odds with many other nations, [including the US](https://theconversation.com/the-us-jumps-on-board-the-electric-vehicle-revolution-leaving-australia-in-the-dust-154566?ref=boilingcold.com.au). [The US jumps on board the electric vehicle revolution, leaving Australia in the dustA new Morrison government plan sorely misses the point on electric vehicles. It’s in stark contrast to Biden’s ambitious EV strategy.![](https://cdn.theconversation.com/static/tc/@theconversation/ui/dist/esm/logos/web-app-logo-192x192-e99834e3a7a551050e9debe6cc925617.png)The ConversationDia Adhikari Smith![](https://images.theconversation.com/files/382684/original/file-20210205-20-hhfwkw.jpg?ixlib=rb-1.1.0&rect=0%2C402%2C3316%2C1655&q=45&auto=format&w=1356&h=668&fit=crop)](https://theconversation.com/the-us-jumps-on-board-the-electric-vehicle-revolution-leaving-australia-in-the-dust-154566?ref=boilingcold.com.au) Despite the “technology, not taxes” mantra, this week’s federal budget ignored electric vehicles. This includes a [A$10 billion infrastructure spend](https://www.abc.net.au/news/2021-05-10/road-rail-and-freight-spending-in-federal-budget/100127436?ref=boilingcold.com.au) which [did not include](https://www.couriermail.com.au/news/national/federal-budget-2021-australia-sets-climate-change-net-zero-target-by-2050/news-story/f590b11dd0476cd5dba2c7c5560a7930?ref=boilingcold.com.au) charging stations as part of highway upgrades. Unless the government takes action soon, Australian motorists will be faced with the choice between a limited range of second-rate petrol and diesel vehicles, or electric vehicles for which key infrastructure is missing. It’s hard to work out why the government is so resistant to doing anything to help electric vehicles. Public support [appears strong](https://australiainstitute.org.au/post/majority-of-australians-support-ev-policies-including-subsidies-for-new-car-purchases/?ref=boilingcold.com.au). There are [no domestic carmakers](https://www.reuters.com/article/us-holden-australia-manufacturing-idUSKBN1CP0JB?ref=boilingcold.com.au) left to protect. The car retail industry is generally unenthusiastic about electric vehicles. Its business model is built on combining competitive sticker prices with a high-margin service and repair business, and electric vehicles don’t fit this model. At the moment (although [not for much longer](https://www.smh.com.au/national/electric-cars-will-be-price-competitive-with-petrol-by-2023-professor-20190826-p52kv2.html?ref=boilingcold.com.au)), electric vehicles are more expensive than traditional cars to buy upfront. But they are cheaper to run and service. There are [fears of](https://www.aph.gov.au/Parliamentary%5FBusiness/Committees/Senate/Electric%5FVehicles/ElectricVehicles/Report?ref=boilingcold.com.au) job losses in car maintenance as electric vehicle uptake increases. However, car dealers have adjusted to change in the past, and can do so in future. ## Wishful thinking The Morrison government is still edging towards announcing a 2050 net-zero target in time for the United Nations Climate Change Conference in Glasgow this November. But as Prime Minister Scott Morrison himself [has emphasised](https://www.9news.com.au/national/australian-pm-scott-morrison-speaks-at-biden-climate-summit/f001d010-c65f-44ed-a543-7091b572e3aa?ref=boilingcold.com.au), there’s no point having a target without a strategy to get there. Yet at this stage, the government's emissions reduction strategy looks more like wishful thinking than a road map. [Australia’s states are forging ahead with ambitious emissions reductions. Imagine if they worked togetherThe new commitments of state governments go some way to filling the void left by the lack of a national climate policy. The states should, and can, coordinate their efforts. Here’s how.![](https://cdn.theconversation.com/static/tc/@theconversation/ui/dist/esm/logos/web-app-logo-192x192-e99834e3a7a551050e9debe6cc925617.png)The ConversationJoel Gilmore![](https://images.theconversation.com/files/398802/original/file-20210505-19-1842fbe.jpg?ixlib=rb-1.1.0&rect=49%2C482%2C5464%2C2732&q=45&auto=format&w=1356&h=668&fit=crop)](https://theconversation.com/australias-states-are-forging-ahead-with-ambitious-emissions-reductions-imagine-if-they-worked-together-160191?ref=boilingcold.com.au) ![The Conversation](https://counter.theconversation.com/content/160775/count.gif?distributor=republish-lightbox-basic) --- [John Quiggin](https://theconversation.com/profiles/john-quiggin-2084?ref=boilingcold.com.au), Professor, School of Economics, *[The University of Queensland](https://theconversation.com/institutions/the-university-of-queensland-805?ref=boilingcold.com.au)* This article is republished from [The Conversation](https://theconversation.com/?ref=boilingcold.com.au) under a Creative Commons license. Read the [original article](https://theconversation.com/the-budget-should-have-been-a-road-to-australias-low-emissions-future-instead-its-a-flight-of-fancy-160775?ref=boilingcold.com.au). --- *Main image: Warradarge wind farm, WA. Source: Synergy.* --- ### Yara and JERA seek Pilbara carbon storage for blue ammonia URL: https://www.boilingcold.com.au/yara-and-jera-seek-pilbara-carbon-storage-for-blue-ammonia/ Last updated: 2022-01-28T10:07:12.000Z Two multinational companies want to make a polluting Pilbara ammonia plant greener by burying some of its emissions to make a clean fuel to help decarbonise Japanese power. Norwegian fertiliser manufacturer [Yara](https://www.yara.com/corporate-releases/yara-and-jera-plan-to-collaborate-on-clean-ammonia-to-decarbonize-power-production-in-japan/?ref=boilingcold.com.au) and Japanese power generator [JERA](https://www.jera.co.jp/english/information/20210511%5F675?ref=boilingcold.com.au) have agreed to investigate sequestering CO2 captured at Yara's ammonia plant near Karratha. Ammonia, now used to make fertilisers and explosives, is seen as a possible clean fuel as it releases no CO2 when burnt. It is made by combining nitrogen from the air with hydrogen. The dominant hydrogen manufacturing method - steam methane reforming - consumes methane and releases large amounts of CO2. Yara Pilbara's plant can produce 850,000 tonnes of ammonia a year and emitted 1.1 million tonnes of greenhouse gases in the 12 months to June 2020. There are two main options for ammonia to be a clean fuel. Green ammonia is made with hydrogen produced from water using renewable energy. Blue ammonia requires the CO2 produced to be buried or offset, such as by planting trees. The companies will look at the storage of CO2 already captured at Yara's plant that, according to the 2001 [environmental submission](https://www.epa.wa.gov.au/sites/default/files/PER%5Fdocumentation/A1370%5FR1036%5FPER.pdf?ref=boilingcold.com.au) for the plant's construction, amounts to about three-quarters of total emissions. The capture of the remaining CO2 from the burning of gas for heat would require expensive equipment that requires significant power to operate, adding to current emissions. The companies did not state whether the emissions not captured and buried would be offset to make the product genuinely blue ammonia. Yara and JERA will also investigate the joint development of new green and blue ammonia projects, improvements to ammonia shipping, and supplying ammonia to Japanese power stations. Last week, in partnership with ENGIE, Yara won $42 million in funding from the Australian Renewable Energy Agency to produce green hydrogen to supply a small portion of the Pilbara plant's needs. [ARENA backs ATCO and Engie with $71M for WA green hydrogenWA will be home to two of the largest green hydrogen electrolysers in the world to feed an ammonia plant and inject the clean fuel into the South West gas grid.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/05/Yara-Pilbara.jpg)](https://www.boilingcold.com.au/arena-backs-atco-and-engie-with-71m-for-wa-green-hydrogen/) Yara chief executive Svein Tore Holsether said the collaboration aimed to decarbonise JERA's power production and provide Yara with a footprint in the Japanese market. "Building blue and green ammonia value chains is critical to enabling the hydrogen economy," Holsether said. JERA produces about 30 per cent of Japan's electricity from 80 gigawatts of generation capacity. The company is the biggest buyer of Australian LNG and owns equity in the Ichthys, Gorgon, Darwin and Wheatstone projects. In October 2020, JERA committed to net-zero emissions by 2050, starting with coal and moving to displace LNG with ammonia and hydrogen. [Australia’s biggest LNG buyer JERA chases zero CO2 emissions by 2050Japan’s JERA, the major buyer of Australian LNG, has embraced zero emissions by 2050 in another signal that the clock is ticking on this major export.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/10/wheatstone-loading-arms-transfer-lng-to-vessel-d-reduced.jpg)](https://www.boilingcold.com.au/australias-biggest-lng-buyer-jera-chases-zero-co2-emissions-by-2050/) JERA will shut its older and more polluting coal-fired power plants by 2030, and the remaining stations are targeted to be 20 per cent ammonia-fuelled by the mid-2030s. The Japanese Government wants the country to be importing three million tonnes a year of ammonia by 2030. The memorandum of understanding signed this week with Yara is JERA's second foray into clean ammonia from Western Australia. JERA teamed up with Woodside and two other Japanese companies in April 2020 to [look at importing carbon-neutral hydrogen](https://files.woodside/docs/default-source/media-releases/woodside-joins-japanese-consortium-to-study-exporting-carbon-neutral-hydrogen.pdf?sfvrsn=a10aae6d%5F2&ref=boilingcold.com.au) to be co-fired with coal in JERA's power stations to reduce emissions. The scope was the construction and operation of world-scale ammonia facilities and the required supply chain. Woodside was tasked with investigating the transition from blue to green hydrogen. [Coleman smells ammonia in Woodside’s futureWoodside looks at gas to ammonia to fuel coal-fired power stations as concerns grow about the viability of LNG mega-projects.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/06/Coleman-reduced.jpg)](https://www.boilingcold.com.au/coleman-smells-ammonia-in-woodsides-future/) A Woodside spokesperson said the company continues to undertake studies with JERA, Marubeni and IHI examining opportunities for the large-scale export of ammonia for use in coal-fired power generation in Japan. For those exports to be blue hydrogen significant carbon capture and storage is required. In April, former Woodside chief executive Peter Coleman said the geology of most of Australia was [unsuitable for carbon storage](https://www.afr.com/companies/energy/coleman-calls-time-on-big-new-lng-projects-20210422-p57lii?ref=boilingcold.com.au). "You can't just go and pop a hole in the ground anywhere you want," Coleman told the *AFR*. "You have to have the reservoirs, you have to have the right rock to be able to do it, you have to have stabilities in the aquifers and so on." --- *Update 13 May 3:00PM: Woodside comments added.* --- *Main image: Blue ammonia logo. Source: Boiling Cold* --- ### Offshore oil & gas producers to pay for $1B Northern Endeavour cleanup URL: https://www.boilingcold.com.au/offshore-oil-and-gas-producers-to-pay-for-1b-northern-endeavour-cleanup/ Last updated: 2022-01-08T08:49:11.000Z The Federal Government will levy offshore oil and gas producers the possibly $1 billion cost of decommissioning the Northern Endeavour oil vessel and its oil fields that arose after its owner went into liquidation in early 2020. The temporary measure announced in tonight's Federal Budget is open-ended in both time and cost. The levy will end in the financial year "in which all costs associated with the decommissioning have been recovered." The Government did not publish the likely cost due to "commercial sensitivities." Independent SA Senator Rex Patrick has [estimated the cost could reach $1 billion](https://www.abc.net.au/news/2021-04-14/northern-endeavour-oil-vessel-could-cost-taxpayers-1-billion/100044914?ref=boilingcold.com.au). It is unlikely the Government has a firm estimate itself as the Department of Industry, Science, Energy and Resources plans only to start[ engaging with potential contractors this quarter](https://www.tenders.gov.au/App/Show/7f39c34f-cf31-3216-4b91-e11d54f157a3?PpId=eefae0c6-8c8e-4ca7-9bc2-770d820e5a99&utm%5Fsource=newsletter&utm%5Fmedium=email&utm%5Fcampaign=bhps%5Fgood%5Freason%5Fto%5Fnot%5Fback%5Fscarborough&utm%5Fterm=2021-05-10#pp-eefae0c6-8c8e-4ca7-9bc2-770d820e5a99). The Government has already [committed or spent more than $200 million](https://www.boilingcold.com.au/northern-endeavour-debacle-hits-209m-with-much-more-to-come/) to maintain the vessel in the Timor Sea and prepare it for decommissioning. Resources Minister Keith Pitt said the levy was an important measure to ensure taxpayers did not foot the bill for the decommissioning and remediation of the Northern Endeavour vessel, Laminaria-Corallina oilfields, and associated infrastructure. ## Industry unhappy with bearing the cost Chief executive of oil and gas lobby group APPEA Andrew McConville said the levy would see offshore oil and gas companies footing the bill for a project they were never involved in. The exception to McConville's concern about lack of involvement is APPEA member Woodside that initially owned and operated the Northern Endeavour. In 2015 the company dropped plans to decommission the oil facility and instead sold it to a small, inexperienced, financially weak one-person company Northern Oil and Gas Australia. The deal allowed Woodside and its partner to avoid a decommissioning bill the company estimated at about $360 million. The Government commissioned experienced UK oil and gas regulator Steve Walker to investigate the Northern Endeavour debacle. Walker [heavily criticised current regulation](https://www.boilingcold.com.au/poor-federal-regulation-allowed-the-360m-northern-endeavor-mess/) that allowed the sale to occur and recommended the introduction of trailing liabilities that would hold previous owners of facilities liable for decommissioning costs as a last resort. [Federal Govt regulates poorly and gets $360M Northern Endeavor clean-up billThe Northern Endeavor mess started with Woodside paying to rid itself of a rusty ageing asset, ended with a $362 million liability for the Government and in between was a regulatory shambles.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/09/northern-endeavour.jpg)](https://www.boilingcold.com.au/poor-federal-regulation-allowed-the-360m-northern-endeavor-mess/) McConville said he is glad there will be consultation with the Government, and APPEA would propose alternatives to the "blunt instrument" of a levy. "Tonight's announcement of a new levy on the entire (offshore) oil and gas industry is a terrible precedent," McConville said. > "Everyone agrees that the Northern Endeavour needs to be decommissioned and the costs managed – but there are a number of ways that the government can do so without risking undermining investment confidence in the offshore oil and gas industry." McConville said options included making the Government's management of the operations more efficient; reducing the cost of decommissioning through working collaboratively with industry; and looking at alternative funding such as selling the asset or accessing Petroleum Resource Rent Tax credits. There is much industry speculation about why the likely cost was so much more than Woodside's estimate six years ago. APPEA strongly opposes the introduction of trailing liabilities as well as the Northern Endeavor levy. Woodside's 2015 decision to sell the Northern Endeavour is unlikely to be remembered fondly by other Australian offshore oil and gas producers. --- *Main image: Northern Endeavour oil vessel in the Timor Sea. Source: Anon.* --- ### Santos and ENI team up to tackle dirty gas and decommissioning URL: https://www.boilingcold.com.au/santos-and-eni-team-up-to-tackle-dirty-gas-and-decommissioning/ Last updated: 2021-12-27T01:31:54.000Z *ANALYSIS* Santos and Italian ENI will work together on two problems they have in common in the waters off northern Australia: gas full of CO2 and expensive cleanups of offshore infrastructure becoming due. In the past 12 months, the companies came to have shared predicaments in very different ways. Santos completed the purchase of assets no one else wanted – ConocoPhillips’ equity in the declining Bayu Undan gas field and the Darwin LNG plant. ENI failed to sell assets it did not want – including Bayu Undan and Darwin LNG – after buyers lost interest when it became clear that [decommissioning costs in Australia were becoming harder to avoid](https://www.boilingcold.com.au/oil-gas-industry-to-get-northern-endeavour-bill-and-trailing-liabilities-pitt/). For years the two companies competed to ensure the field it had an interest in would fill the Darwin LNG plant when gas stopped flowing from Bayu Undan. In mid-2019, Santos [emerged the winner](https://www.spglobal.com/platts/en/market-insights/latest-news/natural-gas/062719-australia-santos-barossa-project-exclusive-talks-backfill-darwin-lng?ref=boilingcold.com.au) when the Barossa joint venture it owns 25 per cent of won exclusive rights to negotiate with Darwin LNG operator ConocoPhillips. However, Santos still had a problem: US-major ConocoPhillips wanted to exit Australia, not stay around to develop the CO2-rich Barossa field and decommission the extensive Bayu Undan offshore facilities. Growth-hungry Santos chief executive Kevin Gallagher went all in and removed ConocoPhillips from the scene by buying it out of Bayu Undan, Darwin LNG and Barossa for $2 billion and tripling Santos’s exposure to Bayu Undan’s decommissioning costs. [Santos’ dirty big $2B Barossa betBarossa would produce Australia’s dirtiest LNG and if other companies will not back it Santos has a very expensive problem.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/08/Bayu-Undan.jpg)](https://www.boilingcold.com.au/santos-dirty-big-2b-barossa-bet/) Now a Barossa go-ahead was vital for Gallagher. Never mind moving on to Woodside, his position at Santos would have become untenable if the buyout of ConocoPhillips had been for nothing. Gallagher did get Barossa over the line in March after loading up the project with risk. Santos increased the lease component and described it as a cost reduction; signed up to sell the LNG at the spot price, leaving it exposed to a volatile market; and committed to Barossa before it finalised a sell down to Japan’s JERA. While the deal was spun and reported as a huge win, a more sober and independent assessment reached a different conclusion. Wood Mackenzie principal upstream analyst Rob Morris analysed 26 global upstream projects sanctioned, or likely to be sanctioned, in 2021. ![plot of emissions intensity versus rate of return for major oil and gas projecs due to have a final investment decision in 2021, including Santos' Barossa LNG project and the North Field East in Qatar.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/05/image.png) Source: [Wood Mackenzie](https://www.woodmac.com/news/the-edge/the-rising-hurdles-for-investment-in-upstream/?ref=boilingcold.com.au) Barossa [achieved the 2021 double wooden spoon award](https://www.woodmac.com/news/the-edge/the-rising-hurdles-for-investment-in-upstream/?ref=boilingcold.com.au) of the lowest return and the highest emissions intensity. Wood Mackenzie calculated the return of about six per cent with a conservative price for Brent crude of $US50 a barrel, but a higher price would not change the ranking of the projects. The sanction of Barossa has allowed Santos to defer the decommissioning costs of the Darwin LNG plant. ## A problem shared is a problem solved Santos is left with 43 per cent of the Bayu Undan decommissioning cost of Bayu Undan of about $US1 billion and very dirty LNG from Barossa just when the market is looking for the opposite. ENI has 11 per cent of the Bayu Undan cleanup bill and the Evans Shoal field that contains up to 30 per cent CO2 and now cannot send gas to Darwin. The [memorandum of understanding between Santos and ENI](https://www.santos.com/news/santos-and-eni-sign-mou-to-collaborate-in-northern-australia-and-timor-leste/?ref=boilingcold.com.au) signed last week positions the companies to grab a share of the Federal Government‘s plan to [support carbon capture and storage with $264 million](https://theconversation.com/hydrogen-and-carbon-capture-receive-extra-funding-as-morrison-prepares-for-biden-summit-159361?ref=boilingcold.com.au) that nominated the Bonaparte Basin as a potential CCS hub. And those taxpayer’s dollars could help the gas producers solve a few immediate issues of their own. ![Santos map of gas fileds off northern Australia includiing Barossa, Bayu Undan, Prelude, Ichthys, Sunrise and Evans Shoal and Blacktip.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/05/Santos-northern-Australia-map-annotated.jpg) **Gas connections to Darwin.** Source: Santos with annotation by Boiling Cold ENI’s Blackwood retention lease next to Evans Shoal expires in June. The Italian company must convince the National Offshore Petroleum Title Administrator that the resource could be commercially viable in 15 years or lose the lease. If judged uneconomic, offshore environment regulator NOPSEMA could apply its [newly toughened approach to decommissioning](https://www.boilingcold.com.au/regulator-calls-time-on-delays-to-52b-offshore-oil-and-gas-decommissioning/) and insist wells are plugged and abandoned at great expense. For NOPTA to judge Evans Shoal and Blackwood viable ENI needs a plan to handle enormous amounts of CO2. A proposal to send CO2 to the Bayu Undan field for reinjection not only justifies a delay in ENI decommissioning the wells at Evans Shoal, but both companies benefit by pushing back the removal of the offshore infrastructure at Bayu Undam. *Boiling Cold* understands the Timor Leste Government supports carbon capture and storage at Bayu Undan as decommissioning costs would be deductible against its royalty income, and it could charge a fee for CO2 storage. An industry consultant said not all the Bayu Undan facilities would be needed for CO2 injection, so some decommissioning work would not be deferred. The Barossa project plans to vent most CO2 from the reservoir offshore, but its LNG could be less carbon-intensive if CO2 currently vented at Darwin was instead buried at Bayu Undan 500km away. [Inpex moves to clean up Ichthys’ dirty LNGA year after Inpex rejected carbon capture and storage at Ichthys LNG as unaffordable it is an essential element in its new drive to slash emissions by 2030.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/01/Ichthys-LNG-Project-onshore-facilities-May-2018.jpg)](https://www.boilingcold.com.au/inpex-moves-to-clean-up-ichthys-dirty-lng/) Inpex’s Ichthys LNG plant near the Darwin LNG is a potential customer for Bayu Undan CCS, especially when [emissions increase by about 30 per cent next decade](https://www.boilingcold.com.au/ichthys-lng-emissions-to-soar-as-inpex-chases-more-gas/) when Inpex develops a new formation. In 2019 Inpex dismissed CCS for Ichthys as unaffordable at about $100 a tonne of CO2 but is now revisiting the plan. ENI, Santos and Inpex all committed to the remote CO2-rich gas off northern Australia when gas was a forever fuel, not a transition fuel, and investors did not consider climate change a business risk. Now Santos appears stuck in a loop of ever-deepening commitment to the Bonaparte Basin. First, it bought out ConocoPhillips, complete with substantial Bayu Undan decommissioning costs; then it sanctioned low return and dirty Barossa to justify the initial purchase. Now Gallagher’s company is chasing carbon storage in deep and distant offshore waters to delay the decommissioning costs of the first deal and partially offset the greenhouse emissions of the second deal. [Gorgon emissions to soar until Chevron fixes CO2 injectionGorgon LNG’s carbon emissions will jump by more than one million tonnes a year until Chevron fixes an underground pressure management problem that caused WA’s safety regulator to curtail CO2 injection by two-thirds.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/02/gorgon-lng-trains-large-d-cropped-reduced.jpg)](https://www.boilingcold.com.au/regulator-limits-chevrons-troubled-gorgon-co2-injection-to-one-third-capacity/) Chevron has spent more than $3 billion at Gorgon to transport CO2 a few kilometres and inject it underground from onshore wells. The system is yet to be fully operational. CCS offshore hundreds of kilometres from the source of the CO2 is unlikely to have fewer problems than Chevron’s work on Barrow Island. If storing CO2 at Bayu Undan is eventually judged to not be feasible Santos and ENI would at least have delayed decommissioning for a few years and temporarily been able to answer the question: what are you doing about emissions? --- *Main image: Bayu Undan offshore platforms. Source: Inpex* --- ### Rio orders LNG ore carriers after Fortescue dumps gas for green ammonia URL: https://www.boilingcold.com.au/rio-orders-lng-ore-carriers-after-fortescue-dumps-gas-for-green-ammonia/ Last updated: 2022-01-08T14:05:32.000Z Rio Tinto has chartered up to six LNG-powered bulk carriers just months after iron ore rival Fortescue dumped an LNG vessel tender in favour of green ammonia. The Newcastlemax 210,000 deadweight tonnes vessels will be chartered from Singapore’s Eastern Pacific Shipping and be built at New Times Shipbuilding in Jiangsu Province, China. London-based Rio Tinto has committed to three vessels to be delivered from the second half of 2023 and has an option for three more. Rio Tinto commercial officer Ashley Howard said the miner was delighted to include LNG dual-fuel shipping into its fleet. “This keeps Rio consistent with industry best practice and will provide additional opportunity to meet our emissions reduction goals,” Howard said. EPS chief executive Cyril Ducau said the deal was an important step forward for industry-wide decarbonisation. > “We need like-minded companies to come together and use transitional fuels, like LNG, to get there,” Ducau said. In September 2020, [BHP agreed to charter five similar vessels](https://www.bhp.com/media-and-insights/news/2020/09/bhp-awards-worlds-first-lng-fuelled-newcastlemax-bulk-carrier-tender-to-reduce-emissions/?ref=boilingcold.com.au) from EPS for five years starting in 2022 on the Pilbara to China iron ore trade. BHP expects the vessels to cut greenhouse gas emissions on the voyage by 30 per cent. The engines will be designed to reduce methane slip, where unburnt gas is released to the atmosphere, to negligible levels. As methane is about [30 times more damaging to the climate over 100 years than CO2](https://www.wartsila.com/insights/article/mind-the-methane-gap?ref=boilingcold.com.au), even a tiny amount of methane slip can negate the climate benefits of switching to LNG. When measured over 20 years, methane is about 85 times more damaging than CO2, making the minimisation of methane slip vital if a switch to LNG is to help keep global warming to close to 1.5℃. ### Pilbara ships but not Pilbara LNG In December 2020, BHP awarded an LNG supply agreement to Shell that owns the first LNG bunker vessel in Singapore, the FueLNG Bellina. The BHP/Shell contract was a blow to Woodside’s plans to enter the LNG bunkering business. The local LNG producer had been awarded a ship-to-ship LNG bunkering licence by the Pilbara Port Authority six months earlier. The Rio Tinto vessel will sail from Dampier, adjacent to Woodside’s two LNG plants. Rio Tinto has not announced its bunkering arrangements. Eastern Pacific Shipping plans to introduce more than 30 dual-fuel vessels over the next few years. The Singaporean company “believes to not let the perfect be the enemy of the good in our pursuit of full decarbonisation, which is why alternative marine fuels will be used until even cleaner energy sources are available.” [Ten hurdles to Twiggy’s green vision for FMGAndrew Forrest has put his iron ore miner FMG on a fast track to net-zero emissions by 2030\. Achieving high speed on a rocky road will not be easy.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/03/Andrew-Forrest---Site-image.jpg)](https://www.boilingcold.com.au/ten-hurdles-to-twiggys-green-vision-for-fmg/) Andrew Forrest’s Fortescue Metals Group is betting on those cleaner fuel being available very soon. Fortescue followed its iron ore rivals in January by [floating a $US700 million](https://www.tradewindsnews.com/shipyards/fortescue-metals-floats-700m-tender-for-lng-fuelled-newcastlemax-bulkers/2-1-951107?ref=boilingcold.com.au) tender to charter up to 10 dual-duelled bulk carriers. Fortescue chair Andrew Forrest shocked many observers in mid-March 15 when he announced the miner would [accelerate its net-zero emission target](https://www.boilingcold.com.au/forrest-pushes-fmg-net-zero-emissions-2030/) a decade to 2030. Ten days later, shipping news site *TradeWinds* reported the [tender for LNG-fuelled carriers had been dropped](https://www.tradewindsnews.com/bulkers/fortescue-metals-opts-to-leapfrog-lng-in-favour-of-green-ammonia/2-1-986255?ref=boilingcold.com.au). *Boiling Cold* has confirmed the move. Fortescue chief executive Elizabeth Gaines said, “in line with Fortescue’s strengthened target to achieve carbon neutrality by 2030, the company’s focus is on the development of vessels powered by green ammonia,” > “Accordingly, tenders for LNG-powered bulk carriers will not be pursued.” ### Green and fast a big challenge for shipping Fortescue will face challenges in the short-term sourcing the two critical components of its clean shipping plan: engines and fuel. Leading marine engine manufacturer Wartsila conducted the [first long term, full-scale testing](https://www.wartsila.com/media/news/30-06-2020-world-s-first-full-scale-ammonia-engine-test---an-important-step-towards-carbon-free-shipping-2737809?ref=boilingcold.com.au) of ammonia in a marine four-stroke combustion engine less than 12 months ago. The Finnish company lists the toxicity, corrosiveness, slow ignition, and NOx emissions of ammonia as [key challenges](https://www.wartsila.com/media/news/01-12-2020-what-does-an-ammonia-ready-vessel-look-like--2825961?ref=boilingcold.com.au) as well as the increased weight of fuel to be stored. The difficulty of procuring large amounts of green ammonia was highlighted by yesterday’s Federal Government [funding of three world-scale renewable hydrogen projects](https://www.boilingcold.com.au/arena-backs-atco-and-engie-with-71m-for-wa-green-hydrogen/). ENGIE and Yara received a $42 million contribution towards the cost of a plant that will produce just 625 tonnes of hydrogen a year that converts to 3700 tonnes of ammonia. What is now world scale in renewable hydrogen and ammonia is tiny compared to the annual fuel consumption of a fleet of iron ore carriers. Wartsila recommends “a gradual transition starting from using ammonia as a drop-in fuel” where small quantities of ammonia mix with regular fuel, and the amount of ammonia increases as technology and operating knowledge improves. The big Pilbara iron ore miners face the same tough decisions in their quest to decarbonise. They must balance investments in current known but polluting technologies to keep operations going; transition solutions like LNG that are improvements but fall well short of achieving net-zero; and moving to less well-developed solutions compatible with a decarbonised business. Time will tell if Rio Tinto was excessively cautious or Andrew Forrest was overly ambitious. --- *Main image: Fortescue iron ore carriers in Herb Elliott Port, Port Hedland WA. Source: Fortescue Metals Group Limited.* --- ### Incitec Pivot backs Perdaman’s $4.6B urea plant with 20-year offtake deal URL: https://www.boilingcold.com.au/incitec-pivot-backs-perdamans-4-6b-urea-plant-with-20-year-offtake-deal/ Last updated: 2022-01-08T13:56:45.000Z Fertiliser manufacturer Incitec Pivot has signed up to take the entire production of Perdaman’s proposed urea plant in Karratha for 20 years in a significant boost for the $4.6 billion project. Incitec said the deal secured it up to 2.3 million tonnes a year of competitively priced granular urea fertiliser for domestic and international markets. IPL chief executive Jeanne Johns said Perdaman’s plant would be one of the most energy-efficient in the world with low emissions technology. The plant would emit the equivalent of 650,000 tonnes of CO2 a year, according to Perdaman’s [submission to the WA Environmental Protection Authority](https://www.epa.wa.gov.au/sites/default/files/PER%5Fdocumentation2/Environmental%20Review%20Document%5F3.pdf?ref=boilingcold.com.au). Perdaman chair Vikas Rambal said the offtake agreement was a major step forward for the $4.6 billion project. Production is expected to start in late 2025. > “The Karratha urea plant has the potential to make Australia a major player in the global urea market,” Rambal said. Rambal said the next milestone was to finalise project financing, and Perdaman was on track to commence construction in the first quarter of 2022\. A joint venture of Clough and Italy’s Saipem [will build the plant](https://www.cloughgroup.com/clough-in-joint-venture-with-saipem-has-been-selected-as-the-engineering-procurement-and-construction-contractor-for-perdamans-urea-plant-in-karratha/?ref=boilingcold.com.au). Incitec Pivot said financing was the primary condition precedent and that in turn depended on Perdaman finalising gas supply arrangements and obtaining environmental and regulatory approvals. ![Granular urea fertiliser](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/05/Urea_-_Kolkata_2003-11-07_00670-cropped.jpg) **Granular urea fertiliser**. Source: *Biswarup Ganguly, CC BY 3.0 [https://creativecommons.org/licenses/by/3.0](https://creativecommons.org/licenses/by/3.0?ref=boilingcold.com.au), via Wikimedia Commons* [Perdaman and Woodside signed an agreement](https://files.woodside/docs/default-source/media-releases/20-11-2018-woodside-signs-agreement-for-long-term-domestic-gas-supply.pdf?sfvrsn=fabd1aa4%5F10&ref=boilingcold.com.au) in November 2018 for the urea plant to receive about 125 TJ/day of gas for 20 years from Woodside’s Scarborough LNG project that due to be sanctioned later this year. Rambal told *WA Works* magazine in March that the price for the gas from Woodside was fixed, and the sanctions of Woodside’s Scarborough LNG project and Perdaman’s urea plant are the only remaining conditions on the gas supply agreement. If Woodside’s Scarborough produces eight million tonnes of LNG a year, the project’s domestic gas obligation will be about 160 terajoules a day, leaving just 35 TJ/day for the rest of the WA market. For the Karratha plant to produce urea competitive in price with imports, it will need relatively cheap gas. If Woodside provides low-priced gas to Perdaman, it may lose an opportunity to supply into the broader market later this decade when the Australian Energy Market Operator says there is the “[potential that demand may exceed supply](https://aemo.com.au/newsroom/media-release/2020-wa-gsoo?ref=boilingcold.com.au).” --- *Main image: graphic of Karratha urea plant. Source: Clough* --- ### ARENA backs ATCO and Engie with $71M for WA green hydrogen URL: https://www.boilingcold.com.au/arena-backs-atco-and-engie-with-71m-for-wa-green-hydrogen/ Last updated: 2022-01-01T09:58:51.000Z The Australian Renewable Energy Agency will fund ATCO to feed green hydrogen into Perth's gas grid and Engie to supply the clean feedstock into Yara Pilbara's ammonia plant. ATCO, Engie and the Australian Gas Infrastructure Group in Victora will build 10-megawatt electrolysers powered by renewable energy with Federal Government funds backing its goal of Australia producing hydrogen for less than $2 a kg. The electrolysers that split water into hydrogen and oxygen will be among the largest built so far in the world. ARENA chief executive Darren Miller said renewable hydrogen was an opportunity to help reduce emissions globally and locally, and create a new export industry. > “Our hydrogen industry in Australia is in its infancy, so the lessons learned from these three projects...will be important in driving our future hydrogen economy," Miller said. ATCO, together with AGIG, received $29 million to locate an electrolyser at the Warradarge wind farm in the Mid-West. Four tonnes a day of green hydrogen will be produced and trucked south to two locations for injection into the gas grid. A final investment decision is expected by December 2021. French company Engie has $42 million from ARENA to fund the supply of green hydrogen to Yara Pilbara's existing ammonia plant to displace a small fraction of the current hydrogen supply manufactured from gas. Yara Pilbara general manager Laurent Trost said green hydrogen could decarbonise the production of ammonia that is a feedstock for a variety of industrial uses. > "More importantly, renewable ammonia is one of the world’s most promising fuels for green power generation and shipping,” Trost said. Yara and ENGIE will build on-site solar panels and a battery system as well as an electrolyser. Annual production of 625 tonnes of hydrogen to produce 3700 tonnes of green ammonia, about 0.4 per cent of the plant's 850,000 tonnes a year capacity, is expected to start in 2023\. Yara and Engie applied in April 2021 for environmental approval to eventually [expand to a 66MW electrolyser](https://reneweconomy.com.au/solar-powered-green-ammonia-plans-in-pilbara-submitted-to-state-epa/?ref=boilingcold.com.au) powered by a 100MW solar farm. Almost all current hydrogen production uses the steam methane reforming process that emits large volumes of carbon dioxide. [Hydrogen: a simple molecule but a complex businessThere is no shortage of hype about hydrogen. Time will tell what ideas fall by the wayside and which build enduring industries.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/07/22951791245_1bb6dfcf46_o.png)](https://www.boilingcold.com.au/hydrogen-a-simple-molecule-but-a-complex-business/) AGIG will receive $32 million to blend green hydrogen into the gas supply at Wodonga Victoria. ARENA's funding of $103 million is two-thirds of the estimated $161 million cost to build the three projects. The projects must satisfy further conditions including financial close before receiving the funds. The Federal Government had been expected to fund just two projects with about $70 million. Two WA projects failed to attract funding. Woodside and energy infrastructure player APA planned to produce hydrogen at APA’s Badgingarra wind and solar farm for use in use in power generation, transport and industry. BHP’s Nickel West wanted to install an electrolyser at its Kwinana Nickel Refinery to produce some of the hydrogen used to refine the valuable battery metal. Other proposals were fuel trucks at an Anglo American coal mine in Queensland, and the Woodside-backed H2TAS project near Launceston, Tasmania. Woodside has failed to attract support for both the projects it bought into less than a year ago in a first step away from fossil fuels. --- *Update 9:15 AM May 5 2021: Added Yara comments, the capacity of the plant and future plans.* *Update May 7 2021: ATCO expects to make a final investment decision in December 2021, not 2022.* --- *Main image: Yara Pilbara ammonia plant on the Burrup Peninsula near Karratha. Source: Woodside Energy Limited* --- ### The 1.5℃ global warming limit is not impossible – but needs political action now URL: https://www.boilingcold.com.au/the-1-5-global-warming-limit-is-not-impossible-but-needs-political-action-now/ Last updated: 2021-12-27T13:52:16.000Z [Bill Hare](https://theconversation.com/profiles/bill-hare-5836?ref=boilingcold.com.au), *[Potsdam Institute for Climate Impact Research](https://theconversation.com/institutions/potsdam-institute-for-climate-impact-research-1300?ref=boilingcold.com.au)*; [Carl-Friedrich Schleussner](https://theconversation.com/profiles/carl-friedrich-schleussner-1225521?ref=boilingcold.com.au), *[Humboldt University of Berlin](https://theconversation.com/institutions/humboldt-university-of-berlin-1261?ref=boilingcold.com.au)*; [Joeri Rogelj](https://theconversation.com/profiles/joeri-rogelj-1226124?ref=boilingcold.com.au), *[Imperial College London](https://theconversation.com/institutions/imperial-college-london-1206?ref=boilingcold.com.au)*, and [Piers Forster](https://theconversation.com/profiles/piers-forster-271934?ref=boilingcold.com.au), *[University of Leeds](https://theconversation.com/institutions/university-of-leeds-1122?ref=boilingcold.com.au)* Limiting global warming to 1.5℃ this century is a central goal of the Paris Agreement. In recent months, climate experts and [others](https://www.science.org.au/files/userfiles/support/reports-and-plans/2021/risks-australia-three-deg-warmer-world-report.pdf?ref=boilingcold.com.au), including in Australia, have [suggested](https://theconversation.com/failure-is-not-an-option-after-a-lost-decade-on-climate-action-the-2020s-offer-one-last-chance-158913?ref=boilingcold.com.au) the target is now impossible. Whether Earth can stay within 1.5℃ warming involves two distinct questions. First, is it physically, technically and economically feasible, considering the physics of the Earth system and possible rates of societal change? Science indicates the answer is “yes” – although it will be very difficult and the best opportunities for success lie in the past. The second question is whether governments will take sufficient action to reduce greenhouse gas emissions. This answer depends on the ambition of governments, and the effectiveness of campaigning by non-government organisations and others. So scientifically speaking, humanity can still limit global warming to 1.5°C this century. But political action will determine whether it *actually* does. Conflating the two questions amounts to misplaced punditry, and is dangerous. ### 1.5℃ wasn’t plucked from thin air The [Paris Agreement](https://unfccc.int/process-and-meetings/the-paris-agreement/the-paris-agreement?ref=boilingcold.com.au) was adopted by 195 countries in 2015\. The inclusion of the 1.5℃ warming limit came after a long push by vulnerable, small-island and least developed countries for whom reaching that goal is their best chance [for survival](https://1point5.info/en/?ref=boilingcold.com.au). They were backed by other [climate-vulnerable](https://thecvf.org/?ref=boilingcold.com.au) nations and a [coalition](https://www.highambitioncoalition.org/work?ref=boilingcold.com.au) of high-ambition countries. The 1.5℃ limit wasn’t plucked from thin air – it was informed by the best available science. Between 2013 and 2015, an extensive United Nations [review process](https://unfccc.int/topics/science/workstreams/periodic-review?ref=boilingcold.com.au) determined that limiting warming to 2℃ this century [cannot avoid](https://unfccc.int/sites/default/files/resource/docs/2015/sb/eng/inf01.pdf?ref=boilingcold.com.au) dangerous climate change. Since Paris, the science on 1.5℃ has expanded rapidly. An Intergovernmental Panel on Climate Change (IPCC) [report](https://www.ipcc.ch/sr15/?ref=boilingcold.com.au) in 2018 synthesised hundreds of studies and found rapidly escalating risks in global warming between 1.5℃ and 2℃. The landmark report also changed the climate risk narrative away from a somewhat unimaginable hothouse world in 2100, to a very real threat within most of our lifetimes – one which climate action now could [help avoid](https://climateanalytics.org/blog/2019/livin-in-the-future-delaying-climate-action-and-intergenerational-justice/?ref=boilingcold.com.au). The message was not lost on a world experiencing ever more climate impacts [firsthand](https://theconversation.com/a-staggering-1-8-million-hectares-burned-in-high-severity-fires-during-australias-black-summer-157883?ref=boilingcold.com.au). It galvanised an unprecedented global youth and activist [movement](https://www.schoolstrike4climate.com/?ref=boilingcold.com.au) demanding action compatible with the 1.5℃ limit. The near-term benefits of stringent emissions reduction are becoming ever clearer. It can significantly reduce [near-term warming rates](https://theconversation.com/paris-agreement-aiming-for-1-5-c-target-could-slow-global-warming-within-next-two-decades-151710?ref=boilingcold.com.au) and increase the prospects for [climate-resilient development](https://iopscience.iop.org/article/10.1088/1748-9326/abed79?ref=boilingcold.com.au). ### A matter of probabilities The IPCC looked extensively at emission reductions required to pursue the 1.5℃ limit. It found getting on a 1.5℃ track is feasible but would require halving global emissions by 2030 compared to 2010 and reaching net-zero emissions by mid-century. It found no published emission reduction pathways giving the world a likely (more than 66%) chance of limiting peak warming this century to 1.5℃. But it identified a range of pathways with about a one-in-two chance of achieving this, with no or limited overshoot. Having about a one-in-two chance of limiting warming to 1.5℃ is not ideal. But these pathways typically have a greater than 90% chance of limiting warming to well below 2℃, and so are [fully compatible](https://www.nature.com/articles/nclimate3096?ref=boilingcold.com.au) with the overall Paris goal. [Spot the difference: as world leaders rose to the occasion at the Biden climate summit, Morrison falteredThere was palpable relief as Biden brought the US back to the table on global climate action, warning “we have to get this done”. Depressingly, Morrison showed little sign of hearing the message.![](https://cdn.theconversation.com/static/tc/@theconversation/ui/dist/esm/logos/web-app-logo-192x192-e99834e3a7a551050e9debe6cc925617.png)The ConversationLesley Hughes![](https://images.theconversation.com/files/396700/original/file-20210423-13-gh1178.jpg?ixlib=rb-1.1.0&rect=158%2C333%2C5367%2C2683&q=45&auto=format&w=1356&h=668&fit=crop)](https://theconversation.com/spot-the-difference-as-world-leaders-rose-to-the-occasion-at-the-biden-climate-summit-morrison-faltered-159295?ref=boilingcold.com.au) ### Don’t rely on carbon budgets Carbon budgets show the amount of carbon dioxide that can be emitted for a given level of global warming. Some point to carbon budgets to argue the 1.5℃ goal is now impossible. But carbon budget estimates are nuanced, and not a suitable way to conclude a temperature level is no longer possible. The carbon budget for 1.5℃ depends on several factors, including: - the likelihood with which warming will be halted at 1.5℃ - the extent to which non-CO₂ greenhouse emissions such as methane are reduced - uncertainties in how the climate responds these emissions. These uncertainties mean strong conclusions cannot be drawn based on a single carbon budget estimate. And, at present, [carbon budgets](https://www.nature.com/articles/s43247-020-00064-9?ref=boilingcold.com.au) and other [estimates](https://www.nature.com/articles/s41558-020-00957-9?ref=boilingcold.com.au) do not support any argument that limiting warming to 1.5℃ is impossible. Keeping temperature rises below 1.5℃ cannot be guaranteed, given the history of action to date, but the goal is certainly not impossible. As any doctor embarking on a critical surgery would say about a one-in-two survival chance is certainly no reason not to do their utmost. ### Closer than we’ve ever been It’s important to remember the special role the 1.5℃ goal plays in how governments respond to climate change. Five years on from Paris, and the gains of including that upper ambition in the agreement are showing. Some [127 countries](https://climateactiontracker.org/publications/global-update-paris-agreement-turning-point/?ref=boilingcold.com.au) aim to achieve net-zero emissions by mid-century at the latest – something considered unrealistic just a few years ago. If achieved globally and accompanied by stringent near-term reductions, the actions could be in line with 1.5℃. If all these countries were to deliver on these targets in line with the [best-available science on net zero](https://www.nature.com/articles/d41586-021-00662-3?ref=boilingcold.com.au), we may have a one-in-two chance of limiting warming this century [to 2.1℃](https://climateactiontracker.org/publications/global-update-paris-agreement-turning-point/?ref=boilingcold.com.au) (but a meagre one-in-ten that it is kept to 1.5°C). Much more work is needed and more countries need to step up. But for the first time, current ambition brings the 1.5℃ limit within striking distance. The next ten years are crucial, and the focus now must be on governments’ 2030 targets for emissions reduction. If these are not set close enough to a 1.5℃-compatible emissions pathway, it will be increasingly difficult to reach net-zero by 2050. The United Kingdom and European Union are getting close to this pathway. [The United States’](https://www.whitehouse.gov/briefing-room/statements-releases/2021/04/22/fact-sheet-president-biden-sets-2030-greenhouse-gas-pollution-reduction-target-aimed-at-creating-good-paying-union-jobs-and-securing-u-s-leadership-on-clean-energy-technologies/?ref=boilingcold.com.au) new climate targets are a major step forward, and China is moving in the right direction. Australia is now under heavy scrutiny as it prepares to update its inadequate 2030 target. The UN wants a 1.5℃ pathway to be the focus at this year’s COP26 climate summit in Glasgow. The stakes could not be higher. [More reasons for optimism on climate change than we’ve seen for decades: 2 climate experts explainFor the first time, political will and global public opinion seem focused on profound climate action. This decade will be a decisive one.![](https://cdn.theconversation.com/static/tc/@theconversation/ui/dist/esm/logos/web-app-logo-192x192-e99834e3a7a551050e9debe6cc925617.png)The ConversationGabi Mocatta![](https://images.theconversation.com/files/396685/original/file-20210423-17-163uhy1.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C4131%2C2065&q=45&auto=format&w=1356&h=668&fit=crop)](https://theconversation.com/more-reasons-for-optimism-on-climate-change-than-weve-seen-for-decades-2-climate-experts-explain-159233?ref=boilingcold.com.au) ![The Conversation](https://counter.theconversation.com/content/159297/count.gif?distributor=republish-lightbox-basic) --- [Bill Hare](https://theconversation.com/profiles/bill-hare-5836?ref=boilingcold.com.au), Director, Climate Analytics, Adjunct Professor, Murdoch University (Perth), Visiting scientist, *[Potsdam Institute for Climate Impact Research](https://theconversation.com/institutions/potsdam-institute-for-climate-impact-research-1300?ref=boilingcold.com.au)*; [Carl-Friedrich Schleussner](https://theconversation.com/profiles/carl-friedrich-schleussner-1225521?ref=boilingcold.com.au), Research Group Leader, *[Humboldt University of Berlin](https://theconversation.com/institutions/humboldt-university-of-berlin-1261?ref=boilingcold.com.au)*; [Joeri Rogelj](https://theconversation.com/profiles/joeri-rogelj-1226124?ref=boilingcold.com.au), Director of Research and Lecturer - Grantham Institute Climate Change & the Environment, *[Imperial College London](https://theconversation.com/institutions/imperial-college-london-1206?ref=boilingcold.com.au)*, and [Piers Forster](https://theconversation.com/profiles/piers-forster-271934?ref=boilingcold.com.au), Professor of Physical Climate Change; Director of the Priestley International Centre for Climate, *[University of Leeds](https://theconversation.com/institutions/university-of-leeds-1122?ref=boilingcold.com.au)* This article is republished from [The Conversation](https://theconversation.com/?ref=boilingcold.com.au) under a Creative Commons license. Read the [original article](https://theconversation.com/the-1-5-global-warming-limit-is-not-impossible-but-without-political-action-it-soon-will-be-159297?ref=boilingcold.com.au). --- *Main Image: plane and chimney. Source:* [*Thijs Stoop*](https://unsplash.com/@thijsstoop?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) *on [Unsplash](https://unsplash.com/?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText)* --- ### South32's coal-fired Worsley Alumina two-thirds dirtier than Alcoa URL: https://www.boilingcold.com.au/south32s-coal-fired-worsley-alumina-twice-as-dirty-as-alcoa/ Last updated: 2022-01-08T14:10:29.000Z *EXCLUSIVE ANALYSIS* South32's coal-fired Worsley refinery emits two-thirds more greenhouse gases to make a tonne of alumina than gas-fuelled Alcoa, a *Boiling Cold* analysis reveals. Both companies mine the jarrah forests of South West WA for bauxite, transport it downhill to be refined into alumina, and then ship it to aluminium smelters worldwide. Alcoa's three refineries create the equivalent of 0.49 tonnes of CO2 for each tonne of alumina. South32's 4.5 million tonnes a year Worsley Alumina operation 15km north of Collie emits 0.82 tonnes of CO2 for each tonne of product (*calculation details below*). The difference is primarily due to the fuels used to power the refineries: gas at Alcoa and mainly coal at Worsley. Worsley's 3.7 million tonnes of carbon emissions make it the fourth-biggest carbon polluter in WA: more than the ageing Muja power station and almost as much as Chevron's Wheatstone LNG plant. [WA’s top carbon polluters: LNG, power, iron ore and aluminaWA’s industrial greenhouse gas emissions are dominated by four products and a handful of companies, including a few that have managed to keep a low profile in the climate wars.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/03/CO2-1.jpg)](https://www.boilingcold.com.au/was-top-carbon-polluters-lng-power-iron-ore-and-alumina/) If South32 produced alumina in WA with Alcoa's lower carbon intensity it would avoid 1.5 million tonnes of greenhouse gases: the same as Alcoa's Wagerup refinery. South32 has to date escaped the ire of environmentalists and climate-focused investors that have targeted more prominent gas producers and coal-fired power generation. The choice of cheaper coal is a significant factor in allowing South32 to describe Worsley as "one of the world's largest and lowest-cost alumina producers." The Perth-based company received $US1.12 billion ($1.45 billion) in revenue last financial year from the 86 per cent of Worsley it owns, and earnings before interest and tax were $US160 million ($207 million). ## Fuel switching for coal and gas? South32 is in the process of exiting thermal coal mining by [selling its South African mines for a token amount](https://www.afr.com/companies/mining/south32-still-sweating-on-approvals-for-thermal-coal-exit-20210427-p57msj?ref=boilingcold.com.au) but to date appears in no hurry to stop burning coal in its home State. South32's current corporate emissions target is simply not to exceed its 2015 emissions by 2021. Investor Group Climate Action 100+ recently failed South32 on its medium-term emission target and decarbonisation strategy. [Big WA polluters fail green investment testMost big WA carbon polluters including Chevron, Adbri, South32 and Woodside are wanting on emissions reduction targets, strategy and cash, according to benchmarking for the world’s biggest investors.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/03/Climate-Action-100-WA-peformance-table.jpg)](https://www.boilingcold.com.au/big-wa-polluters-fail-green-investment-test/) A South32 spokesperson said it has engaged with CA100+ and has work underway that will be included in the following assessment. > "Studies are ongoing in relation to fuel switching options, a key strategy to reduce the carbon intensity of the refinery," the South32 spokesperson said. Some emissions reductions at Worsley will be achieved in the short term, including modifications to mud-washing facilities. The miner will be "stepping up" its ambitions with a release of its next emissions reduction target and details of a path to net-zero by mid-2022, the spokesperson said. While South32 is contemplating moving away from coal, Alcoa wants to reduce its reliance on the WA gas market, where it is the biggest buyer. > "While natural gas produces significantly fewer carbon emissions than coal, we are actively seeking to reduce our energy intensity and reliance on this fuel source," an Alcoa spokesperson said. US-giant Alcoa owns 60 per cent of the Alcoa operations in Australia, and ASX-listed Alumina Limited holds the remaining equity. Alcoa's move away from gas in WA is restricted by existing long-term gas supply contracts, according to the 2019 Alumina Limited Sustainability Update. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/04/worsley-alumina.jpg) **Bauxite mining at Worsley Alumina**. Source: South32. An Alcoa spokesperson said the company was researching using renewable energy to provide process heat to the Bayer process of extracting alumina from bauxite. According to its [2020 Sustainability Report](https://www.alcoa.com/sustainability/en/pdf/2020-Sustainability-Report.pdf?ref=boilingcold.com.au) released last week, Alcoa's first step will be to demonstrate a technology called mechanical vapour recompression that generates steam with electricity instead of gas-fired boilers. Alcoa is also a partner in the University of Adelaide's Solar Thermal in the Bayer Alumina Process research program. Both Alcoa and South32 support a proposed [Heavy Industry Low-Carbon Transition Cooperative Research Centre](https://www.hiltcrc.com.au/?ref=boilingcold.com.au) that will include the study of lower carbon calcination, the last step of the Bayer process. ## More problems than just emissions South32's reliance on coal, which mainly comes from Griffin Coal, is potentially unreliable as well as damaging to the climate. In June 2019, a [fire damaged equipment](https://thewest.com.au/business/mining/fire-halts-mining-at-griffin-coal-site-ng-b881237096z?ref=boilingcold.com.au) at Griffin and stopped production. Months later, the WA Government [quashed the option of South32 importing coal](https://thewest.com.au/business/energy/state-government-says-no-to-south32-indonesian-coal-import-plan-to-power-worsley-ng-b881277700z?ref=boilingcold.com.au) from Indonesia in response to concerns about the financial viability of Griffin Coal. South32 then [started stockpiling coal](https://www.bunburymail.com.au/story/6337181/worsley-coal-traffic-to-increase/?ref=boilingcold.com.au) "to provide flexibility in the event of any potential future supply distributions." Concerns about Griffin's viability deepened in July 2020 when its principal customer Bluewaters Power [issued breach of contract notices](https://www.afr.com/companies/mining/wa-coal-in-crisis-as-griffin-accused-of-breach-of-contract-20200721-p55dzg?ref=boilingcold.com.au) and sought to take control of its coal supply. South32's product could also become discounted as industries like car manufacturing increasingly look at the emissions intensity of their inputs. In contrast, in 2020, Alcoa launched a [premium alumina product called EcoSource](https://news.alcoa.com/press-releases/press-release-details/2020/Alcoa-Expands-its-SustanaTM-Family-of-Products-with-EcoSourceTM-the-Industrys-First-Low-Carbon-Alumina-Brand/default.aspx?ref=boilingcold.com.au) certified to emit less than 0.6t CO2e for each tonne of alumina. The Alcoa spokesperson said it had the lowest global carbon intensity of any alumina refiner, and the EcoSource benchmark was two times better than the industry's average of 1.2t CO2e/tonne of alumina. --- **Calculations** *Emissions and production from WA's four alumina refineries were analysed for three years from July 2017 in case there were significant annual variations (there were not).* *Clean Energy Regulator emissions figures and production from South 32 and Alumina Limited was used.* *Two Alinta gas-fired power plants near Alcoa's Pinjarra and Wagerup refineries do not supply power to Alcoa. However, Alinta's Pinjarra plant provides steam to Alcoa and one-third of its plant's emissions were allocated to Alcoa for this steam supply.* *Boiling Cold provided the complete calculations to Alcoa and South32 in the preparation of this story. Neither company commented on them. See [linked spreadsheet](https://1drv.ms/x/s!Au2z%5FJ8j1nMHhpc-k2ZPIKIW%5FL%5F2ag?e=EdJSiF&ref=boilingcold.com.au).* --- *Correction 3 May 2021 4:40PM: The initial analysis assumed the South32 production data was for the entire Worsley refinery, but it was only South32's 86 per cent share. The correct calculated carbon intensity of Worsley alumina is 0.82 tCO2e/tonne alumina, not 0.95.* --- *Main image: Chimney graphic. Source: Boiling Cold* --- ### Alinta plans more wind to partner WA solar boom URL: https://www.boilingcold.com.au/alinta-plans-wind-and-batteries-in-wa-to-partner-rooftop-solar/ Last updated: 2022-01-01T09:55:45.000Z Alinta Energy plans more wind backed by gas and batteries to support WA's surging rooftop solar that grew about 30 per cent in 2020. WA households [installed 300MW of rooftop solar in 2020](https://www.mediastatements.wa.gov.au/Pages/McGowan/2021/04/Major-milestones-for-Distributed-Energy-Resources-Roadmap.aspx?ref=boilingcold.com.au) to take the total capacity in the South West to an estimated 1300MW. Alinta head of asset strategy Gary Bryant said growing solar panel installations needed to be partnered with other power sources when solar generation dropped, and batteries were a costly solution to "time-shift" substantial amounts of power into the evening. > "Our focus is around wind being the big thing you need to supply when the sun's not shining," Bryant said. Alinta started up its 212-megawatt Yandin wind farm in 2020 to add to its two gas-fired power stations in the South West, has plans lodged for a massive battery, and its eyes firmly on more wind generation in the Mid-West where the wind is strongest at night. [Wind and solar push down coal, gas and prices in South West WATwo huge new wind farms and more solar panels in WA’s South West displaced coal and gas last quarter giving a win-win of lower prices and emissions.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/02/warradarge-green-reduced.JPG)](https://www.boilingcold.com.au/wind-and-solar-push-down-coal-gas-and-prices-in-south-west-wa/) Late last year Yandin, together with the 180MW Warradarge wind farm, connected to the South West grid, pushed coal out and wholesale prices down. Bryant said the Mid-West was "the best place for wind farms in Australia by quite a long way." "We have intentions to put more wind down." ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/04/4R7A7514-4.jpg) ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/04/4R7A7646-12.jpg) ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/04/4R7A7754-23.jpg) ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/04/4R7A7786-29.jpg) ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/04/4R7A7868-35.jpg) ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/04/4R7A7935-45.jpg) ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/04/4R7A7972-Pano-48.jpg) ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/04/DJI_0313-5.jpg) ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/04/FP000545-13.jpg) **Construction of the Yandin wind farm**. Source: Alinta. Wind farms in the Mid-West are connected to Perth with a transmission line, carrying 330kV on one side and 132kV on the other, which needs to be expanded before more wind farms are connected. > "I think it's a relatively small amount of money to convert that (132kV side) to 330 kV, and then you don't you don't have to worry, it becomes a very strong network," Bryant said. Energy Minister Bill Johnston launched the State Government's Whole of System Plan in October 2020 that favoured wind farms between Mandurah and Manjimup as existing transmission capacity was sufficient. [WA plans a slow move to greener powerRooftop solar will make South-West WA power greener, but there is no path outlined for Collie’s future or to net-zero by 2050, according to a WA Government study.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/10/fre-sonneveld-q6n8nIrDQHE-unsplash-reduced.jpg)](https://www.boilingcold.com.au/wa-plans-a-slow-move-to-greener-power/) Bryant said Alinta had not compared the two locations in detail, but a wind farm in the south with no costs for additional transmission but a lower capacity factor would probably be less attractive than a higher capacity wind farm in the north. "I think it's fair to say that all the wind farm operators to the north will probably start to talk to the Government and Western Power about strengthening that part of the network," Bryant said. "I think that will trigger the regulatory investment test for Western Power to look at the upgrading of that line." A wind farm takes about seven years to develop. However, according to Bryant, four or five are under development in the Mid-West. Yandin already has approvals in place for about 40 turbines in addition to the 51 operating now. ## Big battery go-ahead waiting on details Big batteries may be too expensive for large scale storage of solar energy in the middle of the day for discharge in the evening, however, Bryant said they are needed to support high penetration of variable renewable energy. Bryant said cloud cover over part of the network with a high density of residential solar could see a drop in up to 200MW of generation. Batteries and fast response gas turbines were an important part of the response. [WA’s second big $100M battery planned by Alinta for WagerupSouth West WA’s power system may get two $100M big batteries to help handle rooftop solar growth with Alinta planning an investment at its Wagerup power station.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/04/Wagerup_Power_Generation-cropped.png)](https://www.boilingcold.com.au/was-second-big-battery-planned-by-alinta-for-wagerup/) Alinta plans to build a 100MW battery on the site of its Wagerup gas-fired power station. A final decision is waiting on the release of details of how the Essential Systems Services market will operate in WA so Alinta can model market rules and revenue streams in its business case. > "There's a good commercial opportunity there for us if the market plays out the way we believe it will," Bryant said. Alinta's battery could be connected by early 2023\. Synergy plans to have a [similar-sized battery operational by late 2022](https://www.boilingcold.com.au/wa-plans-100m-big-battery-to-balance-solar/). ## Big battery lessons from the Pilbara Bryant said Alinta experienced how a battery can help a grid after operating its 30 MW unit at Newman in the Pilbara for three years. "The first one is the non-thermal spinning reserve," Bryant said. "Normally on a grid, you hold thermal generation online at partial load, so if one of the generators trips, those generators can increase their load to overcome any shortfall, so there's no loss of power." Alinta now does not have to run an extra gas turbine inefficiently at part load. Instead, the battery can go from zero to full output in less than 0.1 seconds. In contrast, a gas turbine can only quickly pick up about a third of its capacity. "They're very good in that contingent event of the loss of a gas turbine…for us that's probably the most important thing a battery does," Bryant said. ![Battery at Alinta's Newman power station](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/04/4R7A0928-4.jpg) **Battery at Alinta's Newman power station**. Source: Alinta The battery also lets Alinta operate the gas turbines at their most efficient level for more time. The battery absorbs and discharges power to match fluctuating loads, so turbines do not have to be switched on and off, reducing both emissions and fuel costs. The battery also helped with frequency control, voltage support, and provided synthetic inertia, allowing the system to have more stable responses to upsets. Bryant said an expected added benefit of the battery was that it absorbed shocks to the system when a large load like a conveyor or crusher tripped and 20MW of load disappeared, keeping the system stable. "I think that's a particularly not well understood and definitely undervalued attribute that you have from a battery," Bryant said. > "In the SWIS, when solar energy fluctuates, you can imagine the battery is sitting there acting in reverse to the power to keep the system smooth and stable." --- *Main image: Wind turbine at Yandin wind farm. Source: Alinta* --- ### Eye in the sky spies Shell's Prelude floating flare machine URL: https://www.boilingcold.com.au/eye-in-the-sky-spies-shells-prelude-floating-flare-machine/ Last updated: 2022-01-01T09:58:05.000Z Shell's unreliable Prelude floating LNG vessel is again flaring massive amounts of gas 400km off the WA coast, but the waste and climate damage is now monitored from satellites. *Boiling Cold* understands an electrical trip about two days ago forced Shell to again shut down the processing of gas and divert gas flowing from subsea wells to the flare tower. It is understood Shell has resolved the technical problem and plans to restart production later today. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/04/Prelude-flare-tower-3.jpg) ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/04/Prelude-flare-tower-tip-1.jpg) ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/04/Prelude-flare-reflection-3.jpg) **Shell's Prelude floating LNG facility off North-West Australia in April 2021**. Source: Anon. Using satellite data, flare tracking service [FlareIntel](https://capterio.com/flareintel?ref=boilingcold.com.au) estimates Prelude is flaring about 100 terajoules of gas a day. That is equivalent to about a quarter of domestic and industrial gas consumption in the Perth region. The difference is that the gas burnt in Perth is not wasted. Excessive flaring has been a problem at Prelude ever since Shell opened its subsea wells in December 2018. In the 12 months to June 2019, Prelude emitted 2.3 million tonnes of greenhouse gases and shipped just one LNG cargo. [Shell’s Prelude LNG is a carbon disasterShell’s Prelude floating LNG, already besieged with safety and reliability issues, has produced 2.3 million tonnes of greenhouse gases for one cargo of LNG.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/03/prelude-is-now-a-live-and-operating-flng-facility-with-gas-onboard-reduced.jpg)](https://www.boilingcold.com.au/shells-prelude-lng-carbon-disaster/) A year ago, *Boiling Cold* asked Shell what proportion of Prelude's emissions was due to flaring but did not receive a response. An [environment plan](https://docs.nopsema.gov.au/A763756?ref=boilingcold.com.au) submitted by Shell to offshore regulator NOPSEMSA early this year revealed the truth: flaring caused 56 per cent of Prelude's carbon pollution in 2018/2019\. If operations were stable, flaring should account for six per cent of carbon emissions. ![Greenhuse gas emisisons from Shell's Prelude floaing LNG vessel broken down into reservoir CO2, combustion, flaring and fugitive emissions.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/04/image-11.png) **Carbon emissions from Prelude**. Source: [Prelude FLNG Environment Plan 2020](https://docs.nopsema.gov.au/A763756?ref=boilingcold.com.au) Note: 2019/2020 emissions submitted to NOPSEMA in January were preliminary and final figures to the Clean Energy Regulator gave total emissions of 1.7 million tonnes. Flaring at Prelude did halve in 2019-2020 compared to the previous year, but not because Shell had better control of the troubled $US17 billion giant. The principal reason Shell gave for its global flaring dropping in 2020 was "due to the [extended shutdown of the Prelude floating liquefied natural gas facility](https://reports.shell.com/sustainability-report/2020/servicepages/downloads/files/achieving-net-zero-emissions-shell-sr20.pdf?ref=boilingcold.com.au) in Australia, a significant contributor to Shell flaring in 2019." Prelude's wells were [closed for about seven months](https://www.boilingcold.com.au/shells-moves-to-restart-prelude-after-safety-near-miss/) in 2020. A Shell spokesperson said the company took greenhouse gas management seriously and was continuously reviewing opportunities and implementing abatement projects at Prelude to reduce emissions. > "Shell is committed to achieving no planned flaring during routine operations at Prelude," the spokesperson said. "During Prelude’s shutdowns and start-ups, flaring only occurs to safely dispose of hydrocarbons that are used as part of the start-up procedure or could otherwise pose a risk to workers and the facility." One problem at Prelude is too many shutdowns and insufficient routine operations. Another issue is that flow from each subsea wells was only able to be turned down to 50 million standard cubic feet a day during a startup, and any surplus gas was flared. Shell has successfully trialled halving this number, according to the environment plan. Shell has nine projects underway to cut Prelude's emissions, including the well turn down, with a target of cutting emission by 90,000 tonnes in 2021, or about five per cent of its last reported emissions. ## The detective with flare FlareIntel was developed by UK-based developer of gas flaring reduction projects Capterio, that made a version providing historical data available for public use this week. Capterio FlareIntel lead John-Henry Charles said the measurement of flaring at Prelude showed the insight real-time earth observation data could provide. "With our FlareIntel Pro tool, we're able to track how much is being flared, by who on a daily basis – and we hope this information can be used to develop and apply solutions to flaring even quicker," Charles said. The FlareIntel tool detected a high level of flaring at Prelude from April 21\. There were also earlier high levels in early March 2021 and late December 2020. The output of FlareIntel has been calibrated against measured flares. The continued high level of flaring from Prelude continues the string of problems at what Shell intended to be a technology showpiece. [No winners from Shell’s $US17B Prelude floating LNGShell’s giant $US17B Prelude floating LNG is late, expensive, dirty and so far unreliable. An exclusive look at how a failed investment for Shell is a terrible deal for Australia.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/04/aerial-view-of-the-prelude-flng-facility-with-the-valencia-knutsen-berthed-side-by-side-reduced.jpg)](https://www.boilingcold.com.au/after-prelude-few-win-from-shells-floating-lng/) --- *Main image: Prelude floating LNG facility flaring gas in April 2021\. Source: Anon.* --- ### Ichthys gas supply plans to destroy Inpex emissions pledge URL: https://www.boilingcold.com.au/ichthys-lng-emissions-to-soar-as-inpex-chases-more-gas/ Last updated: 2024-12-17T08:02:58.000Z When Inpex announced in January 2021 that it would cut its emissions intensity by 30 per cent, it was working to do the opposite at its most significant asset: the Ichthys LNG project in Australia. Almost a decade ago, Inpex went heavily into debt and bet the house on developing Ichthys despite never before operating a significant offshore asset. In a world where only the cheapest and cleanest LNG will compete, the Japanese company is saddled with a project unsuited to the times that produces over three-quarters of its carbon emissions (calculation below). > Inpex chief executive Takayuki Ueda said [reduced emissions from its upstream operations were essential](https://www.inpex.co.jp/english/company/message.html?ref=boilingcold.com.au) to its “response to climate change and transition to a low-carbon society.” The company now plans to cut the carbon emissions per unit of energy it produces by 30 per cent by 2030 and achieve net-zero emissions by 2050. As Ueda spoke, work was underway to install fuel-hungry offshore compressors at Ichthys and develop the Plover field with twice the carbon dioxide content of current production from the Brewster field. When Inpex sanctioned the project in 2012, the installation of compressors to maintain gas flow to the LNG plant near Darwin was planned for the twelfth year of production and would increase emissions by seven per cent. McDermott and Saipem are currently designing the compressor modules and a final investment decision is expected in late 2021\. *Boiling Cold* understands compression will start in 2025 or 2026, about four years earlier than the original plan. ![Planned greenhouse gas emissions from Ichthys LNG project from 2011 greenhouse gas management plan split into offshore, onshore and reservoir emissions. ](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/04/image-8.png) ****Planned greenhouse gas emissions from Ichthys.** Source: Ichthys 2011 [greenhouse gas management plan](https://www.inpex.com.au/media/v2vnjpba/draft-environmental-impact-statement-11-chapter-9-greenhouse-gas-management.pdf?ref=boilingcold.com.au) Inpex’s next step to maintain production from its $US45 billion project will be developing the Plover field with a CO2 content of 17 per cent. Gas for the current Brewster field contains eight per cent CO2. It is understood Inpex plans to commit to drilling up to 10 wells into Plover in two years and start production in about 2027, about six years earlier than the plan when the project was sanctioned. The additional CO2 will flow to shore to be extracted and vented to the atmosphere, as happens now. Ichthys LNG is currently more carbon-intensive than any other Australian offshore project. ![carbon intensity of Australian offshore LNG: North West Shelf, Pluto, Gorgon, Wheatstone, Ichthys and Prelude.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/04/image-10.png) Source: Boiling Cold from project environmental approval submissions. When production from Plover peaks in the 2030s, emissions will be more than 30 per cent higher than current rates. ### For Inpex, Ichthys LNG is everything Inpex needs to maintain Ichthys production as the company depends on it. In 2019 Daniel Toleman, an analyst with energy consultancy WoodMackenzie, said Ichthys accounted for about 70 per cent of the company’s value. Unfortunately for Inpex shareholders, the company had multiple setbacks on the first large project it operated. Costs blew out 32 per cent from $US34 billion to $US45 billion, production started two years late, and there are ongoing disputes over construction costs worth well over $US1 billion. The earlier than planned installation of offshore compression and development of the Plover field indicates the original Brewster field is not performing as well as expected. The latest problem for Inpex’s Ichthys investment is the rapid escalation since the pandemic started in corporate awareness of the need to respond to climate change urgently. When Inpex sanctioned its largest-ever investment in January 2012, it is unlikely management foresaw the Japanese Government committing to [net-zero emissions by 2050](https://www.boilingcold.com.au/japan-net-zero-by-2050/) or the likelihood of the market discounting high carbon intensity LNG. Inpex is tightly tied to the Japanese Government that owns about 20 per cent of the company and has a golden share that gives it a veto over major transactions and board membership. Japanese Prime Minister Shinzo Abe visited Darwin in 2018 for the official opening of Ichthys. Two and a half years later, Abe’s successor Yoshihide Suga [increased Japan’s 2030 emissions cuts target](https://apnews.com/article/joe-biden-climate-yoshihide-suga-carbon-neutrality-summits-3690e8078574dd69de658c60b6d4a167?ref=boilingcold.com.au) from 26 per cent to 46 per cent on the eve of US President Joe Biden starting his climate summit yesterday. Times have changed. In June 2020, Inpex and its Ichthys partners owed $US15.6 billion in project finance loans. In January, credit rating agency Moody’s described Inpex as [highly leveraged due to the debts incurred to build Ichthys](https://finance.yahoo.com/news/inpex-corporation-moodys-announces-completion-170206745.html?ref=boilingcold.com.au) and maintained its standalone credit rating of Baa3, indicating a moderate credit risk. The Baa3 rating, which is [one level above junk or non-investment grade](https://www.moodys.com/sites/products/productattachments/ap075378%5F1%5F1408%5Fki.pdf?ref=boilingcold.com.au), was then increased four notches due to likely support from the Japanese Government in the event of default. Inpex must hope Japanese Government backing continues and its emissions reduction efforts maintain domestic focus . As part of its new emissions reduction strategy, Inpex said it would investigate the capture and storage of Ichthys emissions. [Inpex moves to clean up Ichthys’ dirty LNGA year after Inpex rejected carbon capture and storage at Ichthys LNG as unaffordable it is an essential element in its new drive to slash emissions by 2030.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/01/Ichthys-LNG-Project-onshore-facilities-May-2018.jpg)](https://www.boilingcold.com.au/inpex-moves-to-clean-up-ichthys-dirty-lng/) Less than three years ago, Inpex said it could not commercially justify carbon capture and storage at Ichthys. Now the costly and so far unreliable technology is central to its efforts to reconcile increasing emissions from its primary production asset with a need to reduce corporate emissions. *Boiling Cold* asked Inpex what actions it was taking to reduce emissions from Ichthys and whether any measures would be sanctioned before it committed to the CO2-rich Plover field. No response was received. --- *Calculation of Ichthys share of Inpex reported emissions.* - *In 2019 Inpex reported* [*Scope 1 emissions of 8.91 million tonnes CO2e*](https://www.inpex.co.jp/english/ir/library/pdf/factbook/e-inpex%5Ffactbook201912.pdf?ref=boilingcold.com.au)*.* - *The company reports emissions under its operation control so all of Ichthys counts, not just the 66 per cent it owns.* - *Australia reports project emission over a financial year ending June 30\. Ichthys emited 6.32 million tinnes in 2018-19 and 7.62 million tonnes in 2019-20\. The average of 6.93 is used for 2019.* - *6.93/8.71 = 78 per cent.* --- *Main image: Ichthys Explorer central processing facility off the Western Australian coast. Source: Inpex* --- ### Environment watchdog wants Chevron plan for net-zero Wheatstone LNG emissions by 2050 URL: https://www.boilingcold.com.au/environment-watchdog-wants-chevron-plan-to-cut-wheatstone-emissions-to-net-zero-by-2050/ Last updated: 2021-12-27T01:16:14.000Z 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](https://www.epa.wa.gov.au/sites/default/files/Extract%5Fof%5Fdetermination/922-CD-220118.pdf?ref=boilingcold.com.au) 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](https://www.epa.wa.gov.au/sites/default/files/Policies%5Fand%5FGuidance/EFG%20-%20GHG%20Emissions%20-%2016.04.2020.pdf?ref=boilingcold.com.au) for projects after industry and the State Government rejected a requirement for complete offsets in early 2019. [Carbon emissions hurdle for WA projects finalised by EPANew WA projects will need to publish plans for net-zero emissions by 2050 as the WA Environmental Protection Authority ends a year-long battle with LNG industry.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/04/chimney-3705424-reduced.jpg)](https://www.boilingcold.com.au/carbon-emissions-hurdle-for-wa-projects-finalised-by-epa/) 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. [WA EPA & industry make real moves to net-zero by 2050Fortescue and Mitsui appear to have agreed massive emissions cuts with WA’s environmental watchdog that is now looking at Woodside and Chevron LNG projects.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/09/Screenshot-2020-09-24-160802.jpg)](https://www.boilingcold.com.au/wa-epa-and-industry-make-real-moves-to-net-zero-by-2050/) 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](https://reneweconomy.com.au/waking-the-sleeping-dragon-why-safeguard-mechanism-may-soon-be-tightened/?ref=boilingcold.com.au) 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.* --- ### Regulator calls time on delays to $52B offshore oil and gas decommissioning URL: https://www.boilingcold.com.au/regulator-calls-time-on-delays-to-52b-offshore-oil-and-gas-decommissioning/ Last updated: 2021-12-27T01:14:10.000Z Regulator NOPSEMA has wrested control of the schedule for cleaning up Australia's offshore oil and gas fields from tight-fisted operators in a move that may result in an offshore jobs boom later this decade. Operators will be required to remove all equipment floating in the ocean within 12 months of a permanent end of operations at a facility, according to a new [decommissioning compliance strategy](https://www.nopsema.gov.au/assets/Environment-resources/A763035.pdf?ref=boilingcold.com.au) released by the offshore environment and safety regulator NOPSEMA. Operators must plug wells within three years of operation ending and remove all structures on the seabed by two years after that. The cost to clean up after Australia's offshore oil and gas industry is estimated to be about $52 billion over the next three decades. [Australian offshore oil and gas industry has a $52B clean-up billMuch of the $52 billion cost to decommission Australia’s offshore oil and gas infrastructure will fall on the Federal Government via the tax system and work has started to boost industry collaboration and find cost savings.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/03/Offshore-Platform-Snapper-2.jpg)](https://www.boilingcold.com.au/australian-offshore-oil-and-gas-industry-has-a-52b-clean-up-bill/) It has been common practice for the industry to delay decommissioning rather than spend money on an activity that does not increase revenue. Chevron is seeking permission to [leave a wellhead on the seabed](https://info.nopsema.gov.au/environment%5Fplans/534/show%5Fpublic?utm%5Fsource=newsletter&utm%5Fmedium=email&utm%5Fcampaign=dirty%5Foz%5Fneeds%5Fto%5Fwatch%5Fout%5Ffor%5Fthe%5Fus%5Fchina%5Fclean%5Fteam&utm%5Fterm=2021-04-19) where it drilled a well in 1974 into the West Tryal Rocks field. The 47-year-old well has been plugged. NOPSEMA's move to expedite decommissioning is motivated by concern that "the ability to decommission appropriately is [increasingly at risk the longer the period of time](https://www.nopsema.gov.au/assets/Environment-resources/A776446.pdf?ref=boilingcold.com.au) between cessation of production and completion of decommissioning activities." The industry has until the end of 2023 to have decommissioning plans in place for all fields that have ceased production. ## Decommissioning work likely to boom The new deadlines for completing decommissioning and a backlog of delayed work could prompt a massive surge in offshore activity once NOPSEMA accepts the decommissioning plans. The waters off WA are expected to account for about 60 per cent of the $52 billion decommissioning bill estimated by Advisian in a report for National Energy Resources Australia. Work on about half the total scope is estimated to start this decade, with ExxonMobil's ageing Bass Strait facilities likely to feature heavily. The Northern Carnarvon Basin off WA has about 225 subsea wells to plug and abandon and more than 300 subsea structures to be removed. In contrast to large LNG projects like Barossa and Scarborough, decommissioning expenditure is likely to have a much higher level of Australian content. Offshore oil and gas producers have minimised decommissioning expenditure by selling out, continual delays, or justifying leaving the equipment on the seabed. Selling is now less attractive as under legislation proposed by the Federal Government; the original owner will retain last resort liability if the new owner cannot pay for decommissioning. [ExxonMobil](https://www.boilingcold.com.au/australia-told-exxonmobil-ceo-told-no-easy-exit-before-3b-bass-strait-sale-canned/) and ENI have recently cancelled attempts to sell Australian assets. [Pitt to oil and gas: you can sell assets but not escape liabilitiesInvestors in Australia’s offshore oil and gas industry will find it harder to avoid paying to clean up the assets they profited from under draft legislation released today.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/04/Offshore-Platform-Bass-Strait-cropped.jpg)](https://www.boilingcold.com.au/pitt-to-oil-and-gas-you-can-sell-assets-but-not-escape-liabilities/) Oil and gas lobby APPEA is strongly opposed to the introduction of these trailing liabilities. NOPSEMA's stricter stance on the timely completion of decommissioning takes the option of continual delay away from operators. However, game playing is likely over what constitutes the permanent end of operations that triggers NOPSEMA's regulatory clock. The final offshore decommissioning battle between regulators and industry is likely to be about under what circumstances operators can leave equipment on the seabed. The Australian offshore oil and gas industry is required by law to remove all equipment from the ocean and plug all wells to prevent future unless NOPSEMA approves an alternative. An exemption relies on the high bar of achieving "[equal or better environmental outcomes](https://www.nopsema.gov.au/assets/Policies/A720369.5.pdf?ref=boilingcold.com.au) compared to complete property removal." The industry has heavily promoted so-called rigs-to-reef where structures remain on the seabed to support the marine life that has developed on and around them. The Australian offshore oil and gas industry is now more exposed to decommissioning costs than many companies had planned for. The main reason is a cost-saving decision made on a relatively minor Woodside facility six years ago. ## Tougher rules a Coleman legacy NOPSEMA announced its new decommissioning strategy on April 19, Peter Coleman's last day as Woodside chief executive. Many in the offshore industry believe the Federal Government's recent tough stance on offshore decommissioning, in contrast to its other policies affecting fossil fuels, is largely due to the mounting costs of managing the Northern Endeavor oil vessel in the Timor Sea. Woodside sold the Northern Endeavour to a new, small, inexperienced company Northern Oil and Gas Australia in 2015 after reversing its own plans to decommission the vessel. NOGA was liquidated in early 2020 after a series of technical and financial issues, and the cost to the Federal Government to decommission the vessel and oil field has been put [as high as $1 billion](https://www.abc.net.au/news/2021-04-14/northern-endeavour-oil-vessel-could-cost-taxpayers-1-billion/100044914?ref=boilingcold.com.au) by independent Senator Rex Patrick. > "Let's be clear, Woodside doesn't have an issue on Northern Endeavour," Coleman told the media last week. "It was sold as an ongoing business, so I think we need to move away from that. "We sold it two years before there was an issue, and at the time, the company that purchased it, NOGA, had the liquidity to complete all of their abandonment requirements. "Now what happened in that intervening two years, of course, we can't speak to and at the same time recall that the Government themselves looked at that transaction and approved it." The transaction was not subject to a substantial review by regulators because it involved the sale of the subsidiaries that owned the Northern Endeavour. As no new companies appeared on the title, the regulations in place did not allow the National Offshore Petroleum Titles Administrator to intervene. Proposed legislation will introduce change of control provisions that will allow regulatory scrutiny when there is a significant change of ownership of a company that controls an entity named on a title document. > "If we move beyond that (the Northern Endeavour), we actually have an excellent relationship with the Government in this area," Coleman said. *Boiling Cold* understands Woodside's standing with the Federal Government has significantly deteriorated due to the Northern Endeavour. Coleman said Woodside supported the Federal Government's assessment of what to do with the Northern Endeavour "because we just think it's the right thing to do." Woodside was [paid $7.3 million for the advice](https://www.tenders.gov.au/Cn/Show/75c48ac0-7193-46c4-844c-2d02b51828d1?ref=boilingcold.com.au). "We've also set up a special decommissioning group in the company to focus on this area." Woodside previously had a decommissioning team during Coleman's 10-year tenure leading the company, but it was disbanded in about 2017. "The first major decommissioning we do will be the Enfield project," Coleman said. In February 2021, NOPSEMA ordered Woodside to remove all equipment from the Enfield oil project by a fixed schedule and said it would investigate whether Woodside broke the law by not properly maintaining equipment. [Woodside told to clean up oil field & may face legal actionWoodside’s own lack of maintenance means it cannot dispose of an 83m-long structure onshore as planned and will instead sink it to be an artificial reef near the Ningaloo Marine Park![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/02/Nganhurra-FPSO.jpg)](https://www.boilingcold.com.au/regulator-tells-woodside-to-clean-up-oil-field-and-may-take-legal-action/) Woodside was a member of the APPEA working group that advised the Federal Government on the decommissioning legislation. > "We're quite comfortable with where that has got to, understanding where the law is and understanding where best practice is globally," Coleman said. Coleman said the $US2.1 billion abandonment liability on Woodside's books reflected where the company believed the legislation was going. "The external auditors have been through this in quite a lot of detail over the last 12 months and have come back and said to us that Woodside is the gold standard in the industry," Coleman said. --- *Main image: Northern Endeavour floating production storage and offloading oil vessel in the Timor Sea. Source: Anon.* --- ### Woodside: Scarborough or stranded like a beached whale URL: https://www.boilingcold.com.au/woodside-scarborough-or-stranded-like-a-beached-whale/ Last updated: 2021-12-27T01:25:10.000Z ANALYSIS Woodside's chaotic management succession and climate activism at its AGM was the froth that attracted attention this week, but problems at Australia's biggest oil and gas company run deep. While the $23 billion LNG specialist will never say it, it has just one realistic growth option: Scarborough. Revealed this week was that Woodside incredibly has no plan B. Buying a Woodside share is not an investment; it is a bet that Scarborough both goes ahead and performs well financially. When Woodside chief executive Peter Coleman took charge a decade ago, the company was constructing Pluto to add to its North West Shelf LNG project, and it knew that gas supply to both projects would decline in the 2020s. The ExxonMobil veteran is leaving next week with the situation unchanged but now imminent. Sunrise near Timor, Kitimat in Canada, and the perennial hope Browse - distant and CO2-rich – are unlikely to be developed. Equity in Chevron's Wheatstone LNG project bought in 2015 added production and reserves, but massive write-downs showed it was a sub-par investment. The Sangomar oil project under construction in Senegal offers revenue but adds nothing to Woodside's green pitch to investors that it supplies gas to displace coal in Asian markets. ## No plan B from the A team Woodside chair Richard Goyder was asked at a media conference on Friday morning: what does Woodside have if Scarborough does not get up? The ex-Wesfarmers boss mentioned "world-class assets," which presumably are its two rapidly depleting LNG projects and the non-core Senegal oil project. And then he dropped the clanger about Woodside without Scarborough. > "If that unlikely situation occurs, we'd review where we were at the time," Goyder said. "At the time" might be a bit late. Goyder said, "there would be other challenges if Scarborough doesn't get up, more macro challenges." Yes, the challenges would be substantial. ![Woodside chair Richard Goyder addresses the 2021 AGM.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/04/Screenshot-2021-04-15-140650.jpg) **Woodside chair Richard Goyder addresses the 2021 AGM**. Source: screenshot of webcast Coleman named what he saw as the two biggest threats to shareholder value in the next five years. The first challenge was to find new LNG production that Coleman termed recapitalising the company. "Both NWS and Pluto will go into decline this decade," Coleman said. > "The directors were faced with a decision of recapitalising the company or allowing the company to just to deplete, go into decline." Coleman said Scarborough was the focus to arrest the decline, confirming it is Scarborough or bust for Woodside. The second challenge was the energy transition driven by climate change. Coleman saw Woodside either continuing to produce gas but with carbon offsets or move to the large-scale export of hydrogen and its derivative ammonia. Long-term, large-scale gas production with offsets is unlikely to compete along the value chain with renewable energy when Scope 3 emissions from Woodside's customers are included. The amount of carbon capture and storage and vegetation offsets required is unmanageable. > Coleman said Scarborough would be a "fantastic cash engine", giving Woodside's board and management "many, many opportunities" as they work through the energy transition. Scarborough is the key to both of Coleman's challenges: it replaces the cash from declining projects in the medium term, and that cash buys time and resources for Woodside to develop a place in the emerging new world of energy. Without Scarborough, Woodside could be beached by the receding tide of investor interest in long-term hydrocarbon projects and possibly wither before deep large-scale green hydrogen and ammonia markets develop. ## Scarborough is no sure thing Scarborough can produce relatively low carbon intensity LNG but may be challenged to supply it at a competitive price while earning a reasonable return for investors. An analysis by energy research house Wood Mackenzie released in early 2020 is the only independent assessment of Scarborough's competitiveness available in the public domain. [Woodside’s Scarborough LNG uneconomic before price crash: WoodmacIf Scarborough, considered the most economic of Woodside’s two projects, was uncompetitive before LNG prices crashed then plans will have to change on the Burrup Peninsula.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/05/Pluto-LNG-Plant--Karratha-web.jpg)](https://www.boilingcold.com.au/woodsides-scarborough-lng-was-uneconomic-before-price-crash-woodmac/) LNG from Scarborough was the most expensive of nine projects Wood Mackenzie considered. Qatar could land LNG in Japan for less than it cost Woodside to get Scarborough gas to the inlet of the Pluto LNG plant. Woodside has worked to improve the economics of Scarborough since then, including a 20 per cent increase in upstream capacity. Given the size of the competitive gap, the probability of a Woodside without Scarborough is certainly sufficiently high for shareholders to expect better from the board than a promise to think about it if it happened. Coleman said major projects needed momentum – internally and with customers, contractors and shareholders – and Scarborough had it until COVID hit. "So, we lost that momentum, but we haven't lost faith and were gathering that pace again," Coleman. That pace is less than planned, with plenty of language this week from Woodside walking away from a final investment decision in 2021. And momentum should not be confused with the probability of success. Coleman made Woodside's Browse LNG project look like it had momentum when he got the McGowan Government to beat the WA Environmental Protection Authority into submission in early 2019 when the agency tried to rein in WA's soaring carbon emissions. Browse has gone from being crucial to the future of the State to rarely being mentioned by Woodside. Now, surprise, surprise, we all need Scarborough. "It's not just important for Woodside; it's important for the state and the country," Coleman said. ## Bothersome environmental regulations Coleman's comments and the saturation feel-good advertising Woodside has subjected WA to for months indicate that Woodside is readying to haul the State Government in again to help a marginal project. And again, the EPA is at the centre of the fight. While Goyder told the AGM on Thursday that "key regulatory approvals are now in place", Woodside has two huge hurdles before Scarborough achieves regulatory certainty. [Green legal action could halt Woodside’s Scarborough LNGWoodside wants to sanction its $US11.4 billion Scarborough LNG project in 2021, but a legal challenge to regulatory approval for years of carbon emissions could put it in a two-year legal limbo.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/02/Supreme_court_wa.jpg)](https://www.boilingcold.com.au/the-green-legal-action-that-could-halt-woodsides-scarborough-lng/) The Conservation Council of WA's legal challenge to the EPA allowing additional gas fields to supply the North West Shelf and Pluto LNG plants, extending their life for decades, without a public review process could take two years to resolve. Goyder would not comment on the case as it was before the court. Another lower profile problem for Woodside is the need for the EPA to approve a [revised greenhouse gas management plan for the Pluto LNG project](https://www.energynewsbulletin.net/policy/news/1380855/could-greenhouse-gas-management-delay-pluto-expansion-%C2%A0?ref=boilingcold.com.au) that will process gas from Scarborough. That plan will be subject to the same guidelines that have required the Waitsia gas project and a Fortescue power station to gradually reduce carbon emissions to zero by 2050 or before. Woodside has promised to offset the CO2 contained in the gas from Scarborough reservoir, but that is a trivial amount compared to emissions from the Pluto LNG plant. [WA EPA & industry make real moves to net-zero by 2050Fortescue and Mitsui appear to have agreed massive emissions cuts with WA’s environmental watchdog that is now looking at Woodside and Chevron LNG projects.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/09/Screenshot-2020-09-24-160802.jpg)](https://www.boilingcold.com.au/wa-epa-and-industry-make-real-moves-to-net-zero-by-2050/) Perth's premier oil and gas company, which has proved itself more capable of manipulating governments than progressing projects, appears to be readying to again corral McGowan into helping out. Last time the Premier most likely thought Coleman's Burrup Hub of Browse and Scarborough could deliver attractive job announcements before the March 2021 election. The jobs did not materialise, and the announcements were not needed. Woodside has no choice but to try again, or as departing chief executive Coleman said, see production deplete and the company go into decline. --- *Main image: Protest outside the Woodside office in Perth before the 2021 AGM. Source: Pete Milne.* --- ### Regulator cuts Dampier to Bunbury gas pipeline life as energy transition bites URL: https://www.boilingcold.com.au/regulator-cuts-dampier-to-bunbury-gas-pipeline-life-cut-as-energy-transition-bites/ Last updated: 2022-01-08T13:58:26.000Z Economic regulators in Western Australia are grappling with what to do with a gas pipeline that faces the prospect of its economics failing before the steel and compressors. A recent regulatory skirmish over the Dampier to Bunbury Natural Gas Pipeline finished in a draw, but the fight revealed cracks in the business case for gas pipeline ownership that will only grow. The DBNGP is not just any pipeline. It is Australia’s longest at more than 1500km and was the foundation of a massive LNG export industry. In the late 1970s, the WA State Government took a huge financial punt to back the DBNGP to connect undeveloped offshore fields in the north with industry in the south. The State Energy Commission built the pipeline and signed 20-year take or pay gas contracts it then had insufficient market for. Revenue from the gas that first flowed from the North West Shelf (NWS) project in 1984 bankrolled the construction of Australia’s first LNG trains. Today NWS operator Woodside is an ASX top 20 company; Australia vies with Qatar as the world’s largest LNG producer, and in WA gas fires a huge minerals processing industry and about 40 per cent of the electricity market. ### Potential doom loop for regulated gas pipelines Unlike the eastern states, WA has kept gas prices low by insisting the NWS and later LNG projects reserved some gas for the domestic market. If the Australian Government’s hopes for a gas-fired recovery were to succeed anywhere, WA would be the place. However, a robust long-term role for gas was not the story the present owner of the DBNGP told the WA Economic Regulation Authority when it pitched its case for access arrangements for 2021 to 2025. Chinese-owned Australian Gas Infrastructure Group argued that the past practice of assigning 70-year lives to all new investments was not realistic now gas had competition. > “While the costs of renewable energy remain (only just) more expensive than natural gas for power generation, and hydrogen is more expensive than natural gas for other uses like heat and chemical processes, the costs of these substitutes are falling rapidly,” AGIG’s [January 2020 submission](https://www.erawa.com.au/cproot/20983/2/Final-Plan-Attachment-9.2-Assessment-of-the-Economic-Life-of-the-DBNGP-Public-.pdf?ref=boilingcold.com.au) stated. If nothing changed, spend on the pipeline made at the end of the 2021 to 2025 period under review would not be fully depreciated until 2095\. The rise of renewable energy would make the pipeline uneconomic well before then. The question was when. AGIG argued for regulatory economic life to end in 2059\. After a year of voluminous submissions from AGIG and numerous customers, the WA Economic Regulation Authority settled on 2063. While 2063 is a long way off, the decision almost halved the depreciation period for capital spending in 2025 from 70 to 38 years. When the next five-year access period is adjudicated in 2026, the end of economic life could well be brought forward to 2050 if Australia gets serious about the Paris Agreement. Investment at the end of the 2025 to 2030 access arrangement would then be depreciated over 20 years. 70 years, 38 years, 20 years. The squeeze is on. Each cut in depreciation life increases the capital portion of the pipeline tariff, making transporting gas less affordable. That, in turn, could cut throughput, pushing up tariffs further. It is a potential doom loop for regulated gas pipelines, albeit a slow one. ### Pipeline operators enter uncharted territory Competition from renewable energy may not even allow pipelines to charge the tariff determined by the regulator. WA Economic Regulation Authority chair Nicky Cusworth said businesses that had expected to operate pipelines until the end of their economic lives in a regulated environment were entering uncharted territory. > “We’re starting to see the combination of technological and policy changes feeding through into the life of regulated assets in ways that maybe weren’t envisaged when the regulations were first drawn up,” Cusworth said. Cusworth said the ERA would discuss with the Australian Energy Market Commission whether current rules catered for the risk of stranded assets in an energy transition. Rule changes or not, gas pipeline owners and shippers face a more volatile future. “There has to be (more uncertainty), simply because the future of the market is unclear,” Cusworth said, who added that regulators were in a similar position. The ERA chair said to date, regulators aimed to prevent asset owners from making more than a normal rate of return on efficient investment. Cusworth said in North America, where the regulation of monopoly infrastructure is less adversarial, there is discussion that regulators adopt a second role: to allow investors to make a reasonable rate of return even if markets change. AGIG won the argument for a shorter depreciation life, but after a lower rate of return due to current interest rates was factored in, tariffs hardly moved. It was the end of [a more than year-long battle](https://www.boilingcold.com.au/gas-pipeline-tariffs-spark-war-of-words/) between AGIG wanting higher tariffs and the shippers of gas arguing the opposite. If depreciation accelerates in future decisions when interest rates could be higher, tariffs will rise significantly, giving customers more impetus to move from gas to renewables. In the Australian state where gas is most entrenched, low-risk long-term gas infrastructure investments are slowly looking higher risk and shorter term. --- *This article was researched with the support of the [Institute of Energy Economics and Financial Analysis (IEEFA)](https://ieefa.org/ieefa-competitive-renewables-wipe-decades-off-economic-life-of-australias-longest-gas-pipeline/?ref=boilingcold.com.au), a U.S. non-profit corporation that examines issues related to energy markets, trends, and policies. The Institute’s mission is to accelerate the transition to a diverse, sustainable and profitable energy economy.* --- *Main image: Sign over route of the DBNGP. Source: DBP* --- ### Woodside farewells Peter Coleman early with no successor named URL: https://www.boilingcold.com.au/woodside-farewells-peter-coleman-early-without-naming-a-successor/ Last updated: 2021-12-27T01:27:18.000Z Peter Coleman has one more week in charge of Woodside before development and marketing boss Meg O'Neill takes over as interim ceo with no indication from the board when a permanent replacement will be announced. Coleman will step down from the board and executive on Monday 19 April and continue working at Woodside until June 3. The timing allows Coleman to oversee his last annual general meeting this Thursday and achieve a decade at the gas giant, although not all as a chief executive. Coleman [started at Woodside on May 30 2011](https://www.asx.com.au/asxpdf/20110512/pdf/41ym07clnpnyhg.pdf?ref=boilingcold.com.au) after a long career at ExxonMobil. He was seen as a steady hand after a tumultuous but active seven years for Woodside under Don Voelte. Woodside's [announcement ](https://files.woodside/docs/default-source/about-us-documents/ceo-succession-update1f220b5d-4f5c-4d32-8fdf-ab3a77d0d598.pdf?sfvrsn=b2bd68c5%5F3&ref=boilingcold.com.au)released after trading closed said the board and Coleman agreed on the departure date. In December 2020 when Woodside [announced Coleman's retirement](https://files.woodside/docs/default-source/asx-announcements/ceo-succession.pdf?sfvrsn=9f2b112%5F5&ref=boilingcold.com.au) the plan was for him to leave in the "second half of 2021." Most observers would have expected the new chief executive to have been announced before Coleman departs. O'Neil's appointment as interim ceo points to the ExxonMobil veteran being the leading internal candidate to lead Woodside. Woodside chair Richard Goyder said Coleman had been an outstanding CEO who created a resilient and future-focused organisation. > “Throughout his time at the helm of Woodside, Peter has demonstrated a commitment to promoting inclusion and diversity, operational excellence, a safe workplace, prudent capital management and maintenance of a strong balance sheet," Goyder said. Today's statement said the Woodside board’s internal and external search for its next chief executive is progressing. Woodside did not explain why Coleman was leaving before the second half of the year, why he is leaving before a new chief executive is appointed, or when that appointment might occur. Today's announcement comes a day after Santos announced a [$6 million incentive](https://www.santos.com/news/growth-projects-incentive-for-ceo/?ref=boilingcold.com.au) for its chief executive Kevin Gallagher to stay until 2025\. The timing will fuel speculation that Gallagher was the Woodside board's preferred candidate but Woodside may have made today's announcement to provide shareholders with some clarity before Thursday's annual general meeting. Australia's largest oil and gas company is currently without confirmed long term leadership in place months ahead of its biggest decision in a decade: whether to sanction the $US11.4 billion Scarborough LNG project. The most discussed external candidates to lead Woodside are Shell's Zoe Yujnovich and BHP's Geraldine Slattery. [BHP’s Geraldine Slattery leads pack to replace Peter Coleman at WoodsideThe next Woodside chief executive will be the first to decide what to do apart from gas. Low-profile BHP Petroleum head Geraldine Slattery is a lead contender to take charge of this pivotal WA company.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/03/Mia-Yellagonga--Perth--Western-Australia-web-top-crop.jpg)](https://www.boilingcold.com.au/bhps-geraldine-slattery-leads-pack-to-replace-peter-coleman-at-woodside/) **A view of the race a month ago** --- *Main image: Collage. Source: Woodside Energy Limited for headquarters and profile photos.* --- ### Giant $1B offshore wind farm proposed for South West URL: https://www.boilingcold.com.au/giant-1b-offshore-wind-farm-proposed-for-south-west/ Last updated: 2021-12-27T01:07:51.000Z Plans for an offshore wind farm with up to 37 turbines along the coast north of Bunbury has been revealed in a [submission to the WA Environmental Protection Authority](https://www.epa.wa.gov.au/proposals/wa-offshore-windfarm-project?ref=boilingcold.com.au) today. Between 20 and 37 turbines located about 5km off the coast between Preston Beach and Myalup are planned, with fewer larger turbines preferred. The largest turbine considered would have a rotor diameter of 220m attached to a hub 140m above the water. The 15-megawatt units would be spaced about 1km apart in up to 16m of water. Taller turbines are generally able to harness higher wind speeds. A single pile of about 8m diameter driven into the seabed would support each turbine. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/04/wind-farm-map.jpg) Source: Submission to EPA [Australis Energy Limited](https://australis-energy.com/?ref=boilingcold.com.au), backed by UK offshore wind veterans, has investigated possible offshore wind locations off WA since early 2020. The Myalup site was chosen because it has high wind speeds, relatively shallow water, low population density, and access to the South West power grid at Kemerton. It sits entirely within State waters. The current schedule is to conduct a detailed design in 2024 after the primary planning approvals are received and start operating in early 2027. The 300MW project is larger than two Mid West projects connected to the South West grid in 2020: the 180MW Warradarge and 212MW Yandin wind farms. [Wind and solar push down coal, gas and prices in South West WATwo huge new wind farms and more solar panels in WA’s South West displaced coal and gas last quarter giving a win-win of lower prices and emissions.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/02/warradarge-green-reduced.JPG)](https://www.boilingcold.com.au/wind-and-solar-push-down-coal-gas-and-prices-in-south-west-wa/) The cost is estimated to be between $700 million and $1.3 billion. The turbines would last about 30 years, and Australis is seeking a 60-year lease from the WA Government to allow the refurbishment of the turbines. Australis estimates the wind farm would create about 100 full-time jobs. The company is also chasing offshore wind opportunities in SA and Victoria. *Boiling Cold* was unable to contact Australis for comment. --- *Main image: Schematic of windfarm proposal. Source: EPA submission from WA Offshore Windfarm Pty Ltd.* --- ### Cheap green hydrogen to push out alternatives and threaten gas: BloombergNEF URL: https://www.boilingcold.com.au/cheap-green-hydrogen-to-push-out-alternatives-and-threaten-gas-bloombergnef/ Last updated: 2023-12-04T11:42:44.000Z Green hydrogen made from renewable electricity will be cheaper than so-called blue hydrogen across the world by 2030, according to energy research house BloombergNEF. Due to the plunging price of solar power, BNEF cut its 2030 green hydrogen price forecast 13 per cent to well below $US2/kg for most markets. BNEF lead hydrogen analyst Martin Tengler said such low renewable hydrogen costs could completely rewrite the energy map. > "It shows that in future, at least 33% of the world economy could be powered by clean energy for not a cent more than it pays for fossil fuels," Tengler said. "This is how it goes with clean energy. Every year it gets cheaper, faster than anyone expects. "But the technology will require continued government support to get there - we are at the high part of the cost curve now, and policy-supported investment is needed to get to the low part." BNEF considered more than 600 projects in 28 markets, including Australia. It expects green hydrogen to be produced for less than $US1/kg by 2050 in most areas after cutting its estimate of solar energy costs in 2050 by 40 per cent compared to two years ago. Tengler said in Australia green hydrogen from renewable energy would be cheaper than blue hydrogen before 2030 due to a combination of cheap renewable energy and relatively expensive gas. Blue hydrogen is made from gas with greenhouse emissions dealt with by carbon capture and storage. > "By 2030, it will make little economic sense to build 'blue' hydrogen production facilities in most countries, unless space constraints are an issue for renewables," Tengler said. "Companies currently banking on producing hydrogen from fossil fuels with CCS will have at most ten years before they feel the pinch. "Eventually, those assets will be undercut, like what is happening with coal in the power sector today." BNEF's view is a world away from an outlook Woodside presented 2½ years ago that saw blue hydrogen remaining cheaper for 30 years and negligible production in 2030. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/04/woodside-H2-presentation-plots.png) Source: [Woodside presentation](https://files.woodside/docs/default-source/news-and-media-documents/speeches/shaun-gregory-speech-afr-energy-summit0875ac2b641445cdbbc65a3c06189cfa.pdf?sfvrsn=332cf3a6%5F6&ref=boilingcold.com.au) October 2019 ## Export dream challenged The ability to produce cheap, clean hydrogen is a boon for many until now hard to abate industrial emissions and the future of energy-intensive manufacturing and minerals processing in Australia. However, Australia's plan for a significant export trade is made difficult as green hydrogen can be produced cheaply in many markets but is expensive to transport. > "Indeed, we think exporting hydrogen by ship will be very costly and hard to justify on the basis of pure economics," Tengler said. "But countries like Japan and South Korea, which have shown interest in importing hydrogen, are low on space for solar panels and wind turbines, which means that they might still need to buy imported hydrogen." Tengler said by 2030, Australia may be able to produce green hydrogen for less than the cost of so-called grey hydrogen produced from gas but with the emissions vented to the atmosphere. Tokyo-based Tengler told *Boiling Cold* that Australia was one of the 15 markets where BNEF predicts green hydrogen would be cheaper than gas buy 2050. The BNEF analysis had several conservative assumptions that, if addressed, could make green hydrogen more competitive. No carbon price was applied to the greenhouse emissions from burning natural gas or making grey hydrogen. BNEF also assumed the capacity of solar or wind power matched the capacity of the electrolysers. Tengler said a larger power plant would increase the utilisation of electrolyser capacity and push down modelled prices by 10 per cent in 2050. Electricity to power hydrogen electrolysers was assumed to come from solar panels or onshore wind. Projects like the Pilbara's Asian Renewable Energy Hub that has both solar and wind would likely achieve much higher utilisation of the electrolysers. --- **hydrogen colours primer** - *Gas: CH4 \+ O2 -> heat + CO2 \+ H2O* - *Grey hydrogen: CH4 \-> H2 \+ CO2 (most global production now)* - *Blue hydrogen: grey hydrogen with the CO2 captured and stored* - *Green hydrogen: H2O + renewable electricity -> H2 \+ O2* - *Black or brown hydrogen: like grey hydrogen but from black or brown coal, not gas* - *Hydrogen can be burnt for heat like gas or produce electricity in a fuel cell. In both cases, only water is emitted.* --- ### Pitt to oil and gas: you can sell assets but not escape liabilities URL: https://www.boilingcold.com.au/pitt-to-oil-and-gas-you-can-sell-assets-but-not-escape-liabilities/ Last updated: 2022-01-08T13:57:26.000Z Resources Minister Keith Pitt has won the backing of Cabinet for more effective management of Australia's [$52 billion offshore decommissioning liability](https://www.boilingcold.com.au/australian-offshore-oil-and-gas-industry-has-a-52b-clean-up-bill/). Pitt has been stung by the [$200 million-plus expense](https://www.boilingcold.com.au/northern-endeavour-debacle-hits-209m-with-much-more-to-come/) of decommissioning the Northern Endeavor oil vessel falling on the Australian taxpayer. In December he released [proposals that included so-called trailing liabilities](https://consult.industry.gov.au/offshore-resources-branch/offshore-decom/?ref=boilingcold.com.au) that hold sellers of assets responsible for decommissioning as a last resort. [Australian offshore oil and gas industry has a $52B clean-up billMuch of the $52 billion cost to decommission Australia’s offshore oil and gas infrastructure will fall on the Federal Government via the tax system and work has started to boost industry collaboration and find cost savings.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/03/Offshore-Platform-Snapper-2.jpg)](https://www.boilingcold.com.au/australian-offshore-oil-and-gas-industry-has-a-52b-clean-up-bill/) Today [draft legislation to implement trailing liabilities](https://consult.industry.gov.au/offshore-resources-branch/opggs-amendment/?ref=boilingcold.com.au) was released. > "The Australian Government has approved a suite of measures aimed at enhancing and strengthening Australia’s offshore oil and gas decommissioning framework," Pitt said. The bill will also enhance regulators' powers to assess the suitability of companies buying into an asset and take action when the control of a company changes. All these measures were recommended by the Walker Report into the Northern Endeavour debacle. [Federal Govt regulates poorly and gets $360M Northern Endeavor clean-up billThe Northern Endeavor mess started with Woodside paying to rid itself of a rusty ageing asset, ended with a $362 million liability for the Government and in between was a regulatory shambles.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/09/northern-endeavour.jpg)](https://www.boilingcold.com.au/poor-federal-regulation-allowed-the-360m-northern-endeavor-mess/) In 2015 Woodside sold the Northern Endeavour to a small inexperienced company Northern Oil and Gas Australia that failed in early 2020\. Regulators had little involvement in the transaction as the company that appeared on the title was unchanged, but ownership and control passed from Woodside to NOGA. The proposed legislation will require companies with more than a 20 per cent interest in a title to inform the National Offshore Petroleum Titles Administrator of a change in control within 30 days or face a fine of more than $500,000. The change of control would then be subject to Government approval. The trailing liabilities provision will allow the Government to call back a former titleholder "to decommission and remediate the environment, regardless of how its interest in the title ceased." The callback provision will apply to related entities of the former titleholder, such as the parent company, > "This approach recognises the ways in which companies are able to structure transactions to divest assets and titles to limit accountability for decommissioning obligations," an [overview of the proposed measures](https://consult.industry.gov.au/offshore-resources-branch/opggs-amendment/user%5Fuploads/overview---opggs-amendment-titles-administration-and-other-measures-bill-2021-pdf.pdf?ref=boilingcold.com.au) stated. Oil and gas lobby group APPEA chief executive Andrew McConville said the suggested measures were a step in the right direction and it would closely study the draft bill. “We have some concerns about a few elements, such as the operation of trailing liability, which will have adverse investment impacts, but we’ll work through that with the government,” McConville said. ExxonMobil abandoned the sale of its sprawling but ageing Bass Strait assets in November 2020, weeks after Pitt wrote to ExxonMobil chief executive Darren Woods about the impending announcement of trailing abilities. [Australia told ExxonMobil no easy $3B Bass Strait exitResources Minister Keith Pitt warned ExxonMobil ceo Darren Woods he would tighten rules for selling offshore oil and gas assets and shortly after the US major canned its Bass Strait exit.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/02/Offshore-Platform-Marlin-B-reduced.jpg)](https://www.boilingcold.com.au/australia-told-exxonmobil-ceo-told-no-easy-exit-before-3b-bass-strait-sale-canned/) ExxonMobil said it had determined it would secure more value by retaining the assets. Italian ENI [put on hold the sale of its Australian assets](https://www.argusmedia.com/en/news/2176820-eni-pauses-on-sale-of-australian-upstream-assets?ref=boilingcold.com.au) in January after failing to attract sufficiently high bids. Both companies would have considered that any sale left them with the risk of being called back years later to decommission the facilities. --- *Main image: Offshore platform in the Bass Strait. Source: ExxonMobil Australia.* --- ### WA's second big $100M battery planned by Alinta for Wagerup URL: https://www.boilingcold.com.au/was-second-big-battery-planned-by-alinta-for-wagerup/ Last updated: 2022-01-08T14:12:00.000Z *EXCLUSIVE* WA's second big battery is planned for Alinta Energy's power station in Wagerup and could equal the size of Synergy's $100 million-plus investment in Kwinana. The WA Environmental Protection Authority yesterday [published its approval](https://www.epa.wa.gov.au/sites/default/files/Ministerial%5FStatement/Statement%20729.pdf?ref=boilingcold.com.au) for the "installation of a battery energy storage system (BESS), with a battery power output of 100 megawatts." The system was described as modular, suggesting Alinta could install capacity in stages. The system will cost about $100 million and be completed in the March quarter of 2023, according to a [planning application](https://www.waroona.wa.gov.au/Profiles/waroona/Assets/ClientData/Advertisments/TP2195%5FLPS7%5FApplication%5Ffor%5FDevelopment%5FApproval.pdf?ref=boilingcold.com.au) to the Shire of Waroona lodged in December 2020\. The battery will "improve the reliability of the electricity network and facilitate increased penetration of renewable energy." In October 2020 WA's largest power generator Synergy announced plans to install a battery in Kwinana that could deliver power at a rate of 100MW and store 200MW-hours of energy. It was to be the second-largest in Australia. [WA plans $100M big battery to balance solarA huge battery in Kwinana will help tame the chaos in the South-West WA power system caused by soaring output from rooftop solar panels and pave the way for more renewable energy.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/10/IMG_1513-cropped.JPG)](https://www.boilingcold.com.au/wa-plans-100m-big-battery-to-balance-solar/) A spokesperson for Energy Minister Bill Johnston said tender submissions for construction of the Big Battery at Kwinana Power Station closed today. "Tender evaluation will take place over coming months, with the battery targeted to be operational towards the end of 2022,"the spokesperson said. In the past six months the size of Synergy's "Big Battery" has been surpassed by several announcements in the eastern states. The largest is a [500MW/450MW-hours BESS on Sydney's outskirts](https://reneweconomy.com.au/neoen-plans-massive-500mw-big-battery-west-of-sydney/?ref=boilingcold.com.au) on the site of a disused coal-fired power station. The EPA also approved an increase in Wagerup's capacity from 350MW to 450MW, allowing the two gas turbines and battery to all export at maximum capacity at the same time. The approval document did not specify the amount of battery storage. Synergy plans to store energy in its Kwinana battery in the middle of the day when rooftop solar panel output peaks and feed it back to the grid in the early evening. Alinta could do the same and further help reduce the so-called duck curve that, if untamed, threatens the power system's stability by pushing minimum demand too low. ![Forecast growth in the duck curve on the South West Interconnected System for 2018 to 2028 by AEMO.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/04/image-5.png) **Forecast growth in the duck curve on the South West Interconnected System**. Source: AEMO 2019. Both batteries could also participate in the Essential System Services market to be introduced on the South West grid that will reward facilities that help stabilise the frequency of the power system. The Wagerup facility is adjacent to Alcoa's alumina refinery but the two facilities are separate. The 380MW Wagerup power station was the seventh-largest generator on the South West grid in the 12 months to June 2020, according to Clean Energy Regulator data. Alinta has a second gas-fired power station in the South West near Alcoa's Pinjarra refinery. It is a cogeneration plant that supplies steam to Alcoa as well as 285MW of power to the grid. Alinta began life as the State-owned supplier of gas to WA homes and was privatised in 1998. It remains a domestic gas retailer in WA, competing with Kleenheat, AGL and others. With little public profile, it has become a significant player in WA power. The Chinese-owned company runs two gas-fired power stations in the Pilbara: a 178MW Newman facility and 210MW of capacity in Port Hedland. The Newman station that powers the Roy Hill mine incorporates a 30MW battery. Alinta also owns almost 12 per cent of the Goldfields Gas Pipeline and manages and part-owns the 214MW Yandin wind farm that started operating in 2020. In 2018 Alinta owner, Chow Tai Fook Enterprises Limited, bought the 1100MW Loy Yang B coal-fired power station in Victoria. *Boiling Cold* does not know if Alinta is fully committed to the Wagerup battery investment at this stage or if more approvals are required. Alinta Energy did not respond by deadline to questions from *Boiling Cold*. --- *Updates and Corrections:* *7 April 2021 4:40 PM: Comments from the Energy Minister's spokesperson added.* *7 April 2021 10:00 PM: Cost and schedule from planning application added.* *14 April 2021: Removed incorrect statement that the Wagerup power station was a cogeneration plant that supplied steam to Alcoa.* --- *Main image: Wagerup power station. Source: [Steven Bradley](https://commons.wikimedia.org/wiki/File:Wagerup%5FPower%5FGeneration.png?ref=boilingcold.com.au), [CC BY-SA 3.0](https://creativecommons.org/licenses/by-sa/3.0?ref=boilingcold.com.au), via Wikimedia Commons.* --- ### WA’s top carbon polluters: LNG, power, iron ore and alumina URL: https://www.boilingcold.com.au/was-top-carbon-polluters-lng-power-iron-ore-and-alumina/ Last updated: 2022-01-08T13:52:58.000Z *EXCLUSIVE ANALYSIS* Three major exports and local power account for 85 per cent of the carbon pollution from large facilities in WA, with LNG the dominant emitter of greenhouse gases. *Boiling Cold* has analysed Clean Energy Regulator data for [industrial facilities](http://www.cleanenergyregulator.gov.au/NGER/National%20greenhouse%20and%20energy%20reporting%20data/safeguard-facility-reported-emissions/safeguard-facility-emissions-2019%E2%80%9320?ref=boilingcold.com.au) and [power stations](http://www.cleanenergyregulator.gov.au/NGER/National%20greenhouse%20and%20energy%20reporting%20data/electricity-sector-emissions-and-generation-data/electricity-sector-emissions-and-generation-data-2019-20?ref=boilingcold.com.au) emitting more than the equivalent of 100,000t of CO2 in the 2019-20 financial year. The data excludes agriculture, vehicle emissions, small facilities, and some other emission sources. Five LNG plants in WA produced 20.6 million tonnes of carbon pollution in the 12 months to June 2020\. Inpex's Ichthys project off WA would have topped the list at 7.6 million tonnes of CO2e but was excluded as the gas is piped to shore at Darwin. ![The 10 biggest greenhouse emitters in Western Australia: North West Shelf LNG, Gorgon LNG, Wheatstone LNG, Worsley Alumina, Muja power station, Bluewaters Power, Pinjarra alumina refinery, Pluto LNG, Prelude LNG and Wagerup alumina refinery.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/04/image-14.png) Woodside's ageing North West Shelf LNG plant is WA's biggest emitter, overtaking Chevron's Gorgon that reduced annual emissions from 9.0 million tonnes to 6.3 million tonnes after starting its carbon dioxide injection system in August 2019. State-owned Synergy's Muja power station and Sumitomo and Kansai Electric's nearby Bluewaters showed the significant carbon impact of burning Collie's coal. LNG and Collie's coal-fired power supply to the grid attracts most attention when WA greenhouse gas emissions are discussed. However, South32's largely coal-powered Worsley Alumina operation produced more carbon pollution than the Pluto and Prelude LNG projects combined. WA's most significant export iron ore is absent from the top 10 most polluting facilities as the big miners' operations sprawl over many locations recorded separately by the Clean Energy Regulator. The big two of iron ore – BHP and Rio Tinto - feature when emissions are grouped by company. ![Ten companies that produce the most greenhouse gases in Western Australia: Chevron, Woodside, Synergy, Alcoa, South32, Rio Tinto, Bluewaters, BHP, Shell and Alinta.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/04/image-15.png) Chevron tops the list as operator of the Gorgon and Wheatstone LNG plants. Emissions were allocated to the operators of facilities, not by ownership. Woodside, for example, is assigned all the emissions from the Pluto and North West Shelf projects it operates, but not the emissions from the share of Wheatstone it owns. Chevron is unlikely to be helping the WA Government reach its net-zero emissions by 2050 target any time soon. The LNG giant [recently failed most elements of a scorecard of climate change preparedness](https://www.boilingcold.com.au/big-wa-polluters-fail-green-investment-test/) by the international investor group Climate Action 100+. The US oil and gas major leading WA carbon pollution was red-carded on its net-zero emissions by 2050 ambition, emissions reduction targets and the lack of a strategy to decarbonise. Alcoa's emissions come from three alumina refineries and an allocation of one-third of the emissions from Alinta's gas-fired cogeneration plant that supplies Alcoa's Pinjarra refinery with steam. Power retailer and generator Synergy has so far escaped the ire of climate protesters directed to the two LNG companies above it on the list of top polluters. As well as Muja, the utility has the Collie power station and a swag of gas-fired units. Its prominence shows the WA Government has substantial emissions under its direct control if it wanted to demonstrate a real commitment to its target of net-zero emissions in WA by 2050. Shell features as operator of the troubled Prelude floating LNG vessel. Prelude's previous financial year was a [carbon disaster with 2.3 million tonnes of greenhouse gases for just one cargo of LNG](https://www.boilingcold.com.au/shells-prelude-lng-carbon-disaster/). When the facilities are tallied by commodity, the production of LNG, power, iron ore and alumina dominate WA's industrial carbon footprint. The tally allocated power stations specific to an industry to that sector and other stations to power generation. ![Pir chart of the industry sectors produing the most carbon pollution, or geenhouse gases in Western Australia: gas, power, iron ore, alumina, gold, fertiliser, oil, nickel, cement, mineral sands and other.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/04/image-12.png) Iron ore, oil and gas, gold, and alumina produced 94 per cent of the value of WA's resources output in 2019-2020, according to the Department of Mines, Industry Regulation and Safety's [WA Mineral and Petroleum Statistics Digest](https://www.dmp.wa.gov.au/Documents/About-Us-Careers/Stats%5FDigest%5F2019-20.pdf?ref=boilingcold.com.au). The contribution of gold to WA's emissions is likely to be understated in the emissions figures as much production is from mines that emit less than 100,000 tones of CO2e a year and do not have to report to the Clean Energy Regulator. The other three major exports revenue streams emit vastly different amount of carbon pollution to produce revenue. ![carbon pollution, or greenhouse gas emissions, per revenue earned for three big Western Australian exports: iron ore, oil and gas, and alumina.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/04/image-16.png) South32 and Alcoa's alumina operations are the most dependent on emitting greenhouse gases to make money: twice as intense as the higher-profile LNG sector. Carbon offsets at the [current price of about $17 a tonne](https://www.reputex.com/research-insights/australian-carbon-offset-price-hits-17-t-a-12-month-high-heres-why/?ref=boilingcold.com.au) would take away about two per cent of the alumina sector's revenue. The iron ore sector's revenue is the least carbon-intensive, but total emissions are significant because of the industry's vast size. --- *Correction 29 April: The initial analysis incorrectly allocated all emissions from Alinta's power plants near Alcoa's Pinjara and Wagerup refineries to Alcoa. These plants supply no power to Alcoa but the Pinjarra plant does provide process steam. Also, some small regional power stations were counted twice, slightly affecting some sector and company totals.* --- ### Blue hydrogen a risky path for Australia in global clean fuel race URL: https://www.boilingcold.com.au/blue-hydrogen-a-risky-path-for-australia-in-global-clean-fuel-race/ Last updated: 2021-12-27T13:52:43.000Z *[Thomas Longden](https://theconversation.com/profiles/thomas-longden-185539?ref=boilingcold.com.au), [Australian National University](https://theconversation.com/institutions/australian-national-university-877?ref=boilingcold.com.au); [Fiona J Beck](https://theconversation.com/profiles/fiona-j-beck-565928?ref=boilingcold.com.au), [Australian National University](https://theconversation.com/institutions/australian-national-university-877?ref=boilingcold.com.au), and [Frank Jotzo](https://theconversation.com/profiles/frank-jotzo-167?ref=boilingcold.com.au), [Australian National University](https://theconversation.com/institutions/australian-national-university-877?ref=boilingcold.com.au)* *ANALYSIS* There’s great excitement about Australia potentially producing hydrogen as a clean fuel at large scale, for export to countries such as Germany, Japan and South Korea. Hydrogen (H₂) is a useful energy carrier, and doesn’t release greenhouse gas when that energy is recovered. But carbon dioxide (CO₂) can be emitted when hydrogen is produced, depending on whether the process uses renewable energy or fossil fuels. Dr Alan Finkel – the federal government’s special adviser on low-emissions technology and a former chief scientist – [said](https://www.abc.net.au/news/2021-03-12/hydrogen-from-coal-production-begins-la-trobe-valley/13241482?ref=boilingcold.com.au) this month: “The world’s going to need a lot of hydrogen, and so the more ways we can get that hydrogen the better”. But [our analysis](https://energy.anu.edu.au/files/2020%2003%2025%20-%20ZCEAP%20-%20CCEP%20Working%20Paper%20-%20Clean%20hydrogen%20emissions%20and%20costs%5F0.pdf?ref=boilingcold.com.au), released today, shows producing hydrogen from fossil fuels carries significant risks. The process can emit substantial greenhouse gas emissions – and capturing these emissions at a high rate may make the process more expensive than hydrogen produced from renewable energy. These findings have big implications as Australia looks to become a hydrogen superpower. ### ‘Clean’ hydrogen from coal or gas? Zero-emissions “green hydrogen” is produced via the electrolysis of water, when the process is powered by renewable energy. Hydrogen can also be produced from fossil fuels – including coal and gas. This can leads to a lot of CO₂ emissions, even when some carbon is captured and stored. Several strategy documents leave the door open for Australia to produce “low-emissions” hydrogen from fossil fuels. These include the [National Hydrogen Strategy](https://www.industry.gov.au/data-and-publications/australias-national-hydrogen-strategy?ref=boilingcold.com.au) Finkel spearheaded as chief scientist, and the federal government’s [Technology Investment Roadmap](https://www.industry.gov.au/data-and-publications/technology-investment-roadmap-first-low-emissions-technology-statement-2020?ref=boilingcold.com.au). In a recent [Quarterly Essay](https://www.quarterlyessay.com.au/author/alan-finkel?ref=boilingcold.com.au), Finkel said CO₂ from hydrogen production will need to be captured and stored – in fact, he argued, importing countries would insist on it. This, Finkel says, means hydrogen from fossil fuels would be “clean hydrogen”. But rates of carbon capture and storage (CCS) vary. And the greater the rate of emissions captured and securely stored underground, the more expensive the process. [Gorgon emissions to soar until Chevron fixes CO2 injectionGorgon LNG’s carbon emissions will jump by more than one million tonnes a year until Chevron fixes an underground pressure management problem that caused WA’s safety regulator to curtail CO2 injection by two-thirds.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/02/gorgon-lng-trains-large-d-cropped-reduced.jpg)](https://www.boilingcold.com.au/regulator-limits-chevrons-troubled-gorgon-co2-injection-to-one-third-capacity/) ### A focus on emissions intensity Globally, only a few large-scale hydrogen plants currently operate, and the rates of carbon capture achieved in practice are rarely reported. When assessing whether a fuel source is low-carbon, we calculate its “emissions intensity”. This refers to how many kilograms of CO₂ is associated with the energy produced. Our [analysis](https://energy.anu.edu.au/files/2020%2003%2025%20-%20ZCEAP%20-%20CCEP%20Working%20Paper%20-%20Clean%20hydrogen%20emissions%20and%20costs.pdf?ref=boilingcold.com.au) found the emissions intensity of fossil-fuel based hydrogen production systems are substantial, even with carbon capture. For example, the production of hydrogen from coal, if 90% of emissions are captured, has an emissions intensity not much below that of using gas for the same energy content. The same goes for hydrogen from gas, with a 56% capture rate. [Our analysis](https://energy.anu.edu.au/files/2020%2003%2025%20-%20ZCEAP%20-%20CCEP%20Working%20Paper%20-%20Clean%20hydrogen%20emissions%20and%20costs.pdf?ref=boilingcold.com.au) also takes into account so-called “fugitive emissions” released during the extraction and processing of fossil fuels. They are typically ignored, but are significant. [For hydrogen to be truly ‘clean’ it must be made with renewables, not coalCoal and gas have been proposed as a way to make ‘clean’ hydrogen. But that road is full of challenges.![](https://cdn.theconversation.com/static/tc/@theconversation/ui/dist/esm/logos/web-app-logo-192x192-e99834e3a7a551050e9debe6cc925617.png)The ConversationFiona J Beck![](https://images.theconversation.com/files/304545/original/file-20191201-156116-yomnh0.jpeg?ixlib=rb-1.1.0&rect=0%2C464%2C4452%2C2223&q=45&auto=format&w=1356&h=668&fit=crop)](https://theconversation.com/for-hydrogen-to-be-truly-clean-it-must-be-made-with-renewables-not-coal-128053?ref=boilingcold.com.au) Under global accounting rules, emissions from hydrogen production will count against the producing country’s inventory. But many hydrogen importers concerned about climate change will want to know what emissions were released in production. This can be done through hydrogen certification schemes. For example, the European Union has developed the CertifHy Guarantee of Origin [scheme](https://www.certifhy.eu/images/media/files/CertifHy%5FLeaflet%5Ffinal-compressed.pdf?ref=boilingcold.com.au) which accounts for the origins of hydrogen used. It includes information on whether the hydrogen was produced using renewable or non-renewable energy sources (such as nuclear, or fossil fuels with CCS). Under this scheme, only hydrogen produced from natural gas with a high carbon-capture rate (towards 90%) could be called “low-carbon” hydrogen. These high capture rates are assumed in [major reports](https://www.iea.org/reports/the-future-of-hydrogen?ref=boilingcold.com.au) and national strategies – including Australia’s – but have not been achieved at a large-scale commercial plant. Japan’s Tomakomai CCS [demonstration project](https://www.japanccs.com/en/?ref=boilingcold.com.au) has achieved a 90% capture rate – but at a [very high cost](https://www.meti.go.jp/english/press/2020/pdf/0515%5F004a.pdf?ref=boilingcold.com.au). ![](https://images.theconversation.com/files/392194/original/file-20210329-23-1qajr2u.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip) Emissions intensity of different fuels. Authors Provided ### Now, a look at costs At the moment, producing hydrogen with fossil fuels generally costs less than producing it with renewables-powered electrolysis. But the cost of electrolysis with renewable energy is falling, and could become cheaper than fossil fuel with carbon-capture options, as the graph below shows. [Our analysis found](https://energy.anu.edu.au/files/2020%2003%2025%20-%20ZCEAP%20-%20CCEP%20Working%20Paper%20-%20Clean%20hydrogen%20emissions%20and%20costs.pdf?ref=boilingcold.com.au) hydrogen from gas or coal costs between US$1.66 and $1.84 per kilogram without the carbon being captured and stored. This rises to between US$2.09 and $2.23 per kilogram with high carbon-capture rates. A carbon penalty, such as is applied in Europe, would make hydrogen from fossil fuels more expensive. A penalty of US$50 per tonne of CO₂ pushes the central production cost estimate up to between US$2.24 and $3.15 per kilogram. By comparison, Australia’s [Technology Investment Roadmap](https://www.industry.gov.au/data-and-publications/technology-investment-roadmap-first-low-emissions-technology-statement-2020?ref=boilingcold.com.au) set a target for “clean hydrogen” to be produced for under A$2 per kilogram, or US$1.43. The true cost of carbon avoidance using CCS varies widely and is often not well defined. Current cost projections rely on optimistic estimates of CO₂ transport and storage costs, and generally do not include monitoring and verification costs for long-term storage. So how does all this compare to “green” hydrogen? [Our analysis](https://energy.anu.edu.au/files/2020%2003%2025%20-%20ZCEAP%20-%20CCEP%20Working%20Paper%20-%20Clean%20hydrogen%20emissions%20and%20costs.pdf?ref=boilingcold.com.au) found the median estimate for renewables-based electrolysis falls from US$3.64 per kilogram today to well below US$2 per kilogram. The cost of producing hydrogen with renewables depends mainly on the cost of electricity, as well as the capital cost and how intensively the electrolyser is used. The cost of solar and wind power has fallen dramatically in the past decade, and this [trend is likely to continue](https://ccep.crawford.anu.edu.au/sites/default/files/publication/ccep%5Fcrawford%5Fanu%5Fedu%5Fau/2020-09/ccep20-07%5Flongden-jotzo-prasad-andrews%5Fh2%5Fcosts.pdf?ref=boilingcold.com.au). As electrolysers are deployed at scale, their costs may decrease rapidly - pushing down the cost of green hydrogen. ### More may not be better So what does all this mean? If Australia pushes ahead with producing hydrogen from fossil fuels, two possible risks emerge. If carbon-capture rates are low, we may lock in a new high-emissions energy system. And if capture rates are high, those production facilities could still become uncompetitive. This raises the risk of stranded assets – investments with a short economic life, which do not make a viable return. Investment decisions for large scale hydrogen production will ultimately be taken by businesses, on the basis of commercial viability. But governments have an important role early on as they set expectations and assist pilot projects. The fossil fuel route is becoming a riskier bet. --- ![The Conversation](https://counter.theconversation.com/content/157864/count.gif?distributor=republish-lightbox-basic) *[Thomas Longden](https://theconversation.com/profiles/thomas-longden-185539?ref=boilingcold.com.au), Fellow, Crawford School of Public Policy, [Australian National University](https://theconversation.com/institutions/australian-national-university-877?ref=boilingcold.com.au); [Fiona J Beck](https://theconversation.com/profiles/fiona-j-beck-565928?ref=boilingcold.com.au), Senior research fellow, [Australian National University](https://theconversation.com/institutions/australian-national-university-877?ref=boilingcold.com.au), and [Frank Jotzo](https://theconversation.com/profiles/frank-jotzo-167?ref=boilingcold.com.au), Director, Centre for Climate and Energy Policy, [Australian National University](https://theconversation.com/institutions/australian-national-university-877?ref=boilingcold.com.au)* *This article is republished from [The Conversation](https://theconversation.com/?ref=boilingcold.com.au) under a Creative Commons license. Read the [original article](https://theconversation.com/australia-is-at-a-crossroads-in-the-global-hydrogen-race-and-one-path-looks-risky-157864?ref=boilingcold.com.au).* --- ### Climate crisis: hope of staying within 1.5°C vital to spurring global action URL: https://www.boilingcold.com.au/climate-crisis-hope-of-staying-within-1-5degc-vital-to-spurring-global-action/ Last updated: 2021-12-27T13:53:08.000Z [Richard Black](https://theconversation.com/profiles/richard-black-1219524?ref=boilingcold.com.au), [Imperial College London](https://theconversation.com/institutions/imperial-college-london-1206?ref=boilingcold.com.au) and [Catherine Happer](https://theconversation.com/profiles/catherine-happer-16460?ref=boilingcold.com.au), [University of Glasgow](https://theconversation.com/institutions/university-of-glasgow-1269?ref=boilingcold.com.au) Ever since governments at the 2015 Paris climate summit set 1.5°C as [the desired limit](https://unfccc.int/process-and-meetings/the-paris-agreement/the-paris-agreement?ref=boilingcold.com.au) for global warming, scientists and journalists alike have regularly asked whether it is achievable. [The question arose](https://www.cleanenergywire.org/news/coming-months-decisive-global-net-zero-race-europe-reacts-un-report-national-climate-plans?ref=boilingcold.com.au) again recently when the UN published a report of national [emission-cutting pledges](https://unfccc.int/news/greater-climate-ambition-urged-as-initial-ndc-synthesis-report-is-published?ref=boilingcold.com.au) for the next decade. It will be posed regularly before the publication of the [IPCC’s Sixth Assessment Report](https://www.ipcc.ch/assessment-report/ar6/?ref=boilingcold.com.au) in July – a synthesis of the most recent information scientists can offer on climate change – and the [UN climate summit](https://ukcop26.org/?ref=boilingcold.com.au) in November. [Science](https://www.ipcc.ch/sr15/?ref=boilingcold.com.au) is already clear that the 1.5°C target can be met. But science cannot say whether it will be met. The outcome depends on two things we cannot know with precision: how [sensitive the climate system is](https://www.metoffice.gov.uk/research/climate/understanding-climate/climate-sensitivity-explained?ref=boilingcold.com.au) to rising greenhouse gas concentrations, and how quickly the world will cut emissions. Humanity has little sway over climate sensitivity. But on the second issue – what we do about emissions – humanity clearly holds the lever of influence. The recent UN report showed that governments are not pushing that lever on short-term emissions hard enough. Only 40% of countries have so far set a new emission-cutting target for 2030, as they are due to under the Paris Agreement. Collectively, they are pledging to bring emissions down by 1% below 2010 levels rather than the 45% proposed by the IPCC as being compatible with meeting the 1.5°C limit. Yet, since autumn 2020, [China, the EU, the US, Japan and South Korea](https://ca1-eci.edcdn.com/reports/ECIU-Oxford%5FTaking%5FStock.pdf?ref=boilingcold.com.au) have all pledged to reach net zero emissions around mid-century. If they follow through, that would [halve the gap to the 1.5°C target](https://climateactiontracker.org/publications/global-update-paris-agreement-turning-point/?ref=boilingcold.com.au) – and that’s without factoring in the wider effect on global markets, investment and prices that will inevitably follow. So the future is not set, and much will depend on decisions made in these next few crucial years. While scientists might be tempted to spend much of 2021 arguing whether the Paris Agreement’s limit is feasible, having this as a live debate could itself lower our chances of delivering the target. ## Consensus and empowerment The chances of stopping warming at 1.5°C increase the faster the global community cuts greenhouse gas emissions to zero. And how fast we do that depends on the interrelated actions of a huge mix of people – government ministers most importantly, but also business chiefs, investors, banks, religious leaders, activists and citizens. The last few years have seen efforts accelerate across those constituencies, from the establishment of [financial mechanisms by the UN](https://www.unepfi.org/banking/bankingprinciples/?ref=boilingcold.com.au) to the [Fridays for Future](https://fridaysforfuture.org/?ref=boilingcold.com.au) movement. Across these initiatives, one inescapable fact is how central the 1.5°C target now is. The [open letter](https://climateemergencyeu.org/?ref=boilingcold.com.au#letter) that Fridays for Future sent to political leaders in 2020 referred to the 1.5°C limit five times, and not at all to the other Paris Agreement goal of keeping global warming “well below 2°C”. When deciding their net zero emissions targets, the governments of the [UK](https://www.theccc.org.uk/2019/05/02/phase-out-greenhouse-gas-emissions-by-2050-to-end-uk-contribution-to-global-warming/?ref=boilingcold.com.au) and [New Zealand](https://www.mfe.govt.nz/publications/climate-change/climate-change-response-zero-carbon-amendment-bill-summary?ref=boilingcold.com.au) both explicitly referred to the 1.5°C limit as the global “guardrail” and set their national decarbonisation trajectories accordingly. The UN secretary general, António Guterres, [exhorts](https://unfccc.int/news/un-secretary-general-making-peace-with-nature-is-the-defining-task-of-the-21st-century?ref=boilingcold.com.au) governments and businesses to meet this goal specifically rather than “well below 2°C.” So to claim that 1.5°C is out of reach would be to undercut all of those initiatives and many others – to tell them all, from minister to investor to youth activist, that they are doomed to fail. Social science tells us a lot about the effects of different types of messaging on climate action, including on two issues that are significant here: consensus and empowerment. From [climate change](https://www.nature.com/articles/nclimate1295?ref=boilingcold.com.au) to [vaccination](https://bmcpublichealth.biomedcentral.com/articles/10.1186/s12889-015-2541-4?ref=boilingcold.com.au), a consensus message from scientists increases public faith and willingness to act. We’re seeing how [mixed messaging damages trust](https://www.dw.com/en/european-trust-in-astrazeneca-covid-vaccine-plunges-survey/a-56946669?ref=boilingcold.com.au) right now with the AstraZeneca coronavirus vaccine. Would climate contrarians [have put so much effort](https://www.therealpress.co.uk/product/denied-by-richard-black-print/?ref=boilingcold.com.au) into undermining the perception of consensus among climate scientists were not the perception of consensus important to decarbonisation? The world stands a better chance of tackling climate change if people feel they have a chance of succeeding. Academic research backs up this common sense. [A major study](https://www.cambridge.org/core/journals/global-sustainability/article/discourses-of-climate-delay/7B11B722E3E3454BB6212378E32985A7?ref=boilingcold.com.au) in 2020 showed how the “we cannot do it” argument works to delay action, noting that such statements “can result in a paralysing state of shock and resignation”, which is a deterrent to active engagement in solutions. Research also shows that public disengagement is the inevitable result of a perceived [sense of conflict](http://eprints.gla.ac.uk/113171/?ref=boilingcold.com.au) among scientists. This may be the intent of people wishing to delay climate action, but it’s presumably not an outcome that scientists who support decarbonisation seek. [Climate denial hasn’t gone away – here’s how to spot arguments for delaying climate actionNew research exposes the common tropes of bad faith arguments about climate change.![](https://cdn.theconversation.com/static/tc/@theconversation/ui/dist/esm/logos/web-app-logo-192x192-e99834e3a7a551050e9debe6cc925617.png)The ConversationStuart Capstick![](https://images.theconversation.com/files/349975/original/file-20200728-29-13tw0no.jpg?ixlib=rb-1.1.0&rect=0%2C395%2C4133%2C2066&q=45&auto=format&w=1356&h=668&fit=crop)](https://theconversation.com/climate-denial-hasnt-gone-away-heres-how-to-spot-arguments-for-delaying-climate-action-141991?ref=boilingcold.com.au) The IPCC is perhaps the biggest consensus-forming initiative in the whole of science. Its 2018 Special Report found 1.5°C achievable and, judging from private conversations, this year’s report is unlikely to close the door. So will our species succeed in limiting global warming to 1.5°C and so stave off some of the more crippling effects of climate change? No one can possibly know. Can we succeed? As former US president Barack Obama once said: “Yes, we can.” And knowing that we can makes it more likely that we will. --- ![The Conversation](https://counter.theconversation.com/content/158109/count.gif?distributor=republish-lightbox-basic) *[Richard Black](https://theconversation.com/profiles/richard-black-1219524?ref=boilingcold.com.au), Honorary Research Fellow, Grantham Institute, [Imperial College London](https://theconversation.com/institutions/imperial-college-london-1206?ref=boilingcold.com.au) and [Catherine Happer](https://theconversation.com/profiles/catherine-happer-16460?ref=boilingcold.com.au), Lecturer in Sociology, [University of Glasgow](https://theconversation.com/institutions/university-of-glasgow-1269?ref=boilingcold.com.au)* *This article is republished from [The Conversation](https://theconversation.com/?ref=boilingcold.com.au) under a Creative Commons license. Read the [original article](https://theconversation.com/climate-crisis-keeping-hope-of-1-5-c-limit-alive-is-vital-to-spurring-global-action-158109?ref=boilingcold.com.au).* --- *Main image: Factory chimney smoke. Source: Photo by [veeterzy](https://unsplash.com/@veeterzy?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText)on [Unsplash](https://unsplash.com/?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText)* --- ### Seriously ugly: Australia if the world heats by 3°C this century URL: https://www.boilingcold.com.au/seriously-ugly-australia-if-the-world-heats-by-3c-this-century/ Last updated: 2021-12-27T13:53:39.000Z --- [Ove Hoegh-Guldberg](https://theconversation.com/profiles/ove-hoegh-guldberg-2012?ref=boilingcold.com.au), *[The University of Queensland](https://theconversation.com/institutions/the-university-of-queensland-805?ref=boilingcold.com.au)* and [Lesley Hughes](https://theconversation.com/profiles/lesley-hughes-5823?ref=boilingcold.com.au), *[Macquarie University](https://theconversation.com/institutions/macquarie-university-1174?ref=boilingcold.com.au)* --- Imagine, for a moment, a different kind of Australia. One where bushfires on the catastrophic scale of Black Summer happen almost every year. One where 50℃ days in Sydney and Melbourne are common. Where storms and flooding have violently reshaped our coastlines, and unique ecosystems have been damaged beyond recognition – including the Great Barrier Reef, which no longer exists. Frighteningly, this is not an imaginary future dystopia. It’s a scientific projection of Australia under 3℃ of global warming – a future we must both strenuously try to avoid, but also prepare for. The sum of current commitments under the Paris climate accord puts Earth on track for 3℃ of warming this century. [Research](https://www.science.org.au/warmerworld?ref=boilingcold.com.au) released today by the Australian Academy of Science explores this scenario in detail. The report, which we co-authored with colleagues, lays out the potential damage to Australia’s ecosystems, food production, urban centres and human health. Unless the world changes course and dramatically curbs greenhouse gas emissions, this is how bad it could get. ## **A spotlight on the damage** Nations signed up to the Paris Agreement collectively aim to limit global warming to well below 2℃ this century and to pursue efforts to limit temperature increase to 1.5℃. But on current emissions-reduction pledges, global temperatures are [expected to](https://climateactiontracker.org/global/temperatures/?ref=boilingcold.com.au) far exceed these goals, reaching 2.9℃ by 2100. Australia is the driest inhabited continent, and already has a highly variable climate of “[droughts and flooding rains](https://www.dorotheamackellar.com.au/archive/mycountry.htm?ref=boilingcold.com.au)”. This is why of all developed nations, Australia [has been identified](https://www.ipcc.ch/assessment-report/ar5/?ref=boilingcold.com.au) as one of the most vulnerable to climate change. The damage is already evident. Since records began in 1910, Australia’s average surface temperature has [warmed by 1.4℃](http://www.bom.gov.au/state-of-the-climate/australias-changing-climate.shtml?ref=boilingcold.com.au), and its open ocean areas have [warmed by 1℃](https://www.gbrmpa.gov.au/our-work/threats-to-the-reef/climate-change/sea-temperature?ref=boilingcold.com.au). Extreme events – such as storms, droughts, bushfires, heatwaves and floods – are becoming more [frequent and severe](https://www.iag.com.au/sites/default/files/Documents/Climate%20action/Severe-weather-in-a-changing-climate-2nd-Edition.pdf?ref=boilingcold.com.au). Today’s [report](https://www.science.org.au/warmerworld?ref=boilingcold.com.au) brings together multiple lines of evidence such as computer modelling, observed changes and historical paleoclimate studies. It gives a picture of the damage that’s already occurred, and what Australia should expect next. It shines a spotlight on four sectors: ecosystems, food production, cities and towns, and health and well-being. In all these areas, we found the impacts of climate change are profound and accelerating rapidly. ## **1\. Ecosystems** Australia’s natural resources are directly linked to our well-being, culture and economic prosperity. Warming and changes in climate have already eroded the services ecosystems provide, and affected thousands of [species](https://www.ipcc.ch/assessment-report/ar5/?ref=boilingcold.com.au). The problems extend to [the ocean](https://www.ipcc.ch/srocc/?ref=boilingcold.com.au), which is steadily warming. Heat stress is bleaching and killing [corals](https://www.frontiersin.org/articles/10.3389/fmars.2017.00158/full?ref=boilingcold.com.au), and severely damaging crucial habitats such as [kelp forests](https://science.sciencemag.org/content/328/5985/1523.abstract?ref=boilingcold.com.au) and seagrass meadows. As oceans absorb carbon dioxide (CO₂) from the atmosphere, seawater is reaching record acidity levels, harming marine food webs, [fisheries and aquaculture](https://www.annualreviews.org/doi/abs/10.1146/annurev.marine.010908.163834?ref=boilingcold.com.au). At 3℃ of global warming by 2100, oceans are projected to absorb [five times](https://www.ipcc.ch/report/srocc/?ref=boilingcold.com.au) more heat than the observed amount accumulated since 1970\. Being far more acidic than today, ocean oxygen levels will decline at ever-shallower depths, affecting the distribution and abundance of marine life [everywhere](https://www.ipcc.ch/srocc/?ref=boilingcold.com.au). At 1.5-2℃ warming, the complete loss of coral reefs is [very likely](https://science.sciencemag.org/content/365/6459/eaaw6974?ref=boilingcold.com.au). [The oceans are changing too fast for marine life to keep upOver the past five years we’ve seen a significant increase in research on ocean acidification and warming seas, and their effect on marine life. Overall, unfortunately, the news is not good.![](https://cdn.theconversation.com/static/tc/@theconversation/ui/dist/esm/logos/web-app-logo-192x192-e99834e3a7a551050e9debe6cc925617.png)The ConversationIvan Nagelkerken![](https://images.theconversation.com/files/98045/original/image-20151012-17858-c7tn2s.jpg?ixlib=rb-1.1.0&rect=2%2C140%2C997%2C483&q=45&auto=format&w=1356&h=668&fit=crop)](https://theconversation.com/the-oceans-are-changing-too-fast-for-marine-life-to-keep-up-48977?ref=boilingcold.com.au) Under 3℃ warming, global sea levels are projected to rise [40-80 centimetres](https://www.ipcc.ch/srocc/chapter/chapter-4-sea-level-rise-and-implications-for-low-lying-islands-coasts-and-communities/?ref=boilingcold.com.au), and by many more metres over coming centuries. Rising sea levels are already inundating low-lying coastal areas, and saltwater is intruding into freshwater wetlands. This leads to coastal erosion that amplifies storm impacts and affects both [ecosystems and people](https://www.ipcc.ch/srocc/?ref=boilingcold.com.au). Land and freshwater environments have been damaged by drought, fire, extreme heatwaves, invasive species and disease. An estimated [3 billion vertebrate animals](https://www.abc.net.au/news/2020-07-28/3-billion-animals-killed-displaced-in-fires-wwf-study/12497976?ref=boilingcold.com.au) were killed or displaced in the Black Summer bushfires. Some [24 million hectares](https://www.abc.net.au/radio/newsradio/lessons-from-the-black-summer-fires/12904990?ref=boilingcold.com.au) burned, including 80% of the Blue Mountains World Heritage Area and [50% of Gondwana rainforests](https://www.theguardian.com/environment/2020/jan/17/its-heart-wrenching-80-of-blue-mountains-and-50-of-gondwana-rainforests-burn-in-bushfires?ref=boilingcold.com.au). At 3℃ of warming, the number of extreme fire days could double. Some species are shifting to cooler latitudes or higher elevations. But most will struggle to keep up with the unprecedented rate of warming. Critical thresholds in many natural systems are likely to be exceeded as global warming [reaches 1.5℃](https://www.ipcc.ch/sr15/?ref=boilingcold.com.au). At [2℃ and beyond](https://www.ipcc.ch/sr15/?ref=boilingcold.com.au), we’re likely to see the complete loss of coral reefs, and inundation of iconic ecosystems such as the [World Heritage-listed Kakadu National Park](https://ecos.csiro.au/kakadu-wetlands/?ref=boilingcold.com.au). At 3℃ of global warming, Australia’s present-day ecological systems would be unrecognisable. The first documented climate-related global extinction of a mammal, the [Bramble Cay melomys from the Torres](https://www.uq.edu.au/news/article/2016/06/barrier-reef-rodent-first-mammal-declared-extinct-due-climate-change?ref=boilingcold.com.au) Strait, is highly unlikely to be the last. Climate change is predicted to [increase extinction rates](https://www.ipcc.ch/sr15/chapter/chapter-3/?ref=boilingcold.com.au) by several orders of magnitude. Degradation of Australia’s unique ecosystems will harm the tourism and recreation industries, as well as our food security, health and culture. There are ways to reduce the climate risk for ecosystems – many of which also benefit humans. For example, preserving and restoring mangroves protects our coasts from storms, increases carbon storage and retains [fisheries habitat](https://www.researchgate.net/publication/233814016%5FMangroves%5Fas%5Ffish%5Fhabitat%5F50%5FYears%5Fof%5Ffield%5Fstudies?ref=boilingcold.com.au). ## **2\. Food production** Australian agriculture and food security already face significant risks from droughts, heatwaves, fires, floods and invasive species. At 2℃ or more of global warming, [rainfall will decline](https://www.csiro.au/en/research/environmental-impacts/climate-change/state-of-the-climate/previous/state-of-the-climate-2018/australias-changing-climate?ref=boilingcold.com.au) and [droughts](https://theconversation.com/is-australias-current-drought-caused-by-climate-change-its-complicated-97867?ref=boilingcold.com.au) in areas such as southeastern and southwestern Australia will intensify. This will reduce water availability for irrigated agriculture and increase water prices. [Heat stress affects](https://www.mla.com.au/research-and-development/feeding-finishing-nutrition/Lotfeeding-intensive-finishing/heat-stress/?ref=boilingcold.com.au) livestock welfare, reproduction and production. Projected temperature and humidity changes suggest livestock will experience many [more heat stress days](https://link.springer.com/article/10.1007%2Fs00484-013-0703-6?ref=boilingcold.com.au) each year. More frequent storms and heavy rainfall are likely to worsen erosion on grazing land and may lead to livestock loss from flooding. Heat stress and reduced water availability will also make farms less profitable. A 3℃ global temperature increase would reduce yields of key crops by between [5% and 50%](https://www.sciencedirect.com/science/article/abs/pii/S0308521X14001334?via%3Dihub&ref=boilingcold.com.au). Significant reductions [are expected](https://doi.org/10.1007/s10640-017-0197-5?ref=boilingcold.com.au) in oil seeds (35%), wheat (18%) and fruits and vegetables (14%). [Australia’s farmers want more climate action – and they’re starting in their own (huge) backyardsThe National Farmers’ Federation has called on the Morrison government to commit to net-zero greenhouse gas emission by 2050.![](https://cdn.theconversation.com/static/tc/@theconversation/ui/dist/esm/logos/web-app-logo-192x192-e99834e3a7a551050e9debe6cc925617.png)The ConversationRichard Eckard![](https://images.theconversation.com/files/353766/original/file-20200820-16-1mywqvy.jpg?ixlib=rb-1.1.0&rect=0%2C255%2C3715%2C1857&q=45&auto=format&w=1356&h=668&fit=crop)](https://theconversation.com/australias-farmers-want-more-climate-action-and-theyre-starting-in-their-own-huge-backyards-144792?ref=boilingcold.com.au) Climate change also [threatens](https://doi.org/10.1071/wf15028?ref=boilingcold.com.au) [forestry](https://www.tandfonline.com/doi/abs/10.1080/00049158.2017.1420288?ref=boilingcold.com.au) in hotter, drier regions such as southwestern Australia. There, the industry faces increased fire risks, changed rainfall patterns and growing pest populations. In cooler regions such as Tasmania and Gippsland, forestry production [may increase](https://doi.org/10.1%20080/00049158.2017.1365403?ref=boilingcold.com.au) as the climate warms. Existing plantations would change substantially under 3℃ warming. As ocean waters warm, distributions and stock levels of commercial fish species are [continuing to change](https://doi.org/10.1080/2330824%209.2018.1445980?ref=boilingcold.com.au). This will curb profitability. Many aquaculture fisheries may fundamentally change, relocate or cease to exist. These changes may cause fisheries workers to suffer unemployment, mental health issues (potentially leading to suicides) and other problems. Strategic planning to create new business opportunities in these regions may reduce these risks. ## **3\. Cities and towns** [Almost 90%](https://theconversation.com/regional-australias-time-has-come-planning-for-growth-is-now-vital-149170?ref=boilingcold.com.au) of Australians live in cities and towns and will experience climate change in urban environments. Under a sea level rise of 1 metre by the end of the century – a level considered plausible by federal officials – between 160,000 and 250,000 Australian properties and infrastructure are [at risk](https://www.environment.gov.au/climate-change/adaptation/publications/climate-change-risks-australias-coasts?ref=boilingcold.com.au) of coastal flooding. Strategies to manage the risk include less construction in high-risk areas, and protecting coastal land with sea walls, sand dunes and mangroves. But some coastal areas may have to be [abandoned](https://www.sciencedirect.com/science/article/abs/pii/S146290111000167X?ref=boilingcold.com.au). Extreme heat, bushfires and storms put [strain on](https://www-pub.iaea.org/MTCD/Publications/PDF/P1847%5Fweb.pdf?ref=boilingcold.com.au) power stations and infrastructure. At the same time, more energy is needed for increased air conditioning use. Much of Australia’s electricity generation relies on ageing and unreliable coal-fired power stations. Extreme weather can also disrupt and damage the oil and gas industries. [Diversifying energy sources](https://www.researchgate.net/publication/223533871%5FDiversification%5Fand%5FLocalization%5Fof%5FEnergy%5FSystems%5Ffor%5FSustainable%5FDevelopment%5Fand%5FEnergy%5FSecurity?ref=boilingcold.com.au) and improving infrastructure will be important to ensure reliable energy supplies. The insurance and financial sector is becoming increasingly aware of climate risk and exposure. [Insurance firms](https://www.iag.com.au/sites/default/files/Documents/Climate%20action/Severe-weather-in-a-changing-climate-2nd-Edition.pdf?ref=boilingcold.com.au) face increased claims due to climate-related disasters including floods, cyclones and mega-fires. Under some scenarios, [one in every 19 property owners](https://www.climatecouncil.org.au/wp-content/uploads/2019/05/costs-of-climate-change-report-v2.pdf?ref=boilingcold.com.au) face unaffordable insurance premiums by 2030\. A 3℃ world would render many more properties and businesses uninsurable. [When climate change and other emergencies threaten where we live, how will we manage our retreat?Putting affected people and communities at the centre of difficult relocation decisions must be a priority under laws that replace the old Resource Management Act.![](https://cdn.theconversation.com/static/tc/@theconversation/ui/dist/esm/logos/web-app-logo-192x192-e99834e3a7a551050e9debe6cc925617.png)The ConversationBruce Glavovic![](https://images.theconversation.com/files/387603/original/file-20210303-19-1x7ny41.jpg?ixlib=rb-1.1.0&rect=0%2C220%2C5455%2C2723&q=45&auto=format&w=1356&h=668&fit=crop)](https://theconversation.com/when-climate-change-and-other-emergencies-threaten-where-we-live-how-will-we-manage-our-retreat-156035?ref=boilingcold.com.au) Cities and towns, however, can be part of the climate solution. High-density urban living leads to a lower per capita greenhouse gas emission “footprint”. Also, innovative solutions are easier to implement in urban environments. Passive cooling techniques, such as incorporating more plants and street trees during planning, can reduce city temperatures. But these strategies may require changes to stormwater management and can take time to work. ## **4\. Human health and well-being** A 3℃ world threatens human health, livelihoods and communities. The elderly, young, unwell, and those from disadvantaged socioeconomic backgrounds are at most risk. Heatwaves on land and sea are becoming longer, more frequent and severe. For example, at 3℃ of global warming, heatwaves in Queensland would happen as often as [seven times a year](https://www.sciencedirect.com/science/article/pii/S0048969720340432?via%3Dihub&ref=boilingcold.com.au), lasting 16 days on average. These cause physiological heat stress and worsen existing medical conditions. Bushfire-related health impacts are increasing, causing deaths and exacerbating pre-existing conditions such as heart and lung disease. Tragically, we saw this unfold during Black Summer. These extreme conditions [will increase](https://link.springer.com/article/10.1007%2Fs00704-018-2507-4?ref=boilingcold.com.au) at 2℃ and further at 3℃, causing direct and indirect physical and mental health issues. Under 3℃ warming, climate damage to businesses will likely to lead to increased unemployment and possibly higher suicide rates, [mental health issues](https://onlinelibrary.wiley.com/doi/full/10.1111/j.1741-6612.2010.00424.x?ref=boilingcold.com.au) and health issues relating to heat stress. At 3°C global warming, many locations in Australia would be very difficult to inhabit due to projected [water shortages](https://www.climatecouncil.org.au/resources/water-security-report/?ref=boilingcold.com.au). As weather patterns change, transmission of some infectious diseases, such as [Ross River virus](https://pubmed.ncbi.nlm.nih.gov/22877498/?ref=boilingcold.com.au), will become more intense. “Tropical” diseases may spread to more temperate areas across Australia. Strategies exist to help mitigate these effects. They include improving early warning systems for extreme weather events and boosting the climate resilience of health services. [Nature-based solutions](https://www.iucn.org/theme/nature-based-solutions?ref=boilingcold.com.au), such as increasing green spaces in urban areas, will also help. ## **How to avoid catastrophe** The report acknowledges that limiting global temperatures to 1.5℃ this century is now [extremely difficult](https://theconversation.com/wake-up-mr-morrison-australias-slack-climate-effort-leaves-our-children-10-times-more-work-to-do-157136?ref=boilingcold.com.au). Achieving net-zero global emissions by 2050 is the absolute minimum required to to avoid the worst climate impacts. Australia is well positioned to contribute to this global challenge. We have a well-developed industrial base, skilled workforce and vast sources of renewable energy. But Australia must also pursue far more substantial emissions reduction. Under the Paris deal, we’ve pledged to reduce emissions by 26-28% between 2005 and 2030\. Given the multiple and accelerating climate threats Australia faces, we must scale up this pledge. We must also display the international leadership and collaboration required to set Earth on a safer climate trajectory. Our report recommends Australia immediately do the following: 1. join global leaders in increasing actions to urgently tackle and solve climate change 2. develop strategies to meet the challenges of extreme events that are increasing in intensity, frequency and scale 3. improve our understanding of climate impacts, including tipping points and the compounding effects of multiple stressors at global warming of 2℃ or more 4. systematically explore how food production and supply systems should prepare for climate change 5. better understand the impacts and risks of climate change for the health of Australians 6. introduce policies to deliver deep and rapid cuts in emissions across the economy 7. scale up the development and implementation of low- to zero-emissions technologies 8. review Australia’s capacity and flexibility to take up innovations and technology breakthroughs for transitioning to a low-emissions future 9. develop a better understanding of climate solutions through dialogue with Aboriginal and Torres Strait Islander peoples – particularly strategies that helped people manage Australian ecosystems for tens of thousands of years 10. continue to build adaptation strategies and greater commitment for meeting the challenges of change already in the climate system. We don’t have much time to avert catastrophe. This decade must be transformational, and one where we choose a safer future. --- **[The report](https://www.science.org.au/warmerworld?ref=boilingcold.com.au) upon which this article is based, The Risks to Australia of a 3°C Warmer World, was authored and reviewed by 21 experts.* --- *Main image: Cattle during a drought, Kerry Queensland. Source: [Josh Withers](https://unsplash.com/@joshwithers?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) on [Unsplash](https://unsplash.com/s/photos/drought-australia?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText)* --- ### Shell predicts free gas forever for Gorgon and Prelude LNG URL: https://www.boilingcold.com.au/shell-predicts-free-gas-forever-for-gorgon-and-prelude-lng/ Last updated: 2026-04-28T08:09:10.000Z *ANALYSIS* Dutch giant Shell forecasts it will never pay Australia for oil and gas extracted for the Gorgon and Prelude LNG projects that it can sell for up to almost $4 billion a year. Shell owns 25 per cent of the Chevron-operated $US54 billion Gorgon LNG project and 67.5 per cent of its Prelude floating LNG project that are both liable to pay Petroleum Resources Rent Tax. Shell’s outlook of no PRRT payments is recorded in [notes to the 2020 financial accounts](https://reports.shell.com/annual-report/2020/consolidated-financial-statements/notes/16-taxation.php?ref=boilingcold.com.au) for the global group released last week. The note may not be apparent to a layperson, but the meaning is plain to an accountant: free gas forever from Australia. PRRT is payable when a project’s income exceeds losses, and this would not be expected for some years after production starts due to the enormous cost of LNG projects. To keep track of future PRRT payments, accountants recognise accumulated losses as a deferred tax asset and accumulated income as a deferred tax liability. Eventually, income should exceed losses, and PRRT is then paid at a rate of 40 per cent of the profit. However, Shell’s accounts state that “deferred tax assets are recognised only to the extent it is considered probable that those assets will be recoverable.” In other words, the accountants cannot record or “recognise” losses as a deferred tax asset if it is unlikely that Shell will pay any tax. Shell accumulated “unrecognised” PRRT losses of $US39.4 billion to June 2020 and “based on business forecasts at existing commodity price levels, and the annual augmentation of the unused PRRT losses, this amount is expected to increase in the near future.” While Shell’s assessment at the end of 2020 that it would never pay PRRT may have been based on the relatively low oil and gas prices of 2020, the multinational made the [same assessment in its 2019 accounts](https://reports.shell.com/annual-report/2019/consolidated-financial-statements/notes/16-taxation.php?ref=boilingcold.com.au) before the pandemic hit commodity prices. It is possible that very buoyant gas prices in the future could alter Shell’s assessment. *Boiling Cold* calculated that Shell’s share of production from the Gorgon and Prelude projects at full capacity was worth about $2.4 billion at 2020 prices and $3.8 billion in the more normal oil and gas market of 2019 (*see spreadsheet link below*). Despite the pandemic, [Shell made $US4.8 billion ($6.3 billion) profit in 2020](https://www.reuters.com/article/uk-shell-results-idUSKBN2A40S3?ref=boilingcold.com.au). [![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2025/10/CTA-industry-energy-climate.png)](https://www.boilingcold.com.au/support/) ## Completely free is entirely legal A Shell spokesperson said the company complies with all its legal and tax obligations and is committed to paying the right amount of tax under the letter and the spirit of the law in all countries it operates in. > “Despite being in a heavy investment phase and net cash flow deficit, the Shell Australia Group made total taxation payments of around $5.8 billion during the last 10 years ended 31 December 2019,” the spokesperson said. Much of this would be company tax that, like PRRT, is applied as a proportion of a calculated profit. But the two taxes are levied for very different reasons. All companies in Australia are liable to pay company tax, at 40 per cent of profit for large companies like Shell, for the same reason individuals pay income tax: to contribute to the community they are part of. PRRT is an additional payment for a business input: oil and gas in the ground owned by the Australian Government that companies extract for profit. The Australian Government does not give free meat to butchers or free flour to bakers, but with the PRRT, it gives away vast quantities of gas to multinational LNG makers. Juan Carlos Boué, counsel at international law firm Curtis that advises countries on oil and gas policy, said the poor PRRT revenue outlook was not a recent phenomenon. > “Even before the pandemic, the likelihood of these projects ever paying taxes was recognised to be essentially zero by the Australian Government itself,” Boué said. > “Shell is saying nothing that the Government and everybody in the know has not been aware of for some time now.” The 2017 [Callaghan review into the PRRT](https://treasury.gov.au/sites/default/files/2019-03/R2016-001%5FPRRT%5Ffinal%5Freport.pdf?ref=boilingcold.com.au) concluded that at an oil price of $US65 a barrel, “most of the major LNG projects do not pay any PRRT.” The main reason projects do not pay PRRT is that the legislation increases or “augments” accumulated losses each year. “Simply put, the uplift rate applicable to the unrecovered expenditure is so great that, with the miracle of compound interest, there is just no way for project net income to catch up, ever,” Boué said. The chance of Australia receiving payment for gas used at Gorgon and Prelude was further reduced by [cost overruns of about 45 per cent ](https://www.boilingcold.com.au/after-prelude-few-win-from-shells-floating-lng/)at both projects and years of schedule delays that allowed losses to escalate further. ## Prospects for change? After the Callaghan Review, the Government [reduced the most excessive uplift](https://jws.com.au/en/insights/articles/2018-articles/proposed-changes-to-prrt-system-from-1-july-2019?ref=boilingcold.com.au) for some exploration expenditure from 15 per cent above the long term bond rate to 5 per cent above the LTBR. This change was effective from mid-2019, so it would be allowed for in Shell’s forecast. The Government is still considering one change to PRRT: gas transfer pricing. This determines the notional price attributed to raw gas before it enters an LNG plant, and this price is used to calculate PRRT payable. The review commenced in November 2018 and is not yet complete. > The Shell spokesperson said the company believed for taxes, “it is up to governments to set their policies and the rules for individual and business taxes.” “Governments make deliberate fiscal policy decisions on tax rates, reliefs, exemptions and allowances or disallowances,” the spokesperson said. Oil and gas lobby group APPEA, which Shell is a member of, last week called for the Government to “[close out the PRRT gas transfer pricing review without change](https://www.appea.com.au/all%5Fnews/the-oil-and-gas-industry-can-be-a-key-plank-to-covid-19-economic-recovery-and-reducing-australias-emissions/?ref=boilingcold.com.au).” In WA, Shell also owns one-sixth of the North West Shelf LNG project, and in Queensland it has 50 per cent of Arrow Energy and a majority take in QGC LNG. These gas projects are not subject to PRRT but other regimes to pay for the oil and gas extracted. Each company owning equity in a project subject to PRRT could have different exposures to paying the tax as some accumulated losses can be shared with other projects, and this opportunity varies for each company. --- *Supporting calculations:* [ Shell free gas calculation.xlsx Microsoft Excel Workbook Boiling Cold ![](https://p.sfx.ms/icons/v2/Large/Xls.png) ](https://1drv.ms/x/s!Au2z%5FJ8j1nMHhpZzrDAN7c0bJO7aWQ?e=ZWnxHq&ref=boilingcold.com.au) --- ### Why net-zero emissions pledges should be met with scepticism URL: https://www.boilingcold.com.au/why-net-zero-emissions-pledges-should-be-met-with-skepticism/ Last updated: 2021-12-27T13:54:03.000Z [Oliver Miltenberger](https://theconversation.com/profiles/oliver-miltenberger-797703?ref=boilingcold.com.au), [The University of Melbourne](https://theconversation.com/institutions/the-university-of-melbourne-722?ref=boilingcold.com.au) and [Matthew D. Potts](https://theconversation.com/profiles/matthew-d-potts-1215756?ref=boilingcold.com.au), [University of California, Berkeley](https://theconversation.com/institutions/university-of-california-berkeley-754?ref=boilingcold.com.au) [Hundreds of companies](https://sciencebasedtargets.org/companies-taking-action?ref=boilingcold.com.au), including major emitters like [United Airlines](https://www.united.com/ual/en/us/fly/company/global-citizenship/environment/100-percent-green.html?ref=boilingcold.com.au), [BP](https://www.bp.com/en/global/corporate/news-and-insights/press-releases/bernard-looney-announces-new-ambition-for-bp.html?ref=boilingcold.com.au) and [Shell](https://www.shell.com/media/news-and-media-releases/2021/shell-accelerates-drive-for-net-zero-emissions-with-customer-first-strategy.html?ref=boilingcold.com.au), have pledged to reduce their impact on climate change and reach net-zero carbon emissions by 2050\. These plans sound ambitious, but what does it actually take to reach net-zero and, more importantly, will it be enough to slow climate change? As [environmental policy](https://vcresearch.berkeley.edu/faculty/matthew-potts?ref=boilingcold.com.au) and [economics researchers](https://www.climatecollege.unimelb.edu.au/profiles/oliver-miltenberger?ref=boilingcold.com.au), we study how companies make these net-zero pledges. Though the pledges make great press releases, net-zero is more complicated and potentially problematic than it may seem. ### What is ‘net-zero’ emissions? The gold standard for reaching net-zero emissions [looks like this](https://ghgprotocol.org/corporate-standard?ref=boilingcold.com.au): A company identifies and reports all emissions it is responsible for creating, it reduces them as much as possible, and then – if it still has emissions it cannot reduce – it invests in projects that either prevent emissions elsewhere or pull carbon out of the air to reach a “net-zero” balance on paper. The process [is complex and still largely unregulated and ill-defined](https://www.carbontrust.com/news-and-events/insights/net-zero-an-ambition-in-need-of-a-definition?ref=boilingcold.com.au). As a result, companies have a lot of discretion over how they report their emissions. For example, [a multinational mining company](https://www.riotinto.com/en/sustainability/climate-change?ref=boilingcold.com.au) might count emissions from extracting and processing ore but not the emissions produced by transporting it. Companies also have discretion over how much they rely on what are known as offsets – the projects they can fund to reduce emissions. The [oil giant Shell](https://www.shell.com/promos/business-customers-promos/download-latest-scenario-sky/%5Fjcr%5Fcontent.stream/1530643931055/eca19f7fc0d20adbe830d3b0b27bcc9ef72198f5/shell-scenario-sky.pdf?ref=boilingcold.com.au), for example, projects that it will both achieve net-zero emissions by 2050 and continue to produce high levels of fossil fuel through that year and beyond. How? It proposes to offset the bulk of its fossil-fuel-related emissions through massive nature-based projects that capture and store carbon, such as forest and ocean restoration. In fact, Shell alone plans to [deploy more of these offsets by 2030](https://www.reuters.com/article/us-shell-carbon-offsets-graphic-idUSKBN2AC1CR?ref=boilingcold.com.au) than were available globally in 2019. Environmentalists may welcome Shell’s newfound conservationist agenda, but what if other oil companies, the airline industries, the shipping sectors and the U.S. government all propose a similar solution? Is there enough land and ocean realistically available for offsets, and is simply restoring environments without fundamentally changing the business-as-usual paradigm really a solution to climate change? ![Voluntary carbon offsets are a growing market](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/03/image-9.png) ### Concerns about voluntary carbon markets Outside of [compliance emissions markets](https://www.epa.gov/emissions-trading-resources/what-emissions-trading?ref=boilingcold.com.au), which primarily focus on government regulation in the [energy sector](https://ec.europa.eu/clima/policies/ets%5Fen?ref=boilingcold.com.au), voluntary markets create most of the offsets that are used to reach net-zero. Voluntary markets are organized and operated by a diverse range of groups where anyone can participate. Have you ever seen the option to offset your flight? That offset probably happens through a voluntary carbon market. The activities that produce the offsets include projects like [forestry](https://climatetrust.org/forest-carbon-projects-faq/?ref=boilingcold.com.au) and [ocean management](https://www.thebluecarboninitiative.org/?ref=boilingcold.com.au), waste management, agricultural practices, fuel switching and renewable energy. As the name implies, they are voluntary and therefore largely unregulated. Because of the wave of net-zero pledges and subsequent demand for offsets, voluntary carbon markets are under pressure to expand quickly. [A task force](https://www.iif.com/tsvcm?ref=boilingcold.com.au) launched by United Nations Special Envoy on Climate Action Mark Carney and involving several major companies released a [sweeping blueprint](https://www.iif.com/tsvcm/Main-Page/Publications/ID/4254/Taskforce-Establishes-Core-Carbon-Principles-Publishes-Roadmap-for-Scaling-Voluntary-Carbon-Markets?ref=boilingcold.com.au) at Davos 2021 that predicts voluntary carbon markets need to grow fifteenfold over the next decade. It suggests that the net-zero surge represents one of the largest commercial opportunities of our time – prompting keen interest from [investors](https://www.blackrock.com/corporate/investor-relations/blackrock-client-letter?ref=boilingcold.com.au) and [big business](https://www.uschamber.com/series/above-the-fold/update-the-chambers-approach-climate?ref=boilingcold.com.au). It also identifies and proposes solutions to some persistent challenges and critiques of voluntary carbon offset markets. ![Projects commonly found in voluntary carbon markets](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/03/image-10.png) Some critics of the blueprint argue that it [overlooks deeper problems](https://carbonplan-assets.s3.amazonaws.com/docs/Offset-Task-Force-Comment-Letter-01-05-2021.pdf?ref=boilingcold.com.au) rooted in the overall reliance on and effectiveness of voluntary carbon markets as a solution. Though there is historical [evidence of misuse](https://features.propublica.org/brazil-carbon-offsets/inconvenient-truth-carbon-credits-dont-work-deforestation-redd-acre-cambodia/?ref=boilingcold.com.au) and [plenty of criticism](https://greenfinanceobservatory.org/wp-content/uploads/2021/01/Scaling-up-GFO-analysis-final4.pdf?ref=boilingcold.com.au), voluntary carbon markets are not inherently bad or useless in the pursuit of climate targets. In fact, quite the opposite. Some voluntary carbon market projects, in addition to [mitigating climate change](https://www.edf.org/media/carbon-offsets-when-done-right-can-reduce-emissions-and-support-paris-agreement-edf-and-engie?ref=boilingcold.com.au), provide [other benefits](https://doi.org/10.1080/14693062.2020.1724070?ref=boilingcold.com.au), such as improvements to biodiversity habitats, water quality, soil health and socioeconomic opportunities. However, there are real concerns about the ability of voluntary markets to legitimately deliver what they promise. Common concerns include [questions about the permanence of the projects](https://news.berkeley.edu/2019/05/07/new-paper-states-cap-and-trade-program-is-falling-short-of-goals/?ref=boilingcold.com.au) for storing carbon long term, verifying that offsets actually reduce emissions beyond a business-as-usual scenario and confirming that credits are not being used more than once. These and other challenges expose voluntary carbon markets to potential manipulation, greenwashing, unintended consequences and, regrettably, failure to achieve their purpose. [It’s getting better](http://voluntarycarbonmarket.org/?ref=boilingcold.com.au), but over-reliance on this method for counterbalancing emissions does risk some entities’ using offsets as a [right to pollute](https://www.nrdc.org/stories/should-you-buy-carbon-offsets?ref=boilingcold.com.au). ![Life cycle of a forest carbon credit project](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/03/image-11.png) ### Can global ecology meet the demand? Voluntary carbon markets can improve landscapes and help make up for unavoidable emissions. However, they cannot accommodate all of the developed world’s net-zero targets. Most of these initiatives have not yet started, yet emitters from developed countries are already seeking offsets outside their borders. This is raising concerns that wealthier companies may be placing the burden of their emissions onto poorer countries that can produce offsets cheaply, begging the notion of a newfound climate colonialism. Local communities may benefit from some environmental improvements or socioeconomic opportunities, but should economically developed polluters be forcing that decision? Beyond ethics, in statistical terms, there is simply not enough ecological capacity to offset the world’s emissions. Take the interest in using forests as offset solutions. There are around [3 trillion trees](http://dx.doi.org/10.1038/nature14967?ref=boilingcold.com.au) on Earth today with room for about [1 to 2.5 trillion more](http://doi.org/10.1126/science.aax0848?ref=boilingcold.com.au). The [Trillion Tree Initiative](https://trilliontreesinitiative.com/?ref=boilingcold.com.au), [1T program](https://www.1t.org/?ref=boilingcold.com.au), [Trillion Trees](https://trilliontrees.org/?ref=boilingcold.com.au), and the CEO of [Reddit](https://www.independent.co.uk/climate-change/news/reddit-yishan-wong-trees-b1803102.html?ref=boilingcold.com.au), among others, aim to plant a trillion trees each. From just a few examples, there is already a paradoxical impasse. Offsets can realistically do only so much for reaching climate targets. That is why the focus must turn toward reducing rather than offsetting global emissions. Voluntary carbon markets serve a critical role as innovation sandboxes for creative offset solutions, and they are mobilizing the private sector to act; however, they must be limited. While some prominent organizations are pursuing net-zero, most [businesses and governments](https://climateactiontracker.org/?ref=boilingcold.com.au) have not yet pledged, let alone developed, clear and plausible road maps to meet targets in line with a 2050 net-zero global economy. ![2100Warming Projections](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/03/image-12.png) ### The needed goal: A negative net [The Intergovernmental Panel on Climate Change suggests](https://www.ipcc.ch/site/assets/uploads/sites/2/2019/06/SR15%5FFull%5FReport%5FLow%5FRes.pdf?ref=boilingcold.com.au) that the world can keep global warming in check if emissions are cut in half by 2030, compared to 2010 levels, and reach net-zero by midcentury. However, it also states a need for greenhouse gas removal beyond net-zero emissions targets. The real act of climate cleanup begins at net-negative emissions for all greenhouse gases. Only then will their atmospheric concentrations finally begin shrinking. That feat will require more renewable energy, widespread infrastructure and transportation developments, improved land management and investments in carbon capturing activities and technologies. While net-zero is a critical step toward addressing climate change, it must be achieved smartly. And, importantly, it can’t be the end goal. --- ![The Conversation](https://counter.theconversation.com/content/156386/count.gif?distributor=republish-lightbox-basic) *[Oliver Miltenberger](https://theconversation.com/profiles/oliver-miltenberger-797703?ref=boilingcold.com.au), Ph.D. Candidate in Environmental Economics, [The University of Melbourne](https://theconversation.com/institutions/the-university-of-melbourne-722?ref=boilingcold.com.au) and [Matthew D. Potts](https://theconversation.com/profiles/matthew-d-potts-1215756?ref=boilingcold.com.au), Professor, S.J. Hall Chair in Forest Economics, [University of California, Berkeley](https://theconversation.com/institutions/university-of-california-berkeley-754?ref=boilingcold.com.au)* *This article is republished from [The Conversation](https://theconversation.com/?ref=boilingcold.com.au) under a Creative Commons license. Read the [original article](https://theconversation.com/why-companies-net-zero-emissions-pledges-should-trigger-a-healthy-dose-of-skepticism-156386?ref=boilingcold.com.au).* --- *Main image: Jarrah trees. Source: [Terri Sharp, pixabay](https://pixabay.com/users/terrianneallen-11192675/?ref=boilingcold.com.au)* --- ### Big WA polluters fail green investment test URL: https://www.boilingcold.com.au/big-wa-polluters-fail-green-investment-test/ Last updated: 2021-12-27T01:09:19.000Z WA's biggest carbon polluter Chevron has comprehensively failed a test of preparedness for a net-zero emissions future, and other WA companies did little better, placing themselves at a disadvantage with the world's foremost investors. Climate Action 100+ [assessed 159 companies worldwide](https://www.climateaction100.org/progress/net-zero-company-benchmark/?ref=boilingcold.com.au) for alignment with restricting global warming to 1.5℃ and a net-zero emissions future. The benchmarking was done for 570 investors that manage $US54 trillion ($70 trillion) of assets. Australian Super ESG director Andrew Gray said the assessment provided a baseline for investors to measure companies' progress in addressing climate change. > "It creates much-needed clarity for both investors and companies in climate change engagement, which will enable better management of the investment risks and opportunities from climate change," Gray said. *Boiling Cold* considered 10 of the benchmarked companies with a substantial presence in WA. None performed well against all nine measures or fully disclosed how they would achieve net-zero emissions by 2050. ![Climate Readiness of companies operating in WA assessed by Climate Action 100+: Adbri, BHP, BP, Chevron, ExxonMobil, Shell, Santos, South32 and Woodside.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/03/image-7.png) **Climate Readiness of companies operating in WA.** *Source: data: Climate Action 100+, Graphic: Boiling Cold* Chevron had the worst benchmark performance of the 10 companies. The US-major's Gorgon LNG project is WA's biggest greenhouse gas emitter with 9.0 million tonnes in the 12 months to June 2019, according to Clean Energy Regulator. The performance was made worse by the [failure of its $3.1 billion carbon storage effort to operate reliably](https://www.boilingcold.com.au/regulator-limits-chevrons-troubled-gorgon-co2-injection-to-one-third-capacity/). Chevron's Wheatstone LNG project emitted 4.1 million tonnes. Australia's largest foreign investor has no ambition to have net-zero emissions by 2050 or any targets to reduce emissions over the three time frames assessed: to 2025, 2035 and 2050, according to Climate Action 100+. Fellow American ExxonMobil, which owns 25 per cent of Gorgon, faired almost as poorly in the assessment. Adbri, formerly Adelaide Brighton, that has a lime plant in suburban Munster was judged as harshly as ExxonMobil. Adbri's coal-fired plant operated under its Cockburn Cement brand emits the equivalent of 950,000 tonnes of CO2 a year, as well as a range of gases and particulates that [plague nearby residents](https://www.boilingcold.com.au/coal-and-dust-plagues-two-southern-perth-suburbs/). The other companies with a significant WA footprint made a level of commitment to reducing their direct, or Scope 1 and 2, emissions, but none had substantial ambitions to tackle the Scope 3 emissions of their customers. BlackRock, the world's largest asset manager, is a member of Climate Action 100+ and a substantial equity owner in Australian-listed companies. The New York-based firm owns more than five per cent of Woodside, Santos, BHP and South 32 on behalf of its clients. In January, BlackRock chief executive Larry Fink [wrote to the chief executives of companies BlackRock is invested in](https://www.blackrock.com/corporate/investor-relations/larry-fink-ceo-letter?ref=boilingcold.com.au) and asked them to "disclose a plan for how their business model will be compatible with a net-zero economy." > "Companies that are not quickly preparing themselves will see their businesses and valuations suffer," Fink said. Climate Action 100+ judged that only BHP and Santos had acceptable decarbonisation strategies to achieve their emissions reduction targets. Woodside, which operates the North West Shelf and Pluto LNG plants that together emit 11.5 million tonnes a year, was assessed to have no strategy to meets its climate goals. South32, operator of the coal-fired Worsley alumina plant emitting 3.6 million tonnes a year, received the same fail mark on strategy. While most of the companies operating in WA had some emissions reductions targets and two had plans to meet those targets, Climate Action 100+ concluded none planned to spend their money in a way compatible with limiting global warming to 1.5℃. Put simply; the companies had not put their money where their mouth was, with corporate spin running ahead of corporate plans. Australasian Centre for Corporate Responsibility climate director Dan Gocher said none of the 12 Australian companies assessed by Climate Action had capital spending plans consistent with the Paris Agreement's goals. "BHP, Origin Energy, Santos and Woodside all plan to significantly increase fossil fuel production over the next 5 to 10 years," Gocher said. ACCR executive director Brynn O'Brien said the benchmarks marked the end of greenwashing. "It is cast-iron proof that the world's largest emitters are failing to materially rein in their impact on the planet," O'Brien said. > "It is a reality check…there is no longer room for praising company posturing and losing sight of the need for genuine progress." The Climate Action 100+ benchmarking did not cover the owners of some significant WA carbon polluters: - Inpex - Ichthys LNG project (WA & NT): 6.2 million tonnes - Synergy – coal and gas-fired power stations: 5.9 million tonnes (ineligible as state-owned) - Alcoa – South West alumina: 4.2 million tonnes - Citic – Sino Iron magnetite: 1.3 million tonnes - Yara - Yara Pilbara: 1.0 million tonnes --- ### BHP’s Geraldine Slattery leads pack to replace Peter Coleman at Woodside URL: https://www.boilingcold.com.au/bhps-geraldine-slattery-leads-pack-to-replace-peter-coleman-at-woodside/ Last updated: 2022-01-01T09:59:43.000Z *ANALYSIS* BHP petroleum boss Geraldine Slattery is in serious contention to lead Woodside*, Boiling Cold* understands, with the board keen to have Peter Coleman's replacement appointed as soon as possible. Slattery has not been high on the speculation list in Perth, perhaps because she is less well known than the other contenders. The Ireland-raised holder of a physics degree last worked in WA nine years ago when she led BHP's Australian production unit. In December, Coleman announced he would retire in the second half of this year after a decade at the gas giant's helm. In the same six months, Woodside plans to make the company-defining decision on the $US11.4 billion ($14.7 billion) Scarborough LNG project. An early changeover would allow the new chief executive to be involved with the decision that will shape their tenure: whether it is ensuring Scarborough is a success or urgently determining what is next if the LNG project is not viable. *Boiling Cold* understands the selection process is unfinished with Shell's Zoe Yujnovich under consideration, Santos boss Kevin Gallagher supported by some investors, and Woodside's Meg O'Neill the lead internal candidate. Credit Suisse head of energy research Saul Kavonic outlined some of the boxes the Woodside board's choice must tick. > "The market would like to see a new CEO who can navigate the complex joint ventures Woodside is in, sell a strong narrative to investors and stakeholders, cut costs, and revitalise commercial capability and culture within the organisation," Kavonic said. The gas giant is not what it was on the Australian stock exchange and is now ranked 16th by market capitalisation. The $23 billion company is worth more than poker machine-maker Aristocrat Leisure but less than shopping finance market darling Afterpay. Even if Scarborough goes ahead, Woodside's new leader must quickly turn to what is next. Ever since the first gas from the North Rankin platform arrived onshore 37 years ago, Woodside has mastered selling gas from the Carnarvon Basin to WA and the world. However, apart from a handful of floating oil production assets, it has failed to leave its birthplace on the Burrup Peninsula. The Browse, Kitimat, and Sunrise LNG projects remain optimistically on the books, and there is a long list of foundered foreign flings. The avalanche of Woodside advertising everywhere in WA is a sign of weakness, not of strength, as Woodside tries to maintain government backing for a business model with eroding investor and community support. Woodside chair Richard Goyder understands that the perfect choice to lead Woodside does not exist. > "That person looks like – with apologies to anyone – Jesus Christ. And then you work back from that," [Goyder told the AFR](https://www.afr.com/chanticleer/goyder-hunts-his-own-personal-jesus-for-woodside-20201208-p56log?ref=boilingcold.com.au)**.** At a minimum, the Woodside board needs a leader who keeps the complex operations going, deals with Scarborough, devises a new future in a carbon-constrained world, and builds a flexible, open and skilled organisation. Here is a brief form guide in rough order of how the contenders are understood to line up coming into the final straight, with the new blood leading the inhouse hopefuls. ## The outsiders **Geraldine Slattery** *BHP petroleum operations president since 2019, Houston USA* Slattery has been on the BHP executive leadership team for two years. This participation in determining a resource company's strategy to adapt to climate change would be invaluable in plotting where Woodside should go after LNG. Intimate knowledge of the North West Shelf and Scarborough, through BHP's interests, and Pluto that is slated to process Scarborough gas, gives Slattery a better understanding of Woodside's operation than the other external candidates. However, Slattery's involvement with Woodside could see a near repeat of a skirmish 10 years ago when Coleman was appointed. Coleman's previous employer ExxonMobil told Woodside he was [not welcome at negotiations where he has inside knowledge](https://www.smh.com.au/business/exxonmobil-bans-boss-of-woodside-20110525-1f4cx.html?ref=boilingcold.com.au). The project was Scarborough, which at the time was an ExxonMobil-led joint venture with BHP seeking to send its gas to Woodside's North West Shelf. A decade later, Woodside has bought Exxon Mobil out of Scarborough, but the gas is still undeveloped. If BHP and Woodside are in near agreement on what should be done, a move to Woodside by Slattery may not be as controversial as Coleman's. Slattery [presented her thinking about the oil and gas industry to investors](https://www.bhp.com/media-and-insights/reports-and-presentations/2019/11/petroleum-briefing/?ref=boilingcold.com.au) in November 2019, a few months before the pandemic sent oil and gas prices into freefall. [BHP doubles down on high margin oil and gasWhile BHP’s dominant mining arm wants to be seen to be greener its highly profitable petroleum arm is not slowing down.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/02/171114_PyreneesVenture_HQ-reduced.jpg)](https://www.boilingcold.com.au/bhp-doubles-down-on-high-margin-oil-and-gas/) Pre-COVID Slattery was bullish about hydrocarbons. > "In any plausible future scenario, we believe oil and advantaged gas will be attractive for decades to come," Slattery said. "Advantaged gas" was resources that were low cost due to access to nearby infrastructure or premium markets. The Woodside board will take great interest in whether Slattery's market view has changed and if she considers Scarborough gas advantaged. **Zoe Yujnovich** *Shell executive vice president for conventional oil and gas since 2019, The Hague The Netherlands* Yujnovich joined Shell in 2014 from Rio Tinto to manage the Dutch company's oil sands operation in Canada. She then chaired Shell Australia for 2½ years from early 2017. During her return to her home city, Yujnovich was appointed president of oil and gas industry lobby group APPEA and became well known at the top end of town. Like Slattery, Yujnovich will understand the North West Shelf asset well. The UWA mechanical engineering graduate now presides over Shell's global portfolio of conventional oil assets from corporate headquarters in the Netherlands. Compared to Slattery, Yujnovich has stronger connections in Australia but has worked in oil and gas for just seven years, none of which has been at the level of a direct report to the chief executive. **Kevin Gallagher** *Santos chief executive since 2016, Adelaide SA* Gallagher worked for Woodside for thirteen years and rose to manage the North West Shelf project. He left in October 2011, six months after Coleman got the top job, to become chief executive of Clough. For the past five years, the Glaswegian has led Santos and won plaudits from many investment analysts for his energy and cost-cutting. The Adelaide company has a more diverse set of assets than its Perth-based rival, and while Santos's market capitalisation is less than Woodside's, the gap in production has closed. Gallagher is now aggressively pushing two gas projects: the Barossa field to the Darwin LNG plant and the contentious Narrabri onshore field in NSW. [Santos’ dirty big $2B Barossa betBarossa would produce Australia’s dirtiest LNG and if other companies will not back it Santos has a very expensive problem.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/08/Bayu-Undan.jpg)](https://www.boilingcold.com.au/santos-dirty-big-2b-barossa-bet/) The Santos board would likely be unimpressed if their chief executive left with so much in play. ## The Woodsiders **Meg O'Neill** *Woodside executive vice president development and marketing since 2018, Perth WA* O'Neill carries an enormous burden at Woodside with responsibility for getting the Scarborough project approved and built, as well as inheriting the marketing role when Reinhardt Matisons retired in mid-2020. The larger Browse project falling away only adds to the pressure to sanction Scarborough, as Woodside has no other credible growth options of significance to spruik to investors. [Inside Woodside’s hall of mirrors Browse LNG is deadCost, climate concerns and delay have killed Woodside’s Browse LNG project and now it must negotiate with its old foes, the North West Shelf partners, to ensure Scarborough is developed.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/07/Mia-Yellagonga--Perth--Western-Australia-web-top-crop.jpg)](https://www.boilingcold.com.au/woodside-browse-lng-is-dead/) Effectively second-in-command at Woodside, O'Neill, like her current boss, was a long-term ExxonMobil person before coming to Perth. The two worked together in Indonesia. When Coleman appointed O'Neill in 2018 he said she, chief financial officer Sherry Duhe and chief technology officer Stuart Gregory would be [potential candidates when he left](https://www.afr.com/companies/energy/woodside-petroleum-gets-fresh-blood-into-leadership-team-20180316-h0xjv7?ref=boilingcold.com.au) in four to five years. The changeover is happening now, just three years after Coleman's comment. With Duhe and Gregory lacking significant operational experience, O'Neill is the favourite internal candidate. **Sherry Duhe** *Woodside executive vice president and chief financial officer since 2017, Perth WA* Duhe came to Perth after 10 years at Shell. In three years with Woodside, she has impressed many, but the Louisiana native's career has been entirely in finance and planning. It would be an extraordinary move by the board to appoint to lead Woodside someone without experience in operations or project delivery. **Shaun Gregory** *Woodside executive vice president sustainability and chief technology officer since 2019, Perth WA* Gregory is almost a Woodside lifer with 25 years of service after a brief stint with BHP. The geophysicist has mainly worked on exploration and also led new technology and sustainability for eight years with ever-changing job titles. He is well-regarded, and his tech-savvy places him at the head of the pack in understanding what might come after LNG for Woodside. However, like Duhe, Gregory has little senior experience in some of the essential core functions of an oil and gas company. **Fiona Hick** *Woodside senior vice president operations since 2019, Perth WA.* Hick is a step down the hierarchy that large companies love, being a senior EVP, not an executive EVP. An odd arrangement to outsiders as Hick keeps the money machine running. The engineer was acting executive EVP for nine months when Meg O'Neill moved to take charge of developments but was pushed down a slot when the position became permanent. Some in Woodside may be concerned about her lack of international experience, but she is widely respected further down the ranks. Like Gregory, Hick has had most of her career with Woodside, starting in 2001\. Hick is young enough to be a contender at the next chief executive selection if she can gain broader experience under Coleman's successor. However, that would require the Woodside board to move away from decades of preferring outside expertise. *Woodside chief executives since headquarters moved from Melbourne to Perth in 1996:* - *John Akehurst (1996 – 2003): long term Shell employee then two years at Woodside before appointment* - *Don Voelte (2004 – 2011): 22 years at Mobil, then ARCO and Chroma* - *Peter Coleman (2011 – 2021): 27 years with ExxonMobil* Appointing a chief executive is the most important decision a company board makes. Woodside's directors have not this responsibility for a decade. The speed and scope of the energy transition underway and Woodside's current weakness of having just one large project in the queue makes the 2021 chief executive appointment a sink or swim moment for a company at the heart of corporate WA. --- *Correction: 22 March 12:45pm: Kevin Gallagher worked at Woodside for 13 years, not five as in the original article.* --- *Main image: Woodside headquarters Mia Yellagonga in Perth. Source: Woodside Energy Limited* --- ### Ten hurdles to Twiggy's green vision for FMG URL: https://www.boilingcold.com.au/ten-hurdles-to-twiggys-green-vision-for-fmg/ Last updated: 2023-09-04T00:29:33.000Z *ANALYSIS* When Andrew Forrest set FMG to eliminate carbon emissions from its vast Pilbara money machine in less than 10 years, the move was welcomed not only by environmentalists but also by hard-nosed investment analysts. Fortescue management made much of the company leading the industry with its [net-zero emissions by 2030 target](https://www.boilingcold.com.au/forrest-pushes-fmg-net-zero-emissions-2030/). However, without fantastic execution, a leading-edge can quickly become a bleeding-edge, with the first mover who went too fast haemorrhaging money. Apart from some east coast coal fanatics, Australian industry knows it must decarbonise. The stick is to avoid an inevitable carbon cost of some type, and the carrot is capturing new opportunities available only to the cleanest and greenest products. For Forrest, the prize is tackling the eight per cent of the world's greenhouse gas emissions from making steel. Green steel uses hydrogen made from renewable energy, not coal, to turn iron ore into steel. For a genuinely emissions-free product, steel mills must eliminate their own emissions and use iron ore mined without producing emissions. Forrest wants to tackle steel emissions on multiple fronts. FMG aims to not only eliminate emissions from its iron ore mining but produce the world's cheapest green hydrogen, develop technology for making green steel with low temperatures, and design ships that run on green ammonia. Forrest's success with FMG shocked naysayers who thought it would drown in debt. The knockers were influenced by losses many investors suffered from Forrest's Murrin Murrin nickel project that one analyst described as having "[significant technology risk](https://www.smh.com.au/business/fortescue-woes-stir-anaconda-memories-20120917-261r5.html?ref=boilingcold.com.au)." While FMG aims for a 100 per cent emissions reduction by 2030, conservative [BHP targets just 30 per cent](https://www.boilingcold.com.au/bhps-road-to-cleaner-mining/). There will be numerous challenges to overcome for FMG's bold green energy move to continue its success and not be a rerun of the Murrin Murrin horror movie. Here are ten of them. **1\. Electrify all you can; hydrogen is a last resort** An emissions-free vehicle harnesses renewable electricity to rotate wheels, but [how the energy makes the journey makes all the difference](https://theconversation.com/hydrogen-cars-wont-overtake-electric-vehicles-because-theyre-hampered-by-the-laws-of-science-139899?ref=boilingcold.com.au). For battery electric vehicles, five per cent of the energy is lost getting power to the charger. Another 10 per cent disappears in charging and discharging the battery, and five per cent goes to the inefficiency of powering the vehicle. Eighty per cent of the energy generated by wind or solar is left to move the car. Hydrogen is a different story. Making hydrogen uses 25 per cent of the original energy, 10 per cent is lost in compressing and transporting it, another 25 per cent is used in the hydrogen fuel cell, and some more in powering the car. Less than 40 per cent of the original renewable energy moves the vehicle. So a hydrogen vehicle consumes twice the green electricity of a battery one. That means more solar panels, more wind turbines, more expense. **2\. Minimise storage with wind** Whether green electricity is stored in lithium-ion batteries or by producing hydrogen, it is expensive. To minimise that storage cost a 24-hour operation without fossil fuels needs around the clock green power, which means wind and lots of it. Solar panels on any FMG site in the Pilbara would be effective, but wind is different. The enormous amount of wind power FMG needs requires the right location, massive turbines to achieve high-capacity factors and a vast area to space the turbines over. Access to that much land requires years of environmental studies and approvals, as well as agreements with indigenous groups. If only someone had started this work earlier? [$50B Pilbara energy hub targets 10M tonnes a year of green ammoniaThe giant $50B Asian Renewable Energy Hub proposed for WA’s Pilbara has upsized and switched from providing power to make green ammonia, in Australia’s most ambitious hydrogen play.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/10/180508_AREH_Photomontage_Site-E_Final--1--reduced.jpg)](https://www.boilingcold.com.au/pilbara-energy-hub-targets-10m-tonnes-a-year-of-green-ammonia/) The Asian Renewable Energy Hub is offering at least three gigawatts of power to the local market on top of its own ambitions to manufacture ammonia. The Hub could soon have a new investor interested in building a 250km transmission line to Port Hedland. **3\. A 2030 target affects business decisions now** FMG is in the final stages of gaining approvals to build a $250 million gas-fired [165-megawatt power station](https://www.der.wa.gov.au/our-work/licences-and-works-approvals/lwa-applications/item/14390-w6516-2021-1?ref=boilingcold.com.au) that will emit about 670,000 tonnes of CO2 a year. The station could be up and running by mid-2022\. It will support the troubled $3.8 billion Ironbridge magnetite project that is paused for reassessment after cost and schedule blowouts. When an achievable schedule for Ironbridge is determined, the station may only have about seven years to operate before net-zero emissions in 2030. Whether the power station plans are changed during the reassessment of Ironbridge will be the first test of FMG's commitment to its 2030 goal. Conversation Council of WA director Piers Verstegen said FMG should not build the station. "That is the kind of action that would demonstrate that the company is truly serious about cutting its pollution and capturing the rapidly emerging market opportunities around carbon-neutral metals," Verstegen said. **4\. FMG is racing ahead of equipment manufacturers** FMG's diesel haul trucks produce about 25 per cent of its emissions, and the miner consumes about 640 million litres of diesel a year. Eliminating this diesel use is FMG's biggest challenge. Fortescue chief executive Elizabeth Gaines said the next big fleet replacement in 2026 required decisions in 2024 and 2025. However, some big manufacturers are operating to a different timetable. Komatsu is only starting the [development of hydrogen-powered haul trucks](https://asia.nikkei.com/Business/Engineering-Construction/Komatsu-aims-for-lead-in-hydrogen-powered-mining-trucks?ref=boilingcold.com.au) this year for practical use in 2030. In partnership with Williams Advanced Engineering, Anglo American aims to have a hydrogen fuel cell-powered haul truck [operating in South Africa by June](https://im-mining.com/2020/09/17/anglo-americans-hydrogen-mining-truck-back-track-h1-2021-first-motion/?ref=boilingcold.com.au). FMG is testing large batteries in haul trucks on the same schedule. The miners can accelerate progress with their own trials, but eventually the original equipment manufacturers like Komatsu and Caterpillar need to incorporate the technology in mass-manufactured units. Any manufacturer committing in three to four years to supply hydrogen-fuelled haul trucks is likely to want its customer to take much more of the performance risk than for a conventional warranted diesel haul truck. Locomotive manufacturers will have a similar outlook. **5\. Iron ore may have to be mined differently** BHP sees other technologies becoming viable before hydrogen-driven trucks. [BHP’s road to cleaner miningHydrogen is at the back of the queue in BHP’s efforts to decarbonize mining, after cleaner electricity, in-pit crushing and trolley-assist trucks.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/09/171113_NewmanTruck_HQ-cropped-reduced.jpg)](https://www.boilingcold.com.au/bhps-road-to-cleaner-mining/) For BHP chief executive Mike Henry, one option is to reduce haul truck use with in-pit crushing. Instead of hauling every tonne of iron ore out of the pit, trucks ferry loads to a nearby crusher, and an electrically-driven conveyor does the rest of the work. Mining iron ore with no carbon emissions will require more than replacing diesel equipment with hydrogen kit. Every aspect of the pit to port process will be assessed for optimisation. **6\. Don't distract the money machine** This decade for FMG is like NASA race for the moon in the 1960s, but with one difference. The moon was NASA's core business, but FMG still has its original job of shipping iron ore every day, as well as developing and deploying new technology on a vast scale. The early years of desktop studies and trials should not affect operations. However, in the second half of the decade, the deployment of novel technology could interfere with the smooth operation of the mining that is bankrolling the shift. **7\. The final cuts will be the hardest** FMG could struggle to eliminate the most difficult emissions, particularly maintaining power when the wind is occasionally low for a few cloudy days. The current gas pipelines, diesel tanks and power stations are likely to be still needed occasionally. It may not be often, but when they are used, it could mean the difference between production and shutdown. **8\. Start developing offsets now** "While you would never rule out offsets, it's not what we're planning," Forrest said. However, planning now might be required to ensure affordable offsets are available to FMG in 2030. Early movers will capture the cheapest abatement opportunities, a [2018 study of WA carbon abatement opportunities](https://www.reputex.com/wp-content/uploads/2018/11/REPUTEX-REPORT%5FCost-and-availability-of-offsetting-LNG-emissions-in-Western-Australia%5F1118.pdf?ref=boilingcold.com.au) showed. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/03/image-2.png) **Carbon abatement costs in WA.** Source: Reputex Woodside has been in the market for years, and [Shell acquired a WA carbon farming venture](https://www.boilingcold.com.au/shell-goes-carbon-farming-in-australia/) in 2020. FMG would be wise to prepare for not eliminating all carbon emissions, just in case. **9\. An open company culture is vital** In February, a 30 per cent budget blowout at FMG's Ironbridge magnetite cost widely respected chief operating officer Greg Lilleyman and two senior projects leaders their jobs. A move from shifting ore to processing it was a technical step out for FMG, so problems were likely, and many viewed the management cull as an overreaction. The complete replacement of fossil fuels throughout the operation in less than 10 years is an order of magnitude more challenging than Ironbridge. Tens of millions of dollars will be invested in technologies that are found not to work. After a brief investigation, great ideas will be found to be lacking and need to be killed. People need to be able to fail, or voice concerns about a proposal, without their careers being damaged. Quick and open communication will give FMG the feedback loops vital for rapid trialling and decision-making. **10\. Culture starts at the top** Forrest's drive is key to FMG achieving net zero emissions by 2030. However, strong leadership that provides a vision, resources and a challenging deadline can negatively affect the organisation. Canadian engineer Chris Haubrich looked at why projects were late and over budget in a [2014 study of more than 300 mining projects](https://click.mlsend.com/link/c/YT0xNjI0NDAwNzM5MTc2NTUxNzQ2JmM9ajd0NyZlPTczMTA4MzQ0JmI9NTI4NzA2ODU1JmQ9YTZlMWoxag==.EdXcRJl7UCfrSQn3iw8mr36-xMb9a4knqG1H4Hg9weA?ref=boilingcold.com.au). > "Once management decides they believe a project is viable, it is hard to change their minds," Haubrich concluded. "Pressure to advance a feasibility stage project to construction far outweighs the pressure to get the costs right." In the case of FMG, add the need to get technical feasibility and schedule right. In some aspects of FMG's race to net-zero emissions by 2030, the cautious tortoise willing to voice concerns will be more valuable than the hare that races ahead on shaky ground. Andrew Forrest told investment analysts the switch to green energy would be the biggest economic change in their lifetime. If FMG can get to net-zero emissions iron ore mining ahead of the pack and use that expertise to move into hydrogen more broadly, it is easy to believe FMG could be Australia's biggest company in 2030. Fingers crossed. --- *Main image: Andrew Forrest in the Pilbara. Source: Fortescue Metals Group Limited.* --- ### Forrest pushes FMG to be net-zero emissions by 2030 URL: https://www.boilingcold.com.au/forrest-pushes-fmg-net-zero-emissions-2030/ Last updated: 2021-12-27T01:28:14.000Z Andrew “Twiggy” Forrest has committed iron ore miner FMG to be carbon neutral by 2030 and develop green electricity, hydrogen and ammonia projects in Australia. Fortescue Metals Group chair Forrest said FMG had “joined the global battle to defeat climate change.” “We are trialling and demonstrating green hydrogen technologies in global-scale commercial environments, while also rapidly evolving into a green hydrogen and electricity producer of similar scale,” Forrest said. Today’s [announcement](https://www.fmgl.com.au/docs/default-source/announcements/2189340.pdf?sfvrsn=ac9b01d9%5F6&ref=boilingcold.com.au) to the ASX comes just nine months after FMG set what was then considered an ambitious target of [net-zero operational emissions by 2040](https://www.fmgl.com.au/docs/default-source/announcements/fortescue-climate-change-targets.pdf?sfvrsn=6871fbd%5F6&ref=boilingcold.com.au), with only a 26 per cent cut by 2030. FMG’s initiative covers direct, or Scope 1 emissions, and Scope 2 emissions from any power it purchases. Scope 3 emissions produced using its iron ore to make steel is excluded. Forrest said FMG would demonstrate green hydrogen’s economic value in world-scale operations and become a significant energy exporter. “Fortescue has emerged not simply as a thought-leader and investor, but uniquely as an executor of major green hydrogen projects,” Forrest said. “Our aim is to provide the two “missing links” in the climate change battle, to create both the demand and the supply of green hydrogen. “Due to its high energy performance and environmental neutrality, green hydrogen and direct green electricity has the potential to eliminate fossil fuels from supply chains.” FMG subsidiary Fortescue Future Industries, whose Australian arm is chaired by former prime minister Malcolm Turnbull, will develop the green electricity, hydrogen and ammonia projects. ## Early trials for new clean technologies Forrest said that once the cleaner technologies were established, they would substantially reduce Fortescue’s operating costs. “Our green energy and industry initiatives may one day significantly out scale our iron ore business,” Forrest said, adding that the company remained committed to iron ore and resources. FMG chief executive Elizabeth Gaines said the money aimed to decarbonise its entire mobile fleet and fixed plant using hydrogen and batteries. Without change, FMG is on track to consume a billion litres of diesel a year. FMG has set itself ambitious short-term goals in support of net-zero emissions by 2030. By the end of June 2021, the miner aims to have developed the design of a green ammonia-powered ship; trialled the production of iron from green electricity at low temperatures without coal; and tested large batteries on haul trucks, hydrogen fuel cells on drill rigs and green ammonia technology on its locomotives. Gaines said FMG the trials would establish that major steel, truck, train, ship, and mobile plant industries can be operated with renewable energy. “Each will be tested by Fortescue using commercial-scale equipment to prove that the demand for direct green electricity, green hydrogen and green ammonia could one day be as large as the fossil fuel industry,” Gaines said. Fortescue will have its progress towards carbon neutrality report independently verified link it to executive remuneration. The FMG share price was down 3.8 per cent after two hours of trade today. Fellow iron ore miners BHP and Rio Tinto were down 1.2 per cent and 2.8 per cent, respectively. --- *Main image: Fortescue iron ore train in the Pilbara. Source: FMG* --- ### Australian offshore oil and gas industry has a $52B clean-up bill URL: https://www.boilingcold.com.au/australian-offshore-oil-and-gas-industry-has-a-52b-clean-up-bill/ Last updated: 2021-12-27T01:06:16.000Z Clearing Australian waters of oil and gas wells and facilities will cost $52 billion, with half of the work starting this decade, according to a report produced with the support of major Australian operators. Much of the cost will, via the tax system, fall to the Federal Government that via National Energy Resources Australia has [launched](https://www.nera.org.au/News/CODA-launch/CODA-launch?ref=boilingcold.com.au) the Centre of Decommissioning Australia to seek cost reductions and maximise local content. The enormous size of the oil and gas industry's liability has been revealed just months after two moves to tighten offshore decommissioning regulation. The offshore regulator has [NOPSEMA toughened its enforcement](https://www.nopsema.gov.au/news-and-publications/latest-news/news-announcement/2020/11/20/nopsema-releases-regulatory-policy-on-maintenance-and-removal-of-property/?ref=boilingcold.com.au), and Resources Minister Keith Pitt flagged the introduction of [trailing liabilities](https://www.minister.industry.gov.au/ministers/pitt/media-releases/northern-endeavour-be-decommissioned?ref=boilingcold.com.au) that make previous owners liable if new owners cannot afford to decommission at the end of field life. NERA and operators BHP, Chevron, Cooper Energy, ExxonMobil, Santos, Vermilion and Woodside, commissioned [the study](https://12259-console.memberconnex.com/Attachment?Action=Download&Attachment%5Fid=337&ref=boilingcold.com.au) to estimate the total cost of decommissioning and find opportunities to reduce costs. Chevron operations director Kory Judd, said industry had a responsibility to manage asset retirement in an environmentally responsible and efficient manner. Advisian, a Worley subsidiary, estimated the cost to plug and abandon wells and remove all equipment in both Commonwealth waters and nearshore State waters to be $US40.5 billion ($52.6 billion). Almost 60 per cent of the work is off the WA coast. Equipment to be removed includes 57 platforms with a total weight of 755,000 tonnes, equivalent to the steel in 14 Sydney Harbour bridges. There are also 11 floating facilities, 6700km of pipelines, 1500km of umbilicals and more than 500 subsea structures. The industry has about 1000 wells to plug and abandon to seal them forever. Many of the about 400 subsea wells that are not drilled from a platform will have so-called Christmas trees attached to be removed. The $52 billion cost excludes the decommissioning of onshore LNG and domestic gas plants that process offshore oil and gas, future construction, and all facilities associated with onshore production. In 2020 energy consultancy, Wood Mackenzie estimated that the [total onshore and offshore decommissioning cost would be $US49 billion](https://www.boilingcold.com.au/australias-oil-and-gas-industry-will-create-a-76b-clean-up-bill/) ($64 billion). The Exxon Mobil/BHP Bass joint venture that has operated off Victoria for more than 50 years is likely to bear the vast bulk of the estimated $13.7 billion liability in the Gippsland Basin. The basin has more than 400 wells that can be plugged and abandoned from platforms, so are cheaper to decommission than subsea wells that require the mobilisation of a drilling rig. [Australia told ExxonMobil no easy $3B Bass Strait exitResources Minister Keith Pitt warned ExxonMobil ceo Darren Woods he would tighten rules for selling offshore oil and gas assets and shortly after the US major canned its Bass Strait exit.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/02/Offshore-Platform-Marlin-B-reduced.jpg)](https://www.boilingcold.com.au/australia-told-exxonmobil-ceo-told-no-easy-exit-before-3b-bass-strait-sale-canned/) ExxonMobil cancelled the planned sale of its 50 per cent of the Bass Strait joint venture in November 2020\. The move came just weeks after Resources Minister Keith Pitt wrote to ExxonMobil chief executive Darren Woods. Pitt said any buyer must have the financial and technical capacity to decommission the ageing facilities, and if they failed, ExxonMobil would be liable. The Northern Carnarvon Basin off WA has about 225 subsea wells that must be plugged and abandoned and more than 300 subsea structures to be removed. The costing is based on the legislative requirement that all structures are eventually removed from the ocean. NOPSEMA requires this to be the basis for planning field development but [may allow equipment to remain](https://www.nopsema.gov.au/assets/Policies/A720369.5.pdf?ref=boilingcold.com.au) if that "delivers equal or better environmental outcomes compared to complete property removal." Advisian estimated that if 5000km of larger pipelines were left on the seabed, so-called in situ decommissioning, $US5.9 billion ($7.7 billion) could be saved. Woodside submitted a plan to NOPSEMA in April 2020 to leave all pipelines, umbilicals and wellheads from the Echo Yodel development on the seabed. [Woodside abandons abandonment for Echo YodelIf Woodside’s argument that a reef’s environmental benefit outweighs 400 tonnes of plastic in the ocean wins over NOPSEMA then leaving everything on the seabed could become the default option for Australia’s oil and gas players.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/06/Mia-Yellagonga--Perth--Western-Australia-web-top-crop.jpg)](https://www.boilingcold.com.au/woodside-shouts-abandon-abandonment-for-echo-yodel/) Woodside estimated that not removing the Echo Yodel equipment would save up to $160 million, but the plan left 400 tonnes of plastic in the pipeline coating and umbilical in the environment. In most cases, to pass the test of "equal or better environmental outcomes", operators will need to demonstrate that the immediate benefit of marine growth on subsea equipment outweighs the longer-term risk from plastic degrading and chemicals leaching into the water. Separate to CODA, NERA and the seven operators have funded the National Decommissioning Research Initiative that has [six research projects underway](https://ndriaustralia.org/research?ref=boilingcold.com.au). Two projects look at the benefits of leaving oil and gas infrastructure in the ocean: the value of habitats provided by the equipment and how it can connect ecosystems. Three studies consider how quickly metal corrodes, the breakdown of plastic, and risks from NORMS, or naturally occurring radioactive materials, that can collect in pipelines and equipment. > "The starting point is that everything should be removed, and it's up to the companies to justify whether in situ or full removal is the appropriate course," NERA general manager decommissioning Andrew Taylor said. In December, Woodside submitted a plan only to plug and abandon the Echo Yodel wells. Other work was put off until NOPSEMA accepts a permanent decommissioning plan. Eventually, much of the financial burden to decommission will fall on the Federal Government via lower tax revenues. Deductibility of these costs for company income tax could lead to 30 per cent of the cost falling to the Australian taxpayer. Projects that have paid substantial amounts of Petroleum Resources Rent Tax for the oil and gas extracted are eligible for a PRRT refund that could take the total government share of decommissioning costs to 58 per cent. This could be the case for ExxonMobil's Bass Strait operation, but the offshore LNG projects may never pay substantial amounts of PRRT. ## Searching for cheaper offshore decommissioning Both industry and the Federal Government could save many billions of dollars if decommissioning costs were reduced. As well as leaving larger pipelines on the seabed, Advisian identified possible savings from improved ways to plug wells ($US4.1 billion), towing instead of lifting some platforms ($US1.5 billion), and setting up facilities in WA to avoid towing equipment to Asia ($US1.5 billion). NERA general manager decommissioning Andrew Taylor said the Centre of Decommissioning Australia objectives were to reduce decommissioning costs by at least 35 per cent and maximise local companies' engagement. > "There is an urgency in trying to identify and implement those settings that are going to maximise value to Australia from these activities," Taylor said in reference to half the work estimated to start before 2030. "Every day that we wait is an opportunity lost: that has led effectively to the establishment of CODA." Taylor said improvements in the plugging of wells, floating platform jackets instead of lifting them, 100 per cent local disposal and operators cooperating on work campaigns could cut costs by about 21 per cent. Taylor said the UK had developed predicted cost savings of about 21 per cent after four years of work. NERA has commissioned legal advice on how operators can collaborate on decommissioning within the confines of Australian competition law. The large LNG operators managed to overcome a similar problem with the coordination of LNG plant shutdowns to provide a constant work flow to contractors. The first CODA initiative is to call for proposals to investigate local disposal capabilities, review learnings from similar jurisdictions like the UK and Norway, and develop a decommissioning innovation and technology roadmap. Eventually, Taylor sees CODA being a membership organisation. "We want to engage equitably the service sector, research organisations and operators," Taylor said. Woodside senior vice president operations Fiona Hick said decommissioning would become increasingly prominent in the Australian oil and gas industry in Australia in coming years. "The launch of CODA presents industry with a fantastic opportunity through which to share best practice and to further contribute to undertaking decommissioning safely and efficiently, while delivering benefits to the environment and local communities,” Hick said. --- This article was researched with the support of the [Institute of Energy Economics and Financial Analysis (IEEFA)](https://ieefa.org/ieefa-australias-us40-5-billion-clean-up-bill-for-its-offshore-oil-and-gas-industry/?ref=boilingcold.com.au), a U.S. non-profit corporation that examines issues related to energy markets, trends, and policies. The Institute’s mission is to accelerate the transition to a diverse, sustainable and profitable energy economy. --- *Main image: ExxonMobil's Snapper platform off the Victorian coast in the Bass Strait. Source: ExxonMobil* *Australia* --- ‌ ‌ ### One year of WA energy ups and downs with Boiling Cold URL: https://www.boilingcold.com.au/one-year-of-wa-energy-ups-and-downs-with-boiling-cold/ Last updated: 2021-12-27T00:59:39.000Z A year ago oil was $US52 a barrel, and a month later it hit $US14 as the pandemic squashed global economic activity. Today, a barrel of Brent crude will fetch $62, but the energy world is not what it was. The momentum to tackle climate change has grown enormously, all the components of a cleaner energy future perform better and cost less each year, and investors are edgy about whether the returns from oil and gas investments will justify the risk. *Boiling Cold* has now reported on WA energy, industry and climate for a year. With 149 stories, many revealing new information and insights reported nowhere else, it has been a busy 12 months. ## Big LNG trys to adapt Perth's big gas player Woodside [delayed its huge Scarborough and Browse LNG projects](https://www.boilingcold.com.au/woodside-slashes-costs-delays-scarborough-and-browse-lng/) in late March 2020. Woodside told its investors that when it developed the CO2-rich Browse gas fields, it could be with carbon capture and storage. This was a complete reversal from the message to environmental regulators a few months before that [CCS was "high-risk, high-cost" option](https://www.boilingcold.com.au/woodside-changes-browse-lng-emissions-story/). But the biggest Woodside spin to unwind was that in reality, [the Browse LNG project was dead](https://www.boilingcold.com.au/woodside-browse-lng-is-dead/). Too dirty, too complicated, and many of the partners did not want it. It was common knowledge up and down the Terrace but reported nowhere else. Even Scarborough was struggling, with industry consultant Wood Mackenzie determining [Qatar could deliver gas to Japan for half the price](https://www.boilingcold.com.au/woodsides-scarborough-lng-was-uneconomic-before-price-crash-woodmac/). Such analyses are normally kept away from the media, but oddly it was a report from oil and gas lobby group APPEA that revealed Scarborough's plight. Every oil and gas company in the world struggled to know what to do. Woodside's internal differences were clear at its AGM. Chief executive Peter Coleman told shareholders he would look hard for opportunities outside fossil fuel extraction. Chair Richard [Goyder immediately stepped in and said not to overestimate any changes](https://www.boilingcold.com.au/woodside-finds-its-not-easy-being-green/) as "we're an LNG company." A big decision for all gas players is whether to move into hydrogen. If so, should it be blue hydrogen made from gas with carbon capture and storage or green hydrogen from renewable electricity? Woodside has had a bet each way and looked at [blue hydrogen for Japanese power stations](https://www.boilingcold.com.au/coleman-smells-ammonia-in-woodsides-future/) and [Australian green hydrogen projects](https://www.boilingcold.com.au/woodside-joins-the-green-hydrogen-race/). The [$50 billion Asian Renewable Energy Hub](https://www.boilingcold.com.au/pilbara-energy-hub-targets-10m-tonnes-a-year-of-green-ammonia/) in the Pilbara is clear where it is going: green hydrogen for ammonia in massive quantities. [Hydrogen: a simple molecule but a complex businessThere is no shortage of hype about hydrogen. Time will tell what ideas fall by the wayside and which build enduring industries.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/07/22951791245_1bb6dfcf46_o.png)](https://www.boilingcold.com.au/hydrogen-a-simple-molecule-but-a-complex-business/) It will take years to know which hydrogen business cases are sound and which are fanciful. Meanwhile, Santos wants to make [Australia's dirtiest LNG](https://www.boilingcold.com.au/santos-dirty-big-2b-barossa-bet/) by bringing gas from the Barossa field into Darwin. In a surprise decision Chevron decided to sells out of the North West Shelf and its bank spruiked a sales pitch. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/03/image-1.png) [*Boiling Cold* had a look and came to a different conclusions](https://www.boilingcold.com.au/chevrons-north-west-shelf-sales-pitch-missed-8-key-points/). ## COVID cost cuts While the workforce at their LNG facilities was slashed, Woodside and Chevron made sure [dividends kept flowing](https://www.boilingcold.com.au/flow-of-lng-and-dividends-unaffected-as-jobs-culled/) [to shareholders](https://www.boilingcold.com.au/flow-of-lng-and-dividends-unaffected-as-jobs-culled/). There was plenty of angst about new rosters with longer swings and time in quarantine. Unions labelled a Woodside proposal for a $50,000 bonus for [working 12 weeks straight as unsafe](https://www.boilingcold.com.au/woodside-offers-workers-big-bucks-as-compam-s/), and it was [quickly dumped](https://www.boilingcold.com.au/woodside-dumps-12-week-work-roster/). Offshore safety regulator NOPSEMA warned that long swings were a [danger to mental health](https://www.boilingcold.com.au/offshore-oil-and-gas-warned-long-rosters-affect-mental-health/) and worried about [the effect of less maintenance](https://www.boilingcold.com.au/offshore-maintenance-worries-unions-safety-regulator/) on complex offshore facilities. During 2020 Australia's oil and gas industry [cut its workforce six times deeper than the national average](https://www.boilingcold.com.au/oil-and-gas-job-cuts-six-times-deeper-than-2020-australian-average/). A freedom of information request revealed that NOPSEMA chief executive Stuart Smith was [unhappy about operators' priorities](https://www.boilingcold.com.au/behind-closed-doors-what-worries-australias-offshore-safety-regulator-nopsema/). > "It appears industry is focussed on increasing profitability rather than safety," minutes noted Smith saying. ## Never, never Northern Endeavour From a first report three years ago about a [dangerous lack of maintenance](https://www.boilingcold.com.au/cutbacks-and-haste-spell-danger-on-northern-endeavour/), the Northern Endeavour oil vessel has generated stories well beyond the significance of its production. Exclusive analysis showed that Woodside priced the [decommissioning of the vessel and oil fields at $362 million](https://www.boilingcold.com.au/poor-federal-regulation-allowed-the-360m-northern-endeavor-mess/). No wonder Woodside paid the now-failed new owner to take the vessel. With the Government having already committed $209 million to keep the vessel safe and prepare it for decommissioning, the total bill could be $500 million. One expense was [$8.8 million for Woodside to advise on how to clean the mess up](https://www.boilingcold.com.au/top-dollar-bill-failed-oil-project/). "[Yes, there is a certain irony in that](https://www.boilingcold.com.au/northern-endeavour-a-major-screw-up-by-government-patrick/), and we as a Department understand that," Department of Industry, Science, Energy and Resources secretary David Fredericks told the Senate. A deep dive into the full report on the collapse of the owner of the Northern Endeavour showed the [Australian Government and its regulators had made a hash of their job](https://www.boilingcold.com.au/cutbacks-and-haste-spell-danger-on-northern-endeavour/) at almost every opportunity. Bizarrely the Government did not give NOPSEMA and NOPTA the full report. The two regulators only read it when it was released after a freedom of information request. A bit of digging revealed other small companies with hefty offshore decommissioning liabilities. Tiny Western Gas bought the Equus fields off Hess in 2017 for $US4 and now has [$US100 million of well plugging and abandonment to pay for](https://www.boilingcold.com.au/western-gas-micro-oil-gas-player-with-a-us100-million-clean-up-bill/) if it cannot develop the gas. Triangle Energy, which within weeks could lose access to BP's Kwinana refinery to process oil from Cliff Head, [has an abandonment liability of at least $37 million](https://www.boilingcold.com.au/triangle-energy-battles-for-life-after-bp-kwinana-stops-refining/). In December, Resources Minister Keith Pitt said that companies selling offshore assets would now have liability for the clean-up if the new owner failed. *Boiling Cold* revealed [Pitt gave the heads up to ExxonMobil chief executive Darren Woods](https://www.boilingcold.com.au/australia-told-exxonmobil-ceo-told-no-easy-exit-before-3b-bass-strait-sale-canned/) weeks earlier, and soon after, the US major dropped its planned exit from the Bass Strait. Woodside's sale of the Northern Endeavour may have saved it many millions and eventually cost the Australian taxpayer $500 million. However, the jolt it gave the Federal Government to [properly manage decommissioning liability](https://www.boilingcold.com.au/oil-gas-industry-to-get-northern-endeavour-bill-and-trailing-liabilities-pitt/) that could [total $76 billion over the coming decades](https://www.boilingcold.com.au/australias-oil-and-gas-industry-will-create-a-76b-clean-up-bill/) will likely save Australia many times more than the cost of the Northern Endeavour. ## Gorgon struggles to bury its problem Chevron's now decades-long mission to bury CO2 under Barrow Island is another perennial story with implications well beyond that facility. A [deep dive into all the available data](https://www.boilingcold.com.au/chevron-faces-little-grief-from-gorgon-lng-emissions-miss/) revealed that to mid-2020, Gorgon vented seven million tonnes of greenhouse gas more than if it had injected 80 per cent of the reservoir CO2 as required by the WA Government. A freedom of information request revealed [$3.1 billion spent so far](https://www.boilingcold.com.au/chevrons-gorgon-co2-emissions-to-rise-sand-clogs/), and some wells were clogged with sand. Another FOI request unearthed that the WA safety regulator ordered [CO2 injection to be cut to one-third of design capacity](https://www.boilingcold.com.au/regulator-limits-chevrons-troubled-gorgon-co2-injection-to-one-third-capacity/) until the sand problem was fixed. It is understood there is much more time and expense required until all is well with CO2 injection at Barrow Island. The importance of Gorgon's woes is that many oil and gas companies are claiming they can continue producing hydrocarbons on a net-zero by 2050 emissions trajectory with a massive rollout of carbon capture and storage. Chevron's struggles cast severe doubt on the viability of those plans. Gorgon was not the only project with carbon emissions problems. Shell's Prelude floating LNG managed to emit [2.3 million tonnes of CO2 for just one LNG cargo](https://www.boilingcold.com.au/shells-prelude-lng-carbon-disaster/). Its neighbour Ichthys exceeded its allowed emissions by enough to [negate the climate benefits of 1.7 million solar panels](https://www.boilingcold.com.au/inpexs-ichthys-lng-emissions-bust-negates-1-7m-solar-panels/). None of this is good news for investors in these projects. The International Energy Agency said [LNG carbon intensity must be reduced](https://www.boilingcold.com.au/a-greener-world-is-a-dark-outlook-for-aussie-lng-iea/) for the product to keeps its place in the energy transition. ## Project glitches The most-read story of the year was an exclusive look at the multitude of problems Shell faces at its $US17 billion Prelude floating LNG facility. [No winners from Shell’s $US17B Prelude floating LNGShell’s giant $US17B Prelude floating LNG is late, expensive, dirty and so far unreliable. An exclusive look at how a failed investment for Shell is a terrible deal for Australia.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/04/aerial-view-of-the-prelude-flng-facility-with-the-valencia-knutsen-berthed-side-by-side-reduced.jpg)](https://www.boilingcold.com.au/after-prelude-few-win-from-shells-floating-lng/) It is a fascinating project, but in hindsight, perhaps too ambitious. Both [Shell](https://www.boilingcold.com.au/shell-slashes-value-of-prelude-floating-lng/) and [Inpex](https://www.boilingcold.com.au/inpex-slashes-value-of-prelude-lng-by-a-third/) slashed the value of the unreliable giant. The Prelude restarted in September for the first time in seven months, only to shut down days later. It is back in production, and Shell's challenge is to achieve consistent production at design capacity. Thousands of [cracks in propane vessels on a Gorgon LNG train](https://www.boilingcold.com.au/cracks-at-chevrons-gorgon-threaten-lng-production/) were first revealed by *Boiling Cold* and *The West Australian* in July, which is how WA's safety regulator knew of the problem. Chevron was [hit with numerous notices](https://www.boilingcold.com.au/safety-cop-orders-chevron-to-fix-gorgon/) to covering all LNG three trains. The pain was extended [by botched early repairs](https://www.boilingcold.com.au/chevron-to-redo-its-botched-gorgon-weld-repairs/) and [lost production from shutdowns](https://www.boilingcold.com.au/shutdowns-to-keep-chevrons-australia-lng-production-down-through-2021/) to repair the vessels will last well into this year. We will never know if Chevron would have shut down the other two trains to fix similar vessels without the regulator's intervention. ## A state of confusion The WA Government started the year wanting to [lure industry to WA with cheap gas](https://www.boilingcold.com.au/wa-wants-gas-growth/) and months later allowed Waitsia, WA biggest onshore gas find in decades, an exemption from an export ban. [McGowan: onshore gas export banned, unless its Stokes’ WaitsiaWA Premier Mark McGowan has extended WA’s successful gas reservation policy to all onshore gas - except Waitsia that is backed by a powerful media boss Kerry Stokes![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/08/Indicative-image-of-proposed-Waitsia-Gas-Plant-looking-east.jpg)](https://www.boilingcold.com.au/mcgowan-onshore-gas-export-banned-unless-its-stokes-waitsia/) Fortunately, Waitsia's [plan to vent all the CO2 from the reservoir](https://www.boilingcold.com.au/waitsia-gives-mcgowan-gas-powered-climate-dilemma/) did not proceed, and Beach Energy and Mitsui now have to [offset 180,000 tonnes of CO2 a year.](https://www.boilingcold.com.au/wa-epa-and-industry-make-real-moves-to-net-zero-by-2050/) Collie's coal mines and power stations continued their [precarious existence](https://www.boilingcold.com.au/collie-wobbles-wa-powers-financial-mess/), and Sumitomo [wrote down the value](https://www.boilingcold.com.au/collies-bluewaters-power-worthless-sumitomo/) of its half share of Bluewaters power station to zero. New [wind farms ate into coal's market share](https://www.boilingcold.com.au/new-wind-crushes-coal-on-south-west-grid/), and the WA Liberal Party shocked everyone with a [plan to shut down the State-owned power stations in Collie by 2025](https://www.boilingcold.com.au/wa-libs-fills-labors-energy-policy-void-with-a-coal-exit-and-green-hydrogen/) in favour of wind farms in the Mid-West. Energy Minister Bill Johnston's criticism of the Liberals' plan as too fast and ambitious would have held more weight if the Government's plans were not [slow and unambitious](https://www.boilingcold.com.au/wa-plans-a-slow-move-to-greener-power/) and completely ignored its net-zero emissions by 2050 target. *Boiling Cold* exclusively revealed that Kerry Stokes' Seven Group was promoting [pumped hydro storage at a disused Collie coal mine](https://www.boilingcold.com.au/stokes-650m-pumped-hydro-collie-coal/) as it could save up to $1.3 billion in rehabilitation costs. ## A new world for 2021 From October onward, it became clear that Australian governments and businesses could not avoid adjusting to a carbon-constrained world. First, China committed to net-zero carbon emission by 2060, and Japan and South Korea followed with 2050 targets. In one month, the buyers of 88 per cent of Australia's LNG, 75 per cent of its thermal coal exports and 51% of its metallurgical coal exports had [signed up to a new future](https://www.boilingcold.com.au/south-korea-china-japan-net-zero-squeeze-on-80b-of-australian-fossil-exports/). Weeks later, the Australian Government lost its main international ally in its fight for climate inaction when President Trump was defeated. With the energy transition accelerating every year, there will be plenty for *Boiling Cold* to cover. Some readers say the balance of *Boiling Cold'*s coverage is negative. To some extent, that is right. It is called accountability. If a Government, regulator or company does the right thing, they have ample resources to ensure it is widely known. However, if they fall short on what they promise - whether it is safety, taxes, local content, employment conditions, returns to investors or on the climate – you will not know about it unless someone does some digging. --- ### Inpex’s Ichthys LNG emissions bust negates 1.7M solar panels URL: https://www.boilingcold.com.au/inpexs-ichthys-lng-emissions-bust-negates-1-7m-solar-panels/ Last updated: 2022-01-01T09:52:02.000Z Carbon pollution from Inpex's Ichthys LNG project has exceeded allowed emissions by 10 per cent, enough to cancel out the emissions savings from 1.7 million Australian solar panels. Emissions from Australia's dirtiest offshore LNG project are likely to rise, and Inpex has reversed its opposition to carbon capture and storage that has proved unreliable at Chevron's Gorgon LNG. Ichthys emitted the equivalent of 7.62 million tonnes of CO2 in the 12 months to June 2020, according to [corporate emissions data](http://www.cleanenergyregulator.gov.au/NGER/National%20greenhouse%20and%20energy%20reporting%20data/Data-highlights/2019-20-published-data-highlights/state-and-territory-emissions-profile-2019-20?ref=boilingcold.com.au) released by the Clean Energy Regulator yesterday. Ichthys is allowed an emissions baseline of 6.95 million tonnes under the Clean Energy Regulator's safeguard mechanism. The $US45 billion ($57.4 billion) project produces gas offshore the Kimberley that is piped 890km to an 8.9 million tonnes a year LNG plant in Darwin. Gas first flowed from the wells in July 2018, and the initial LNG cargo sailed for Japan in October 2018\. Emissions for the 12 months to June 2019 were 6.23 million tonnes. An Inpex spokesperson said the Ichthys project was in the early stages of operation. LNG projects often have higher emissions in the early stages of operation, mainly if frequent shutdowns cause large amounts of gas to be flared. "Ichthys LNG features high energy efficiency technologies to minimise greenhouse gas emissions over its operational life," the spokesperson said. Ichthys does use a combined cycle gas plant for its Darwin power station that is more efficient than the open-cycle gas turbines used at most LNG projects. However, the carbon intensity of Ichthys LNG is far greater than any other project using gas from Australian waters when environmental approval submissions are compared. ![carbon intensity of LNG from existing Australian offshore LNG projects: North West Shelf, Pluto, Gorgon, Wheatstone, Ichthys and Prelude.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/02/image-5.png) Source: Boiling Cold. Data from environmental approval submissions, not actual performance. If Ichthys achieved its stated production capacity of 8.9 million tonnes a year of LNG in 2019-20, then its product's actual carbon intensity was 0.86 t CO2e for each tonne of LNG exported. Ichthys' emissions are driven up by the 8% CO2 in the reservoir vented at Darwin and massive volumes of gas burnt offshore to push gas through its 890km-long pipeline. ## Ichthys carbon footprint likely to grow Three factors are likely to push Ichthys emissions higher. *Boiling Cold* understands late this year Inpex will trial the project running at 110% capacity, and if that is successful Inpex will test operations at 115% capacity. Design is underway for a booster compression module for the Ichthys Explorer central processing facility that will increase offshore processing emissions. After about 15 years of production from the Brewster field with 8% CO2 will decline and be replaced with the Plover field containing 17% CO2\. The [Ichthys Greenhouse Gas Management environmental submission](https://www.inpex.com.au/media/v2vnjpba/draft-environmental-impact-statement-11-chapter-9-greenhouse-gas-management.pdf?ref=boilingcold.com.au) estimates this will add about 1.6 million tonnes a year to the project's carbon pollution. Inpex has to deal with Ichthys' appalling emissions over two time frames. The immediate problem is breaching the safeguard mechanism baseline. The Inpex spokesperson said Ichthys has approval for a multi-year monitoring period. The Clean Energy Regulator will judge its emissions over three years to June 2022, not on annual figures. Australian Carbon Credit Units will need to be purchased for any emissions above the baseline. > "Ichthys is already originating ACCUs through a bio-sequestration project in southern WA and savannah fire management projects in the Northern Territory," the spokesperson said. "These credits will be surrendered as required to meet any residual offset requirement in 2022." ## U-turn on carbon capture and storage Longer-term Ichthys faces the near certainty of both being disadvantaged in the market for the high carbon intensity of its LNG and facing some form of financial cost for its carbon emissions. "Inpex recognises climate change as a critical business issue," the spokesperson said. Inpex is investigating the feasibility of carbon capture and storage at its Darwin LNG plant. "The recent global wave of commitments to 2050 net-zero carbon society has opened up the way for collaboration, innovation and funding for CCS," the spokesperson said. > "We recognise CCS is a critical component of the energy transition." In January, Inpex committed to net-zero emissions by 2050 and a 30 per cent emission reduction by 2030, with its largest asset Ichthys a priority. "This is a gigantic project and…we aim to make the LNG as clean as possible and will engage in carbon capture and storage initiatives," Inpex chief executive Ueda said at the time. Inpex's move came three months after the Japanese Government [adopted a net-zero by 2050 target](https://www.boilingcold.com.au/japan-net-zero-by-2050/). The embrace of CCS is a stark turnaround from an Inpex [submission to the Productivity Commission](https://www.pc.gov.au/%5F%5Fdata/assets/pdf%5Ffile/0009/247428/sub034-resources.pdf?ref=boilingcold.com.au) in November 2019. "To date, Ichthys LNG has spent over $10 million evaluating CCS as an abatement option," the submission stated. > "While there may be no technical barriers to implementation, the cost of CCS is very high with a break-even carbon price of around $100/t carbon dioxide equivalent or more. > "Therefore, implementation of CCS cannot be commercially justified at this stage." The easiest CCS opportunity at Darwin is the storage of reservoir CO2 as it is already separated before the gas enters the LNG plant. Even if all reservoir CO2 were buried, Ichthys LNG would likely still be the most carbon-intensive offshore LNG project in Australia. Chevron's system to store Gorgon's reservoir CO2 under Barrow Island has cost $3.1 billion to data and is currently operating at just one-third of its design capacity due to technical problems. [Gorgon emissions to soar until Chevron fixes CO2 injectionGorgon LNG’s carbon emissions will jump by more than one million tonnes a year until Chevron fixes an underground pressure management problem that caused WA’s safety regulator to curtail CO2 injection by two-thirds.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/02/gorgon-lng-trains-large-d-cropped-reduced.jpg)](https://www.boilingcold.com.au/regulator-limits-chevrons-troubled-gorgon-co2-injection-to-one-third-capacity/) Storing emission from onshore processing is even more challenging. Separating CO2 from combustion gases is expensive, complicated, and requires substantial amounts of power that drive emissions up further. The Ichthys project is operated by Inpex that has a 66% stake. Other owners are French Total (26%), Taiwan's CPC (3%) and small stakes from five Japanese utilities: Tokyo Gas, Osaka Gas, Kansai Electric power, JERA and Toho Gas. --- *Solar panels / emissions equivalence calculations* - Ichthys has a safeguard mechanism baseline of 6,952,477 tonnes a year of CO2e. - 2020 emissions of Inpex Holdings Australia Pty Ltd, ultimate controlling corporation the Ichthys project, had corporate emissions of 7,623,682t CO2e in 2020: 671,205t CO2e more than the baseline. IHAPL controls no other projects in Australia. - WA Water Corporation [equates 45,000 rooftop panels with saving 18,000t of CO2e a year](https://www.mediastatements.wa.gov.au/Pages/McGowan/2020/02/Water-Corporation-commits-30-million-dollars-to-solar-energy.aspx?ref=boilingcold.com.au). - Number of solar panels to save the emissions above baseline of Ichthys = 671205 x (45000/18000) = 1.678 million. --- *Main image: Solar panels and Ichthys offshore facilities. Sources: [Zbynek Burival](https://unsplash.com/@zburival?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) on [Unsplash](https://unsplash.com/s/photos/solar-panels?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) and Inpex Australia.* --- ### Western Gas looks to east coast pipeline to make a market for Equus URL: https://www.boilingcold.com.au/western-gas-looks-to-east-coast-pipeline-to-make-a-market-for-equus/ Last updated: 2022-01-08T13:55:09.000Z Industry minnow Western Gas will study a transcontinental pipeline with APA for the Equus gas it bought from Hess for $US2. The company has joined gas project proponents Strike and Theia in seeing a need to promote new downstream demand for their gas despite predictions that the WA market will be undersupplied later this decade. As well as shipping gas to the east coast, Western Gas is eyeing petrochemical feedstock and the existing WA domestic gas market. In January Theia Energy announced it was considering supplying a urea plant in Derby and Strike Energy said it planned to do the same near Geraldton. Western Gas' [initial plan three years ago](https://thewest.com.au/business/oil-gas/high-hopes-for-western-gas-to-get-equus-flowing-after-hess-flop-ng-b88740352z?ref=boilingcold.com.au) was to supply the WA market with about 150 to 200 terajoules of gas a day from 2023 through a pipeline crossing the shore near Onslow. A year later, in December 2018, engineering contractors McDermott and Baker Hughes were on board, and by March 2019, the plan was for a nearshore floating LNG facility with first gas in 2024. Western Gas director Will Barker said the 2020 oil price collapse made investments in new LNG facilities difficult. Instead, the plan now is to pipe the gas 200km to the Ashburton North Strategic Industrial Area west of Onslow. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/02/image-4.png) **Equus development to Ashburton North.** Source: Western Gas Barker said the Equus resource could supply 350 terajoules of gas a day for more than 15 years. The ANSIA is a State Government hydrocarbon-focused industrial area that currently houses BHP's Macedon domestic gas plant and Chevron's Wheatstone LNG plant. ### Keeping market options open From the ANSIA, Western Gas is looking at an array of options for its two trillion cubic feet resource. > "What we need to do is create a market big enough to justify the development of Equus," Barker said. "We're agnostic around what market we enter, but we've looked at a range of different market opportunities, "A key focus is being able to control our own destiny." Barker does not want to rely on backfill to an LNG plant like its predecessor, the US major Hess. Hess secured the Equus fields in 2007 by committing to spend $500 million on development and wanted to send the gas to the North West Shelf. Woodside preferred gas from its now-shelved Browse project, and Hess sold Equus to newly-formed Western Gas for $US2 in 2017. If Equus gas reaches the ANSIA, Western Gas has several possible markets. The gas could supply BHPs Macedon gas plant when production for the Macedon field declines, a petrochemical plant such as urea at the ANSIA, a pipeline to the east or still pursue backfill to the North West Shelf plant. Barker said work is underway on the Dampier to Bunbury Natural gas pipeline to allow gas to flow in both directions between Karratha, where the NWS plant is, and the connection nearest Onslow. APA and Western Gas signed an MOU in October to investigate a pipeline to the east that would be competing with proposals to build LNG import terminals on the east coast. The two companies would also be competing with a perception that any west-east gas pipeline would be a white elephant. "The ACIL Allen report from 2018 that had a negative ultimate viewpoint on the pipeline, that wasn't due to the economics of the pipeline, it was due to the major gas suppliers on the western side of it were unwilling to provide long-term volumes, and they wanted linkages to…LNG pricing," Barker said. Western Gas would offer long-term fixed-price contracts to east coast customers, Barker said. [Western Gas, an ineffective regulator and a $US100M clean-up billIf Western Gas’ Equus LNG project does not take off in these tough times neither the small company nor regulator NOPTA have an answer to how making safe the wells is paid for.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/07/W-Gas-schematic.jpg)](https://www.boilingcold.com.au/western-gas-micro-oil-gas-player-with-a-us100-million-clean-up-bill/) *Boiling Cold* asked Barker how Western Gas would finance the $US100 million bill to plug and abandon Hess' old wells if the Equus development did not proceed. "We do not see a way that these resources won't be developed," Barker said. --- *Main image: Two graphics of Equus development. Source: Western Gas* --- ### Oil and gas job cuts six times deeper than 2020 Australian average URL: https://www.boilingcold.com.au/oil-and-gas-job-cuts-six-times-deeper-than-2020-australian-average/ Last updated: 2022-01-08T14:04:04.000Z The Australian oil and gas industry workforce shrunk about 10 per cent in 2020 as companies offloaded almost 3000 people in response to a plunging oil price. The savage cutback was six times greater than the 1.7 per cent reduction in Australia's overall workforce. However, Australia's big gas players achieved record LNG production in 2020 despite dealing with COVID-19 and having less staff. The analysis is from an Australia Institute [report released this week](https://australiainstitute.org.au/report/when-the-going-gets-toughthe-gas-industry-sacks-workers/?ref=boilingcold.com.au): "*When the going gets tough…the gas industry sacks workers*." The Australia Institute used quarterly Australian Bureau of Statistics employee numbers for oil and gas extraction averaged over 2019 and 2020 to allow for seasonal variations in the reports. Despite a high profile, oil and gas production employment averaged just 25,200 people in 2020, only 0.2 per cent of the Australian workforce of 12.9 million. The report described oil and gas as one of the "smallest and least labour-intensive employers in Australia." The Australia Institute principal adviser Mark Ogge, a co-author of the report, said the industry sacked its workers in record time. "Australian employers as a whole stood by their workers through the 2020 pandemic with the gas industry, dominated by multinational firms, being a notable exception," Ogge said. "They are also inclined to retrench a large proportion those workers they do employ as soon as they face difficult circumstances," the report said. Chevron cut its Australian workforce by twice as much as the average for the company globally. [Chevron’s red tape for its doubly deep Aussie job cullChevron’s 5-month process to trim its Australian workforce twice as hard as its global cuts will now start the musical chairs of allocating spots in the leaner organisation.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/07/QV1-red-tape.jpg)](https://www.boilingcold.com.au/chevron-red-tape-for-hr-hunger-games/) The loss of capability came as its battles [weld problems](https://www.boilingcold.com.au/shutdowns-to-keep-chevrons-australia-lng-production-down-through-2021/) at its Gorgon LNG plant, a CO2 injection system that is [limping along](https://www.boilingcold.com.au/regulator-limits-chevrons-troubled-gorgon-co2-injection-to-one-third-capacity/) at one-third design capacity and recent issues on the Wheatstone offshore platform. The Australia Institute attempted to determine where the jobs were lost by collating reports of job losses. ![Reported job cuts by oil and gas companies November 2019-December 2020, from Inpex, Woodside, Santos, Oil Search, Chevron, Shell, Origin and ExxonMobil](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/02/image-3.png) **Reported job cuts by oil and gas companies November 2019-December 2020**. Source The Australia Institute Workforce reductions are difficult to quantify as they are often a mixture of staff and contractors, and voluntary and forced retrenchment. For example, according to its recent annual report, the number of Woodside staff dropped by just 164 in 2020 to 3670\. This indicates most jobs lost at tits facilities were from Woodside's contractors. The number of hours worked on safety-critical offshore facilities [fell 30 per cent](https://www.boilingcold.com.au/behind-closed-doors-what-worries-australias-offshore-safety-regulator-nopsema/) in the September 2020 quarter. In June 2020, Derrick O'Keeffe, the head of safety at offshore regulator NOPSEMA, said maintenance was had been delayed due to a lack of workers. [Offshore maintenance backlog worries unions and safety regulatorDelays in offshore oil and gas maintenance after COVID-19 workforce cuts worries safety regulator NOPSEMA and unions, who have pointed to Inpex’s Ichthys LNG project as a concern.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/06/cpf-from-website.jpg)](https://www.boilingcold.com.au/offshore-maintenance-worries-unions-safety-regulator/) "I think it's as an area of concern for industry about how do you clear that backlog?" O'Keeffe said. "Given the volatility of the industry, I always get concerned when the price of oil goes down, and you see evidence of jobs being cut, work not happening." In September 2020, O'Keefe [told the NOPSEMA Advisory Board](https://beta.documentcloud.org/documents/20484264-nopsema-advisory-board-minutes-of-meeting-35-9-september-2020?ref=boilingcold.com.au#document/p5/a2019696) that in 2021 his inspectors would target risks causes by the maintenance that was not done in 2020. --- *Main image: North West Shelf LNG plant near Karratha. Source: Woodside Energy Limited* --- ### Behind closed doors: what worries Australia’s offshore safety regulator NOPSEMA URL: https://www.boilingcold.com.au/behind-closed-doors-what-worries-australias-offshore-safety-regulator-nopsema/ Last updated: 2022-01-08T14:08:55.000Z *EXCLUSIVE* Cost-cutting operators, a divided industry, financial capacity in tough times, and hundreds of wells to clean up are among the top concerns of the past four years at NOPSEMA Advisory Board meetings. [The Board](https://www.nopsema.gov.au/about/advisory-board/?ref=boilingcold.com.au), which is separate from NOPSEMA, meets with the regulator quarterly and provides advice to NOPSEMA chief executive Stuart Smith. However, the regulator must only have regard to the advice and does not have to follow it. The minutes from 2017 to 2020 have been obtained by a *Boiling Cold* freedom of information request and a response to a question from Senator Rex Patrick (see below for all documents). The safety and environmental performance of an offshore oil and gas facility is the responsibility of the operator, usually the biggest holder of equity in the joint venture that owns the oil or gas field. The operator employs the people, runs the show day to day, and bills the other owners for the service. NOPSEMA's job is to ensure the operators are doing the right thing. 2017 was a busy year. Hours worked offshore increased 30 per cent as four LNG projects were finished at the same time: Chevron's Gorgon and Wheatstone projects, Inpex's Ichthys and Shell's Prelude. Smith told the Advisory Board in August 2017 that these facilities, especially Prelude and Ichthys, were significantly more complex than what had been built in Australia in the past. At the same time, new entrants to the industry were taking over older facilities and "contributing to a change to the risk profile of the industry." In layman's terms, safety and environmental risks were growing, and not just with the newer and smaller operators. In November 2017, the Board was told of "progressive enforcement action" against BHP after a series of gas releases during the abandonment of wells at the Griffin oil field off the WA coast. An [improvement notice](https://www.nopsema.gov.au/assets/Published-notices/A586375.pdf?ref=boilingcold.com.au) issued the next month revealed that gas was released numerous times into areas where workers were put at risk, and the amount of gas was considerably more than allowed for in the plans for the work. > Damningly the minutes noted: "It is understood BHP were aware of the deficiency and allowed the equipment to continue to be used and they did not notify NOPSEMA." ## Distracted operators In February 2018, Smith told the Board that commissioning four LNG projects at the same time was "unprecedented in the industry globally." Smith had raised with oil and gas lobby group APPEA and the chief executives of the operators that increased risks were getting insufficient attention. He told the Board the industry's management of safety and the environment displayed a combination of incoherence and complacency. > "It appears industry is focussed on increasing profitability rather than safety," the minutes noted. Three months later, Smith noted after a meeting with chief executives that the chief executives appeared to have delegated responsibility for safety to others. The Board discussed an extensive list of concerns about different operators in August 2018. Inpex had "a range of low-level issues" with electrical equipment that caused NOPSEMA to stop production until they were fixed, and Shell had similar but fewer problems on Prelude. Woodside had to revise plans to plug and abandon a well due to NOPSEMA's concerns about how unexpected high pressures would be managed. > "Some Woodside staff thanked NOPSEMA as they thought management was not listening," the minutes noted. The industry still did not have its act together by late 2019 and were "continuing to have difficulty reaching and holding a consistent position on safety and environmental initiatives," according to Smith. Ken Fitzpatrick, a NOPSEMA board member who also chairs government industry development body National Energy Resources Australia, said NERA experienced similar issues and was also frustrated in its dealings with the industry. ## Virus time In March 2020 the oil price had halved in three months and the Board flagged the impact of tight economic times on safety. Three months later, several companies had been identified as "prone to falling into financial difficulty" and were being monitored. Smaller operators had been in NOPSEMA's sights since at least August 2018 when the regulator was concerned about the financial capability of Jadestone, which was buying the Montara oil field from Thailand's PTTEP. At the same time, an inspection of Triangle Energy's Cliff Head operation off the coast of Dongara was an example of "risks associated the sale of late-life assets to smaller title holders." In September 2020, concerns about the loss of technical expertise in safety-critical positions as operators shed staff to cut costs were discussed. There had been a 30 per cent cut in hours worked offshore during the previous four months. Workers were leaving the industry to escape COVID-related pressures and spend more time with their families, some of whom has not been seen in six months. One upside of COVID from NOPSEMA's perspective was improved communication and cooperation between the regulator, operators and unions. Smith noted that operators' adoption of best practices was often prevented by each company preferring its way of doing things, but they worked well together during the pandemic. ## The Northern Endeavor No offshore facility was mentioned at Board meetings more than the ex-Woodside Northern Endeavour oil vessel in the Timor Sea, starting in late 2017 with a query about why a journalist had put in a freedom of information request about the facility. The reason was that budget cutbacks and pressure to maintain production made the Northern Endeavor a dangerous place to work. [Cutbacks and haste spell danger on Northern EndeavourMaintenance cutbacks and pressure to resume production made the Northern Endeavour oil vessel a dangerous place to work.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/02/northern-endeavour-2.jpg)](https://www.boilingcold.com.au/cutbacks-and-haste-spell-danger-on-northern-endeavour/) Northern Oil and Gas Australia that owned the Northern Endeavour went into administration in September 2019\. Two months later then Resources Minister Matt Canavan told the Board that the industry did not want to pay a levy to clean up the oil field, but the Government was looking at all options. Smith said in March 2020, a month after NOGA went into liquidation, that the industry was divided on the way forward. > "The Board noted that while it was a difficult issue, it was important for industry to maintain credibility with the community." By June 2020 the Government had decided it did want to levy the industry, according to Smith. The Federal Government commissioned experienced UK regulator Steve Walker to report on the failure of the Northern Endeavour and released a summary report in August. The next month the Board noted "the full report has not been released by the Minister, nor has it been seen by NOPSEMA." Incredibly Australia's offshore oil and gas regulator did not see the full report until it was released after a freedom of information request. [Federal Govt regulates poorly and gets $360M Northern Endeavor clean-up billThe Northern Endeavor mess started with Woodside paying to rid itself of a rusty ageing asset, ended with a $362 million liability for the Government and in between was a regulatory shambles.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/09/northern-endeavour.jpg)](https://www.boilingcold.com.au/poor-federal-regulation-allowed-the-360m-northern-endeavor-mess/) ## Hundreds of wells to clean up The cost of cleaning up the Northern Endeavour may not be the only levy imposed on the industry as the Government also has to also deal with so-called "orphan wells" that have not been fully plugged and abandoned but have no company legally responsible for these older wells. While fewer than 20 have been identified, each could cost about $15 million to plug and abandon. Smith noted in November 2019 that the Government could recoup this cost from industry using existing levies. The orphan wells are among about 250 wells in Australian waters that are classified as suspended, some for more than 20 years. A suspended well no longer produces oil or gas but has not been made permanently safe by being plugged and abandoned. Smith said the wells were not posing a significant environmental risk at present but did need to be addressed in the longer term. > The minutes noted, "that while it has been a legal obligation to fully remove equipment since the 1960s, industry appears to not have had this as the default consideration in their planning, nor have assets been valued on the basis of full removal." In other words, the operators have not planned to do the clean-up work they are required to, and not fully recognised the future costs on their books. Identification of wells that need to be plugged and abandoned has been complicated by many of the records residing with State authorities that governed offshore wells before NOPSEMA was formed. --- **NOPSEMA Advisory Board minutes of meetings: 2017 to 2020** --- *Main image: Offshore platform picture in NOPSEMA's foyer. Source: Peter Milne* --- ### Chevron sells greenhouse-impact certified LNG to Singapore URL: https://www.boilingcold.com.au/chevron-sells-greenhouse-impact-certified-lng-to-singapore/ Last updated: 2022-01-08T13:54:29.000Z Chevron will sell half a million tonnes a year of Australian LNG to Singapore accompanied by a statement of the greenhouse gas emissions generated from the wellhead to arrival in Singapore. The [deal announced today](https://www.pavilionenergy.com/en/media/pavilion-energy-and-chevron-ink-a-lng-supply-agreement-for-singapore?ref=boilingcold.com.au) between Pavilion Energy and a Chevron subsidiary in Singapore will run from 2023 to 2029. Pavilion is owned by Temasek, a Singapore Government sovereign wealth fund, and supplies one-third of Singapore's gas demand. The Chevron deal followed an agreement Pavilion signed in November 2020 with Qatar Petroleum for [1.8 mtpa of LNG for 10 years](https://www.pavilionenergy.com/en/node/874?ref=boilingcold.com.au), also from 2023 with a requirement for a statement of greenhouse gas emissions. In April 2020 Pavilion launched a [request for up to two million tonnes a year](https://www.pavilionenergy.com/en/media/temasek-owned-pavilion-energy-calls-offers-pave-way-carbon-neutral-lng-supply?ref=boilingcold.com.au) of LNG starting in 2023, and has exceeded that target with the Chevron deal. Bidders were expected to put in significant resources to develop a reporting methodology for greenhouse gas emissions and develop plans to reduce those emissions. At the time Pavilion chief executive Frederic Barnaud told *Reuters* that the [company wanted to work with industry](https://www.reuters.com/article/us-singapore-lng-carbonoffset-idUKKBN21K04F?ref=boilingcold.com.au) to develop standardisation, certification and price transparency for emissions reduction or offset certificates in Asia. "I am confident that a bold, ambitious and uncompromising industry collaboration will boost our own efforts towards achieving a meaningful impact,” Barnaud said today. Pavilion also wants to develop a marketplace and trading hub for so-called green LNG. Is is understood Chevron will source the LNG from its share of production from the North West Shelf, Gorgon and Wheatstone LNG plants, with most cargoes sailing from Gorgon. ![Carbon Intensity of Australian Offshore LNG projects NWS Pluto Gorgon Wheatstone Ichthys Prelude Scarborough Barossa](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/01/LNG-carbon-intensity.png) Source: Boiling Cold. Data from environmental approval submissions. If Chevron can get Gorgon's troubled CO2 injection system working reliably at full capacity then the LNG from Barrow Island has the lowest carbon footprint of any LNG exported from Australia. [Gorgon emissions to soar until Chevron fixes CO2 injectionGorgon LNG’s carbon emissions will jump by more than one million tonnes a year until Chevron fixes an underground pressure management problem that caused WA’s safety regulator to curtail CO2 injection by two-thirds.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/02/gorgon-lng-trains-large-d-cropped-reduced.jpg)](https://www.boilingcold.com.au/regulator-limits-chevrons-troubled-gorgon-co2-injection-to-one-third-capacity/) Pavilion's quest for carbon-certified LNG and Chevron's decision to source most of the supply from Gorgon are both signs that less carbon-intensive LNG will be increasingly favoured in the marketplace. Total went one step further in October 2020 when it supplied an LNG cargo from Ichthys to China that included the [offsetting of all emissions](https://www.total.com/media/news/communiques-presse/total-delivers-its-first-carbon-neutral-lng-cargo?ref=boilingcold.com.au) from the production and end use of the gas. The increasingly climate-sensitive LNG market favours Woodside's proposed Scarborough LNG project but is difficult for Santos' plans to sanction the Barossa project before July. --- *Main image: First LNG cargo leaves the Gorgon project in March 2016\. Source: Chevron Australia Pty Ltd* --- ### Woodside’s Coleman: Myanmar coup a “difficult decision” for aggrieved generals URL: https://www.boilingcold.com.au/woodsides-coleman-myanmar-coup-a-difficult-decision-for-aggrieved-generals/ Last updated: 2022-01-08T08:47:28.000Z Woodside chief executive Peter Coleman has sympathised with generals who "weren't being heard" and staged a coup in Myanmar where Woodside is exploring for gas. The company has subsequently declined to say the military's move was wrong. Woodside has operated in Myanmar since 2012, where it is one of the largest holders of offshore acreage. Three drilling campaigns have all discovered gas, and a fourth campaign is underway. In 2015 the National League for Democracy led by Aung San Suu Kyi resoundingly won an election held after many years of military rule. She repeated the feat in November 2020, [defeating the army-backed opposition](https://www.bbc.com/news/world-asia-55882489?ref=boilingcold.com.au). On February 1, the military staged a coup before Parliament could sit and make the election result official by appointing a government. The military has detained Aung San Suu Kyi and other prominent leaders. "It's very early days in the coup; the military has committed to free and fair elections in 12 months," Coleman said to *Energy News Bulletin* in an [interview yesterday](https://www.energynewsbulletin.net/on-the-record/news/1405009/too-early-to-say-coleman-on-myanmar-coup?ref=boilingcold.com.au) after presenting the gas company's 2020 results. > "It's not up to us to judge the veracity of grievances they have around the previous election process," Coleman told *Energy News Bulletin.* > "I understand they've put together quite an extensive folder of grievances around the election that they wanted to be heard, and they weren't being heard. > "They were pushed up against a difficult decision point; the day of the coup was the day the new parliament was due to proceed." The Woodside [Human Rights Policy ](https://files.woodside/docs/default-source/about-us-documents/corporate-governance/woodside-policies-and-code-of-conduct/human-rights-policy-%28december-2020%29.pdf?sfvrsn=30c9955f%5F18&ref=boilingcold.com.au) states that "Woodside conducts business in a way that respects the human rights of all people, including our employees, the communities in which we are active." *Boiling Cold* asked Woodside one question: does the company's chief executive regard the military coup as unacceptable? A Woodside spokesperson said the Australian Government was a long-standing supporter of democracy in Myanmar and had requested the military to respect the rule of law and resolve disputes through lawful mechanisms. However, the Woodside spokesperson did not say whether Coleman or Woodside supported Myanmar democracy as the Australian Government does. > "While operating in Myanmar, Woodside has aimed to be a constructive foreign investor," the company spokesperson said. "This includes investing in education, training and capability-building as well as local content, using Myanmar goods and services where we can. "We continue to monitor the evolving situation regarding the Myanmar Government, including any guidance from the United Nations and the Australian Government on economic engagement in Myanmar. "In the ongoing development of Myanmar, economic stability and energy supply can play an important role." The company has plans to protect its workers if tensions escalate. --- *Main image: Woodside chief executive Peter Coleman. Source: Woodside Energy Limited.* --- ### The green legal action that could halt Woodside’s $US11.4B Scarborough LNG URL: https://www.boilingcold.com.au/the-green-legal-action-that-could-halt-woodsides-scarborough-lng/ Last updated: 2022-01-08T08:50:02.000Z December 23, 2020, was a big day for the WA gas industry as years of negotiations to open up Woodside's giant North West Shelf LNG plant were finalised just before Christmas. The deal allowed gas from Pluto next door and the Waitsia gas field in the Perth Basin to be processed at the NWS plant after 30 years of it only taking gas from fields owned by the NWS joint venture. The NWS joint venture's partners – Woodside as operator and BHP, BP, Chevron, Shell and Japan Australia LNG – had to agree to the deal, as did Waitsia owners Beach Energy and Mitsui. The next day Premier Mark McGowan [announced](https://www.mediastatements.wa.gov.au/Pages/McGowan/2020/12/WA-Government-reaches-agreement-on-job-creating-domestic-gas-project.aspx?ref=boilingcold.com.au) the execution of agreements with Waitsia. > "Gas will continue to be an important part of the WA economy, as the State continues to be one of the world's largest producers of LNG," McGowan said. If only it were that simple. None of the self-congratulatory press releases mentioned that two days before the Conservation Council of WA served Woodside notice of a legal action that removed regulatory certainty from all of Woodside's LNG plans. [Conservation Council moves to quash Woodside’s growth plansThe Conservation Council has launched legal action against Woodside and the WA Government that may reopen environmental approvals essential to the Scarborough and Browse LNG projects.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/12/Mia-Yellagonga--Perth--Western-Australia-web-top-crop.jpg)](https://www.boilingcold.com.au/conservation-council-moves-to-quash-woodsides-growth-plans/) The CCWA is disputing two decisions the WA Environment Protection Authority quietly made in mid-2019 to allow the NWS and Pluto LNG plants to take gas from other fields. The EPA was also served a notice. Flow from the gas fields currently supplying the NWS plant start to decline as early as this year and Pluto production will begin to taper mid-decade. The production declines opened up capacity at the NWS plant for gas from other fields to be exported without having to build a processing plant. It was a huge economic opportunity that hinged on the EPA's approval. The two EPA's decisions added decades to the permitted operational lives of the NWS and Pluto LNG plants. At stake is Waitsia's plan to sell LNG for five years under an exemption the WA Premier granted from the ban on the export of onshore gas. [McGowan: onshore gas export banned, unless its Stokes’ WaitsiaWA Premier Mark McGowan has extended WA’s successful gas reservation policy to all onshore gas - except Waitsia that is backed by a powerful media boss Kerry Stokes![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/08/Indicative-image-of-proposed-Waitsia-Gas-Plant-looking-east.jpg)](https://www.boilingcold.com.au/mcgowan-onshore-gas-export-banned-unless-its-stokes-waitsia/) Woodside could lose the opportunity to process Pluto gas into LNG now rather than later this decade that is has valued as a $US1.8 billion ($2.3 billion) acceleration of revenue. Waitsia could switch to sell to the WA market, and the Pluto gas will be produced eventually. However, there is no alternative destination for gas from the Woodside's $US11.4 billion ($14.7 billion) Scarborough project. Regulatory approval for the use of Pluto is a must. ### A 2019 regulatory shortcut The EPA used section 45C of the Environmental Protection Act that allows certain changes to be approved without a full public assessment process to open up access to the LNG plants. Environmental Defenders Office managing lawyer Tim Macknay, who represents the CCWA, said he argues that the approvals were not made in accordance with the law and therefore they are not valid. "The actual test is…whether the decision might lead to a significant detrimental impact on the environment that is different from or additional to the original proposal," Macknay said. "It's a fairly tight test, that power should not be used if there is any likelihood there might be anything significant that is different, > "Ultimately, larger quantities of gas will be processed through the plant in its lifetime, and that will result in a significantly greater quantity of greenhouse gas emissions." The CCWA and EDO think additional decades of production from LNG plants that produce millions of tonnes of greenhouse gases each year is not an insignificant environmental negative. > "We think there are good prospects for success," Macknay said. While Macknay is confident, there are no certainties in law, especially when there are few precedents. The provision used by the EPA has only been tested in court once: 20 years ago concerning a quarry in the Perth hills. Macknay said a decision from the Supreme Court could take six to 12 months. A directions hearing listed for 24 February may give a better definition of the timeline. If the CCWA action is successful, Macknay expects the EPA to put the two decisions through its full appraisal process. That includes public submissions and possible appeals. Those EPA processes could take more than a year. Woodside wants to approve the Scarborough project in the second half of 2021, but the EPA's recommendation may not land on Environment Minister Stephen Dawson's desk until early 2023. ### A dangerous delay Ultimately, the CCWA action cannot stop Dawson approving the two LNG plants' opening up to more supply, but the Minister cannot do so until he receives the EPA report. A delay could be death to a project in the competitive LNG market as other projects move forward and grab market share. When the action was launched Woodside chief executive Peter Coleman said that the company at all times complied with regulatory requirements in seeking and receiving approvals. "We intend to vigorously defend our position," Coleman said. "The CCWA is resorting to a legal challenge a year and a half after the approvals were granted." Macknay said the CCWA did not know of the decisions for some time as notifications were not published. The CCWA then proposed the EPA address their concerns by putting the two decisions through its full referral process. Machnay said the EPA told the CCWA it would not do this in November 2020 and then it was clear a legal action was required. Coleman told investment analysts after the release on full-year results on Thursday that the CCWA was challenging "a minor administrative approval." > "We believe the EPA is on very strong ground with respect to the process, but nonetheless we'll flag that," Coleman said. Coleman flagged another approval issue faced by the Scarborough project: possible aboriginal heritage concerns on the seabed where the pipeline from Scarborough approached the Pluto LNG plant. [Ancient Aboriginal artefacts now an issue for offshore projectsHundreds of 7000-year-old Aboriginal artefacts found off the Pilbara coast highlight a new issue for oil and gas to maintain its social license, with Woodside’s Scarborough project at the forefront.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/07/DJI_0747-reduced.jpg)](https://www.boilingcold.com.au/ancient-aboriginal-artefacts-seabed/) "The study work on that has been completed and the technical expert reports have been finalized at the moment," Coleman said. "Again, we don't believe that will have a material impact on the project at all, but I just flagged that there are unresolved issues at this point." A Beach Energy spokesperson said Beach and Mitsui are continuing to progress Waitsia, which remains on schedule. "No delays to the project are forecast as a result of the suggested action by CCWA," the Beach spokesperson said. In a footnote to its half-yearly results this week Beach said the Waitsia conditional final investment decision on 23 December 2020 became unconditional on 12 February 2021. A Mitsui spokesperson said the company remained committed to the project, subject to relevant government and regulatory approvals. Woodside's final investment decision for Scarborough remained subject to commercial arrangements and joint venture and regulatory approvals, a company spokesperson said. --- *Update 8:45AM 19 February 2021: Peter Coleman comments added* --- *Main image: WA Supreme Court building in Perth. Source: kju, [CC BY 2.0](https://creativecommons.org/licenses/by/2.0?ref=boilingcold.com.au) via Wikimedia Commons* --- ### WA energy debate: When and where the wind blows after coal URL: https://www.boilingcold.com.au/wa-energy-debate-when-and-where-the-wind-blows-after-coal/ Last updated: 2021-12-27T01:17:48.000Z The energy transition on the South West power grid is charging ahead, but the State's political leaders differ on targets, the rate of change, coal closures and how best to harness the wind. Energy Minister Bill Johnston yesterday said in Labor's first four-year term 1439 megawatts of renewable energy capacity was added, with both wind and rooftop solar capacity more than doubling. Johnston spoke at an energy policy debate with Liberal David Honey and The Greens' Tim Clifford hosted by the Australian Institute of Energy. The event had unexpected importance after the Liberal's last week committed to closing down State-owned Synergy's two Collie power stations by 2025 and underwriting 1500 megawatts of wind generation in the Mid-West with a Synergy power-purchase agreement. The Liberals want the WA Government to achieve net-zero emissions by 2030 but have no plans to impose any private sector restrictions. Labor plans to close two Synergy generators in Collie but is silent about further closures and has a stated aspiration for all of WA to achieve net-zero emissions by 2050. In the March 13 State election, a solid Greens vote could see the party, which now has four members in the 36-strong Legislative Council, hold the balance of power in the upper house. Greens MLC Tim Clifford said the South West grid should be 100 per cent renewable energy by 2030 and wants the State to achieve net-zero emissions by 2035. It is a long way from Labor's position, but upper house horse-trading could allow the Greens to pull an expected second-term Labor Government towards their targets. However, whatever the targets, there are some practical issues the next government must tackle. A lot depends on the future of coal, that generated 41 per cent of the power sold in the South West in the last 12 months. ## The life of coal Few dispute that coal will eventually depart WA power generation, but the question is when? It is essential information for the planning and construction of whatever generation takes its place, together with any additional transmission capacity needed. Synergy's Muja C units, Muja 5 and 6, will close in 2022 and 2024. Technical condition and economic viability will determine the life of the remaining Synergy units at the Muja and Collie power stations and the privately-owned Bluewaters. Labor's 20-year Whole of System Plan assumed Muja D (units 7 and 8) could last until 2036 and Collie and Bluewaters Power stations will be capable of producing power past 2040, based on a standard 50-year life for coal-fired plants. Honey recalled his experience as a production manager at Alcoa's Kwinana refinery: "The last thing we ever did was turn the boiler up and down because you destroyed it and it cost millions of dollars to do your overhauls." The Liberal energy spokesperson said WA's coal-fired plants were being destroyed as they respond to fluctuating solar generation. > "They are shutting themselves down because they are not baseload, they are swing, and they are up and down like a yoyo," Honey said. ![Collie coal-fired power station loads for 48 hours to 6AM 17 Feb 2021: Muja, Collie and Bluewaters stations. ](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/02/image-2.png) **Collie power station loads for 48 hours: 15-17 Feb 2021**. Source: [AEMO WEM Data Dashboard](https://aemo.com.au/energy-systems/electricity/wholesale-electricity-market-wem/data-wem/data-dashboard?ref=boilingcold.com.au) Yesterday on the other side of the country Energy Security Board chair Kerry Schott said east coast coal-fired power plants are unlikely to operate until the end of their technical lives. "It's a very difficult juggling act because it is not just the plants going because they are old, it is they are going because they are commercially unviable and can become so reasonably quickly," [Schott said](https://www.afr.com/companies/energy/coal-power-stations-going-broke-schott-20210216-p572xn?ref=boilingcold.com.au). Honey said the cost of running the stations was huge. > "The trouble is that Labor is half on the pot, they are half committed to going to renewable energy, but then they are committed to maintaining union jobs in Collie with the coal-fired power stations," Honey said. Johnston said the Liberal plan was not thought through and a 2025 closure of Synergy's coal generators would cost about $500 million to buy out the coal contracts that go beyond 2025. "We support renewable energy and lower carbon outcomes, but it had to be done through a proper transition," Johnston said. ## Where the wind goes All sides see wind stepping in to at least in part replace coal but disagree on where and how much. Johnston said the Liberal plan for 1500 megawatts wind farm generation in the Mid-West "over a 1000km from Perth" connected by a single line to the major load was not a real solution. The Minister said the Australian Energy Market Operator recommended such a large facility have three connections. Johnston said the 97 per cent reliability of the massive wind project meant "11 days a year the Liberal Party are planning to switch the lights off." The Energy Minister said the proposed 500MW battery to accompany the wind farm only provided 20 minutes of backup but about two hours of storage was required to get gas generation up if the wind dropped. Johnston wants future wind generation to be located closer to Perth in the South West where it could use existing transmission capacity freed up as coal plants in Collie retire. > "I was quite horrified to see the Liberal Party's announcement last week; it is too risky, it is not a realistic plan for this State's energy," Johnston said. "If you want to know what we're doing for the next four years read the DER roadmap, read the Whole of System Plan and look at the 700 pages of new rules were implementing here in WA.". However, question marks over South West power remain as the misnamed Whole of System Plan is a study of four possible scenarios, not a documented set of actions people usually associate with the term "plan." ## Green hydrogen on the distant horizon The Greens' position on the role of gas is starkly different to the major parties that strongly support WA's existing gas giants. The Greens' targets would see gas banished from the South West grid in 10 years and from the entire State in 15 years unless carbon emissions were offset or captured and buried. > "LNG is a pariah, if we give so much of our economy to the LNG industry without offering a transition plan for it we are going to have stranded assets and a situation where we don't take advantage of green hydrogen," Clifford said. And the promise of green hydrogen was applauded by all three parties, perhaps showing that general support for a new industry is more comfortable than the necessary but difficult and complex disruption of an existing one. --- *Main image: Graphic. Source: Warradarge wind farm: Synergy, Bluewaters power station near Collie: Bluewaters Power, graphics: Boiling Cold.* --- ### Australia will face carbon levies unless it changes course URL: https://www.boilingcold.com.au/australia-will-face-carbon-levies-unless-it-changes-course/ Last updated: 2021-12-27T13:54:27.000Z *[John Quiggin](https://theconversation.com/profiles/john-quiggin-2084?ref=boilingcold.com.au), [The University of Queensland](https://theconversation.com/institutions/the-university-of-queensland-805?ref=boilingcold.com.au)* Reports that Britain’s prime minister Boris Johnson is considering calling for [carbon border levies](https://www.bloomberg.com/news/articles/2021-02-04/u-k-s-boris-johnson-considers-g-7-bid-on-green-border-levies?ref=boilingcold.com.au) at the G7 summit to be held in London in June have produced a predictable reaction from the Australian government. The levies would impose tariffs on carbon-intensive goods from countries such as Australia that haven’t adopted a carbon price or a 2050 net-zero emissions target. Appearing to be shocked by the news, Energy Minister Angus Taylor declared that Australia is “[dead against](https://www.smh.com.au/politics/federal/australia-dead-against-climate-tariffs-declares-taylor-20210211-p571iq.html?ref=boilingcold.com.au)” carbon tariffs. They were a “new form of protectionism designed to shield local industries from free trade”. In fact they are already the policy of the [European Union](https://www.bloomberg.com/news/articles/2020-02-18/here-s-how-the-eu-could-tax-carbon-around-the-world-quicktake?ref=boilingcold.com.au) and the US, where President [Joe Biden](https://joebiden.com/made-in-america/?ref=boilingcold.com.au) calls them a “carbon adjustment fee against countries that are failing to meet their climate and environmental obligations”. [Canada](https://www.journalpioneer.com/opinion/national-perspectives/john-ivison-carbon-border-tax-under-biden-likely-not-imminent-but-it-may-be-inevitable-518580/?ref=boilingcold.com.au), which has an economy-wide price on carbon, isn’t worried. Saying you’re [dead against](https://www.theguardian.com/commentisfree/2019/jul/28/local-newspaper-tsar-of-russia-19th-century?ref=boilingcold.com.au) something doesn’t stop it, and nor does asserting that it is anti free trade, when it is just as arguable that it is pro fair trade because it denies exporters from countries that aren’t taking action against climate change an unfair advantage. ## Australia not the primary target The mining industry itself made this point during the Gillard government’s introduction of Australia’s short-lived carbon price. It would leave Australian exporters at a “[disadvantage compared with international competitors](https://www.theaustralian.com.au/business/news/coal-industry-fears-18bn-hit-from-gillards-carbon-tax/news-story/4f20af4f424fcb4f2ebbe28f24b0c14a?ref=boilingcold.com.au)”. Australia isn’t the primary target in any event. The main aim of carbon tariffs would be to encourage China’s leader Xi Jinping to shift his country’s zero emissions date from [2060 to 2050](https://www.vox.com/21455941/china-climate-change-carbon-neutrality-net-zero-solar-electric-vehicles?ref=boilingcold.com.au), benefiting the rest of the world. [Vital Signs: a global carbon price could soon be a reality – Australia should prepareAustralia faces a carbon tax being imposed on it by its trading partners. It’s time to get ahead of the curve.![](https://cdn.theconversation.com/static/tc/@theconversation/ui/dist/esm/logos/web-app-logo-192x192-e99834e3a7a551050e9debe6cc925617.png)The ConversationRichard Holden![](https://images.theconversation.com/files/368977/original/file-20201112-18-1te2p9e.jpg?ixlib=rb-1.1.0&rect=0%2C576%2C4374%2C2183&q=45&auto=format&w=1356&h=668&fit=crop)](https://theconversation.com/vital-signs-a-global-carbon-price-could-soon-be-a-reality-australia-should-prepare-149919?ref=boilingcold.com.au) If Xi Jinping does it, he’ll be on a level playing field with much of the world, although not with Australia, whose fate, like that of Britain’s Admiral Byng in 1757 would be used “[to encourage the others](https://militaryhistorynow.com/2018/04/15/to-encourage-the-others-admirals-byngs-execution-was-a-grim-warning-to-royal-navy-officers-do-your-utmost/?ref=boilingcold.com.au)”. Complaining won’t much help. The [International Monetary Fund](https://www.climatechangenews.com/2020/09/17/imf-endorses-eu-plan-put-carbon-price-imports/?ref=boilingcold.com.au) has [endorsed](https://www.imf.org/en/News/Articles/2020/09/16/sp091620-friends-of-europe-md-opening-remarks?ref=boilingcold.com.au) the idea, saying > in the absence of an agreement on carbon pricing – which would be by far preferable – applying the same carbon prices on the same products irrespective of where they are produced could help avoid shifting emissions out of the EU to countries with different standards The World Trade Organisation, which has in the past has [pushed back](https://openknowledge.worldbank.org/bitstream/handle/10986/19903/WPS5194.pdf;sequence=1?ref=boilingcold.com.au) against environmental considerations in trade, is neutered. ## World Trade Organisation powerless In the late 1990s the WTO struck down a range of environmental restrictions imposed by the United States that required imported tuna to be labelled “[dolphin safe](https://www.wto.org/english/tratop%5Fe/dispu%5Fe/cases%5Fe/ds381%5Fe.htm?ref=boilingcold.com.au)” and required shrimp catchers to take action to protect turtles. These decisions proved disastrous for the WTO, producing bitter hostility from the environmental movement and contributing to mass protests at the 1999 WTO meeting, which became known as the [Battle of Seattle](https://www.britannica.com/event/Seattle-WTO-protests-of-1999?ref=boilingcold.com.au) and ultimately killed the [Doha round of trade negotiations](https://www.theguardian.com/business/2015/dec/20/doha-is-dead-hopes-for-fairer-global-trade-shouldnt-die-too?ref=boilingcold.com.au). Right now the WTO is in the organisational equivalent of an induced coma. By refusing to fill vacancies as they arose, the Trump Administration denied its appellate panel a quorum, forcing it to [stop hearing cases](https://theconversation.com/are-trumps-tariffs-legal-under-the-wto-it-seems-not-and-they-are-overturning-70-years-of-global-leadership-121425?ref=boilingcold.com.au). The result is that any appeal to the WTO against carbon border tariffs would be left in limbo. US President Joe Biden has agreed to the appointment of a new WTO director general, stalled by Trump, but is in no hurry to re-establish the appellate body. Instead, he will first try to refashion the WTO into an organisation that supports his own policies, among them stronger environmental measures, carbon tariffs and “Buy American” provisions. When reformed, the appellate body will give complaints from Australia’s government short shrift. Prime Minister Scott Morrison has shown some signs of recognising these realities, making [baby steps](https://theconversation.com/view-from-the-hill-now-scott-morrisons-preference-is-for-net-zero-emissions-by-2050-154394?ref=boilingcold.com.au) towards announcing a 2050 zero emissions target. But time is short. Morrison will have to either face down the [denialists and do-nothingists](https://www.nytimes.com/2020/01/22/world/australia/fires-craig-kelly-climate-denial.html?ref=boilingcold.com.au) on his own side of politics, or set himself, and Australia, up for a series of humiliations on the international stage, with real and damaging consequences. ![The Conversation](https://counter.theconversation.com/content/155200/count.gif?distributor=republish-lightbox-basic) --- *[John Quiggin](https://theconversation.com/profiles/john-quiggin-2084?ref=boilingcold.com.au), Professor, School of Economics, [The University of Queensland](https://theconversation.com/institutions/the-university-of-queensland-805?ref=boilingcold.com.au)* *This article is republished from [The Conversation](https://theconversation.com/?ref=boilingcold.com.au) under a Creative Commons license. Read the [original article](https://theconversation.com/no-point-complaining-about-it-australia-will-face-carbon-levies-unless-it-changes-course-155200?ref=boilingcold.com.au).* --- *Main image: Parliament House, Canberra. Source:* [*Social Estate*](https://unsplash.com/@socialestate?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) *on* [*Unsplash*](https://unsplash.com/s/photos/canberra?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText)*.* --- ### Santos’ $126M Reindeer gas field write off tightens WA market URL: https://www.boilingcold.com.au/santos-126m-reindeer-gas-field-write-off/ Last updated: 2022-01-08T08:45:38.000Z The Reindeer gas field that supplies 17 per cent of the WA market will cease production sooner than expected due to increasing amounts of water produced with the gas. The news will heighten concerns about gas demand exceeding supply in WA, with a [squeeze starting as soon as 2027](https://aemo.com.au/newsroom/media-release/2020-wa-gsoo?ref=boilingcold.com.au), according to an assessment by the Australia Energy Market Operator in December before the Reindeer announcement. Adelaide-based Santos announced Reindeer's problems today as part of an annual update of the company's reserves. Santos will write off $US98 million ($126 million) from Reindeer's value bringing total impairments for 2020 to $US895 million ($1.15 billion). "The revision at Reindeer is due to water ingress occurring earlier than previously modelled combined with seismic analysis showing a lower structure across a portion of the field," today's [announcement from Santos](https://www.santos.com/news/annual-reserves-resource-statement-and-expected-impairment/?ref=boilingcold.com.au) stated. Simon Molyneux, principal geoscientist with Molyneux Advisors, said a managed decline of production from Reindeer was now inevitable. "Once water ingress starts it is impossible to stop it, and it will occur in more areas across the field," Molyneux said. Santos is the dominant supplier of gas to the WA market from its wholly-owned Varanus Island and Devil Creek plants and a 29 per cent stake in BHP's Macedon development. Reindeer is the sole gas supply to the Devil Creek gas plant that had increased production significantly since mid-2020 when long-term contracts from the North West Shelf ended. [North West Shelf’s 36-year WA gas reign is overSantos is now the biggest supplier of gas to WA and the future may depend on the Perth Basin after the State’s almost four decades of reliance on Australia’s first LNG plant.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/06/Karratha-Gas-Plant--North-West-Shelf-Project-web--1-.jpeg)](https://www.boilingcold.com.au/north-west-shelf-wa-gas-reign-over/) Varanus Island supplied 25 per cent of the market at an average of 268 terajoules a day in the second half of 2020, AEMO data shows. Devil Creek's had a 17 per cent market share with 184 TJ/day. Today's impairment cut the equivalent of 27 million barrels of oil, or 157 petajoules, from Reindeer's proved and probable, or 2P, reserves. The loss of reserves equals two years and four months of current Devil Creek production. Santos plans to increase gas supply to Varanus Island with a compression plant to start operating by December 2021 and the Spartan offshore development slated for the first quarter of 2023. ![Monthly supply of gas to Western Australia in 2020 by processing plant](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/02/image-1.png) Sources: Data: AEMO WA Gas Bulletin Board, Graphics: Boiling Cold However, no amount of extra gas to Varanus Island can offset the loss of gas to 184 TJ/day from Devil Creek due to processing capacity constraints. The capacity at Varanus of 345 TJ/day only allows an additional 77 TJ/day of output, less than half what will be lost from Devil Creek when Reindeer waters out. Santos plans to start drilling an exploration well at the Dancer gas prospect about 8km from Reindeer in the December quarter of 2021, according to an [environmental plan](https://info.nopsema.gov.au/environment%5Fplans/531/show%5Fpublic?ref=boilingcold.com.au) submitted to offshore regulator NOPSEMA in January. *Boiling Cold* understands Dancer is not expected to be a large field. Santos said it its 2P reserves in WA of 1277 PJ were sufficient to cover its sales contracts 1.8 times, indicating it is committed to supplying about 710 PJ to customers. The largest commitment is the [supply to Alcoa of 120 TJ/day of gas](https://www.alcoa.com/australia/en/news/releases?id=2015/04/alcoa-secures-new-gas-supply-agreement-to-power-its-alumina-refineries-in-western-australia&year=y2015&ref=boilingcold.com.au) for 12 years from 2020, a total of more than 500 PJ. Santos has proved reserves in WA of 733 PJ. Proved, or 1P reserves have a higher degree of certainty of delivery than 2P reserves. [McGowan: onshore gas export banned, unless its Stokes’ WaitsiaWA Premier Mark McGowan has extended WA’s successful gas reservation policy to all onshore gas - except Waitsia that is backed by a powerful media boss Kerry Stokes![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/08/Indicative-image-of-proposed-Waitsia-Gas-Plant-looking-east.jpg)](https://www.boilingcold.com.au/mcgowan-onshore-gas-export-banned-unless-its-stokes-waitsia/) The earlier than expected watering out of Reindeer raises more concerns about Premier Mark McGowan's August 2020 decision to exempt the Waitsia gas field from a ban on the export from WA of onshore gas. The Mitsui-operated Perth Basin development half-owned by Beach Energy is planned to begin production in the second half of 2023, but the gas will be exported as LNG until 2029. Had Waitsia not been exempted from the ban its production would have more than covered the earlier than expected loss of Reindeer production --- *Main image: Devil Creek gas plant. Source: Santos.* --- ### WA Libs fills Labor’s energy policy void with a coal exit and green hydrogen URL: https://www.boilingcold.com.au/wa-libs-fills-labors-energy-policy-void-with-a-coal-exit-and-green-hydrogen/ Last updated: 2021-12-27T01:08:31.000Z *OPINION* WA Opposition leader Zak Kirkup wants to replace State-owned coal-fired power from Collie with wind and solar from the Mid-West by 2025 in a surprise move that has left Labor as the clean energy laggards in WA. Kirkup's [energy plan](https://www.waliberal.org.au/state-news/liberals-visionary-plan-to-take-wa-forward-with-the-biggest-jobs-and-renewable-energy-export-project-in-the-nation/?ref=boilingcold.com.au) announced yesterday also offers infrastructure support for a green hydrogen industry north of Geraldton and pledges net-zero emissions from the State Government by 2030. Labor Energy Minister Bill Johnston has gone out of his way for two years to avoid being realistic about the future of Collie coal or supporting Mid-West wind farms. Johnston was warned early on that growing installation of rooftop solar generating surges of power in the middle of the day combined with inflexible coal-fired power could make the South West power grid unstable as soon as 2022. In response, Johnston launched an energy transformation taskforce in May 2019 that has won plaudits from industry for quickly completing two complex tasks. New market rules have opened up access to the grid and improved management of services required to keep supply stable. The taskforce also produced a plan to [better integrated distributed energy sources](https://www.wa.gov.au/government/distributed-energy-resources-roadmap?ref=boilingcold.com.au) such as rooftop solar, batteries and electric vehicles into the system. Johnston delivered these critical, complex and difficult reforms. It was low profile work many politicians would ignore, hoping no problems popped up before the next election. However, the taskforce's third deliverable, a Whole of System Plan for the South West grid to support better investment and regulatory decisions, was hobbled from the start. ## A plan planned to fail The 20-year plan ignored the near-certainty of some form of cost for carbon emissions, and the analysis only sought lower price and higher reliability but not lower emissions. These omissions were despite emissions reduction being one of the five [overarching objectives](https://www.wa.gov.au/sites/default/files/2019-08/Energy-Transformation-Taskforce-Terms-of-Reference.pdf?ref=boilingcold.com.au) in the taskforce's terms of reference. A few months after the taskforce was launched the McGowan government said it would work towards [net-zero emissions by 2050](https://www.mediastatements.wa.gov.au/Pages/McGowan/2019/08/State-Government-details-emissions-policy-for-major-projects.aspx?ref=boilingcold.com.au). With Collie's three power stations all among the State's top 10 producers of greenhouse gases, the plan was an opportunity to identify real action to achieve the Government's stated goals. But it seems the intent was not to identify any action at all. When Johnston launched the plan in October 2020, he told *Boiling Cold* that the exclusion of a carbon price from the plan was "a political question." > "If the Federal Government set a price on carbon then it would be very easy to adjust the modelling," Johnston said. By Johnston's logic homeowners in the North West would only consider a cyclone-proof design when the wind picked up. The State Government has chosen not to factor in a future carbon price in its investment decisions, contrary to the practice of every large resource company in WA. Anyone relying on the Whole of System Plan to inform investment decisions would be betting on a fantastical future without climate change. Two other features of the plan unrealistically favoured coal. ![coal-fired power stations in Collie](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/10/image-9.png) Source: AEMO 2020 Electricity Statement of Opportunities The two Muja units scheduled to stay open are assumed to be technically capable of operating until 2036\. State-owned Collie and privately-owned Bluewaters stations were predicted to last past 2040\. Few if any industry players think this is possible. Collie's generators must bend to the will of daily solar power surges and are frequently shut down. This is not the service they were designed for and the cycling is shortening the life of the equipment. ## Don't mention the wind The final free-kick for coal was handicapping competition from more wind farms in the Mid-West. The Warradarge and Yandin wind farms opened in 2020 and last quarter [ate into coal's market share](https://www.boilingcold.com.au/wind-and-solar-push-down-coal-gas-and-prices-in-south-west-wa/). ![Wind and soar displace gas and coal Q4 2019 to Q4 2020 on South West Interconnected System](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/02/change-in-WEM-supply-Q4-2019-to-Q4-2020.jpg) **Wind and solar displace gas and coal Q4 2019 to Q4 2020**. Source AEMO The two new wind farms ran at an extraordinary capacity factor of about 47 per cent in February, according to Rystad Energy, and five of the seven Australian wind farms that did better were in WA's Mid-West or Wheatbelt. So where did Johnston's plan conclude new wind farms should go? Around Collie of course, meaning lower capacity factors, more difficult terrain and hugely more challenging community acceptance issues. The justification was that Collie wind power would be cheaper by hooking into existing transmission lines, but new Mid-West wind farms needed to pay for a grid upgrade. It appears the plan's model iteratively chose the cheapest generation options until the demand was met. The result is that a new Mid -West wind farm would unrealistically bear the entire cost of the transmission upgrade so was never chosen. Unsurprisingly, the model concluded that little wind capacity was required for a decade. The Liberals want to spend $500 million to extend 330kV transmission to Geraldton to unlock Australia's best wind province. The work has been planned for a decade as the second stage of the Mid-West Energy project. Labor can criticise the grid upgrade cost but must acknowledge that unlike their numerous road upgrades is not a sunk cost and will recoup revenue. ## Coal's black future Taskforce chair Stephen Edwell said in October that the plan showed the outlook for coal was "perhaps more bleak then some might have expected." Edwell said under the plan's most realistic scenarios of relatively flat demand 130MW or 500MW of the 1200MW of coal-fired capacity still open 2025 would be uncompetitive. Given the extremely positive way coal's role in the South West was modelled, the true picture must be catastrophic. Sumitomo confirmed that in November when it [wrote off as worthless](https://www.boilingcold.com.au/collies-bluewaters-power-worthless-sumitomo/) its 50 per cent share of Bluewaters power station. In October Johnston said the plan was criticised for "allowing coal to go on forever." > "So, the people of Collie can be confident that in a Labor Government they've got friends," Johnston said. Friends deserve the truth, but while the overall trend for Collie is simple and inevitable, how it plays out is not. Labor has made an enormous effort to prepare Collie's community and economy for life after coal, but the transition needs much more than a schedule to close down the power stations. The private sector owns Collie's two coal miners and one of its three power stations, and all owners are heavily in debt and financially precarious. [Collie wobbles: WA power’s financial messBefore it takes WA to a clean, green renewable energy future the State Government has problems a plenty in still vital coal-fired power.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/07/1d-600x450.jpg)](https://www.boilingcold.com.au/collie-wobbles-wa-powers-financial-mess/) The Government is heavily exposed to the mess. Synergy has contracts to buy coal and power, mine rehabilitation costs could be as high as [$1.6 billion for just one large pit](https://www.boilingcold.com.au/stokes-650m-pumped-hydro-collie-coal/), and above all else, the lights must stay on. It would be understandable if Labor is frustrated that Kirkup's plan skips these difficulties. ## The next big thing The Liberal plan starts with an opportunity and a boost for cleaner energy. A schedule for shuttering Synergy's coal-fired stations is the opportunity, and pre-investment in Mid-West transmission is the boost. State-owned Synergy would back the generation with power purchase agreements to replace its Collie plants. Competitive reverse auctions could yield Synergy very cheap power. The transmission capacity to Geraldton and infrastructure investment at the proposed Oakajee industrial area nearby would then hopefully lure big investments in green hydrogen. Labor also wants [Oakajee to be a green hydrogen hub](https://www.boilingcold.com.au/wa-pushes-green-hydrogen-hub-near-geraldton/), but without kickstarting more Mid-West generation or investing in transmission or infrastructure. Kirkup positioned his green hydrogen push as a successor to the efforts of previous Liberal leaders. Sir David Brand supported iron ore in the 1960s, and Sir Charlies Court bankrolled the North West Shelf project in the 1970's. The analogy with the North West Shelf has merit. The State financed most of the gas pipeline from Karratha to the south and Synergy's predecessor the State Energy Commission pre-bought much of the gas. The NWS domestic gas project financed the LNG development, and in the succeeding decades more LNG plants and gas-intensive industry followed. The opportunity for green steel, and many other materials, is genuine. This month BMW agreed to buy [aluminium produced with solar power](https://www.cnbc.com/2021/02/02/bmw-will-now-use-aluminum-thats-been-made-with-solar-power.html?ref=boilingcold.com.au) from the United Arab Emirates, starting with 43,000 tonnes this year. The deal has two lessons for WA: the opportunity is there, but it will be competitive. WA is not the world's only windy, sunny spot, and a few carrots may be needed to kick off real investment. ## A united front? Kirkup has given Labor the chance of making WA's energy transition a bipartisan issue by allowing it to open up about the true outlook for Collie without risking the marginal lower house seat it sits in. Then the State can move forward with fact-based decisions that are not reversed every time Government changes. WA achieved this in response to Perth's water shortages from reduced rainfall. Either party could have run scare campaigns about the successive introduction of sprinkler bans, bore water, expensive desalination plants and now recycled water but they did not, and the State is better off for it. However, Premier McGowan's first response was not encouraging. > "All it would mean is many, many billions of extra debt, huge increase in family power bills, rolling blackouts across the State, and huge job losses," McGowan said yesterday, according to *The West Australian*. The Premier's ill-informed scaremongering about renewable energy sounded like one of Angus Taylor's spin doctors wrote it. The Liberal's policy can righty be criticised for having an aggressive schedule and a lack of detail. However, it is correct about the big picture: Mid-West wind with storage will replace South West coal, and it could happen very quickly and be the foundation for a green hydrogen industry. Kirkup's simple plan has numerous flaws but gets the big questions right. Johnston's plan has copious detail but, beyond a [big battery](https://www.boilingcold.com.au/wa-plans-100m-big-battery-to-balance-solar/), little action. The Minister has done the hard yards of regulatory reform to build the launch pad and put the rocket in position. It is time to start the countdown. --- *Main image: Zak Kirkup and David Honey launch Liberal energy policy. Source: WA Liberal Party* --- ### Regulator orders Inpex to stop Ichthys drilling until it is safe URL: https://www.boilingcold.com.au/inpex-ordered-to-stop-ichthys-drilling-until-it-is-safe/ Last updated: 2022-01-08T14:03:30.000Z Inpex has been forced to halt offshore drilling at its Ichthys LNG project after about 200 tonnes of large pipe fell out of control on the Maersk Deliverer drilling rig on January 22. Since then, the $US45 billion project suffered another safety incident when a tanker loading condensate could not keep the correct position near the 336m-long Ichthys Venturer oil vessel, and an emergency disconnection was required. The drilling incident prompted offshore safety regulator NOPSEMA to tell Inpex to stop drilling and move the rig to a safe area until the cause of the incident is identified and fixed, and all equipment involved in the incident checked for safety. A NOPSEMA spokesperson said the regulator had inspected the drilling rig and commenced an investigation. “There were no injuries or environmental concerns associated with the incident,” the spokesperson said. > “However, the incident had the potential to lead to a major accident event.” A major accident event is one that NOPSEMA regards as "[having the potential to cause multiple fatalities](https://www.nopsema.gov.au/assets/Guidance-notes/A86485.pdf?ref=boilingcold.com.au)." A long string of vertical pipe, known as a marine riser, weighing more than 200 tonnes fell toward the seabed after a locking mechanism failed. NOPSEMA’s early conclusion is that all the equipment would have fallen to the seabed if one piece of equipment has not inadvertently caught on another. A device to stop blowouts at the bottom of the marine riser was just 4m above the seabed when the fall stopped. Two workers were nearby when the fall occurred. The [NOPSEMA direction](https://www.nopsema.gov.au/assets/Published-notices/A767302.pdf?ref=boilingcold.com.au) issued last week to Inpex and published yesterday states the incident was a “high-potential near-miss with respect to personnel health and safety.” > “NOPSEMA was not satisfied that the same failure would not reoccur…risking damage to subsea infrastructure, including wells with potential for loss of containment and personnel injury,” the direction stated. The NOPSEMA direction also applies to the owner of the rig, Danish company Maersk Drilling. “While the Maersk Deliver is undertaking the drilling activity, Inpex has duties as titleholder and operator to ensure the safety of its workforce and the environment,” the NOPSEMA spokesperson said. ### An expensive accident Inpex has contracted the Maersk Deliverer for almost [three years from October 2020](https://investor.maerskdrilling.com/static-files/6c473a7a-eddc-44c1-b52b-e472b606b505?ref=boilingcold.com.au) with two option to extend for a year at the cost of $US266,000 ($345,000) a day. A lack of safety has been expensive with idle time already worth about $6.5 million. *Boiling Cold* asked Inpex if it had determined the cause of the Maersk Deliverer incident and when it expected drilling to resume. An Inpex spokesperson said it was the company’s general policy not to comment on specifics regarding its operations. The drilling is part of Ichthys Phase 2, a multi-billion dollar expansion of wells and pipelines to keep gas flowing to the LNG plant in Darwin. Twelve to fifteen wells will be drilled, and existing wells worked over during a campaign expected to last five years, according to Inpex’s [environmental plan](https://docs.nopsema.gov.au/A704690?ref=boilingcold.com.au). Each well is expected to take three to four months to drill. Two weeks after the 200 tonnes of pipe moved out of control on the Maersk Deliverer Inpex lost control of a much larger item: a tanker. The tanker was loading condensate from the Ichthys Venturer floating production storage and offloading vessel when it moved out of position, forcing Inpex to activate the quick disconnect mechanism on the hose that floats on the ocean between the two vessels. The NOPSEMA spokesperson said there was no loss of hydrocarbons or injuries, and it is investigating the incident is. --- Clarification 14 February 2021: Revised to clarify that the piping that fell was a marine riser not drill pipe. --- *Main image: Maersk Deliverer dynamically positioned semi-submersible drilling rig. Source: Maersk Drilling* --- ### Gorgon emissions to soar until Chevron fixes restricted CO2 injection URL: https://www.boilingcold.com.au/regulator-limits-chevrons-troubled-gorgon-co2-injection-to-one-third-capacity/ Last updated: 2022-01-01T09:56:27.000Z *EXCLUSIVE* Gorgon’s CO2 injection system can run at just one-third its design capacity, increasing the rate of carbon emissions by more than one million tonnes a year, until Chevron can fix a system to limit the rise in underground gas pressure. *Boiling Cold* revealed in January that the WA Department of Mines, Industry Regulation and Safety had limited the rate of CO2 injection until a so-called pressure management system was operational. The CO2 injection cap would reveal the increase in carbon emissions caused by the flaws in the $3.1 billion system that should store four million tonnes of CO2 a year. However, a DMIRS spokesperson in January said “the revised rate is not publicly available.” [Gorgon LNG emissions to rise as sand clogs $3.1B C02 systemThe WA safety regulator has told Chevron to turn down Australia’s $3.1 billion showpiece Gorgon LNG carbon capture and storage system until problems are fixed, meaning carbon emissions will rise.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/01/Gorogn-CO2-injection-well-with-LNG-plant-in-background.jpg)](https://www.boilingcold.com.au/chevrons-gorgon-co2-emissions-to-rise-sand-clogs/) A freedom of information request by *Boiling Cold* has revealed that the regulator told Chevron in December to turn down the rate of CO2 injection by a massive two-thirds of its design capacity from January 1 2021 (full letter below). DMIRS wrote to Chevron in response to the US-major’s request for a third extension to its permission to keep injecting CO2 underground without operating the pressure management system. Chevron started pumping CO2 from offshore gas fields into the Dupuy formation 2000m under Barrow Island in August 2019, 2½ years after LNG production began. Before injection started, Chevron tested wells designed to suck water out of the Dupuy formation to stop pressure in the formation rising too much as more gas is pumped in. The water contained sand that clogged other wells that were to dispose of the excess water in a different underground reservoir. The problem is not yet fixed. ### CO2 injection cut to reduce risks The regulator gave Chevron another extension, but after “a review of the additional risks” of operating without the pressure management system imposed new conditions. Most importantly, only 70 million cubic feet of CO2 can be injected a day, one-third of the [rate expected when the system is fully operational](https://beta.documentcloud.org/documents/20440490-foi-4-abu200300205%5F1-jul-2019-to-30-dec-2019-section-13-annual-operational-rep-ar?ref=boilingcold.com.au#document/p20/a2016958). Usually this turndown of a four million tonnes a year system would cause an extra 2.7 million tonnes a year of CO2 to be vented to the atmosphere. However other technical problems at Gorgon – [cracks in propane vessels](https://www.boilingcold.com.au/safety-cop-orders-chevron-to-fix-gorgon/) – mean that one of Gorgon’s three LNG trains will be shut down for repair for some months. This may limit excess carbon emissions to a rate of 1.3 million tonnes a year until all three trains are back in production. “CO2 venting occurs as part of normal LNG operations, and our environmental approvals reflect this,” a Chevron spokesperson said. However, the maximum venting predicted at this stage in Gorgon’s [Greenhouse Gas Abatement Program](https://australia.chevron.com/-/media/australia/our-businesses/documents/gorgon-emp-greenhouse-gas-abatement-program.pdf?ref=boilingcold.com.au) in 1.26 million tonnes a year. This is less than half the 2.7 million tonnes a year rate if Gorgon’s three LNG trains return to production before the pressure management system is fixed. *Boiling Cold* asked Chevron how much CO2 Gorgon is currently venting and when it expects to have CO2 injection back at full capacity. Chevron did not respond. The severe curtailment of injection is another blow to Chevron’s attempt to manage Gorgon’s carbon emissions ahead of July 2021 when it is required to have buried at least 80 per cent of the CO2 from reservoirs during the past five years. [Chevron unlikely to suffer from Gorgon LNG emissions failGorgon LNG has emitted 7 million tonnes of climate-warming CO2 more than permitted but Chevron is unlikely to suffer at the hands of lax Australian governments.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/11/gorgon-plant-site-d-cropped-reduced.jpg)](https://www.boilingcold.com.au/chevron-faces-little-grief-from-gorgon-lng-emissions-miss/) DMIRS also told Chevron to install more equipment to detect very small earth tremors, or microseismic activity, that could be caused by injecting the CO2 underground. If microseismic activity is too high, Chevron must turn down its rate of CO2 injection even further. A Chevron spokesperson said there had been no microseismic events requiring a reduction in CO2 injection. “Seismic activity is part of the system design and was considered as part of the regulatory approvals for the system,” the spokesperson said, “The magnitude of these events is extremely low – approximately 100 times lower than events that could be felt at surface.” The Chevron spokesperson said the CO2 injection system was operating safely and had stored four million tonnes of CO2 so far. “Like any pioneering endeavour, it has presented some challenges,” the Chevron spokesperson said. “We have the right people with the right technical expertise, utilising proven technologies common in the oil and gas industry, to assess and undertake this work.” --- *Letter from regulator DMIRS to Chevron* A suite of [documents about the environmental performance of Gorgon](https://beta.documentcloud.org/projects/gorgon-co2-injection-201321/?ref=boilingcold.com.au) is available. --- *Main image: Gorgon LN G project on Barrow Island. Source: Chevron Australia Pty Ltd* --- ### Stokes’ $650M pumped hydro plan reveals huge Collie clean up cost URL: https://www.boilingcold.com.au/stokes-650m-pumped-hydro-collie-coal/ Last updated: 2022-01-08T14:12:42.000Z *EXCLUSIVE* Seven Group has proposed to build a pumped hydro energy storage facility in a disused coal pit in Collie and save $1.6 billion in rehabilitation costs that the State Government seems blissfully unaware of. *Boiling Cold* has learnt that Seven Group Holdings wrote to the State Government in December about repurposing Griffin Coal's disused Muja coal pit to store energy with pumped hydroelectricity. SGH would spend $650 million to produce 400 megawatts of power from about 2026\. The cost is in line with ATCO's plan last week to [spend $500 million on a pumped hydro facility](https://www.afr.com/companies/energy/atco-takes-500m-dive-into-nsw-pumped-hydro-20210129-p56xy2?ref=boilingcold.com.au) in NSW that could generate 325MW of power for eight hours. SGH, chaired by media owner Kerry Stokes, supported its proposal with a claim that the WA Government could save about $1.6 billion by not having to rehabilitate the Muja mine pit. Centre for Mining Restoration director Professor Kingsley Dixon said this estimate seemed "reasonable, bordering on conservative." In 2018 Dixon [told *WA Today* in 2018](https://www.watoday.com.au/national/western-australia/mine-rehab-in-wa-is-the-pits-inquiry-finds-few-success-stories-20180308-h0x7w9.html?ref=boilingcold.com.au) that Collie's coal pits were "voids to the horizon" and "backfilling" the pits was beyond current technical ability. > "I frankly don't know what we should do with holes that now measure in the cubic kilometres," Dixon said. "Pit voids, ecologically and naturally, don't provide a surface for the environment to return." ## State Government does not check if companies can pay The responsibility for the rehabilitation of mine sites rests with the companies holding the mining leases, a spokesperson for the Department of Jobs, Tourism, Science and Innovation said. Muja pit owner Griffin Coal recognised just $31 million for rehabilitation liabilities in its accounts to March 2018, the most recent report lodged with corporate regulator ASIC. Premier Coal, the other Collie coal miner, recorded $30.5 million in its accounts for the year to December 2019. Rehabilitation provisions are the present value of a future cost, and the value is affected by when the work would occur, and the discount rate used. A $30 million provision could represent say $70 million of work performed near the end of the decade. However, discounting does not explain the discrepancy between the miner's provisions and the "conservative" Seven Group estimate. Together the two miners have recognised $61.5 million to rehabilitate mine pits covering an area 17km long and 4km wide: just four per cent of Seven Group's estimate for one large pit. Both of Collie's coal miners are [well known to be heavily indebted](https://www.boilingcold.com.au/collie-wobbles-wa-powers-financial-mess/) and either losing money or marginally profitable. Coal's quickly [reducing share of the WA power market](https://www.boilingcold.com.au/wind-and-solar-push-down-coal-gas-and-prices-in-south-west-wa/) and the need to move more overburden each year to mine each tonne of coal will likely make the businesses more precarious. "Mining companies are required to prepare mine closure plans outlining the plans and strategies for the rehabilitation of their mining operations which are reviewed by regulatory agencies," the JTSI spokesperson said. "This is a process currently being undertaken by the Collie coal companies, and others, on a three-yearly cycle." *Boiling Cold* asked what the Government did to ensure mining companies can pay for rehabilitation. > "It is not usual for Government to assess the financial capability of companies to undertake their project responsibilities," the JTSI spokesperson said. The Federal Government had a similar light-touch regulation of the decommissioning of offshore oil and gas facilities until a company producing oil went into liquidation in 2019 and landed Australian taxpayers a [clean-up bill of up to $500 million](https://www.boilingcold.com.au/northern-endeavour-debacle-hits-209m-with-much-more-to-come/). ## Could mine rehab make pumped hydro add up in WA? Pumped hydro acts like a battery: it use surplus electricity to pump water uphill and later generate electricity when the water travels downhill through a generator. In WA's South West, it would likely take in power during the day when solar panels are most productive and discharge power in the evening. The maximum power is determined by the capacity of the pump/generator and the hours of operation depend on the volume of water stored in the upper and lower reservoirs. The Muja pit would be the lower reservoir. ![Possible pumped hydro energy storage facility in Collie](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/02/ANU-Collie-pumped-hydro-graphic.jpg) **Possible pumped hydro energy storage facility in Collie.** Source: [ANU PHES Atlas, 2017](https://arena.gov.au/assets/2018/10/ANU-STORES-An-Atlas-of-Pumped-Hydro-Energy-Storage-The-Complete-Atlas.pdf?ref=boilingcold.com.au) A State Government report into the next 20 years of the South West grid released in November did not consider pumped hydro in detail. The [Whole of System Plan](https://www.wa.gov.au/government/publications/whole-of-system-plan-report?ref=boilingcold.com.au) concluded that batteries were the preferred form of energy storage in all scenarios. Batteries were cheaper, had lower energy losses, and were easier to install the capacity required when as needed. State-owned electricity generator Synergy is planning a [100MW battery in Kwinana](https://www.boilingcold.com.au/wa-plans-100m-big-battery-to-balance-solar/), but further increases in variable solar and wind generation will require more energy storage on the South West grid. In the lead up to the 2017 State election, the then ALP opposition promised a study into pumped hydro at Collie. Energy Minister Bill Johnston said the report revealed "many technical and engineering challenges which suggest it is not currently viable." > "However, the Government would welcome any private-sector proposal, and we continue to welcome innovation and risk-taking by the private sector in WA's energy journey," Johnston said. Pumped hydro may not be viable in WA purely as a component of the energy system. However, if it eliminates or delays a huge rehabilitation bill that could fall on WA taxpayers, there could be a net benefit to the State. Seven Group's pitch for pumped hydro was made under the State's market-led proposals policy introduced in March 2019 to provide a single channel for businesses to approach the Government about potential investments. A Department of Finance spokesperson said initial MLP proposals are kept confidential for commercial reasons but are publicly disclosed if they progress to the second stage of business case evaluation. A proposal is a long way from a project. Dixon said that storing and pumping vast quantities of water in a disused mine site would have its own environmental concerns. > "They have to demonstrate the capacity for this to be safe, stable and non-polluting," Dixon said. *Boiling Cold* understands there is another possible way to fill the vast void of the Muja pit: with overburden from a potential mine expansion nearby. The pumped hydro facility would not be the first SGH investment in Collie. SGH subsidiary Westrac that distributes Caterpillar mining equipment received $2.77 million from the WA Government's $20 million Collie Futures fund to open a [training centre for operators of automated trucks](https://www.smh.com.au/national/taxpayers-fork-out-770-000-above-funding-limit-for-westrac-training-centre-in-collie-20201027-p56975.html?ref=boilingcold.com.au). Seven Group Holdings did not respond to questions from *Boiling Cold.* Griffin Coal declined to comment. --- *Main image: Flooded coal pit near Muja Power Station, Collie. Source: [Google Maps](https://goo.gl/maps/fAH2n4QS2FtAdKrS8?ref=boilingcold.com.au)* --- ### Regulator tells Woodside to clean up oil field and may take legal action URL: https://www.boilingcold.com.au/regulator-tells-woodside-to-clean-up-oil-field-and-may-take-legal-action/ Last updated: 2022-01-01T09:53:03.000Z Offshore regulator NOPSEMA will investigate whether Woodside broke the law when it did not properly maintain equipment at its Enfield oil field 38km off the North West Cape. The regulator has also ordered Woodside remove all its equipment from the ocean by a fixed schedule. The Nganhurra floating production storage and offloading vessel was towed away in December 2018, a month after production ended after 12 years and 80 million barrels of oil. The 270m-long Nganhurra was towed to Malaysia and Woodside is considering divestment options, a company spokesperson said. Woodside was not as quick to remove equipment that had no value. Still in the ocean, about 20km from the Ningaloo Marine Park are a massive riser turret mooring the Nganhurra was connected to, chains that secured it to the seabed, numerous pipelines and umbilicals, structures on the seabed, and eighteen wells. ![Topsides of the 83m long riser turret mooring for Woodside's Nganhurra FPSO](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/02/Nganhurra-RTM-topsides.jpg) **Topsides of the 83m long riser turret mooring.** Source: Woodside's Nganhurra Operations Cessation Environment Plan Woodside’s initial plan was to tow the 83m-long RTM to Henderson south of Perth for disposal. However, this was impossible after discovering that ballast tanks needed to get the RTM in position for a long tow did not work. “The RTM has already degraded in at least two areas, namely flooding of compartment two and the failure of several ballast valves,” A [NOPSEMA notice to Woodside](https://www.nopsema.gov.au/assets/Published-notices/A700032.pdf?ref=boilingcold.com.au) in late 2019 stated. NOPSEMSA found that Woodside had not adequately maintained the RTM, including skipping planned inspections, and it could become a navigation hazard or leak oil into the ocean. NOPSEMA has [now concluded](https://docs.nopsema.gov.au/A757729?ref=boilingcold.com.au) that “there is a low probability that the RTM could be successfully removed from the marine environment and disposed of onshore.” However, offshore disposal “results in impacts and risks that would not be realised if the RTM was disposed onshore.” Disposal in relatively shallow water was preferred as deeper water made it harder to remove plastic and seal in the plastic, including 65 cubic metres of polyurethane foam, that could not be removed. Now, due to its own poor maintenance, Woodside cannot tow the RTM to Perth. Instead, in about 12 months, Woodside will sink it just outside the Ningaloo Marine Park border to act as an artificial reef. Legal action by the regulator against Woodside is possible. “As Woodside is unable to decommission the riser turret mooring as originally approved, NOPSEMA is investigating possible breaches…of the law relating to requirements to maintain property in good condition,” according to the regulator’s statement today. A Woodside spokesperson said repurposing the RTM as an artificial reef will not be cheaper than onshore disposal. ## Tardy decommissioning not uncommon NOPSEMA has given Woodside and its partner Mitsui E&P, which operates the Waitsia gas field in the Perth Basin, a schedule for the complete decommissioning of the area where the Nganhurra operated. Woodside must plug eighteen wells by mid-2024, remove all other equipment by the end of 2024, and restore the seabed environment by the end of 2025, according to the [direction](https://www.nopsema.gov.au/assets/Published-notices/A763405.pdf?ref=boilingcold.com.au). Failure to comply could result in hefty fines or jail terms. Such a definitive direction to decommission equipment is unprecedented in the Australian offshore oil and gas industry. A Woodside spokesperson said that as well as sailing away the FPSO the company had isolated wells, flushed subsea infrastructure and undertaken extensive studies and for the remaining of decommissioning work. The Nganhurra is the third decommissioning issue that has damaged Woodside’s reputation recently. In June 2020 Woodside proposed to [leave everything on the seabed](https://www.boilingcold.com.au/woodside-shouts-abandon-abandonment-for-echo-yodel/) at its now-shuttered Echo Yodel gas field, including 400 tonnes of plastic. Many in government and industry regard as irresponsible Woodside’s legal 2016 sale of the aging Northern Endeavour oil vessel to a small inexperienced company that later failed. The [cost to the Australian taxpayer has exceeded $200 million](https://www.boilingcold.com.au/northern-endeavour-debacle-hits-209m-with-much-more-to-come/) and may reach $500 million. A Woodside spokesperson said the company was focused on strong environmental performance, including decommissioning of facilities in line with good industry practice. However, the problem is not isolated to Woodside. ENI’s [poor maintenance of its shuttered Woollybutt oil field](https://www.boilingcold.com.au/enis-poor-maintenance-causes-marine-hazard-off-wa-coast/) caused a marine hazard in September 2020\. In December 2020 NOPSEMA directed it to decommission Woollybutt and prepare to clean up its still operating Blacktip gas project. Soon after, the Italian company cancelled the sale of its Australian assets. In December 2020 NOPSEMA announced it would [toughen its enforcement](https://www.nopsema.gov.au/news-and-publications/latest-news/news-announcement/2020/12/21/nopsema-reinforces-offshore-obligations-under-new-compliance-plan/?ref=boilingcold.com.au) of decommissioning requirements and the Federal Government moved to [ensure that operators have sufficient funds](https://consult.industry.gov.au/offshore-resources-branch/offshore-decom/?ref=boilingcold.com.au) for the work. --- *Correction 5PM 6 February 2021: Woodside has to decommission 18 wells, not none.* --- *Main image: Nganhurra FPSO. Source: Woodside Energy Limited* --- ### Australia told ExxonMobil CEO 'no easy exit' before $3B Bass Strait sale canned URL: https://www.boilingcold.com.au/australia-told-exxonmobil-ceo-told-no-easy-exit-before-3b-bass-strait-sale-canned/ Last updated: 2022-01-08T14:04:42.000Z *EXCLUSIVE* ExxonMobil abandoned the sale of its Bass Strait operation just two weeks after the Australian Government told the US major it would be liable for decommissioning the 50-year-old operation if a new owner failed to. Resources Minister Keith Pitt told ExxonMobil chief executive Darren Woods in November 2020 that he would crackdown on the sale of offshore oil and gas assets, a month before the [policy change](https://www.minister.industry.gov.au/ministers/pitt/media-releases/northern-endeavour-be-decommissioned?ref=boilingcold.com.au) was made public. In the letter obtained by *Boiling Cold* after a freedom of information request (full letter below) Pitt laid out his expectations of ExxonMobil including that any new owner must have the financial and technical capacity to decommission the ageing Bass Strait facilities. Pitt also told ExxonMobil he would introduce trailing liabilities that hold previous owners liable for decommissioning costs as a last resort to avoid the burden falling on Australian taxpayers. Trailing liabilities were recommended by the [Walker Report](https://www.boilingcold.com.au/sellers-of-oil-and-gas-assets-should-stay-liable-for-cleanup-report/) into the failure of the owner of the Northern Endeavour oil vessel that [could cost taxpayers $500 million](https://www.boilingcold.com.au/northern-endeavour-debacle-hits-209m-with-much-more-to-come/). ## Industry behaviour prompted crackdown Three days after giant ExxonMobil announced it would sell its 50 per cent share of the Bass Strait in September 2019 an oil and gas minnow Northern Oil and Gas Australia operating in the Timor Sea entered administration. The big players in Australian oil and gas may not have realised it then, but the window of opportunity would soon close to cut and run by selling late-life assets to small players and escape decommissioning costs. Two companies – Hess and Woodside – had already made the jump. In late 2017 Hess [sold its Equus fields to newly-formed Western Gas](https://www.boilingcold.com.au/western-gas-micro-oil-gas-player-with-a-us100-million-clean-up-bill/) after its 10-year $US1.8 billion effort to develop an LNG project failed. A fifteen-day old company now had the rights to develop Equus, but it came with the liability to plug and abandon five wells in remote deep water at the cost of about $US100 million. *Boiling Cold* understands Western Gas paid $US2 for Equus. In 2016 Woodside had gone further than selling as asset for next to nothing to avoid decommissioning costs: it paid NOGA $US16.5 million to take the ageing Northern Endeavour oil production vessel. The Federal Government allowed a tiny inexperienced undercapitalised company to buy a poorly maintained vessel with dwindling reserves and a decommissioning cost Woodside in 2015 estimated to be $362 million. Unsurprisingly the [lack of regulatory oversight](https://www.boilingcold.com.au/poor-federal-regulation-allowed-the-360m-northern-endeavor-mess/) did not end well. A routine review of offshore decommissioning regulation launched in October 2018 now had real importance. Cleaning up after Australia's oil and gas industry was estimated to cost [$76 billion to 2050](https://www.boilingcold.com.au/australias-oil-and-gas-industry-will-create-a-76b-clean-up-bill/), with much of that offshore. Pitt did not appear happy with how ExxonMobil engaged with the Federal Government over the sale of its share in 23 platforms and 600km of pipelines in the Bass Strait. ExxonMobil had to make sale documents and schedules available and promptly responded to queries, Woods was told. When a Federal Minister writes to the chief executive of a $US190 billion company about tardy paperwork, the relationship is not going well. To make it clearer, Pitt wrote that government agencies would "closely scrutinise any transaction to ensure my expectations are met." Fifteen days after Pitt signed the letter ExxonMobil abandoned the sale process it announced 14 months before. ExxonMobil told *Boiling Cold* the introduction of trailing liabilities did not affect its decision not to sell its Bass Strait interests. "Following a marketing process, ExxonMobil has determined it can secure more value by continuing to operate the assets," an ExxonMobil spokesperson said. ## Long term players may become stayers Woodside's opportunistic sale of the Northern Endeavour let hundreds of millions of dollars of decommissioning costs flow from producers to taxpayers, but it triggered regulatory reform intended to stop that happening again. A sale of an older asset will still be possible but the pool of buyers acceptable to the Federal Government will be similar large companies who also do not want to invest in late life assets. A few weeks after ExxonMobil cancelled the sale it promoted that its work decommissioning projects overseas "demonstrate that our company has the knowledge, expertise, [experience and skill to achieve similar success in Bass Strait](https://www.exxonmobil.com.au/Community-engagement/Local-outreach/Esso-community-news/2020/Leveraging-our-decommisioning-experience?ref=boilingcold.com.au)." Unwittingly ExxonMobil had advertised precisely why the Federal Government wanted it to stay. Neither reported potential buyers - Macquarie and Beach Energy - could offer this capability. ExxonMobil has already plugged and abandoned wells on the Blackback, Whiting, Seahorse, Tarwhine and Mackerel fields. "Over the next few years, we will continue to progressively plug and abandon wells as they reach the end of their production life, while we continue to progress the extensive planning and preparation of our final decommissioning program," an ExxonMobil spokesperson said. Pitt told ExxonMobil he had also written to BHP about its proposed sale of the other half of the Bass Strait operation. BHP chief executive Mike Henry announced the "relatively clear-cut decision" in August 2020. "We are clear on the future for Bass Strait… there's not a lot of upside there, in terms of exploration," Henry said, adding that BHP preferred oil to the mainly gas production of the Bass Strait. A BHP spokesperson said the Bass Strait sale process was ongoing but declined to comment specifically on the effect of the introduction of trailing liabilities. In January, Italian ENI was reported to have called off the sale of its Australian assets after receiving unsatisfactory bids. However, *Boiling Cold* understands the introduction of trailing liabilities and [tough action by offshore safety regulator NOPSEMSA](https://www.boilingcold.com.au/enis-australian-clear-out-prompts-orders-to-clean-up/) in December killed any deals on the table. Chevron, that launched the [sale of its one-sixth interest in the North West Shelf](https://www.boilingcold.com.au/chevrons-north-west-shelf-sales-pitch-missed-8-key-points/) LNG project in June 2020, will also be hit by the Government's new approach. BHP is not considering a sale of its North West Shelf stake, the BHP spokesperson said. --- **Letter from Boiling Cold* freedom of information request** Resources Minister Keith Pitt to ExxonMobil chief executive Darren Woods --- *Main image: Marlin B platform in the Bass Strait. Source: ExxonMobil Australia* --- ### Wind and solar push down coal, gas and prices in South West WA URL: https://www.boilingcold.com.au/wind-and-solar-push-down-coal-gas-and-prices-in-south-west-wa/ Last updated: 2021-12-27T01:15:30.000Z New wind and solar farms and rooftop solar pushed clean energy to 35 per cent of South West power generation last quarter while wholesale prices fell 13 to 19 per cent year on year, according to the Australian Energy Market Operator. Coal-fired generation fell 186 megawatts, and there was 89MW less power from gas turbines in the December quarter compared to 12 months ago. In the South West Interconnected System demand averages about 2000MW. The slump in fossil fuel use was driven by the start-up of the 180MW Warradarge and 212MW Yandin wind farms, the 100MW Merredin solar farm, and continued installations of rooftop solar. ![Wind and soar displace gas and coal Q4 2019 to Q4 2020 on South West Interconnected System](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/02/change-in-WEM-supply-Q4-2019-to-Q4-2020.jpg) **Wind and solar displace gas and coal Q4 2019 to Q4 2020**. Source AEMO This quarter may see greater penetration of renewable energy as the two new wind farms were not fully operational last quarter. Warradarge was completed in November, and Yandin was finishing commissioning in December. Clean energy is also variable energy, leading to increased fluctuations within the grid. At 1 PM November 28 the South West grid experienced an all-time minimum operational demand – that excludes behind the meter rooftop solar – of 985MW as householders generated about 1189MW themselves. A month later the highest recorded fourth-quarter demand of 3618MW was reached on December 23 as the temperature went past 40℃. The fluctuation of operational demand during the day also increased. The so-called duck curve has become steeper as increasing amounts of rooftop solar cuts into daytime demand. !["Duck curve" of non-rooftop solar demand on the South West Interconnected system for Q4 2019 and 2020 ](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/02/SWIS-duck-curve.jpg) **"Duck curve" demand excluding rooftop solar.** Source AEMO The trend is nationwide with about 3000MW of rooftop solar capacity installed in 2020, up about 50 per cent from 2019, according to the [AEMO Quarterly Energy Dynamics Q4 2020](https://aemo.com.au/-/media/files/major-publications/qed/2020/qed-q4-2020.pdf?la=en&hash=BE12D7DEBE790078B5E7C047FB7BD0BB&ref=boilingcold.com.au) report. In October 2020 the State Government announced that Synergy would operate a [grid-scale battery in Kwinana](https://www.boilingcold.com.au/wa-plans-100m-big-battery-to-balance-solar/) to manage the steepening duck curve by storing excess rooftop solar power from the middle of the day for use in the early evening. Synergy is expected to go to shortlisted suppliers within the next few weeks and will make a final decision in a few months, a spokesperson for Minister of Energy Bill Johnston said. The project is on track to be operational by September 2022. The Commonwealth Government will contribute $15 million towards the expected cost of more than $100 million. The South West’s Wholesale Electricity Market has two prices, a balancing price and the Short Term Energy Market. The fourth quarter balancing price was 13 per cent less than the previous quarter and the lowest for five years. The STEM price was down 19 per cent compared to the third quarter. AEMO attributed the lower balancing price to falling demand and the new wind and solar farms that sometimes bid at negative prices. ## Gas market survives turndown of its biggest producer Gas-fired power generation in the South West consumed six per cent less gas compared to 12 months ago, but total WA gas consumption increased by about 4 per cent year on year. Yara Pilbara’s ammonia plant increased its gas consumption 85 per cent to 7.7 petajoules, about eight per cent of WA demand. ![quarterly gas supply to WA by major plants 2018 to 2020](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/02/WA-gas-production.jpg) **Gas supply to WA.** Source AEMO While demand went up production was down about six per cent compared to Q4 2019, mainly driven by Woodside’s North West Shelf gas plant near Karratha producing 87 per cent less than a year ago after [long term contracts ended mid-2020](https://www.boilingcold.com.au/north-west-shelf-wa-gas-reign-over/). Other plants have increased production to fill the void. For the first time in three years, more gas was extracted from the Mondarra and Tubridgi gas storage facilities than injected into them. --- **Main image: Warradarge wind farm. Source: Synergy* --- ### Shutdowns to keep Chevron’s Australian LNG production down through 2021 URL: https://www.boilingcold.com.au/shutdowns-to-keep-chevrons-australia-lng-production-down-through-2021/ Last updated: 2022-01-01T09:54:46.000Z Chevron faces another year of curtailed Australian LNG output due to continuing shutdowns at its Gorgon and Wheatstone LNG plants; the US major has told Wall Street analysts. Chevron chief financial officer Pierre Breber said Gorgon's LNG Train 1 now under repair will recommence production in March and then Train 3 will be shutdown. The schedule is two months later than WA's safety regulator reported in August. Faulty welds on propane vessels were discovered during a routine shutdown of Gorgon Train 2 in May 2020, and the unit did not return to production for almost six months. Propane vessels on Gorgon's other two trains required inspection as they were of the same design and manufacture. [Chevron’s Gorgon LNG faces up to $1.4B hit to fix cracksAfter action by safety regulators Chevron will progressively shut down all LNG trains at Gorgon to fix faulty welds in propane-filled pressure vessels.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/08/gorgon-lng-trains-large-d-cropped-reduced.jpg)](https://www.boilingcold.com.au/chevron-shutdown-all-gorgon-trains/) Breber, speaking Saturday morning Perth time, said Chevron's Wheatstone plant was "modestly below capacity" while an inlet separator on the offshore platform was repaired, but full production was expected in the April quarter. More production will be lost to a planned shutdown of Wheatstone later in the year. Chevron will lose the equivalent of about 60,000 barrels of oil of production to shutdowns in the March quarter, primarily because of its Australian plants. Breber said Chevron's Australian production would be flat to modestly down from 2020 when it operated for much of the year with only two of Gorgon's three trains in operation. Chevron chief executive Mike Wirth said about 80 per cent Australian production was committed to contracts. Despite having only four of its five trains available last quarter it was not substantially exposed to buying to cargoes during the recent record-high LNG spot prices. "We've been able to satisfy all of our term needs…buying a cargo here, selling a cargo there…on the spot market, but we haven't been out of position and hurt because we had to buy high and sell low to any meaningful degree through this whole cycle," Wirth said. However, the technical problems at Gorgon have cost Chevron the opportunity of substantial sales into the buoyant spot market. ## Chevron cautious on the energy transition Wirth said shareholders were told him they did not support Chevron entering areas where it had no competitive differentiation and "pursue lower return investments just for the sake of saying 'we're doing it' when there's others out there that can do it just as well." Chevron plan to be active in hydrogen and carbon capture and storage, despite its showpiece CCS effort at Gorgon under regulator's orders to operate at part-capacity until it fixes technical problems. [Gorgon LNG emissions to rise as sand clogs $3.1B C02 systemThe WA safety regulator has told Chevron to turn down Australia’s $3.1 billion showpiece Gorgon LNG carbon capture and storage system until problems are fixed, meaning carbon emissions will rise.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/01/Gorogn-CO2-injection-well-with-LNG-plant-in-background.jpg)](https://www.boilingcold.com.au/chevrons-gorgon-co2-emissions-to-rise-sand-clogs/) Chevron recently [invested in Californian start-up Blue Planet](https://www.chevron.com/investors/press-releases?ref=boilingcold.com.au) that makes building aggregate from CO2 captured from fossil fuels' combustion. Wirth said hydrogen was technically feasible but not yet economically practical and Chevron was looking for ways to scale up production and cut costs. > Renewables was "a space that's getting a lot of love from investors right now and you see it in EV start-ups, you see it in solar start-ups, you see it in a lot of different technologies." Wirth said. The Chevron boss held out hope that the momentum away from a fossil fuel-based energy system may fade. "The question is when the tide starts flowing in other direction and when the day comes that interest rates are up, maybe investor perceptions shift a little bit, and maybe government policy shifts a little bit, have we invested in things that can sustain in that environment?" Wirth said. Low interest rates favour solar, wind and battery investments as they are capital intensive but have negligible operating costs compared to producing and burning hydrocarbons. Chevron chief financial officer Pierre Breber said the oil and gas sector was trying to regain favour with investors. > "It hasn't earned its cost of capital and the way out of that isn't by investing more capital," Breber said of Chevron's industry. In the last week President Biden's climate and energy policy moves were "sweeping and broad" Wirth said. "I don't want to overreact to that at this point in time until we know more, > "Just bear in mind, if conditions in the US become so onerous, that it really disincentivizes investment, we've got other places where we can take those dollars," Wirth said, using a threat US multinationals usually reserve for foreign countries. "Today's energy system is not the enemy." Chevron lost $US665 million in the December quarter and $5.5 billion in 2020 during which it distributed $US11.4 billion to shareholders. --- *Main image: Chevron LNG carrier loading at Gorgon. Source: Chevron Australia Pty Ltd* --- ### Inpex moves to clean up Ichthys' dirty LNG URL: https://www.boilingcold.com.au/inpex-moves-to-clean-up-ichthys-dirty-lng/ Last updated: 2022-01-01T09:57:20.000Z *ANALYSIS* Inpex wants to store CO2 from its Ichthys LNG project underground as it moves to make its business 30 per cent cleaner by 2030 despite a year ago saying it was unaffordable. Inpex chief executive Takayuki Ueda yesterday announced that the Japanese oil and gas company would achieve net-zero emissions by 2050\. As an interim goal, Inpex will cut its emissions per unit of energy it produces by 30 per cent by 2030. Ueda said the biggest challenge was to make natural gas cleaner, and Ichthys is by far Inpex’s largest gas project. “This is a gigantic project and…we aim to make the LNG as clean as possible and will engage in carbon capture and storage initiatives,” Ueda said. Making Ichthys cleaner is no easy challenge as the $US45 billion ($59 billion) project produces more greenhouse gases per tonne of LNG than any other Australian LNG project fed by offshore gas. ![Carbon Intensity of Australian Offshore LNG projects NWS Pluto Gorgon Wheatstone Ichthys Prelude Scarborough Barossa](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/01/LNG-carbon-intensity.png) Source: Boiling Cold. Data from environmental approval submissions. Inpex’s current enthusiasm to use CCS for Ichthys is a complete turnaround from November 2019 continued in a [submission to the Productivity Commission](https://www.pc.gov.au/%5F%5Fdata/assets/pdf%5Ffile/0009/247428/sub034-resources.pdf?ref=boilingcold.com.au). “To date, Ichthys LNG has spent over $10 million evaluating CCS as an abatement option,” the submission stated. > “While there may be no technical barriers to implementation, the cost of CCS is very high with a break-even carbon price of around $100/t carbon dioxide equivalent or more. > “Therefore, implementation of CCS cannot be commercially justified at this stage.” Inpex’s aversion to CCS for Ichthys was before Japan’s Government committed to [net-zero emissions by 2050](https://www.boilingcold.com.au/japan-net-zero-by-2050/) in October. In 2019 Inpex produced the equivalent of 8.76 million tonnes of CO2, as measured by its equity share of assets. Inpex’s 66 per cent of Ichthys will produce about 53 per cent of the company’s emissions if the project emits the 6.95 million tonnes of CO2 allowed under the Federal Government’s safeguard mechanism. Inpex cannot meet its 2030 emissions target without substantial progress at its largest asset, but the pursuit of CCS appears to be at an early stage. ## Burial at Bayu Undan could be the answer According to a [company presentation](https://www.inpex.co.jp/english/company/pdf/business%5Fdevelopment%5Fstrategy.pdf?ref=boilingcold.com.au), Inpex is still investigating the feasibility of burying CO2 from Ichthys and is yet to select an injection site. Given that Chevron started studying the burial of CO2 from its Gorgon project in 1998 and the [system is currently turned down](https://www.boilingcold.com.au/chevrons-gorgon-co2-emissions-to-rise-sand-clogs/) as sand is clogging wells, nine years is a very short time for Inpex to go from early studies to reliable operation. [Gorgon LNG emissions to rise as sand clogs $3.1B C02 systemThe WA safety regulator has told Chevron to turn down Australia’s $3.1 billion showpiece Gorgon LNG carbon capture and storage system until problems are fixed, meaning carbon emissions will rise.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/01/Gorogn-CO2-injection-well-with-LNG-plant-in-background.jpg)](https://www.boilingcold.com.au/chevrons-gorgon-co2-emissions-to-rise-sand-clogs/) *Boiling Cold* understands ENI investigated storing CO2 in the Bayu Undan reservoirs when it was promoting the CO2-rich Evans Shoal field as a replacement supply of gas to the Darwin LNG plant when Bayu Undan is depleted. Ichthys’ emissions come from gas burnt offshore (26%), reservoir CO2 extracted from the pipeline when it reaches the Ichthys LNG plant near Darwin (35%) and gas burnt to drive the LNG plant (40%). Like Gorgon, Ichthys would store CO2 in the gas from the Ichthys reservoir as it is already separated as LNG plants cannot process gas containing CO2. Complete storage of the reservoir CO2 would more than achieve Inpex’s targeted 30 per cent emissions cut. To store CO2 in the Bayu Undan reservoir, Inpex would need a pipeline from Darwin and the cooperation of the other Bayu Undan partners and the Timor Leste Government. ## Net-zero momentum building Inpex has now joined all but one of the big players in Australian offshore LNG that in the past 12 months have adopted significant targets for cutting emissions. The targets differ in coverage (operational emissions of Scope 1 direct emissions and Scope 2 emissions of electricity purchased, or the inclusion of the Scope 3 emissions from the end use of the product) and whether total emissions or emissions intensity (emissions per unit of energy produced) is measured. - Shell: Will cut what it calls its net carbon footprint (Scopes 1 , 2 and 3 emissions per unit of energy produced) by 30% by 2035 and 65% by 2050 and reduce its operational emissions to zero by 2050 ([April 2020](https://www.shell.com/investors/news-and-media-releases/investor-presentations/2020-investor-presentations/responsible-investment-annual-briefing-april-16-2020/%5Fjcr%5Fcontent/par/pageheader%5Fcopy%5Fcopy.stream/1587027568331/59b9154c9d920e11586dea171ad939a0aed36cd3/ri-day-slides.pdf?ref=boilingcold.com.au)) - Woodside: operational emissions down 15% by 2025, 30% by 2030 and net-zero by 2050 ([November 2020](https://files.woodside/docs/default-source/asx-announcements/2020-asx/investor-briefing-day-2020.pdf?sfvrsn=128d8f51%5F2&ref=boilingcold.com.au)) - Santos: 26-30% cut in operational emissions from by 2030 and net-zero by 2040 ([December 2020](https://www.santos.com/news/santos-to-be-net-zero-emissions-by-2040/?ref=boilingcold.com.au)) - Inpex: Operational emissions intensity cut by 30% by 2030 and absolute operational emissions to be net-zero by 2050 ([January 2021](https://www.inpex.co.jp/english/company/pdf/business%5Fdevelopment%5Fstrategy.pdf?ref=boilingcold.com.au)) The exception is Chevron that in October 2019 [announced](https://www.chevron.com/stories/chevron-sets-new-greenhouse-gas-reduction-goals?ref=boilingcold.com.au) a relatively unambitious 5-10% cut in the emissions intensity of oil production and 2-5% for gas production over the period 2016 to 2023. Inpex’s other Australian LNG investment is a 17.5 per cent interest in Shell’s troubled Prelude floating LNG, the second dirtiest LNG from offshore Australia after Ichthys. Retrofitting any carbon storage solution to Prelude would be extraordinarily difficult due to lack of space and the cost of offshore work. However, Ichthys and Prelude's emissions intensities are far less than the Barossa LNG project proposed by Santos to fill Darwin LNG after Bayu Undan. Most of the 16 to 20 per cent CO2 content in the Barossa reservoir will be vented offshore. Previous Barossa operator ConocoPhillips had discussed an alternative of bringing all the CO2 to shore in its [2018 project proposal](https://www.nopsema.gov.au/environmental-management/assessment-process/offshore-project-proposals/public-comment/barossa-area-development-offshore-project-proposal/?ref=boilingcold.com.au) to offshore regulator NOPSEMA, but it was not the base case. Onshore venting of reservoir CO2 would have allowed Santos to pursue similar CCS options that Inpex is now investigating for its nearby Ichthys LNG plant. --- *Main image: Ichthys LNG Plant near Darwin. Source: Inpex* --- ### Chevron’s Gorgon emissions to rise after sand clogs $3.1B C02 injection system URL: https://www.boilingcold.com.au/chevrons-gorgon-co2-emissions-to-rise-sand-clogs/ Last updated: 2021-12-27T01:12:01.000Z *EXCLUSIVE* Greenhouse gas emissions from Chevron's Gorgon LNG project will increase after the safety regulator curtailed burial of carbon dioxide as wells to control underground pressure are not working. Documents obtained by a *Boiling Cold* freedom of information request reveal Chevron and its main partners Shell and ExxonMobil have spent $3.1 billion ($US2.4 billion) to mid-2020 on the showpiece carbon storage project, and still, there are costly problems. Before Chevron fired up the CO2 injection system in August 2019 it needed the safety regulator's approval because one of its main components was out of action: wells to move water out of the underground formation that will store the CO2. They are still not working. CO2 injection started more than three years after Gorgon first produced LNG because water in the CO2 corroded pipework. That problem caused an [additional seven million tonnes of CO2](https://www.boilingcold.com.au/chevron-faces-little-grief-from-gorgon-lng-emissions-miss/) to be vented to the atmosphere. Gorgon is the world's largest carbon capture and storage system dedicated to reducing greenhouse gases instead of injecting CO2 to boost oil production. The delayed start-up was a blow to the credibility of CCS that is one of five technologies the Federal Government is relying on to [lower emissions](https://www.minister.industry.gov.au/ministers/taylor/media-releases/technology-led-plan-lower-emissions-lower-costs-and-support-jobs?ref=boilingcold.com.au). The ongoing problems revealed by *Boiling Cold* will add to concerns about how easily and quickly CCS can be deployed more widely. Chevron started studying how to store the high amounts of CO2 in the Gorgon gas field in 1998. ![Gorgon CO2 plume movement and influence of pressure management wells](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/01/Gorgon-CO2-injection-system-schematic.jpg) *Source: [Chevron presentation](http://www.ga.gov.au/webtemp/image%5Fcache/GA16243.pdf?ref=boilingcold.com.au) 2010* Attempting to bury four million tonnes of CO2 a year under Barrow Island is not simple. CO2 is injected into a layer of sandstone about 400m thick more than 2000m underground, and about 4km away water is pumped to the surface from the same layer to make room for the CO2. This water is then pumped into a different layer of rock above the CO2. If the water is not moved the pressure required to inject the CO2 will rise and reduce the amount of CO2 that can be stored, and eventually risk fracturing the rock around the CO2 injection wells. ## Continued extensions from the regulator In May 2019 Chevron tested the wells that inject the water back underground and struck problems. Chevron thought that debris leftover from the drilling of the well was blocking the flow of water. The WA Department of Mines, Industry Regulation and Safety allowed Chevron to begin injecting CO2 in August 2019 without the so-called the pressure management system, provided it started operating by December 2019. In December 2019 DMIRS granted an extension to May 2020 and at that milestone Chevron was given another seven months to December 2020. DMIRS then granted the US-major a further six months to June 2021 to fix the pressure management system, but this time it capped the level of CO2 injection and increased reporting requirements. The regulator would not reveal the CO2 injection cap that would have indicated the resultant increase in carbon emissions from what Chevron termed "additional short-term CO2 venting." DMIRS resource and environmental compliance division director Karen Caple said the Department considered there was a low likelihood that continued injection of CO2 without the pressure management system would adversely impact the system's long-term performance. > "DMIRS is closely monitoring Chevron's progress on the CO2 injection system and will modify approval conditions if required, if the risks change," Caple said. ## A gritty problem Chevron now believes sand in the water is blocking the well that reinjects water underground. The company has told DMIRS it will install equipment to extract the "significant volume of sand" from the water before it is reinjected underground. The Department of Water and Environment Regulation will regulate the disposal of the sand, as it does with all other liquid and solid waste on Barrow Island. The sand was a known risk, and Chevron targeted its water extraction at depths thought not to have weak zones prone to sand production. Chevron expects to start up the pressure management system before mid-2021, a company spokesperson said. This would be almost two years after CO2 injection began. "We are pleased with the performance and how safely and reliably the injection system is operating," a Chevron spokesperson said. > "Like any pioneering endeavour, the carbon capture sequestration system has presented some challenges." Chevron aimed to share what it learned at Gorgon to "support the increased deployment and cost-effectiveness of carbon capture and storage in Australia and globally." [Chevron unlikely to suffer from Gorgon LNG emissions failGorgon LNG has emitted 7 million tonnes of climate-warming CO2 more than permitted but Chevron is unlikely to suffer at the hands of lax Australian governments.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/11/gorgon-plant-site-d-cropped-reduced.jpg)](https://www.boilingcold.com.au/chevron-faces-little-grief-from-gorgon-lng-emissions-miss/) The WA Government requires that at least 80 per cent of the CO2 in reservoirs that supply the $US54 billion Gorgon LNG plant is buried in any five-year period, the first of which expires in July 2021. An interpretation of the requirement that excluded some of the vented CO2 from two of Gorgon's three LNG trains will reduce the calculated deficit. The WA Government has in the past said [no action would be taken](https://www.smh.com.au/business/companies/no-idea-what-enforcement-or-when-flying-blind-on-chevron-s-gorgon-20200203-p53xej.html?ref=boilingcold.com.au) against Chevron until the five-year period had ended. The Gorgon project received $60 million from the Federal Government for the CO2 injection system, all of which was claimed before the failed initial start up of the system in 2017. --- **Chevron reports from *Boiling Cold* freedom of information request** *Annual report to the Australian Government* Gorgon Project Carbon Dioxide Injection Project Low Emissions Technology Demonstration Fund Annual Report 1 July 2019 – 30 June 2020 *Annual report to the Western Australian Government* [Gorgon Project Carbon Dioxide Injection Annual Operational Report to WA State Government (1 July 2019 - 31 December 2019)](https://beta.documentcloud.org/documents/20440490-foi-4-abu200300205%5F1-jul-2019-to-30-dec-2019-section-13-annual-operational-rep-ar?ref=boilingcold.com.au) A suite of [documents about the environmental performance of Gorgon](https://beta.documentcloud.org/projects/gorgon-co2-injection-201321/?ref=boilingcold.com.au) is also available. --- *Main image: Gorgon CO2 injection wells with LNG plant in background. Source: Chevron 2020 Gorgon CO2 injection report to Federal Government* --- ### BP's Ironbark well fails to find gas URL: https://www.boilingcold.com.au/bps-ironbark-well-failes-to-find-gas/ Last updated: 2022-01-08T13:52:06.000Z BP's Ironbark-1 well off the Pilbara coast has come up dry, dashing hopes it could provide gas to the emptying North West Shelf LNG plant, and crashing partner's share prices. BP owns 42.5 per cent of the WA-359-P permit it operates where Ironbark-1 is located. Cue Energy Resources owns 21.5 per cent; Beach Energy has 21 per cent and New Zealand Oil and Gas has the remaining 15 per cent. Beach, Cue and NZOG all made announcements of the dry well to the stock exchange just before 9:30 AM WA time. One hour later, Beach shares were down 6 per cent, NZOG 27 per cent and Cue's shares had plummeted 61 per cent. Cue had estimated that up to 15 trillion cubic feet of gas could be found. The well intersected its primary target at a depth of 5275m, but "no significant hydrocarbon shows were encountered in any of the target sands," according to the NZOG statement. New Zealand Oil and Gas chief executive Andrew Jefferies said the full implication for the play would not be understood until all data was retrieved and analysed. > "Bugger…. a very disappointing result for us all," Jeffries said. > "Ironbark was a world scale prospect in a highly prospective address, and it needed drilling. > "We got an answer, but it was not the one we wanted." The Ironbark prospect is close to the Woodside-operated North Rankin platform that would have made getting Ironbark gas to the North West Shelf LNG plant relatively easy. The NWS plant is expected to start operating at less than full capacity in 2021 as production from the NWS Venture's fields dwindles. BP is a one-sixth partner in the NWS, and without gas from Ironbark may consider an exit. Fellow NWS partner Chevron is currently trying to sell its stake. ![map of Ironbark gas prospect](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/12/Ironbark-permits-map-source-Cue.jpg) *Source: Cue Energy Resources* BP started drilling Ironbark-1 on 31 October 2020 with Diamond Offshore's Ocean Apex drilling rig. BP drilled the well to a total depth of 5618m and has started plugging and abandoning the well. Cue completed a farm out of WA-359-P in June 2019 to the other joint venture participants. Cue is just over 50 per cent owned by NZOG, which is almost 70 per cent owned by Ofer Global, a private conglomerate based on Monaco. Ofer, through its subsidiary O.G. Energy also owns 40% of the Beach-operated assets in the Otway Basin. --- *Main image: A drilling rig's derrick from below. Source: BP* --- ### ENI’s Australian clear out prompts clean up order URL: https://www.boilingcold.com.au/enis-australian-clear-out-prompts-orders-to-clean-up/ Last updated: 2022-01-08T13:53:50.000Z The sale of ENI's Australian oil and gas assets has hit a hurdle with the offshore oil and gas environmental regulator's orders to decommission two offshore fields. NOPSEMA today published directions to ENI that require it to decommission the Woollybutt field off WA and the Blacktip gas field off the NT. ENI now has 12 months to plug and abandon six wells at its Woollybutt oil field off WA that stopped production in 2012. The Woollybutt floating production storage and offloading vessel, or FPSO, left one month after production stopped in 2012\. FPSOs need expensive crews if left in place and if removed, can be sold to other oil projects. The [NOPSEMA direction](https://www.nopsema.gov.au/assets/Published-notices/A762863.pdf?ref=boilingcold.com.au) also requires all subsea equipment including pipelines, umbilicals, mooring systems, and manifolds to be removed. In September a poorly-maintained mid-depth buoy at Woollybutt came to the surface and [posed a danger to vessels](https://www.boilingcold.com.au/enis-poor-maintenance-causes-marine-hazard-off-wa-coast/). [ENI’s poor maintenance causes marine hazard off WA coastAn eight year wait for ENI’s Woollybutt oil field to be decommissioned and poor maintenance have caused subsea kit to surface and pose a danger to vessels.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/09/ENI-logo.jpg)](https://www.boilingcold.com.au/enis-poor-maintenance-causes-marine-hazard-off-wa-coast/) NOPSEMA has also [directed ENI to decommission its Blacktip gas project](https://www.nopsema.gov.au/assets/Published-notices/A762868.pdf?ref=boilingcold.com.au) that supplies gas to the Northern Territory. Blacktip is still producing gas, and the direction clarifies that decommissioning must occur before the title expires. The directions do not impose new obligations on ENI but stipulate a completion date for Woollybutt and put the Government in a stronger legal position as non-compliance is now a more serious offence. While the directions stipulate the complete removal of equipment on the seabed, they note that some equipment can remain in place under some circumstances. ## ENI assets now a complex purchase In May news broke that ENI wanted to [sell its Australian interests](https://www.afr.com/street-talk/eni-retreats-from-australian-gas-hires-citi-for-portfolio-sale-20200512-p54s1q?ref=boilingcold.com.au). These include the Bayu Undan gas field and the Darwin LNG plant it supplies, the undeveloped Evans Shoal gas field, and the Yelcherr plant that processes Blacktip gas and the Woollybutt and Blacktip fields covered by NOPSEMA's actions. ![ENI's Australian operations as at 2015 including Woollybutt, Blacktip, and Bayu Undan.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/12/map-of-ENI-operations-in-Australia.jpg) **ENI's Australian operations as at 2016**. Source ENI. ENI was disappointed in the final bids it received in November after initial expectations of receiving about $1 billion, [according to The Australian](https://www.theaustralian.com.au/business/dataroom/sale-of-enis-australian-oil-and-gas-assets-drags-on-into-the-new-year/news-story/4e322ccafdbfc2371611256f12106b7b?ref=boilingcold.com.au). Potential buyers were reported to include two consortiums, one led by Neptune Energy from the UK and another that included Macquarie and Cooper Energy. Since ENI received the disappointing bids in November, its task of selling out of Australia has become more demanding. Resources Minister Keith Pitt announced a [crackdown on the decommissioning of offshore oil and gas facilities](https://www.minister.industry.gov.au/ministers/pitt/media-releases/northern-endeavour-be-decommissioned?ref=boilingcold.com.au). The Government will more closely scrutinise sales, seek greater assurances that companies have the financial strength to meet their decommissioning obligation, and hold sellers like ENI liable for clean-up costs if new owners fail. These new initiatives - that will be backdated to mid-December 2020 when introduced - are in addition to NOPSEMA's tougher approach based on existing legislation and regulations. Whatever potential buyers thought the ENI assets were worth in November, the new valuation after the Christmas break will be much less. The Federal Government commenced a review of its decommissioning policy in 2018\. The strong response released this month is thought to be mainly due to the failure of the Northern Endeavor oil vessel that is [likely to cost more than $500 million](https://www.boilingcold.com.au/northern-endeavour-debacle-hits-209m-with-much-more-to-come/). [Northern Endeavour debacle hits $209M with much more to comeThe Government will spend $130 million to look after the Northern Endeavour in 2021 and has the oil and gas industry in its sights for the total bill of more than half a billion dollars.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/12/NE-circa-2018-edited-cropped-1.jpg)](https://www.boilingcold.com.au/northern-endeavour-debacle-hits-209m-with-much-more-to-come/) NOPSEMA move against ENI came two days after it [announced a plan to reinforce compliance](https://www.nopsema.gov.au/news-and-publications/latest-news/news-announcement/2020/12/21/nopsema-reinforces-offshore-obligations-under-new-compliance-plan/?ref=boilingcold.com.au) with requirements to decommission oil and gas fields. Triggers for directions like those received by ENI include a lack of planning for decommissioning and how long since a facility had produced, as well a pending sale. NOPSEMA has dedicated a team to review what titleholders need to lift their game on decommissioning. "With an increasing number of aging facilities within the regulatory regime, a wide range of titleholders are likely to be examined, with the possibility of issuing directions to them," a NOPSEMA spokesperson said. "The work being undertaken to ensure industry compliance with the maintenance and removal of property requirements…will run throughout 2021 and 2022." ENI chief executive Claudio Descalzi wants the Italian oil and gas company to [become a greener business](https://fr.reuters.com/article/eni-m-a-australia-int/eni-expects-binding-bids-for-australian-gas-assets-by-end-november-sources-idUSKBN27C1QS?ref=boilingcold.com.au). Tidying up the seabed off Australia could be an unintended early opportunity for ENI to demonstrate its new environmental awareness. --- *Main image: Blacktip gas platform. Source: ENI* --- ### Northern Endeavour debacle hits $209M with much more to come URL: https://www.boilingcold.com.au/northern-endeavour-debacle-hits-209m-with-much-more-to-come/ Last updated: 2022-01-01T09:51:11.000Z The company looking after the shuttered Northern Endeavor oil vessel in the Timor Sea expects to charge the Federal Government $130 million in 2021 with significant costs to come for others to remove the vessel and abandon the subsea wells. GR Engineering told the market this morning that its subsidiary Upstream Production Solutions had been awarded a one-year contract by the Department of Industry, Science, Energy and Resources to continue operating the vessel. GR Engineering expects to earn about $130 million from the contract “based on the current budget for core operation and maintenance services and planned pre-disconnection project activities.” > “We are pleased to continue working with DISER and the relevant regulator bodies to safely manage and maintain the FPSO and execute the required pre-disconnect preparation activities to support a safe removal of the FPSO in the future,” GE Engineering managing director Geoff Jones said. The award means UPS will charge $192 million from February 2020 - when the Federal Government inherited the vessel from liquidated Northern Oil and Gas Australia - to December 2021. With other costs, mainly insurance and $8.8 million to Woodside for a study, the Federal Government has now committed $209 million to keep the Northern Endeavor safe. The future bill to decommission the vessel and its oil fields could be much higher than maintaining them. The vessel and subsea equipment must be removed, and most significantly, the subsea wells have to be plugged and abandoned. Woodside, that sold the Northern Endeavor to NOGA in 2016, estimated decommissioning would cost about $360 million. This would take the total cost to the Federal Government to well over half a billion dollars. [Federal Govt regulates poorly and gets $360M Northern Endeavor clean-up billThe Northern Endeavor mess started with Woodside paying to rid itself of a rusty ageing asset, ended with a $362 million liability for the Government and in between was a regulatory shambles.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/09/northern-endeavour.jpg)](https://www.boilingcold.com.au/poor-federal-regulation-allowed-the-360m-northern-endeavor-mess/) **The full story on how responsibility for the Northern Endeavour went from Woodside to the Federal Government via NOGA: a small inexperienced and undercapitalised company.** Earlier this month Resources Minister Keith Pitt announced the [Government would decommission the Northern Endeavour](https://www.minister.industry.gov.au/ministers/pitt/media-releases/northern-endeavour-be-decommissioned?ref=boilingcold.com.au), ending any prospects that it would be sold to a new owner and return to production. Pitt said taxpayers should not be left to bear the costs. “We have been working closely with the offshore oil and gas industry on proposals to recover the costs,” Pitt said. The Government's plans are complicated by a [court battle with NOGA's principal creditor](https://www.boilingcold.com.au/government-fights-in-court-for-northern-endeavour/) over possession of the vessel. *Boiling Cold* understands NOGA spent about $4 million a month to operate the Northern Endeavour when it was producing oil. One industry observer said using diesel for power instead of oil produced on-site and flying helicopters from Australia instead of Timor Leste would add $2 million a month to operating costs. The UPS contract for 2021 averages to about $11 million a month. The Federal Government may have little choice in what company operates the vessel. NOGA contracted UPS to operate the vessel and safety regulator NOPSEMA approved the company. No other company has the knowledge of the facility and the systems in place to quickly step in. --- *Main image: the Northern Endeavour in 2018\. Source: Anon.* --- ### Conservation Council moves to quash Woodside's growth plans URL: https://www.boilingcold.com.au/conservation-council-moves-to-quash-woodsides-growth-plans/ Last updated: 2022-01-08T08:46:20.000Z The Conservation Council of WA today launched legal action against Woodside and the WA Government that could stop the proposed Scarborough and Browse LNG projects. CCWA director Piers Verstegen said the environmental organisation had lodged papers with the Supreme Court to initiate the action and Woodside and the WA Government would be served today. Woodside plans to pipe gas 1000km from the Browse fields to the North West LNG plant near Karratha and build an additional LNG train at the nearby Pluto LNG plant to process gas from the Scarborough field. The developments, termed the Burrup Hub by Woodside, are the long-term future for the Perth-based LNG specialist. There are serious [doubts about the viability of Browse](https://www.reddit.com/r/energy/comments/hsuxcf/inside%5Fwoodsides%5Fhall%5Fof%5Fmirrors%5Fbrowse%5Flng%5Fis/?ref=boilingcold.com.au) and Woodside is focussed on a final investment decision for the $US11.4 billion ($15.2 billion) Scarborough project in the second half of 2021. Verstegen said the Burrup Hub was the most polluting fossil fuel project ever proposed in Australia and the CCWA was acting to prevent carbon pollution and impacts to Aboriginal heritage values on the Burrup Peninsula. > “Documents released under Freedom of Information reveal that the impacts of pollution from processing the new gas - either on the climate or Murujuga rock art - were not assessed when the approvals were granted,” Verstegen said. Verstegen said Woodside’s current approvals remained valid while the legal action that he expected to take six to 12 months played out. However, Verstegen said Woodside would be taking a significant risk approving projects until the legal uncertainty was resolved and the company needed to be cautious with the information it supplied to investors. ![Environmental Defenders Office managing lawyer Tim Macknay and CCWA director Piers Verstegen outside the WA Supreme Court](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/12/piers-verstegen-reduced-pic.jpg) **Environmental Defenders Office managing lawyer Tim Macknay and CCWA director Piers Verstegen**. Source:CCWA If the action were successful, Woodside’s plans would likely be reopened for public reviews that would cause further delays with no certainty of approval. *Boiling Cold* understands the CCWA’s legal action is challenging changes to the environmental conditions imposed on the Pluto and North West Shelf LNG plants by the State government that are documented in ministerial statements. Section 45C of the Environmental Protection Act allows the Environment Minister to approve changes to the conditions without a review by the Environmental Protection Authority unless the changes “might have a significant detrimental effect on the environment in addition to…the original proposal.” In July 2019 Ministerial Statement 757 that covers the Pluto project was changed under section 45C to remove references to what gas fields were to supply the Pluto LNG plant, effectively allowing the facility to take gas from the Scarborough field. At the same time Ministerial Statement 536 for the North West Shelf project was revised to allow the plant to process gas from any source. Environmental Defenders Office managing lawyer Tim Macknay who is acting for the CCWA said the lack of assessment meant the public did not know how much gas the plants would process and what the total emissions would be. “We will argue the government made an error by not applying the correct test in deciding whether the changes might have environmental impacts requiring further assessments,” Macknay said. “Our client has engaged in good faith with the EPA and Woodside for over a year on this issue and is now left with no choice but to apply to the Supreme Court in their stand for due process and transparency.” The legal action also threatens plans for the North West Shelf LNG plant to process gas from Pluto, and Mitsui and Beach Energy’s Waitsia field in the Perth Basin. Beach Energy said in November that it was on track to sanction Waitsia this year. The agreements to allow Pluto and Waitsia gas to use the North West Shelf facility are also due to be signed this month. Woodside chief executive Peter Coleman said in a [statement](https://files.woodside/docs/default-source/media-releases/woodside-supports-environmental-approval-processes.pdf?sfvrsn=2695c2db%5F2&ref=boilingcold.com.au) that the company intended to defend its position vigorously. “The CCWA is resorting to a legal challenge a year and a half after the approvals were granted,” Coleman said. > “Their action will cost taxpayers money and flies in the face of the EPA’s independent assessment. “We strongly support the State Government’s and the EPA’s processes,” he said. Woodside disputed claims about its project’s greenhouse gas emission made by the CCWA and said the use of its gas instead of coal reduces emissions. The CCWA needs $200,000 to fund the legal action, according to a fundraising email sent to supporters today. “There are high costs and big risks in taking this legal action,” the email stated. --- *Update: 23 December: added reference to Ministerial Statement 536 for the North West Shelf project* --- *Main image: Woodside headquarters Mia Yellagonga in Perth. Source: Woodside Energy Limited* --- ### Government fights in court for Northern Endeavour oil vessel URL: https://www.boilingcold.com.au/government-fights-in-court-for-northern-endeavour/ Last updated: 2021-12-27T00:45:46.000Z The Federal Government wants to decommission the liquidated Northern Endeavor without paying for it but first must battle a creditor in court over possession of the oil vessel. Resources Minister Keith Pitt yesterday [announced his decision](https://www.minister.industry.gov.au/ministers/pitt/media-releases/northern-endeavour-be-decommissioned?ref=boilingcold.com.au) to decommission the Northern Endeavor "but taxpayers should not be left to bear the costs." "We have been working closely with the offshore oil and gas industry on proposals to recover the costs," Pitt said. The ageing vessel has not produced oil since July 2019 when offshore safety regulator NOPSEMA ordered that production cease until safety issues were addressed. Then owner Northern Oil and Gas Australia lacked sufficient liquidity to fix the problems without constant income, and the single-asset company was liquidated in February. The Government was left responsible for the facility that has proved to be a money pit. Since February, the Government has spent $81 million to keep the vessel in so-called lighthouse mode - manned, safe, but not producing oil – and costs continue to accumulate at about $5 million a month. Pitt's move puts an end to the possibility that the Northern Endeavor and its oil fields could continue to operate under a new owner. The most significant expense is to come. Woodside, that sold the Northern Endeavour to NOGA in 2016, estimated in 2015 that decommissioning the field could cost about $350 million. The decommissioning bill will mostly be spent on plugging and abandoning wells drilled by Woodside when it operated the field for 17 years. There are 22 wells in the titles NOGA owned according to the National Offshore Petroleum Information Management System that does not specify if any wells are already plugged. ## Who gets to sell the Northern Endeavour? As Pitt announced his plan for the Northern Endeavor lawyers for his department were arguing in the NSW Supreme Court with the other big financial loser from the collapse of NOGA: Castleton Commodities International. CCI subsidiary CCMA bankrolled NOGA's operations and is a secured creditor owed $124 million. CCMA has sought a court order to force the Government to hand over the vessel it has a secured interest in. The 274m-long Northern Endeavour can be disconnected and towed away. *Boiling Cold* understands it could fetch many tens of millions of dollars from a buyer that wants to refurbish it for use elsewhere. However, the Government argued that it has an equitable lien over the Northern Endeavour: a right to secure debt with a property being looked after that is awarded by the court to achieve fairness. In simple terms, both the Government and CCMA want to sell the Northern Endeavour to reduce their losses. [Federal Govt regulates poorly and gets $360M Northern Endeavor clean-up billThe Northern Endeavor mess started with Woodside paying to rid itself of a rusty ageing asset, ended with a $362 million liability for the Government and in between was a regulatory shambles.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/09/northern-endeavour.jpg)](https://www.boilingcold.com.au/poor-federal-regulation-allowed-the-360m-northern-endeavor-mess/) **How a regulatory shambles led to a gigantic bill for the Australian taxpayer** The CCMA lawyer argued that the Government should not be awarded a lien, in part because it had contributed to the problem. This likely refers to the Government allowing a small, inexperienced company to take over a complex ageing asset with a sizeable decommissioning liability. The two sides also differed on timing. CCMA wants the vessel as soon as possible, but the Government does not plan to disconnect it until the end of 2021. Yesterday's preliminary hearing focused on whether CCMA could view a report into how best to decommission the Northern Endeavor produced for the Government by Woodside for $8.8 million. The Government lawyer said the Woodside report addressed a significant environmental problem that might happen in the Timor Sea if not handled properly and referred to the risk of discharge of "considerable quantities of hydrocarbons into the ocean." The Government argued that the Woodside report was used to prepare a submission to Cabinet and is covered by Cabinet confidentiality. ## Who pays the clean-up bill? Arguments over access to the Woodside report will continue later this week. Even if the Government eventually wins the right to sell the Northern Endeavour, it is likely to be left with an enormous decommissioning bill. A lead contractor will be appointed through a global open tender process "to achieve the best result at a reasonable price." Pitt then must work out how that "reasonable price, less anything from the sale of the Northern Endeavour, does not fall on the taxpayer. When NOGA first failed, an industry levy was raised as a possibility to shield the taxpayer from the expense. Australian oil and gas producers will be hoping that the Government gets to sell the Northern Endeavour at a good price and the decommissioning contractor is much cheaper than Woodside's $350 million estimate in 2015, otherwise they may be reaching very deeply into their own pockets. --- *Main image: Northern Endeavour oil facility. Source: Anon.* --- ### Wheatstone platform still partly shutdown as Chevron investigates anomaly URL: https://www.boilingcold.com.au/wheatstone-platform-still-partly-shutdown-as-chevron-investigates-anomaly/ Last updated: 2021-12-27T00:33:30.000Z The Wheatstone offshore platform remained partly shut down three days after the first media report that routine maintenance uncovered a problem with a crucial pressure vessel. The maintenance finding likely sent shockwaves through Chevron Australia’s Perth headquarters that has just seen the end of a five-month shutdown of an LNG train at its Gorgon LNG project after inspectors found faulty welds. That incident [cost about $500 million in lost production](https://www.boilingcold.com.au/chevron-to-restart-gorgon-lng-train-after-500m-production-loss/), a second Gorgon train is now out of action for inspection, and the third train on Barrow Island will follow. *Reuters* [reported on Tuesday](https://www.reuters.com/article/us-australia-lng-wheatstone/unit-at-chevron-operated-wheatstone-offshore-platform-shut-temporarily-idUSKBN28I0U5?ref=boilingcold.com.au) that an anomaly within a nozzle on an inlet separator vessel was found during routine maintenance on the Wheatstone platform. The inlet separator receives fluids directly from the subsea wells and separates the flow into gas and liquids. A Chevron spokesperson yesterday told *Boiling Cold* that the large pressure vessel remained shut down as a precaution while it undertook additional assessments. “Inspection of the equivalent nozzle on a similar separator on the platform has confirmed that nozzle is not affected by an anomaly,” the Chevron spokesperson said. “We are committed to the safety of our workforce and the safe and reliable operation of our facilities.” The offshore safety regulator NOPSEMA has met with Chevron and is examining the risks associated with Wheatstone, a spokesperson for the regulator told *Boiling Cold.* > “There is no immediate threat to safety as the areas of concern at the facility have been temporarily shut down,” the NOPSEMA spokesperson said. “NOPSEMA is assessing information provided by Chevron and has requested additional information.” The $US34 billion Chevron-operated Wheatstone project can produce 8.9 million tonnes of LNG a year and 200 terajoules of gas a day for the WA market. The Wheatstone offshore platform receives about 80 per cent of its gas from the Chevron-operated Wheatstone-Iago fields and the remainder from the Woodside-operated Julimar-Brunello fields. A Woodside spokesperson referred questions about the platform to Chevron that operates the facility. “If there is any material impact on our production, we will report that to the market as required,” the Woodside spokesperson said. Chevron said both Wheatstone LNG trains remained operational and deliveries continued to international and WA customers. The Wheatstone domestic gas plant supplied 16 per cent of the WA gas market in November at an average rate of 165 terajoules a day of gas, according to the WA Gas Bulletin Board. The plant has maintained that rate into December, including this week since the anomaly was reported. If the partial shutdown of the platform has reduced gas production, Chevron could maintain domestic gas output for a short time with so-called linepack: gas already in the 225km-long pipeline to shore. A prolonged partial shutdown would likely require a reduction in LNG production for supply to WA to be maintained. The Wheatstone platform, like the propane heat exchangers that caused problems at Gorgon this year, was built in South Korea. **Wheatstone topsides installation**. Source: Chevron A 36,000-tonne steel gravity structure was towed from South Korea to location and filled with water to set it on the seabed, and was then ballasted with 115,000 tonnes of iron ore. The 37,000 tonnes topsides built by DSME was installed on the SGS on schedule in 2015\. However prolonged and expensive rectification work was then required to fix numerous issues, including faulty valves and piping. --- *Main image: Wheatstone platform. Source: Chevron Australia Pty Ltd* --- ### Kimberley fracker expects to escape WA gas export ban URL: https://www.boilingcold.com.au/kimberley-fracker-expects-to-escape-wa-gas-export-ban/ Last updated: 2026-02-03T00:55:29.000Z Black Mountain expects to be allowed to export gas from its Kimberley acreage despite the McGowan Government [banning such sales](https://www.boilingcold.com.au/mcgowan-onshore-gas-export-banned-unless-its-stokes-waitsia/) less than four months ago to ensure WA “can continue to access reliable and affordable gas.” Black Mountain Exploration director Ashley Zumwalt-Forbes said the US company had worked with Premier Mark McGowan and the Department of Jobs, Tourism, Science and Innovation to have the ban lifted since its imposition in August. “Feedback has been positive, based on the number of benefits for WA and the traditional owners living on Noonkanbah Station that stem from development of Valhalla,” Zumwalt-Forbes said. To date, only the Waitsia field in the Perth Basin is exempt from the ban that applies to gas going to other states and territories as well as international sales. Waitsia’s owners Beach Energy and Mitsui want to export gas via spare capacity in the North West Shelf LNG plant. The exemption granted to Waitsia was controversial as the Premier has been criticised for being too accommodating to the interests of significant Beach Energy shareholder Kerry Stokes who controls the Seven Network and The West Australian newspaper. Black Mountain expects the ban to be lifted imminently, according to a company presentation. Environs Kimberley director Martin Pritchard said if the McGowan Government exempts Black Mountain from its ban on the export of onshore gas so soon after it was implemented: “then this would signal the policy is effectively dead and buried.” Pritchard said his group was highly sceptical of Black Mountain’s plans. “Valhalla is in the National Heritage listed Fitzroy River catchment, we don’t want any risk to the river from fracking,” Pritchard. “Fracking is not compatible with the world-renowned Kimberley environment and landscapes.” ## Export where? Previous owner Mitsubishi drilled the Valhalla gas prospect on permit EP371i in 2015\. Three wells were drilled, and 11 zones fracked, all of which flowed gas according to a Black Mountain presentation. The company said its acreage of more than 7700 km2 has 2.9 trillion cubic feet of discovered gas resources with the potential for significantly more from further exploration. Black Mountain plans to drill six appraisal wells in 2024 and have 30 wells drilled by 2026 to produce more than 200 terajoules a day of gas in 2027\. Long term growth plans stretch to 900 TJ/day of gas. Zumwalt-Forbes said Black Mountain planned to initially use a mini LNG plant to allow gas to be sold from the remote Kimberley site and would later build a pipeline. Two possible pipeline routes are south to gain access to the international market through the NWS LNG plant or east to enter the eastern states gas market. Black Mountain would only say that negotiations are progressing well, but Zumwalt-Forbes comments on market prospects indicate the gas may go east: “Australia is short natural gas,” Zumwalt-Forbes said. “We have the right resource of scale and the right experienced team to deliver affordable natural gas to the nation.” ## New fracking approvals delay drilling Last week the environmental assessment of the drilling program by the WA Environmental Protection Authority was [terminated by the WA Government](https://www.epa.wa.gov.au/sites/default/files/Termination%5Fnotice/CMS17847%20-%20Termination%20Notice%20under%20s40A.pdf?ref=boilingcold.com.au) with the agreement of Black Mountains subsidiary Bennet Resources. Zumwalt-Forbes said Black Mountain was the first company to refer a fracking project to the WA EPA since the McGowan Government lifted its ban over most of the State in late 2018 and was treading on uncharted ground. “We now know that the EPA will require two years of baseline studies prior to starting our project, taking us to 2024 before drilling can commence,” Zumwalt-Forbes said. “We elected to pull down the existing referral in order to revise and re-submit a more robust referral that will set us up better for an economic development.” ## Net-zero emissions gas, to a point When Black Mountain goes back to the EPA its submission will include a claim of “Net-Zero Natural Gas” that it has placed a trademark on. The company plans to offset all greenhouse gas emissions produced from its operations in the Canning Basin, including the relatively low two per cent CO2 content in the reservoir and emissions from excess gas that must be burnt, or flared, at times for operational reasons. The net-zero plan does not cover emissions beyond Black Mountain’s operations, such as pipeline compressors and most significantly from end-users burning the gas for power and heat. “We will be responsible for the emissions from our part of the value chain,” Zumwalt-Forbes said. Environs Kimberley’s Pritchard said if Australia is to meet its Paris Agreement emissions cuts targets, it cannot open new fossil fuel provinces. “Net-zero actually means leaving the gas in the ground,” Pritchard said. “Furthermore, if the emissions of CO2 when burnt by the end customer aren’t taken into account, then it’s really a big furphy.” “We’d like to know what levels of fugitive methane emissions are assumed in this ‘net zero’ promise – methane being 30-80 times worse as a greenhouse gas than CO2.” --- *Main image: Valhalla being fracked in 2015\. Source: Environs Kimberley* --- ### Chevron slashes global spend and ignores energy transition URL: https://www.boilingcold.com.au/chevron-slashes-its-global-spend/ Last updated: 2020-12-14T02:48:38.000Z Chevron has cut its 2021 capital and exploration spend to $US14 billion and slashed spending for 2022 to 2025 by $US20 to $US24 billion. The long-term cuts are a clear sign that the US company expects the slump in oil and gas prices and demand caused by the pandemic to last for some time. "Chevron remains committed to capital discipline with a 2021 capital budget and longer-term capital outlook that are well below our prior guidance," Chevron chief executive Mike Wirth said. Wirth said Chevron was committed to maintaining dividends to shareholders. Chevron senior managers are known to be proud of being classified as a dividend aristocrat: a company that increases its annual dividend each year for more than 25 years, regardless of business conditions. > "We took early and swift action at the beginning of the pandemic to prudently allocate capital, reduce costs and protect our industry-leading balance sheet," Wirth said. That action included a five-month process to trim its Australian workforce from that ended in September with the loss of about 700 jobs. The budget cuts come despite Chevron now being a bigger company after it acquired Noble Energy in July for $US5 billion. Over 2022 to 2025 Chevron will spend between $US14 and $US16 billion a year, significantly down from the previous plan of $US19 to $US22 billion which excluded Noble Energy. In 2022 Chevron will spend $US6.5 billion of its $US14 billion budget on international upstream assets that include the Gorgon and Wheatstone LNG projects in Australia. About $US2.6 billion of this non-US spend is for the Tengiz oil project in Kazakhstan. Wirth said Chevron would prioritize investments that it expected to grow long-term value, deliver higher returns and lower carbon. The 2022 budget included $US300 million, or two per cent, to "investments to advance the energy transition." Chevron's next significant spend on its Gorgon and Wheatstone LNG projects in Australia is subsea compression on the Jansz-Io field to ensure the Gorgon LNG plant is kept fully supplied with gas. The innovative project is awaiting a decision by Chevron and its partners ExxonMobil and Shell to proceed with front end engineering and design. --- Please consider becoming a **Boiling Cold* supporter to keep yourself and others informed about energy, industry and climate in WA. Independent news and analysis free of government and big business spin. ![Boiling Cold soil sun sea logo](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/10/bc_logo.png) [Soil $5/month](https://boilingcold.memberful.com/checkout?plan=54843&ref=boilingcold.com.au) [Sun $10/month](https://boilingcold.memberful.com/checkout?plan=54842&ref=boilingcold.com.au) [Sea $20/month](https://boilingcold.memberful.com/checkout?plan=54841&ref=boilingcold.com.au) Or a bit more with a monthly contribution of your choice. --- *Main image: First loading of LNG at Chevron's Gorgon project. Source: Chevron Australia Pty Ltd.* --- ### Oil & gas to get Northern Endeavour bill and trailing liabilities: Pitt URL: https://www.boilingcold.com.au/oil-gas-industry-to-get-northern-endeavour-bill-and-trailing-liabilities-pitt/ Last updated: 2021-12-27T00:29:52.000Z Oil and gas companies that sell ageing offshore facilities will retain liability for clean up costs under planned changes to legislation, according to Federal Resources Keith Pitt. Pitt also told the ABC's *Background Briefing* that the industry will foot some of the bill to decommission the shuttered Northern Endeavour oil vessel that is now the Government's responsibility after its owner was liquidated earlier this year. [Buyer Wanted - Mothballed Oil RigDid you know you’re the lucky operator of a rusty oil rig floating in the Timor Sea? You, along with 25-odd-million others, that is. This week, reporter Alex Mann investigates why Australian taxpayers are forking out four million dollars a week for this facility, some 550km off the coast of Darwin.ABC Radio National![](https://www.abc.net.au/cm/rimage/12947626-16x9-large.jpg?v=2)](https://www.abc.net.au/radionational/programs/backgroundbriefing/buyer-wanted-mothballed-oil-rig/12947632?ref=boilingcold.com.au) **Background Briefing podcast on offshore decommissioning** Before the Northern Endeavour failed, the Government was reviewing its regulation of the decommissioning of offshore oil and gas facilities. The [offshore and onshore cleanup bill](https://www.boilingcold.com.au/australias-oil-and-gas-industry-will-create-a-76b-clean-up-bill/) to 2050 has been estimated at $76 billion by oil and gas consultancy Wood Mackenzie. Pitt, speaking on the *Background Briefing* podcast released this morning, said the Government would release the review before the end of the year. > "There will be legislation that's required which I expect to put up following... all the normal processes that we would go through if we were looking to make changes around trailing liability and of course the role of the regulator," Pitt said. A report into the Northern Endeavour by experienced UK North Sea regulator Steve Walker recommended trailing liabilities as current Australian regulations did not anticipate operators going into liquidation. > "The adoption of 'trailing liability' whereby a titleholder would be continually liable for the decommissioning and removal of its offshore assets even after selling its interests in a title, was receiving growing acceptance," Walker wrote. "This is a serious concern, as such events could be repeated as Australia's offshore industry matures and late-life assets are likely to be passed from established majors." [Sellers of oil and gas assets should stay liable for cleanup: reportNorth Sea expert recommends changes to stop a repeat of Woodside escaping a $360 million cleanup bill by paying a tiny inexperienced company to take an old rusty asset.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/08/northern-endeavour.jpg)](https://www.boilingcold.com.au/sellers-of-oil-and-gas-assets-should-stay-liable-for-cleanup-report/) Trailing liabilities are likely to put a brake on established producers' plans to sell late-life assets to smaller companies. *Boiling Cold* understands the Federal Government's stricter approach to decommissioning was a factor in ExxonMobil announcing a week ago that it had [canned efforts to sell its half-share](https://www.afr.com/companies/energy/exxon-abandons-bass-strait-sale-20201127-p56il8?ref=boilingcold.com.au) of the vast but ageing Bass Strait oil and gas operation. Pitt said the failure of the Northern Endeavour was an unprecedented situation. "We've taken the right and appropriate action and now we'll ensure that it can't reoccur anytime in the future," Pitt said. The owner of the Northern Endeavour, Northern Oil and Gas Australia, was a small inexperienced company owned by just one person: Angus Karoll. The Northern Endeavour's initial operator Woodside paid Karoll in 2016 to take the Northern Endeavour. Woodside's alternative was to close the facility and decommission the wells, subsea structures and vessel at a cost it estimated to be about $360 million. Current legislation did not require the financial strength of the new owner NOGA to be checked before it took over the facility. [Federal Govt regulates poorly and gets $360M Northern Endeavor clean-up billThe Northern Endeavor mess started with Woodside paying to rid itself of a rusty ageing asset, ended with a $362 million liability for the Government and in between was a regulatory shambles.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/09/northern-endeavour.jpg)](https://www.boilingcold.com.au/poor-federal-regulation-allowed-the-360m-northern-endeavor-mess/) "There are some challenges around the legislation that's allowed this position to become a reality," Pitt said. > "I'm addressing that as the Minister so the taxpayer won't be left on the hook for the full cost of what's necessary to decommission that facility, "I've told the industry that very clearly. "We're looking at options now in terms of cost recovery and how that will be done. "I've been very upfront with industry that they'll be expected to contribute." Pitt did not say if the industry generally or Woodside specifically would bear the cost. If Woodside's 2016 deal to move decommissioning liability elsewhere results in stringent restrictions on the sale of assets and an industry levy to pay for the Northern Endeavour clean up, it will not be a popular company amongst its peers. --- **Main image: Northern Endeavour in early 2018\. Source: not disclosed, used with permission.* --- ### New boss at Chevron Australia as Al Williams gets global PR gig URL: https://www.boilingcold.com.au/new-boss-at-chevron-australia-as-al-williams/ Last updated: 2021-12-27T00:19:42.000Z The head of Chevron in Australia Al Williams will return to the US in March to take charge of corporate affairs, and fellow American Mark Hatfield will take control of Australia's biggest foreign investor. Williams will become vice president of corporate affairs after just two years in charge of Chevron Australia that operates the Gorgon and Wheatstone LNG plants. Williams will report to Chevron chief executive Mike Wirth and have the challenging task of leading Chevron's "worldwide efforts to protect and enhance its reputation" at a time when oil and gas majors are feeling climate pressure from governments, investors and customers. Wirth said Williams possessed an in-depth knowledge of oil and gas, had a global perspective and is a proven leader. "Will will be a valued addition to our leadership team at a time of increasing regulatory, social and political complexity for all our businesses," Wirth said. Williams has leapt up the Chevron hierarchy with this appointment, indicating his time in Perth impressed headquarters in San Ramon. In William's time in Perth he helped the industry crush the WA Environmental Protection Authority's call for new projects to offset all their carbon emissions; [cut into the Australian workforce](https://www.boilingcold.com.au/chevron-red-tape-for-hr-hunger-games/) twice as deep as Chevron did globally; and saw faulty welding in Korea many years ago create a [safety, production and public relations disaster](https://www.boilingcold.com.au/chevron-to-restart-gorgon-lng-train-after-500m-production-loss/) at the Gorgon LNG project. Williams canned predecessor Nigel Hearne's plan to send Chevron gas to Woodside's North West Shelf LNG project and started the [complicated process of selling Chevron's one-sixth share](https://www.boilingcold.com.au/chevrons-north-west-shelf-sales-pitch-missed-8-key-points/) in the NWS. His tenure saw [Gorgon's troubled carbon injection system](https://www.boilingcold.com.au/chevron-faces-little-grief-from-gorgon-lng-emissions-miss/) come close to planned performance. The State Government will decide next year if it penalises Chevron and its partners for excess carbon emissions. Undoubtedly paving the way for minimum impact on Chevron would have been one of Williams' jobs. ![Mark Hatfield, future managing director Chevron Australia.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/12/Mark-Hatfield-reduced.jpg) **Mark Hatfield, future managing director Chevron Australia.** Source Chevron Australia Pty Ltd Mark Hatfield, who is in charge of Chevron's deepwater exploration and production in the Gulf of Mexico, will replace Williams. Hatfield joined Chevron in 1982 with a petroleum engineering degree and has served as general manager of Strategy and Planning for Chevron's global upstream business. Hatfield said Gorgon, Wheatstone and North West Shelf facilities were strategic assets in Chevron's global portfolio. --- *Correction 2PM 3 December: original story incorrectly said Williams headed Chevron Australia for three years, not two years.* --- *Main image: Chevron Australia managing director Al Williams. Source: Chevron Australia Pty Ltd.* --- ### Chevron faces little grief from Gorgon LNG's 7 million tonnes emissions miss URL: https://www.boilingcold.com.au/chevron-faces-little-grief-from-gorgon-lng-emissions-miss/ Last updated: 2021-12-27T00:37:56.000Z *EXCLUSIVE ANALYSIS* Chevron's Gorgon LNG project has pumped more than seven million tonnes of greenhouse gases into the atmosphere that should be buried underground, but there may be few if any repercussions due to lax State and Federal regulation. The $US54 billion project off the WA coast was to be a showpiece for carbon storage, but no CO2 was stored until August 2019, more than three years after the first LNG cargo sailed to Japan. Chevron was only allowed to build Gorgon on environmentally sensitive Barrow Island because it was the ideal place to store the 4.2 million tonnes a year of CO2 contained in gas that would flow from the Gorgon reservoir. Gorgon has the third-largest carbon storage project in the world, according to the Global CCS Institute. It is the biggest CCS project dedicated to CO2 storage, with 14 of the 19 CCS facilities in operation primarily used to inject CO2 underground to boost oil production, not to limit climate change. *Boiling Cold* has assembled the full picture of Gorgon's greenhouse gas performance from a detailed analysis of Chevron's reporting to various State and Federal authorities over several years. Gorgon emitted almost 34 million tonnes of greenhouse gases in the five years to June 2020 from the reservoir CO2 that was vented instead of buried, as well as gas combusted to power the plant and excess gas burnt in a flare. Only the CO2 in the gas flowing from the reservoirs is captured and able to be injected underground. ![Plot of annual greenhouse gas emissions from Chevron's Gorgon LNG project split into combustion emissions, CO2 buried and CO2 vented.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/11/image-9.png) *Source: Data - Clean Energy Regulator, WA Department of Water and Environmental Regulation, and Chevron's Environmental Performance Reports. Analysis - Boiling Cold* In those five years, Chevron and its partners Shell and ExxonMobil have produced carbon emissions equivalent to almost 10 years of operation of WA's largest coal-fired power station, Muja in Collie. Gorgon started badly, emitting almost two million tonnes of greenhouse gases in 2015-2016 when only a handful of LNG cargoes were shipped. Constant [stopping and starting of the trains due to technical problems](https://thewest.com.au/business/energy/environment-pays-big-price-for-tricky-gorgon-start-up-ng-b881067449z?ref=boilingcold.com.au) meant more than half a million tonnes of fuel was wasted and burnt in a flare in the first 16 months of operation, producing about 1.5 million tonnes of greenhouse gases. From mid-2017 emissions from combustion have been close to the 5.25 million tonnes a year Chevron forecast in Gorgon's [Greenhouse Gas Abatement Program](https://australia.chevron.com/-/media/australia/our-businesses/documents/gorgon-emp-greenhouse-gas-abatement-program.pdf?ref=boilingcold.com.au). However, all the CO2 from the Gorgon reservoir continued to be vented for two more years. In 2018-2019 Gorgon achieved at its nameplate capacity of 15.6 million tonnes of LNG. Burial of CO2 deep below Barrow Island started in August 2019, and injection capacity ramped up into 2020\. The troubled system buried 70 per cent of the reservoir CO2 in 2019-2020, according to the [Gorgon Environmental Performance Report](https://australia.chevron.com/-/media/australia/our-businesses/documents/gorgon-and-jansz-feed-gas-pipeline-5-year-environmental-performance-report-2015-2020.pdf?ref=boilingcold.com.au). Chevron forecast total emissions would be 6.1 million tonnes a year. In 2019-2020 Chevron almost achieved this target with emissions of 6.3 million tonnes, albeit with production at 93 per cent of nameplate capacity. The emission intensity, or tonnes of CO2 emitted for each tonne of LNG produced, has improved since the terrible early performance. ![Plot of annual LNG production and carbon emission intensity of Chevron's Gorgon LNG plant.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/11/image-10.png) *Source: Data - WA Department of Water and Environmental Regulation and Chevron's Environmental Performance Reports. Graphic - Boiling Cold* The Australia Institute climate and energy director Richie Merzian said Gorgon was supposed to be the great hope for carbon capture and storage with an ideal location, ample funding and government support. Apart from its size Gorgon was in some ways, at least in theory, a simple carbon and capture storage project. There was no additional cost to capture the CO2 in the gas flowing from the reservoir as all LNG plants do this to prevent frozen CO2 damaging the equipment. The CO2 only had to be transported a short distance from the LNG plant to the injection wells, and Chevron had decades of oil production experience at Barrow Island to build an understanding of its geology. "We are talking about almost $74 billion invested from the biggest energy companies in the world like Chevron, Shell and ExxonMobil, they couldn't make it work on time, or to scale, or likely within budget," Merzian said. "How can the Australian public take the Federal Government seriously when it claims CCS is one of the top five technologies available to reduce emissions out of 160 available." "The Federal Department of Energy admits that it is not banking on any emissions reductions from carbon capture and storage over the next twenty years because it has been 'so variable' to date. You can see why when you look at Gorgon." A Chevron spokesperson said the CO2 injection system would reduce Gorgon's greenhouse gas emissions by about 40 per cent over the life of the project. "Since safely starting the system, more than three million tonnes of greenhouse gas emissions have been mitigated," the spokesperson said. ## WA requirements kick in late with loopholes In 2006 then State Environment Minister and now Premier Mark McGowan required Chevron to "implement all practicable means" to inject all the reservoir CO2 underground and achieve at least 80 per cent injection over any five years. "That reflects our commitment to doing something very significant about greenhouse gases, which is a world issue," McGowan said at the time. The initial five-year measurement period goes from July 2016 to July 2021\. In the first four years, the Gorgon LNG plant extracted 12.2 million tonnes of CO2 from gas from the offshore Gorgon field. Only 2.7 million tonnes, or 22 per cent, of the reservoir CO2 was buried. This was a shortfall of seven million tonnes from the 80 per cent target. The final shortfall over five years will depend on whether the injection system achieves more or less than 80 per cent injection in the 12 months to July 2021. However, not all the CO2 vented to the atmosphere will count against the target. Production from Gorgon's second train started in October 2016, and the third train started in March 2017, yet Chevron did not receive an operating license for these trains until July 2018. Before then the two giant trains operated under a works approval usually uses for construction and a short period of commissioning after startup. The [Ministerial Statement](https://www.epa.wa.gov.au/sites/default/files/Ministerial%5FStatement/00800.pdf?ref=boilingcold.com.au) of Gorgon's environmental requirements was revised in June 2020 to clarify that vented gas associated with Trains 2 and 3 before the July 2018 license would not count towards the 80 per cent target. *Boiling Cold* estimates this legal interpretation could reduce Gorgon's measured CO2 injection shortfall by more than two million tonnes. If the amount of CO2 injected "falls significantly below the target levels" Chevron has to report to the Government on measures to meet the target, "or, if injection is not considered feasible…measures to otherwise offset." The requirement has great ambiguity from what "significantly below" could mean. Also, offsets, such as planting trees, are only considered if injection is not considered feasible. This suggests Chevron could propose that the shortfall be made up by injecting more than 80 per cent of the CO2 in future years. This tactic could be repeated indefinitely, effectively delaying any reckoning. The possible use of this long-term approach is consistent with the response from Chevron that it "was committed to meeting its regulatory obligations over the more than 40-year life of the Gorgon plant." ## Federal Government gives Chevron ample room to pollute As well as WA's requirement to bury 80 per cent of the CO2 from the reservoir, the Federal Government imposes a limit on total emissions from all large carbon polluters known as the safeguard mechanism baseline. The baseline for Gorgon was set at 8.34 million tonnes a year, an incredibly generous 37 per cent higher than the 6.1 million tonnes Chevron forecast. Even for the first year of production when problems were likely, Chevron forecast worst-case emissions of only 6.9 million tonnes, well below the baseline. Gorgon also received a concession of being measured against a three-year average from July 2017 instead of annually. This concession was widened further this year with the option for Gorgon and other projects with the three-year concession to add a year "in recognition of the widespread disruption that COVID-19 has caused for business operations." Merzian said the safeguard mechanism was supposed to cap emissions from large polluting facilities but the current Federal Government "has laid out a red carpet for more and more increases and Gorgon is a great example." "Chevron owes a debt to the people of WA, to the people of Australia to make good its emissions and do so by investing in WA offsets." The Chevron spokesperson said managing greenhouse gas emissions was integral to how Chevron executed its business. "Our path to a lower-carbon future is a shared approach between industry and government to enable complex new technologies to be developed at scale, tested and continually improved," the spokesperson said. --- *Main image: Gorgon LNG plant on Barrow Island. Source: Chevron Australia Pty Ltd.* --- ### Chevron and Santos battle Kerry Stokes’ Mardie Salt project URL: https://www.boilingcold.com.au/chevron-santos-battle-kerry-stokes-mardie-salt-project/ Last updated: 2021-12-27T00:37:01.000Z WA’s two largest gas suppliers are taking legal action against the Mardie salt project backed by media mogul Kerry Stokes that will traverse pipelines supplying about 40 per cent of WA’s gas. The disagreements over access to land are unresolved just weeks before BCI Minerals plans to start early work on its Mardie Project. In October companies related to Chevron’s Gorgon LNG project and Santos’ Varanus Island facility lodged [objections in the Perth Warden’s Court](http://dmp.wa.gov.au/Documents/Minerals/WC-CauseList%5FPerth%5F16October2020.pdf?ref=boilingcold.com.au) against five tenements for BCI Minerals’ Mardie Project. The action follows other objections lodged over the past 12 months. ASX-listed BCI Minerals plans to spend $779 million building the world’s third-largest solar salt project on a 30km long tract of land half-way between Onslow and Karratha. Powerful media and mining equipment mogul Kerry Stokes owns 40 per cent of BCI Minerals. The stake is currently worth about $60 million. A pipeline from Chevron’s Gorgon project on Barrow Island and two pipelines from Santos’ Varanus Island facility travel from the beach to the Dampier to Perth gas pipeline across land destined for Mardie Salt. In October these pipelines supplied 39 per cent of the WA gas market, according to the WA Gas Bulletin Board. ![Map of the Gorgon gas pipeline from Barrow Island and pipelines from Varanus Island running through the proposed Mardie Salt project in North West Western Australia.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/11/image-8.png) **Gas Pipelines through the Mardie Salt project**. Source: BCI Minerals map with pipeline routes added BCI started meeting separately with Chevron and Santos about 18 months ago to discuss “operability of proposal and integrity of the gas pipeline,” according to the [Mardie environmental review document](https://www.epa.wa.gov.au/sites/default/files/PER%5Fdocumentation2/Mardie%20Project%20ERD%20-%2020200622.pdf?ref=boilingcold.com.au) lodged with the WA Environmental Protection Authority. Issues raised included the design of crossings over the pipelines and BCI’s access to the gas pipeline corridor for exploration, construction of a trial pond, full construction, and operations. ## A lot at stake in delayed agreements BCI agreed with the gas companies to “commence negotiation of an access agreement to ensure interest of both businesses are protected.” Offshore oil and gas companies commonly execute a legal agreement before one company lays a pipeline over the other company’s pipeline. These agreements cover the design of the crossing and the construction method to ensure the original pipeline is safe. Liability if something goes wrong is also agreed, with most of the burden usually falling on the company laying the second pipeline. A similar agreement, in this case, could expose BCI Minerals to not only the cost of fixing a damaged pipeline but loss of sales revenue to Santos or Chevron and loss of production by the gas consumer. *Boiling Cold* understands that at least one gas company does not believe BCI is putting sufficient effort into finalising the agreements. BCI plans to start construction of a trial pond near the pipelines in December, according to a September [presentation for a $48 million entitlement offer](https://www.bciminerals.com.au/images/200914-BCI-Equity-Raise-Presentation-MASTER.pdf?ref=boilingcold.com.au) to fund early work before a planned final investment decision in March. A pastoral subsidiary of Citic Pacific that operates the Sino Iron project has also lodged objections in the Warden’s Court. BCI [told the market](http://clients3.weblink.com.au/pdf/BCI/02301429.pdf?ref=boilingcold.com.au) on October 29, two weeks after objections were lodged, that “land access arrangements with the pastoralist and gas pipeline owners are being progressed.” *Boiling Cold* asked BCI how close the parties were to an agreement and if the final investment decision planned for March 2021 would be delayed. A BCI spokesperson said the company is working collaboratively with the stakeholders on the interfaces between the Mardie Project. “Land access matters are confidential, and BCI cannot comment further at this time,” the spokesperson said. Chevron, Santos and Citic Pacific all declined to comment. --- *Main image: Salt stockpile with conveyor. Source: BCI Minerals Mardie definitive feasibility study* --- ### Montara well problem adds to Jadestone's Australian workload URL: https://www.boilingcold.com.au/montara-well-problem-adds-to-jadestones-australian-workload/ Last updated: 2021-12-27T00:29:04.000Z Jadestone Energy has a second well out of action at its crucial Montara field in the Timor Sea that produces three-quarters of its production. The problem with the Skua-11 subsea well this month followed a shut-in of the Skua-10 well earlier this year. Jadestone chief executive Paul Blakeley said the Skua-11 well casing had not collapsed and it still had structural integrity. “Our preliminary investigations point to communication somewhere in the gas lift system and/or possibly one of the outer casing annuli,” Blakeley said. > “Since the only source of bubbles comes from clean lift gas, which we control completely, there is no environmental risk. “It’s a remote subsea well, so there are also no safety issues for workers either.” Blakeley said if the problems were at the wellheads on the seabed a remotely operated vehicle could carry out the repairs. If the problem was within the well repairs would require a rig. Blakely said Jadestone had reported the issues with both wells to the offshore safety regulator NOPSEMA. The London-listed and Singapore headquartered company had planned to repair the Skua-10 well, workover three wells at its Stag field further south earlier this year and drill an additional well at both fields. Jadestone pushed the work back when the oil price crumbled. “This delay aims to best align capital spending with a strengthening oil price environment, maximising potential future returns, while preserving the Company’s balance sheet and net cash position today,” Jadestone’s 2019 Annual Report stated. ## Montara and Stag work planned for 2021 Blakeley said the loss of the Skua-11 well had a minimal effect of production as flow from other wells increased. Jadestone has contracted the Valaris (or Ensco) 107 jack-up rig for about 95 days tentatively starting in late second quarter 2021. The £267 million ($486 million) company bought Stag off Santos in 2016 and gained Montara from Thailand’s PTTEP in 2018 for a reported $US195 million. Despite the low oil prices this year Blakely said with cash on hand of $US114 million mid-year and positive free cash flow the company could afford the Montara and Stag work. “We have chosen a simple financial structure, no funky financing and we maintain a very healthy balance sheet,” Blakely said. “We have access to a number of sources of funding, should we need it, and a very supportive shareholder base who are looking for us to expand the business and for them to back it. > “But we will only commit to levels of capital expenditure that we can afford, always taking a prudent approach to preserve the balance sheet.” Jadestone owns 100 per cent of the Montara and Stag fields. It became the operator of Montara in August 2019 when its safety case, that details how it would manage the operation, was accepted NOPSEMA. In September, the company reported a small oil leak at Stag, that it also operates. Jadestone plans to complete the acquisition of the Maari field in New Zealand in January. --- *Main image: Montara wellhead platform and the Ensco 107 workover rig. Source: Jadestone Energy 2019 annual report.* --- ### WA green hydrogen rush joined by the world’s biggest renewables fund URL: https://www.boilingcold.com.au/wa-green-hydrogen-rush-joined-by-worlds-biggest-renewables-fund/ Last updated: 2022-01-01T09:46:27.000Z A green hydrogen project near Kalbarri has won the support of Copenhagen Infrastructure Partners that manages €12 billion ($19.5 billion) of investments. Hydrogen Renewables Australia plans to build five-gigawatt of wind and solar capacity with a desalination and electrolyser plant at Murchison House Station near Kalbarri. The Murchison Renewable Hydrogen project would start with a demonstration plant to produce transport fuel. An initial expansion would allow the blending of hydrogen into the nearby Dampier to Bunbury Natural Gas Pipeline, and a later development would support the export of hydrogen to Asia. HRA executive chair Terry Kallis said the CIP deal would enable the assessment of the feasibility of producing competitive hydrogen exports for the Asian markets. CIP partner Michael Hannibal said the project aimed to export green hydrogen produced from solar PV and onshore wind to Asia. > "We believe Murchison represents the best combined wind and solar resource in Australia and the project complements our existing activities in Australia," Hannibal said. CIP is also progressing the Star of the South 2.2 GW offshore wind power project off the Gippsland coast of Victoria. ### The green hydrogen rush gets crowded The Murchison project is on a growing list of renewable hydrogen projects being pushed in WA, including: - The [Asian Renewable Energy Hub](https://www.boilingcold.com.au/pilbara-energy-hub-targets-10m-tonnes-a-year-of-green-ammonia/) in the Pilbara with a potential 26 gigawatts of wind and solar - BP's feasibility study into a [green ammonia pilot plant near Geraldton](https://www.boilingcold.com.au/bp-to-chase-green-ammonia-in-geraldton/) that could precede a 1.5 GW export plant - Hazer Group's [gas to hydrogen and graphite pilot plant](https://www.boilingcold.com.au/hazers-clean-hydrogen-plant-gets-funded/) at the Water Corporation's Woodman Point wastewater treatment plant - The WA Government's search for partners to develop a [green hydrogen hub at Oakajee](https://www.boilingcold.com.au/wa-pushes-green-hydrogen-hub-near-geraldton/), north of Geraldton - FMG will power ten hydrogen-fuelled buses at its Pilbara mines with hydrogen produced on site. - Infinite Blue Energy is seeking funds to develop a project at Arrowsmith in the Mid-West. - ASZ-listed Pilot Energy and Triangle Energy are investigating large scale offshore wind power near Triangle's Cliff Head oil platform off Dongara. - ATCO's wants to step up from its 65kg a day hydrogen pilot plant at Jandakot to produce about 4.2 tonnes a day of green hydrogen. - French energy giant ENGIE and Norwegian fertiliser manufacturer Yara want to supply green hydrogen to Yara's ammonia plant on the Burrup Peninsula. - Woodside and APA plan to produce hydrogen at APA's Badgingarra wind and solar farm for use in use in power generation, transport, and industry. - BHP's Nickel West plans to install an electrolyser at its Kwinana nickel refinery to produce some of the hydrogen it uses to refine the valuable battery metal The final four projects listed are among seven in the running for $70 million of funding from the Australian Renewable Energy Agency that *Boiling Cold* understands ARENA will share between two projects. [Hydrogen: a simple molecule but a complex businessThere is no shortage of hype about hydrogen. Time will tell what ideas fall by the wayside and which build enduring industries.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/07/22951791245_1bb6dfcf46_o.png)](https://www.boilingcold.com.au/hydrogen-a-simple-molecule-but-a-complex-business/) The WA Government's hydrogen strategy is exclusively focussed on green hydrogen produced from splitting water into hydrogen and oxygen in electrolysers powered by renewable energy. Most hydrogen is now produced by steam methane reforming where natural gas is split into hydrogen and carbon dioxide. Federal chief scientist Alan Finkel today defended hydrogen made from coal or gas instead of renewable electricity, but only with carbon capture and storage. > "If it's not done with CCS then it hasn't got a chance, no one is going to buy it," he told the *AFR*. Woodside executive vice president sustainability Shaun Gregory last week said the gas company believed its path to produce green hydrogen would start with blue hydrogen. "In the future, we expect the transition to green hydrogen to occur over different timelines based on the end-market use, be it from heavy transport to power generation, and to chemicals and industrials as well," Gregory said. --- *Main image: wind turbine. Source: [Jan Kopřiva](https://unsplash.com/@jxk?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) on [Unsplash](https://unsplash.com/s/photos/wind-turbine?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText)* --- ### A global carbon price could soon be a reality: Australia should prepare URL: https://www.boilingcold.com.au/a-global-carbon-price-could-soon-be-a-reality-australia-should-prepare/ Last updated: 2021-12-27T13:54:47.000Z [Richard Holden](https://theconversation.com/profiles/richard-holden-118107?ref=boilingcold.com.au), *[UNSW](https://theconversation.com/institutions/unsw-1414?ref=boilingcold.com.au)* As well as restoring dignity to the Oval Office, another thing that will definitely change under a Biden presidency is US policy on the environment. [Biden’s plan](https://joebiden.com/climate-plan/?ref=boilingcold.com.au) for “a clean energy revolution and environmental justice” includes rejoining the Paris Agreement on climate change, investing US$1.7 trillion over the next decade in “green energy” and achieving net-zero greenhouse gas emissions by 2050. The European Union, Japan and South Korea have already committed to net-zero emissions by 2050\. China’s net-zero target is 2060. With the US joining the fold, the implications for Australia could be huge. ## A carbon border tax coming our way The European Union [has already announced](https://www.bcg.com/en-au/publications/2020/how-an-eu-carbon-border-tax-could-jolt-world-trade?ref=boilingcold.com.au) it is considering a carbon border tax. This would involve a tariff on imports from nations without a price on carbon similar to the EU. The tax would be proportional to the amount of carbon in the imports, and the relative difference in carbon price between Europe and the exporting country. This type of “border-adjustment tax” is a smart way to protect domestic industries from being undercut by imports from other countries without a price on carbon. It would make eminent sense for the US to follow suit. If so, things get really interesting. It would make it even harder to challenge such taxes as trade restriction before the World Trade Organisation. It would trigger similar moves by other countries serious about tackling climate change. In fact, a border-adjustment tax is part of the [US Climate Leadership Council’s](https://clcouncil.org/?ref=boilingcold.com.au) proposal for a carbon tax and “carbon dividend” – returning all net proceeds from the tax to the American people on an equal basis. The carbon dividend idea is [supported by](https://clcouncil.org/economists-statement/?ref=boilingcold.com.au) 28 Nobel laureate economists, 15 former chairs of the US Council of Economic Advisers and four former chairs of the US Federal Reserve. [Carbon pricing works: the largest-ever study puts it beyond doubtHaving a carbon price is linked to lower emissions growth. A larger price cuts emissions by more.![](https://cdn.theconversation.com/static/tc/@theconversation/ui/dist/esm/logos/web-app-logo-192x192-e99834e3a7a551050e9debe6cc925617.png)The ConversationFrank Jotzo![](https://images.theconversation.com/files/346648/original/file-20200709-62-1kefbky.jpg?ixlib=rb-1.1.0&rect=359%2C616%2C3634%2C1814&q=45&auto=format&w=1356&h=668&fit=crop)](https://theconversation.com/carbon-pricing-works-the-largest-ever-study-puts-it-beyond-doubt-142034?ref=boilingcold.com.au) If most of our trading partners have a carbon border tax, then Australia will have a price on carbon – but only for exporters. This will leave the Australian economy in a bad position. With no price on carbon internally, no serious commitment to reduce emissions and a vain hope of meeting our Paris Agreement obligations through dodgy accounting tricks and future technological innovation, the rest of the world is unlikely to be sympathetic. ## A carbon dividend plan There is a better way: enact our own carbon dividend plan. In 2018 law professor Rosalind Dixon and I proposed a plan for Australia similar to the Climate Leadership Council’s. ![Cover of A Climate Dividend for Australians, UNSW, 2018.](https://images.theconversation.com/files/368959/original/file-20201112-17-rf0gnp.png?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip) [University of NSW](https://static1.squarespace.com/static/5c637ff692441b2555c2fd4b/t/5c64b231eef1a104f29aefec/1550103152623/carbon%5Freport%5Fdigital-rh.pdf?ref=boilingcold.com.au) Our [Australian Carbon Dividend Plan](https://static1.squarespace.com/static/5c637ff692441b2555c2fd4b/t/5c64b231eef1a104f29aefec/1550103152623/carbon%5Freport%5Fdigital-rh.pdf?ref=boilingcold.com.au) involves a price on carbon, with the proceeds being distributed as a dividend, equally, to every voting-age citizen. It also allows for a border-adjustment rebate so exporters aren’t penalised if exporting to countries without a similar price on carbon. This would see a significant majority of Australians better off financially, and help protect exporters while we transition to cleaner energy. It would also give the Australian government’s [Technology Investment Roadmap](https://www.industry.gov.au/data-and-publications/technology-investment-roadmap-first-low-emissions-technology-statement-2020?ref=boilingcold.com.au) (to accelerate the use of low-emissions technology) a chance of working. It makes no sense to bet on technology without using market price mechanisms to give suppliers and buyers the right incentives to develop and adopt the most effective technologies. [Fresh thinking: the carbon tax that would leave households better offIt is possible to both tax carbon emissions and enrich households. A report to be released by UNSW today outlines how.![](https://cdn.theconversation.com/static/tc/@theconversation/ui/dist/esm/logos/web-app-logo-192x192-e99834e3a7a551050e9debe6cc925617.png)The ConversationRichard Holden![](https://images.theconversation.com/files/246373/original/file-20181120-161621-nh31d1.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1356&h=668&fit=crop)](https://theconversation.com/fresh-thinking-the-carbon-tax-that-would-leave-households-better-off-107177?ref=boilingcold.com.au) ## The world is acting The US just voted out a climate denier and is now going to take serious action on the environment. Europe is already acting. Our major trading partners are committing to net-zero targets. We’re getting left behind. This ought to provide the impetus to put Australia’s climate wars to rest. Even if our elected politicians don’t want to do something serious about climate change for moral reasons, they now have little choice but to do so for practical reasons. And that involves a price on carbon. Otherwise our exporters are going to be seriously disadvantaged. Using the proceeds from that price on carbon to pay it back as a dividend to Australians would be the best way forward. ![The Conversation](https://counter.theconversation.com/content/149919/count.gif?distributor=republish-lightbox-basic) --- *[Richard Holden](https://theconversation.com/profiles/richard-holden-118107?ref=boilingcold.com.au), Professor of Economics, [UNSW](https://theconversation.com/institutions/unsw-1414?ref=boilingcold.com.au)* *This article is republished from [The Conversation](https://theconversation.com/?ref=boilingcold.com.au) under a Creative Commons license. Read the [original article](https://theconversation.com/vital-signs-a-global-carbon-price-could-soon-be-a-reality-australia-should-prepare-149919?ref=boilingcold.com.au).* --- *Main image: Climate Change Protest In Melbourne. Source: [Mitchell Luo](https://unsplash.com/@mitchel3uo?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) on [Unsplash](https://unsplash.com/s/photos/climate-action?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText)* --- ### Prepare for hotter days, says the State of the Climate 2020 report URL: https://www.boilingcold.com.au/prepare-for-hotter-days-says-the-state-of-the-climate-2020-report/ Last updated: 2021-12-27T13:55:21.000Z [Michael Grose](https://theconversation.com/profiles/michael-grose-95584?ref=boilingcold.com.au), *[CSIRO](https://theconversation.com/institutions/csiro-1035?ref=boilingcold.com.au)* and [Lynette Bettio](https://theconversation.com/profiles/lynette-bettio-649221?ref=boilingcold.com.au), *[Australian Bureau of Meteorology](https://theconversation.com/institutions/australian-bureau-of-meteorology-1083?ref=boilingcold.com.au)* The Australian State of the Climate 2020 report reveals a picture of long-term climate trends and climate variability. The biennial climate snapshot draws on the latest observations and climate research from the marine, atmospheric and terrestrial monitoring programs at CSIRO and Bureau of Meteorology. We are all still dealing with the lasting impacts of Australia’s [hottest and driest year on record](https://theconversation.com/weather-bureau-says-hottest-driest-year-on-record-led-to-extreme-bushfire-season-129447?ref=boilingcold.com.au) in 2019\. It was a year of [intensifying drought over eastern Australia](https://theconversation.com/yes-its-been-raining-a-lot-but-that-doesnt-mean-australias-drought-has-broken-144702?ref=boilingcold.com.au), high [temperature records](http://www.bom.gov.au/climate/current/statements/scs73.pdf?ref=boilingcold.com.au) and the devastating bushfires of summer [2019](https://theconversation.com/nz/topics/bushfires-2019-78551?ref=boilingcold.com.au)\-[2020](https://theconversation.com/nz/topics/bushfires-2020-80584?ref=boilingcold.com.au). State of the Climate 2020 puts all these events into the longer-term context of climate change trends and key climate drivers. ## Australia’s hottest year on record Using the best available [data](http://www.bom.gov.au/climate/change/?ref=boilingcold.com.au#tabs=Datasets), the Bureau of Meteorology estimates Australia has warmed on average by 1.44℃ (±0.24℃) between 1910 and 2019. [Weather bureau says hottest, driest year on record led to extreme bushfire seasonThe Bureau of Meterology says persistent drought and record temperatures were a major driver of Australia’s fire activity, and the context for 2019 lies in the past three years of drought.![](https://cdn.theconversation.com/static/tc/@theconversation/ui/dist/esm/logos/web-app-logo-192x192-e99834e3a7a551050e9debe6cc925617.png)The ConversationDavid Jones![](https://images.theconversation.com/files/308957/original/file-20200108-107261-znmw9x.jpg?ixlib=rb-1.1.0&rect=0%2C817%2C4918%2C2459&q=45&auto=format&w=1356&h=668&fit=crop)](https://theconversation.com/weather-bureau-says-hottest-driest-year-on-record-led-to-extreme-bushfire-season-129447?ref=boilingcold.com.au) Global rates of warming are lower due to the inclusion of the oceans in the global average, with the oceans experiencing a relatively slower rate of warming than continental areas. The long-term warming trend increases the likelihood of extreme events beyond our historical experience. In 2019, natural climate phenomena that drive our weather, including a strong [Indian Ocean Dipole](http://www.bom.gov.au/climate/iod/?ref=boilingcold.com.au) and a negative [Southern Annular Mode](http://www.bom.gov.au/climate/sam/?ref=boilingcold.com.au), added to the local warming trend, setting a [record](http://www.bom.gov.au/climate/current/annual/aus/2019/?ref=boilingcold.com.au) for the Australian average annual temperature. This annual temperature for Australia is similar to what we might expect in an average year if the world reaches the [+1.5℃ warming](https://theconversation.com/earth-may-temporarily-pass-dangerous-1-5-warming-limit-by-2024-major-new-report-says-145450?ref=boilingcold.com.au) since pre-industrial times. The long-term warming trend is also increasing the frequency of extreme warm days. We have seen a rise in the number of days when the Australian average temperature is within the top 1% ever recorded. ![A graph showing rising mean temperatures for Australia](https://images.theconversation.com/files/368520/original/file-20201110-17-o8fi6i.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip) Extreme daily mean temperatures are the warmest 1% of days for each month, calculated for the period from 1910 to 2019. CSIRO/BoM, Author provided The long-term temperature trend is also lowering the frequency of cooler years. The annual mean temperatures of Australia in the seven years from 2013 to 2019 all rank in the nine warmest years since national records began in 1910. Barring unpredictable events such as major volcanic eruptions, projections show Australia’s average temperature of 2020-2040 is very likely to be warmer than the average in 2000-2020, as the climate system continues to warm in response to greenhouse gases that are already in the atmosphere. ## What’s driving our changing climate? Australia’s [Cape Grim atmosphere monitoring station](https://www.csiro.au/en/Research/OandA/Areas/Assessing-our-climate/Latest-greenhouse-gas-data?ref=boilingcold.com.au), in north-west Tasmania, is one of several critical global observing sites for detecting changes in the gas concentrations that make up our atmosphere. ![An aerial view of the testing station at Cape Grim, Tasmania.](https://images.theconversation.com/files/368990/original/file-20201112-15-187cmmk.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip) The Bureau and CSIRO’s atmospheric monitoring station at Cape Grim, Tasmania. CSIRO, Author provided The increase in greenhouse gas concentrations has been the predominant cause of global climate warming over the last 70 years. In 2019 the global average CO₂ concentration reached 410ppm, while all greenhouse gases combined reached 508ppm CO₂-equivalent, levels not seen for at least 2 million years. Emissions of CO₂ from burning fossil fuels are the major source of the increase, followed by emissions from changes to land use. While the ocean and land have absorbed more than half the extra CO₂ emitted, the rest remains in the atmosphere. The impact of the COVID-19 pandemic has [reduced fossil fuel CO₂ emissions](https://www.nature.com/articles/s41467-020-18922-7?ref=boilingcold.com.au) in many countries, including Australia. Over the first three months of 2020, global CO₂ emissions declined by 8% compared to the same three months in 2019\. But CO₂ is still increasing in the atmosphere. Recent reductions in emissions due to COVID-19 have only marginally slowed the current rate of CO₂ accumulation in the atmosphere, and are [barely distinguishable from natural variability](https://theconversation.com/carbon-dioxide-levels-over-australia-rose-even-after-covid-19-forced-global-emissions-down-heres-why-144119?ref=boilingcold.com.au) in the records at sites such as Cape Grim. ## Oceans warming and sea levels rising Similar to surface temperatures over the continents, the State of the Climate report says sea surface temperatures are showing a warming trend that is contributing to an increase in marine heatwaves and the risk of coral bleaching. ![State of the Climate 2020 report cover.](https://images.theconversation.com/files/368989/original/file-20201112-19-8h2bcz.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip) [CSRIO/BoM](http://www.csiro.au/state-of-the-climate?ref=boilingcold.com.au), Author provided Important changes are also happening below the ocean’s surface. The global oceans have a much higher heat capacity than either the land surface or atmosphere. This means they can absorb much more of the additional energy from the enhanced greenhouse effect, while warming at a relatively slower rate. Currently, the oceans are absorbing around 90% of the excess energy in the Earth system associated with increasing greenhouse gases. The related increase in total heat content provides another important way to monitor long-term global warming. Warmer temperatures cause the water in our global oceans to expand. This expansion, combined with the additional water from melting ice sheets and glaciers, is causing sea levels to rise. Total global average sea level has now risen around 25cm [since 1880](https://www.cmar.csiro.au/sealevel/sl%5Fhist%5Ffew%5Fhundred.html?ref=boilingcold.com.au), with half of this rise occurring since 1970\. The rate of sea level rise varies around Australia, with larger increases observed in the north and the southeast. ![A map of Australia showing areas where sea level is rising.](https://images.theconversation.com/files/368527/original/file-20201110-13-cdv2tk.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip) The rate of sea level rise around Australia measured using satellite data, from 1993 to 2019. CSIRO/BoM, Author provided The oceans are also acidifying due to changes in the chemistry of seawater, related to excess CO₂. The effect of this pH change is detectable in areas such as the [Great Barrier Reef](http://www.gbrmpa.gov.au/our-work/threats-to-the-reef/climate-change/ocean-acidification?ref=boilingcold.com.au) and the [Southern Ocean](http://acecrc.org.au/publication/southern-ocean-acidification/?ref=boilingcold.com.au). ## The wetter and drier parts of Australia The State of the Climate report shows the trend in recent decades has been for less rainfall over much of southern and eastern Australia, particularly in the cooler months of the year. The longer-term drying trend is likely to continue, particularly in the southwest and southeast of the continent. Most areas of northern Australia have had an increase in average rainfall since the 1970s. Natural variability has always been, and will continue to be, part of Australia’s rainfall patterns. ## Fire seasons: longer and more intense The fires of 2019-20 are still very much on everyone’s minds, and the State of the Climate report puts the weather component of fire risk into a longer-term perspective. Since the middle of last century there has been a significant increase in extreme fire weather days, and longer fire seasons across many parts of Australia, especially in southern Australia. ![Map of Australia showing areas where there is a risk of increased fire days.](https://images.theconversation.com/files/368524/original/file-20201110-19-17tr5nt.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip) There has been an increase in the number of days with dangerous weather conditions for bushfires. CSIRO/BoM, Author provided The 2020 report highlights many recent changes in Australia’s climate. Most are expected to continue and include: - warmer air and sea temperatures - increased numbers of very hot days - ongoing sea level rise - more periods of dangerous fire weather - longer and warmer marine heatwaves. When these extremes occur consecutively within a short timeframe of each other, or when multiple types of extreme events coincide, the impacts can compound in severity. [Emissions “business as usual” will hit South-West farming hardDroughts could be twice as long and severe in the greenest parts of South West WA from 2050 onwards if greenhouse gas emissions are not controlled, and some WA farms may become unviable.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://images.unsplash.com/photo-1499339503145-ac015b70cfa5?ixlib=rb-1.2.1&q=80&fm=jpg&crop=entropy&cs=tinysrgb&w=2000&fit=max&ixid=eyJhcHBfaWQiOjExNzczfQ)](https://www.boilingcold.com.au/emissions-business-as-usual-will-hit-south-west-farming-hard/) Understanding these climate risks and how they might affect us will help to ensure the future well-being of our Australian communities, ecosystems and economy. **Hotter, wetter, drier and more bushfires** --- *State of the Climate 2020 can be read on either the [Bureau of Meteorology](http://www.bom.gov.au/state-of-the-climate?ref=boilingcold.com.au) or [CSIRO](http://www.csiro.au/state-of-the-climate?ref=boilingcold.com.au) websites. The online report includes an extensive list of references and useful links.* ![The Conversation](https://counter.theconversation.com/content/149430/count.gif?distributor=republish-lightbox-basic) *[Michael Grose](https://theconversation.com/profiles/michael-grose-95584?ref=boilingcold.com.au), Climate Projections Scientist, [CSIRO](https://theconversation.com/institutions/csiro-1035?ref=boilingcold.com.au) and [Lynette Bettio](https://theconversation.com/profiles/lynette-bettio-649221?ref=boilingcold.com.au), Senior Climatologist, [Australian Bureau of Meteorology](https://theconversation.com/institutions/australian-bureau-of-meteorology-1083?ref=boilingcold.com.au)* *This article is republished from [The Conversation](https://theconversation.com/?ref=boilingcold.com.au) under a Creative Commons license. Read the [original article](https://theconversation.com/prepare-for-hotter-days-says-the-state-of-the-climate-2020-report-for-australia-149430?ref=boilingcold.com.au).* --- *Main image: Australian road. Source: [Photoholgic](https://unsplash.com/@photoholgic?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) on [Unsplash](https://unsplash.com/s/photos/australia?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText)* --- ### Is Woodside a high-risk low-return bet on Scarborough LNG? URL: https://www.boilingcold.com.au/is-woodside-high-risk-low-return-bet-scarborough-lng/ Last updated: 2021-12-27T00:22:59.000Z *EXCLUSIVE ANALYSIS* "Today you're going to hear a lot about Scarborough," Woodside chief executive Peter Coleman told investment analysts this week, and he was right. Woodside's annual Investor Briefing Day on Wednesday was a much-needed opportunity to impress a market that now priced the Perth-based LNG specialist's shares at their lowest value for 15 years. There was a lot to learn behind the buoyant sales pitch. **1\. Bye bye North West Shelf** Next year the North West Shelf LNG plant will not be full after 32 years of effort to push as much gas as possible through it each day. Without gas from elsewhere, such as Pluto, Mitsui and Beach Energy's Waitsia field in the Perth Basin, or later some excess gas from Scarborough the third NWS LNG train will shut down in 2024 after 32 years of service. ![North West Shelf LNG plant production](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/11/image-7.png) **The decline of a giant**. Source of indicative data: Woodside IBD presentation. Graphics: Boiling Cold. Production from the project that made Woodside and was the foundation of WA industry for decades will halve by 2028. **2\. Pluto field soon past its best** For 15 years Woodside's 90 per cent share of the 4.9 million tonnes a year Pluto LNG project has been its primary source of revenue, not its 17 per cent slice of the 16.4 mtpa NWS plant down the road. In six years, Woodside plans to use up the 60 per cent of the original Pluto LNG train capacity for gas from Scarborough. So, Woodside has decided it is better off producing Scarborough gas it owns 73.5 per cent of than its 90 per cent share of Pluto. That says a lot about the cost competitiveness of gas from Pluto by mid this decade. **3\. Browse dumped** On Valentine's Day, February 2018 Woodside announced it had bought ExxonMobil out of the Scarborough field and assumed operatorship. Woodside matched up its new Scarborough asset up with three-times-around-the-block Browse. Scarborough gas would supply an expanded Pluto LNG plant and gas from Browse would flow through 1000km of pipeline to backfill the NWS plant. The two plants on the Burrup Peninsula would exchange gas through an interconnecting pipeline. The happy couple was called the Burrup Hub. For two years Woodside consistently pushed the Burrup Hub. On Wednesday, over two hours, the phrase was not mentioned once. [Inside Woodside’s hall of mirrors Browse LNG is deadCost, climate concerns and delay have killed Woodside’s Browse LNG project and now it must negotiate with its old foes, the North West Shelf partners, to ensure Scarborough is developed.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/07/Mia-Yellagonga--Perth--Western-Australia-web-top-crop.jpg)](https://www.boilingcold.com.au/woodside-browse-lng-is-dead/) Browse is expensive and dirty. It is a project for the past century. **4\. It is all about Scarborough now** Browse joins Sunrise in the Timor Sea and Kitimat in Canada as Woodside fields that will never be developed. In the past large gas fields like Chevron's Gorgon could wait for decades and still be produced. Today, a delay is death as opportunities for large LNG developments in a world belatedly committing to strive for net-zero carbon emissions by 2050. ![Woodside contingent resources by region. Scarborough is Woodside's only significant resource likely to be developed.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/11/image-3.png) **Scarborough is Woodside's only significant resource likely to be developed.** Source: Woodside 2019 Annual Report with annotation. Browse got a few mentions in front of the investment analysts for politeness, and to distract from the awkward fact that Scarborough is now Woodside's only growth option. A salesman with one product must sell it hard, and that is what Woodside did, starting with the appeal of LNG in a carbon-constrained world. **5\. A selective take on the energy outlook** Woodside used the International Energy Agency's annual World Energy Outlook released in October to bolster its business case. [A greener world is a dark outlook for Aussie LNG: IEAProspects for LNG are under a shadow if Paris Agreement emissions cuts are pursued, according to the IEA, leaving Woodside and Santos in a very dark place.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/10/Northwest-Shearwater-LNG-carrier.jpg)](https://www.boilingcold.com.au/a-greener-world-is-a-dark-outlook-for-aussie-lng-iea/) Woodside senior vice president climate Tom Ridsdill-Smith rightly said that the IEA predicted Asia Pacific gas demand would keep growing to 2040 under its sustainable development scenario where global warming is limited to 1.65℃. However, more relevant than Asia Pacific gas to the prospects of Scarborough is the outlook for global LNG, as Australia competes with the US and Qatar. The IEA predicts LNG growth will continue to about 2035 and then flatten out. In the sustainable scenario "liquefaction capacity existing or under construction today would suffice through to the end of the decade." So, no need for Pluto Train 2. Woodside's Investor Briefing Day presentation missed these two key points. Since the IEA work the major buyers of Australian LNG have moved to support limiting global warning to 1.5℃. China has committed to net zero emissions by 2060, and Japan and Korea want to reach the goal by 2050\. This will depress LNG demand further than the IEA forecast, and only the most cost-competitive projects will proceed. "New gas export projects need to sell gas at a delivered cost of $US6-8 an MMBtu to break even," according to the IEA. Woodside claims Scarborough can deliver gas at $US6.8 an MMBtu. MST Marquee analyst Mark Samter queried if this LNG price could be achieved if the oil price returns to Woodside's assumed $US65 a barrel, which is about $10 more than the IEA predicts in its sustainable scenario. In a world where warming is limited to 1.65℃ LNG prices will be depressed and no new LNG trains are needed this decade. When they are, Qatar's massive volumes that Woodside presents as delivering LNG at less than $US4.5 MMBtu will be at the front of the queue. A business case for building Pluto Train 2 this decade is a business case that requires the Paris Agreement goals to be missed and global warming to greatly exceed 1.65℃. However, expect the PR deluge to convince you otherwise to continue. **6\. Scarborough can only go to Pluto** Woodside has unequivocally put to bed the notion it could send Scarborough gas to the emptying NWS plant and avoid building Train 2. The NWS plant needs heavier hydrocarbon components in its gas supply to provide the refrigerant that cools methane to a liquid. The expense of modifying the ageing NWS plant to process lean Scarborough gas makes building a second LNG train at Pluto the cheapest option. Only a small tranche of Scarborough gas could be blended with other supply into the NWS (see first figure above). If the NWS cannot accept the bulk of Scarborough gas and Browse is dead, there is no identified source of gas that could economically send significant volumes of gas to the plant. All eyes will be on the results of BP's current drilling of ironbark, a gas prospect not far from NWS infrastructure. Until then, it is unclear why any company would buy Chevron's one-sixth share of the NWS for anything but a bargain-basement price. **7\. The risks are adding up** With Scarborough its only option, Woodside is doing everything to make it happen. No buyer for equity in the Scarborough gas field: Woodside will go ahead with its hefty 73.5 per cent stake. That leaves only infrastructure investors interested in Pluto Train 2: Woodside must derisk the deal to make it attractive. However, commercial deals do not eliminate risk; they reallocate it. Woodside will need to take much of the risk of construction cost blowouts and shortfalls of volume through the train. Woodside said it is targeting for much of the construction of Scarborough and Pluto to be costed as a fixed lump sum, in what it terms a "buyers' market." It is a fine target to have, but the construction companies know that one-shot Woodside needs Scarborough more than they do. As the final investment decision approaches any change in contractors would cause a massive delay. The contractors will be in a perfect position to push risk back onto Woodside as final terms are agreed. **8\. The hot take** Woodside has only one viable long-term growth option: Scarborough. Its business case is incompatible with limiting global warming. The serious questions about demand for its product and its price competitiveness show a real possibility for low returns. Woodside's desperation to make it happen is forcing it to take on more and more risk. Is a high-risk low-return project what Woodside investors need, just because that is all that Woodside management has? --- *Main image: Woodside's Perth headquarters Mia* Yellagonga*. Source: Woodside Energy Ltd.* --- ### Woodside spins scant Scarborough progress ahead of Coleman’s big day URL: https://www.boilingcold.com.au/woodside-spins-scant-scarborough-progress-ahead-of-colemans-big-day/ Last updated: 2023-12-04T11:46:00.000Z *ANALYSIS* Woodside is trying to show its stalled Scarborough LNG project has momentum by highlighting the unsurprising acceptance of production licenses from the Federal Government. Yesterday Woodside chief executive Peter Coleman said the move demonstrated the Perth-based LNG specialist and its partner BHP had a "[strong commitment](https://files.woodside/docs/default-source/media-releases/scarborough-joint-venture-to-accept-production-licences.pdf?sfvrsn=23ce1346%5F4&ref=boilingcold.com.au)" to the $US11.4 ($15\. 7 billion) project to bring gas from Scarborough to an expanded Pluto LNG plant. That commitment, and many other aspects of Scarborough's viability, will be scrutinised tomorrow at Woodside's Investor Briefing Day. With the [Browse LNG project near death](https://www.boilingcold.com.au/woodside-browse-lng-is-dead/), Scarborough is Woodside's future. It is all or nothing. > Federal Resources Minister Keith Pitt [supported the charade](https://www.minister.industry.gov.au/ministers/pitt/media-releases/thousands-jobs-come-scarborough-project?ref=boilingcold.com.au) and said: "thousands of new jobs are to be created after the Coalition and WA Governments offered two production licences." That is a lot of economic value from two pieces of paper that were never at risk of not being available. Pitt said the Coalition Government was pleased to see the project's engineering, commercial and regulatory work was well advanced. In reality, there is a lot to do on Scarborough to achieve a final investment decision by the much-delayed date of the second half of 2021. Woodside has laid off a good portion of its Scarborough team since the pandemic cratered oil prices earlier this year. Those remaining are in the middle of determining if upsizing the offshore project by 20 per cent will improve economics that were challenged even before oil and gas prices slumped. [Woodside’s Scarborough LNG uneconomic before price crash: WoodmacIf Scarborough, considered the most economic of Woodside’s two projects, was uncompetitive before LNG prices crashed then plans will have to change on the Burrup Peninsula.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/05/Pluto-LNG-Plant--Karratha-web.jpg)](https://www.boilingcold.com.au/woodsides-scarborough-lng-was-uneconomic-before-price-crash-woodmac/) Coleman said Woodside had now secured the key primary Commonwealth approvals required to support a final investment decision. However, there are many joint venture and WA regulatory hurdles to be completed. Even the short and straightforward pipeline from Pluto to the North West Shelf LNG plant to allow additional Scarborough gas to be processed is not approved to go. ## Stuck in a spin cycle Last year Woodside tried the same tactic of boosting the insignificant to appear notable before Investor Briefing Day. "Woodside has taken a final investment decision on the pipeline component of the Pluto-North West Shelf (NWS) Interconnector," a [release](https://files.woodside/docs/default-source/media-releases/woodside-approves-pluto---nws-interconnector-pipeline.pdf?sfvrsn=7025c91%5F10&ref=boilingcold.com.au) announced. However, it was "subject to regulatory approvals by the State of WA and finalisation of commercial arrangements with the Pluto and NWS joint venture participants." In other words: not final at all. A year later, that is still the case. In October Woodside said work was underway within the Pluto site, but there was no mention of the actual pipeline between the plants or the necessary facilities at the NWS plant. Execution of an agreement for processing Pluto gas at the NWS is planned by December. "The fully termed agreements are the key enabler for final JV and regulatory approvals" for the pipeline, a Woodside spokesperson said. So approvals are yet to come, as is the real final investment decision for the interconnector. Another approval has caught the attention of senior Woodside management over the last few months. ## Danger of subsea 'Juukan cave' trouble Marine archaeology researchers Deep History of Sea Country have appealed the recommendation of the WA Environmental Protection Authority to approve the section of the Scarborough pipeline in State waters. DHSC in July announced it had found hundreds of ancient artefacts on the seabed to the north of the proposed pipeline route. [Ancient Aboriginal artefacts now an issue for offshore projectsHundreds of 7000-year-old Aboriginal artefacts found off the Pilbara coast highlight a new issue for oil and gas to maintain its social license, with Woodside’s Scarborough project at the forefront.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/07/DJI_0747-reduced.jpg)](https://www.boilingcold.com.au/ancient-aboriginal-artefacts-seabed/) At the time Woodside said it welcomed the study "which indicates the potential for artefacts rather than rock art." The Burrup Peninsula, or Murujuga, where the Pluto LNG plant is located is famous for thousands of examples of ancient rock. "The proposed Scarborough dredging will not impact any igneous (volcanic) rock, which is the type of rock on which Murujuga rock art has been found," a Woodside spokesperson said. However, the distinction Woodside drew between artefacts and rock art now looks risky after Rio Tinto sacked its chief executive and two other senior executives over the destruction of the Juukan cave full of artefacts. *Boiling Cold* understands Juukan cave has led Woodside to revisit the danger its Scarborough pipeline could pose to indigenous heritage and its social license. Woodside said it engaged with the Murujuga Aboriginal Corporation and the DHSC researchers many times before and after the July report and will continue to do so. The Scarborough operator has tasked MAC to facilitate a new ethnographic survey of the area with Traditional Custodians. ## Scarborough still beached for now With an increased upstream capacity, Scarborough's long-term access to the North West Shelf plant is essential. Woodside submitted plans to extend the life of the North West Shelf project to the WA EPA in December 2019. The EPA expects to provide a recommendation to the Minister for Environment in the first quarter of 2021, an EPA spokesperson said. That recommendation will inevitably be appealed by conservation groups, likely triggering a review by the Appeals Convenor. The expanded Pluto plant has primary approvals in place but needs an updated management plan approved by the EPA for the most sensitive issue of all: greenhouse gas emissions. Woodside will be well into 2021 at the earliest before it has regulatory certainty about all the elements of the Scarborough development. All these regulatory issues are on top of achieving alignment with Scarborough partner BHP, finding customers in an oversupplied market, finalising the processing agreement with the NWS, selling down equity in Scarborough and financing the project. Minister Pitt has been counting jobs well before they were hatched. --- *Main image: Pluto LNG plant. Source: Woodside Energy Ltd.* ### Zali Steggall's climate change bill comes as business steps up URL: https://www.boilingcold.com.au/zali-steggalls-climate-change-bill-comes-as-business-steps-up/ Last updated: 2021-12-27T13:55:52.000Z # [Anna Malos](https://theconversation.com/profiles/anna-malos-424945?ref=boilingcold.com.au), *[ClimateWorks Australia](https://theconversation.com/institutions/climateworks-australia-984?ref=boilingcold.com.au)* and [Amandine Denis-Ryan](https://theconversation.com/profiles/amandine-denis-ryan-99925?ref=boilingcold.com.au), *[Monash University](https://theconversation.com/institutions/monash-university-1065?ref=boilingcold.com.au)* Yesterday, Zali Steggall, the independent member for Warringah, introduced her long-awaited [climate change bill](https://climateactnow.com.au/wp-content/uploads/2020/11/CAN-Climate-Change-National-Framework-for-Adaptation-and-Mitigation-Bill-2020.pdf?ref=boilingcold.com.au) to the Australian parliament. Much of the debate around the bill centres on what needs to be done for Australia to reach [net zero emissions](https://theconversation.com/conservative-but-green-independent-mp-zali-steggall-could-break-the-governments-climate-policy-deadlock-131644?ref=boilingcold.com.au) by 2050\. That’s a crucial discussion — but it’s equally vital to recognise what’s already been committed. Our project, the [Net Zero Momentum Tracker](https://www.climateworksaustralia.org/net-zero/?ref=boilingcold.com.au), monitors Australia’s journey towards net zero emissions, tracking climate commitments and progress in key sectors of the economy. This includes [superannuation](https://www.climateworksaustralia.org/resource/net-zero-momentum-tracker-superannuation-sector/?ref=boilingcold.com.au), [transport](https://www.climateworksaustralia.org/resource/net-zero-momentum-tracker-transport-report/?ref=boilingcold.com.au), [retail](https://www.climateworksaustralia.org/resource/net-zero-momentum-tracker-retail-report/?ref=boilingcold.com.au), [property](https://www.climateworksaustralia.org/resource/net-zero-momentum-tracker-property-sector-report/?ref=boilingcold.com.au) and [local government](https://www.climateworksaustralia.org/resource/net-zero-momentum-tracker-local-government-report/?ref=boilingcold.com.au), and a forthcoming analysis of the resources sector. We’ve found progress is, in general, going well. These sectors are increasingly making more climate-active commitments, which means the moment is right for precisely the kind of pivot Steggall’s bill seeks to facilitate. ## What the climate change bill proposes Steggall has garnered huge support outside of politics. In a [joint letter](https://d3n8a8pro7vhmx.cloudfront.net/brains/pages/495/attachments/original/1604717867/Joint%5Fletter%5Fto%5FMembers%5Fof%5FParliament.pdf?1604717867&ref=boilingcold.com.au) this week, more than 100 Australian businesses, industry groups and community organisations endorsed the bill as a critical step in the recovery from the pandemic. This included Oxfam, the Business Council of Australia, the ACTU, the Australian Medical Association and our organisation, ClimateWorks Australia Along with the 2050 target, the bill proposes the establishment of an independent Climate Change Commission. It also adopts the government’s low emissions technology roadmap and would require the government to introduce risk assessment and adaptation plans. To reach the 2050 target, the bill calls for a process to review the target every five years, and ensure independent advice on five-yearly emissions budgets. An emissions budget sets the amount of greenhouse gases that can be emitted over five-year periods — in line with requirements for the Paris Agreement on climate. This is important because the amount of global warming depends on cumulative emissions, not emissions in any one year. ## Tracking the sectors Australia can no longer consider a commitment to a net zero target as a matter of ideology or a moral gesture. Increasingly, it’s simple economic common sense, especially for investors. In 2019, Geoff Summerhayes from the [Australian Prudential Regulation Authority](https://www.afr.com/companies/financial-services/apra-asic-unite-on-all-pervading-climate-risk-20190508-p51l8i?ref=boilingcold.com.au) pointed out that climate change now constitutes “a legally foreseeable risk facing many different companies in a range of different industries”. As such, the financial sector has an obligation to act. In 2020, the level of ambition in the superannuation sector rose considerably, [with REST super](https://www.abc.net.au/news/2020-11-02/rest-super-commits-to-net-zero-emmissions/12840204?ref=boilingcold.com.au) now joining Cbus, HESTA and UniSuper with net zero pledges. Similarly, the recent ANZ [announcement](https://www.abc.net.au/news/2020-10-29/anz-climate-policy-steps-away-from-coal-toward-carbon-neutrality/12825934?ref=boilingcold.com.au) of “strong action to support the Paris Agreement” signals that all the major banks and insurers are moving away from thermal coal, [as the International Energy Agency declares](https://www.abc.net.au/triplej/programs/hack/solar-is-now-the-cheapest-electricity-in-history-report-says/12767310?ref=boilingcold.com.au) solar energy to be the cheapest source of electricity in history. Certainly, some sectors of the Australian economy are moving faster than others. Our analysis of [21 major property companies](https://www.climateworksaustralia.org/resource/net-zero-momentum-tracker-property-sector-report/?ref=boilingcold.com.au) found 90% had set an emissions reduction target, while nearly a third were already committed to net zero. The [local government sector](https://www.climateworksaustralia.org/resource/net-zero-momentum-tracker-local-government-report/?ref=boilingcold.com.au) is equally proactive. Over a third of the largest local governments we assessed (representing a fifth of the Australian population) have committed to reaching zero community emissions by or before 2050. And more than half are acting to reduce their operational (or direct) emissions by, for instance, installing solar panels and switching their vehicle fleet to electric vehicles. By contrast, our analysis showed [the retail](https://www.climateworksaustralia.org/resource/net-zero-momentum-tracker-retail-report/?ref=boilingcold.com.au) and [transport sectors](https://www.climateworksaustralia.org/resource/net-zero-momentum-tracker-transport-report/?ref=boilingcold.com.au) have a long way to go before they’re aligned with net zero. ## Asking ‘how’, not ‘why’ Even in a historically difficult sector like resources, progress is being made. BHP, for instance, [now says it can flourish under conditions](https://www.bhp.com/-/media/documents/investors/annual-reports/2020/200910%5Fbhpclimatechangereport2020.pdf?ref=boilingcold.com.au) compatible with the Paris Agreement. Rather than posing a problem for business, action to decarbonise the global economy will, it declares, present “opportunities to invest in commodities such as potash, nickel and copper”, which will “provide a strong foundation” for its business. This shows when it comes to net zero many of Australia’s biggest companies no longer ask “why”, but instead focus on “how”. In part, that’s because businesses that don’t change know they increasingly risk isolation. For example, the International Energy Agency said in [its annual report](https://www.iea.org/reports/world-energy-outlook-2020?ref=boilingcold.com.au) that demand for Australian thermal coal has peaked, and renewables will meet 80% of the world’s energy demands in the coming years. Japan, South Korea and the European Union have committed to reaching net zero by 2050, and US President-elect [Joe Biden](https://theconversation.com/biden-says-the-us-will-rejoin-the-paris-climate-agreement-in-77-days-then-australia-will-really-feel-the-heat-149533?ref=boilingcold.com.au) says his administration will make the same pledge. China also [recently committed](https://theconversation.com/china-just-stunned-the-world-with-its-step-up-on-climate-action-and-the-implications-for-australia-may-be-huge-147268?ref=boilingcold.com.au) to reaching net zero by 2060. [Australia will feel the heat when US rejoins the Paris climate dealWhen a Biden-led USA rejoins the Paris Agreement and takes strong climate action Scott Morrison will have few international allies for his stubborn idleness.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdThe Conversation![](https://images.unsplash.com/photo-1464660756002-dd9f9a92b01b?ixlib=rb-1.2.1&q=80&fm=jpg&crop=entropy&cs=tinysrgb&w=2000&fit=max&ixid=eyJhcHBfaWQiOjExNzczfQ)](https://www.boilingcold.com.au/biden-rejoin-paris-australia-feel-heat/) That means the vast majority of Australia’s exports are going to trading partners who have committed to transform their economies. This will result in a shift in demand from high-carbon products and services, such as thermal coal, towards zero or near zero carbon alternatives, such as renewable hydrogen. ## An opportunity, not a threat Such a demand also presents extraordinary opportunities. The international transition to cleaner economies is a chance for Australia to become [a renewable energy superpower](https://reneweconomy.com.au/australia-could-fall-apart-under-climate-change-or-it-could-be-a-renewable-superpower-32080/?ref=boilingcold.com.au). After all, [Australia possesses](https://www.climateworksaustralia.org/wp-content/uploads/2020/10/Recover-and-Reduce%5FPrudent-investments-to-boost-the-economy-and-lower-emissions%5FSept2020.pdf?ref=boilingcold.com.au) the world’s third-largest reserves of lithium and currently produces nine of the ten elements required for lithium-ion batteries. Likewise, by 2030, Australia could be using renewable electricity and water to produce [500,000 tonnes](https://arena.gov.au/assets/2018/08/opportunities-for-australia-from-hydrogen-exports.pdf?ref=boilingcold.com.au) of green hydrogen annually, one of the most important commodities of the transition into a clean economy. ## Providing certainty to businesses In tracking the momentum to net zero, we’ve seen the importance of clear targets in raising ambition, encouraging innovation and fostering the deployment of known solutions quickly and at scale. And a parliamentary commitment to decarbonisation at the federal level, backed by interim targets set every five years, would provide businesses and the public with the certainty they need to plan. [The UK has a national climate change act – why don’t we?Nation-wide climate legislation would not only help reduce our carbon emissions, but also boost economic growth.![](https://cdn.theconversation.com/static/tc/@theconversation/ui/dist/esm/logos/web-app-logo-192x192-e99834e3a7a551050e9debe6cc925617.png)The ConversationAnna Malos![](https://images.theconversation.com/files/274310/original/file-20190514-60541-lwn0l.jpg?ixlib=rb-1.1.0&rect=9%2C320%2C3215%2C1605&q=45&auto=format&w=1356&h=668&fit=crop)](https://theconversation.com/the-uk-has-a-national-climate-change-act-why-dont-we-115230?ref=boilingcold.com.au) Many other countries, [such as Britain](https://theconversation.com/the-uk-has-a-national-climate-change-act-why-dont-we-115230?ref=boilingcold.com.au), already have their own climate change acts. So, too, does [the state of Victoria](https://www.climatechange.vic.gov.au/legislation/climate-change-act-2017?ref=boilingcold.com.au). Across the country, all the state and territory governments have made net zero commitments – and our assessment of local governments found many of them to be taking strong stands, too. It’s time for the federal parliament to get on board. --- ![The Conversation](https://counter.theconversation.com/content/149728/count.gif?distributor=republish-lightbox-basic) *[Anna Malos](https://theconversation.com/profiles/anna-malos-424945?ref=boilingcold.com.au), Project Manager, climate and energy policy, [ClimateWorks Australia](https://theconversation.com/institutions/climateworks-australia-984?ref=boilingcold.com.au) and [Amandine Denis-Ryan](https://theconversation.com/profiles/amandine-denis-ryan-99925?ref=boilingcold.com.au), Head of National Programs, ClimateWorks Australia, [Monash University](https://theconversation.com/institutions/monash-university-1065?ref=boilingcold.com.au)* *This article is republished from [The Conversation](https://theconversation.com/?ref=boilingcold.com.au) under a Creative Commons license. Read the [original article](https://theconversation.com/zali-steggalls-new-climate-change-bill-comes-just-as-economic-sectors-step-up-149728?ref=boilingcold.com.au).* --- *Main image: Zali Steggall, MP for Warringah, NSW. Source: [https://www.zalisteggall.com.au/](https://www.zalisteggall.com.au/?ref=boilingcold.com.au)* --- ### Collie’s Bluewaters Power worthless: Sumitomo URL: https://www.boilingcold.com.au/collies-bluewaters-power-worthless-sumitomo/ Last updated: 2021-12-27T00:21:15.000Z Sumitomo has written off the entire $326 million value of its half share in Collie’s Bluewaters power station, in another sign that WA is not immune from the financial crisis facing coal assets around the world. WA’s three coal-fired power stations have struggled to compete against rooftop solar panels that are reducing their market share. The fluctuating solar output forces the plants designed to operate at a steady load to [regularly cycle up and down](https://www.boilingcold.com.au/synergy-pushes-ageing-coal-plants/), increasing operating costs and equipment wear and tear. The connection the Yandin and Warradarge wind farms in the Mid-West and continued growth in solar [pushed coal’s share of power generation down](https://www.boilingcold.com.au/new-wind-crushes-coal-on-south-west-grid/) to 29 per cent in October 2020, from 37 per cent a year before. Sumitomo and Kansai Electric bought the near-new power station in 2011 for a reported $1.2 billion. The sale came after the collapse of Ric Stowe’s Griffin Coal that also saw the Griffin coal mine bought by Lanco Infratech from India. Sumitomo announced the write-down in its half-year results to September that recorded a $795 million loss for the sprawling diversified group, about 40 per cent from the Bluewaters impairment. Sumitomo said it booked the Bluewaters loss “for the total amount of investment and loan” after it had difficulty in refinancing loans secured against the asset that expired in August. [Collie wobbles: WA power’s financial messBefore it takes WA to a clean, green renewable energy future the State Government has problems a plenty in still vital coal-fired power.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/07/1d-600x450.jpg)](https://www.boilingcold.com.au/collie-wobbles-wa-powers-financial-mess/) Kansai Electric that owns the other half of Bluewaters Power made no mention of the asset in its results. The two Japanese companies offered the mainstream banks holding the debt of about $369 million about 65c in the dollar, according to the [*AFR*](https://www.afr.com/street-talk/nab-sells-bluewaters-power-debt-20200728-p55g66?ref=boilingcold.com.au). Instead, the banks sold the debt for about 70c in the dollar to investors that specialise in distressed assets. A year ago, State-owned generator Synergy that owns the Muja and Collie coal-fired plants booked a $429 million impairment, in large part due to its coal assets. The utility may install a [giant battery in Kwinana](https://www.boilingcold.com.au/wa-plans-100m-big-battery-to-balance-solar/) that will help smooth out the loads on its Collie stations. Half the capacity of Muja, the largest generator on the South West Interconnected System, will be closed in two stages in 2022 and 2024. Collie’s coal-fired stations produced the equivalent of 7.9 million tonnes of carbon dioxide in the 12 months to June 2019, Another Japanese trading house, Marubeni, plans to halve its coal-fired power capacity by 2030. > “To sum up, it is becoming harder to sell stakes in coal power plants as coal has run into a lot of flak,” [*Reuters* reported](https://www.reuters.com/article/japan-coal-marubeni/marubeni-ceo-says-becoming-harder-to-sell-stakes-in-coal-power-plants-idUKL4N2HV0YE?ref=boilingcold.com.au) Marubeni chief executive Masumi Kakinoki saying yesterday. “The best solution is to stop and scrap the plants, but we need to sell our stakes to parties with an interest in owning them as there are many power stations that are still valuable and needed for regions or countries.” --- **Main image: Bluewaters power Station, Collie*. Source: Bluewaters Power* --- ### US under Biden will rejoin the Paris climate agreement and Australia will feel the heat URL: https://www.boilingcold.com.au/biden-rejoin-paris-australia-feel-heat/ Last updated: 2025-11-18T03:49:13.000Z [Christian Downie](https://theconversation.com/profiles/christian-downie-762?ref=boilingcold.com.au), [*Australian National University*](https://theconversation.com/institutions/australian-national-university-877?ref=boilingcold.com.au) When the US formally left the Paris climate agreement, Joe Biden [tweeted](https://twitter.com/JoeBiden/status/1324158992877154310?ref=boilingcold.com.au) that “in exactly 77 days, a Biden Administration will rejoin it”. The US announced its intention to withdraw from the agreement [back in 2017](https://theconversation.com/time-for-china-and-europe-to-lead-as-trump-dumps-the-paris-climate-deal-78709?ref=boilingcold.com.au). But the agreement’s complex rules meant formal notification could only be sent to the United Nations last year, followed by a 12-month notice period — hence the long wait. While diplomacy via Twitter looks here to stay, global climate politics is about to be upended — and the impacts will be felt at home in Australia if Biden delivers on his plans. ## Biden’s position on climate change Under a Biden administration, the US will have the most progressive position on climate change in the nation’s history. Biden has already laid out a [US$2 trillion](https://www.cnbc.com/2020/07/14/joe-biden-unveils-green-jobs-and-infrastructure-plan-during-2020-election.html?ref=boilingcold.com.au) clean energy and infrastructure plan, a commitment to rejoin the Paris agreement and a goal of net-zero emissions by 2050. As Biden said back in July when he [announced the plan](https://www.nytimes.com/2020/07/14/us/politics/biden-climate-plan.html?ref=boilingcold.com.au): > If I have the honour of being elected president, we’re not just going to tinker around the edges. We’re going to make historic investments that will seize the opportunity, meet this moment in history. And his [plan](https://joebiden.com/clean-energy/?ref=boilingcold.com.au) is historic. It aims to achieve a power sector that’s free from carbon pollution by 2035 — in a country with the [largest reserves](https://www.nsenergybusiness.com/features/countries-largest-coal-reserves/?ref=boilingcold.com.au) of coal on the planet. Biden also aims to revitalise the US auto industry and become a leader in electric vehicles, and to upgrade four million buildings and two million homes over four years to meet new energy efficiency standards. ## Can he do it under a divided Congress? While the votes are still being counted — as they should (can any Australian believe we actually need to say this?) — it seems likely the Democrats will control the presidency and the House, but not the Senate. This means Biden will be able to re-join the Paris agreement, which does not require Senate ratification. But any attempt to legislate a carbon price will be blocked in the Senate, as it was when then-President Barack Obama introduced the [Waxman-Markey bill in 2010](https://www.newyorker.com/magazine/2010/10/11/as-the-world-burns?ref=boilingcold.com.au). In any case, there’s no reason to think a carbon price is a silver bullet, given the window to act on climate change is closing fast. [New polling shows 79% of Aussies care about climate change. So why doesn’t the government listen?A new poll from The Australia Institute shows 71% of Aussies want the country to be a global leader in climate action. Yet Australia lags behind the rest of the world.![](https://cdn.theconversation.com/static/tc/@theconversation/ui/dist/esm/logos/web-app-logo-192x192-e99834e3a7a551050e9debe6cc925617.png)The ConversationRebecca Colvin![](https://images.theconversation.com/files/365690/original/file-20201027-23-4w6lbl.jpg?ixlib=rb-1.1.0&rect=0%2C0%2C4596%2C2294&q=45&auto=format&w=1356&h=668&fit=crop)](https://theconversation.com/new-polling-shows-79-of-aussies-care-about-climate-change-so-why-doesnt-the-government-listen-148726?ref=boilingcold.com.au) What’s needed are ambitious targets and mandates for the power sector, transport sector and manufacturing sector, backed up with billions in government investment. Fortunately, this is precisely what Biden is promising to do. And he can do it without the Senate by using the executive powers of the US government to implement a raft of new regulatory measures. Take the transport sector as an example. His plan aims to set “ambitious fuel economy standards” for cars, set a goal that all American-built buses be zero emissions by 2030, and use public money to build half a million electric vehicle charging stations. Most of these actions can be put in place through regulations that don’t require congressional approval. And with Trump out of the White House, California will be free to achieve its target that all [new cars be zero emissions by 2035](https://www.gov.ca.gov/2020/09/23/governor-newsom-announces-california-will-phase-out-gasoline-powered-cars-drastically-reduce-demand-for-fossil-fuel-in-californias-fight-against-climate-change/?ref=boilingcold.com.au), which the Trump administration had impeded. If that sounds far-fetched, given [Australia is the only OECD country](https://theconversation.com/labors-plan-for-transport-emissions-is-long-on-ambition-but-short-on-details-114592?ref=boilingcold.com.au) that still doesn’t have fuel efficiency standards for cars, keep in mind [China promised](https://asia.nikkei.com/Business/Automobiles/China-plans-to-phase-out-conventional-gas-burning-cars-by-2035?ref=boilingcold.com.au) to do the same thing as California last week. ## What does this mean for Australia? For the last four years, the Trump administration has been a boon for successive Australian governments as they have torn up climate policies and failed to implement new ones. Rather than witnessing our principal ally rebuke us on home soil, as Obama did at the [University of Queensland in 2014](https://www.youtube.com/watch?v=qLmcEzO6hnc&ref=boilingcold.com.au), Prime Minister Scott Morrison has instead benefited from a cosy relationship with a US president who regularly dismisses decades of climate science, as he does medical science. And people are dying as a result. For Australia, the ambitious climate policies of a Biden administration means in every international negotiation our diplomats turn up to, climate change will not only be top of the agenda, but we will likely face constant criticism. Indeed, fireside chats in the White House will come with new expectations that Australia significantly increases its ambitions under the Paris agreement. Committing to a net zero emissions target will be just the first. The real kicker, however, will be Biden’s trade agenda, which supports carbon tariffs on imports that produce considerable carbon pollution. The US is still [Australia’s third-largest trading partner](https://www.dfat.gov.au/about-us/publications/trade-investment/trade-at-a-glance/trade-investment-at-a-glance-2019/Pages/default?ref=boilingcold.com.au) after China and Japan — who, by the way, have just announced [net zero emissions targets](https://theconversation.com/china-just-stunned-the-world-with-its-step-up-on-climate-action-and-the-implications-for-australia-may-be-huge-147268?ref=boilingcold.com.au) themselves. Should the US start hitting Australian goods with a carbon fee at the border, you can bet Australian business won’t be happy, and Morrison may begin to re-think his domestic climate calculus. And what [political science tells us](https://www.e-elgar.com/shop/gbp/the-politics-of-climate-change-negotiations-9781783472109.html?ref=boilingcold.com.au) is if international pressure doesn’t shift a country’s position on climate change, domestic pressure certainly will. With Biden now in the White House, it’s not just global climate politics that will be turned on its head. Australia’s failure to implement a serious domestic climate and energy policy could have profound costs. Costs, mind you, that are easily avoidable if Australia acts on climate change, and does so now. --- [Christian Downie](https://theconversation.com/profiles/christian-downie-762?ref=boilingcold.com.au), Australian Research Council DECRA Fellow, [*Australian National University*](https://theconversation.com/institutions/australian-national-university-877?ref=boilingcold.com.au) *This article is republished from* [*The Conversation*](https://theconversation.com/?ref=boilingcold.com.au) *under a Creative Commons license. Read the* [*original article*](https://theconversation.com/biden-says-the-us-will-rejoin-the-paris-climate-agreement-in-77-days-then-australia-will-really-feel-the-heat-149533?ref=boilingcold.com.au)*.* --- *Main image: American flag. Source:* [*Aaron Burden*](https://unsplash.com/@aaronburden?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) *on* [*Unsplash*](https://unsplash.com/s/photos/american-flag?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) --- ### Triangle Energy battles for life after BP Kwinana stops refining URL: https://www.boilingcold.com.au/triangle-energy-battles-for-life-after-bp-kwinana-stops-refining/ Last updated: 2026-02-02T08:22:05.000Z It is apt but unfortunate that trouble comes in threes for Triangle Energy. Rob Towner, chief executive of the ASX-listed producer of oil offshore Dongara, started 2020 shipping about a thousand barrels of oil a day to BP’s Kwinana refinery and Brent crude was worth a healthy $US67 a barrel. By March, the oil price was $US15 thanks to COVID-19. In June pumps in two of the five wells on the Cliff Head platform failed, slashing production. BP completed the trifecta in October with the shock news that refining at Kwinana would wind up by April 2021. The replacement of two electrical submersible pumps is underway, courtesy of about $6 million of capital raised in the third quarter, to get production back to normal levels and a barrel of Brent crude is now worth about $US40. There would have been light at the end of Triangle’s tunnel if BP’s headquarters in London’s posh Saint James had not sent a train from Kwinana down it last Friday. “It would have been nice to have a bit of notice,” Towner said of BP’s decision to cease refining at Kwinana in six months. A BP spokesperson told *Boiling Cold* that the company had made the decision last Thursday and informed all employees and stakeholders as soon as possible after that. [Nine takeaways from BP’s shock closure of its Kwinana refineryThe effect of BP closing its Kwinana oil refinery after 65 years will be felt far and wide in the WA economy - especially among workers and other industries, but BP will do just fine.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/11/Kwinana-refinery.jpg)](https://www.boilingcold.com.au/nine-takeaways-from-bps-shock-closure-kwinana-refinery/) The same day BP decided to close Australia’s largest oil refinery Triangle [updated the estimate of its oil reserves](http://triangleenergy.com.au/wp-content/uploads/2020/10/2134340-Cliff-Head-Reserves-Update-and-Farmout-Campaign.pdf?ref=boilingcold.com.au), adding two years to the expected life of the field. Triangle went into a trading halt the next day, immediately after BP revealed its Kwinana decision. Tuesday’s commencement of trade came with a 30 per cent share price plunge and the withdrawal of the updated reserves estimate. Reserves are not the quantity of oil in the ground, but how much can be produced economically. Without knowing where Triangle’s product will go in six months and when that will cost, there is no basis for an estimate of reserves. Triangle also planned to attract a new partner to the Cliff Head joint venture to finance the drilling of more wells. No investors will go near Cliff Head until a route to market is found. Towner said the investigation of export options is underway and he is feeling upbeat, with a lot of support from industry. He has met with Buru Energy executive chairman Eric Streitberg to learn from the Kimberley producer’s export through Wyndham. Triangle has a three-pronged challenge: develop a route to market which will likely involve infrastructure, commercial deals and regulatory approvals; keep the cost low,; and have it all in place in six months. “I can only give it my best shot,” Towner said. ## No one wants another Northern Endeavour Triangle’s plight is attracting uncomfortable comparisons with Northern Oil and Gas Australia, that went into liquidation in February. NOGA has left the Federal Government with the responsibility to decommission the Northern Endeavour oil vessel and its subsea wells in the Timor Sea that could cost more than $300 million. Both companies relied on a single asset with ageing facilities near the end of field life but differed in what threatened revenue. NOGA’s cashflow stopped when offshore safety regulator NOPSEMA insisted it fixes long-running safety problems. [Federal Govt regulates poorly and gets $360M Northern Endeavor clean-up billThe Northern Endeavor mess started with Woodside paying to rid itself of a rusty ageing asset, ended with a $362 million liability for the Government and in between was a regulatory shambles.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/09/northern-endeavour.jpg)](https://www.boilingcold.com.au/poor-federal-regulation-allowed-the-360m-northern-endeavor-mess/) Triangle’s revenue may disappear due to a third party without notice pulling its access to the market. When asked about the cost to decommission Cliff Head if production past April is not viable, Towner said: “I really don’t want to address that.” The provision for restoration of the Cliff Head platform, wells and the onshore Arrowsmith processing plant is $37 million. Triangle’s accounts recognise a $21 million liability for the 57.5 per cent of Cliff Head it owns directly. It is liable for a further $8 million through its 50 per cent holding in Triangle Energy Operations Pty Ltd that accounting standards do not require to be recognised because Triangle does not control TEOPL. Private company Royal Energy, that ASX-listed Pilot Energy is currently taking over, owns the other half of TEOPL. The actual decommissioning cost is likely to be greater than $37 million as restoration provisions are the present value of a future cost, with the difference depending on the time to end of field life and the discount rate used. If cash is required Triangle has a 27.7 per cent stake in ASX-listed State gas worth $26 million. Unfortunately, a large parcel in the small Queensland gas explorer is challenging to sell. Triangle’s shareholders and workers, as well as the Federal Government, will all hope Cliff Head remains viable. The fact that another decommissioning liability could drop onto Australian taxpayers should cause the logic of single-asset companies being awarded petroleum licenses to be questioned. Unlike larger concerns, they do not have alternative sources of cash when an asset strikes trouble, which happens regularly in this high-risk industry. --- **Main image: Cliff Head platform. Source: Triangle Energy* --- ### Nine takeaways from BP's shock closure of its Kwinana refinery URL: https://www.boilingcold.com.au/nine-takeaways-from-bps-shock-closure-kwinana-refinery/ Last updated: 2021-12-27T00:32:10.000Z ANALYSIS BP's surprise announcement that production from Australia's largest oil refinery in Kwinana will cease after 65 years will have repercussions well beyond WA's industrial heart. Here are ten things to think about from what is known so far. **Hopefully mainly job moves, not job losses** BP has 400 staff and 250 contractors producing fuels at its Kwinana refinery. Refining will wind down over six months, and once work to turn the site into an import terminal is completed there will be only 60 ongoing jobs. "Employees who have worked tirelessly through the pandemic to deliver fuel to West Australians have been utterly blindsided by management," Australian Workers' Union WA Secretary Brad Gandy said. "The union will be pulling out all stops to ensure these workers are not left high and dry by BP's disastrous and heartless decision." With WA miners needing [8000 more workers](https://thewest.com.au/news/wa/chamber-of-minerals-and-energy-wa-chief-executive-paul-everingham-to-discuss-mining-skill-shortage-ng-b881636345z?ref=boilingcold.com.au) by next year it was no surprise that FMG quickly put its hand up. FMG chief executive Elizabeth [Gaines said](https://thewest.com.au/business/mining/fortescue-metals-group-to-retrain-suitable-axed-bp-workers-when-kwinana-refinery-closes-ng-b881709005z?ref=boilingcold.com.au) the iron ore miner saw the potential for skilled personnel from BP to join Fortescue. "Particularly as we build the workforce for our new Iron Bridge magnetite operation, which will require more complex processing skills," Gaines said. In the end, many BP workers will find a job elsewhere, but for some of those who swap a quick drive home for FIFO their family life will be diminished. **It's a done deal** AWU national secretary Daniel Walton called on Prime Minister Morrison to stop the closure. "This a matter of national security," Walton said. "BP cannot be allowed to breezily announce this on a Friday afternoon as if it's some run-of-the-mill commercial decision." However, BP head of Australia Frédéric Baudry said both State and Federal Government knew about the closure ahead of time, and the decision was "not in any way a result of local policy settings." Baudry [told the *AFR*](https://www.afr.com/companies/energy/bp-slams-door-shut-on-australian-oil-refinery-20201030-p56a5b?ref=boilingcold.com.au) "the decision is unequivocal and the numbers support it." If talks were held to try to save the refinery they were completed before last Friday. "This is not one of these occasions where politicians can simply shake their heads and express disappointment," Walton said. However, the [State](https://www.mediastatements.wa.gov.au/Pages/McGowan/2020/10/BP-must-honour-commitment-to-workers-following-Kwinana-closure.aspx?ref=boilingcold.com.au) and [Federal](https://www.minister.industry.gov.au/ministers/taylor/media-releases/bp-kwinana-refinery?ref=boilingcold.com.au) Governments did precisely that in their media releases. **Fuel prices untouched** BP closed Kwinana as "regional oversupply and sustained low refining margins" made it no longer economically viable. With WA's fuel most likely now coming from much larger and more modern South-East Asian refineries, there is no reason to believe that the closure of Kwinana will push up fuel prices. Prices will, of course, continue to oscillate for a lot of other reasons that will be indecipherable as always to the paying motorists. **BP still dominant in WA fuel supply** Production from Kwinana was equivalent to 80 per cent of WA's fuel requirements in 2016, and its closure leaves a huge hole to fill with imports. Kwinana's products included diesel, bunker fuel, three grades of unleaded petrol, aviation fuels and low aromatic fuel used in remote communities. When BP finishes the conversion into an import terminal, the British giant will be well-positioned to maintain a large market share. As well as the storage tanks, BP will have three jetties for the tankers and exclusive pipelines to shift aviation fuel to Perth airport and other products to the Kewdale freight terminal. In an industry notorious for tight margins, efficient logistics will be a massive competitive advantage for BP. **BP in Australia will be just fine** In Australia, BP owns the Kwinana refinery, its fuel distribution and retail business, one-sixth of the North West Shelf LNG project and a majority share in the Ironbark gas prospect near the NWS. In 2019 these assets had revenue of $18.4 billion and made a $1.1 billion profit before tax, according to the BP Australia Group Pty Ltd's filing to the corporate regulator ASIC. Most of BP's profit came from a relatively small amount of revenue from the NWS. This is shown by the results of Japan Australia LNG Pty Ltd that owns another one-sixth share of the NWS and little else. The Japanese company's 2019 revenue was $1.76 billion, and it made an $880 million before tax profit. So, the 10 per cent of BP's revenue in Australia that comes from North West Shelf LNG produced about 80 per cent of its before-tax profit. The redundancy payments to refinery workers and the cost of conversion to an import terminal may make a small temporary dent in BP's finances. After that it will be free of the losses that Kwinana is presumably making and perform better than ever for its overseas shareholders. If drilling at Ironbark that started in the past week is successful, the cashflow from Australia to London will get another bump in the long term. **What about the site?** BP has 250 hectares of prized freehold waterfront land in the Kwinana industrial area. Much of this is taken up by the tank farm that will be used by the import terminal. The refinery area must eventually be decommissioned and dismantled. BP closed down its Bulwer Island refinery in Queensland in 2015\. Its 2019 report to ASIC said demolition of redundant assets is underway and will be completed in 2021. BP is unlikely to hurry the decommissioning at Kwinana as all oil and gas companies have slashed spending to the minimum due to the low oil price. When the job is done the treatment of soil that has sat underneath a refinery for 65 years will be a significant issue. **An upset to Kwinana's industrial ecosystem** One reason industry wants to be located in Kwinana is the opportunity to trade with other plants. BP Kwinana's role beyond fuel sales included the supply of sulphur to Coogee Chemicals and LPG to Wesfarmers' Kleenheat. The refinery also provides fuel gas to a nearby [120-megawatt cogeneration plant](https://engie.com.au/home/what-we-do/our-assets/gas/kwinana/?ref=boilingcold.com.au) that in turn provides power and steam to BP as well as power to Synergy. All these businesses will need to change their operations in some way. **A massive challenge to Perth Basin oil production** Every day ASX-listed Triangle Energy sends a road-train of oil from Cliff Head offshore platform off Dongara to Kwinana for refining. Triangle chief executive Rob Towner said BP gave his company no notice that the destination for its production was to close. "You'd think normal working relationships would have given us more notice," [Towner told *Energy News Bulletin*](https://www.energynewsbulletin.net/on-the-record/news/1398264/kwinana-shutdown-perth-basin%E2%80%99s-oilers-react%C2%A0?ref=boilingcold.com.au). "I put my head in my hands and went shake, shake, shake." Triangle called a trading halt after BP's announcement and suffered a 37 per cent share price drop when trading resumed on Tuesday. The company has [withdrawn an update to its reserves](http://triangleenergy.com.au/wp-content/uploads/2020/11/2137040-Response-to-BP-Kwinana-Refinery-Announcement.pdf?ref=boilingcold.com.au) issued the day before BP's shock decision as it does not know what the economic basis of production beyond six months from now. Triangle faces a risk of not getting a supply chain to a new destination for its oil ready in time and the near certainty that the alternative will be more expensive than its present arrangement. **Three refineries left standing, for now** When refining ceases at Kwinana, Australia's refining capacity would have shrunk by almost 60 per cent in less than 10 years. | **A tough decade for Australian refining** | | | | | ------------------------------------------ | ---------- | ------------------------ | ------------------- | | | | | | | **Refinery** | **Owner** | **Capacity** (bill L/yr) | **Status** | | Clyde NSW | Shell | 5.0 | closed 2012 | | Kurnell NSW | Caltex | 7.8 | closed 2014 | | Bulwer Island Qld | BP | 5.9 | closed 2015 | | Kwinana WA | BP | 8.6 | to close in 2021 | | Geelong Victoria | Viva | 7.5 | under review | | Lytton Qld | Ampol | 6.5 | under review | | Altona Victoria | ExxonMobil | 5.0 | “trading at a loss” | The future of the three remaining refineries is uncertain. Viva and Ampol are reviewing their commitment to local refining, and ExxonMobil has said it [could close Altona](https://www.afr.com/companies/energy/exxon-warns-of-refinery-closure-before-government-talks-20201030-p56a8q?ref=boilingcold.com.au) unless the Federal Government's fuel security measures announced in the budget are quickly introduced. The pressure will be on Energy Minister Angus Taylor to keep the refineries open. The three owners have a strong bargaining position, as closures could well please shareholders but would make Taylor look ineffectual. No domestic refining would remove any logical argument against increasing the fuel efficiency standard for new cars that is currently hampered by the fuel types produced locally. Total reliance on imported fuel would also point to a politically uncomfortable conclusion for the Federal Government: the ultimate fuel security is no fuel - electric vehicles. --- **Main image: Kwinana oil refinery. Source: BP PLC* --- ### New wind crushes coal on South West grid URL: https://www.boilingcold.com.au/new-wind-crushes-coal-on-south-west-grid/ Last updated: 2021-12-27T00:20:17.000Z South West WA received 35 per cent of its power from renewable energy in October, up from 25 per cent a year ago, due to two new wind farms and continued installation of rooftop solar panels. The new Yandin and Warradarge wind farms in the Mid-West pushed wind’s share of generation from 12 to 17 per cent, to overtake rooftop solar panels that rose from 13 to 16 per cent. ![South West WA power generation in October](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/11/image.png) Data: [OpenNEM](https://opennem.org.au/energy/wem/?ref=boilingcold.com.au) Graphics: Boiling Cold Collie’s coal-fired power stations produced 29 per cent of the power consumed on the South West Interconnected System in October 2020, a massive cut from 37 per cent in 2019. Coal-fired output dropped by more than a fifth, an indication of the immense financial pressure facing the town’s two privately-owned coal mines and the Bluewaters Power station. [Collie wobbles: WA power’s financial messBefore it takes WA to a clean, green renewable energy future the State Government has problems a plenty in still vital coal-fired power.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/07/1d-600x450.jpg)](https://www.boilingcold.com.au/collie-wobbles-wa-powers-financial-mess/) Gas is now the dominant fossil fuel burnt to generate power, with 35 per cent of the market, but still lost 2 per cent of the market year on year due to the surge in renewable energy. The 212-megawatt Yandin wind farm has generated power since July. Warradarge started in August but only connected its full 180 MW in late October, indicating that future years could see a more power generated by wind in October. [Warradarge wind farm powers upThe start-up of Bright Energy’s Warradarge wind farm completes a massive addition of wind generation to the South-West of WA.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/10/warradarge-green-reduced.JPG)](https://www.boilingcold.com.au/warradarge-wind-farm/) The data comes from [OpenNEM](https://opennem.org.au/energy/nem?ref=boilingcold.com.au), a platform that just extended its coverage to WA and, unlike market operator AEMO, includes generation from rooftop solar. --- **Main image: Warradarge wind farm. Source: Synergy* --- ### Chevron to restart Gorgon LNG train after $500M production loss URL: https://www.boilingcold.com.au/chevron-to-restart-gorgon-lng-train-after-500m-production-loss/ Last updated: 2022-01-08T14:19:01.000Z Chevron has repaired faulty welds on a Gorgon LNG train after a six-month shutdown that caused an unplanned $545 million production loss and will now check two more trains. Chevron chief financial officer Pierre Breber said repairs of faulty welds on propane-filled heat exchangers, or kettles, on Train 2 were complete and had passed non-destructive and pressure testing. "We're now in the process of getting back online," Breber said. "The next steps are to dry out the systems, and then we'll begin to cool down." Breber told Wall Street analysts late Friday that LNG production from Train 2 would start in late November. Train 1 will shut down soon after to allow its propane kettles to be inspected and repaired if required, with Train 3 to follow. Chevron found thousands of cracks were in eight propane kettles during a routine maintenance shutdown of Train 2 that started in May. Trains 1 and 3 that operate either side of the Train 2 maintenance workers have propane kettles of the same design and manufacture, leading to concerns about the safety of the workers. WA safety regulators were unaware of the problem until *The West Australian* and *Boiling Cold* broke the story. Regulators later said actions taken to minimise the risk to the workers were adequate. Near completed weld repairs were stopped in late August as the procedure used was incorrect. Workers had to grind out all the work they had done before repairing the welds to the correct procedure. [Chevron to redo its botched Gorgon weld repairsWelders will have to grind out and redo repairs at Gorgon performed to an incorrect procedure provided by Chevron and the delay could cost up to $250M.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://images.unsplash.com/photo-1511651432281-5cf2a44004f4?ixlib=rb-1.2.1&q=80&fm=jpg&crop=entropy&cs=tinysrgb&w=2000&fit=max&ixid=eyJhcHBfaWQiOjExNzczfQ)](https://www.boilingcold.com.au/chevron-to-redo-its-botched-gorgon-weld-repairs/) The LNG production lost from July 11, when the shutdown was to be complete, to late November is worth about $545 million. This estimate, based on the average LNG price received by Woodside in the third quarter, excludes lost condensate revenue. Shutdowns, and possible repairs, of Trains 1 and 3 will incur further losses to Chevron and its principal Gorgon partners Shell and ExxonMobil. ## Lips sealed on North West Shelf sale Chevron plans to sell between $US5 billion and $US10 billion of assets from 2018 to 2020. Breber said the most significant planned sale Chevron had disclosed is its one-sixth interest in the North West Shelf LNG project. "That's a commercial matter, and we won't comment on that," Breber said. "But I guess I would just say we're in a different place than many of our competitors." Woodside has been reported to be interested in the stake, potentially in partnership with the Macquarie Group. "If you think of North West Shelf, it's almost like an infrastructure investment as the resource behind the plant comes down, and it becomes more of a tolling facility going forward," Breber said. [Eight huge risks Chevron’s North West Shelf sales pitch missedChevron’s slice of the North West Shelf LNG project is touted as ideal for infrastructure investors. It is the opposite - highly risky, complex and dysfunctional.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/08/Karratha-Gas-Plant--North-West-Shelf-Project-web.jpeg)](https://www.boilingcold.com.au/chevrons-north-west-shelf-sales-pitch-missed-8-key-points/) The NWS five-train 16.9 million tonnes a year LNG plant will have spare capacity from as early as 2021 as production from fields owned by the NWS joint venture declines. NWS operator Woodside planned to send gas from the Browse fields to the NWS, but the project has been delayed and considered by many in the industry to be unlikely to occur. Compared to oil and gas companies, infrastructure investors usually want lower risk and will accept lower returns. Currently, the NWS has preliminary non-binding agreements to process relatively small volumes of gas from the nearby Pluto project and the Waitsia field in the Perth Basin. --- *Main image: Three Gorgon LNG trains on Barrow Island. Source: Chevron Australia Pty Ltd* --- ### Northern Endeavour a “major screw up” by Government: Patrick URL: https://www.boilingcold.com.au/northern-endeavour-a-major-screw-up-by-government-patrick/ Last updated: 2021-12-27T00:23:51.000Z Senator Rex Patrick has labelled the Northern Endeavor oil vessel becoming the responsibility of the Australian taxpayer as a "major screw up" and a failing of Government. "I think major mistakes have been made here," Patrick said yesterday at a meeting of the Senate Economics Estimates committee. The Northern Endeavour vessel in the Timor Sea was to be decommissioned by Woodside in 2016 after many years of oil production. Instead, Woodside changed its plan and in late 2015 agreed to pay a small one-person company with no offshore oil and gas experience $US21.9 million to take the vessel and oil fields. The deal with Northern Oil and Gas Australia allowed Woodside to avoid a decommissioning bill estimated in its 2015 annual report at $US156 million for its 60 per cent share. If that estimate was still valid, the full cost of decommissioning is $US260 million ($371 million). NOGA was liquidated in February after offshore safety regulator NOPSEMA ordered a halt to production in 2019 until the vessel was made safe. [Federal Govt regulates poorly and gets $360M Northern Endeavor clean-up billThe Northern Endeavor mess started with Woodside paying to rid itself of a rusty ageing asset, ended with a $362 million liability for the Government and in between was a regulatory shambles.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/09/northern-endeavour.jpg)](https://www.boilingcold.com.au/poor-federal-regulation-allowed-the-360m-northern-endeavor-mess/) The vessel and subsea wells are now the responsibility of the Australian Government and the Department of Industry, Science, Energy and Resources has a 13-strong Northern Endeavour Taskforce managing the problem until a decision on the long-term future of the vessel is made. Taskforce head Shanan Gilles told the Senate committee $75.3 million is allocated to June 2021 for the operation of the Northern Endeavour. Since February DISER has [committed $73.6 million](https://www.boilingcold.com.au/govt-spends-10m-to-look-after-northern-endeavour-for-one-month/) to Northern Endeavor contracts, almost the entire budget. Upstream Production Solutions has contracts worth $57.9 million to operate the vessel, but the allocation only lasts until the end of November. Patrick queried whether the Government had paid UPS too much compared to what it received from NOGA to operate the facility when it was in production. "We understand the funding we are providing under the contract reflects current market rates and is reasonable for the services provided," Gilles said. "When the Commonwealth Government took possession of the facility in February this year, we inherited an extensive backlog of maintenance." The Taskforce is considering both decommissioning the Northern Endeavor and the commercial viability of a return to production. The South Australian Senator tackled DISER on the payment of $8.8\. million to Woodside for advice on decommissioning, [first revealed by *Boiling Cold*](https://www.boilingcold.com.au/top-dollar-bill-failed-oil-project/). > "Now there is a certain irony in this because Woodside sold this vessel to NOGA and some people might observe that they knew what was coming and they've offloaded the asset, and now the Department is paying them," Patrick said. "Yes, there is a certain irony in that, and we as a Department understand that," DISER secretary David Fredericks said. "Please tell me you're not going to go and sole source Woodside to clean up the mess they should have done in the first place," Patrick said. There is no suggestion that Woodside's sale of the Northern Endeavour was not fully compliant with the law. NOPSEMA chief executive Stuart Smith said the regulator recognised NOGA could fail financially after it took enforcement actions against it. "We also recognised that safety concerns should override any economic concerns and it's important that we take action to ensure the safety of the worker and the community and that's what we did," Smith said. Smith said he did not recall telling his Minister, at the time Senator Matt Canavan, about the risk of liquidation. "This is a major failing of government,…it was a foreseen event, and we've just heard that NOPSEMA didn't feel they were obliged to inform the Minister of something that they knew was going to happen," Patrick said. ## Loophole spotted and left open The independent senator also queried the National Offshore Petroleum Titles Administrator Graeme Waters about the transfer of titles to NOGA in 2016. NOGA gained complete control over the Northern Endeavor and associated oil fields by first buying a subsidiary of Talisman that owned 40 per cent of the asset: Talisman Oil and Gas Australia Pty Ltd. TOGA then purchased the remaining 60 per cent from Woodside. NOPTA had no legislative authority to investigate the suitability of NOGA as the ultimate owner as no new company names appeared on the titles. > "I might call it a loophole, where if you're changing from one titleholder to the next you do a bunch of due diligence but if someone simply buys out the company that owns the title that limits what you can do," Patrick said. Waters said the Act was deficient and concerns were first raised in 2015 in the context of another transaction. The so-called loophole remains in the legislation. Patrick left Waters with a question on notice about when NOPTA informed the Minister of the concerns. The Resources Minister at the time of the NOGA purchase was current Treasurer Josh Frydenberg. The Government commissioned UK oil and gas regulator Steve Walker to investigate the failure of the Northern Endeavour. One of Walker's recommendation was for the Government to consider trailing liabilities, where if an owner fails financially decommissioning liabilities are borne by the previous owner, not the Government. DISER offshore resources branch general manager Marie Illman said trailing liabilities were being considered as part of a review of the whole approach to decommissioning that the Department hopes to deliver to the Government in coming months. --- *Main image: Northern Endeavour in early 2018\. Source: not disclosed, used with permission.* --- ### South Korea joins China, Japan in net-zero in $80B squeeze on Australian fossil exports URL: https://www.boilingcold.com.au/south-korea-china-japan-net-zero-squeeze-on-80b-of-australian-fossil-exports/ Last updated: 2021-12-27T00:24:47.000Z South Korean President Moon Jae-in today committed the country to achieve net-zero greenhouse gas emissions by 2050, joining fellow East Asian economic giants China and Japan. Moon's declaration to Parliament followed [Japan's embrace of net-zero emissions](https://www.boilingcold.com.au/japan-net-zero-by-2050/) by 2050 two days ago and [China's commitment to a 2060](https://www.boilingcold.com.au/what-chinas-climate-push-means-for-australia/) target last month. "Together with the international community, we will actively respond to climate change and aim for carbon neutrality by 2050," Moon said, according to [*Carbon Pulse*](https://carbon-pulse.com/113131/?ref=boilingcold.com.au). "By replacing coal power generation with renewable energy, we will create new markets and industries and create jobs." Reports of Moon's speech have not mentioned gas serving as a transition fuel between the retirement of coal-fired power stations and an increase in renewable energy production. "We will make smart industrial complexes — i.e. making them into low-carbon and green industrial complexes — and expand financial support to local renewable energy businesses," Moon said. "The Korean New Deal is a people-centred development strategy." China, Japan and South Korea together imported $80 billion of coal and gas from Australia in 2019. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/10/image-18.png) 2019 exports. Source: Resources Energy Quarterly historical data set, Sept 20\. The value and volume of thermal coal exports are likely to be hit first, with early details of how the three countries will implement their climate pledges expected over coming months. Demand for metallurgical coal may be untouched for some time until low carbon steel-making technologies are commercialised. The three countries take 88% of Australia's LNG exports. Sanctioning of major projects to supply gas to LNG plants, such as Woodside's Scarborough field and the Santos-led Barossa development, will be difficult before the final policy settings in these three major markets are understood. ## Bye-bye Barossa? Barossa gas may remain stranded due to its [carbon intensity](https://www.boilingcold.com.au/santos-dirty-big-2b-barossa-bet/) of 1.36 tonnes of carbon dioxide for each tonne of LNG produced. This is about 60 per cent higher than Ichthys, the current dirtiest offshore LNG project in Australia. Santos chief executive Kevin Gallagher today did his best to spin the dire prospects for Barossa in the face of increased climate ambitions among the dominant LNG buyers as "incredibly exciting." Speaking before the Korean announcement, Gallagher [told the *AFR*](https://www.afr.com/companies/energy/japan-net-zero-pledge-to-spur-carbon-free-hydrogen-lng-20201028-p5699t?ref=boilingcold.com.au) that Japan's pledge would "drive innovation to accelerate zero-emissions LNG and also zero-emissions hydrogen products in the market." Gallagher said Santos' plan to inject 1.7 million tonnes of CO2 a year at Moomba "could be a real game-changer for our industry." The Moomba project would offset about a third of the 5.04 million tonnes of greenhouse gases a year from the production and liquefaction of Barossa gas, leaving the product as still the most climate-damaging LNG to depart Australian shores. A constrained LNG market increasingly interested in carbon-neutral cargoes will favour the cheapest gas to produce with the lowest carbon intensity to offset. Last week Santos told the market that Barossa was progressing to be ready for a final investment decision by the end of the year "subject to business conditions, joint venture agreements and relevant approvals." Santos is looking to South Korea's SK E&S and Japan's JERA to invest in the Barossa. Both companies will want to understand their home countries' appetite for emissions-intensive gas before making an investment decision. If Barossa does not go ahead and other gas cannot fill the Darwin LNG plant Santos' buy out of ConocoPhillips' northern Australian assets to clear the way for the project will prove to be an expensive mistake. [Santos’ dirty big $2B Barossa betBarossa would produce Australia’s dirtiest LNG and if other companies will not back it Santos has a very expensive problem.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/08/Bayu-Undan.jpg)](https://www.boilingcold.com.au/santos-dirty-big-2b-barossa-bet/) --- *Main image: South Korean flag. Sourc*e: [Sergei Mazhuga](https://unsplash.com/@ghbdtnghbdtn8?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) on [Unsplash](https://unsplash.com/s/photos/south-korea-flag?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) --- ### Japan's net-zero by 2050 to hit Australian exports URL: https://www.boilingcold.com.au/japan-net-zero-by-2050/ Last updated: 2021-12-27T00:18:58.000Z Japan that buys about $40 billion of emissions producing imports from Australia every year has committed to achieving zero carbon emissions by 2050. Prime Minister Yoshihide Suga [today told parliament](https://apnews.com/article/virus-outbreak-shinzo-abe-cabinets-health-yoshihide-suga-726ac43cceb4b94fe2b532bdea704410?ref=boilingcold.com.au) that a sustainable economy would be a pillar of his growth strategy. Suga said he would “put maximum effort into achieving a green society,” including being carbon-free by 2050. The newly installed leader said Japan needs to change its mindset. “Global warming measures are no longer obstacles for economic growth but would lead to industrial and socio-economic reforms and a major growth,” Suga said. The industrial giant’s previous target was an 80% cut in emissions by 2050. Industry Minister Hiroshi Kajiyama later said the government would [develop plans for some elements](https://www.reuters.com/article/japan-politics-suga/pm-suga-says-japan-will-attain-zero-emissions-carbon-neutral-society-by-2050-idUSKBN27B0FB?ref=boilingcold.com.au) of achieving net-zero by 2050 by the end of the year. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/10/image-16.png) Sources below. Japan’s acceleration of emission reductions is awful news for exports of thermal coal from NSW and Queensland that supply 72% of the fuel for Japan’s coal-fired power stations. Under any plan to reduce emissions coal use - the dirtiest way to generate electricity - would be slashed. LNG is the dominant fuel for power in Japan, with a 40% [share of generation in 2017](https://www.enecho.meti.go.jp/en/category/special/article/energyissue2019%5F01.html?ref=boilingcold.com.au#:~:text=Japan%2C%20in%20particular%2C%20is%20largely,the%20total%20primary%20energy%20supply.), followed by coal 33%, oil 9% and renewables 8%. Nuclear energy produced just 3% of power, down from 25% in 2010 before reactors were shut down after the Fukushima disaster. Australian LNG producers may initially benefit from the demise of coal. Still, they will be squeezed by efforts to increase energy efficiency, renewable energy and the ongoing reopening of nuclear power stations. Metallurgical coal, used to make steel, is unlikely to be affected in the short term as there are no workable alternatives. In later decades coal will only have a place in steelmaking if with the added cost of carbon capture and storage it can compete with steel made with green hydrogen. Leaders in China, another major importer of emission producing Australian products, have [reportedly met today](https://uk.reuters.com/article/china-politics-carbon-plan/xis-carbon-neutrality-vow-to-reshape-chinas-five-year-plan-idUKL4N2HE12Q?utm%5Fcampaign=Carbon%20Brief%20Daily%20Briefing&utm%5Fcontent=20201026&utm%5Fmedium=email&utm%5Fsource=Revue%20Daily) to consider how to incorporate the nation’s new goal of net-zero emission by 2050 into its 2021-2025 five-year economic plan. --- *Main image: Shibuya area in Tokyo. Source: [Jezael Melgoza](https://unsplash.com/@jezael?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) on [Unsplash](https://unsplash.com/s/photos/japan?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText)* --- *Sources for table:* - *Australian export share and value: [Resources and Energy Quarterly September 2020](https://www.industry.gov.au/data-and-publications/resources-and-energy-quarterly-september-2020?ref=boilingcold.com.au#:~:text=The%20Resources%20and%20Energy%20Quarterly,commodity%20prices%2C%20demand%20and%20supply) historical data* - *Japanese import share for thermal coal and LNG: [METI](https://www.enecho.meti.go.jp/en/category/special/article/energyissue2019%5F01.html?ref=boilingcold.com.au#:~:text=Japan%2C%20in%20particular%2C%20is%20largely,the%20total%20primary%20energy%20supply.)* - *Japanese import share for metallurgical coal and LNG: [Argus Media](https://www.argusmedia.com/en/news/2060499-japans-coking-coal-imports-stable-in-2019?ref=boilingcold.com.au#:~:text=Japan's%20coking%20coal%20imports%20were,according%20to%20finance%20ministry%20data.)* ### Unions call on Inpex to improve travel to Ichthys URL: https://www.boilingcold.com.au/unions-call-on-inpex-improve-travel-ichthys/ Last updated: 2021-12-27T00:44:30.000Z Unions for offshore workers have accused LNG operator Inpex of cost-cutting at the expense of worker’s welfare under the guise of COVID health concerns. Before the pandemic, offshore workers in the Browse Basin flew into Broome then boarded helicopters that refuelled at the remote settlement Aboriginal of Djarindjin before flying to Inpex’s two Ichthys facilities or Shell’s nearby Prelude. Earlier this year both companies rejigged travel arrangements to avoid Djarindjin due to concerns about COVID-19 spreading in remote indigenous communities. Shell reduced loading so helicopters could travel about 475km to the Prelude without refuelling. Inpex bypassed Broome and flew workers to the remote Truscott airfield near the northernmost tip of the Kimberley where helicopters then ferried them offshore. Inpex president director Australia Hitoshi Okawa i[n April said](https://www.facebook.com/ABCKimberley/posts/inpex-temporary-helicopter-relocationinpex-has-announced-it-will-be-temporarily-/10158158240512156/) the arrangements protected Inpex personnel and the Kimberley community. > "Inpex shares the government's commitment to protecting the health and well being of residents and remote Aboriginal communities in the Kimberley by minimizing exposure as much as possible, to people from outside the region," he said. *Boiling Cold* understands Shell returned to normal travel arrangement mid-year, but three months later Inpex has not. Australian Workers Union branch secretary Brad Gandy, spokesperson for the Offshore Alliance, said workers were left stranded at Truscott for up to 10 hours waiting for connecting flights with inadequate facilities to allow them to rest, relax or sleep. > “When COVID-19 struck our members were willing to have their departure point changed to lessen the potential impact of the pandemic on indigenous Australians, who were identified as being particularly vulnerable to the disease,” Gandy said. “Despite there being no infections in WA, no infections on any offshore facilities throughout the pandemic, and despite other operators such as Shell going back to using Broome airport, Inpex has not yet stopped using Truscott.” Inpex and Shell made much of the economic benefits delivered to Broome and Djarindjin through their travel arrangements. It is understood Shell continued payments to the Djarindjin community when they were bypassed. *Boiling Cold* asked Inpex why it was still using Truscott, if the reason was concern over COVID transmission how recent was the medical advice used, and whether it regarded Truscott’s facilities to be adequate. Inpex did not reply. Gandy said the offshore workers did long shifts for weeks at a time in cramped conditions. “So, when they finish on the facilities they need to rest, recuperate and go home to their families – not be dumped at an isolated airport for up to 10 hours,” Gandy said. “Our members’ concern is Inpex is only continuing in its use of Truscott over Broome to avoid paying fees to use Broome airport, and what’s worse is they’re doing it under the guise of COVID-19.” ## Pullback from offshore safety training Non-profit training provider IFAP will cease offshore safety courses at its North Fremantle facility this week, including Helicopter Underwater Escape Training. IFAP acting chief executive Adam Bonneville said the closure was a commercial decision by the board. Private training organisation ERGT has agreed with the new owners of the facility to use it for lifeboat training, an ERGT spokesperson said. HUET training, that offshore workers must do every four to five years, will continue to be available in Perth at ERGT’s Jandakot facility. --- *Main image: Ichthys Explorer central processing facility. Source: Inpex* --- ### Govt spends $10M to look after Northern Endeavour for an extra month URL: https://www.boilingcold.com.au/govt-spends-10m-to-look-after-northern-endeavour-for-one-month/ Last updated: 2020-11-18T09:48:19.000Z The Federal Government will spend $10 million to look after the stricken Northern Endeavor oil vessel for just one additional month. A contract for Upstream Production Solutions to operate the vessel has been [increased in value by $10.34 million](https://www.tenders.gov.au/Cn/Show/0b53a4ea-8065-4ad8-ab46-7fd3b5fadb23?ref=boilingcold.com.au) and extended one month to the end of November. *Boiling Cold* asked the Department of Industry, Science, Energy and Resources if $10 million would be the monthly cost from now on, but did not receive an answer. A DISER spokesperson said the Government remained committed to keeping the Northern Endeavour facility and the surrounding marine environment safe and secure. Since assuming responsibility in February, DISER has contracted $73.6 million of services to manage the Northern Endeavor. GR Engineering subsidiary UPS received $57.9 million, and the original vessel owner Woodside is charging $8.8 million for advice on decommissioning. Taxpayers could also face a decommissioning bill as high as $360 million and ongoing costs until decommissioning occurs. An exclusive *Boiling Cold* analysis revealed the full extent of mismanagement by the Federal Government and regulators that led to this mess while Woodside avoided a $US156 million ($220 million) decommissioning liability. [Federal Govt regulates poorly and gets $360M Northern Endeavor clean-up billThe Northern Endeavor mess started with Woodside paying to rid itself of a rusty ageing asset, ended with a $362 million liability for the Government and in between was a regulatory shambles.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/09/northern-endeavour.jpg)](https://www.boilingcold.com.au/poor-federal-regulation-allowed-the-360m-northern-endeavor-mess/) DISER had previously said it was pursuing opportunities to recover costs. *Boiling Cold* asked if this was still the case but did not receive an answer. The Government plans to finalise its strategy to manage the Northern Endeavour this year, with complete decommissioning commencing in 2021 the most likely option. This likely outcome was revealed in a Department of Industry, Science, Energy and Resources document changing the regulation of the Northern Endeavour. ## Legal limbo The offshore safety and environmental regulator NOPSEMA no longer covers the Northern Endeavor, unlike all other Australian offshore oil and gas facilities. The Federal Government became responsible for the Northern Endeavour and the Laminaria Corallina oil field in February after the owner Northern Oil and Gas Australia was placed into liquidation. The liquidator then "disclaimed" the assets. Liquidators can disclaim property they do not want to keep if it is too onerous to keep or worth too little. The Government effectively became the titleholder and, until appointing UPS, the operator of the Northern Endeavour. However, the Offshore Petroleum and Greenhouse Gas Storage Act that NOPSEMA operates under cannot bind the Crown. The Northern Endeavor then fell under the jurisdiction of the Environment Protection and Biodiversity Conservation Act that was not suitable as approvals would be too slow to match operational needs. In July Minister for Environment Sussan Ley [exempted the Northern Endeavor from the EPBC Act](http://epbcnotices.environment.gov.au/%5Fentity/annotation/d51ba2c5-f8dd-ea11-a87e-005056842ad1/a71d58ad-4cba-48b6-8dab-f3091fc31cd5?t=1603261927188&ref=boilingcold.com.au) provided it remained in lighthouse mode when no production occurs. Ley's [reasoning](http://epbcnotices.environment.gov.au/%5Fentity/annotation/3fe3cbcf-f8dd-ea11-a87e-005056842ad1/a71d58ad-4cba-48b6-8dab-f3091fc31cd5?t=1603261927188&ref=boilingcold.com.au) included the need to "properly manage the FPSO in a timely way" and "critically, the risk of damaging Australia's international relations with Indonesia and Timor-Leste." The vessel is close to the maritime borders of both countries. The vessel will be managed "with the advice and assurance of NOPSEMA that the operations are being undertaken in accordance with the previously-accepted Safety Case…and in compliance with good oil field practice." Separate to the Northern Endeavor, the Government is reviewing its approach to offshore decommissioning and plans to release a revised framework for public consultation this year. --- Please consider becoming a *Boiling Cold* supporter to keep yourself and others informed about energy, industry and climate in WA. Independent news and analysis free of government and big business spin. ![Boiling Cold soil sun sea logo](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/10/bc_logo.png) [Soil $5/month](https://boilingcold.memberful.com/checkout?plan=54843&ref=boilingcold.com.au) [Sun $10/month](https://boilingcold.memberful.com/checkout?plan=54842&ref=boilingcold.com.au) [Sea $20/month](https://boilingcold.memberful.com/checkout?plan=54841&ref=boilingcold.com.au) Or a bit more with a monthly contribution [of your choice](https://boilingcold.memberful.com/checkout?plan=54844&ref=boilingcold.com.au). --- *Main image: Northern Endeavour floating oil production storage and offloading vessel. Source: Northern Oil and Gas Australia.* ### $50B Pilbara energy hub targets 10M tonnes a year of green ammonia URL: https://www.boilingcold.com.au/pilbara-energy-hub-targets-10m-tonnes-a-year-of-green-ammonia/ Last updated: 2021-12-27T00:43:41.000Z An expanded $US36 billion ($50.5 billion) Asian Renewable Energy Hub that will export ammonia has received Major Project Status from the Australian Government. The proposed 26 gigawatts solar and wind farm will export almost 10 million tonnes a year of the carbon emissions-free fuel through a loading facility 20km off Eighty Mile Beach. The proposed size of the AREH has grown several times since a five-gigawatt project to send power to Indonesia was [launched in Jakarta three years ago](https://www.perthnow.com.au/business/renewable-energy/asian-renewable-energy-hub-plans-132b-pilbara-renewables-plug-in-to-light-up-south-east-asia-ng-b88676878z?ref=boilingcold.com.au). The $US36 billion 9.9 mtpa ammonia hub has a similar cost to Chevron's 8.9 mtpa Wheatstone LNG project that commenced production in 2017. In May the WA Environmental Protection Authority recommended that a [$22 billion 15 GW project](https://www.boilingcold.com.au/pilbara-wind-solar-farm-gets-environmental-tick/) that powered both Java and WA's Pilbara region be approved. The subsea power cable to Indonesia has been dropped from the expanded proposal. The State Government provided that approval last week and yesterday the WA EPA published a [revised proposal](https://www.epa.wa.gov.au/proposals/asian-renewable-energy-hub-revised-proposal?ref=boilingcold.com.au) for 26 GW of renewable energy and ammonia manufacture, but no cable to Indonesia. The award of Major Project Status means the Federal Government will accelerate project approvals, including through the Foreign Investment Review Board. Solar capacity has expanded from 2 GW to 10.8 GW in 18 arrays over the approximately 100km by 100km site between Broome and Port Hedland. The project still plans for 1743 wind turbines, but the maximum ground to tip height has increased 30m to 290m. The 9.9 million tonnes a year ammonia facility will be located about 30km inland from Eighty Mile Beach. The downstream facility will include a water desalination plant, electrolysers to produce hydrogen, hydrogen storage, units to extract nitrogen from the air, and plant to combine the hydrogen and nitrogen to make ammonia. Hydrogen-fuelled gas turbines and biomass generators fed by vegetation removed from the solar array areas will provide back-up power. The consortium backing the AREH consists of Intercontinental Energy (46%), CWP Energy Asia (44%), Macquarie Group's Pathway Investments (7%) and Danish wind turbine manufacturer Vestas (3%). Intercontinental managing director Alex Tannoch said the hub would create a new industrial sector. > "The falling costs of wind and solar power, our carefully selected locations, and the vast scale of the facility we are building, all mean it's inevitable that we will be able to produce green fuels that are cost-competitive with fossil fuels," Tannoch said. "This will speed up the essential decarbonisation of energy-intensive sectors such as shipping, aviation, resource extraction and chemicals." The group plans a final investment decision for the first export phase in 2025, according to a project spokesperson, but local energy supply could be approved earlier. ## Local boost "We are predominantly an export-oriented project still, but we have voluntarily committed at least 3GW of our generation capacity for the Pilbara, for existing and future energy users," the spokesperson said. "This could potentially include electrification of heavy vehicles, the production of hydrogen-based fuels to replace diesel fuels, and new downstream mineral and metal processing such as direct reduction ironmaking, alumina refining or aluminium smelting." Minister for Regional Development Alannah MacTiernan last week said the project would put WA on the map as a major contributor to lowering carbon emissions. Each tonne of green ammonia saves about two tonnes of greenhouse emissions, according to the environmental proposal. On that basis a full build-out of the project would cut global carbon emission by 20 million tonnes a year, about 90 per cent of the emissions from WA's Gorgon, North West Shelf, Wheatstone and Pluto LNG projects. > "This development will demonstrate WA's credentials as a world-class investment destination for green energy generation, including the production of exportable commodities, like green hydrogen and ammonia, and green steel manufacturing," MacTiernan said. "The Asian Renewable Energy Hub could transform the Pilbara, create thousands of jobs and be a major contributor to global efforts to decarbonise the economy." The consortium estimates there will be 5000 direct construction jobs and 3000 jobs during operations. [Hydrogen: a simple molecule but a complex businessThere is no shortage of hype about hydrogen. Time will tell what ideas fall by the wayside and which build enduring industries.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/07/22951791245_1bb6dfcf46_o.png)](https://www.boilingcold.com.au/hydrogen-a-simple-molecule-but-a-complex-business/) ## Ammonia players smell growth International interest in green ammonia has exploded since the AREH was launched to export power to Indonesia. This year's pandemic-induced gas price and push for a green recovery in many countries, excluding Australia, has seen oil and gas companies join the chase in WA. [BP is conducting a feasibility study](https://www.boilingcold.com.au/bp-to-chase-green-ammonia-in-geraldton/) for a pilot phase for a project similar to the AREH near Geraldton. [Woodside has invested](https://www.boilingcold.com.au/woodside-joins-the-green-hydrogen-race/) in an APA-led project near the Badgingarra wind and solar farm. Asian Renewable Energy Hub project director Brendan Hammond said Japan was driving market development to add the clean fuel to coal-fired power stations, power ammonia-only generators and for large ships. "The only viable non-fossil fuel alternative for blue water ships, frankly, is ammonia," Hammond said. This week the International Maritime Organisation is hosting meetings to finalise an international agreement to [cut carbon emissions from shipping by 50%](https://www.supplychainbrain.com/articles/32066-shippers-near-global-deal-to-cut-greenhouse-gas-pollution?ref=boilingcold.com.au) by 2050. Hammond said providing power to Indonesia was dropped as the cable constrained the size of the project, it would cross some of the most geologically active seafloor in the world, and the variable generation in the Pilbara had to match demand in Java. *Boiling Cold* understands that export of power is still an option for the future. In contrast, Hammond has great faith in demand for green ammonia, with shipping alone requiring many projects the size of the AREH. The former mining executive said the competitiveness of large-scale renewable energy generation, like mining, was determined by the quality of the resources. Hammond said in addition to the Pilbara well known exceptional solar resource the hub's location between the Indian Ocean and the Great Sandy Desert produced strong and regular winds. He said the only aspect of the project not done at a large scale before was the electrolysis, where technology was consistently improving and driving cost reductions. "Were not anywhere close to needing to make a decision yet in terms of what the technology or supplier will be," Hammond said. The hub is attracting interest from global companies looking to invest in future low carbon energy supply chains, the project spokesperson said. --- *Update 7am 23 October: Cost, major project status, Wheatstone comparison and Tannoch comments added. Main image changed.* --- **Main picture: Photomontage. Source: Asian Renewable Energy Hub* --- ### Australia’s biggest LNG buyer JERA chases zero CO2 emissions by 2050 URL: https://www.boilingcold.com.au/australias-biggest-lng-buyer-jera-chases-zero-co2-emissions-by-2050/ Last updated: 2021-12-27T00:30:49.000Z Japanese energy giant JERA has launched a push to zero emissions by 2050, starting with coal and moving to displace LNG with ammonia and hydrogen. JERA owns the LNG interests and local and overseas power stations of two Japanese power utility companies: Tokyo's TEPCO and Chubu Electric. In Australia, JERA has equity in four LNG projects and more buys about 10 per cent of the nation's production. ![JERA in Australian LNG](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/10/image-15.png) Sources: equity: JERA, contracts: news announcements JERA is also a member of Australian Industrial Energy, the Andrew Forrest-led consortium seeking to build an LNG import terminal in Port Kembla, NSW. Corporate strategy in Japan, that takes 13% of Australian thermal coal exports and 22% of the LNG production, often moves to guidance from the powerful Ministry of Economy, Trade and Industry. If JERA's move to eliminate carbon emissions is reflective of Japan overall than these two trades have a limited lifespan. JERA issued a [four-part plan](https://www.jera.co.jp/system/files/private/%28Attachment2%29%20%E2%80%9DJERA%20Zero%20CO2%20Emissions%202050%20Roadmap%20for%20its%20Business%20in%20Japan%E2%80%9D%20and%20%E2%80%9CJERA%20Environmental%20Target%202030.pdf?ref=boilingcold.com.au) for its core power generation business in Japan and will follow up with plans for each country it invests in. Gas and coal-fired power stations produce about 80 per cent of Japan's electricity demand and about 40 per cent of the nation's greenhouse gases. JERA will shut down its older and more polluting coal-fired power plants by 2030. Coal plants still running in the mid-2030s will include at least 20% ammonia in the fuel mix, and JERA will have 100% ammonia-fuelled plants in the 2040s. JERA, Japanese generation equipment manufacturer IHI, trading house Marubeni and Woodside are jointly looking into the [feasibility of sending large volumes of ammonia to Japan to displace coal](https://www.jera.co.jp/system/files/private/%E3%80%90Attachment%E3%80%91Overview%20of%20Feasibility%20Study.pdf?ref=boilingcold.com.au). Woodside chief executive Peter Coleman said in June that owners of coal-fired power stations wanted to keep them running as long as possible. [Coleman smells ammonia in Woodside’s futureWoodside looks at gas to ammonia to fuel coal-fired power stations as concerns grow about the viability of LNG mega-projects.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/06/Coleman-reduced.jpg)](https://www.boilingcold.com.au/coleman-smells-ammonia-in-woodsides-future/) Development of hydrogen as a fuel will follow the progress of ammonia. The use of CO2-free LNG is also under consideration, but the plan did not specify what this meant. It could be synthetic methane from the combination of hydrogen produced with renewable energy and CO2 from the atmosphere. The fourth arm of JERA's drive to no CO2 emissions is offshore wind projects and batteries. JERA is the major investor in the Formosa 3 two-gigawatt wind project in Taiwan and is pursuing wind projects off the Japanese coast. The cost of offshore wind power is expected to halve in the next five years according to the International Energy Agency's World Energy Outlook released this week. JERA said its progress towards zero emissions depended on advances in decarbonization technology, economic feasibility, and government policies. JERA is a potential investor in the Santos-led Barossa offshore gas field to supply gas to the soon to be empty Darwin LNG plant. The high level of C02 in the reservoir - 16 to 20 per cent – means Barossa LNG would be the most carbon-intensive in Australia, making the project an awkward investment for the newly climate-conscious JERA. [Santos’ dirty big $2B Barossa betBarossa would produce Australia’s dirtiest LNG and if other companies will not back it Santos has a very expensive problem.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/08/Bayu-Undan.jpg)](https://www.boilingcold.com.au/santos-dirty-big-2b-barossa-bet/) --- *Main image: Wheatstone LNG loading arms. Source: Chevron Australia Pty Ltd* --- ### A greener world is a dark outlook for Aussie LNG: IEA URL: https://www.boilingcold.com.au/a-greener-world-is-a-dark-outlook-for-aussie-lng-iea/ Last updated: 2021-12-27T00:26:15.000Z Lower prices and lower demand are the future for Australian LNG if the world chases the Paris Agreement goals to limit the damage from climate warming, according to the International Energy Agency. A search for LNG through the voluminous 464-page [World Energy Outlook ](https://www.iea.org/reports/world-energy-outlook-2020?ref=boilingcold.com.au)released by the IEA yesterday reveals a mountain of unwelcome news for Australia’s $48 billion a year LNG export industry. The IEA analysis, often criticised for favouring fossil fuels, shows that the fortunes of the gas industry and progress to tackle climate change are mutually exclusive. The oil and gas industry is in its third major downturn in 12 years with little room to cut costs as it did last time. The IEA estimates that the pandemic caused the net present value of the next 20 years of natural gas production to drop 20 per cent. Adoption of policies to achieve sustainable development would see the value of the gas producers halve compared to 2019. The Paris-based agency looked in detail at three different scenarios for the future of the world’s energy system. - stated policies – the world carries on with its current energy policies, and COVID-19 is controlled in 2021 - delayed recovery – same energy policies but a prolonged pandemic dampens energy demand for a decade - sustainable development – clean energy policies to meet the Paris Agreement goal of limiting global warming to 1.65℃ are followed, and the pandemic is controlled next year A scenario of net-zero emissions by 2050 to limit global warning to 1.5℃ was looked at in less detail. The stated policies did not include China’s aim to achieve net-zero emissions by 2060 announced three weeks ago. The IEA’s estimate that the emissions from just present infrastructure operating until the end of its life will increase the global temperature to 1.65℃ above pre-industrial levels highlights the difficulty of reconciling fossil fuel investment with managing climate change. Oil and coal have a worse outlook than natural gas, but the IEA questioned the blanket characterisation of gas as a “transition fuel.” A slight decline in natural gas demand to 2040 from advanced economies is predicted under stated policies. Opportunities to displace coal are exhausted, and gas must compete with renewables, efficiency, electrification of end-use demand, and alternative low-carbon gases. If sustainable development policies are enacted, more emissions are reduced by switching away from gas than from gas replacing coal and oil. Almost a quarter of gas investment in 2040 would go to bio-methane and low-carbon hydrogen. There is however a robust case for the long-term presence of gas in the energy system, according to the IEA, including high-temperature heat for industry, heat for buildings and seasonal flexibility for power systems. However, lower volume and lower prices will make some planned investments unviable. ## Who wants an LNG project? Last year was a record for LNG final investment decisions, driven mainly by Chinese demand. However, the IEA sees no need for more LNG projects until late this decade under stated policies. If recovery is delayed or sustainable development pursued, there is no need for any LNG projects to be sanctioned until the 2030s. ![LNG capacity and demand. Source: World Energy Outlook](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/10/image-12.png) **LNG capacity and demand**. Source: World Energy Outlook The IEA estimated that the average gas prices delivered to China and Japan to 2040 to be $US8.5 and $US9.0 a MMBtu respectively under stated policies. In a world heading toward meeting the Paris Agreement goals, these prices would plunge 27 per cent to $US6.2 for China and drop 38 per cent to $US5.55 for Japan. Lower demand removes the need to develop more costly resources. “Operators in both Qatar and Russia look well placed to lead long-term supply growth in the post-Covid-19 environment, particularly given their access to vast reserves of low-cost supplies,” the report stated. The IEA assessment did not allow for China’s recently announced drive for net-zero emission by 2060. In the short-term LNG economics are most threatened by a delayed recovery but after that “the goals of the Paris Agreement cast the bigger shadow over the prospects for LNG.” The sustainable development scenario cuts LNG demand in 2040 by 15 to 25 per cent compared to a world that sticks with stated policies and accepts greater damage from climate change. The IEA believes producers must reduce the carbon intensity of LNG to make a case for gas in the energy transition. For any LNG projects to go ahead, they will need to be both low cost and low emissions. The production of a tonne of LNG from Barossa emits about 1.35 tonnes of CO2 and Browse LNG will produce more than 0.9 tonnes on CO2 for each tonne of LNG. All existing Australian offshore LNG project except Ichthys have a carbon intensity of 0.6 or less. Low cost and low emissions are not what [Woodside’s Browse](https://www.boilingcold.com.au/woodside-browse-lng-is-dead/) and [Santos’s Barossa](https://www.boilingcold.com.au/santos-dirty-big-2b-barossa-bet/) LNG projects offer. The IEA assessment describes a narrow rocky path to sanction for these showcase projects from Australia’s two gas giants under current stated policies. If the world embraces the Paris Agreement that path disappears. --- *Main image: Northwest Shearwater LNG carrier. Source: BP* --- ### WA plans a slow move to greener power URL: https://www.boilingcold.com.au/wa-plans-a-slow-move-to-greener-power/ Last updated: 2021-12-27T00:21:54.000Z A WA Government study sees surging rooftop solar and maybe some wind farms bringing cleaner energy to South-West WA, but emissions reductions are a long way from the State's aspiration of net-zero emissions by 2050. The [Whole of System Plan](https://brighterenergyfuture.wa.gov.au/whole-of-system-plan/?ref=boilingcold.com.au) for the South West Interconnected System released yesterday predicts that more than 70 per cent of generation capacity will be renewable energy by 2040. The Plan launched yesterday by Energy Minister Bill Johnston considered four scenarios for operational demand: the power supplied by the network that excludes rooftop solar. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/10/image-10.png) **Operation demand scenarios**. Source: Whole of System Plan In two cases, operational demand dropped as growth in rooftop solar generation exceeded growth in total demand. Operational demand more than doubled over the next two decades in the other scenarios. The work by the Energy Transformation Taskforce determined the lowest cost generation for all scenarios, which was always wind when the system needed additional generation. Wind farms between Mandurah and Manjimup were favoured instead of the Mid-West where most are now located. The South-West has spare transmission capacity and gives the power system more diversity to lessen peaks and troughs in wind production. Little additional wind generation is required this decade under the two low demand scenarios. ## Climate change? The only mention of climate change in the 126-page Plan was to exclude its consideration: "As there is no explicit climate or emissions reduction policy targeting the electricity sector, no State or Federal target or carbon price has been included in the modelling." The State Government's Plan ignored its own "[aspiration of net-zero (emissions) by 2050](https://www.der.wa.gov.au/images/documents/your-environment/climate-change/Greenhouse%20Gas%20Emissions%20Policy%20for%20Major%20Projects.pdf?ref=boilingcold.com.au)" released in 2019. South-West power generation is the source of emissions the WA Government has the most influence over due to its ownership of the Western Power grid and the dominant generator Synergy. ![EWA top carbon polluters, Emissions for 12 months to June 2019](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/10/image-11.png) Emissions for 12 months to June 2019\. Source: Clean Energy Regulator. Many non-government owners of emissions-intensive facilities in WA assume a carbon price when making investment decisions as a proxy for likely action to rein in Australia's emissions. Woodside uses $US80 ($112) a tonne of CO2. Energy Minister Bill Johnston said the exclusion of a carbon price from the Plan's assumptions was "a political question." "If the Federal Government set a price on carbon then it would be very easy to adjust the modelling," Johnston said. "Every businessman I've ever talked to since I became shadow minister for energy in 2012 has said they personally support a price on carbon, "But currently nobody's industry lobby group supports putting a price on carbon." ![Emissions intensity. Source: Whole of System Plan](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/10/image-8.png) **Emissions intensity**. Source: Whole of System Plan The emissions intensity of South-West power more than halved by 2040 in all scenarios. The intensity dropped the most under the two growth scenarios as there was greater opportunity for new cleaner generation to enter the market. However, total emissions grew under both growth cases. ## Questions over Collie coal Energy Transformation Taskforce independent chair Stephen Edwell said the outlook for coal was "perhaps more bleak then some might have expected." Collie's coal-fired power stations were designed for constant output but must cycle down during the day when rooftop solar generation peaks. Synergy's proposed [battery at Kwinana](https://www.boilingcold.com.au/wa-plans-100m-big-battery-to-balance-solar/) would lessen the ramping that is increasing maintenance costs. "Coal will come under increasing economic pressure over the coming decade," Edwell said. The State Government decided last year to close two units of Synergy's Muja Power Station in 2022 and 2024. Edwell said under the two low demand scenarios additional coal capacity was predicted to be uncompetitive by 2025: 130 MW in the Groundhog Day scenario and 500 MW under the Cast Away assumptions. ![coal-fired power stations in Collie](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/10/image-9.png) Source: AEMO 2020 Electricity Statement of Opportunities Edwell said while the Plan predicted coal would not be cost-competitive, whether the plants close is a matter for the owners who would consider a range of issues. These could include ongoing coal purchase and power sale agreements and decommissioning liabilities. The application of, by international standards, a modest carbon price such as the [$15.74 a tonne](http://www.cleanenergyregulator.gov.au/ERF/Pages/Auctions%20results/September%202020/Auction-September-2020.aspx?ref=boilingcold.com.au) averaged at an Emissions Reduction Fund auction in September, would further hurt the competitiveness of coal-fired power in WA. Collie's power stations emit about [0.9 tonnes of CO2](https://www.boilingcold.com.au/synergy-pushes-ageing-coal-plants/) for each megawatt-hour of power produced. A carbon cost of $14.66 a MWhr in a market with an average cost of about $58 a MWhr would accelerate the closure of coal and increase demand for renewable energy projects. Most gas-fired generators on the SWIS have an emissions intensity of about 0.55 tonnes of CO2 a MWhr. *Boiling Cold* asked Johnston when people in Collie would receive guidance on their future beyond the already-announced closures at Muja. "We've made our decisions at this stage and if we need to make further decisions, we will," Johnston said. "One of the criticisms of the Government's Whole of System Plan by some lobby groups is that we're allowing coal to go on forever," "So, the people of Collie can be confident that in a Labor Government they've got friends." ## Keeping the lights on Reliability is a crucial aspect of the power system, as well as cost and emissions. Johnston said when he was Labor State secretary, he would tell then energy minister Eric Ripper "if the lights go out it's the Minister's fault." "So, I'm determined to make sure, despite the 10th of January, that the lights don't go out." The SWIS [lost almost 500 megawatts](https://aemo.com.au/-/media/files/electricity/wem/security%5Fand%5Freliability/2020/aemo-investigation-report---swis-ufls-event-10-january-2020.pdf?la=en%27&ref=boilingcold.com.au) of generation within four minutes on the evening on January 10, 2020, leaving nearly 100,000 customers in the dark, some up to four hours. Johnston said the South-West power sector needed strategic leadership from the Government beyond the life of the Energy Transformation Taskforce. "We'll need to continue to coordinate and carefully manage the system here in WA to make sure we can deliver the cleaner, reliable, affordable energy supply that all West Australians demand," Johnston said. Responsibility for updates to the Whole of System Plan will rest with the Coordinator of Energy, a position currently filled by the director of Energy Policy WA Kate Ryan. The Coordinator will also assume the responsibilities of the Economic Regulation Authority's rule change panel. --- *Main image: Power lines. Source: [Fré Sonneveld](https://unsplash.com/@fresonneveld?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) on [Unsplash](https://unsplash.com/s/photos/electricity?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText)* ### What China's climate push means for Australia URL: https://www.boilingcold.com.au/what-chinas-climate-push-means-for-australia/ Last updated: 2021-12-27T13:56:42.000Z ANALYSIS [Hao Tan](https://theconversation.com/profiles/hao-tan-111566?ref=boilingcold.com.au), *[University of Newcastle](https://theconversation.com/institutions/university-of-newcastle-1060?ref=boilingcold.com.au)*; [Elizabeth Thurbon](https://theconversation.com/profiles/elizabeth-thurbon-8510?ref=boilingcold.com.au), *[UNSW](https://theconversation.com/institutions/unsw-1414?ref=boilingcold.com.au)*; [John Mathews](https://theconversation.com/profiles/john-mathews-7546?ref=boilingcold.com.au), *[Macquarie University](https://theconversation.com/institutions/macquarie-university-1174?ref=boilingcold.com.au)*, and [Sung-Young Kim](https://theconversation.com/profiles/sung-young-kim-12936?ref=boilingcold.com.au), *[Macquarie University](https://theconversation.com/institutions/macquarie-university-1174?ref=boilingcold.com.au)* China’s President Xi Jinping surprised the global community recently by committing his country to net-zero emissions by 2060\. Prior to [this announcement](https://news.cgtn.com/news/2020-09-23/Full-text-Xi-Jinping-s-speech-at-General-Debate-of-UNGA-U07X2dn8Ag/index.html?ref=boilingcold.com.au), the prospect of becoming “carbon neutral” barely rated a mention in China’s national policies. China currently accounts for about [28% of global carbon emissions](https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/energy-economics/statistical-review/bp-stats-review-2020-co2-emissions.pdf?ref=boilingcold.com.au) – double the US contribution and three times the European Union’s. Meeting the pledge will demand a deep transition of not just China’s energy system, but its entire economy. Importantly, China’s use of coal, oil and gas must be slashed, and its industrial production stripped of emissions. This will affect demand for Australia’s exports in coming decades. It remains to be seen whether China’s climate promise is genuine, or simply a ploy to win international favour. But it puts pressure on many other nations – not least Australia – to follow. ## Goodbye, fossil fuels Coal is currently used to generate [about 60%](https://ieefa.org/coals-share-of-china-electricity-generation-dropped-below-60-in-2018/?ref=boilingcold.com.au) of China’s electricity. Coal must be phased out for China to meet its climate target, unless technologies such as carbon-capture and storage become commercially viable. Natural gas is [increasingly used](https://chineseclimatepolicy.energypolicy.columbia.edu/en/natural-gas?ref=boilingcold.com.au) in China for heating and transport, as an alternative to coal and petrol. To achieve carbon neutrality, China must dramatically reduce its gas use. Electric vehicles and hydrogen fuel-cell vehicles must also come to dominate road transport - currently they account for [less than 2%](http://www.xinhuanet.com/fortune/2020-01/08/c%5F1125433202.htm?ref=boilingcold.com.au) of the total fleet. China must also slash the production of carbon-intensive steel, cement and chemicals, unless they can be powered by renewable electricity or zero-emissions hydrogen. One [report](https://www.energy-transitions.org/publications/china-2050-a-fully-developed-rich-zero-carbon-economy/?ref=boilingcold.com.au) suggests meeting the target will mean most of China’s steel is produced using recycled steel, in a process powered by renewable electricity. [Modelling](https://www.energy-transitions.org/publications/china-2050-a-fully-developed-rich-zero-carbon-economy/?ref=boilingcold.com.au) in that report suggests China’s use of iron ore – and the coking coal required to process it into steel – will decrease by 75%. The implications for Australia’s mining industry would be huge; around [80%](https://minerals.org.au/minerals/ironore?ref=boilingcold.com.au) of our iron ore is exported to China. It is critically important for Australian industries and policymakers to assess the seriousness of China’s pledge and the likelihood it will be delivered. Investment plans for large mining projects should then be reconsidered accordingly. Conversely, China’s path towards a carbon neutral economy may open up new export opportunities for Australia, such as “green” hydrogen. ## A renewables revolution Solar and wind currently account for [10% of China’s total power generation](https://www.bp.com/en/global/corporate/energy-economics/statistical-review-of-world-energy.html?ref=boilingcold.com.au). For China to meet the net-zero goal, renewable energy generation would have to ramp up dramatically. This is needed for two reasons: to replace the lost coal-fired power capacity, and to provide the larger electricity needs of transport and heavy industry. Two factors are likely to reduce energy demand in China in coming years. First, energy efficiency in the building, transport and manufacturing sectors is likely to improve. Second, the economy is moving [away](https://apjjf.org/2018/10/Tan.html?ref=boilingcold.com.au) from energy- and pollution-intensive production, towards an economy based on services and digital technologies. It’s in China’s interests to take greater action on climate change. Developing renewable energy helps China build new “green” export industries, secure its energy supplies and improve air and water quality. ## The global picture It’s worth considering what factors may have motivated China’s announcement, beyond the desire to do good for the climate. In recent years, China has been viewed with increasing hostility on the world stage, especially by Western nations. Some [commentators](https://www.japantimes.co.jp/news/2020/09/23/asia-pacific/china-carbon-neutral-2060/?ref=boilingcold.com.au) have suggested China’s climate pledge is a bid to improve its global image. The pledge also gives China the high ground over a major antagonist, the US, which under President Donald Trump has walked away from its international obligations on climate action. China’s pledge follows similar ones by the European Union, New Zealand, California and others. It sets an example for other developing nations to follow, and puts pressure on Australia to do the same. The European Union has also been [urging China](https://www.euractiv.com/section/energy/news/europe-urges-china-to-match-its-climate-ambitions/?ref=boilingcold.com.au) to take stronger climate action. The fact Xi made the net-zero pledge at a United Nations meeting suggests it was largely targeted at an international, rather than Chinese, audience. However, the international community will judge China’s pledge on how quickly it can implement specific, measurable short- and mid-term targets for net-zero emissions, and whether it has the policies in place to ensure the goal is delivered by 2060. Much is resting on China’s next [Five Year Plan](https://chinadialogue.net/en/climate/11434-the-14th-five-year-plan-what-ideas-are-on-the-table/?ref=boilingcold.com.au) – a policy blueprint created every five years to steer the economy towards various priorities. The latest plan, covering 2021–25, is being developed. It will be examined closely for measures such as phasing out coal and more ambitious targets for renewables. Also key is whether the recent [rebound](https://www.carbonbrief.org/guest-post-why-chinas-co2-emissions-grew-4-during-first-half-of-2019?ref=boilingcold.com.au) of China’s carbon emissions – following a fall from 2013 to 2016 – can be reversed. ## Wriggle room The 2060 commitment is bold, but China may look to leave itself wriggle room in several ways. First, Xi declared in his speech that China will “aim to” achieve carbon neutrality, leaving open the option his nation may not meet the target. Second, the Paris Agreement states that developed nations should provide financial [resources and technological support](https://unfccc.int/files/essential%5Fbackground/convention/application/pdf/english%5Fparis%5Fagreement.pdf?ref=boilingcold.com.au) to help developing countries reduce their emissions. China may make its delivery of the pledge conditional on this support. Third, China may seek to game the way carbon neutrality is measured – for example, by insisting it excludes carbon emissions “embodied” in imports and exports. This move is quite likely, given exports account for a [significant share](https://www.sciencedirect.com/science/article/pii/S0140988316302432?ref=boilingcold.com.au) of China’s total greenhouse gas emissions. So for the time being, the world is holding its applause for China’s commitment to carbon neutrality. Like every nation, China will be judged not on its climate promises, but on its delivery. --- *[Hao Tan](https://theconversation.com/profiles/hao-tan-111566?ref=boilingcold.com.au), Associate professor, [University of Newcastle](https://theconversation.com/institutions/university-of-newcastle-1060?ref=boilingcold.com.au); [Elizabeth Thurbon](https://theconversation.com/profiles/elizabeth-thurbon-8510?ref=boilingcold.com.au), Scientia Fellow and Associate Professor in International Relations / International Political Economy, [UNSW](https://theconversation.com/institutions/unsw-1414?ref=boilingcold.com.au); [John Mathews](https://theconversation.com/profiles/john-mathews-7546?ref=boilingcold.com.au), Professor Emeritus, Macquarie Business School, [Macquarie University](https://theconversation.com/institutions/macquarie-university-1174?ref=boilingcold.com.au), and [Sung-Young Kim](https://theconversation.com/profiles/sung-young-kim-12936?ref=boilingcold.com.au), Senior Lecturer in International Relations, Discipline of Politics & International Relations, Macquarie School of Social Sciences, [Macquarie University](https://theconversation.com/institutions/macquarie-university-1174?ref=boilingcold.com.au)* *This article is republished from [The Conversation](https://theconversation.com/?ref=boilingcold.com.au) under a Creative Commons license. Read the [original article](https://theconversation.com/china-just-stunned-the-world-with-its-step-up-on-climate-action-and-the-implications-for-australia-may-be-huge-147268?ref=boilingcold.com.au).* --- *Main image: Industry in Jilin, China. Source: Photo by [Andreas Felske](https://unsplash.com/@andreasfelske?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) on [Unsplash](https://unsplash.com/s/photos/china-pollution?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText)* --- ### 'Backwards' federal budget: Morrison govt never fails to disappoint on climate URL: https://www.boilingcold.com.au/backwards-federal-budget-morrison-government-never-fails-to-disappoint-on-climate-action/ Last updated: 2020-10-08T00:31:35.000Z *ANALYSIS* [John Quiggin](https://theconversation.com/profiles/john-quiggin-2084?ref=boilingcold.com.au), *[The University of Queensland](https://theconversation.com/institutions/the-university-of-queensland-805?ref=boilingcold.com.au)* When it comes to action on climate change, Tuesday’s [federal budget](https://budget.gov.au/index.htm?ref=boilingcold.com.au) delivered by Treasurer Josh Frydenberg was a real – though not unexpected – disappointment which favoured polluting technologies over a clean energy future. It included money to upgrade a coal-fired power station in New South Wales, and confirmed A$50 million [previously announced](https://www.industry.gov.au/news-media/climate-and-energy-news/new-package-to-lower-emissions-through-future-technologies?ref=boilingcold.com.au) to develop carbon capture and storage. The government will also spend A$52.9 million expanding Australia’s gas industry. But investment in renewable energy was largely shunned. Notably, the government allocated just A$5 million for electric vehicles. It confirmed funding for the Australian Renewable Energy Agency (ARENA) for another decade, but the money is far less than what’s needed. The COVID-19 pandemic has seen the Morrison government abandon long-held dogma on debt and deficits. However, the federal budget shows when it comes to climate and energy, the government is singing from the same old songbook. ## A techno-fix The budget doubled down on the Morrison government’s rhetoric of “[technology, not taxes](https://www.industry.gov.au/news-media/climate-and-energy-news/new-package-to-lower-emissions-through-future-technologies?ref=boilingcold.com.au)”, by choosing preferred technologies for investment. This “picking winners” approach would have some chance of addressing climate change if it were based on a comprehensive analysis of the best path to zero emissions. But instead, the government has largely made offerings at the altars of technologies worshipped by the conservative side of politics. The government will spend an [as-yet undisclosed](https://www.afr.com/policy/energy-and-climate/vales-point-coal-power-station-secures-upgrade-20201005-p56248?ref=boilingcold.com.au) sum, possibly [A$11 million](https://reneweconomy.com.au/federal-budget-funds-vales-point-upgrade-and-ccs-but-snubs-evs-13886/?ref=boilingcold.com.au), to refurbish the Vales Point coal-fired power station. The commitment to this coal infrastructure, co-owned by prominent Liberal party [donor](https://www.theguardian.com/australia-news/2019/may/02/morrison-defied-treasurys-advice-to-reject-help-for-liberal-donors-power-company?ref=boilingcold.com.au) Trevor St Baker, is a disgraceful misuse of public money. It will also do little to halt the steady decline of coal-fired power generation. As [previously announced](https://www.theguardian.com/australia-news/2020/sep/15/government-to-use-529m-funding-to-unlock-more-gas-for-domestic-market?ref=boilingcold.com.au), the government will spend A$52.9 million to support the gas industry, which Frydenberg says will lower prices and support more manufacturing jobs. It includes money for gas infrastructure planning and to open up five gas basins, starting with Beetaloo Basin in the Northern Territory. The budget confirms A$50 million for carbon capture and storage (CCS) to fund projects to cut emissions from industry. But proving the viability of large-scale CCS projects is extremely difficult, as experience in the [United States](https://www.eenews.net/stories/1063714297?ref=boilingcold.com.au) and [Canada](https://www.nytimes.com/2016/03/30/business/energy-environment/technology-to-make-clean-energy-from-coal-is-stumbling-in-practice.html?ref=boilingcold.com.au) has shown. In this context, allocating just A$50 million to get the technology off the ground is simply laughable. History suggests the spending offers little return on investment. [Research](https://www.tai.org.au/content/money-nothing?ref=boilingcold.com.au) by the Australia Institute in 2017 revealed federal governments have spent A$1.3 billion in taxpayers’ money on CCS projects, with very little to show for it. ## Renewables snubbed Meanwhile, last night’s budget largely shunned investment in renewable energy. The budget confirmed A$1.4 billion in ARENA funding for a further ten years, including a pretty paltry A$223.9 million over the next four years. Separately, the government will also seek to pass legislation to [change](https://reneweconomy.com.au/taylor-seeks-to-push-arena-and-cefc-towards-gas-and-ccs-31594/?ref=boilingcold.com.au) ARENA’s investment mandate, enabling it to fund gas and carbon capture projects. The government has allocated a tiny A$5 million towards electric vehicle development, including money towards a manufacturing facility in South Australia. It’s good to see electric vehicles on the government’s radar. But the commitment is dwarfed by investment overseas, including a [reported](https://www.reuters.com/article/us-autoshow-detroit-electric-exclusive-idUSKCN1P40G6?ref=boilingcold.com.au) US$300 billion set aside by global car makers over the next decade to bring electric vehicles to mass production. The measly spending on clean energy technology does not make economic sense. The renewable energy sector is [standing by](https://theconversation.com/scott-morrisons-gas-transition-plan-is-a-dangerous-road-to-nowhere-130951?ref=boilingcold.com.au) to slash emissions and deliver lower energy prices – if only the right policy environment existed. The budget was also an opportunity for the government to ditch its irrational opposition to carbon pricing. [Recent research](https://theconversation.com/carbon-pricing-works-the-largest-ever-study-puts-it-beyond-doubt-142034?ref=boilingcold.com.au) has comprehensively shown carbon pricing slows growth in greenhouse gas emissions. Vehement carbon pricing critics, such as conservatives Tony Abbott, [Craig Kelly](https://www.smh.com.au/politics/federal/craig-kelly-accused-of-pushing-dangerous-covid-19-conspiracy-theory-20200827-p55pw4.html?ref=boilingcold.com.au) and Barnaby Joyce, are now either discredited or out of parliament altogether. And scores of [countries around the world](https://carbonpricingdashboard.worldbank.org/map%5Fdata?ref=boilingcold.com.au) have implemented some form of price on carbon. ## A global outlier Most obviously, the budget was an opportunity to commit to net-zero emissions by 2050, as many developed countries have [done](https://www.climatechangenews.com/2020/09/17/countries-net-zero-climate-goal/?ref=boilingcold.com.au). The Morrison government has already used [dodgy accounting](https://theconversation.com/today-australias-kyoto-climate-targets-end-and-our-paris-cop-out-begins-thats-nothing-to-be-proud-of-mr-taylor-131137?ref=boilingcold.com.au) tricks to meet Australia’s Paris Agreement commitment – reducing emissions by 26% on 2005 levels. The absence of a net-zero target suggests the government intends to allow emissions to grow indefinitely after 2030. This approach is out of step with many of Australia’s international peers. Democratic presidential candidate Joe Biden, now the [clear favourite](https://projects.fivethirtyeight.com/polls/president-general/national/?ref=boilingcold.com.au) to win the US election in November, is campaigning on what has been [described as](https://www.nature.com/articles/d41586-020-02786-4?ref=boilingcold.com.au) “the most aggressive climate platform” ever put forward by a presidential nominee. Biden wants the US to produce net-zero emissions by 2050\. His US$2 trillion plan includes huge investments in clean energy research and development, and low-emissions infrastructure such as public transport and energy-efficient buildings. He has also promised a [border tax](https://www.politifact.com/article/2020/aug/03/joe-bidens-climate-change-plan-explained/?ref=boilingcold.com.au) levied on imports from countries without a carbon price. Europe is well on the way to [phasing out](https://climateanalytics.org/briefings/eu-coal-phase-out/?ref=boilingcold.com.au) coal, and forging ahead with new carbon-free technologies to produce steel, cement and ammonia. The European Union has also [said](https://www.allens.com.au/insights-news/insights/2020/05/climate-change-guide/the-big-picture-australias-commitments-under-the-paris-agreement/?ref=boilingcold.com.au) any free trade deal with Australia is contingent on our commitment to deep emissions abatement. And in China, President Xi Jinping recently [announced](https://www.theguardian.com/commentisfree/2020/oct/05/china-plan-net-zero-emissions-2060-clean-technology?ref=boilingcold.com.au) his nation will reach net-zero emissions by 2060. ## We have no choice The budget was a chance to reset Australia’s failed climate policy – an opportunity enhanced by the stimulus spending brought on by COVID-19. Instead, we got a string of backward-looking gestures including subsidies for coal, another go at the failed technology of carbon capture storage and a continued push for gas. Sooner or later, Australia will have to join the rest of the world in ending our reliance on carbon-based energy. The catastrophic bushfires of last summer proved this. And if we refuse to move, the rest of the world will force our hand.![The Conversation](https://counter.theconversation.com/content/147659/count.gif?distributor=republish-lightbox-basic) --- [John Quiggin](https://theconversation.com/profiles/john-quiggin-2084?ref=boilingcold.com.au), Professor, School of Economics, *[The University of Queensland](https://theconversation.com/institutions/the-university-of-queensland-805?ref=boilingcold.com.au)* This article is republished from [The Conversation](https://theconversation.com/?ref=boilingcold.com.au) under a Creative Commons license. Read the [original article](https://theconversation.com/backwards-federal-budget-morrison-government-never-fails-to-disappoint-on-climate-action-147659?ref=boilingcold.com.au). --- *Main image: The Sun. Source: [Luis Graterol](https://unsplash.com/@iguanaphoto?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) on [Unsplash](https://unsplash.com/s/photos/sun?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText)* --- ### Warradarge wind farm powers up URL: https://www.boilingcold.com.au/warradarge-wind-farm/ Last updated: 2022-01-28T10:09:16.000Z The Warradarge Wind Farm near Eneabba will be putting up to 180 megawatts into the grid by the end of October, after being opened by Energy Minister Bill Johnston today. The farm 15km south-east of Eneabba has 51 Vestas turbines that each weigh 181 tonnes with 67m-long blades. The hubs are 84m high, and top of the blade tip reaches 151m above ground level. Bright Energy kicked off the project less than two years ago, in December 2018\. Bright is owned by the Dutch Infrastructure Fund, Australian industry superannuation fund Cbus, and State-owned generator Synergy. At full power, the Warradarge Wind Farm will generate enough renewable energy to supply the equivalent of 135,000 Western Australian homes. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/10/Wind-turbines-w-Mumbida.png) Source: Bright Energy Bright Energy Investments general manager Tom Frood said Warradarge was a world-class asset and been delivered successfully despite COVID-19. Warradarge will be operated by Vestas and is connected to the 330-kilovolt grid by a 10km transmission line constructed by Western Power. Wind farms provided 13 per cent of power to the SWIS during the past 12 months. Collie’s coal-fired power stations generated 43 per cent and gas-fired s 42 per cent. Warradarge is one of three large utility-scale renewable energy projects to be connected to the South West Interconnected System this year. ![top 10 renewable projects on the SWIS](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/10/image-2.png) The opening of Badgingarra, Yandin and now Warradarge wind farms in the Mid-West over the past 18 months is a massive change in the generation mix on the SWIS. Energy Minister Bill Johnston said the Government was committed to improving energy affordability and creating a cleaner, greener energy system for Western Australians. On Monday Johnston will launch the Whole of System Plan, a 20-year outlook for the SWIS that stretches between Kalbarri, Albany, and Kalgoorlie. The preliminary results released by the Energy Transformation Taskforce in August showed emissions would not come close to the WA Government’s stated aspiration of net-zero emission by 2050. [WA power plan not heading for net-zero emissions by 2050The first cut at planning WA power’s future ignores carbon costs that Woodside would estimate at many billions and comes nowhere near the WA Government’s target of net-zero emissions by 2050.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/07/Figure-2.png)](https://www.boilingcold.com.au/wa-power-plan-not-heading-net-zero/) Frood told *Boiling Cold* that Bright currently only supplies Synergy but has ambitions to grow. The 30-year experienced engineer said Bright would need a power purchase agreement with Synergy to expand, but Synergy now had the generation and green certificates it needs. “It’s not just a matter of renewable energy being cheaper, Synergy has commitments to its current assets,” Frood said. The second stage of Warradarge is planned, should it be needed. The Mid-West is one of the best locations in the world for onshore wind farms, with facilities achieving capacity factors close to 50 per cent. However, the Western Power transmission line connecting the area to Perth is understood to be at full capacity after the recent connections of new wind farms. Further investment in Mid-West wind farms is unlikely without an increase in transmission capacity. --- *Update 7 October 1:40 AM: Comments from Tom Frood added.* --- *Main image: Warradarge wind farm. Source: Synergy* ### WA research to keep gas flowing to LNG plants URL: https://www.boilingcold.com.au/wa-research-keep-gas-flowing-lng/ Last updated: 2020-10-05T00:47:54.000Z ### **This story was originally published in [The Australian Pipeliner](https://www.pipeliner.com.au/?ref=boilingcold.com.au), October 2020.* For investors to approve the vast expenditure to build Australia's LNG projects fed by offshore gas, they needed confidence there would be enough gas for decades. They then logically planned to develop the cheapest gas first. Before the last project in the great LNG boom went into production – Shell’s Prelude floating LNG – the industry was busy moving to the next, more difficult, sources of gas. In April 2018 Chevron committed about $5 billion to Gorgon Stage 2: the drilling of 11 new wells in the Gorgon and Jansz-Io fields. Inpex is planning to install a 4000-tonne compression module on the Ichthys central processing platform to maintain flow as reservoir pressure declines. Shell wants to bring gas from the Crux field to Prelude with an unmanned platform and a 165km pipeline, although the pandemic has put that development on hold. Woodside is drilling the Julimar reservoir that will be tied back to existing subsea infrastructure that feeds the Wheatstone LNG plant. In early 2019 Chevron engaged Aker to perform front end engineering to add subsea compression to the Jansz-Io field that feeds the Gorgon LNG project. [October 2020 - The Australian PipelinerYour quarterly update on the pipelines and gas industry in Australasia.![](https://oe59k1abp092ccqag2vzw9hi-wpengine.netdna-ssl.com/wp-content/uploads/sites/3/2019/03/cropped-TAP_Favicon_Icon_32x32-192x192.jpg)The Australian PipelinerEvie![](https://www.pipeliner.com.au/wp-content/uploads/sites/3/2020/09/TAP_Oct_2020_Thumbnail-Cover-640x470.jpg)](https://www.pipeliner.com.au/magazines/october-2020/?ref=boilingcold.com.au) Aker had designed the first such system, for Equinor’s Asgard field offshore Norway in 2017. Raw gas from the Asgard reservoir is cooled and separated into gas and liquid streams by machinery on the seabed. The two streams are compressed separately, recombined, and then has enough pressure to flow 40km to shore. Chevron wants to avoid the expense of an offshore compression platform at its $US54 billion Gorgon project. Instead compressors on the seabed would be powered through subsea electrical cables from Barrow Island 130km away. A normally unmanned control station floating above the location of the compressors. Such novelty and complexity is not only costly, it increases risk. ### WA research to keep gas flowing With so much money and technology being deployed to maintain the gas supply to LNG plants it makes sense that the west coast’s biggest operators are looking for cheaper, simpler solutions. Dr Zachary Aman is the Chevron-Woodside chair in long subsea tiebacks at the University of Western Australia. > “Putting in massive subsea compression structures and sinking all of it to the seafloor…the cost of doing that is not necessarily going to be viable,” Aman said, particularly in the current oil and gas market. The Centre he leads has the goal to enable gas to travel 250km using the natural energy of the reservoir. It sounds simple, and it would be if not for a problem rarely encountered in onshore pipelines: gas hydrates. When high pressure flow from a well in deep water is cooled by the surrounding seawater, that can be as cold as 4℃, the well fluids have the perfect condition for hydrates to form. The water forms thin layers of ice that surround gas molecules but behaves somewhat like regular ice. Aman said these molecular cages of water with gas inside start binding together to form particles that can range in size from the thickness of a human hair to a dice. The hydrates build up in the wall of the pipeline and start to restrict flow. The problem of hydrates is normally solved with the addition of antifreeze, usually methanol or mono ethylene glycol. Unfortunately, while the additives stop hydrates forming they also drive up the pressure required to move the fluid in the pipeline and so reduce the distance gas can travel just driven by the pressure of the reservoir. > “Companies are up against a constraint where we can't put enough antifreeze in because in doing so, we burn the natural momentum energy of that reservoir," Aman said. “Our group specifically studies the physics of where these hydrates form, how quickly they build-up, and what is their location on the pipe wall as a function of time, pressure and temperature." And operators need the understand hydrates very well, as their behaviour can be unexpected. Hydrate can completely block a pipeline for lengths up to 500m. Aman said it is natural to think that is one side of the hydrate plug was depressurised the hydrates, that require high pressure and low temperatures, would gradually melt starting at the end with low pressure. In fact, the whole plug melts from the wall inward, due to the thermal conductivity of the pipeline. Eventually the half kilometre long block of hydrate is no longer stuck to the pipeline wall and become a giant crystal bullet. “These are the very infamous examples in North America where you've seen loss of life occur because these projectiles can accelerate up to 270 feet per second,” Aman said. In late 2019 the Centre opened a laboratory where less dangerous scenarios, such as the effect that sand in the gas has on hydrate formation, can be investigated by the Centre’s staff and post-graduate students. With Australian LNG facing fierce competition, such as huge low-cost developments in Qatar, technology will be key to keeping the LNG plants in WA and the Northern Territory supplied with gas and economically viable. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/10/image.png) ****This story was first published in [The Australian Pipeliner](https://www.pipeliner.com.au/?ref=boilingcold.com.au)*** --- *Main image: Wheatstone platform. Source: Chevron Australia Pty Ltd.* ### WA plans $100M big battery to balance solar URL: https://www.boilingcold.com.au/wa-plans-100m-big-battery-to-balance-solar/ Last updated: 2022-01-08T14:19:55.000Z The WA Government plans to have Australia's second-largest battery operating on the South West power grid in two years to help pave the way for more renewable energy. The battery will be built at the site of the Synergy's old Kwinana Power Station that is being pulled down. It will be next to a 330-kilovolt transmission line that also serves nearby gas-fired peaker and combined-cycle power stations. Jason Waters, the chief executive of State-owned generator and retailer Synergy, said the battery was part of more resilient, cleaner and smarter power system the future. Waters said battery storage would be the hallmark of an intelligent and advanced power system, including household, community, and grid-scale installations. > "I think over the long term it will be the first of many," Waters said at the Kwinana site today. The battery will be able to absorb or deliver power at a rate of 100 megawatts and store 200 megawatt-hours of energy. The battery could power 160,000 homes for two hours. The Kwinana facility will be bigger than the famed battery that Elon Musk in 2017 said Tesla would install in South Australia within 100 days or he would give it away for free. Musk won the bet and charged $90 million for the 100MW/129MWh system. The so-called Tesla battery, officially named the Hornsdale Power Reserve, has been [a success](https://reneweconomy.com.au/tesla-big-battery-at-hornsdale-gets-big-jump-in-revenues-more-to-come-65622/?ref=boilingcold.com.au) for its French owners Neoen who this year completed a 50 per cent expansion of capacity. Most of the revenue from Hornsdale comes from so-called essential services that stabilise the grid. The primary role of the Kwinana battery will be store excess solar energy in the middle of the day and return it to the grid during the early evening peak demand. This flattening of the so-called duck curve will allow coal-fired power stations to operate more steadily across 24 hours and cut the total generation required in the evening. Synergy has been trying a range of measures to allow its coal and gas-fired power station to [better operate in a market with rapidly fluctuating demand](https://www.boilingcold.com.au/synergy-pushes-ageing-coal-plants/) caused by intermittent solar generation. Synergy plans to have the bigger Kwinana battery operating by September 2022\. The utility today issued a [request for information ](https://www.tenders.wa.gov.au/watenders/tender/display/tender-details.do?CSRFNONCE=19DBA33B55AC89E2EF13ED91D6E8735E&id=47404&action=display-tender-details&returnUrl=%2Ftender%2Fsearch%2Ftender-search.do%3FCSRFNONCE%3DF435686DEDE318BFB69CCC4666360707%26amp%3Baction%3Dadvanced-tender-search-new-tenders&ref=boilingcold.com.au)from possible suppliers that closes at the end of October. Waters said the cost, that he expected to be more than $100 million, and how it would be funded would be determined after the RFIs were received. Energy Minister Bill Johnston said a battery provides the cheapest stability for the grid. > "We need to face the future and get our system ready for more renewable energy," Johnston said, or the system would face challenges. Johnston said the Federal Government was putting $15 million towards the cost of the battery. Federal Minister for Energy and Emissions Reduction Angus Taylor said in a statement that with the contribution the Federal Government was a step closer to a State Energy and Emissions Reduction Deal with WA. NSW agreed on [a package of measures](https://www.energy.gov.au/sites/default/files/2020-02/200131%5FMC19-078588%20-%20NSW%20MOU%20SIGNED.PDF?ref=boilingcold.com.au) in January 2020 worth more than $2 billion that included a commitment of increased gas supply from either by Santos' controversial Narrabri project that received planning approval this week or an LNG import terminal. Johnston said he expected the Commonwealth Government to be fair to WA and match the contributions it is making on the east coast. --- *Main image: Battery graphic. Source: Synergy* --- ### Federal Govt regulates poorly and gets $360M Northern Endeavor clean-up bill URL: https://www.boilingcold.com.au/poor-federal-regulation-allowed-the-360m-northern-endeavor-mess/ Last updated: 2021-12-27T01:34:17.000Z *EXCLUSIVE ANALYSIS* The Federal Government is burdened with an expensive clean-up of the rusty Northern Endeavour oil vessel because of its own ineffective regulations, according to information in a report by an experienced UK oil and gas regulator. The vessel’s owner Northern Oil and Gas Australia went into liquidation in February after safety regulator NOPSEMA shut down production due to a string of safety incidents, many related to corrosion. Inexperienced NOGA was not helped by inheriting a vessel that for more than a year received from Woodside reduced maintenance only suitable for an asset about to be scrapped. After NOGA went into liquidation Resources Minister Keith Pitt asked Steve Walker, who headed UK oil and gas safety regulation for five years, to find what went wrong. The Government released a [summary of his findings](https://www.minister.industry.gov.au/ministers/pitt/media-releases/update-safety-northern-endeavour?ref=boilingcold.com.au) in August, but the [full report](https://www.industry.gov.au/sites/default/files/2020-09/disclosure-log-20-036.pdf?ref=boilingcold.com.au) only became available this week after a freedom of information request. [Sellers of oil and gas assets should stay liable for cleanup: reportNorth Sea expert recommends changes to stop a repeat of Woodside escaping a $360 million cleanup bill by paying a tiny inexperienced company to take an old rusty asset.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/08/northern-endeavour.jpg)](https://www.boilingcold.com.au/sellers-of-oil-and-gas-assets-should-stay-liable-for-cleanup-report/) The new information allows the fullest picture yet of how Woodside made $132 million, NOGA’s [creditors lost $165 million](https://www.boilingcold.com.au/failed-oiler-northern-endeavour-owes-165m/), and the Federal Government inherited a $362 million clean-up bill. It is a tale of liability shifting from two oil and gas giants to a tiny inexperienced one-man outfit and then to the Federal Government while safety concerns mounted, one regulator was powerless, and the other dithered. This tale starts with a deal, perhaps a deal too good to be true: take my rusty old asset and have some cash too. ## The deal The first step towards NOGA’s liquidation was when Woodside switched from a long-planned decommissioning to consider selling the Northern Endeavor and its Laminaria and Corallina oil fields 550km north of Darwin. The Northern Endeavour produced less than 3000 barrels of oil a day in 2015, a fraction of its peak of 180,000 bbl a day. Woodside thought the Laminaria and Corallina fields would be uneconomic by the end of 2016 and nearby exploration prospects “were either too small, too deep, or likely to be gas rather than oil (and therefore unsuitable for the Northern Endeavour)” according to the Walker report. NOGA, with no experience in offshore oil and gas, thought Australia’s largest oil and gas company was wrong. The company with a single owner and director Angus Karoll planned to restart a well shut-in with a stuck tool, develop a nearby prospect, and “had longer-term ideas for utilising the Northern Endeavour FPSO as a regional hub for fields in neighbouring Timor-Leste waters.” The optimistically ambitious NOGA was formed in August 2015 and a month later signed an agreement to buy the assets off Woodside and minor partner Talisman, part of Spain’s Repsol. The deal completed in April 2016 when NOGA bought the Talisman subsidiary TOGA that owned its share in the Northern Endeavour, and then TOGA bought out Woodside’s interest. ## The devil is in the dollars Woodside and NOGA would not divulge the financial details of the sale to Walker. Still, much is on the public record from Woodside’s annual reports and filings with Australia’s corporate regulator ASIC by NOGA and its related companies. Woodside assigned a $US156 million decommissioning liability to its share of the Northern Endeavor in its 2015 annual report. The split of the asset between Woodside and Talisman was complex, with the two companies having different shares of two offshore titles and Woodside owning 100 per cent of the Northern Endeavor. However, TOGA’s 2015 filing to ASIC states that Woodside shouldered about 60 per cent of the decommissioning liability, giving a total cost of $US260 million ($362 million) to clean up the asset. (*Author’s note: I have reported a lower decommissioning cost in the past as I did not factor in that Woodside’s estimate was for its share only).* Most of the decommissioning cost is likely to be spent on a drilling rig to plug and abandonment the subsea wells so they will be safe in perpetuity. So, in April 2016 inexperienced NOGA gained an asset Woodside thought would be uneconomic in eight months and a massive decommissioning liability. Luckily for NOGA, it also had some cash. Woodside paid NOGA $US16.5 million cash and $5.4 million in services to take its share of the Northern Endeavor, according to NOGA’s 2016 filing to ASIC. The services were most likely for Woodside’s operation of the asset before NOGA’s contractor Upstream Production Solutions took over later in 2016. Woodside attributed a value of $US95 million ($132 million) to the deal by a reversed impairment. Woodside’s gain is likely to allow for the payments to NOGA and be after tax, so is less than the decommissioning cost the company avoided. Whether NOGA also received cash from Talisman is not known. ## NOPTA no teeth The National Offshore Petroleum Titles Administrator had long known of Woodside’s plans to decommission the Northern Endeavour. It only became aware of the switch to a sale in December 2015, three months after the agreement was signed. “NOPTA realised the significance of what was being proposed,” Walker wrote. > “Woodside, an ASX-listed company with significant assets and upstream experience in Australia and elsewhere, was exiting from the title and therefore from its decommissioning liabilities.” > In its place was “privately-owned NOGA, recently created and with no background in offshore petroleum.” > “In particular, NOPTA had concerns over the uncertainty of…NOGA’s financial capacity, and their ability to meet any future decommissioning liabilities.” Time would prove NOPTA right, but it was powerless to do anything. NOPTA is only empowered to assess the financial strength of new titleholders, not existing ones. Under NOPTA’s legislation, the fact that TOGA was now owned by Angus Karoll’s NOGA and not Repsol was not relevant, as the company name on the title was unchanged. And NOPTA no choice but to rubber-stamp the transfer of equity from Woodside to TOGA. Australia’s oil and gas players commonly set up subsidiaries that are titleholders in different fields. Without revised legislation, the Federal Government cannot stop the sale of these subsidiaries to anyone. ## The U-turn Walker described the decision to “life extend an ageing asset which had been preparing for end of economic life and decommissioning” as a U-turn with significant implications. Woodside was maintaining the Northern Endeavor “in the context of an ageing asset that was being prepared for end of field life and decommissioning.” “The amount of maintenance and investment would sensibly focus on what is essential for the asset to arrive at the cut-off decommissioning date in a legal, safe and effective condition, but not overinvest in an asset that was nearing the end of its economic life.” Woodside’s approach was entirely reasonable for a facility that would soon be shut down, but that was not the only option Woodside was pursuing. “Woodside explained that it progressed both the sale and decommissioning planning in parallel for over a year until the sale was finalised,” the Walker report stated. *Boiling Cold* asked Woodside why it continued to maintain the Northern Endeavour as though it was to be decommissioned for a period of over a year when a sale was a known option? Woodside responded with a reference to the Walker Report that did not answer the question. Walker said corrosion was the biggest problem caused by vessel’s age. Corrosion would feature heavily in NOGA’s downfall. ## Safety can wait Interest in NOGA’s collapse has focused on the decommissioning liability falling on the Federal Government. The other question is why a facility where numerous safety risks that were demonstrably poorly managed was allowed to operate for so long? When UPS took over as operator in September 2016, it inherited a vessel with problems. A NOPSEMA inspection in October found “extensive corrosion was present throughout the facility.” There were 21 NOPSEMA recommendations from Woodside’s time as an operator that were outstanding. Damaged piping that carried firefighting foam had not been fixed almost three years after NOPSEMA recommended it be “permanently repaired and fit for purpose.” NOPSEMA added 16 more recommendations to the UPS to-do list, including the need for a plan to reduce the risk from corrosion. It was a bad starting point. Things did not improve. On an afternoon in February 2017, a 3kg piece of equipment fell 8m and just missed a worker. The [UPS report to NOPSEMA](https://www.nopsema.gov.au/assets/Freedom-of-information/F095/A554483.pdf?ref=boilingcold.com.au) said the dropped object would have “most likely have caused a fatality” had it hit the worker. Walker described this near-fatality as “another example of the issues arising from the U-turn of Woodside’s decision to decommission.” In April 2017, the vital corrosion risk plan NOPSEMA recommended six months ago was incomplete. At this point, NOPSEMA knew there was widespread corrosion on the Northern Endeavour, the operator had no plan to manage the risk, and corrosion had nearly killed a worker. So, what did the body charged with ensuring the safety of offshore workers do? NOPSEMA gave UPS six more months to complete the plan. In March 2019, two years and five months after NOPSEMA called for a corrosion plan, UPS had not “done enough to comply” and “there was still substantial structural corrosion at the facility.” Another potentially fatal dropped object incident occurred in July 2019 that [according to NOPSEMA](https://www.nopsema.gov.au/assets/Published-notices/A682075.pdf?ref=boilingcold.com.au) was in part due to the “failure to adequately identify and rectify structural corrosion.” NOPSEMA then finally ordered that the Northern Endeavour cease production and be made safe. The resultant revenue loss was eventually too much for an already financially weak NOGA. *Boiling Cold* asked NOPSEMA why it allowed the Northern Endeavour to operate for 2.5 years after a near-fatal incident caused by corrosion when there was ample evidence that corrosion was significant, widespread and not well managed by UPS? A NOPSEMA spokesperson said as evidence of widespread corrosion escalated in 2018 it issued improvement notices to UPS, but the company went to the Fair Work Commission for a review. “The matter remains before the Commission and no further comment can be provided,” the spokesperson said. Walker said NOPSEMA should have focussed more on “root causes such as contractual issues, financial resourcing, senior management commitment, safety culture, failures of internal company monitoring, auditing and reviews, and titleholder–operator relationships.” ## Split responsibilities NOGA owned the Northern Endeavor and the titles to its oil fields, and paid UPS to operate the vessel. It was an unusual division of responsibility in Australia where almost all offshore oil and gas facilities are operated by one of the owners. Walker noted that while UPS was legally responsible for safety it “was not in control of the maintenance budgets and was operating in an environment which was strongly production-oriented, seeking to reduce overall operating costs on an ageing asset.” UPS told Walker it regularly received less money than it needed from NOGA. Conversely, NOGA said it was “massively overcharged” by UPS. A troubled asset like the Northern Endeavour does not benefit from being looked after by warring parties. At one stage UPS workers were fixing issues identified by one NOPSEMA notice while NOGA had separate contractors tacking problems from a different NOPSEMA notice, despite significant overlap in the two work scopes. Walker recommended that the legislation be changed to ensure owners retain some responsibility for operations when they sub-contract the role. ## Missing details of a missed opportunity Walker’s report indicates regulators had an opportunity to intervene in late 2017 when one of NOGA’s licenses needed to be renewed. NOPTA is only authorised to make minor decisions and for big calls provides advice to the Joint Authorities. The JA’s are usually the Federal Resources Minister and a minister from the relevant State Government. However, in the distant waters close to the Timor-Leste border then Federal Minister for Resources Senator Matt Canavan was the sole JA. The Walker Report states “licence renewal is a decision for the JA” and after a large chunk of redacted text states “I think this was a missed opportunity” where the knowledge of NOPTA and NOPSEMA “was not being put to best use.” The information available strongly suggests Canavan received relevant advice from the regulators but did not act on it. At the time the 2015 and 2016 filings for NOGA companies had become available from ASIC and revealed losses of $US30 million and $US27 million. For both years, auditor EY stated there was “a material uncertainty that may cast significant doubt” about NOGA’s “ability to continue as a going to concern.” [Australia’s oil and gas industry will create a $76B clean-up billIt will cost $76 billion to clean up after Australia’s oil and gas industry, with a good chunk to be borne by taxpayers, and no one is in a hurry to start the work.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/05/XOM-Bass-Strait-platform-reduced.jpg)](https://www.boilingcold.com.au/australias-oil-and-gas-industry-will-create-a-76b-clean-up-bill/) ## Time for a fix There is no suggestion that any of the players in this saga operated outside the law. The law is the problem. There is an opportunity for change. The Federal Government is in the final stages of [reviewing how it manages decommissioning](https://www.industry.gov.au/data-and-publications/offshore-oil-and-gas-decommissioning-framework-review?ref=boilingcold.com.au) and has launched reviews of NOPSEMA and NOPTA. Oil and gas majors such as ExxonMobil, Chevron and ENI are in the process of divesting some of their Australian assets, and the buyers will most likely have less financial strength. With oil and gas decommissioning in Australia estimated to cost [$76 billion over the next 30 years](https://www.boilingcold.com.au/australias-oil-and-gas-industry-will-create-a-76b-clean-up-bill/), the nation does not need any more fiascos like the Northern Endeavor. The Federal Government is paying UPS about $1.4 million a week to look after the Northern Endeavour while it waits for the $8.8 million of advice on what to do next it has ordered from Woodside. All of this is on top of the eventual decommissioning cost, that was $362 million the last time Woodside looked at it. What a mess. --- *Main image: Northern Endeavour floating production storage and offloading vessel. Source: Northern Oil and Gas Australia* --- ### Alcoa backs Warrego's West Erregulla with gas buy URL: https://www.boilingcold.com.au/alcoa-backs-warregos-west-errugulla-with-gas-buy/ Last updated: 2023-01-05T00:31:16.000Z The Perth Basin’s West Erregulla gas field now has the firm backing of two of WA’s biggest gas buyers after Alcoa signed a deal with Warrego Energy. The alumina manufacturer will take [155 petajoules of gas from 2024](http://asx.warregoenergy.com/site/PDF/13373f03-6987-4b3e-abfe-4aa05fb9b0d4/WarregoandAlcoaSignLongTermGasSalesAgreement?ref=boilingcold.com.au) subject to Warrego and its partner Strike Energy making a final investment decision planned for the first half of 2021. Warrego said it continued to market gas from West Erregulla, but it does not need any further sales to support the investment. Alcoa’s Warrego deal is equivalent to 25 terajoules a day for 17 years. Warrego chief executive Dennis Donald said he was pleased to do a deal with WA’s largest and most experienced gas buyer, Alcoa. Strike, that operates and owns the other 50 per cent of West Erregulla, firmed up a 100 PJ deal with Wesfarmers’ CSBP in August. The fertiliser manufacturer will take 25 terajoules a day for 11 years. The first phase of West Erregulla will produce 50 TJ a day. A second phase is planned to add between 100 and 200 TJ a day. Nearby Waitsia, owned by operator Mitsui and Beach Energy, has followed a similar staged approach. Currently 20 TJ a day is produced thorough the Xyris production facility and the companies plan to make a final investment decision on the 250 TJ a day Stage 2 in the December quarter. Mitsui will build a dedicated plant for Waitsia Stage 2. ![map of Perth Basin gas fields: Waitsia, Beharra Springs, West Erregulla](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/09/image-14.png) **Perth Basin gas field**. Source: Strike Energy. The West Erregulla partners are considering a range of processing options, including third-party or shared facilities. West Erregulla Phase 2 gas will need to find buyers in WA after the State Government in August banned the export of onshore gas overseas or to other states. The Government controversially exempted Waitsia from the ban for the first five years of its Stage 2 production. [McGowan: onshore gas export banned, unless its Stokes’ WaitsiaWA Premier Mark McGowan has extended WA’s successful gas reservation policy to all onshore gas - except Waitsia that is backed by a powerful media boss Kerry Stokes![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/08/Indicative-image-of-proposed-Waitsia-Gas-Plant-looking-east.jpg)](https://www.boilingcold.com.au/mcgowan-onshore-gas-export-banned-unless-its-stokes-waitsia/) Alcoa has a long but mixed history of getting involved in the initial stages of gas projects to ensure continued supply to its three alumina refineries in the South West. Alcoa and the WA Government underwrote the construction of the Dampier to Bunbury natural gas pipeline in the early 1980s. The company was part of the consortium that bought the pipeline in 2004 after it went into receivership under the stewardship of its first private Epic Energy. Alcoa maintained a stake until 2016. [Alcoa’s search for gas went as far as the Kimberley](https://www.energynewsbulletin.net/finance-legal/news/1143666/alcoa-relents-debt?ref=boilingcold.com.au) in 2007 with a $40 million loan to ARC to develop the Canning Basin. The effort was not successful and ARC’s successor Buru had to pay the money back a decade later. Closer to its refineries, in 2011 Alcoa put up [$25 million as prepayment](https://www.perthnow.com.au/news/wa/alcoa-in-gas-supply-deal-with-empire-oil-gas-erm-power-wharf-resources-ng-029f617256ee89488c8ccd9b790286e3?ref=boilingcold.com.au) for gas to support Empire Oil and Gas’ Red Gully project in the Perth Basin. Empire failed in 2017 after a blocked well halted production, and [MinRes bought the asset](https://thewest.com.au/business/energy/minres-snaps-up-collapsed-empire-oil-gas-assets-ng-b88655467z?ref=boilingcold.com.au). When Quadrant Energy was formed in 2015 to buy Apache energy’s oil and domestic gas operations in WA Alcoa backed the deal with a $US500 million prepayment for gas. Santos, that bought Quadrant in 2018, is delivering the gas. --- *Main image: Drilling at West Erregulla. Source: Strike Energy* --- ### Chevron gets final OK for extended Gorgon fix URL: https://www.boilingcold.com.au/chevron-gets-final-ok-for-extended-gorgon-fix/ Last updated: 2021-12-27T00:38:54.000Z Chevron has avoided a complete shutdown of its $US54 billion Gorgon LNG plant after WA safety regulator WorkSafe this week approved the staggered repair of propane vessels. LNG Train 2 at the three-train plant has been shut down since May as workers grind out and repair faulty welds in eight propane filled heat exchangers, also called kettles. Trains 1 and 3 with near-identical kettles have continued to operate, leading to union concerns about the safety of maintenance workers on nearby Train 2. In early August two WA safety regulators within the Department of Mines, Industry Regulation and Safety, WorkSafe and the Dangerous Goods Directorate, [acted to ensure all 24 kettles were inspected and repaired](https://www.boilingcold.com.au/safety-cop-orders-chevron-to-fix-gorgon/). Two weeks later the Dangerous Goods Directorate allowed Chevron to delay the Train 3 shutdown to early October and start work on Train 1 in January. However, the US major had to wait another month until its plans were approved by WorkSafe this week. A WorkSafe spokesperson said its 24 outstanding notices with Chevron now have to be complied with by various dates out to 30 April 2021. The complexity arose because pressure vessels at Gorgon straddled the responsibility of two regulators that independently administer separate acts. The Dangerous Goods Directorate covered Gorgon as it is classified as a major hazard facility. WorkSafe generally does not cover mining and petroleum activities, but the problems at Gorgon came within its remit as pressure vessels were involved. A new Work Health and Safety Bill that will supersede a variety of separate safety legislation and result in a single regulator is currently before Parliament. Both regulators intend to keep a close eye on Gorgon. A spokesperson for the Dangerous Goods Directorate said it remained in close contact with Chevron regarding all aspects of its work on Train 2 and pending inspection of Trains 1 and 3. “The Gorgon plant remains subject to the department’s ongoing regulatory oversight.” The completion of the Train 2 work was delayed after [Chevron used the wrong weld procedure](https://www.boilingcold.com.au/chevron-to-redo-its-botched-gorgon-weld-repairs/), requiring the work to be ground out and repeated. Chevron will want Train 2 back in operation before the agreed shutdown of Train 1 in early October. The thousands of cracks found in the welds at Gorgon may have prompted a broader review of pressure vessels across WA. “WorkSafe’s investigation is looking at the current safety of the pressure vessels and the implications for the safety of the plant,” the WorkSafe spokesperson said. “WorkSafe is working closely with Chevron to ensure the site remains safe to operate, “Aside from the current investigations, a proactive inspection program on high-risk pressure vessels is currently taking place, and Gorgon is included and will be visited as part of the project.” --- *Main image: Gorgon LNG plant on Barrow Island. Source: Chevron Australia Pty Ltd* --- ### WA EPA & industry make real moves to net-zero by 2050 URL: https://www.boilingcold.com.au/wa-epa-and-industry-make-real-moves-to-net-zero-by-2050/ Last updated: 2021-12-27T00:40:58.000Z Two significant projects by Fortescue and Mitsui will taper their carbon emissions towards zero by 2050 in the first tangible steps towards cutting WA's soaring emissions. The WA Environmental Protection Authority has recommended significant emission cuts or offsets for Mitsui's Waitsia gas project and a power plant for Fortescue that substantially match the companies' plans. Fortescue's 165-megawatt gas-fired power station for its Iron Bridge magnetite project will emit about 670,000 tonnes of CO2 a year when it starts up in 2025 and emissions will be progressively reduced or offset to zero by 2040. Waitsia will reduce or offset 60% of its planned 300,000 tonnes a year of carbon emissions and make a further 10 per cent cut by 2040. Waitsia would spend about $2.8 million on offsets in its first year if purchased at the average price of [$15.74 a tonne of CO2](http://www.cleanenergyregulator.gov.au/ERF/Pages/Auctions%20results/September%202020/Auction-September-2020.aspx?ref=boilingcold.com.au) achieved at a Clean Energy Regulator auction in early September. Both companies said they would prioritise emission reductions before the purchase of carbon offsets. Emissions from Woodside's existing North West Shelf LNG plant and planned second LNG train at Pluto, Chevron's Wheatstone LNG plant and Perdaman's proposed urea plant are all before the EPA for review. ## Back with a bark Climate heating carbon emissions from WA [increased](http://www.environment.gov.au/system/files/resources/917a98ab-85cd-45e4-ae7a-bcd1b914cfb2/files/state-territory-inventories-2017.pdf?ref=boilingcold.com.au) 23% from 2005 to 2017, mainly due to new LNG plants while all other states recorded drops of at least 10 per cent. WA's environmental watchdog appeared vanquished in March 2019 after it attempted to rein in WA's emissions. The State's big polluters ignited a media frenzy and pressured the State Government to quash an EPA guideline that it would recommend the offset of all carbon emissions from large new projects. While the Environmental Protection Authority worked on a new approach, the State Government announced in August 2019 an "aspiration of net zero by 2050" in a greenhouse gas policy for major projects. The [policy ](http://www.dmp.wa.gov.au/Petroleum/New-emissions-policy-25793.aspx?ref=boilingcold.com.au)that required no emission reductions before 2050 was welcomed by Woodside, the chief opponent of the EPA's full offset proposal, and was reported as an [attempt by the Government to muzzle the EPA](https://www.afr.com/policy/energy-and-climate/wa-moves-to-muzzle-emissions-watchdog-20190828-p52ljb?ref=boilingcold.com.au). Minister for Energy Bill Johnston released the policy, not the Minister for Environment Stephen Dawson. Johnston said there were no plans to nominate interim reduction targets for the 30 years to 2050. At the time EPA chair Tom Hatton said the scientific consensus was that to limit global heating emissions had to reduce to net-zero by 2050 gradually. The EPA [published a new guideline](https://www.boilingcold.com.au/carbon-emissions-hurdle-for-wa-projects-finalised-by-epa/) in April 2020 that required proponents of new projects to submit a plan that showed emissions reductions over the life of the project as well as a contribution to net-zero by 2050. ## Waitsia gas production, FMG gas consumption Mitsui initially planned to reduce or offset 10% of Waitsia's emissions by 2025 and 26% by 2030, according to a greenhouse gas management plan submitted to the EPA in May 2020. The proposal [ignored a long-standing practice](https://www.boilingcold.com.au/waitsia-gives-mcgowan-gas-powered-climate-dilemma/) in WA to require the offset of all CO2 that comes from the reservoir: about 60 per cent of Waitsia's emissions due to the reservoir having a CO2 content of about six per cent. In August Mitsui issued a revised plan to offset all reservoir emissions and achieve a further 10 per cent cut in 2040. A Mitsui spokesperson said the company would focus on avoidance or reduction of emissions but said if required there are sufficient offsets available to meet the targets. Mitsui and its partner Beach Energy are targeting a final investment decision in the December quarter. Fortescue did not nominate emission cuts in its first submission to the EPA as company-wide targets were under development. In June Fortescue released its goal of zero operational emissions by 2040, starting with a 26 per cent drop this decade and shortly afterwards issued a complying plan for the power station. Fortescue chief executive Elizabeth Gaines said the iron ore miner's goal of net-zero operational emissions by 2040 led the industry. "This goal is core to Fortescue's climate change strategy and is underpinned by a pathway to decarbonisation, including the reduction of Scope 1 and 2 emissions…by 26 per cent from 2020 levels, by 2030," Gaines said. "Our primary focus is on avoidance and reduction of our emissions, with offsets used to address residual emissions where economically viable decarbonisation opportunities and technologies are unavailable." ## Not just words, deeds required Three appeals have been lodged against the EPA's recommendations for the Fortescue Power station, and Waitsia has attracted 21 appeals. Spokespeople for Fortescue and Mitsui said the companies had not appealed. After the Appeals Convenor investigates the appeals the EPA's recommendations go to the Minister for Environment Stephen Dawson for approval. Dawson is obliged to consider the EPA's advice on environmental issues but can go against them for other reasons. With the proponent's plans very close to the EPA's recommendations, it would be unusual for a minister to reject the emissions reduction conditions for being too demanding. The Department of Water and Environmental Regulation administers and enforces whatever conditions Dawson signs off. EPA chair Tom Hatton said both companies would breach their conditions if they failed to meet the emissions targets outlined in the proposed Ministerial conditions. "If the CEO of the DWER finds that the proponent has not complied with an implementation condition, then the CEO may exercise any power in respect of the non-compliance that is afforded to him under a written law," Hatton said. ## Old and new gas projects under EPA spotlight An EPA spokesperson said the authority had used the new guideline on all proposals under consideration since it was issued on 16 April 2020. Large projects with significant emissions currently before the EPA include the life extension of Woodside's North West Shelf LNG plant and Perdaman's proposed urea plant nearby. In December 2019 Woodside submitted to the EPA a [plan to limit NWS LNG plant carbon emissions](https://www.epa.wa.gov.au/sites/default/files/PER%5Fdocumentation2/NWS%20Project%20Extension%20-%20Appendix%20B%20-%20Greenhouse%20Gas%20Management%20Plan.pdf?ref=boilingcold.com.au) by 330,000 tonnes a year and ensure any changes to the plant did not result in more than 7.7 million tonnes a year of emissions. The NWS LNG plant produced 6.85 million tonnes of carbon emissions in the 12 months to June 2018, according to a [Woodside emissions report](https://www.epa.wa.gov.au/sites/default/files/PER%5Fdocumentation2/NWS%20Project%20Extension%20-%20Appendix%20F%20-%20Greenhouse%20Gas%20Benchmarking%20Report.pdf?ref=boilingcold.com.au). The Perdaman urea plant would emit about 650,000 tonnes of greenhouse gases a year, according to a [greenhouse gas management plan](https://www.epa.wa.gov.au/sites/default/files/PER%5Fdocumentation2/Appendix%20K%20-%20Management%20Plans%5F09%20Air%20Qal%20GHG%20MP%20Ver1.pdf?ref=boilingcold.com.au) submitted to the EPA in March. Perdaman proposed to reduce emissions by five per cent by 2035 and an additional five per cent by 2050. The plans for both projects fall well short of the EPA's guideline. Woodside also intends to build a second LNG train at its Pluto plant under a primary environmental approval received when it built the first train. However, [a revised greenhouse gas management plan is required](https://www.energynewsbulletin.net/policy/news/1380855/could-greenhouse-gas-management-delay-pluto-expansion-%C2%A0?ref=boilingcold.com.au), and the EPA will assess it under its new guideline. Chevron's Wheatstone LNG plant is also under review. The project's owners committed to the investment in 2011 [knowing there was a requirement to offset emissions](https://thewest.com.au/business/oil-gas/chevron-forced-to-confront-gas-problem-ng-b88721789z?ref=boilingcold.com.au) from the reservoir. The Barnett Government removed the requirement in 2013 on the basis that it overlapped with Federal Labor's now rescinded carbon price. In early 2018 the State Government requested the EPA to review Wheatstone's emissions. If the EPA makes a recommendation in line with its long-standing practise Wheatstone will have to offset about 1.1 million tonnes of reservoir CO2\. The regulator's new guideline means it may also ask for the other 2.9 million tonnes of greenhouse gases to be gradually cut or offset to zero. The EPA expects to publish its report on Wheatstone by the end of the year, a spokesperson for the regulator said. Such requirements will massively increase the demand for offsets and make sense of Shell's decision this year to [invest in Australian carbon farming](https://www.boilingcold.com.au/shell-goes-carbon-farming-in-australia/). The State Government's commitment to emissions reduction will be tested if, unlike Mitsui and Fortescue, a project proponent cannot agree with the EPA and opposes the regulator's recommendations. Minister Dawson's decision in that scenario would indicate the strength of the McGowan Government's commitment to its "aspiration" of net-zero emissions by 2050. Another signpost will be the State Climate Policy due for release before Christmas that will, according to the major projects GHG policy of August 2019, consider "opportunities to transition WA towards net-zero by 2050." --- *Update 3PM 26 September 2020: Added that the EPA expects to report on Wheatstone this year.* --- ### Taylor’s roadmap flawed: renewables doable almost everywhere URL: https://www.boilingcold.com.au/taylors-roadmap-flawed-renewables-doable-almost-everywhere/ Last updated: 2021-12-27T13:57:18.000Z *[Mark Diesendorf](https://theconversation.com/profiles/mark-diesendorf-226?ref=boilingcold.com.au), [UNSW](https://theconversation.com/institutions/unsw-1414?ref=boilingcold.com.au)* The Morrison government on Tuesday revealed the five low-emissions technologies it will prioritise for investment. The so called “[technology roadmap](https://www.industry.gov.au/data-and-publications/technology-investment-roadmap-first-low-emissions-technology-statement-2020?ref=boilingcold.com.au)” offers scant support for renewable energy, for reasons that do not stand up to scrutiny. The technologies at the centre of the roadmap are: - clean hydrogen - energy storage - low-carbon steel and aluminium - carbon capture and storage - soil carbon. Federal energy minister Angus Taylor said proven technologies such as solar and wind “are not the focus of the roadmap”. Over the past week or so, Taylor has sought to justify the government’s lack of support for renewable energy. This includes [saying](https://www.abc.net.au/radionational/programs/breakfast/taylor-gas-17-sept/12672104?ref=boilingcold.com.au) two-thirds of Australia’s emissions now are produced “outside the electricity grid” – implying renewable energy has little role to play beyond the power sector. But I believe that claim is misleading. ## Renewables are versatile The graph below, [based on official data](https://www.industry.gov.au/sites/default/files/2020-07/nggi-quarterly-update-dec-2018.pdf?ref=boilingcold.com.au), shows the sources of Australia’s greenhouse gas emissions in 2018\. It reveals 82% of the national total stems from energy emissions. This does not just include electricity generation, but non-electrical heating, transport, and emissions from extracting, moving and using fossil fuels (or fugitive emissions). Almost all these emissions can be [avoided](https://www.climateworksaustralia.org/resource/decarbonisation-futures-solutions-actions-and-benchmarks-for-a-net-zero-emissions-australia/?ref=boilingcold.com.au) by renewable energy, such as by: - using electric heat pumps (such as reverse cycle air conditioners), solar hot water, and geothermal and solar thermal for heating - replacing gas and coal with renewable energy for heating in [industrial processes](https://arena.gov.au/assets/2019/11/renewable-energy-options-for-industrial-process-heat.pdf?ref=boilingcold.com.au) - a transition to [electric vehicles](https://thedriven.io/?ref=boilingcold.com.au) plus cycling and walking. Technologies to support these uses are already commercially available. Renewable electricity cannot directly replace fossil fuel use in activities such as air and sea transport, and industrial processes such as steel-making. But with a bit of development, it can be used to produce [“green” hydrogen](https://grattan.edu.au/news/green-steel-is-no-longer-a-fantasy/?ref=boilingcold.com.au) and ammonia, which promise to decarbonise those areas. Hydrogen is not the emissions reduction panacea Taylor seems to suggest it is. However, together with energy efficiency, green hydrogen could substitute for Australia’s non-energy industrial emissions (6.4%) together with those from air and sea transport (about 5%). ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/09/image-12.png) ## Hydrogen: a trojan horse? The roadmap prioritises “clean” hydrogen. This does not just refer to hydrogen produced using renewables — the government says hydrogen can be produced cleanly with coal and gas if resulting carbon is captured and stored. In fact, the plan claims fossil fuel-derived hydrogen “might be the lowest cost clean production methods in the short-term”. Carbon capture and storage is an [expensive, energy-wasting technology](https://www.theguardian.com/commentisfree/2018/feb/16/itd-be-wonderful-if-the-claims-made-about-carbon-capture-were-true?ref=boilingcold.com.au). Despite federal governments having spent more than [A$1.3 billion](https://www.aph.gov.au/Parliamentary%5FBusiness/Committees/Senate/Environment%5Fand%5FCommunications/CarbonCaptureBill/Report/d02?ref=boilingcold.com.au) on the technology, a commercially viable plant has not come to fruition. The government will also establish Australia’s first regional hydrogen hub, at a cost of [A$70 million](https://www.minister.industry.gov.au/ministers/taylor/media-releases/investment-new-energy-technologies?ref=boilingcold.com.au), to “scale-up demand and take advantage of the advancements in this low emissions, high powered source of energy”. Almost all the proposed locations are close to coal mines or gas field, suggesting the government is preparing to wager big on hydrogen from fossil fuels. In fact, the government’s plans on hydrogen (and associated steel and aluminium production), as well as carbon capture, may all lock in fossil fuel use for decades. This outcome is completely at odds with what’s needed to address the [climate emergency](https://theconversation.com/earth-may-temporarily-pass-dangerous-1-5-warming-limit-by-2024-major-new-report-says-145450?ref=boilingcold.com.au). ## Renewable energy: a market failure The Morrison government [says](https://www.minister.industry.gov.au/ministers/taylor/media-releases/investment-new-energy-technologies?ref=boilingcold.com.au) solar panels and wind farms “are now clearly commercially viable and have graduated from the need for government subsidies”. The roadmap classifies renewables as mature technologies, giving them low priority. The government intends only to invest in such mature technologies “where there is a clear market failure, like a shortage of dispatchable generation, or where these investments secure jobs in key industries.” But an existing market failure means the future of wind and solar farms is by no means assured. [Congestion](https://reneweconomy.com.au/wind-and-solar-farms-face-more-cutbacks-due-to-new-network-constraints-42800/?ref=boilingcold.com.au) on transmission lines is limiting renewables growth. More infrastructure is urgently [needed](https://reneweconomy.com.au/four-key-steps-to-take-australia-towards-100-per-cent-renewable-electricity-29993/?ref=boilingcold.com.au) to connect renewable energy to the grid, and transmit it where required. Federal funding is also needed urgently to help the states create renewable energy zones, as [recommended by](https://aemo.com.au/-/media/files/major-publications/isp/2020/final-2020-integrated-system-plan.pdf?ref=boilingcold.com.au) the Australian Energy Market Operator (AEMO). These areas would involve the coordinated development of grid infrastructure, such as transmission lines, in places with big renewable energy potential. Yet the government package doesn’t prioritise these essential measures – and markets will not build them. ## Reason to hope Amid the economic downturn brought on by COVID-19, there were high hopes the Morrison government would invest in a green-led recovery. While its roadmap contains a few bright spots, such as a focus on energy storage, overall it is not the emissions-busting plan Australia needed. But there is reason for hope. In the absence of federal government leadership on emissions reduction, others are stepping up with ideas. The [Million Jobs Plan](https://bze.org.au/wp-content/uploads/BZE-Million-Jobs-Plan%5FFINAL%5Fweb.pdf?ref=boilingcold.com.au), for example, envisages investment in zero-emissions technologies that could create more than a million new jobs in Australia over five years. The plan, by think tank Beyond Zero Emissions, has been backed by Atlassian co-founder Mike Cannon-Brookes and senior business leaders. [Other](https://www.climatecouncil.org.au/wp-content/uploads/2020/07/Climate-Council%5FAlphaBeta-Clean-Jobs-Plan-200720.pdf?ref=boilingcold.com.au) groups have proposed similarly promising [plans](https://assets.cleanenergycouncil.org.au/documents/advocacy-initiatives/A-Clean-Recovery.pdf?ref=boilingcold.com.au). The government’s latest energy plans are a failure of logic. An economic recovery that moves Australia far beyond fossil fuels is the way forward environmentally, socially and economically. --- *[Mark Diesendorf](https://theconversation.com/profiles/mark-diesendorf-226?ref=boilingcold.com.au), Honorary Associate Professor, [UNSW](https://theconversation.com/institutions/unsw-1414?ref=boilingcold.com.au)* *This article is republished from [The Conversation](https://theconversation.com/?ref=boilingcold.com.au) under a Creative Commons license. Read the [original article](https://theconversation.com/angus-taylors-tech-roadmap-is-fundamentally-flawed-renewables-are-doable-almost-everywhere-146352?ref=boilingcold.com.au).* --- *Main image: screenshot of Technology Investment Roadmap [video](https://www.industry.gov.au/data-and-publications/technology-investment-roadmap-first-low-emissions-technology-statement-2020?ref=boilingcold.com.au). Source: Department of Industry* --- ### WA pushes green hydrogen hub near Geraldton URL: https://www.boilingcold.com.au/wa-pushes-green-hydrogen-hub-near-geraldton/ Last updated: 2021-12-27T00:40:02.000Z The WA Government is looking for partners to turn the proposed Oakajee industrial area into a hub for the production and use of green hydrogen. After more than a decade of efforts to turn the area 23km north of Geraldton into an export port for iron ore, Regional Development Minister Alannah MacTiernan has called for expressions for interest to develop renewable hydrogen projects. The State Government wants to hear from companies interested in producing and using renewable hydrogen, as well as providers of infrastructure and technology. The EOI is focused on the domestic use of the hydrogen but does not preclude future export. Green or renewable hydrogen is made in electrolysers powered with renewable energy that split water into hydrogen and oxygen. Blue hydrogen is an alternative carbon emissions-free product. Hydrogen is separated from methane in a process called steam methane reforming and the carbon dioxide produced is buried. Most of the world's current hydrogen supply is produced using steam methane reforming but the carbon dioxide is vented to the atmosphere. The proposed industrial area is surrounded by a 4000-hectare buffer zone that, according to the [EOI](https://www.jtsi.wa.gov.au/economic-development/economy/renewable-hydrogen-industry/oakajee-renewable-hydrogen-eoi?ref=boilingcold.com.au) released on Friday, has the potential to generate up to 270 megawatts of wind power and 1250 megawatts of solar energy. The Mid West of WA has a world-class combination of solar irradiation and high capacity wind resource. An initial assessment by the Government indicated that the solar panel and wind turbines supported by gas peakers could produce power that cost less than 10c a kilowatt-hour on a levelized basis. Oakajee is about 50km from the main gas pipeline from the Pilbara to the South West. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/09/image-4.png) **Energy infrastructure near Oakagee** Source: Oakagee EOI Report MacTiernan said interest in renewable hydrogen was accelerating. “Renewable hydrogen has the potential to be a major economic driver for the State, and the Oakajee Strategic Industrial Area could truly transform the Mid-West region,” MacTiernan said. “The State Government is keen to work collaboratively with industry through the EOI process and understand exactly what it will take to transform the area into a globally competitive producer and user of renewable hydrogen.” British oil and gas giant BP announced in May a study into the feasibility of a green ammonia plant near Geraldton. [BP begins chase for giant green ammonia plant in GeraldtonBP has joined Yara in looking at huge projects to unlock WA’s vast solar and wind resources to replace gas in the production of ammonia.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/05/Yara-ammonia-plant.jpg)](https://www.boilingcold.com.au/bp-to-chase-green-ammonia-in-geraldton/) Further south start-up Infinite Blue Energy wants to build a green hydrogen plant near Dongara. The Government wants the Oakajee site to eventually have infrastructure and reliable and affordable renewable power available to all users principally supplied through private sector investment. --- *Main image: Emu Downs wind farm. Source: APA.* --- ### South West 90% renewable power job boost plan URL: https://www.boilingcold.com.au/south-west-90-renewable-power-job-boost-plan/ Last updated: 2020-09-23T01:40:31.000Z Moving the South West of WA electricity supply to 90% renewable energy by 2030 could create an average of 5000 jobs across the decade, according to a plan by advocacy group Sustainable Energy Now. The [ambitious plan](https://www.sen.asn.au/?ref=boilingcold.com.au) launched by SEN this week was backed by modelling of the South West Interconnected System across the year and an estimate of direct jobs. The multiplier effect of employment to determine the number of indirect jobs created was conservatively ignored. The plan did not allow for a significant rise in demand SEN expects from electric vehicles and gas to electricity switching in commercial and industrial applications. During this decade, wind power capacity is assumed to increase five-fold, solar farms eight-fold and rooftop solar 2.5 times. To make way for more wind and solar power coal-fired generation is retired by 2030 and combined-cycle gas turbines by 2027. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/09/image-1.png) **SWIS generation capacity by technology** Source: SEN Report The total capacity of open-cycle gas turbines increases slightly. They are a large part of the generation capacity by 2030 and serve as so-called peakers - only running when there is insufficient power from wind, solar and storage – to generate the 10% non-renewable component of the power mix. While coal and combined-cycle gas disappear and other generation grows, the most significant change in the South West to achieve 90% renewable energy is storage. Utility-scale and household batteries with 3200 megawatt-hours capacity capable of delivering 1200 megawatts are required. To cover rarer but more extended periods with insufficient wind and solar power, the SWIS will need 8000 megawatt-hours of pumped hydro storage that can deliver 800 megawatts into the grid. WA is less-suited to pumped-hydro storage that eastern stated due to its flat topography. The Collie coal mines, and the Harvey and Wellington dams are possible sites for pumped-hydro storage are. The SEN report concluded 90% renewable energy by 2030 is technically possible but acknowledges it may not be realistic from a business perspective. SEN assumed that a rapid transition to a high penetration of renewable energy was driven by government policy that created a steady flow of work and jobs. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/09/image-2.png) **Predicted full time equivalent jobs** Source: SEN Report “In an isolated state like WA, a clear Government timeline for staged renewables rollout would enable commercial enterprises to invest in appropriate and sufficient manufacturing capacity,” the report stated. The alternative hands-off approach would likely “involve significant delay followed by problematic booms and busts.” Other roadblocks identified were an overcapacity of fossil fuel generation on the grid and possible constraints on wind farms connecting to Western Power’s transmission system. --- *Main image: Warradarge wind farm. Source: Bright Energy Investments* ### BP interested in North West Shelf LNG but not Browse URL: https://www.boilingcold.com.au/bp-interested-north-west-shelf-lng-not-browse/ Last updated: 2021-12-27T00:42:47.000Z BP appears to be committed to the North West Shelf for the long term, but not with gas from Browse. The British major that owns one-sixth of the Woodside-operated NWS intends to cut its oil and gas production by 40 per cent this decade as it pivots from oil and gas to be what it calls an integrated energy company. BP will sell off oil and gas assets worth $US25 billion off but judging from comments last night its interest in the NWS LNG plant near Karratha and its offshore facilities are not for sale. BP executive vice president for gas and low carbon energy Dev Sanyal said BP's NWS stake was material to the London-based business and a substantial cash generator. The NWS accounts for about a sixth of the liquefaction capacity BP owns. "We intend to optimise existing infrastructure through a combination of infill drilling, near-hub exploration and third-party gas," Sanyal said. US major Chevron has come to a different conclusion and is attempting to sell its own one-sixth stake in the NWS. Rystad Energy estimated in a presentation today that Chevron's stake is worth $US1.82 billion and listed Woodside, PetroChina and Macquarie as potential buyers. The North West Shelf partners sanctioned the development of Greater Western Flank Phase 3 in the first quarter of this year, but prospects for future infill drilling are diminishing. Wood Mackenzie estimates the decline in the NWS project's own gas supply could leave seven million tonnes of LNG capacity unused by 2027. Only some of this capacity is likely to be used by gas from nearby Pluto or the Waitsia field in the Perth Basin that plans take 1.5 million tonnes of capacity from late 2023. BP's primary reason to stay in the North West Shelf venture is most likely the "near-hub exploration" opportunity of Ironbark that it plans to start drilling in October and is about 50km from existing NWS infrastructure. If results from the Ironbark well are disappointing BP could revisit its commitment to the NWS. Sanyal did not mention BP's 17.3 per cent share of Woodside's Browse LNG project that plans to pipe gas 900km to the NWS facilities. BP requires gas projects to have a payback period of fewer than 15 years when a carbon price is factored into the project's cashflow. LNG from Browse would require more CO2 emissions for each tonne of LNG than any current Australian LNG project. It is unlikely that when Sanyal listed "infill drilling, near-hub exploration and third-party gas" as ways to fill the NWS plant with gas he was unaware that Browse, with its 900km pipeline, was excluded. Sanyal was speaking on the last of three days of presentations by BP management on its new low-carbon strategy. On Monday BP's energy outlook predicted strong growth in global LNG production, with volumes doubling by 2035 whether the world's energy system carries on as usual or if there is rapid decarbonisation to limit the damage from global heating. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/09/image.png) **Global LNG trade (billion cubic metres)**. Source BP Energy Outlook 2020 In all scenarios, BP predicts the volume of Australian LNG will remain roughly constant, indicating that the future for the industry is to keep existing plants supplied with gas, not building new ones. --- *Main image: North West Shelf LNG plant. Source: BP PLC.* --- ### BHP's road to cleaner mining URL: https://www.boilingcold.com.au/bhps-road-to-cleaner-mining/ Last updated: 2020-10-01T22:41:48.000Z BHP's priorities to cut its greenhouse gas emissions will be cleaner power, then electrify more activities and finally hydrogen. The changes are needed for the miner to meet a commitment to cut its emissions by 30 per cent this decade, announced yesterday by chief executive Mike Henry. The initial focus is to cut emissions from BHP's current electricity demand by switching to renewable energy. In late 2019 BHP signed renewable energy contracts to replace coal-fired power at two of its copper mines in Chile. Earlier this month it moved to source some of the power for its Queensland coal mines with new contracts for solar and wind power backed with gas. All the power to the mines currently comes from coal-fired power stations. BHP is yet to make a similar announcement for its most important asset: the Pilbara iron ore operation. Henry said later this decade the miner would start to remove diesel, that accounts for 40 per cent of its emission, from its mine sites. It's always going to be a competition in our mind between in-pit crushing and conveying, and trolley assist," Henry said. If the ore goes to crushers in the pit and is then moved by conveyors, both electric-powered, the amount of haulage by diesel-powered trucks is slashed. The alternative is trolley-assist trucks driven by electric motors. These are powered by tram-like overhead cables where installed, and their own diesel engines at other times. Henry said these changes would be implemented later this decade, with the timing dependent on fleet replacement needs and the pace of development of the new technologies. BHP expected these two options to become economically viable before hydrogen fuel cells for haul trucks. ## No loopholes Henry said BHP would not "shuffle things around on the portfolio" to meet its emissions reduction target. "I don't think it should be open to companies to claim advances on emissions reductions just because they divested certain assets," Henry said. "Because at the end of the day that does nothing for the world in terms of reducing actual emissions, "If we were to divest an asset that was Scope 1 and Scope 2 intensive, we would actually change the baseline, so there is no free-kick here for divestments, "But if we elect to develop a project or grow production out of an asset than we have to find other means of achieving decarbonisation." --- *Main image: Haulpak at BHP's Newman iron ore mine in the Pilbara. Source: BHP.* ### Methane explained: short-lived but long-term damage URL: https://www.boilingcold.com.au/methane-explained-short-lived-but-long-term-damage/ Last updated: 2021-12-27T13:57:38.000Z *[Zebedee Nicholls](https://theconversation.com/profiles/zebedee-nicholls-365241?ref=boilingcold.com.au), [University of Melbourne](https://theconversation.com/institutions/university-of-melbourne-722?ref=boilingcold.com.au) and [Tim Baxter](https://theconversation.com/profiles/tim-baxter-133963?ref=boilingcold.com.au), [University of Melbourne](https://theconversation.com/institutions/university-of-melbourne-722?ref=boilingcold.com.au)* Methane is a shorter-lived greenhouse gas - why do we average it out over 100 years? By doing so, do we risk emitting so much in the upcoming decades that we reach climate tipping points? The climate conversation is often dominated by talk of carbon dioxide, and rightly so. [Carbon dioxide](https://www.livescience.com/58203-how-carbon-dioxide-is-warming-earth.html?ref=boilingcold.com.au) is the climate warming agent with the biggest overall impact on the heating of the planet. But it is not the only greenhouse gas driving climate change. ## Comparing apples and oranges For the benefit of policy makers, the climate science community set up several ways to compare gases to aid with implementing, monitoring and verifying emissions reduction policies. In almost all cases, these rely on a calculated common currency - a carbon dioxide-equivalent (CO₂-e). The most common way to determine this is by assessing the global warming potential ([GWP](https://www.epa.gov/ghgemissions/understanding-global-warming-potentials?ref=boilingcold.com.au)) of the gas over time. The simple intent of GWP calculations is to compare the climate heating effect of each greenhouse gas to that created by an equivalent amount (by mass) of carbon dioxide. In this way, emissions of one gas - like methane - can be compared with emissions of any other - like carbon dioxide, nitrous dioxide or any of the myriad other greenhouse gases. These comparisons are imperfect but the point of GWP is to provide a defensible way to compare apples and oranges. ## Limits of metrics Unlike carbon dioxide, which is relatively stable and by definition has a GWP value of one, methane is a live-fast, die-young greenhouse gas. Methane traps very large quantities of heat in the first decade after it is released in to the atmosphere, but quickly breaks down. After a decade, most emitted methane has reacted with ozone to form carbon dioxide and water. This carbon dioxide continues to heat the climate for hundreds or even thousands of years. Emitting methane will always be worse than emitting the same quantity of carbon dioxide, no matter the time scale. How much worse depends on the time period used to average out its effects. The most commonly used averaging period is 100 years, but this is not the only choice, and it is not wrong to choose another. As a starting point, the Intergovernmental Panel on Climate Change’s (IPCC) [Fifth Assessment Report](https://www.ipcc.ch/report/ar5/wg1/anthropogenic-and-natural-radiative-forcing/?ref=boilingcold.com.au) from 2013 says methane heats the climate by 28 times more than carbon dioxide when averaged over 100 years and 84 times more when averaged over 20 years. ## Many sources of methane On top of these base rates of warming, there are other important considerations. Fully considered using the 100-year GWP and including natural feedbacks, the IPCC’s [report](https://www.ipcc.ch/report/ar5/wg1/anthropogenic-and-natural-radiative-forcing/?ref=boilingcold.com.au) says fossil sources of methane - most of the gas burned for electricity or heat for industry and houses - can be up to 36 times worse than carbon dioxide. Methane from other sources - such as livestock and waste - can be up to 34 times worse. While [some uncertainty remains](https://agupubs.onlinelibrary.wiley.com/doi/full/10.1029/2018GL079826?ref=boilingcold.com.au), a [well-regarded recent assessment](https://agupubs.onlinelibrary.wiley.com/doi/full/10.1002/2016GL071930?ref=boilingcold.com.au) suggested an upwards revision of fossil and other methane sources, that would increase their GWP values to around 40 and 38 times worse than carbon dioxide respectively. These works will be assessed in the IPCC’s upcoming [Sixth Assessment Report](https://www.ipcc.ch/assessment-report/ar6/?ref=boilingcold.com.au), with the physical science contribution due in 2021. While we should prefer the most up to date science at any given time, the choice to consider - or not - the full impact of methane and the choice to consider its impact over 20, 100 or 500 years is ultimately political, not scientific. Undervaluing or misrepresenting the impact of methane presents a clear risk for policy makers. It is vital they pay attention to the advice of scientists and bodies such as the IPCC. Undervaluing methane’s impact in this way is not a risk for climate modellers because they rely on more direct assessments of the impact of gases than GWP. ## Tipping points The idea of climate tipping points is that, at some point, we may change the climate so much that it crosses an irreversible threshold. At such a tipping point, the world would continue to heat well beyond our capability to limit the harm. There are [many tipping points](https://www.pnas.org/content/115/33/8252?ref=boilingcold.com.au) we should be aware of. But exactly where these are - and precisely what the implications of crossing one would be - is uncertain. Unfortunately, the only way we can be sure of where these tipping points are is to cross them. The only thing we know for sure about them is that the impact on lives, livelihoods and the places we love would be beyond catastrophic if we did. But we cannot ignore disturbing impacts of climate change that are already here. For example, damage to the landscape from the Black Summer bushfires [may be irreversible](https://www.cell.com/trends/ecology-evolution/fulltext/S0169-5347%2820%2930171-3?ref=boilingcold.com.au) and this represents its [own form of climate tipping point](https://ecos.csiro.au/a-changing-climate-could-challenge-our-understanding-of-bushfires-as-carbon-neutral-events/?ref=boilingcold.com.au). The scientific understanding of climate change goes well beyond simple metrics like GWP. Shuffling between metrics - such as 20-year or 100-year GWP - cannot avoid the fact our very best chance of avoiding ever-worsening climate harm is to massively reduce our reliance on coal, oil and gas, along with reducing our emissions from all other sources of greenhouse gas. If we do this, we offer ourselves the best chance of avoiding crossing thresholds we can never return from. --- ![The Conversation](https://counter.theconversation.com/content/145040/count.gif?distributor=republish-lightbox-basic) [Zebedee Nicholls](https://theconversation.com/profiles/zebedee-nicholls-365241?ref=boilingcold.com.au), PhD Researcher at the Climate & Energy College, [University of Melbourne](https://theconversation.com/institutions/university-of-melbourne-722?ref=boilingcold.com.au) and [Tim Baxter](https://theconversation.com/profiles/tim-baxter-133963?ref=boilingcold.com.au), Fellow - Melbourne Law School; Senior Researcher - Climate Council; Associate - Australian-German Climate and Energy College, [University of Melbourne](https://theconversation.com/institutions/university-of-melbourne-722?ref=boilingcold.com.au) This article is republished from [The Conversation](https://theconversation.com/?ref=boilingcold.com.au) under a Creative Commons license. Read the [original article](https://theconversation.com/climate-explained-methane-is-short-lived-in-the-atmosphere-but-leaves-long-term-damage-145040?ref=boilingcold.com.au). --- *Main image source: [koushik das](https://unsplash.com/@7890857439kd?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) on [Unsplash](https://unsplash.com/s/photos/emissions?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText)* --- ### Chevron to redo its botched Gorgon weld repairs URL: https://www.boilingcold.com.au/chevron-to-redo-its-botched-gorgon-weld-repairs/ Last updated: 2020-09-07T23:43:05.000Z Urgent repairs to cracked welds at the Gorgon LNG plant will have to be ground out and redone, with every day of delay costing almost $5 million. Chevron last week [pushed back the completion of repairs](https://www.boilingcold.com.au/chevrons-fix-of-gorgon-lng-cracks-to-take-longer/) to cracked welds from early September to sometime in October. *Boiling Cold* understands Chevron gave the wrong instructions to the welders working 12-hour shifts to repair eight propane heat exchangers, or kettles, that form part of LNG Train 2. Welders usually perform critical welds to a set procedure that must conform to the relevant engineering code. Just as long weeks of repair work on Train 2 neared completion Chevron told welders the procedure it had provided to repair the deeper cracks omitted a final step called post-weld heat treatment. Geoff Crittenden, chief executive of industry association Weld Australia, said he could not comment directly on the Gorgon repairs without knowing more details. However, Crittenden said if any weld required post-weld heat treatment but did not receive it, there was a significant risk the weld could crack and fail. Each welder has to be qualified to perform a welding procedure. The welder follows the procedure under test conditions with the same equipment, materials and position as the job requires. The weld is then subjected to various tests such as X-rays to ensure it is suitable. *Boiling Cold* understands the welders working on the Train 2 repairs have flown back to Perth to be qualified on the new corrected procedure. The delay of between 20 to 50 days to the restart of the 5.2 million tonnes a year LNG Train 2 will cost Chevron and its partners between $100 million to $250 million of lost revenue, assuming [similar prices to Woodside](https://files.woodside/docs/default-source/investor-documents/quarterly-and-half-yearly-pdfs-and-data-tables/2020/037-q2-2020-briefing-transcript-and-additional-information.pdf?sfvrsn=a32e8391%5F3&ref=boilingcold.com.au). ## Delay increases safety concerns Cracks in the propane kettles on Train 2 were found during a planned maintenance shutdown in May that was planned to finish by July 11. Unions are concerned about the safety of workers repairing Trains 2 as they are near kettles full of propane on Trains 1 and 3 that have the same design and manufacture as the flawed Train 2 kettles. The Department of Mines, Industry Regulation and Safety gave Chevron [permission to continue operating Trains 1 and 3](https://www.boilingcold.com.au/chevron-shutdown-all-gorgon-trains/) under a plan where Train 1 would close for inspection of its kettles in early October and Train 3 would shut down in early January. Without that permission, all the trains would have had to stop production on August 21, 14 days after [regulators first intervened](https://www.boilingcold.com.au/safety-cop-orders-chevron-to-fix-gorgon/). The delay to Train 2 repairs from Chevron's incorrect procedure is likely to cause Train 2 to still be under repair when Train 1 is due to be shutdown. DMIRS director dangerous goods and petroleum safety Steve Emery said the regulator and Chevron are discussing the impact the Train 2 weld repairs may have on the inspection schedule for Trains 1 and 3. Emery said DMIRS was satisfied with the current level of safety. Australian Manufacturing Workers' Union state secretary Steve McCartney said the union had no faith in Chevron fixing the cracks or DMIRS making the job safe. "AMWU understands Chevron attempted to fix the exchangers on Train 2 but failed to undertake the correct welding procedure which has delayed the repairs to Train 2 even further, McCartney said. "We have been told the procedure failed to include a post-weld heat treatment and that the problem was only discovered near completion of the final repair. > "We can't afford to give Chevron another extension; it needs to be done now to protect the safety of our members." Chevron's error has been revealed a week before the final phase of [a 20 to 30 per cent cull](https://www.boilingcold.com.au/chevron-red-tape-for-hr-hunger-games/) of its Australian workforce begins. *Boiling Cold* asked the US major three days ago about the faulty weld procedure and how the public could have faith in its ability to manage hazardous facilities. Chevron declined to respond. --- *Main image: Generic image of welder. Source: [Dan Schiumarini](https://unsplash.com/@dan%5Fschiumarini?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) on [Unsplash](https://unsplash.com/s/photos/welding?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText)* ### Leak sets back Shell’s restart of Prelude LNG URL: https://www.boilingcold.com.au/leak-sets-back-shells-restart-of-prelude-lng/ Last updated: 2022-01-08T14:15:09.000Z A failed gas seal has forced Shell to stop flowing gas to its Prelude floating LNG vessel just days after it opened subsea wells for the first time in seven months. Shell was in the initial stages of restarting LNG production when a seal leaked in the turret that connects the 488m-long facility to equipment on the seabed. *Boiling Cold* understands that the failed primary seal in a production swivel did not cause gas to escape as a secondary seal continued to work as designed. However, Shell stopped the gas flow as a precaution. It is understood the turret has two swivels for gas produced from the reservoir to flow to the Prelude, but before this leak, the other production swivel was already out of action due to technical problems. Prelude’s 96m high turret is secured to the seabed 250m below with 16 massive chains and allows the giant vessel to rotate freely around it according to weather conditions. The turret designed and built by SBM Offshore has [nine swivels](https://www.sbmoffshore.com/wp-content/uploads/2016/05/FACTSHEET-TURRET-PRELUDE.pdf?ref=boilingcold.com.au) that connect the flexible pipelines rising from the seabed to the rotating vessel. “Designed in Monaco, built in Dubai, shipped to South Korea and for use off Australia, the turret is an example of the truly global nature of this project,” Shell projects director Matthias Bichsel [said in 2014](https://www.shell.com/media/news-and-media-releases/2014/giant-turret-module-for-worlds-largest-floating-facility-sets-sail-for-south-korea.html?ref=boilingcold.com.au). The turret is the largest ever built and designed to withstand the most severe storm expected in 10,000 years in the Browse basin of the Kimberley coast. Swivels are large precision-engineered components that some industry insiders have said could take months to fix. The failed seal is the latest of many technical problems on what is probably the most complex offshore facility ever built. [No winners from Shell’s $US17B Prelude floating LNGShell’s giant $US17B Prelude floating LNG is late, expensive, dirty and so far unreliable. An exclusive look at how a failed investment for Shell is a terrible deal for Australia.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/04/aerial-view-of-the-prelude-flng-facility-with-the-valencia-knutsen-berthed-side-by-side-reduced.jpg)](https://www.boilingcold.com.au/after-prelude-few-win-from-shells-floating-lng/) The lack of gas will force the Prelude to use expensive diesel to generate power. Shell declined to answer questions. --- *Main image: Schematic of Prelude turret. Source: SBM Offshore.* --- ### Shells moves to restart Prelude after safety near miss URL: https://www.boilingcold.com.au/shells-moves-to-restart-prelude-after-safety-near-miss/ Last updated: 2020-09-04T08:53:24.000Z Shell has reopened subsea wells to flow gas to its $US17 billion Prelude floating LNG facility after a seven-month shut down to fix technical problems. Preparations have not been without incident, with a routine test three weeks ago resulting in a near-miss safety incident. *Boiling Cold* understands the wells have been open from early this week, if not earlier. Shell said it had started the “process for hydrocarbon restart.” “This is the final phase in the multi-stage, multi-faceted restart process,” the Shell spokesperson said. “We will be in a stronger position to talk about timing of production and cargo once that has been completed.” Production from the Prelude, that has never reached more than about half its design capacity, was halted in early February after a series of trips of its troubled steam-driven power generation system. Backup diesel generators did not power-up and essential services such as toilets failed. Shell immediately cut crew numbers on what was meant to be a showcase of it’s technical and project management prowess. [No winners from Shell’s $US17B Prelude floating LNGShell’s giant $US17B Prelude floating LNG is late, expensive, dirty and so far unreliable. An exclusive look at how a failed investment for Shell is a terrible deal for Australia.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/04/aerial-view-of-the-prelude-flng-facility-with-the-valencia-knutsen-berthed-side-by-side-reduced.jpg)](https://www.boilingcold.com.au/after-prelude-few-win-from-shells-floating-lng/) Those problems came just weeks after the offshore safety regulator [NOPSEMA directed Shell to fix its safety management systems](https://www.nopsema.gov.au/assets/Published-notices/A722042.pdf?ref=boilingcold.com.au) for fundamental tasks such as safely isolating equipment before maintenance occurred. NOPSEMA inspectors are currently undergoing pre-departure self-quarantine ahead of a planned inspection of the Prelude from 8 to 10 September. The inspectors will add to their scope a near-miss incident on 13 August when during routine testing of an arm that loads LPG from the Prelude to waiting tankers a stud “ejected at pressure.” There were no injuries from the incident that Shell has reported to NOPSEMA and is investigating, a spokesperson for the regulator said. *Boiling Cold* understands the stud may have been the wrong grade of steel. A Shell spokesperson said its focus is very much on a safe and stable facility. “We’ve continued to work methodically through the…process required for production to re-commence with that foremost in mind.” NOPSEMA has commenced a minimum 90-day verification process, which requires Shell to collect data to demonstrate that its management of safety is “in alignment with good industry practise.” If Shell fails to do so, the regulator could reimpose its ban on “intrusive activities into plant and equipment where the loss of containment…could result in risk to the health and safety.” Such a ban would effectively stop many tasks that Shell needs to perform to maintain production. --- *Corrections 4 September 12:30 PM:* *NOPSEMA has commenced the verification of safety management at Prelude. The original story said this was yet to begin.* *Clarified that the production shutdown was triggered by failure of the steam-driven power generation, not the shut down of essential services.* --- *Main image: First LNG cargo from Prelude in June 2019\. Source: Shell* ### Chevron’s fix of Gorgon LNG cracks delayed URL: https://www.boilingcold.com.au/chevrons-fix-of-gorgon-lng-cracks-to-take-longer/ Last updated: 2020-09-03T07:52:57.000Z Chevron needs about another month to fix eight cracked propane kettles that have shut down one of Gorgon's three LNG trains for months. The US major today [announced](https://australia.chevron.com/news/2020/chevron-continues-repairs-on-gorgon-lng-train-2?ref=boilingcold.com.au) that it would complete repairs to faulty welds on the kettles, or heat exchangers, on Train 2 and restart production sometime in October. "Following our ongoing technical work, we are further refining our approach and have decided some welds in targeted areas will require additional work," a Chevron spokesperson said. *Boiling Cold* [broke the news](https://www.boilingcold.com.au/cracks-at-chevrons-gorgon-threaten-lng-production/) of thousands of cracks in the propane-filled vessels in late July. Before media enquiries to the Minister for Petroleum Bill Johnston, safety regulators knew nothing of the problems on Barrow Island. Chevron identified the cracks during a planned shutdown that commenced in May and was to meant to be completed by July 11. The propane kettles on Trains 1 and 3 are of a near-identical design and from the same South Korean fabricator as those on Train 2\. They are operating while workers nearby fix Train 2. Two weeks ago, Chevron expected to restart Train 2 in early September. [Chevron’s Gorgon LNG faces up to $1.4B hit to fix cracksAfter action by safety regulators Chevron will progressively shut down all LNG trains at Gorgon to fix faulty welds in propane-filed pressure vessels.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/08/gorgon-lng-trains-large-d-cropped-reduced.jpg)](https://www.boilingcold.com.au/chevron-shutdown-all-gorgon-trains/) A delay to sometime in October implies about an additional 20 to 50 days of lost production. Every day one of Gorgon's 5.2 million tonnes a year LNG trains is out of action about $4.9 million of revenue is lost, assuming [similar prices to Woodside](https://files.woodside/docs/default-source/investor-documents/quarterly-and-half-yearly-pdfs-and-data-tables/2020/037-q2-2020-briefing-transcript-and-additional-information.pdf?sfvrsn=a32e8391%5F3&ref=boilingcold.com.au). Gorgon's partners will lose a further $100 million to $250 million from this delay when oil and gas companies are desperate for revenue. Before today's delay, *Boiling Cold* estimated that losses could amount to as high as $1.4 billion. Department of Mines, Industry Regulation and Safety director dangerous goods and petroleum safety Steve Emery said Chevron told the regulator today that it had identified issues with the weld repairs. "DMIRS remains satisfied with the current level of safety around Trains 1 and 3," Emery said. "The Dangerous Goods Directorate is working with Chevron to assess any potential impact to the agreed inspection schedule for Trains 1 and 3." When WA's safety regulators a fortnight ago allowed a staged shutdown of the trains to fix the welds, Chevron said Train 1 would shut down in early October, and it would start work on Train 3 in January. Today's announcement has almost certainly pushed back the repairs to Train 1\. Chevron has discussed its plans with the regulator. "We...will maintain alignment on its requirements for inspections and repairs on the Gorgon heat exchangers and the sequencing of work on Gorgon Trains 1 and 3," the Chevron spokesperson said. "Insights gained from the Train 2 repairs will contribute to more efficient inspections and potential repairs on Trains 1 and 3." Chevron operates and owns 47% of the $US54 billion ($74 billion) project. Shell and ExxonMobil each have a 25% stake and Japanese companies Osaka Gas, Tokyo Gas and JERA own the remainder. --- *Updated September 3, 3:50 PM: DMIRS comments incorporated.* --- *Main image: Gorgon's three LNG trains on Barrow Island. Source: Chevron Australia Pty Ltd* ### Hydrogen hype: what will actually work? URL: https://www.boilingcold.com.au/hydrogen-hype-what-will-actually-work/ Last updated: 2021-12-27T13:58:05.000Z ANALYSIS [Jake Whitehead](https://theconversation.com/profiles/jake-whitehead-3312?ref=boilingcold.com.au), *[The University of Queensland](https://theconversation.com/institutions/the-university-of-queensland-805?ref=boilingcold.com.au)*; [Peter Newman](https://theconversation.com/profiles/peter-newman-1858?ref=boilingcold.com.au), *[Curtin University](https://theconversation.com/institutions/curtin-university-873?ref=boilingcold.com.au)*, and [ Thomas Bräunl](https://theconversation.com/profiles/thomas-braunl-215?ref=boilingcold.com.au), *[University of Western Australia](https://theconversation.com/institutions/university-of-western-australia-1067?ref=boilingcold.com.au)* For 50 years hydrogen has been championed as a [clean-burning gas](https://www.energy.gov/eere/fuelcells/hydrogen-fuel-basics?ref=boilingcold.com.au) that could help reduce greenhouse gas emissions. The idea of a “[hydrogen economy](https://www.bcg.com/publications/2019/real-promise-of-hydrogen?ref=boilingcold.com.au)” is now enjoying a new wave of enthusiasm — but it is not a [silver bullet](https://www.abc.net.au/radio/programs/the-signal/hydrogen-explainer/10470944?ref=boilingcold.com.au). Amid the current [hydrogen hype](https://www.industry.gov.au/data-and-publications/australias-national-hydrogen-strategy?ref=boilingcold.com.au), there is little discussion about when the technology can realistically become [commercially viable](https://www.afr.com/policy/energy-and-climate/there-is-no-magic-hydrogen-bullet-coming-20191106-p537t6?ref=boilingcold.com.au), or the [best ways](https://www.oxfordenergy.org/wpcms/wp-content/uploads/2020/03/Insight-66-Hydrogen-and-Decarbonisation-of-Gas.pdf?ref=boilingcold.com.au) it can be used to cut emissions. Australia must use hydrogen intelligently and strategically. Otherwise, we risk supporting a comparatively energy-intensive technology in uses that don’t make sense. This would waste valuable renewable energy resources and land space, increase costs for Australians and slow emissions reduction. Here’s where we can focus hydrogen investment to get the best bang for our buck. ## Hydrogen sucks up energy and space Hydrogen is the [most abundant element](https://www.eia.gov/energyexplained/hydrogen/?ref=boilingcold.com.au) in the universe, but rarely is it freely available. It must be unlocked from [water](https://www.energy.gov/eere/fuelcells/hydrogen-production-electrolysis?ref=boilingcold.com.au) (H2O) or fossil fuels such as [methane](https://www.energy.gov/eere/fuelcells/hydrogen-production-natural-gas-reforming?ref=boilingcold.com.au) (CH4), then compressed for transport and use. These steps waste a lot of energy. To be transported, for example, hydrogen must be kept under [high pressure or extremely low temperature](https://www.energy.gov/eere/fuelcells/hydrogen-delivery?ref=boilingcold.com.au). And in terms of energy storage, even heating up [stones](https://www.golem.de/news/energiespeicher-heisse-steine-sind-effizienter-als-brennstoffzellen-1906-142012.html?ref=boilingcold.com.au) is more efficient. Australia could become a renewable energy superpower in the future. But there are serious medium-term challenges, including [constraints](https://www.smh.com.au/environment/sustainability/economic-brink-solar-plants-curtailed-as-grid-links-stall-20200209-p53z3l.html?ref=boilingcold.com.au) in the infrastructure that transmits energy. The world must reach net-zero emissions [within 30 years](https://www.ipcc.ch/sr15/?ref=boilingcold.com.au) to avert the worst climate change. That means using renewable energy as efficiently as possible to maximise emissions reductions and minimise the land space required. So we must be strategic in how and where we use hydrogen. ![](https://images.theconversation.com/files/353342/original/file-20200818-22-gsyxgk.gif?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip) Hydrogen pathways. Staffell et al 2018\. The role of hydrogen and fuel cells in the global energy system. ## Use hydrogen in places electricity won’t go In most applications, renewables-based electrification [has emerged](https://theconversation.com/creative-destruction-the-covid-19-economic-crisis-is-accelerating-the-demise-of-fossil-fuels-143739?ref=boilingcold.com.au) as the most energy efficient, and cost-effective way to strip emissions from the economy. Yet there are some industries where electrification will remain challenging. It’s here renewable hydrogen — produced from wind and solar energy — will be most important. These industries include [steel](https://reneweconomy.com.au/another-nail-in-coals-coffin-german-steel-furnace-runs-on-renewable-hydrogen-in-world-first-55906/?ref=boilingcold.com.au), [cement](https://arstechnica.com/science/2019/09/splitting-water-to-make-cement-could-clean-up-a-dirty-industry/?ref=boilingcold.com.au), [aluminium](https://www.afr.com/companies/energy/hope-for-affordable-hydrogen-for-steel-alumina-report-20200330-p54fee?ref=boilingcold.com.au), [shipping](https://www.transportenvironment.org/press/battery-hydrogen-and-ammonia-powered-ships-far-most-efficient-way-decarbonise-sector-%E2%80%93?ref=boilingcold.com.au) and [aviation](https://www.economist.com/technology-quarterly/2018/11/29/synthetic-fuels-could-help-low-carbon-aviation-take-off?ref=boilingcold.com.au). A renewable hydrogen export market may also emerge in the [long-term](https://www.afr.com/chanticleer/hydrogen-exports-a-long-way-off-20190617-p51yke?ref=boilingcold.com.au). Renewable hydrogen will also be important to replace existing [hydrogen](https://www.oxfordenergy.org/wpcms/wp-content/uploads/2020/03/Insight-66-Hydrogen-and-Decarbonisation-of-Gas.pdf?ref=boilingcold.com.au) produced by fossil fuels. But this alone will require a [significant increase in electricity generation](https://cpree.princeton.edu/sites/cpree2019/files/media/2020-02-010%5F-%5Fwws%5Fbradford%5Fseminar%5F-%5Fgetting%5Fto%5Fzero.pdf?ref=boilingcold.com.au), to reach net zero emissions by 2050\. This is a major challenge. ## What about cars and trucks? Road transport is one area where we believe hydrogen will not play a major role. In fact, Telsa founder Elon Musk has gone as far as to call hydrogen fuel-cell vehicles “[mind-bogglingly stupid](https://www.cnbc.com/2019/02/21/musk-calls-hydrogen-fuel-cells-stupid-but-tech-may-threaten-tesla.html?ref=boilingcold.com.au)”. Hydrogen vehicles will always consume [two to four times more energy](https://www.researchgate.net/publication/328782184%5FWhere%5Fare%5Fwe%5Fheading%5Fwith%5Felectric%5Fvehicles?ref=boilingcold.com.au) than battery electric vehicles. This is simply due to the [laws of physics](https://theconversation.com/hydrogen-cars-wont-overtake-electric-vehicles-because-theyre-hampered-by-the-laws-of-science-139899?ref=boilingcold.com.au), and cannot be resolved by technological improvements. In the case of hydrogen-powered vehicles, this will mean higher costs for consumers compared to battery-electric vehicles. It also means far more space for solar panels or wind turbines is needed to generate renewable energy. What’s more, electric vehicles already have [longer driving range](https://www.nature.com/articles/s41560-018-0108-1?ref=boilingcold.com.au) and continuously expanding [charging infrastructure](https://www.plugshare.com/?ref=boilingcold.com.au), including [ultra-fast chargers](https://thedriven.io/2019/12/20/dc-fast-chargers-australia-2019/?ref=boilingcold.com.au). ![](https://images.theconversation.com/files/353341/original/file-20200818-18-1i105bh.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip) Comparing the amount of electricity that is lost for hydrogen cars versus electric cars. Volkswagen AG Most global car makers have recognised the [lack of advantage](https://www.volkswagenag.com/en/news/stories/2019/08/hydrogen-or-battery--that-is-the-question.html?ref=boilingcold.com.au) for hydrogen cars and instead invested about [US$300 billion](https://www.peakresources.com.au/news/3823/?ref=boilingcold.com.au) in the development and manufacturing of electric cars. [Toyota](https://www.reuters.com/article/us-toyota-electric/toyota-speeds-up-electric-vehicle-schedule-as-demand-heats-up-idUSKCN1T806X?ref=boilingcold.com.au) and [Hyundai](https://www.forbes.com/sites/johnkang/2020/02/28/as-hyundai-races-toward-electric-vehicles-hydrogen-powered-cars-take-a-backseat/?ref=boilingcold.com.au#16af078a6b8c) — the last main proponents of hydrogen cars — are also ramping up efforts on electric cars. As for trucks, the US Department of Energy [does not expect](https://www.hydrogen.energy.gov/pdfs/19006%5Fhydrogen%5Fclass8%5Flong%5Fhaul%5Ftruck%5Ftargets.pdf?ref=boilingcold.com.au) hydrogen semi-trailers to be competitive with diesel until around 2050, mainly due to the high cost and low durability of hydrogen fuel cells. While hydrogen trucks may have a role to play in 20 to 30 years, this will be too late to help reach a 2050 net-zero target. As such, we must explore energy-efficient options already widely deployed overseas, including [electric trucks](https://www.nytimes.com/2020/03/19/business/electric-semi-trucks-big-rigs.html?ref=boilingcold.com.au), electrified [roads](https://press.siemens.com/global/en/feature/ehighway-solutions-electrified-road-freight-transport?ref=boilingcold.com.au) and [electrified trailers](https://www.bosch-mobility-solutions.com/en/products-and-services/commercial-vehicles/powertrain-systems/electrified-axle/?ref=boilingcold.com.au). ## A truly strategic plan If Australia is serious about climate action, we must focus efforts on where renewable hydrogen can deliver the greatest environmental and economic benefits: regional ports. Hydrogen derived from fossil fuels is currently used to make products such as fertiliser and methanol. Supporting the transition to renewable hydrogen for these uses will be an important first step to [scale up the industry](https://www.oxfordenergy.org/wpcms/wp-content/uploads/2020/03/Insight-66-Hydrogen-and-Decarbonisation-of-Gas.pdf?ref=boilingcold.com.au). If produced at regional shipping ports close to aluminium, steel or cement plants, this will provide further opportunities to expand renewable hydrogen use to [minerals processing](https://www.afr.com/policy/energy-and-climate/three-reforms-that-can-make-us-the-world-s-low-carbon-superpower-20191103-p536wl?ref=boilingcold.com.au), while creating new jobs. As hydrogen production scales up and costs fall, excess hydrogen would be available at ports for fuelling ships — either [directly](https://theicct.org/publications/zero-emission-container-corridor-hydrogen-2020?ref=boilingcold.com.au) or through a hydrogen derivative like [ammonia](https://www.ft.com/content/2014e53c-531f-11ea-a1ef-da1721a0541e?ref=boilingcold.com.au). Hydrogen gas could also be used to make carbon-neutral [synthetic fuel](https://www.swissinfo.ch/eng/sustainable-aviation%5F-green--aviation-fuel-aims-to-power-planes-by-2030/45804038?ref=boilingcold.com.au) for planes. If an international export market emerged in the future, this strategy would also mean renewable hydrogen would be available at ports to directly ship overseas. Finally, if the development of hydrogen truck technology accelerates before 2050, renewable hydrogen would be available to power the significant number of semi-trailers that travel to and from shipping ports. ## Let’s get real Renewable hydrogen is a scarce and valuable resource, and should be directed towards sectors most difficult to decarbonise. Delaying the [electrification of road transport](http://revproject.com/traffic/report.pdf?ref=boilingcold.com.au) and energy on the promise of hydrogen will [ultimately only benefit the fossil fuel industry](https://thesiseleven.com/2020/08/21/creative-destruction-and-covid/?ref=boilingcold.com.au). ![The Conversation](https://counter.theconversation.com/content/144579/count.gif?distributor=republish-lightbox-basic) --- [Jake Whitehead](https://theconversation.com/profiles/jake-whitehead-3312?ref=boilingcold.com.au), Advance Queensland Industry Research Fellow & Tritum E-Mobility Fellow, *[The University of Queensland](https://theconversation.com/institutions/the-university-of-queensland-805?ref=boilingcold.com.au)*; [Peter Newman](https://theconversation.com/profiles/peter-newman-1858?ref=boilingcold.com.au), Professor of Sustainability, *[Curtin University](https://theconversation.com/institutions/curtin-university-873?ref=boilingcold.com.au)*, and [ Thomas Bräunl](https://theconversation.com/profiles/thomas-braunl-215?ref=boilingcold.com.au), Professor of Robotics; Director, WA Electric Vehicle Trial, *[University of Western Australia](https://theconversation.com/institutions/university-of-western-australia-1067?ref=boilingcold.com.au)* This article is republished from [The Conversation](https://theconversation.com/?ref=boilingcold.com.au) under a Creative Commons license. Read the [original article](https://theconversation.com/time-to-get-real-amid-the-hydrogen-hype-lets-talk-about-what-will-actually-work-144579?ref=boilingcold.com.au). --- ### ENI’s poor maintenance causes marine hazard off WA coast URL: https://www.boilingcold.com.au/enis-poor-maintenance-causes-marine-hazard-off-wa-coast/ Last updated: 2022-01-08T14:16:48.000Z Mariners have been warned of equipment floating west of Barrow Island at ENI’s Woollybutt oil field months after ENI was told its poor maintenance posed a risk to vessels. The Australian Maritime Safety Authority [issued an alert](https://www.amsa.gov.au/safety-navigation/navigation-systems/maritime-safety-information-database?ref=boilingcold.com.au) shortly before 1 PM WA time Monday of a “20m wellhead frame semi-submerged, possibly adrift” at a latitude and longitude very close to the Woollybutt location. A member of the public sighted the object from a vessel and reported it to the Authority, an AMSA spokesperson said. *Boiling Cold* understands the object is a mid-depth buoy that should be chained to the seabed and float well below the surface. The Woollybutt oil development consisted of a production vessel that rotated around a single point mooring buoy tethered to the seabed with chains. Oil lines and umbilicals rose from the seabed and draped over buoys position between the seabed and sea surface before going to the SPBM. The two mid-depth buoys were themselves attached to the seabed with chains. Woollybutt ceased production in 2012, and the vessel left a few weeks later. Little has happened since. Offshore safety regulator NOPSEMA in July 2019 approved an [ENI plan to plug and abandon the wells](https://info.nopsema.gov.au/activities/28/show%5Fpublic?ref=boilingcold.com.au) and monitor the equipment that had been unused for eight years. Six months later, in January 2020, ENI reported that the single point mooring buoy had sunk to the seabed. NOPSEMA concluded that ENI failed to maintain so-called cathodic protection to stop the buoy from corroding. Cathodic protection typically involves attaching an easily corroded material that corrodes instead of the structure to be protected. NOPSEMA told ENI to inspect the chains that secured two MDB’s to the surface as the Italian firm was not properly conducting proper inspection and maintenance. > “In the event of a mooring system failure resulting in an MDB floating to the surface, this would create a marine vessel collision hazard leading to vessel damage or sinking and could result in injuries to, or loss of life of, vessel personnel,” the [NOPSEMA notice](https://www.nopsema.gov.au/assets/Published-notices/A730702.pdf?ref=boilingcold.com.au) stated. The floating object remains within the Petroleum Safety Zone surrounding Woollybutt and is being monitored by a vessel, according to ENI. “There was no release of hydrocarbons as the equipment was properly cleaned during FPSO departure,” the ENI spokesperson said. > “Planning is in place to abandon and decommission the subsurface equipment by 2021.” *Boiling Cold* has asked ENI whether it plans to leave the equipment in place or remove it. The remaining equipment includes as a minimum: wellheads, umbilicals, chains, gravity-based structures, two mid-depth buoys and the sunken single point mooring buoy. Woodside has proposed that all equipment be left on the seabed when it abandons the North West Shelf Project’s Echo Yodel field. [Woodside abandons abandonment for Echo YodelIf Woodside’s argument that a reef’s environmental benefit outweighs 400 tonnes of plastic in the ocean wins over NOPSEMA then leaving everything on the seabed could become the default option for Australia’s oil and gas players.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/06/Mia-Yellagonga--Perth--Western-Australia-web-top-crop.jpg)](https://www.boilingcold.com.au/woodside-shouts-abandon-abandonment-for-echo-yodel/) NOPSEMA said it had not yet confirmed whether the object was free to float away or still tethered to the seabed. *Boiling Cold* asked NOPSEMA if, given this mooring failure, it would require ENI to remove the two mid-depth buoys before the cyclone season. “It’s premature at this point to be issuing any further Notices or Directions prior to confirming various details that will need to be clarified by Eni in the coming days, and up to 30 days in the final report issued to NOPSEMA,” a spokesperson for the regulator said. ENI’s delayed work on Woollybutt is a tiny part of the estimated $76 billion to be spent cleaning up Australia’s oil and gas fields over the next 30 years. [Australia’s oil and gas industry will create a $76B clean-up billIt will cost $76 billion to clean up after Australia’s oil and gas industry, with a good chunk to be borne by taxpayers, and no one is in a hurry to start the work.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/05/XOM-Bass-Strait-platform-reduced.jpg)](https://www.boilingcold.com.au/australias-oil-and-gas-industry-will-create-a-76b-clean-up-bill/) ENI is [seeking to sell all its Australian assets](https://www.reuters.com/article/us-eni-m-a-australia/eni-appoints-citi-to-sell-australia-gas-assets-sources-idUSKBN22R25P?ref=boilingcold.com.au#:~:text=LONDON%2FMILAN%20%28Reuters%29%20%2D,to%20%241%20billion%2C%20sources%20said.&text=The%20sale%2C%20which%20is%20expected,all%20but%20exit%20from%20Australia.), that include interests in the Darwin LNG plant, Bayu-Undan project, and the Blacktip gas field off the Northern Territory coast. --- *Correction: September 1 2:20 PM: Original story incorrectly said Woollybutt was east of Barrow Island.* --- ### Eight huge risks Chevron’s North West Shelf sales pitch missed URL: https://www.boilingcold.com.au/chevrons-north-west-shelf-sales-pitch-missed-8-key-points/ Last updated: 2021-12-27T00:34:45.000Z *ANALYSIS* Chevron's eight-point sales pitch for its share of North West Shelf LNG has leaked and, like a real estate ad, has missed some key points. Bankers UBS sent a detailed flyer to oil and gas companies, overseas sovereign wealth funds, and local superannuation and investment funds, [according to a copy obtained by the *Financial Review*](https://www.afr.com/street-talk/eight-reasons-to-buy-chevron-s-north-west-shelf-stake-ubs-launches-sale-20200813-p55l84?ref=boilingcold.com.au). Apparently, Chevron is selling a 17 per cent stake in a "world-class" project with a "proven" joint venture that has made "significant progress" towards becoming a facility for processing other companies' gas. However, there are at least eight points UBS missed that potential buyers should mull before putting down several billion dollars. **1\. A renovators' delight** The NWS domestic gas plant is 36 years old, and its first LNG train is 31 years old. The plant needs a life-extending refurbishment for any new buyer to get a return on investment. That could [cost up to $US12 billion](https://www.woodmac.com/news/opinion/australias-north-west-shelf-set-for-change/?ref=boilingcold.com.au), according to oil and gas consultancy Wood Mackenzie. It is worth noting what Woodside chief executive Peter Coleman said in June: "Once you get into an old plant, you start to find things that you didn't see before," Coleman told a Credit Suisse webinar. "It's like doing renovations on your house. "How many of those on the line today actually got a renovation on budget?" **2\. An excellent CO2 machine** The three oldest LNG trains that produce almost half the NWS plant's LNG emit 0.40 tonnes of greenhouse gases for each tonne of LNG, excluding CO2 in the reservoir gas and emission from offshore facilities. Their climate impact is 54% greater than the carbon intensity of the more modern Trains 4 and 5, according to a Woodside [environmental submission](https://files.woodside/docs/default-source/current-consultation-activities/australian-activties/north-west-shelf-project-extension---environmental-review-document.pdf?sfvrsn=a8b10277%5F4&ref=boilingcold.com.au). Half the NWS LNG capacity was designed before climate change was an issue. The world is now transitioning through fossil fuels, with the dirtiest fuels dumped first. Coal has been hit hard, and the most polluting gas is next. Expect to see NWS LNG marked down in the market in the future. Coleman has said that tolling agreements could place the cost of any future carbon price onto the owners of the gas processed at the NWS, but that would result in lower tolls. Passing through the costs does not absolve the plant owners of other responsibilities. Any potential plant owner will need to consider how the high emissions affect its own carbon targets and those of its potential investors. **3\. Air pollution for a possible social license disaster** Rio Tinto has taken a big knock for blowing up the Juukan caves that, despite their importance, few had heard of before their destruction. Imagine being responsible for ongoing damage to a high-profile World Heritage-listed collection of more than one million rock art images? That is the risk any buyer of the NWS plant needs to consider due to concerns that oxides of nitrogen, or NOx, from industry on the Burrup are [affecting the Murujuga rock art](https://thewest.com.au/business/infrastructure/burrup-peninsula-players-ponder-move-in-push-for-world-heritage-status-looms-ng-b88966863z?ref=boilingcold.com.au). The artwork is scratched into a very thin varnish-like layer on the rocks of the Burrup Peninsula. If air pollution damages that layer then images that have lasted 40,000 years could disappear. The NWS emitted [6900 tonnes of NOx](http://www.npi.gov.au/npidata/action/load/emission-by-individual-facility-result/criteria/state/WA/year/2019/jurisdiction-facility/WA0196?ref=boilingcold.com.au) in the 12 months to June 2019\. Coleman told Woodside's AGM in May that the North West Shelf's "1970's vintage power generation" produced 60 per cent of the total NOx from all industry on the Burrup Peninsula. "There is no material detrimental effect to the petroglyphs (rock art) at this point due…however we do recognise the potential," Coleman told his shareholders. Note the qualifiers "material," "at this point" and "potential." Further scientific work started this year to investigate if air pollution is damaging the rock art. *Boiling Cold* understands useful results will not be available until 2023 at the earliest. This week the Murujuga rock art achieved [tentative World Heritage listing](https://www.mediastatements.wa.gov.au/Pages/McGowan/2020/08/Joint-media-statement-World-Heritage-Tentative-listing-celebrated-on-country.aspx?ref=boilingcold.com.au), the first step in the nomination process. Any investor in the NWS has the prospect that in three years the science shows the NWS is damaging the rock art, and that rock art is World Heritage-listed. Good luck to potential buyers factoring that risk into their spreadsheets. Woodside has considered building a new power plant for the NWS about 25km away on the Maitland Estate. However, it was not included in environmental approvals for NWS life extension lodged in late 2019. **4\. Where is the gas to process?** Woodside's planned to fill the NWS plant with gas from Browse as production from the NWS's own fields dwindles over this decade. That will not be happening. In short, Browse is dirty, expensive, risky and its partners, unlike Woodside, have better options to invest in. [Inside Woodside’s hall of mirrors Browse LNG is deadCost, climate concerns and delay have killed Woodside’s Browse LNG project and now it must negotiate with its old foes, the North West Shelf partners, to ensure Scarborough is developed.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/07/Mia-Yellagonga--Perth--Western-Australia-web-top-crop.jpg)](https://www.boilingcold.com.au/woodside-browse-lng-is-dead/) Very preliminary agreements have been made for [Pluto and Waitsia to process gas](https://files.woodside/docs/default-source/media-releases/nwsp-agree-key-principles-for-gas-processing.pdf?sfvrsn=c770bdb1%5F10&ref=boilingcold.com.au) through the NWS, but these are relatively small volumes for a few years. The only likely source of significant gas through the NWS is the Scarborough field, 75% owned by Woodside, with BHP holding the remaining equity. Woodside's base case for Scarborough's gas is a new LNG train at Pluto. Having an option gives negotiation leverage to get a better deal with the NWS. To be approved, Scarborough either needs an excellent deal with NWS or a more economic Pluto development. [Woodside’s Scarborough LNG uneconomic before price crash: WoodmacIf Scarborough, considered the most economic of Woodside’s two projects, was uncompetitive before LNG prices crashed then plans will have to change on the Burrup Peninsula.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/05/Pluto-LNG-Plant--Karratha-web.jpg)](https://www.boilingcold.com.au/woodsides-scarborough-lng-was-uneconomic-before-price-crash-woodmac/) Any investment in the NWS before Scarborough is sanctioned and committed to the NWS is a bet that could yield nothing more than an old rapidly emptying LNG plant. **5\. Good luck agreeing on processing terms** Agreeing on terms to process multiple streams of gas through an ageing LNG plant is a commercial nightmare. Which gas has priority when there is an unplanned shutdown? Who pays for the enormous but unpredictable ongoing maintenance bill? What happens when unplanned major work worth many hundreds of millions of dollars is required? Will it be an expensive quick fix to maximise production or a more considered approach to minimise costs? Who takes responsibility for reliability? The plant owner will be trying to minimise operating costs while the gas owner wants production prioritised. Remember, the NWS joint venture has trouble agreeing when the gas and plant have the same ownership. In a tolling arrangement, the sources of disagreement multiply enormously. **6\. Come join a dysfunctional family** Partner dynamics within the NWS have long been an industry joke. A Chevron exit removes the friction of the US major trying to get its gas processed ahead of Woodside's. However, it also signals that the largest owner of gas reserves in the Carnarvon Basin plans to send its gas elsewhere. Woodside will push for the best deal for Scarborough, not the NWS. BHP will do the same, in a half-hearted way, as an exit is its real strategy. Keen-to-be-green BP would rather exit the NWS except for one thing: it is drilling the Ironbark gas play later this year that is conveniently near existing NWS offshore facilities. If Ironbark looks promising, BP will focus on getting that gas through the NWS, and that may conflict with Woodside's plans. Shell has more than enough Australian LNG with Gorgon, Prelude and QCLNG. Expect an exit to free up cash and reduce its corporate emissions. Japan Australia LNG, the joint Mitsui and Mitsubishi company, may not be interested in a pure infrastructure play. Mitsui, however, is happy in the short term as its gas from Waitsia gets processed. And NWS does not have six partners; it has seven. China's CNOOC has a 50% stake in some of the offshore fields and, *Boiling Cold* understands, a similar veto to the other partners over major changes to the project. Good luck spotting a common purpose among this group. With many exits planned, the dynamics could improve. The Catch 22 is that the full picture will only be knowns when the last deal is done, which makes the first deal crazily risky. When every partner has a veto near enough is not good enough. **7\. The cleanup bill will hit when cashflow is lean** Woodside estimated it will cost up to [$160 million to decommission the Echo Yodel](https://www.boilingcold.com.au/woodside-shouts-abandon-abandonment-for-echo-yodel/) step out development of a few wells and 23 km of pipeline and umbilical. Echo Yodel is a tiny fraction of North West Shelf's offshore infrastructure. The cost of decommissioning the entire onshore and offshore NWS infrastructure is massive and may be required within a decade if no significant gas sources are signed up. The lean cashflow of the last few years of declining NWS production will not finance this effort, and the partners will need to inject cash. The upside of any NWS investment case has to be enormous to warrant the risk of this downside. **8\. And you lose either way** Any buyer that successfully strikes a deal with Chevron faces a winner's curse. If Woodside thinks the price is good and Scarborough gas is likely to go the NWS it will pre-empt the deal and take Chevron's stake itself. Months of effort and millions of dollars on advisors wasted. And if Woodside lets the purchase go ahead? You have just paid too much for 17% of an ageing and emptying LNG plant. Congratulations. --- *Main image: North West Shelf gas plant near Karratha. Source: Woodside Energy Ltd* --- ### Federal Govt paying top-dollar $1.5M a week for failed oil project URL: https://www.boilingcold.com.au/top-dollar-bill-failed-oil-project/ Last updated: 2020-08-28T01:34:12.000Z The Northern Endeavour’s operator appears to be billing the Federal Government more for minimal manning of the oil vessel than it did for a full production crew. At the same time, original owner Woodside will charge $8.8 million for advice on what to do next. Northern Oil and Gas Australia went into liquidation in early February with [debts of more than $165 million](https://www.boilingcold.com.au/failed-oiler-northern-endeavour-owes-165m/). It left the Federal Government with the responsibility for keeping the Northern Endeavour safe and a possible decommissioning bill of up to $230 million. The failure of NOGA had been a real possibility since it entered voluntary administration in September 2019 after the safety regulator NOPSEMA ordered production to cease in July due to the vessel’s “degraded state.” The burden on the Australian taxpayer is growing, as shown by a review of Federal Government tenders by *Boiling Cold*. --- ***The bills for the Northern Endeavour so far*** *Upstream Production Solutions - operations & maintenance services* - 13 Feb 2020 to 30 Apr 2020: $12,136,412 - 1 May 2020 to 31 Oct 2020: $35,440,240 *Arthur J Gallagher and Co – insurance* - 2 Mar 2020 to 15 Oct 2020: $6,915,864 *Woodside – advice on possible decommissioning* - 24 Jun 2020 to 23 Jan 2021: $8,800,000 *Gaffney Cline – due diligence of options* - 23 Jul 2020 to 30 Nov 2020: $118,934 --- NOGA paid Upstream Production Solutions to operate the Northern Endeavour after it took over the vessel from Woodside in 2016. After NOGA failed UPS owner GR Engineering wrote off $17.6 million of bills not paid by the vessel owner. Since February, UPS has fulfilled the same role for the Federal Government while the vessel is in lighthouse mode: no production, minimal crew and only critical maintenance undertaken. The current UPS contract is equivalent to almost $71 million a year to keep that minimal crew, understood to be between 10 and 12 people, offshore in the Timor Sea. This charge is almost as much as past UPS annual revenue from many assets across the country. The annual report of GR Engineering for the 12 months to June 2019 showed UPS revenue was $88.4 million. In that year UPS operated a fully-crewed Northern Endeavour while it was producing oil, maintained 3500 gas wells in Queensland, and provided operations and maintenance support to Mitsui, ENI and Triangle Energy for onshore and offshore fields in WA and the NT. *Boiling Cold* asked UPS why it was charging so much to operate the Northern Endeavour in lighthouse mode. The company did not respond. Independent Senator for South Australia Rex Patrick said the taxpayer seemed to be paying UPS more to operate the Northern Endeavour in lighthouse mode than it had cost NOGA to have UPS operate it as a production facility. “I don’t think anyone could reasonably reconcile this and the Minister owes the public an explanation,” Patrick said. Operating and insurance costs are about $1.57 million a week. *Boiling Cold* asked Resources Minister Keith Pitt what action the Government had taken to ensure it was not paying an excessive amount. The question was not answered. A spokesperson for the Department of Industry, Science, Energy and Resources said UPS was a respected and reliable operator. The Government is also paying for insurance and oil spill preparedness while it decides what to do with its unwanted inheritance. ## Planning decommissioning twice Earlier this month Minister Pitt announced Woodside was advising the Government on what was required to decommission the facility and associated oil fields if the Government chose that option. “As a previous owner of the Northern Endeavour, Woodside is well placed to provide timely, detailed advice,” he said. Indeed, Woodside had plans to decommission the Northern Endeavour in 2015\. It will now receive $8.8 million to revisit the issue, equivalent to almost $60,000 a day for seven months. Woodside advertised its intention to decommission the Northern Endeavour in mid-2015 but two months later agreed to pay the newly-formed NOGA $24 million to take the asset over, complete with the decommissioning liability of up to $230 million. NOGA was significantly under-capitalised and had a fragile business model, according to a [report into the company’s failure](https://www.boilingcold.com.au/sellers-of-oil-and-gas-assets-should-stay-liable-for-cleanup-report/) for the Government by North Sea industry veteran Steve Walker, “It had taken over an ageing FPSO and with the LamCor (Laminaria Corallina) fields approaching their end of life,” Walker said. “The NOGA group had limited background in the offshore industry, and with no other income-generating assets was significantly reliant on day-to-day production for cash flows.” Senator Patrick said Woodside could not in good faith claim it did not bear some responsibility for the failure of NOGA. “Any advice they are providing the Commonwealth should be on the basis of moral obligation,” Patrick said. A Woodside spokesperson said the advice would be provided at cost and the sale and transfer of the Northern Endeavour to NOGA was completed in accordance with Australian laws and regulations. ## Who pays? *Boiling Cold* understands the Government’s favoured option is to decommission the vessel, subsea infrastructure and wells. The alternative of a return to production either requires ongoing Government involvement with significant costs and risk; or passing the asset to a private entity with the chance of another financial failure. Pitt’s predecessor Senator Matt Canavan in January said a levy on other oil and gas producers was one way for the Government to recoup the cost of dealing with the Northern Endeavour. The Government is still considering opportunities to recover costs, the DISER spokesperson said. Senator Patrick said the Government put the taxpayer into this very costly position because they were unwilling to work with NOGA to address the Northern Endeavour’s maintenance issues. “As much as I would like to see either Woodside or industry pick up the tab, the reality is we are in this situation because of a failure of Government,” Patrick said. “They were warned of the potential outcome by myself and others well before the mess occurred. “The Government’s response to this warning was: ‘We won’t be taking anything over. That’s not our role’”. “And yet that’s exactly where things have ended up.” Senator Patrick said the Government needed to overhaul its policies to make sure the taxpayer was not left carrying the can on stranded assets and called for the release of the full Walker report. “The first step in making sure this doesn’t happen again is for a rather large broom to be put through the Departments that were responsible,” Patrick said. --- *Main image: Northern Endeavour floating production storage and offloading vessel. Source: Northern Oil and Gas Australia.* ### Chevron's Gorgon LNG faces up to $1.4B hit to fix cracks URL: https://www.boilingcold.com.au/chevron-shutdown-all-gorgon-trains/ Last updated: 2020-09-07T08:27:21.000Z Chevron will shut down LNG Train 1 at its $US54 billion Gorgon project in early October to fix faulty welds on pressurised vessels full of propane and Train 3 will undergo repairs in January, according to a WA safety regulator. Each of the giant LNG trains on Barrow Island has eight propane kettles, also called shell and tube heat exchangers, that have vast quantities of flammable fluids flow through them. During a routine shutdown of Train 2 that commenced in late May thousands of cracks were found in the welds of the kettles. The propane kettles on Trains 1 and 3 are of a near-identical design and manufacture to those on Train 2 and are operating while workers nearby fix Train 2. A requirement to inspect the so-called propane kettles on Trains 1 and 3 by today has been amended, Department of Mines, Industry Regulation and Safety director dangerous goods and petroleum safety Steve Emery said in a statement this afternoon. "Chevron has presented the department with comprehensive safety and technical information that supports an accelerated but staged inspection schedule combined with a range of other controls," Emery said. "This information included details on the origins and nature of the defects as well as the risks associated with various approaches to addressing the uncertainties around Trains 1 and 3." After *Boiling Cold* broke the news of the cracks a month ago Australian Manufacturing Workers' Union state secretary Steve McCartney called for Chevron to explain what they were doing to ensure the workers were safe. "If this was a crack in an aeroplane wing, they'd be shutting down all the planes to make sure there are no other cracks," McCartney said at the time. Emery said the dangerous goods directorate had conducted an in-depth review of Chevron's submission and was satisfied it provided an acceptable level of risk. The amended Remediation Notice required Chevron to comply with its submission. "Dangerous Goods Directorate officers will continue to analyse the inspection results, review the on-going suitability of the program and assess if further regulatory action is required," Emery said. "The officers will also be conducting audits for compliance with the Remediation Notice." ## An expensive repair The kettles are critical components of the plant. Liquid propane, a component of LPG, is pumped into each shell at a rate of 2300 tonnes an hour and evaporates quickly – or flashes - to cool a mixed refrigerant that flows in tubes that run through the shell. The mixed refrigerant of propane, ethane, methane and nitrogen is later used to cool the natural gas to become liquid at -160℃. Train 1 will be shutdown for between 45 and 90 days and the extent on the Train 3 shutdown will depend on what Chevron learns from the other repairs, a company spokesperson said. Chevron initially planned to restart Train 2 by July 11, but now plans production to recommence in early September once the welds are fixed. Every day one of Gorgon's 5.2 million tonnes a year LNG trains is out of action about $4.9 million of revenue is lost, assuming Gorgon's partners are achieving [similar prices to Woodside](https://files.woodside/docs/default-source/investor-documents/quarterly-and-half-yearly-pdfs-and-data-tables/2020/037-q2-2020-briefing-transcript-and-additional-information.pdf?sfvrsn=a32e8391%5F3&ref=boilingcold.com.au). If Train 2 restarts in early September as planned and the subsequent shutdowns take 90 days - the upper end of Chevron's estimate - Gorgon's partners will lose production worth about $1.4 billion. Gorgon is operated and 47% owned by Chevron. Shell and ExxonMobil each have a 25% stake and Japanese companies Osaka Gas, Tokyo Gas and JERA own the remainder. The plan agreed with the regulator is far from the worst case for Chevron. If Trains 1 and 3 had been shut down at once a shortage of qualified workers would likely have prolonged the work. Given the size of Gorgon - 15.6 million tonnes of LNG a year - securing replacement volumes for customers could have been difficult and likely have pushed up spot prices significantly. Chevron has been preparing for shutdowns. Yesterday [Argus Media reported](https://www.argusmedia.com/en/news/2134037-prolonged-gorgon-lng-output-issues-expected?backToResults=true&ref=boilingcold.com.au) Chevron was asking its Gorgon customers to accept LNG cargoes from the Wheatstone or North West Shelf LNG plants during October and November. Chevron operates and owns 64% of Wheatstone and has a 17% stake in the Woodside-operated North West Shelf project. ## Regulatory action still open Today's news comes two weeks after safety regulators slapped an [extraordinary 33 orders on Chevron](https://www.boilingcold.com.au/safety-cop-orders-chevron-to-fix-gorgon/) to make Gorgon safe. The problems at Gorgon appear to straddle the jurisdiction of two regulatory agencies within WA's Department of Mines, Industry Regulation and Safety. The remediation notice issued by the DMIRS Dangerous Goods Directorate issued to inspect the propane heat exchangers on Trains 1 and 3 by today has now been extended. However, 32 improvement notices issued by WorkSafe a fortnight ago are still open. Chevron received a notice for each of the eight propane kettles on Train 2 as they were not manufactured to the registered design. Worksafe also issued another 24 notices for the Train 3 kettles over the design issue, a need to inspect the vessels, and weld repairs. Today, Worksafe issued more improvement notices for Chevron to inspect the Train 1 kettles by September 4. DMIRS Worksafe director Sally North said Chevron could seek a review or extension of the notices. The Chevron spokesperson said it had requested a review of the Improvement Notices for Train 3 and responded to some of the Train 2 notices. "Chevron and the regulator share the same goal of maintaining the safety of our workforce and operating facilities," the spokesperson said. "The appropriate safety measures are in place, and we continue to deliver LNG to customers and natural gas to the Western Australian domestic market under our contractual commitments." ## Chevron's private problem went public News of the damaged pressure vessels was [first broken by *Boiling Cold*](https://www.boilingcold.com.au/cracks-at-chevrons-gorgon-threaten-lng-production/) and *The West Australian* a month ago. At the time DMIRS director of dangerous goods and petroleum safety Steve Emery said Chevron was responsible for ensuring the suitability and integrity of any repairs and the department did not intend to take any action at that stage. Later that day it emerged that the regulator had known nothing of the problems on Barrow Island until a media query to Energy Minister Bill Johnston. A few days later DMIRS announced it would send inspectors to Barrow Island. Less than a week after the news broke Chevron senior management were quizzed about the propane vessels by Wall Street analysts. Chevron upstream executive vice president Jay Johnson, who headed up the Australian business when Gorgon was being designed, said the weld defects arose from problems during the manufacture of the vessels and were not related to the design. "It's really just grinding out and replacing a weld that had some abnormalities and ensuring that we have the structural and pressure-containing capacity that we are looking for," Johnson said. "We do not need to replace the vessels; we believe the repairs are going to be fully effective." Chevron Australia [manages safety](https://australia.chevron.com/environment/protecting-people?ref=boilingcold.com.au) "based on two unwavering principles: do it safely or not at all; and there is always time to do it right," according to its website. The welding of the propane vessel not being done right some years ago in a South Korean workshop is now costing Chevron and its partners dearly. Chevron's problems at Gorgon come as the US major is in the final stages of [culling 20 to 30 per cent of its Australian workforce](https://www.boilingcold.com.au/chevron-red-tape-for-hr-hunger-games/), a cut twice as deep as it is planning for the company overall. --- UPDATES: 21 August 4:o0 PM: originally published as "Chevron to shutdown all Gorgon LNG trains in stages to fix cracks." 21 August 6:40 PM: updated and rewritten to include Chevron comments and discussion of revenue loss as "Chevron's Gorgon LNG faces up to $1.4B hit to fix cracks." --- *Main image: Gorgon LNG plant on Barrow Island. Source: Chevron Australia Pty Ltd.* ### Santos’ dirty big $2B Barossa bet URL: https://www.boilingcold.com.au/santos-dirty-big-2b-barossa-bet/ Last updated: 2021-12-27T00:46:32.000Z *ANALYSIS* When Santos bought ConocoPhillips northern Australia LNG interests for $US1.465 billion ($2 billion) in October 2019 Brent crude cost $59 a barrel, the LNG outlook was rosy, partners lined up to invest, and the crucial Barossa development was to go ahead in early 2020. Seven months later when the [deal completed](https://www.santos.com/news/santos-completes-conocophillips-northern-australia-acquisition/?ref=boilingcold.com.au) Brent cost $US34 a barrel after going as low as $US15, CO2-rich Barossa was delayed indefinitely, and Santos is left holding well more than its target equity of 40% in the assets. Santos has increased its stake in the Darwin LNG plant and the near-end-of-life Bayu-Undan field from 12% to 68%, and its interest in the Barossa field lined up to supply gas to Darwin LNG from 25% to 62%. It was another move offshore for the Adelaide-based company that bought Quadrant Energy’s WA operation in 2018 for $US2.15 billion. Again, chief executive Kevin Gallagher invested in assets that Santos already had a stake in and assumed operatorship. ConocoPhillips’ large northern Australia headquarters in Perth will join Santos’ WA operation like the Quadrant employees in 2019. The [plan](https://www.santos.com/news/acquisition-of-conocophillips-northern-australia-interests/?ref=boilingcold.com.au) was for Santos to sell down to more closely align the ownership of the Barossa field and the Darwin LNG plant that may soon shut down when gas from Bayu-Undan stops flowing. LNG contracts would be signed and the $US4.7 billion ($6.5 billion) Barossa project given the go-ahead. ![Equity in Bayu Undan offshore, Darwin LNG plant and Barossa development](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/08/image-6.png) **Equity in Bayu Undan offshore, Darwin LNG plant and Barossa development** South Korean SK E&S has [agreed to buy](https://www.santos.com/wp-content/uploads/2020/03/200312-Santos-agrees-to-sell-a-25-interest-in-Darwin-LNG-and-Bayu-Undan-to-SK-ES.pdf?ref=boilingcold.com.au) 25% of Darwin LNG and Bayu-Undan for $US390 million, and Japan’s JERA is interested in [taking 12.5%](https://www.santos.com/wp-content/uploads/2020/04/200416-Santos-signs-LOI-to-sell-a-12.5-interest-in-Barossa-to-JERA.pdf?ref=boilingcold.com.au) of Barossa. Unfortunately for Santos the SK E&S deal is conditional on the sanction of the Barossa project and JERA have just signed a non-binding letter of intent. For now, Santos is caught holding a very costly baby. When the ConocoPhillips transaction completed in May Santos made much of the fact that it had increased the portion of the price contingent on Barossa approval from $US75 million to $US200 million, about 14% of the total price. ## The nasty no-Barossa downside This was small concession from ConocoPhillips given the financial disaster Santos faces if Barossa does not go ahead. In that downside scenario, that any company should plan for, Santos would have paid $US1.265 billion to increase its stake in an LNG plant that may be empty in a few years, an offshore facility with a $US1.1 billion abandonment cost, and a field of high-CO2 stranded gas. The purchase price plus the extra 57% of Bayu-Undan abandonment cost amounts to a $US1.89 billion ($2.6 billion) hit, about 20% of the Santos’ market capitalisation. Abandonment of Darwin LNG would add to the bill. The financial impact will be considerably lessened by the increased share of Bayu-Undan and Darwin LNG profits that flow to Santos from the January 2019 effective date of the ConocoPhillips deal. ![Santos map of gas fileds off northern Australia includiing Barossa, Bayu Undan, Prelude, Ichthys and Blacktip.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/08/image-7.png) **Gas connections to Darwin.** Source: Santos Santos would be in a much better position if it had secured from ConocoPhillips a common clause in large oil and gas deals: if the oil price drops drastically – in this case 42% - between agreeing terms and completion all bets are off. *Boiling Cold* understands this clause was bargained away at the negotiation table. ASX-listed oil and gas junior Karoon Energy struck a much better deal when it bought the Baúna field offshore Brazil. In July Karoon announced that the purchase price of $US665 million [agreed in June 2019](https://www.karoonenergy.com.au/wp-content/uploads/2019/07/Karoon%5Fsigns%5Fbinding%5FBauna%5FSale%5F%5FPurchase%5FAgreement%5F25%5FJuly%5F2019.pdf?ref=boilingcold.com.au) had a $US285 million component [contingent on increased oil prices](https://www.karoonenergy.com.au/wp-content/uploads/2020/07/Karoon-agrees-on-adjusted-terms-for-the-Bauna-acquisition-27072020.pdf?ref=boilingcold.com.au). While Karoon was able to link 43% of its acquisition price to a success case, Santos managed only 14% with ConocoPhillips. Santos’ agreements to sell down may also be problematic. SK E&S’s commitment to buy additional equity is conditional on a final investment decision on Barossa, but as a member of the Barossa joint venture it can veto that decision. The deal appears to be an option that SK can take or leave. ## The buy big and barge through (or bust) strategy Santos chief executive Kevin Gallagher and his counterpart at Woodside Peter Coleman may not, rumour has it, be best of mates but they have a common strategic approach. Both ambitious men are driven to grow companies that are big Australian players but much smaller and with fewer investment choices than many of their joint venture partners. The two companies are forced to either take a high stake in a project initially or buy out less interested partners to stop projects being left on the shelf. Either way, the result is risk and value concentrated in a small number of projects and desperate attempts to push through the few investment opportunities they have. Woodside’s 90% share in Pluto and Santos’ 80% of Narrabri are examples of investments so good partners could not be found. Pluto did not have sufficient gas reserves to support a second LNG train that would have justified the high initial investment, and Narrabri may never happen. Woodside bought an unenthusiastic ExxonMobil out of Scarborough to have an alternative growth option to Browse. It is likely Woodside will now have to buy Chevron out of the North West Shelf to increase its control over where to put that Scarborough gas. BHP is also looking to exit the North West Shelf, and others may follow. Santos has repeated the process with the acquisition from ConocoPhillips and now faces [ENI selling](https://www.reuters.com/article/us-eni-m-a-australia/eni-appoints-citi-to-sell-australia-gas-assets-sources-idUSKBN22R25P?ref=boilingcold.com.au) its 11% of Darwin LNG. If the trend goes too far so much will be spent buying out partners that would rather invest elsewhere there will be little money left for the projects themselves. The rush of major players out of some or all of their Australian LNG investments should prompt some concern about how good an investment in Australian LNG is. One thing ExxonMobil, Chevron and ConocoPhillips have in common is that they are [shortlisted to invest](https://af.reuters.com/article/commoditiesNews/idAFL8N2D35CX?ref=boilingcold.com.au) in the expansion of LNG from Qatar. The lure is easy to understand given that respected industry consultant Wood Mackenzie estimated Qatar could deliver LNG to East Asia for [less than half the price](https://www.boilingcold.com.au/woodsides-scarborough-lng-was-uneconomic-before-price-crash-woodmac/) of Woodside’s Scarborough to Pluto proposal. Barossa’s cost of supply was not revealed, but would certainly be closer to Scarborough than Qatar. [Woodside’s Scarborough LNG uneconomic before price crash: WoodmacIf Scarborough, considered the most economic of Woodside’s two projects, was uncompetitive before LNG prices crashed then plans will have to change on the Burrup Peninsula.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/05/Pluto-LNG-Plant--Karratha-web.jpg)](https://www.boilingcold.com.au/woodsides-scarborough-lng-was-uneconomic-before-price-crash-woodmac/) ## How do you sell a problem like Barossa? Santos has a long list of problems to solve to achieve the plan it bet $2 billion on ten months ago. History shows that Australian LNG projects go ahead when the equity in the gas fields and the LNG plant are the same. A misalignment makes agreement on the terms to process the gas into LNG very difficult. The upstream parties want a low tariff and high reliability while the downstream investors seek to minimise both costs and their responsibility for lost production. Santos is a long way from achieving that alignment, even with its agreements with SK and JERA. ENI wants to exit Australia so will not invest in Barossa to match its interest in Darwin LNG. Inpex’s money in Australia is committed to keeping gas flowing to its Ichthys LNG project with expensive drilling and compression projects. If these companies are more likely to sell than buy, who would step in? Not an investor that puts any weight on climate risk in its decision making. Barossa has escaped the public scrutiny directed towards Narrabri on the east coast and Woodside’s Scarborough and Browse projects in the west. However, the Barossa reservoir with 16% to 20% carbon dioxide would concern any investor focused on climate risks: which is just about all of them. Santos estimated the Barossa offshore development would emit an average of 3.38 million tonnes of greenhouse gases a year in its [submission to the offshore regulator NOPSEMA](https://www.nopsema.gov.au/environmental-management/assessment-process/offshore-project-proposals/offshore-project-proposals-public-comment/barossa-area-development-offshore-project-proposal/?ref=boilingcold.com.au). The Darwin LNG plant emits about 1.66 mtpa of C02, as reported to the Clean Energy Regulator. This means each tonne of Barossa LNG from the 3.7 million tonnes a year Darwin LNG plant would send about 1.36 tonnes of carbon dioxide into the atmosphere. The carbon intensity of LNG from Barossa is literally off the [chart produced but the Conservation Council of WA](https://d3n8a8pro7vhmx.cloudfront.net/ccwa/pages/11680/attachments/original/1586154175/CCWA%5FClean-State%5FBurrup-Hub%5FReport%5FWEB-READER.pdf?1586154175&ref=boilingcold.com.au) for its campaign against the Browse project. ![Carbon intensity of Australian LNG projects: North West Shelf, Pluto, Gorgon, Wheatstone, Ichthys, Prelude, Scarborough and Browse.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/08/image-8.png) **Carbon intensity of Australian LNG projects**. Source: Conservation Council of WA Barossa LNG is incredibly three times more carbon-intensive than LNG from Pluto, Wheatstone, or Gorgon if its CO2 injection works. ConocoPhillips luckily rid itself of the hot potato of Barossa emissions and Bayu-Undan abandonment costs before the pandemic-induced oil and gas price crash. Santos is now holding the costly smelly package and dearly wants someone to pass some of it onto others. And those parties know Santos needs a deal more than them, giving them all the negotiation leverage. Tomorrow morning Santos presents its half-year financial results. --- *Correction: 22 August: JERA has merely signed a letter of intent to buy an interest in Barossa. The original story reported JERA had agreed to buy a stake subject to a final investment decision on Barossa.* --- *Main image: Bayu Undan facility in the Timor Sea. Source: Santos* --- ### McGowan: onshore gas export banned, unless its Stokes' Waitsia URL: https://www.boilingcold.com.au/mcgowan-onshore-gas-export-banned-unless-its-stokes-waitsia/ Last updated: 2022-01-28T10:08:22.000Z The WA Government has banned the export of gas produced onshore except for the Waitsia field that influential media proprietor Kerry Stokes has a significant interest in. Premier Mark McGowan yesterday [prohibited the export of gas produced onshore in WA](https://www.mediastatements.wa.gov.au/Pages/McGowan/2020/08/Revised-policy-to-secure-domestic-gas-supply-and-create-jobs.aspx?ref=boilingcold.com.au) to other countries or states, adding to the longstanding requirement that LNG projects reserve about 15% of their gas for the WA market. > "WA's domestic gas policy is the envy of the nation, and the updated policy will ensure our State can continue to access reliable and affordable gas," McGowan said. Previously the policy only covered offshore gas as all LNG plants in WA – North West Shelf, Pluto, Gorgon and Wheatstone - were developed exclusively to process gas from giant offshore fields. Developers of onshore gas fields had no access to export markets, and the reservation policy added a portion of the offshore gas to the WA market. WA enjoyed a gas market independent of international prices while it benefitted from the development of large offshore fields that the local market was too small to justify. The foundation of this arrangement was threatened by the availability of North West Shelf LNG plant capacity as early as this year as gas supply from the project's own fields declined. [North West Shelf’s 36-year WA gas reign is overSantos is now the biggest supplier of gas to WA and the future may depend on the Perth Basin after the State’s almost four decades of reliance on Australia’s first LNG plant.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/06/Karratha-Gas-Plant--North-West-Shelf-Project-web--1-.jpeg)](https://www.boilingcold.com.au/north-west-shelf-wa-gas-reign-over/) Onshore gas producers now had the opportunity to bypass the local market and send gas to the NWS plant for export. The export opportunity arose just as the WA market was likely to rely on Perth Basin gas more. The NWS is now a minor player in the market after the [expiry of contracts in June](https://www.boilingcold.com.au/north-west-shelf-wa-gas-reign-over/) and Woodside's Scarborough and Browse LNG projects, that were subject to the 15% requirement, are delayed. ## Waitsia is special McGowan has made the second stage of the Waitsia field in the Perth Basin the sole exception to the new policy. > "Once sanctioned, it will provide urgently needed jobs, royalties and economic stimulus for the region and the State," McGowan said. Waitsia operator and half-owner Mitsui estimated Waitsia would create at least 150 jobs during construction and require 12 to 15 workers to operate, according to its [submission](https://www.epa.wa.gov.au/sites/default/files/Referral%5FDocumentation/Supporting%20Document%5F7.pdf?ref=boilingcold.com.au) to WA's Environmental Protection Authority. There are about [124,000 unemployed](https://www.abc.net.au/news/2020-07-16/wa-unemployment-up-again-despite-coronavirus-restrictions-easing/12461146?ref=boilingcold.com.au) people in WA. The Premier's statement said Waitsia could "export some of its gas as LNG for a short period of time." In fact, Waitsia will export almost all its gas for about five years from late 2023, accounting for about half the field's reserves. To export the planned 1.5 million tonnes of LNG a year, Waitsia must supply about 225 terajoules of gas a day from the 250 TJ a day capacity of the project's second stage. A spokesperson for the Department of Jobs, Tourism, Science and Innovation that administers the domestic gas policy said it anticipated the export to last for about five years. Beach Energy chief executive Matt Kay, who was briefing investors about Waitsia yesterday morning when McGowan announced the project's special treatment, said about half of Waitsia's reserves would be exported. Alinta has already purchased 20 TJ a day of gas from Waitsia, so Waitsia will provide no additional gas to the WA market until about late 2028. The JTSI spokesperson said allowing Waitsia to export gas would help ensure the project proceeded. "The project entails new domestic gas supply infrastructure in the Mid-West and…provides a pathway to develop more Perth Basin gas in the future," the spokesperson said. The Premier's support for Waitsia comes before the Environmental Protection Authority has made its recommendations about the project that will emit about 300,000 tonnes of greenhouse gases a year. [Waitsia gives McGowan a gas-powered climate dilemmaAs Environment Minister in 2006 Mark McGowan led the way to ensure gas projects offset some of their emissions. Now as Premier he may need to choose between climate credibility and the interests of WA’s most powerful man.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/05/MEPAU-Covid-19-response.jpg)](https://www.boilingcold.com.au/waitsia-gives-mcgowan-gas-powered-climate-dilemma/) The EPA could follow its past practise and recommend to Environment Minister Stephen Dawson that Waitsia offsets the 180,000 tonnes a year of emissions from CO2 in the reservoir. This policy led to the injection of CO2 underground at Chevron's Gorgon project and the planting of 26 million trees by Woodside's Pluto project. However, any additional cost would directly affect Kerry Stokes, the powerful proprietor of WA's only daily newspaper *The West Australian* and *Channel 7*, that hosts Perth's top-rating news bulletin. Stokes and his family, through Seven Group that owns shares in Beach Energy, has about a 10 per cent stake in Waitsia. Dawson will decide, after consultation with other ministers, if the EPA's recommendations are imposed or rejected. *Boiling Cold* understands the EPA will publish its Waitsia recommendations in a few weeks. ## Woodside sidelined Woodside yesterday announced that the NWS had [agreed on non-binding key terms](https://files.woodside/docs/default-source/media-releases/nwsp-agree-key-principles-for-gas-processing.pdf?sfvrsn=c770bdb1%5F10&ref=boilingcold.com.au) for processing gas from its 90%-owned Pluto project as well as Waitsia. Waitsia can export half its reserves only because Woodside's Browse to NWS project is delayed, as is the Scarborough project that was to send some of its gas to the NWS before Browse gas arrived. The details of the new domestic gas policy do not help some other Woodside initiatives. LNG sold to ships is now explicitly labelled an export. Woodside will not be able to count LNG sold to ships though its [planned bunkering facilities at Port Hedland and Dampier](https://www.mediastatements.wa.gov.au/Pages/McGowan/2020/05/Push-to-create-international-LNG-fuelling-hub-in-the-Pilbara.aspx?ref=boilingcold.com.au) against its domestic reservation requirements. Woodside has considered replacing the dirty and inefficient NWS power plant with a gas-solar hybrid plant at nearby Maitland estate. It is understood that Woodside has considered counting the gas supply to power station as domestic supply as it was outside the LNG plant boundary A JTSI spokesperson told *Boiling* Cold that gas used for LNG production was not considered a domestic gas supply. ## Pipeline reversal Waitsia cannot export 1.5 mtpa of LNG until the flow of the Dampier to Bunbury natural gas pipeline is reversed in its northernmost section. The DBNGP started operation in 1984 solely to transport NWS gas to the South West of WA. Since then the Varanus Island, Devil Creek, Macedon and Gorgon plants have connected to the DBNGP at points further south. Pluto joined at the top of the DBNGP in 2018. The North West Shelf now supplies less than 100 TJ a day of gas to the WA market after [large contracts expired in June](https://www.boilingcold.com.au/north-west-shelf-wa-gas-reign-over/) and Pluto sells about 25 TJ a day. If the volume of Waitsia gas destined for export was less than the flow from NWS and Pluto, the parties could have agreed a swap. NWS would divert gas from its domestic gas plant to LNG and Waitsia would supply gas to NWS customers in the south. However, as the amount of Waitsia gas destined for export exceeds the south-bound flow at the top of the DBNGP, flow in that section will need to be reversed. WA's Economic Regulation Authority's allowed for a reversal in its [draft decision on a new-five year access arrangement](https://www.erawa.com.au/cproot/21404/2/Notice---Proposed-revisions-to-the-access-arrangement-for-the-Dampier-to-Bunbury-Pipeline---Draft-decision.pdf?ref=boilingcold.com.au) for 2021 to 2025 released on Friday. The arrangement will now be revised earlier if pipeline operator DBP agrees before May 2023 to transport gas that required flow to be re-directed. ## Big gas opposition Oil and gas lobby group APPEA has come out against the WA Government's ban against exporting domestic gas. APPEA WA director Claire Wilkinson said the Government did not consult with industry and the move would reduce investor confidence. "WA's domestic gas market has been well supplied for many years," Wilkinson said. "The policy settings were already bringing gas to market that WA needs, so this added restriction may actually do the opposite to what the Government expects and will reduce future gas developments." The [APPEA statement](https://www.appea.com.au/all%5Fnews/tightening-wa-domestic-gas-policy-risks-further-development/?ref=boilingcold.com.au) did not mention its consistent opposition to the policy that it now says is working: that gas equivalent to 15% of LNG exported from offshore fields with plants in WA be reserved for local use. APPEA's argument that the policy would hamper investment was destroyed by the approval of the $US54 billion Gorgon and $34 billion Wheatstone LNG projects that were subject to the 15% reservation. WA's reservation policy gas has successfully shielded the local market from international gas prices while an enormous LNG industry was built. In the eastern states, three Queensland LNG projects were built without a reservation policy. Competition regulator ACCC today released a [report](https://www.accc.gov.au/media-release/domestic-gas-users-paying-too-much?ref=boilingcold.com.au) that eastern states consumers are not just exposed to international prices, but are paying more. > "I am yet to hear a compelling reason from LNG producers as to why domestic users are paying substantially higher prices than buyers in international markets," ACCC chair Rod Sims said. "The ACCC is very concerned with the widening gap between domestic and export parity prices, which will have an inevitable impact on Australia's industrial sector during what is already a difficult economic period." --- **Main image: Proposed Waitsia Stage 2gas plant. Source: Mitsui E&P Australia* ### Woodside joins the green hydrogen race URL: https://www.boilingcold.com.au/woodside-joins-the-green-hydrogen-race/ Last updated: 2022-01-08T14:18:22.000Z Woodside has taken stakes in two renewable energy hydrogen projects less than a year after it said hydrogen from gas would be cheaper for the next 30 years. The LNG giant’s chief executive Peter Coleman told investment analysts on Thursday that the company was now involved in two green hydrogen projects. Emissions-free hydrogen can either be green or blue. Green hydrogen made with an electrolyser powered by renewable energy that splits water into hydrogen and oxygen. Blue hydrogen combines the current dominant form of hydrogen production – making hydrogen and carbon dioxide from natural gas – with the capture and storage of the CO2. [Hydrogen: a simple molecule but a complex businessThere is no shortage of hype about hydrogen. Time will tell what ideas fall by the wayside and which build enduring industries.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/07/22951791245_1bb6dfcf46_o.png)](https://www.boilingcold.com.au/hydrogen-a-simple-molecule-but-a-complex-business/) **A background to the hydrogen hype** A joint venture between Woodside and energy infrastructure player APA wants to produce hydrogen at APA’s Badgingarra wind and solar farm for use in use in power generation, transport and industry. In the longer-term delivery to Perth through a pipeline could be possible. Woodside has also become the operator of the H2TAS project at Bell Bay, near Launceston, Tasmania. The proposal to use wind and hydropower to make 4.5 tonnes a day of hydrogen was first promoted by Countrywide Renewable Energy that remains involved. The two projects are among seven [shortlisted by the Australian Renewable Energy Agency](https://arena.gov.au/news/seven-shortlisted-for-70-million-hydrogen-funding-round/?ref=boilingcold.com.au) to share $70 million to help fast track the development of renewable hydrogen in Australia. The projects have an average cost of about $70 million and will deploy electrolysers of at least 10-megawatts in capacity, placing them at the top end of international facilities. In addition to Badgingarra, three other WA projects are on the shortlist. ATCO wants to step up from its hydrogen 65kg a day microgrid pilot plant completed in 2019 at its Jandakot facility south of Perth to produce about 4.2 tonnes a day of green hydrogen. BHP’s Nickel West plans to install an electrolyser at its Kwinana Nickel Refinery to produce some of the hydrogen it uses to refine the valuable battery metal. French energy giant ENGIE and Norwegian fertiliser manufacturer Yara want to supply green hydrogen to Yara’s ammonia plant on the Burrup Peninsula to displace some of the hydrogen made from gas that the plant uses. The other shortlisted proposals are to blend hydrogen into the gas supply to Albury Wodonga and to fuel trucks at an Anglo American coal mine in Queensland. ARENA plans to select the preferred projects by mid-2021 and expects them to reach financial close by late 2021 and begin construction in 2022. In June Coleman said Woodside needed new products its traditional business of developing large LNG projects grew more difficult. [Coleman smells ammonia in Woodside’s futureWoodside looks at gas to ammonia to fuel coal-fired power stations as concerns grow about the viability of LNG mega-projects.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/06/Coleman-reduced.jpg)](https://www.boilingcold.com.au/coleman-smells-ammonia-in-woodsides-future/) With three Japanese companies it is studying the feasibility of part-fueling coal-fired power stations with ammonia made from renewable hydrogen. ## Green versus blue Less than a year ago, [Woodside’s position](https://www.boilingcold.com.au/time-out-for-hydrogen-from-gas/) was that green hydrogen would be the most expensive product until at least 2050. For fossil fuel companies’ blue hydrogen has the benefits of maintaining demand for their product and using some of their current skills. However, this year [BP has launched a feasibility study](https://www.boilingcold.com.au/bp-to-chase-green-ammonia-in-geraldton/) to make one million tonnes of ammonia a year from green hydrogen at a plant near Geraldton and Shell has planned a massive wind to hydrogen project off the coast of the Netherlands. Woodside’s move to invest in existing projects allows it to compete for the ARENA funding. The move to tangible action was reflected in changed messaging on Woodside’s web page on climate change hours before Coleman spoke to investors. The switch from “Natural gas: the natural step to net zero,” to “A better tomorrow needs action today” perhaps reflects the industry’s struggle to portray methane as substantially better than coal and a growing cynicism that the sector is greenwashing rather than making substantive changes. Monday night’s television highlighted Woodside’s difficulties in portraying itself as playing a positive climate role. About 800,000 people watched Craig Reucassel try to deliver some trees to Woodside’s headquarters to help offset its emissions on the ABC’s *Fight for Planet A: Our climate challenge.* “Chevron kicked me out but luckily Woodside, an Australian-owned natural gas supplier are just across the road,” Reucassel said, as he wheeled his trolley of trees across Saint Georges Terrace. “They’ve pledged to offset a million tonnes of CO2 over 25 years, but considering they are creating nearly 10 million tonnes a year that clearly isn’t going to cut it.” That recent [deal with Greening Australia](https://www.greeningaustralia.org.au/woodside-and-greening-australia/?ref=boilingcold.com.au) is part of Woodside’s commitment to offset its equity share of the CO2 in the gas from its reservoirs. It builds on an earlier effort that has offset more than 850,000 tonnes of CO2 from the Pluto LNG project. That achievement of Woodside occurred because WA’s Environmental Protection Authority required it. --- *Main image: Badgingarra wind farm. Source: APA Group* --- ### Gorgon CO2 injection questions remain one year on URL: https://www.boilingcold.com.au/gorgon-co2-injection-one-year-on/ Last updated: 2021-07-16T06:26:14.000Z Gorgon LNG’s controversial and late storage of CO2 underground started 12 months ago, but operator Chevron will not confirm if it is fully operational. The first of three units that compresses CO2 from gas in the Gorgon reservoir and sends it to wells that go deep under Barrow Island started operating on 8 August 2019: two and a half years after production from the CO2-rich Gorgon field commenced. In March Chevron Australia operations director Kory Judd said the system, designed to store up to four million tonnes of carbon dioxide a year, was then [fully operational](https://australia.chevron.com/news/2020/aog-opening-session-speech?ref=boilingcold.com.au). Gorgon must inject at least 80 per cent of the CO2 from the reservoirs that feed its $US54 billion plant Chevron would not answerif the system was meeting this requirement in July before the planned shutdown of the second of Gorgon’s three LNG trains. A Chevron spokesperson said the system’s performance would be made public in November when it must release a report. Another unknown is whether Chevron and its partners, principally Shell and ExxonMobil, will suffer a penalty for the excess greenhouse gas emissions caused by the delayed start and slow ramp-up of CO2 injection. In July, the State Government backed a recommendation from the WA Environmental Protection Authority that Gorgon was required to inject CO2 from the start of operations, not two years after that Chevron argued for. [Chevron’s dodge on Gorgon LNG carbon pollution rejectedChevron has been denied a two-year free pass on Gorgon greenhouse gas emissions by the WA Government that could cost it more than $80 million, and there may be a future bill for Wheatstone as well.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/05/gorgon-lng-trains-large-d-cropped-reduced.jpg)](https://www.boilingcold.com.au/chevrons-dodge-on-gorgon-carbon-pollution-rejected/) However, Chevron will have to wait until at least July 2021, the end of the first five-year period that average injection is measured over, before the State Government reveals what action it will take. *Boiling Cold* estimated that the emissions above the 80 per cent target could cost more than $80 million at the current price for Australian carbon credits. ## World-leading ambition In the 28 years from discovery in 1981 to project go-ahead in 2009 Gorgon gained the tag within the oil and gas industry of being deep, dirty, distant and dry. The depth was 220m of water, the distance was 130km from the mainland, dry meant the gas had little valuable condensate, and the dirt was the 14 per cent of carbon dioxide in the gas from the Gorgon field, one of two that feeds the project. In the end, reducing CO2 emissions shaped the whole project. It resulted in construction on Barrow Island with limited land area, little infrastructure, strict environmental and quarantine conditions, and the need to transport almost everything in by sea. However, Barrow Island had one advantage, a sandstone formation called the Dupuy, 2500m below the island, that could store CO2. Gorgon was to emit 6.1 million tonnes of CO2 a year and inject a further 3.4 million tonnes a year under Barrow Island, according to Gorgon’s [Greenhouse Gas Abatement Plan](https://australia.chevron.com/-/media/australia/our-businesses/documents/gorgon-emp-greenhouse-gas-abatement-program.pdf?ref=boilingcold.com.au). The total CO2 produced by Gorgon is greater than the 9 million tonnes emitted from Collie’s coal-fired power stations. Injecting 80 per cent of the CO2 from the reservoirs will make Gorgon the third biggest CO2 storage project in the world. ![Gorgon CO2 injection system schematic](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/08/image-5.png) **Gorgon CO2 injection system schematic.** Source: Chevron Australia Pty Ltd The cost was estimated to be $2 billion in 2010 before the cost of the whole Gorgon project increased by 46 per cent and the injection system needed substantial modification. The Federal Government contributed $60 million. Gorgon has a long-term target to store 95 per cent of the reservoir CO2, or almost four million tonnes a year. Separating CO2 from the reservoir gas was required to avoid CO2 causing corrosion and freezing into solid dry ice in the LNG plant, so was not an additional cost. Gorgon will not separate and store the CO2 from the turbines that generate power and liquefy the gas. The only two projects that store CO2 from combustion, in Canada and the US, are on a smaller scale than Gorgon. They recoup the expense by injecting the CO2 into depleted oil reservoirs to increase production. Only five of the 19 carbon storage projects operating in 2019, including Gorgon, do not use the CO2 to increase oil production. ## Nothing simple about burying CO2 The first step in storing the CO2 underground it is to compress it to a pressure sufficient to force it down the injection wells and then deep into the sandstone and siltstone of the Dupuy Formation. When compressed, the CO2 is neither a true gas or liquid: it is kept at a so-called super-critical phase by controlling the temperature and pressure of the gas. The super-critical CO2 is easier to drive into the Dupuy because it flows like gas but requires less storage volume as it is dense like liquid. The 7km pipeline from the compressors at the LNG plant to the injection wells was at risk as CO2 mixed with water is highly corrosive. The compressors were configured to ensure the water stayed entrapped in the CO2 flow and did not become so-called free water that would cause corrosion. The alternatives for the designers had been to use expensive corrosion-resistant alloys or install additional equipment to remove almost all water from the stream of CO2 before entered the pipeline. Gorgon’s 2017 environmental performance report revealed that when tested in March 2017 the pipeline to the injection wells had leaky and corroded valves and under certain conditions water could condense in the pipeline and cause corrosion. More than two years passed with all reservoir CO2 flowing to the atmosphere while units to dry the gas, that the initial design was meant to avoid, were installed. There was some industry chatter that had revenue been affected the work would likely have taken less time. The pipeline delivers CO2 to nine wells drilled deep into Dupuy. ![Map of CO2 injection facilities on Barrow Island for the Gorgon LNG project, including compressors and wells for CO2 injection, surveillance and pressure management.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/08/BWI-CO2-map.jpg) **CO2 injection facilities on Barrow Island.** Source: Chevron Australia Pty Ltd Up to nine more wells may be required later to control the gas pressure at the bottom of the wells. High pressure could fracture the formation and disturb the planned flow of over seven tonnes of CO2 a minute into the sandstone. Once underground the CO2 sticks to the surface of rock grains or dissolves into the water between them. As more CO2 is stored underground, the pressure in the Dupuy Formation could increase and reduce the flow through each injection well. This pressure increase is managed by extracting water from one side of the Dupuy at the same CO2 is injected into the other. Several kilometres west of the injection wells are four wells with electric submersible pumps that can lift over 12,000 tonnes of water a day to the surface. This water is then reinjected into a formation above the CO2. --- *Part of this story was originally published in the West Australian 26 September 2017 as “Gorgon’s next big challenge.” © Peter Milne* --- *Main image: Workers at a CO2 injection facility on Barrow Island. Source: Chevron Australia Pty Ltd.* ### $4B Fremantle to Kwinana container port move likely URL: https://www.boilingcold.com.au/fremantle-port-likely-to-move-to-kwinana/ Last updated: 2020-08-10T09:47:56.000Z The State Government will put $97 million behind a plan to move WA's container port from Fremantle to Kwinana as early as 2032. The Westport Taskforce has recommended a new port be built at Kwinana and has left the option open of a move south in 2032 or a phased transition over 15 years from 2032. The 2032 move is estimated to cost $4.7 billion and the phased transition $4 billion according to Westport's Stage 2 [report](https://www.transport.wa.gov.au/mediaFiles/marine/PROJ%5FP%5FWestport%5FFuture%5FPort%5FRecommendations%5FStage%5F2%5FReport%5FMay%5F2020.pdf?ref=boilingcold.com.au) completed in May and released by the State Government today. The report estimated it would take five years to plan the port and another five years to build it. Taskforce chair Nicole Lockwood said the options were still at a conceptual stage. "We know the Kwinana Industrial Area makes sense as the location for Perth's future port and will accommodate rail and road links to move heavy container traffic around the city away from the suburbs," Lockwood said. The Department of Transport will run the next phase of work to cost $97 million. The scope will include detailed port planning, environmental approvals, protecting required land, a business case for new infrastructure, and further work to improve current operations at Fremantle. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/08/artists-impression-snip.jpg) **Artist's impression of future container port in Kwinana.** Source: Westport & Dept. of Transport Premier Mark McGowan said it was imperative to plan for Perth's long-term future beyond the capacity limits of Fremantle Port and its road and rail links. "Fremantle Port has served our State for the last one hundred years, it's now time to plan and build the next big piece of economic infrastructure that sets our State up for the next century," McGowan said. Fremantle handled the equivalent of 770,000 twenty-foot containers (TEUs) in 2018\. The Taskforce assumed an annual 3.25 per cent growth in traffic when it assessed options for a future port, leading to 3.8 million TEUs a year in 2068. A one-step move to Kwinana was ranked high on most selection criteria, except for a high upfront cost. Questions remain about whether a breakwater is required, how the port operates with the adjacent bulk port, impact on a possible second Water Corporation desalination plant in Kwinana and whether enough nearby land is available in for port support services such as marshalling yards. The Taskforce concluded in its December 2018 Stage 1 report that increased container traffic through Fremantle was limited by road and rail links, not the harbour itself. That report excluded Bunbury from consideration and narrowed the field to various options at Fremantle and Kwinana. The plan has immediately failed to win bipartisan support with Shadow Minister for Ports Libby Mettam calling for the contentious Roe 8/9 Freeway extension to go ahead to improve road links to Fremantle Harbour. "This is a process which has always had one outcome," Mettam said. "It is based on flawed data, which makes an assumption that our consumption will triple over the next 48 years and which was directed to ignore the benefits that the Roe 8/9 project would provide to Fremantle Port. "This simply represents a four-year plan to develop a business case and is set to threaten jobs at Fremantle." The Roe 8/9 extension was a bitterly fought issue in the 2017 State election. In May the Labor Government made the Beeliar Wetland that the freeway extension was to traverse an A-Class conservation reserve. --- *Main image: Graphic from Westport report. Source: Westport & Dept. of Transport.* ### Chevron cops 33 orders from regulators to make Gorgon safe URL: https://www.boilingcold.com.au/safety-cop-orders-chevron-to-fix-gorgon/ Last updated: 2020-08-07T10:26:36.000Z Two WA safety regulators have slapped Chevron with an extraordinary 33 notices to improve the safety of propane-filled vessels at its Gorgon LNG plant. The US giant may have to shut down its $US54 billion facility to fix poor-quality welds. The regulators inspected Barrow Island last week in response to media reports of workers fears about thousands of cracks found in propane vessels during planned maintenance of LNG Train 2. The immediate concern of workers was their proximity to near-identical vessels on Trains 1 and 3 that are still running. Department of Mines, Industry Regulation and Safety WorkSafe director Sally North said Chevron received eight Improvement Notices last week covering each of the propane heat exchangers on LNG Train 2. "As a high-hazard plant, the design must be registered with WorkSafe, and the vessels have to be manufactured as per the registered design," North said. WorkSafe found that the manufacture of the vessels differed from the design and Chevron has until 28 August to make the vessels compliant. Yesterday Chevron received 24 additional Improvement Notices "in relation to plant registration, weld repairs and the requirement to inspect - and if necessary, repair - vessels on Train 3" that must be complied with by 24 September. *Boiling Cold* understands WorkSafe is still investigating the vessels on Train 3. Separately the DMIRS Dangerous Goods Directorate today issued Chevron with a remediation notice to inspect the propane heat exchangers on Trains 1 and 3 by 21 August 2020. DMIRS dangerous goods and petroleum safety director Steve Emery said the nature of the cracking on Train 2 was such that there might be similar defects in Trains 1 and 3. ## Unions happy Australian Manufacturing Workers' Union state secretary Steve McCartney said the regulator had done the right thing. > "Chevron should comply with these notices and act on this swiftly to give confidence to our members...that they are putting worker safety first," McCartney said. "It's a concern of the AMWU that Chevron had to be dragged kicking and screaming to this position by the regulator." Emery said operators are required to comply with all notices and the Department has a range of enforcement actions available. "DMIRS continues to take the matter seriously and is in close contact with Chevron," Emery said. > "The short-term measures Chevron has taken to mitigate the consequences of any potential gas leaks appear sufficient until the welds are inspected." A Chevron spokesperson said the company was working closely with the regulator to plan and implement the repairs. "The appropriate safety measures are in place, and we remain committed to operating safely and reliably," the spokesperson said. McCartney said Chevron had been caught out talking down the severity of the situation to justify cutting costs by offshoring work to Asia. The same manufacturer in South Korea built all 24 propane heat exchangers at Gorgon. "Good work ain't cheap and in this case, cheap work ain't safe," McCartney said. ## Way forward in the public gaze News of thousands of cracks in propane-filled vessels was broken by *Boiling Cold* and *The West Australian* less than two weeks ago. The regulators only learnt of the problems on Barrow Island from a media query to the Minister for Mines and Energy Bill Johnston. Chevron Australia [manages safety](https://australia.chevron.com/environment/protecting-people?ref=boilingcold.com.au) "based on two unwavering principles: do it safely or not at all; and there is always time to do it right," according to its website. At the same time, all oil and gas companies are under pressure to maximise revenue to offset the collapse in oil and gas prices this year. Before today's news, Chevron had extended the planned shutdown of Train 2 for maintenance from July 11 to early September to repair the Train 2 propane vessels. *Boiling Cold* estimated that Chevron and its principal partners Shell and ExxonMobil lose about $5 million of LNG revenue every day a single LNG train on Barrow Island is out of action. In the past fortnight, Chevron has been forced to abandon its standard practice of keeping problems in-house as Gorgon drew wide attention ranging from WA Premier Mark McGowan to Wall Street investment analysts. Chevron upstream executive vice president Jay Johnson told analysts a week ago that the weld repairs were to ensure "we have the structural and pressure-containing capacity that we are looking for." [Gorgon weld problems raise safety questions Chevron will not answerChevron has “put additional mitigations in place” to protect workers while it mulls what to do with two giant LNG trains operating at Gorgon that could have defective welds.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/08/gorgon-business-overview-mobile.jpg)](https://www.boilingcold.com.au/gorgon-weld-problems-raise-safety-questions-chevron-will-not-answer/) Johnson, who led Chevron's Australian business from 2003 to 2008, said the company had "put additional mitigations in place" to protect workers while it determined how to address the potential for similar issues on LNG Trains 1 and 3. Chevron is required by law to display all Improvement Notices in an area where staff can see them, such as a noticeboard in a common area. Chevron has two avenues to seek a review of the notices. Chevron can request the Worksafe Commissioner to review the notices any time before the date when the notice requires an issue to be fixed. A review would stop the clock on the time restriction until the Commissioner agrees with, modifies or cancels the notice. Chevron then has seven days to lodge an appeal with the Occupational Safety and Health Tribunal that is part of the Western Australian Industrial Relations Commission. --- *Update: August 7, 6:20 PM: Union and Chevron comments added.* --- *Main image: Gorgon LNG project on Barrow Island. Source: Chevron Australia Pty Ltd.* ### Inpex slashes value of Prelude LNG by a third URL: https://www.boilingcold.com.au/inpex-slashes-value-of-prelude-lng-by-a-third/ Last updated: 2020-08-07T01:34:25.000Z Inpex has impaired its stake in the shutdown Prelude vessel by $1.71 billion, slicing 37 per cent off the value it put on the troubled project eight months ago. The Japanese company’s [half-year results](https://www.inpex.co.jp/english/ir/library/pdf/result/e-result20200806.pdf?ref=boilingcold.com.au) released yesterday included a $US1.25 billion “impairment loss due to deteriorating business environments based on the drop in oil prices” for its 17.5 per cent stake in the Shell-operated floating LNG project. In December Inpex valued its stake in the Prelude at$US3.38 billion, according to the 2019 accounts of INPEX Oil & Gas Australia Pty Ltd filed with corporate regulator ASIC. The move follows Shell impairing its gas interests by $US8 to $9 billion, [mainly due to Prelude and the QGC](https://www.boilingcold.com.au/shell-slashes-value-of-prelude-floating-lng/) coal seam methane to LNG project in Queensland. The Japanese company’s move was in stark contrast to its approach to the Ichthys LNG project it operates about 20km away from Prelude, where no value was impaired. The floating facilities for both projects arrived in Australia in mid-2017\. Ichthys shipped its first LNG cargo in October 2018 and quickly ramped up the full production. Prelude, however, did not produce LNG until June 2019 and limped along at about half its design capacity until technical problems caused it to shut down in February. [No winners from Shell’s $US17B Prelude floating LNGShell’s giant $US17B Prelude floating LNG is late, expensive, dirty and so far unreliable. An exclusive look at how a failed investment for Shell is a terrible deal for Australia.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/04/aerial-view-of-the-prelude-flng-facility-with-the-valencia-knutsen-berthed-side-by-side-reduced.jpg)](https://www.boilingcold.com.au/after-prelude-few-win-from-shells-floating-lng/) Prelude’s problems are continuing. In the last month, *Energy News Bulletin* has reported [strikes by catering staff](https://www.energynewsbulletin.net/workforce/news/1391324/workforce-strike-at-shell%E2%80%99s-prelude-confirmed?ref=boilingcold.com.au), a planned strike by maintenance workers and an [accident](https://www.energynewsbulletin.net/workforce/news/1392469/worker-loses-%E2%80%9Cmost%E2%80%9D-of-finger-on-shell-prelude-flng?ref=boilingcold.com.au) that caused a worked to lose most of a finger. Offshore safety and environment regulator NOPSEMA this week approved Shell’s now [postponed plan](https://www.boilingcold.com.au/shell-extends-prelude-lng-shutdown-and-delays-crux-expansion/) to bring gas from the Crux field 165km away to Prelude when its own gas supply dwindles. In the long-term Prelude has the additional problem that its highly carbon-intensive LNG may be priced down in a gas market increasingly aware of climate concerns. [Shell’s Prelude LNG is a carbon disasterShell’s Prelude floating LNG, already besieged with safety and reliability issues, has produced 2.3 million tonnes of greenhouse gases for one cargo of LNG.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/03/prelude-is-now-a-live-and-operating-flng-facility-with-gas-onboard-reduced.jpg)](https://www.boilingcold.com.au/shells-prelude-lng-carbon-disaster/) --- *Main image:Prelude leaving South Korean shipyard. Source: Shell* ### Sellers of oil and gas assets should stay liable for cleanup: report URL: https://www.boilingcold.com.au/sellers-of-oil-and-gas-assets-should-stay-liable-for-cleanup-report/ Last updated: 2020-10-01T22:03:29.000Z An independent review into the liquidation of the Northern Endeavor oil production vessel has recommended companies that sell offshore facilities pick up the bill for decommissioning if the new owner cannot afford it. Experienced UK North Sea regulator Steve Walker said Australia’s regulatory controls do not anticipate the holder of an offshore title going into liquidation. “This is a serious concern, as such events could be repeated as Australia’s offshore industry matures and late-life assets are likely to be passed from established major,” Walker said. “The adoption of ‘trailing liability’ whereby a titleholder would be continually liable for the decommissioning and removal of its offshore assets even after selling its interests in a title, was receiving growing acceptance. “It is a concept which could provide a final backstop for decommissioning liability.” The Federal Government commissioned Walker to investigate the circumstances that led to the owner of the Northern Endeavour, Northern Oil and Gas Australia, entering liquidation in February. The Federal Government is now responsible for the vessel and the Laminaria and Corallina oil fields in the Timor Sea, as a [cost of about $4 million a month](https://www.boilingcold.com.au/northern-endeavour-awaits-federal-government-plan-as-bills-mount-up/). If the Federal Government implements a trailing liability, it is likely to affect the outcome of ExxonMobil’s plan to sell its 50% interest in its Bass Strait joint venture with BHP. A review of the [whole approach to decommissioning](https://www.industry.gov.au/data-and-publications/offshore-oil-and-gas-decommissioning-framework-review?ref=boilingcold.com.au) offshore oil and gas fields is expected to be released this year. ## A rust bucket never properly fixed In 2015 the Northern Endeavour was operated by Woodside that planned to decommission the asset at a cost it estimated to be about $360 million. Instead in September 2015, it agreed to pay NOGA; a company formed a month before, $24 million to take the asset. [Decommissioning oil vessel could cost taxpayers $230mThe sale of a Woodside offshore oil vessel to a fledgling company that has since gone belly up could potentially see taxpayers footing a huge decommissioning bill.![](https://www.thesaturdaypaper.com.au/sites/all/themes/saturday/favicon.ico)The Saturday PaperPeter Milne![](https://www.thesaturdaypaper.com.au/sites/default/files/styles/news/public/noga-timor.jpg)](https://www.thesaturdaypaper.com.au/news/resources/2020/02/15/decommissioning-oil-vessel-could-cost-taxpayers-230m/15816852009400?ref=boilingcold.com.au) Read how the Northern Endeavor mess came to be As NOGA bought the company that held the titles, there was no title transfer for the National Offshore Petroleum Titles Administrator to approve. The responsibility for the ageing and corroded vessel moved from one of Australia’s largest companies to an inexperienced, single-owner, single-director, single-asset undercapitalised company with no input from the regulator. Three days after NOGA gained the title in 2016 it was already in trouble with offshore safety regulator NOPSEMA for being ill-prepared for an oil spill. NOGA, as title holder, subcontracted the operating responsibility to Upstream Production Solutions. UPS was “unable to convince” NOPSEMA that it was managing the “extensive corrosion present on the facility” when the regulator first inspected the vessel under its new ownership. Problems with corrosion and production shutdowns due to technical issues were a constant feature of the Northern Endeavours’ operation under NOGA’s ownership. Eventually in July 2019, after two dangerous incidents caused by corrosion, NOPSEMA ordered that production halt until the vessel was made safe. NOGA’s money ran out before it could complete the repairs. Walker said NOGA was significantly under-capitalised and had a fragile business model. “It had taken over an ageing FPSO and with the LamCor fields approaching their end of life,” Walker said. “The NOGA group had limited background in the offshore industry, and with no other income-generating assets was significantly reliant on day-to-day production for cash flows.” Walker said NOGA eventually lost the confidence of NOPSEMA “who witnessed an increasing number of examples where the necessary high standards of maintaining an ageing asset such as the Northern Endeavour were not being reached.” ## Regulatory toughening recommended Walker said NOPSEMA took well-informed decisions as the cumulative effect of its concerns mounted. Walker recommended that NOPSEMA needed to tailor its inspection strategies to different facilities and owners. “Such an approach may have helped NOPSEMA to bring its concerns over the Northern Endeavour to a conclusion somewhat earlier,” Walker said. “I also recommend that NOPSEMA review its inspection practices to identify the root causes of non-compliance and not just the symptoms.” Walker said NOPTA was limited by current legislation that allowed it to consider if a company had the funds to respond to an oil spill, but not if it could afford to decommission a field. [Western Gas, an ineffective regulator and a $US100M clean-up billIf Western Gas’ Equus LNG project does not take off in these tough times neither the small company nor regulator NOPTA have an answer to how making safe the wells is paid for.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/07/W-Gas-schematic.jpg)](https://www.boilingcold.com.au/western-gas-micro-oil-gas-player-with-a-us100-million-clean-up-bill/) Other tiny companies have been allowed to take on enormous decommissioning liabilities Walker said the legislation allowed NOGA to become the titleholder “without, in my opinion, being subject to adequate scrutiny.” Minister for Resources Keith Pitt, who released [Walker’s report](https://www.industry.gov.au/data-and-publications/independent-review-into-the-circumstances-leading-to-the-administration-and-liquidation-of-northern-oil-and-gas-australia-noga?ref=boilingcold.com.au) today, said he would consult with industry on its findings. “It is crucial that the Government understands how and why this situation arose to consider how best to minimise the risks of a similar event occurring in the future,” Pitt said. ## The future of the Northern Endeavour The Federal Government is paying UPS [about $4 million a month](https://www.boilingcold.com.au/northern-endeavour-awaits-federal-government-plan-as-bills-mount-up/) to keep the Northern Endeavor in lighthouse mode where safety is maintained with no production and minimal manning. Pitt said the Government is seeking advice on options for a longer-term solution for the Northern Endeavour and associated fields. “I’m very pleased to announce that Woodside Energy is providing expert advice on what will be required to decommission and remediate the facility and fields if the Government proceeds with that option,” Pitt said. “As a previous owner of the Northern Endeavour, Woodside is well placed to provide timely, detailed advice,” he said. [Federal Govt regulates poorly and gets $360M Northern Endeavor clean-up billThe Northern Endeavor mess started with Woodside paying to rid itself of a rusty ageing asset, ended with a $362 million liability for the Government and in between was a regulatory shambles.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/09/northern-endeavour.jpg)](https://www.boilingcold.com.au/poor-federal-regulation-allowed-the-360m-northern-endeavor-mess/) The full Walker Report was released later. --- *Main image: Northern Endeavour. Source: Northern Oil and Gas Australia Pty Ltd* --- *Update 1 October 2020: Estimated decommissioning cost updated to $360 million.* ### WA power plan not heading for net-zero emissions by 2050 URL: https://www.boilingcold.com.au/wa-power-plan-not-heading-net-zero/ Last updated: 2020-08-04T22:00:00.000Z The South-West electricity system will fall well short of the WA Government's goal of net-zero emissions by 2050 if a preliminary plan by the Energy Transformation Taskforce is any guide. Carbon emission drops ranged from about 15 per cent to 43 per cent between 2020 and 2040 in four scenarios analysed, leaving an enormous task for the final decade of the 30-year journey. Taskforce energy transformation implementation director Jai Thomas said the "sneak peek" of its Whole of System Plan presented at a webinar on Friday was "interim and preliminary findings only." The Whole of System Plan is one of three major initiatives for the Taskforce as part of the WA Government's energy transformation strategy [launched by Minister for Energy Bill Johnston](https://www.mediastatements.wa.gov.au/Pages/McGowan/2019/03/McGowan-Government-launches-Energy-Transformation-Strategy.aspx?ref=boilingcold.com.au) in March 2019. Taskforce independent chair Stephen Edwell said the plan was not biased to any particular technology. > "Clearly we want to open the door and break down barriers to new technologies, but we're agnostic in terms of the way to which the capacity mix involves," Edwell said. "What you're really for in the WOSP is a reflection of the economics and the physics of the power system based on assumptions as we see them today." Total electricity usage on the South West Interconnected System increased under all four scenarios. Power sold onto the grid, so-called operational demand, decreased in two scenarios as more consumers generated electricity with rooftop solar panels. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/07/image-12.png) **Operational demand scenarios considered in Whole of System Plan (gigawatt hours).** Source: Energy Policy WA Whole of System Plan project lead Miles Jupp said the lowest-cost capacity mix was calculated for each scenario. "The generation mix becomes more diverse, with far more renewables connecting across more areas, rooftop PV and other renewables displace thermal generation," Jupp said. "Coal generation output declines while gas plays a greater role in firming intermittency and supporting renewables." Renewable power increased by between about 39 per cent and 44 per cent by 2030, according to plots presented at the webinar. Power from gas-fired generators also increased in at least three of the scenarios. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/07/Annotation-2020-07-31-150854.jpg) **Annual electricity emissions (millions tonnes CO2)**. Source Energy Policy WA Carbon emissions in 2040 reduced by up to about 43 per cent under the two scenarios with no operational demand growth. However, total emissions dropped by only about 15 per cent in the other two scenarios. Jupp said the modelling put no value on carbon emissions. The current absence of a carbon price, or any other effective restriction on greenhouse gas emissions, in Australia has not stopped private investors assuming the situation will change in the future. Just weeks ago, Woodside, a company with a keen interest in and influence over environment policy in WA, [doubled the carbon price](https://www.boilingcold.com.au/woodside-browse-lng-is-dead/) it used to assess investments to $US80 a tonne. > "If you are really targeting 1.5℃ you need to be around that $US80 a tonne longer term," Woodside chief executive Peter Coleman said. A target of net zero emissions by 2050, [tentatively embraced by the WA Government as an "aspiration"](https://www.mediastatements.wa.gov.au/Pages/McGowan/2019/08/State-Government-details-emissions-policy-for-major-projects.aspx?ref=boilingcold.com.au) in August 2019, is based on what is required to limit global heating to 1.5℃. The lowest emissions predicted by the preliminary WOSP is about 7.2 million tonnes of CO2e in 2040 under the Cast Away scenario of muted economic growth. Woodside would price the costs of just that 12 months of emissions at $800 million: an enormous amount that clearly would sway investment choices on the SWIS. The cost would be many billions over the next 20 years, and even more for other scenarios. Edwell said the Taskforce did not analyse a scenario that achieved net-zero emissions as it was not a Federal Government target. > "What it (the plan) tells government is that if you just let the economics go and you don't have any interventionist policies this is where you end up," Edwell said. > "How government takes that information and carries it forward is really a matter for government." *Boiling Cold* asked the Minister for Energy Bill Johnston why he did not ask the Taskforce to consider what was required to achieve net-zero emissions by 2050. "It's just a modelling tool, and the Government will respond to the Whole of System Plan when it's complete," Johnston said. The questions about achieving net-zero emission by 2050 were not answered. The Taskforce expects to deliver the final plan to Johnston in September. The WA Government announced in December 2018 that it would develop a new climate change policy. Minister for Environment Stephen Dawson said work on the policy, paused while the Government managed the COVID-19 pandemic, has recommenced and he expected the policy to be released this year. --- *Main image: new electricity supply chain graphic. Source: Energy Policy WA website* ### Shell goes carbon farming in Australia URL: https://www.boilingcold.com.au/shell-goes-carbon-farming-in-australia/ Last updated: 2020-08-04T01:06:49.000Z Shell has bought Perth-based Select Carbon that develops projects to capture carbon in vegetation and soils. The acquisition is part of Shell's push announced in April to have [net-zero emissions by 2050](https://www.boilingcold.com.au/shells-2050-zero-carbon-net-has-a-hole-a-very-large-loophole/). Shell Australia chairman Tony Nunan said the Anglo-Dutch giant wanted to use its global resources and Select Carbon's expertise and established relationships with landowners across Australia to grow carbon farming in Australia. "The scale of Australia's rangelands, ecological diversity and integrity of intact primary forests make this market a natural choice for Shell's first acquisition globally for our Nature-Based Solutions business," Nunan said. *Boiling Cold* understands that Australia's rare combination of a vast landmass and a reliable legal system make the country attractive to international investors such as Shell that want a robust regulatory system to ensure carbon credits are recognised internationally. Select Carbon chief executive Dean Revell said the company believed joining Shell would allow it to capture new opportunities in land management and carbon sequestration. "It is a great opportunity to work alongside land managers to achieve multiple outcomes, including resilient regional businesses and landscape health," Revell said. "Our collective immediate actions, and those over the next few decades, will be critical to ensure liveable, productive and sustainable environments for generations to come." Shell said in a statement that Australia was a priority market for investment in new energies as it offered strong growth in renewables, access to gas for complementary energy, and demand for low-carbon energy solutions. The acquisition complements Shell's existing efforts in reducing the carbon intensity of its natural gas operations, the statement said. Shell is a significant contributor to Australia's greenhouse gas emissions through its investments in LNG projects that export gas to Asia. ![Shell's Australian carbon footprint, Gorgon, Prelude, North West Shelf, QGC, ERM, Arrow](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/08/image-3.png) Ref emissions data: Clean Energy Regulator (2018-2019). Graphic: Boiling Cold The carbon credits generated by projects managed by Select Carbon are traded on the open market and to the Federal Government's Emissions Reduction Fund, now renamed the Climate Solutions Fund with most finds flowing to landholders. *Boiling Cold* understands Shell does not currently purchase credits to offset its operations in Australia. Shell likely does not need Australian carbon credits. The safeguard mechanism that governs emissions from large facilities such as LNG projects sets generous limits that are rarely exceeded. As part of a shift from being an almost purely hydrocarbon company to a broader energy mix Shell has bought Australian energy retailer ERM Power, German battery and solar company Sonnen, and a 49% stake in Australian solar developer ESCO Pacific. Select Carbon's 24 staff will be retained under the deal, and their managers will report to Singapore-based Flora Ji, Shell's general manager of nature-based solutions for the Asia-Pacific. The 10-year-old company's portfolio includes the management of 56 human-induced regeneration projects in NSW, Queensland and WA that change land management practices to allow native vegetation to regrow. *Boiling Cold* understands that Select Carbon will continue to trade under its current name for now, and Shell will revisit this as the company is integrated into its operation. --- *Main Image: Stirling Range National Park, WA. Source: [Michael Milverton](https://unsplash.com/@milverton?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) on [Unsplash](https://unsplash.com/s/photos/trees-western-australia?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText)* ### Gorgon weld problems raise safety questions Chevron will not answer URL: https://www.boilingcold.com.au/gorgon-weld-problems-raise-safety-questions-chevron-will-not-answer/ Last updated: 2020-08-01T02:25:47.000Z Chevron will not disclose the measures it has taken to protect workers from 16 propane-filled vessels operating at its Gorgon LNG plant that may have poor quality welds that reduce the vessels' strength and ability to contain pressure. Chevron upstream executive vice president Jay Johnson said late yesterday that propane heat exchangers, or kettles, on the second of three giant LNG trains at Gorgon were found to have defective welds. Each LNG train that can produce 5.2 million tonnes of LNG a year has eight kettles that each have 2300 tonnes of propane pumped through them every hour. Chevron found the problems during a planned shutdown of Train 2 scheduled to finish three weeks ago. The work is now extended to early September to allow for the repair of the propane kettles. Speaking to Wall Street analysts Friday night Perth time Johnson said the weld defects arose from problems during the manufacture of the vessels and were not related to the design. > "It's really just grinding out and replacing a weld that had some abnormalities and ensuring that we have the structural and pressure-containing capacity that we are looking for," Johnson said. "We do not need to replace the vessels; we believe the repairs are going to be fully effective." All of Gorgon's 24 propane kettles are the same design and made by the same South Korean manufacturer. "We are evaluating based on the learnings that we got how to best address Train 1 and 3, and we put additional mitigations in place until that's been accomplished," Johnson said. The workers fixing the eight kettles on Train 2 are sandwiched between Train 1 and 3 that are filled with gas, operating, and each producing about $5 million worth of LNG a day. *Boiling Cold* asked Chevron what the mitigations Chevron had put in place were and how can workers know if the company's measures are sufficient to keep them safe. A Chevron spokesperson said the company had "nothing more to provide" beyond the information provided in the US yesterday. In a few minutes of questioning by Wall Street analysts representing investors worried about lost production Chevron revealed more about what is happening on Barrow Island than during almost two weeks of queries by Australian media concerned about the safety of WA workers. Despite absorbing the announcement of a $US8.3 billion ($11.6 billion) second-quarter loss by the US major the problems at Gorgon featured prominently in the quarterly quizzing of Chevron senior management. Three analysts probed the issue, one of whom was cut off and told to move to his next question when he asked a follow-up question about the problems on Barrow Island. Weld defects were not found on the eight propane kettles on Train 1 when it was shut down for planned maintenance in 2019. > "We did not see the issue in train 1, but we're assessing whether or not we need to reevaluate that inspection and go through it again," Johnson said. > "And we are addressing how best to inspect and if necessary, repair train 3." A maintenance shutdown is planned for Train 3 next year. After *Boiling Cold* and *The West Australian* both broke the story of concerns about thousands of cracks in the propane vessels the Department of Mines, Industry Regulation and Safety stepped in and this week sent inspectors to Barrow Island. DMIRS director dangerous goods and petroleum safety Steve Emery said earlier this week that he expected Chevron would explore in detail the type of cracking, its causes and any other associated factors. "The department also expects Chevron to review how the results of its investigation may affect the entire operation to ensure the facility's safety and integrity," Emery said. The big question Chevron has refused to answer is how it can ensure that the 16 propane-filled vessels operating now are safe when identical vessels have weld defects that bring into question their structural strength and ability to contain pressure. *Boiling Cold* understands that three inspectors from DMIRS returned from Barrow Island yesterday and that the Department will likely make a statement when it has finished its assessment. --- *Main image: Gorgon LNG project on Barrow Island. Source: Chevron Australia Pty Ltd.* ### Collie wobbles: WA power's financial mess URL: https://www.boilingcold.com.au/collie-wobbles-wa-powers-financial-mess/ Last updated: 2020-07-30T01:02:54.000Z The ongoing financial distress of Collie’s coal mines and power stations reaches another milestone on Monday when Bluewaters Power Station is due to pay a debt of about $360 million. The troubles of the companies based two hours south of Perth receive little attention despite providing 50 per cent of the electricity into the South West market over the last 12 months. The lack of interest may be because local investors have nothing to lose. It is Chinese, Japanese and Indian companies that came to Collie a decade ago after the collapse of Ric Stowe’s Griffin Coal and the exit of Wesfarmers that are struggling to survive. Griffin’s administrators sold Stowe’s near-new Bluewater’s power station to Sumitomo and Kansai Electric in 2011 for a reported $1.2 billion. Lanco Infratech from India bought Griffin’s coal-mining operation for $830 million. In the same year, Wesfarmers sold Premier Coal to Chinese-owned Yancoal for about $300 million. A common feature of the $2.3 billion of purchases is that they were highly leveraged, and that debt has been a burden ever since. On Monday Bluewaters is due to repay a debt that totalled $360 million in March 2019, according to the annual report of Bluewaters Power 3 Pty Ltd to the corporate regulator ASIC. Many members of the lending consortium have little faith the money can be fully repaid, with the [*Financial Review*](https://www.afr.com/street-talk/nab-sells-bluewaters-power-debt-20200728-p55g66?ref=boilingcold.com.au) and [*The Australian*](https://www.theaustralian.com.au/business/dataroom/bank-of-america-buys-bluewaters-coal-fired-power-station-debt/news-story/c827eefc1f5b80442d2f1e2f306f1cda?ref=boilingcold.com.au) reporting this week that a slew of banks were selling the debt for about 71c in the dollar. In the 12 months to March 2019, the two entities that own the 434-megawatt Bluewaters power plant had finance costs of $48.8 million that consumed 18% of total revenue to service a myriad of different loans. The station produced a positive cashflow of just $9 million for the year. Griffin Coal that supplies the fuel to Bluewaters saw $49 million in cash flow out from its operating activities in the 12 months to March 2018, the last financial year it has filed with ASIC. Revenue from coal sales was $108 million. Griffin’s owner, Lanco Infratech, went into [receivership](https://www.watoday.com.au/national/western-australia/parent-company-of-collie-miner-griffin-coal-put-into-administration-20170505-gvz31b.html?ref=boilingcold.com.au) in 2017. Amidst its own financial problems, Bluewaters took action against Griffin last week to [take control](https://www.afr.com/companies/mining/wa-coal-in-crisis-as-griffin-accused-of-breach-of-contract-20200721-p55dzg?ref=boilingcold.com.au) of its operations to ensure the continued supply of coal. Collie’s other coal miner, Premier Coal, has a [contract to 2030](https://www.mediastatements.wa.gov.au/Pages/Gallop/2005/08/New-coal-contracts-bring-certainty-to-Collie's-future.aspx?ref=boilingcold.com.au) to supply coal to state-owner Synergy’s Muja and Collie power stations. In 2018 Premier [cut its annual loss](https://www.bdtimes.com.au/business/mining/premier-reduces-coal-losses-at-collie-ng-b881188680z?ref=boilingcold.com.au) from to $17 million to $1 million. The intricate arrangements between Collie coal miners and power stations are further complicated by a [$50 million loan](https://thewest.com.au/news/wa/coal-giant-in-bank-surprise-ng-ya-100357?ref=boilingcold.com.au) Synergy gave to Premier Coal in 2014. If the loan is not repaid by its expiry, understood to be in 2030, Synergy gains a 25 per cent stake in the miner. The State Government announced that two units of the four-unit 810 mega-watt Muja power station would [close down](https://www.swtimes.com.au/news/wa/up-to-80-jobs-axed-as-long-awaited-cuts-at-collies-coal-fired-generation-muja-finally-revealed-ng-b881281629z?ref=boilingcold.com.au), one each in 2022 and 2024. Synergy impaired the value of its assets by $429 million in September 2019, in large part due to lower sales during the day as the combined generation capacity of rooftop solar continues to grow. The move to solar not only cuts revenue for coal-fired power stations, but it [eats into useful life](https://www.boilingcold.com.au/synergy-pushes-ageing-coal-plants/) as the machinery was not designed for fluctuating loads. Energy Minister Bill Johnston has said he [expects no new coal or gas-fired power generation](https://www.boilingcold.com.au/no-new-coal-or-gas-power-for-wa-south-west/') will be built in the South-West as renewable energy is now cheaper. The real unknown is when Collie, Bluewaters and the last two Muja units will be retired. With little demand growth predicted in the South-West, significant uptake of renewable energy can only be achieved by some existing generation capacity being closed down. Without space to grow the industry will struggle to implement the output of the State Government's well-regarded [Energy Transformation Taskforce](https://www.wa.gov.au/organisation/energy-policy-wa/the-energy-transformation-taskforce?ref=boilingcold.com.au). --- *Main image: Bluewaters Power Station, Collie. Source: Bluewaters Power.* ### Chevron plans to fix and restart Gorgon Train 2 by September URL: https://www.boilingcold.com.au/chevron-plans-to-fix-and-restart-gorgon-train-2-by-september/ Last updated: 2020-07-28T05:08:27.000Z Chevron plans to restart the shuttered second Gorgon LNG train on Barrow Island in September once it fixes weld problems on propane-filled vessels. The US-major found weld quality issues during routine inspections of propane heat exchangers, a Chevron spokesperson said. The inspections were part of a planned maintenance shutdown of Gorgon Train 2 that commenced on May 23 and was due to be complete by July 11. A Chevron spokesperson said the company was closely coordinating with the WA safety regulator, the Department of Mines, Industry Regulation and Safety, in planning and implementing the work. DMIRS was unaware of the issue before *Boiling Cold* and *The West Australian* a week ago broke news of thousands of cracks found in the propane heat exchanges, or kettles. [Cracks at Chevron’s Gorgon threaten safety and LNG productionThousands of cracks raise questions about the safety of the Gorgon LNG plant and operator Chevron will decide to shutdown or maintain revenue, with the safety regulator on the sidelines.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/07/gorgon-plant-site-aerial-d-cropped-reduced.jpg)](https://www.boilingcold.com.au/cracks-at-chevrons-gorgon-threaten-lng-production/) Personnel from DMIRS and Worksafe plan to visit Barrow Island this week. DMIRS director dangerous goods and petroleum safety Steve Emery said DMIRS was unable to discuss the nature and extent of the issues with the propane kettles. There are eight propane kettles on Train 2. Emery said he expected Chevron’s investigation would explore in detail the type of cracking, its causes and any other associated factors. “The department also expects Chevron to review how the results of its investigation may affect the entire operation to ensure the facility’s safety and integrity,” Emery said. The Chevron spokesperson said the company expected to commence LNG Train 2 restart activities around early September, once repairs were complete. The unexpected two-month extension to the shutdowns will cost Chevron and its partners about $300 million in lost LNG revenue. “The purpose of a turnaround is to maintain the safety and reliability of the LNG plant by performing risk-based inspections, maintenance, and repairs to systems and equipment,” a Chevron spokesperson said. “The turnaround to date has been safely executed with all planned work successfully completed.” LNG production from Trains 1 and 3, as well as the export of domestic gas to the mainland, has continued as usual during the Train 2 shutdown. --- **Other related stories:** [Safety regulator to inspect Chevron’s Gorgon ASAPSafety regulators knew nothing of cracked pressure vessels at Chevron’s Gorgon LNG plant until alerted by media reports and now plan to inspect the equipment themselves.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/07/CVX-sign-at-QV1-cropped-reduced.jpg)](https://www.boilingcold.com.au/safety-regulator-to-inspect-gorgon-as-soon-as-possible/) [Regulator OK with Gorgon safety but will inspect early next weekThe safety and economic stakes for Gorgon LNG are high as WA Government inspectors soon head to Barrow Island to check on Chevron’s cracked pressure vessels.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/07/gorgon-plant-site-d-cropped-reduced.jpg)](https://www.boilingcold.com.au/regulator-to-inspect-gorgon/) --- **Main image: Gorgon LNG plant on Barrow Island. Source: Chevron Australia Pty Ltd.* ### Hydrogen: a simple molecule but a complex business URL: https://www.boilingcold.com.au/hydrogen-a-simple-molecule-but-a-complex-business/ Last updated: 2021-12-27T00:27:08.000Z **This story was originally published in [The Australian Pipeliner](https://www.pipeliner.com.au/?ref=boilingcold.com.au), July 2020.* It seems Australia is awash with hydrogen buzz. A specialised product few cared about a decade ago is now touted as a replacement for LNG exports and metallurgical coal in steelmaking, a long-term store of renewable energy, and a provider of green fertiliser and climate-friendly fuel for heavy transport. Hydrogen is a simple molecule powering a slew of new business opportunities that have one thing in common – the need to slash carbon emissions. Many make the call to electrify everything, backed by a power grid dominated by renewable energy. The trouble is that not everything can be electrified. Electricity is expensive to store for extended periods or to transport long distances. Batteries can store much less energy for a given weight than liquid fuels. Electricity also cannot produce the high-temperatures required for some industrial processes such as steelmaking. There is also the need for a cleaner way to meet the current annual demand for 70 million tonnes of hydrogen that is predominantly used in oil refining and to produce ammonia and methanol. Presently about 75 per cent of hydrogen is made from gas, and most of the remainder comes from coal. A tonne of hydrogen made from natural gas produces 10 tonnes of carbon dioxide and almost twice that if made from coal. Greenhouse gases from hydrogen production are equal to the combined emissions of the United Kingdom and Indonesia. If global warming was not a concern, there would be no driver to expand the application of hydrogen. [July 2020 - The Australian PipelinerYour quarterly update on the pipelines and gas industry in Australasia.![](https://oe59k1abp092ccqag2vzw9hi-wpengine.netdna-ssl.com/wp-content/uploads/sites/3/2019/03/cropped-TAP_Favicon_Icon_32x32-192x192.jpg)The Australian PipelinerSophie Venz![](https://www.pipeliner.com.au/wp-content/uploads/sites/3/2020/07/Cover_image_plain_640x480px-640x470.jpg)](https://www.pipeliner.com.au/magazines/july-2020/?ref=boilingcold.com.au) At every stage of the hydrogen value chain – production, storage, transport and use – there is a myriad of technical and commercial options. From computing operating systems in the 1980s Windows became dominant, MacOS a profitable niche player and Amiga disappeared completely. The same array of fates awaits the hydrogen business cases talked about now. Time, technical progress, regulation and the market will determine the winners and losers. ## Blue or green? The production of hydrogen without carbon emissions comes down to two main choices. The current steam methane reforming technology that splits methane into hydrogen and carbon dioxide can be combined with carbon capture and storage to produce emissions-free blue hydrogen. The alternative is green hydrogen made in electrolysers powered by renewable energy that produce hydrogen and oxygen from water. Perth-based Hazer Group has a technology to produce hydrogen from natural gas but also make high-quality graphite instead of emitting carbon dioxide. A demonstration plant will start next year using biogas from a sewerage treatment works in Perth's south. In the Latrobe Valley, a pilot plant is under development to test the shipment to Japan of hydrogen made from brown coal and a carbon offset for the CO2 emitted is under consideration. The winning technology will be the cheapest technology. Currently, blue hydrogen is less expensive than green hydrogen, but the future will be determined by the rate at which technology can drive prices down. The future cost of blue hydrogen depends on the price of gas and carbon capture and storage. As an established technology steam methane reforming has less potential to achieve substantial improvements The expected continued decline in the cost of power from wind and solar energy will help the competitiveness of green hydrogen. The big unknown is the cost of electrolysers and their efficiency that currently sits between 60% and 80%. While little improvement in expected on the more established alkaline electrolysis process, the newer polymer electrolyte membrane technology is expected to improve rapidly over the next few years, according to the National Hydrogen Roadmap, When it comes to commercialisation green hydrogen has the advantage of being more scalable, with the number of solar panels, wind turbines and electrolysers matched to the investment and production required. ## Exporting hydrogen Once produced hydrogen can be used here in Australia or exported. The clear prize that ignited Australian interest in hydrogen was a commitment by Japan to making the new fuel a vital part of its cleaner energy mix. Minister for Energy and Emissions Reduction Angus Taylor recently said the Government was driving towards a hydrogen cost of $2 a kilogram. > "Getting costs down will be key to establishing Australia as a world leader in the hydrogen sector through both domestic uses …to exporting Australian-made hydrogen to our key trading partners, like Japan and Korea," Taylor said. Unfortunately, transporting hydrogen overseas is not straight forward. Hydrogen is often compared to LNG in that it can be cooled to a liquid for transport, but the almost 100℃ extra temperature drop makes the process much more expensive. Methane becomes liquid at -160℃ in a process that consumes about 10% of the gas; but cooling hydrogen to -253℃ loses 25% to 35% of the energy. The alternative is to incorporate the hydrogen into a larger molecule such as ammonia, that is liquid at -33℃ or so-called liquid organic hydrogen carriers that have similar properties to oil products. The rationale behind exporting hydrogen to Japan is that as it is smaller and cloudier than Australia, it could not produce enough renewable energy itself to feed its need for hydrogen. This export business case was recently questioned by Sydney-based Bloomberg New Energy Finance head of industrial decarbonisation Kobad Bhavnagri. BloombergNEF estimated that while Australia could land green hydrogen into Japan for US$2.81 a kg by 2050, with onshore wind Japan would be able to produce hydrogen for US$1.60 a kg. Australia was uncompetitive as 70 per cent of the cost was for shipping, wiping out its advantage of cheaper renewable energy. Bhavnagri said countries requiring energy imports are likely to view hydrogen by ship as the worst option. > "This challenges the narrative that Australia can become a hydrogen exporting superpower," he said. > "Instead, Australia could have a competitive advantage using hydrogen onshore, to produce and export value-added products like green steel, fertilisers, ammonia and alumina, instead of just raw commodities." ## Planes, trains and automobiles Whether Australian hydrogen is used here or overseas, there is a dizzying array of potential uses in addition to Bhavnagri's industrial examples. Number one is heavy or long-distance transport where compressed hydrogen in a tank has a quicker refuelling process and higher energy density than lithium-ion batteries. While vehicles would most likely use a hydrogen fuel cell that essentially replaces the lithium battery in current electric cars, hydrogen-based fuels such as synthetic methane, methanol and ammonia could power heavier transport. In particular, there are few low emission alternatives for rail, shipping and aviation. Hydrogen trains have started operating in Germany. Thay can work on long-distance or less-used routes where electrification is uneconomic. Hydrogen can also be the feedstock for synthetic jet fuel or power marine engines in the form of ammonia. Small streams of hydrogen can be mixed into natural gas distribution systems to achieve partial decarbonisation. This is a relatively simple way to build local demand for hydrogen as it scales up. ATCO has built a clean energy innovation hub in WA to test the use of blended natural gas and green hydrogen produced on-site with common household appliances. However, so-called green steel, where hydrogen powers the furnace instead of metallurgical coal could be the killer-application for hydrogen in Australia. BloombergNEF's Bhavnagri said an international transition to green steel would decimate demand for metallurgical coal, one of Australia's most valuable exports. However, if that green steel is built here, it could utilise Australia's vast sun, wind and iron ore resources to offset the loss of coal income and jobs. The Grattan Institute recently concluded that the coal mining areas of central Queensland and the Hunter Valley have the right combination of workforce and renewable energy potential to turn Pilbara iron ore into steel. The north-west was regarded as too expensive to operate a labour-intensive steel mill. Making ammonia in Australia from green hydrogen has attracted interest from some of the world's biggest industrial companies. In May BP announced a feasibility study into an export scale project near Geraldton in WA targeting a 20,000 tonnes a year pilot plant that could expand to a one million tonnes a year giant consuming 1.5 gigawatts of power. Norwegian fertiliser manufacturer Yara is looking to produce 28,000 tonnes a year to replace five per cent of the hydrogen used in its Pilbara ammonia plant as a first step towards decarbonisation. The International Energy Agency noted last year that while hydrogen has had false starts in the past this time could be different. In the past hydrogen had surged wave of enthusiasm for hydrogen fuel cells for transport. > "What is new today is both the breadth of possibilities for hydrogen use being discussed and the depth of political enthusiasm for those possibilities around the world," the IEA said in its Future of Hydrogen report. For businesses involved in hydrogen, the coming decade will be one of experimentation and learning. Money will be lost at times, and some companies will retire hurt. However, with hydrogen the favoured solution for so many decarbonising opportunities, the rewards for the winners will be vast. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/07/TAP_July_2020_Cover_280x396px-1.jpg) **This story was first published in *[The Australian Pipeliner](https://www.pipeliner.com.au/?ref=boilingcold.com.au)*** --- *Main Picture: Hydrogen on the table of elements. Source:* [https://flic.kr/p/AYaVUH](https://flic.kr/p/AYaVUH?ref=boilingcold.com.au) --- ### Chevron's red tape for its doubly deep Aussie job cull URL: https://www.boilingcold.com.au/chevron-red-tape-for-hr-hunger-games/ Last updated: 2020-07-26T22:00:01.000Z Today is the last day for Chevron’s 2400 Australian employees to nominate for positions in a trimmed down organisation before four cycles of retrenchment that will see up to about 700 jobs lost. In early May Chevron Australia managing director Al Williams [sent a memo](https://thewest.com.au/business/chevron-eyes-up-to-600-wa-job-cuts-ng-b881541447z?ref=boilingcold.com.au) to his workers that operate the Gorgon and Wheatstone LNG projects to expect the organisation to be cut by 20 to 30 per cent. “With crude prices near 20-year lows and global annual energy demand forecasted to drop by 6 per cent, the largest in 70 years, we have a challenging road ahead to preserve cash in the short-term while protecting value for the long-term,” Mr Williams said. The suggested reduction is twice as deep as the [10 to 15 per cut](https://www.reuters.com/article/us-chevron-layoffs-exclusive/exclusive-chevron-to-cut-up-to-15-of-staff-amid-restructuring-idUSKBN2332P3?ref=boilingcold.com.au) Chevon has planned for its global workforce of 45,000. Chevron has about 2400 employees in Australia according to its 2019 filing with the corporate regulator ASIC. By the end of September, when Chevron hopes to complete the redundancy process, between 480 and 720 Chevon employees could find themselves competing in an extraordinarily difficult job market, especially for oil and gas specialists. An email from Chevron management to workers on July 14 seen by *Boiling Cold* said the design of the smaller organisation was nearly complete and “we are turning our focus to the selection of the workforce that will take our new organisation forward”. Workers were able to “express their interest in leaving the company and potentially being eligible to receive an exit payment” up to July 15. Today the “the opportunity to express their job preferences via a questionnaire” closes. Four cycles of cuts then begin, starting at the top. “For each position, the Job Owner and Employee Sponsors will assess candidates against the position’s selection criteria and the Job Owner will develop a shortlist of candidates for consideration by the selection team,” the email said. “The selection team – typically, a diverse group including a leader from the relevant function and an Inclusion Counsellor from another area of the business – will identify the preferred candidate. “Successful candidates in selection cycles 1 and 2 (leadership positions) will be notified at the completion of these cycles to enable their participation in the selection decisions for cycles 3 and 4. “We are targeting to complete the selection process and notify employees of cycle 3 and 4 selection outcomes before the end of September.” By then five months of uncertainty for Chevron’s Australian people will be over. --- *Main image: QV1 Building in Perth that houses Chevron's Australian headquarters. Source: Peter Milne.* ### Regulator OK with Gorgon safety but will inspect early next week URL: https://www.boilingcold.com.au/regulator-to-inspect-gorgon/ Last updated: 2020-07-24T02:20:41.000Z A WA safety regulator has "no reason to object" to Chevron's management of the safety of cracked propane kettles at its Gorgon LNG plant and will fly inspectors to Barrow Island early next week to investigate. Non-destructive testing revealed thousands of cracks in propane kettles, or heat exchangers, during a planned shutdown of one of the three LNG trains at the $US54 billion Chevon-operated project. *Boiling Cold* understands some cracks about 40mm deep have been found on the inside of a kettle on the shut down Train 2. The Department of Mines, Industry Regulation and Safety first became aware of the issue after media inquiries. DMIRS director of dangerous goods and petroleum safety Steve Emery said the regulator met with Chevron on Thursday to discuss issues associated with cracking to the propane kettles. "The department is finalising the travel arrangements for its joint Dangerous Goods Directorate and Worksafe inspection of the plant, and inspectors will be on site early next week," Emery said. Unions are concerned about the safety of workers on the Train 2 shutdown as they are surrounded either side by Trains 1 and 3 that are operating with near-identical kettles full of pressurised propane. Australian Manufacturing Workers' Union state secretary Steve McCartney earlier this week said the kettles were a "potential bomb." Chevron told DMIRS earlier this week that the kettles on Trains 1 and 3 are of similar design and manufacture but may have individual design features and histories. "The department remains in contact with Chevron regarding the company's investigation into the causes of the cracking to the propane kettles, and the action it is taking to ensure worker safety at the LNG plant," Emery said. > "At this stage, DMIRS had no reason to object to Chevron's actions and assessments of the plant's safety." Emery said DMIRS was unable to provide further information as talks with Chevron were ongoing. *Boiling Cold* has estimated that each day a Gorgon LNG train is out of action Chevron and its main partners Shell and ExxonMobil lose almost $5 million of revenue. The total economic impact will be determined by: - Can the Train 2 kettles be repaired, or must replacements be built, extending the shutdown significantly? - Do kettles on Trains 1 and 3 have similar problems? - And if so, can Trains 1 and 3 be operated safely until a repair or replacement is organised, or must they be shut down immediately? Given the importance of Gorgon to Chevron, the company will likely update Wall Street analysts when it presents its second-quarter results late Friday 31 July Perth time. --- **Earlier stories:** [Cracks at Chevron’s Gorgon threaten safety and LNG productionThousands of cracks raise questions about the safety of the Gorgon LNG plant and operator Chevron will decide to shutdown or maintain revenue, with the safety regulator on the sidelines.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/07/gorgon-plant-site-aerial-d-cropped-reduced.jpg)](https://www.boilingcold.com.au/cracks-at-chevrons-gorgon-threaten-lng-production/) [Safety regulator to inspect Chevron’s Gorgon ASAPSafety regulators knew nothing of cracked pressure vessels at Chevron’s Gorgon LNG plant until alerted by media reports and now plan to inspect the equipment themselves.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/07/CVX-sign-at-QV1-cropped-reduced.jpg)](https://www.boilingcold.com.au/safety-regulator-to-inspect-gorgon-as-soon-as-possible/) --- *Main image: Gorgon LNG plant on Barrow Island. Source: Chevron Australia Pty Ltd.* ### Northern Endeavour still waiting on Federal Government plan URL: https://www.boilingcold.com.au/northern-endeavour-awaits-federal-government-plan-as-bills-mount-up/ Last updated: 2020-07-23T21:29:59.000Z The Federal Government is still discussing with industry what to do with the Northern Endeavour oil production vessel in the Timor Sea almost six months after its owner went into liquidation. The vessel has been in so-called lighthouse mode since February at the cost of about $4 million a month for the minimum crew to maintain safety. The responsibility for the vessel and the Laminaria-Corallina oil fields was foisted on the Government after administrators failed to rescue the company after five months of effort. Woodside agreed to sell the asset to the newly-formed Northern Oil and Gas Australia in September 2015, just two months after it was publicising its plans to decommission the vessel. Woodside paid NOGA $24 million to take the asset off its hands. ![Woodside publicised decommissioning plans in July 2015 and agreed to sell two months later](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/07/image-9.png) **Woodside publicised decommissioning plans in July 2015 and agreed to sell two months later.** Numerous safety issues on the Northern Endeavour caused offshore safety regulator NOPSEMA to order production be shut down in July 2019 until the operation could be made safe. The loss of revenue combined with the single-asset company's lack of liquidity resulted in NOGA management calling in administrators in September 2019. The cost to decommission the Northern Endeavour, wells and subsea equipment has been estimated to be as high as $230 million. [Decommissioning oil vessel could cost taxpayers $230mThe sale of a Woodside offshore oil vessel to a fledgling company that has since gone belly up could potentially see taxpayers footing a huge decommissioning bill.![](https://www.thesaturdaypaper.com.au/sites/all/themes/saturday/favicon.ico)The Saturday PaperPeter Milne![](https://www.thesaturdaypaper.com.au/sites/default/files/styles/news/public/noga-timor.jpg)](https://www.thesaturdaypaper.com.au/news/resources/2020/02/15/decommissioning-oil-vessel-could-cost-taxpayers-230m/15816852009400?ref=boilingcold.com.au) Creditors of NOGA are [owed a further $165 million](https://www.boilingcold.com.au/failed-oiler-northern-endeavour-owes-165m/). Department of Industry, Science, Energy and Resources deputy secretary Mike Lawson told the Senate economics estimates committee in March that the Government did not have "even a rough order of magnitude of the likely cost." "We are working with industry; we have no reason to believe we can't find a better solution to this than...a cost being imposed on the taxpayer," Lawson said. Four months later the Department did not answer whether it now had an estimate for the total cost to Government. > "The Government is working with industry to undertake the necessary planning on a longer-term solution for the Northern Endeavour FPSO and Laminaria-Corallina fields, including costs and timeframes," a Department spokesperson said. The Department also did not say if it expected to have to extend the contract with Upstream Production Solutions to keep the Northern Endeavor in lighthouse mode beyond the current end of October expiry. Minister for Resources Keith Pitt in June received an independent review of the circumstances which led to the administration and subsequent liquidation of the NOGA group of companies. The Minister is considering the report. There has been talk that the Federal Government was [considering a levy](https://www.afr.com/companies/energy/oil-levy-threat-grows-as-noga-sinks-20200210-p53z8j?ref=boilingcold.com.au) on the offshore oil and gas industry rather than have Australian taxpayers foot the decommissioning bill. *Boiling Cold* understands that some senior members of APPEA, the lobby group for big oil and gas companies in Australia, are unimpressed that Woodside's actions five years ago may impact them financially. --- *Main image: Northern Endeavour floating production, storage and offloading vessel in the Timor Sea. Source: Northern Oil and Gas Australia Pty Ltd.* ### Safety regulator to inspect Chevron's Gorgon ASAP URL: https://www.boilingcold.com.au/safety-regulator-to-inspect-gorgon-as-soon-as-possible/ Last updated: 2020-07-22T10:15:59.000Z State safety regulators will inspect Chevron's Gorgon LNG plant on Barrow Island as soon as practical in response to concerns about propane-filled pressure vessels with thousands of cracks. Australian Manufacturing Workers' Union state secretary Steve McCartney said this morning that his members told him propane kettles, or heat exchangers, that Chevron planned to install on the second Gorgon LNG train had cracks up to 1m long. McCartney was speaking to Gareth Parker on *Radio 6PR* after *Boiling Cold* and [*The West Australian*](https://thewest.com.au/business/thousands-of-cracks-found-at-chevrons-76-billion-gorgon-lng-project-off-the-pilbara-coast-ng-b881612674z?ref=boilingcold.com.au) revealed the safety concerns that have arisen during a planned maintenance shutdown of the second of three giant LNG trains on the $US54 billion ($76 billion) project. [Cracks at Chevron’s Gorgon threaten safety and LNG productionThousands of cracks raise questions about the safety of the Gorgon LNG plant and operator Chevron will decide to shutdown or maintain revenue, with the safety regulator on the sidelines.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/07/gorgon-plant-site-aerial-d-cropped-reduced.jpg)](https://www.boilingcold.com.au/cracks-at-chevrons-gorgon-threaten-lng-production/) Immediate safety concerns centre on the eight propane kettles on each of Trains 1 and 3 that are currently in operation, filled with pressurised propane, and understood to be a similar design and manufacture to the cracked Train 2 replacement kettles. > "They are full of propane and a potential bomb," McCartney said. "What are they doing to make sure that the workers that are working on Train 2 are safe from Train 1 next door and Train 3 on the other side, "The potential for this to hurt people is immense, "If this was a crack in an aeroplane wing, they'd be shutting down all the planes to make sure there are no other cracks." ## Chevron sheds no light McCartney said Chevron was trying to downplay the situation. "We need to be guaranteed their safety now," McCartney said of the workers performing the Train 2 shutdown. "Chevron has never been famous for coming forward with details about what's going on on that island, and we know from our members that this is a serious problem," McCartney said. "So do they (Chevron), and that's why they are being quiet about it." Parker reviewed the information Chevron released to the media with his listeners. > "There is some good corporate spin doctor language in there," Parker said. > "I think it would be helpful if there's just straight talk about these sorts of things, > "Are there cracks or not? > "Are they a safety issue or not? > "Simple questions, simple answers will give everyone reassurance." *Boiling Cold* received similar material from Chevron and included little of it in the initial story as it was not relevant to the safety concerns or the questions asked. A Chevron spokesperson said the company had no further updates at this stage. Department of Mines, Industry Regulation and Safety director of dangerous goods and petroleum safety Steve Emery was more informative than Chevron. Emery said DMIRS understood that during a routine inspection of the Train 2 propane kettles a Chevron inspector found cracking of the kettle structure associated with welds. "The extent and cause of these cracks is still being investigated," Emery said. Chevron told DMIRS that the kettles on Trains 1 and 3 are of similar design and manufacture, but each kettle may have individual design features and different manufacture and operational histories. > "Chevron has advised it found no cracking or weld problems on Train 1 during the same routine inspections carried out last year, and there have been no other incidents or issues with the kettles in any of the trains," Emery said. "Based on its investigation findings to date, Chevron have reviewed the integrity and safety associated with the operational kettles and believes it has appropriate and adequate safety measures in place, "The discussions between DMIRS and Chevron have included a review of these safety and integrity assessments, and the department currently has no reason to object." Emery said DMIRS' Dangerous Goods Directorate and WorkSafe are meeting with Chevron tomorrow to review the technical aspects in more detail, and a trip to Barrow Island is being arranged as soon as practical. ## Local gas concerns State opposition spokesperson for the public sector Tjorn Simba has questioned whether WA's energy supplies are secure. "We understand that there are issues with Gorgon's LNG Train 2," Sibma said. "The public needs to know whether this extends to other LNG trains and the supply of domestic gas?" Simba said the State did not want a repeat of the 2008 Varanus Island gas explosion that cut gas supply by 30 per cent for two months. [The Varanus Island gas explosion that shook the WA economyIn 2007 WA lost 30% of its gas supply, and Apache Energy workers were lucky not to lose their lives, after a corroded gas pipeline failed and produced a gigantic explosion.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/07/Varanus-Island.jpg)](https://www.boilingcold.com.au/the-varanus-island-gas-explosion-that-shook-the-wa-economy/) Gorgon supplied 165 terajoules of gas to the mainland on July 20, the most recent data available on the WA Gas Bulletin Board, and met 14 per cent of total demand. Even if Gorgon's three LNG trains were shut down, the domestic market would likely be unaffected as gas can flow from the offshore wells to the domestic gas plant without going through the LNG plant. ## Who told who? Simba said there was confusion about what the State Government knew. "I would be interested to know if the Government were fully aware of this and kept it quiet, or for the second day in a row they were caught unaware," Simba said. Mines and Petroleum Minister Bill Johnston said his office found out about the safety concerns on Monday morning after being contacted by a journalist from *The West Australian*. Johnson said his office then checked with the Department of Mines, Industry Regulation and Safety and DMIRS said Chevron had not informed it of the cracked kettles. "An officer then called Chevron, and they confirmed that there had been no incident, loss of containment nor process issue that would trigger the notification requirements," Johnson said. > "The Department is not required to be informed of the results of routine maintenance checks and inspections, noting that the purpose of such inspections is to look for defects prior to the defects becoming failures, "Once again the Opposition hasn't done their homework." --- *Main image: Chevron sign. Source: Peter Milne* ### Cracks at Chevron's Gorgon threaten safety and LNG production URL: https://www.boilingcold.com.au/cracks-at-chevrons-gorgon-threaten-lng-production/ Last updated: 2020-08-01T03:52:57.000Z Crucial pressure vessels that Chevron was to install on its $US54 billion Gorgon LNG plant have thousands of dangerous cracks and a solution may cut production for months. A lot is at stake for the finances of Gorgon’s partners Chevron, Shell and ExxonMobil; and for the safety of the workers on Barrow Island. Every day one of Gorgon’s 5.2 million tonnes a year LNG trains is out of action about $4.9 million of revenue is lost, assuming Gorgon’s partners are achieving [similar prices to Woodside](https://files.woodside/docs/default-source/investor-documents/quarterly-and-half-yearly-pdfs-and-data-tables/2020/037-q2-2020-briefing-transcript-and-additional-information.pdf?sfvrsn=a32e8391%5F3&ref=boilingcold.com.au). If a crack caused one of the vessels to fail, it could be fatal for some of the about 213 workers that, according to the Gorgon Safety Report, operate the plant during the day shift. *Boiling Cold* understands the vessels, called propane kettles, currently in use on LNG Trains 1 and 3 are of the same design and are built in the same factory as the cracked kettles. [Gorgon weld problems raise safety questions Chevron will not answerChevron has “put additional mitigations in place” to protect workers while it mulls what to do with two giant LNG trains operating at Gorgon that could have defective welds.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/08/gorgon-business-overview-mobile.jpg)](https://www.boilingcold.com.au/gorgon-weld-problems-raise-safety-questions-chevron-will-not-answer/) **Read the latest on Chevron's problems with propane kettles at Gorgon** Chevron was asked if it was safe to continue to operate these kettles. The US major did not answer. It will be up to Chevron to determine if it can safely repair the kettles, which is expected to take a few months, or must procure new kettles and endure a more prolonged shutdown and greater revenue loss. There is no involvement in the decision by the safety regulator, the Department of Mines, Industry Regulation and Safety. ## Cracks appear The second of three LNG trains on Barrow Island is currently shut down for planned maintenance but was expected to resume production by July 11, according to a notification on the Chevron Australia website. Part of the work was to replace eight propane kettles, also called shell and tube heat exchangers, that have vast quantities of flammable fluids flow through them. Liquid propane, a component of LPG, is pumped into each shell at a rate of 2300 tonnes an hour and evaporates quickly – or flashes - to cool a mixed refrigerant that flows in tubes that run through the shell. The mixed refrigerant of propane, ethane, methane and nitrogen is later used to cool the natural gas to become liquid at -160℃. The catastrophic failure of a propane compressor, that pumps the propane through the kettles, in the early weeks of Gorgon production in 2016 shut down Train 1 for about three months. [Gorgon’s catastrophic start-upIn early 2017 Chevron’s rush to ship the first LNG from the $US54 billion Gorgon project to meet its chief executive’s deadline had disastrous consequences.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/07/gorgon-lng-trains-large-d-cropped-reduced.jpg)](https://www.boilingcold.com.au/gorgons-catastrophic-startup/) Problems with equipment connected to the propane kettles shut Gorgon down in its early weeks. When maintenance workers recently unpacked the replacement kettles and performed non-destructive testing, they found thousands of cracks in the steel shells, according to sources on the site. The cracks are thought to have been caused by water getting through the thermal insulation around the vessels while they were stored for what *Boiling Cold* understands was some years. Chemicals left behind when the water evaporates can, in some circumstances, weaken the steel and allow cracks to form. Bulky insulation around vessels and pipework and encased in a sheet metal jacket prevents gas from gaining heat as it goes through successive stages of cooling to make LNG. Insulation problems have cost Australian LNG projects in the past. Woodside’s Pluto LNG project was reported to have [spent $700 million](https://thewest.com.au/news/wa/insulation-cause-of-pluto-cost-blowout-ng-ya-157872?ref=boilingcold.com.au) and have [200 people work for six months](https://www.civmec.com.au/what-we-do/our-sectors-and-projects/oil-and-gas/27-projects/all-projects/205-woodside-pluto-lng-plant?ref=boilingcold.com.au) to fix damaged insulation. Waterlogged insulation is at the heart of a contractual dispute between operator Inpex, the joint venture that built the Ichthys LNG plant in Darwin, and sub-contractors. In both cases, the insulation was installed in overseas construction yards before the equipment was shipped to Australia. ## Safe solution needed A Chevron spokesperson said inspections were underway on the Train 2 propane kettles and the relevant regulatory bodies had been informed. *Boiling Cold* understands Chevron has removed some insulation from the kettles in operating on Trains 1 and 3 to allow the external surfaces of the shells to be inspected for cracks. An engineer experienced with pressure vessels told *Boiling Cold* that cracks could often be repaired by grinding out the crack and filling the void with weld metal. However, the safety of any repair method needed to be verified with substantial engineering analysis before work started and the considerable number of cracks made this difficult. The engineer said an option was to perform the repairs and then surround, or encapsulate, the kettle with another pressure vessel as an added safety measure. This would likely be an interim measure until a new kettle installed. Safety regulations recognise that risk cannot be completely eliminated from the workplace, and operators like Chevron are required to reduce risk to as low as reasonably practicable, or ALARP. ALARP is defined in Chevron’s Gorgon Safety Report as “a level of risk that is tolerable, and that cannot be reduced further without the expenditure of costs that are grossly disproportionate to the benefit gained.” The Safety Report submitted to DMIRS by Chevron was obtained by a freedom of information request in 2016. The first part of the ALARP test – is the risk tolerable? – must be met of regardless of cost. Measures of what is tolerable in the Safety Report include that the chance of an individual worker in a given year being killed must be less than 1 in 2000. DMIRS director of dangerous goods and petroleum safety Steve Emery said the regulator was aware Chevron had discovered issues with propane kettles at Gorgon, but nothing had happened to trigger formal notification requirements. Emery said Chevron is responsible for ensuring the suitability and integrity of any repairs to any system. > “The department does not intend to take any action at this stage but may discuss the nature of any general repairs during its routine meetings with Chevron,” Emery said. Chevron owns 47.3 per cent of Gorgon. In a scenario of all three trains being shutdown for six months while new kettles were made and installed the US company would lose about $1.27 billion in LNG revenue. The party with the most to lose from an extended shutdown will decide if the kettles in operation on Trains 1 and 3 are safe and choose between a quicker repair or a longer-term replacement for the Train 2 kettles. Chevron may provide an update on Gorgon’s production outlook at the next quarterly update to Wall Street analysts on July 31. --- **Read what happened next:** **1\. Regulator stepped in after Gorgon's problems revealed by Boiling Cold and The West Australian:** [Safety regulator to inspect Chevron’s Gorgon ASAPSafety regulators knew nothing of cracked pressure vessels at Chevron’s Gorgon LNG plant until alerted by media reports and now plan to inspect the equipment themselves.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/07/CVX-sign-at-QV1-cropped-reduced.jpg)](https://www.boilingcold.com.au/safety-regulator-to-inspect-gorgon-as-soon-as-possible/) **2\. Chevron says Train 2 will be fixed by September:** [Chevron plans to fix and restart Gorgon Train 2 by SeptemberChevron intends to have cracked propane vessels fixed and Gorgon LNG back in full production by September as it awaits inspection by the safety regulator.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/07/gorgon-plant-site-aerial-d-cropped-reduced-2.jpg)](https://www.boilingcold.com.au/chevron-plans-to-fix-and-restart-gorgon-train-2-by-september/) **3\. Chevron reveals more to Wall Street** [Gorgon weld problems raise safety questions Chevron will not answerChevron has “put additional mitigations in place” to protect workers while it mulls what to do with two giant LNG trains operating at Gorgon that could have defective welds.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/08/gorgon-business-overview-mobile.jpg)](https://www.boilingcold.com.au/gorgon-weld-problems-raise-safety-questions-chevron-will-not-answer/) --- *Main image: Aerial view of the Gorgon LNG plant on Barrow Island. Source: Chevron Australia Pty Ltd* ### Inside Woodside’s hall of mirrors Browse LNG is dead URL: https://www.boilingcold.com.au/woodside-browse-lng-is-dead/ Last updated: 2021-12-27T00:16:15.000Z ANALYSIS The key to Woodside's future was raised at its May 2019 annual general meeting, not by chair Richard Goyder or chief executive Peter Coleman, but by a shareholder. If the world moved to limit global warming to 1.5℃ "how much of our company's planned capital expenditure could end up being stranded?" the lady asked. "Let's be clear the world has signed up for 2℃," Coleman said. "1.5 ℃ is just a recent report that has been recommended but not accepted by anybody, "So, for companies to start moving to a 1.5℃ scenario might be a little too fast, I think." Coleman noted that "under a 1.5℃ scenario, of course, the amount of natural gas gets cut." This week Woodside's thinking caught up with the shareholder as it acknowledged a world with less gas demand and doubled its assumed carbon price to $80 a tonne of CO2. > "It depends on whether you are a believer in the 2℃ scenario or the 1.5℃ scenario," a newly accepting chief executive told investment analysts. "If you are really targeting 1.5℃ you need to be around that $US80 a tonne longer term." Woodside has now accepted the premise of last year's question but has not answered it: what assets will be stranded? The answer is the $US20.5 billion Browse project. ## Just browsers, no buyers The plan is to supply gas through 1000km of pipe to the existing North West Shelf LNG plant that will shortly have spare capacity as production from its own fields declines. It is the fourth attempt to monetize this remote gas, and likely the last. Even before COVID-19 if you asked an investment analyst, industry consultant or oil and gas insider, the answer was uniform: Browse would not fly. Browse is expensive and dirty: the worst possible attributes for an LNG project in a world of lower prices and heightened climate concern. The $US20.5 billion cost for the offshore facility was looking underdone in February when Coleman said Woodside would lengthen the duration of the front end engineering design as the topsides equipment was in the "top decile of complexity on a global scale." The offshore plan included nothing to reduce or bury carbon emissions. The other cost to develop Browse that Woodside never revealed was the life extension of the ageing NWS plant that [Wood Mackenzie recently put as high as $US12 billion](https://www.woodmac.com/news/opinion/australias-north-west-shelf-set-for-change/?ref=boilingcold.com.au). Browse gas contains between 8% and 12 % CO2, has to be pumped 1000km and would then be processed in the inefficient NWS plant. This chain means [Browse would emit more CO2 for each tonne of LNG](https://www.boilingcold.com.au/woodside-changes-browse-lng-emissions-story/) produced than any existing Australian offshore project. BP and Shell that together own 40 per cent of Browse have vast portfolios of investment opportunities to choose from and newly-strengthened goals to be greener would be reluctant to put money into Browse. Woodside showed its true commitment to Browse this week by delaying a final investment decision to the open-ended "from" 2023. Browse is dead, but right now it suits Woodside to pretend otherwise. ## In a big hole This week Woodside booked a $US4.37 billion post-tax impairment, due to write-downs on projects, exploration assets and a loss-making US LNG deal, after cutting its long term price forecast to $US65 a barrel for Brent crude. BP announced a $US13 to $US17.5 billion post-tax impairment in June that was shortly followed by Shell's $US15 to $US22 billion impact. Comparing the minimum impairment to current market capitalization Shell had a 12 per cent hit, BP 16 per cent and Woodside's impairment was an enormous 30 per cent of its value on the ASX. Woodside's impairment relative to its size would have been much more than twice its rivals except for its higher price assumptions. In the long-term Shell sees Brent crude costing $US60 a barrel, BP estimates $US55, but Woodside has chosen $US65. Citi analyst James Byrne said the LNG industry, particularly customers, used lower price assumptions than Woodside. Shell and BP have retreated to their bunkers to plot new corporate strategies they will reveal later this year. However, Woodside chief executive Peter Coleman on Wednesday told investment analysts the company was "still very much committed to our overall Burrup Hub strategy." ![The Burrup Hub concept - Browse and Scarborough LNG projects ](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/07/burrup-hub-schematic-small.png) **The Burrup Hub concept**. Source: Woodside Energy Ltd. ## Scarborough beached? In addition to Browse, Woodside's so-called Burrup Hub growth plan includes spending $US11.4 billion for the Scarborough field it owns with BHP to feed a new LNG train built at the Pluto LNG project. Respected industry consultant Wood Mackenzie concluded that LNG from the Scarborough project delivered to Asia would be the [most expensive of nine rival projects](https://www.boilingcold.com.au/woodsides-scarborough-lng-was-uneconomic-before-price-crash-woodmac/). Browse was not considered. An investment in Scarborough can only meet the 12 per cent internal rate set by Woodside's board if Woodside's higher-priced vision of the future eventuates, according to Citi's Byrne. The obvious solution to improve the economics of Scarborough is to process the gas in the NWS plant and avoid the $US6.1 billion construction of a second LNG train at Pluto. The economics could stack up if the six NWS partners do not charge too high a toll to process Scarborough gas into LNG, but the partners not in Scarborough will want to extract as much value as possible from Woodside and BHP. Woodside needs to be seen to have a BATNA - a best alternative to a negotiated outcome – so the other companies think it could walk away if the NWS toll is too high. That BATNA is Pluto train 2\. For Woodside to be considered as serious about sending Scarborough gas to Pluto instead of the NWS, it must also persevere with the Browse to NWS option. When Woodside took its stake in Scarborough to 75 per cent in early 2018, it undoubtedly intended to execute its two-project Burrup Hub strategy. However, in the intervening two and a half years, the outlook for LNG projects has shifted more than any company could have imagined and Browse no longer has a role. Scarborough, however, is cleaner, simpler and has an option to be developed independently from the notoriously troublesome NWS venture. Without Scarborough, Woodside's future would now look bleak. ## Musical chairs Woodside's chances of clinching a deal with the NWS for Scarborough is complicated but perhaps helped by Chevron's recent announcement that it wanted to sell its one-sixth stake in the NWS. With NWS production starting to decline from as early as this year, BP and Shell may also want to sell out. A sale would free up capital for investment in cleaner energy and remove the emissions of the inefficient NWS plant from their carbon accounting. ![Ownership of Burrup Hub Projects](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/07/image-7.png) **Ownership of Burrup Hub Projects** Coleman said this week that new investors would likely share a common goal of maximum utilization of the NWS plant "rather than the asset be simply parts a global portfolio." Woodside's problem is who those buyers would be. The local company may able to afford to buy out one partner, but no more. An old plant needing up to $US12 billion spent on it with considerable uncertainty about throughput does not tick any boxes for infrastructure investors that seek low risks. Financing the purchasing of a massive carbon emitter could also prove difficult as climate concerns around coal increasingly move into the gas space. Coleman told the investment analysts this week that the next 12 to 18 months would determine the company's growth plans. > "Our plans will reflect the reality of the marketplace, but the great thing is…we do have a lot of optionality in what we do, and we'll be making sure we exercise that optionality to get the best outcome," Coleman said. Byrne said the market was not factoring the growth plans into the share price. "The inherent assumption is that the market believes that the projects are either not economic or don't trust management to be able to execute and take these projects all the way forward to an FID," Byrne said. "It's effectively a very high-quality base business that gives you the free option on the growth." --- *Main image: Woodside's headquarters in Perth. Source: Woodside Energy Limited* ### Western Gas, an ineffective regulator and a $US100M clean-up bill URL: https://www.boilingcold.com.au/western-gas-micro-oil-gas-player-with-a-us100-million-clean-up-bill/ Last updated: 2021-12-27T00:35:51.000Z Cleaning up after Australia’s oil and gas industry will cost [$76 billion over the next three decades](https://www.boilingcold.com.au/australias-oil-and-gas-industry-will-create-a-76b-clean-up-bill/), and the Federal Government is powerless to stop big gas passing that liability onto smaller companies with less financial strength. In late 2017 the responsibility to make safe five gas wells in 1000m of water off WA that could cost $100 million passed from the then $US14 billion Hess Corporation to a company formed just weeks before, and the Federal Government had no say in the matter. For Hess, it was the end of a 10-year $US1.8 billion quest to mimic fellow-American Chevron and develop an LNG project in the Carnarvon Basin. ## The deal Hess Australia Holdings signed an agreement on 26 October 2017 to sell two subsidiaries that owned interests in two offshore titles, WA-518-P and WA-519-P, to Western Gas Corporation Pty Ltd. Hess Australia’s annual filing with the corporate regulator ASIC noted: “The company sold its investment in the subsidiary undertakings, with total net assets of $US4, for consideration of $US1.” At the same time, US-based Hess Corporation sold to Western Gas two other Australian subsidiaries that owned the rights to offshore titles WA-70-R and WA-474-P. *Boiling Cold* understands this purchase price was also $US1. Western Gas Corporation Pty Ltd was formed just 15 days earlier. For an outlay of $US2 it now had the rights to develop oil and gas from the vast Equus acreage in the Carnarvon Basin. Western Gas is principally owned by its two executive directors Will Barker and Andrew Leibovitch who, through several companies, own 32.5 per cent of Western Gas each. Barker has more than 20 years’ experience in oil and gas including with Arrow Energy, and Leibovitch is a veteran of Woodside. AGG WA Pty Ltd, a company with 26 shareholders, owns another 30 per cent of Western Gas and Hong Kong-based Sweet Iron Investments owns the remaining five per cent. ## The project Western Gas [plans ](https://www.westerngas.com.au/equus-gas-project?ref=boilingcold.com.au)to develop only the better fields discovered by Hess to decrease the unit cost of gas compared to the American’s plan. Oil and gas would flow from subsea wells to a floating production facility that offloads oil to tankers. A 160km pipeline would take gas to a floating LNG facility near Onslow with some gas delivered to the WA market. ![Equus fields in the Carnarvon Basin](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/07/Western-Gas-Car-Basin-map.jpg) **Equus project in the Carnarvon Basin**. Source: Western Gas Leibovitch said in early 2019 that the project would [cost between $US3billion and $US4 billion](https://www.afr.com/companies/energy/lng-players-in-talks-for-us4b-wa-project-20190104-h19ptu?ref=boilingcold.com.au). A Western Gas spokesperson said the plan could also provide gas to existing LNG plants or the petrochemical industry. The North West Shelf LNG plant will soon have spare capacity. Western Gas enlisted oil and gas engineering heavyweights McDermott and Baker Hughes to perform the design. Goldman Sachs is leading a process to attract investors, the Western Gas spokesperson said. > “Equus is an attractive development opportunity with a certified low CO2 resource of 2 trillion cubic feet of gas and 42 million barrels of condensate, a development plan that supports delivery of low-cost gas and with a 20-year project life provides the ability to offer long-term supply contracts,” the company spokesperson said. Developing an LNG project is always extraordinarily difficult, even for large companies. Finance, customers, partners and engineering contractors must all be on board for an expensive long-term commitment. After the COVID-19 oil price collapse, Australia’s LNG heavyweights Woodside and Santos both delayed LNG projects. For an industry minnow, the challenge is enormous. ## The wells Hess drilled 21 wells in the waters off WA and before it sold the titles to Western Gas made all but five of the wells safe by the process called plugging and abandoning. If the Equus project goes ahead, those five wells are a tremendous asset as they can produce gas without the cost of additional drilling. However, if Western Gas cannot develop the Equus fields, it must make the wells safe before it hands the titles back to the Federal Government. An asset if the project succeeds, turns into a liability if it does not. In the UK sector of the North Sea the cost to plug and abandon five subsea wells could range from $45 million to $170 million, with a mid-cost of $64 million. The UK Oil and Gas Authority calculated this range from the [cost of 26 wells](https://www.ogauthority.co.uk/media/5906/decommissioning-estimate-cost-report-2019.pdf?ref=boilingcold.com.au) abandoned in the northern and central North Sea in 2018. Offshore work in Australia usually is more expensive than the North Sea and one experienced offshore engineer told *Boiling Cold* he expected it would cost at least $100 million to plug and abandon the five Equus wells. *Boiling Cold* asked Western Gas and the National Offshore Petroleum Titles Administrator how the expensive process of making the five wells safe would be paid for if the Equus project did not go ahead. NOPTA manages the titles the Federal Government awards to companies to explore for and produce oil and gas in the waters off Australia. In their responses, both the company and regulator pointed out that the development was being progressed. Neither party addressed the question asked: what happens if the Western Gas does not attract sufficient investors and customers to its Equus project? ## The Northern Endeavour The Federal Government is currently saddled with the cost of one failed offshore company. In 2016 Woodside [paid Northern Oil and Gas Australia $24 million](https://www.thesaturdaypaper.com.au/news/resources/2020/02/15/decommissioning-oil-vessel-could-cost-taxpayers-230m/15816852009400?cb=1594698110&ref=boilingcold.com.au) to take its subsidiary Timor Sea Oil and Gas Australia. NOGA was formed eight months earlier. TSOGA owned the Northern Endeavour oil production vessel and the titles to the Laminaria-Corallina oil field. Four years later NOGA was liquidated, and Australian taxpayers are responsible for a clean-up that could cost $230 million. Minister for Resources Keith Pitt announced in April that the Northern Endeavor would be kept safe in so-called “lighthouse mode” at taxpayer’s expense while a longer-term solution was developed. The Laminaria and Equus deals have a good deal in common: a large established oil and gas company offloads a subsidiary with substantial abandonment liabilities to a new small single-asset company. The actions of Woodside and NOGA were legal, as were the Hess and Western Gas transactions. Western Gas, with its engineering partners, could have the required technical capacity to develop Equus. Western Gas could also have the required financial capability, but this cannot be independently determined as it is below the size required for Australian companies to submit publicly available annual reports to ASIC. However, the capabilities of Western Gas were not verified by NOPTA that, according to its most recent annual report had the job of “Contributing to national prosperity through administering a thriving offshore oil and gas industry.” ## The quick tick regulator A month after the Hess deal Western Gas told NOPTA that the names of the four companies it bought had changed. NOPTA registered the changed names. Giving a tick to a name change was the full involvement of the Federal Government in a transfer of significant rights and responsibilities between two completely different companies. NOPTA has the authority to assess the financial capacity of a company when a title is transferred or an exploration permit is awarded, according to a spokesperson for the Department of Industry, Science, Energy and Resources that NOPTA is part of. > “As the transaction…occurred at the company level, there was no transfer of title,” under the legislation the Department spokesperson said. It is common practise in Australia for oil and gas companies to have a myriad of subsidiaries so interests in different projects, or in the case of Hess at Equus even interests in various fields in a project, are held in separate companies. NOPTA awards titles to these subsidiaries so the ultimate ownership and control of a title can change by selling the company with no involvement of the regulator. Oil and gas joint venture agreements often guard against the sale of a company in the venture to a perhaps unsuitable owner with change of control provisions. The provisions give other venturers the same rights as if the company in the venture was sold: such as a veto of the transaction or the right to pre-empt the deal by buying the interest at the same price. The joint venture can protect itself from the entry of a company that may not be able to pay its way. Under current legislation, the Federal Government has no such ability to protect the interests of Australian taxpayers. ## Is change coming? The Department spokesperson said current legislation placed a duty on titleholders to maintain sufficient financial assurance to meet the costs required. “NOPTA regularly meets with titleholders in relation to the progress and performance of projects,” the spokesperson said. “The Department also works with NOPTA and NOPSEMA (the safety and environment regulator) to keep itself informed on matters impacting on projects.” Despite these activities, the Government does not have a cost estimate for plugging and abandoning the Equus wells. The Department spokesperson said a review of the current decommissioning policy and legislation is underway “including ensuringthere is sufficient coverage for all decommissioning activity including the plugging and abandoning of wells and providing ongoing monitoring of the financial health of companies.” The Department plans to release a revised decommissioning framework in the coming months. > “Decommissioning obligations, including the plugging and abandonment of wells, are the responsibility of the registered holder of the title, it must ensure its obligations and liabilities are met,” the Department spokesperson said “Failure to comply with the property removal, maintenance or repair obligations may attract a criminal or civil penalty.” --- *Main image: Schematic of Equus field development proposal. Source:Western Gas* --- ### Synergy pushes its ageing coal plants to be more flexible URL: https://www.boilingcold.com.au/synergy-pushes-ageing-coal-plants/ Last updated: 2020-07-09T09:09:41.000Z Despite all the talk of wind and solar, Collie coal remains the bedrock of power generation in the South West of WA and Synergy is working to keep its coal-burning fleet viable in an ever-changing energy market. Synergy asset optimisation manager Paul Chaperon said the State-owned utility's generation fleet had loads "going up and down like a yoyo" on Good Friday 2019\. The low load of a public holiday combined with wild swings in generation from rooftop solar panels with intermittent cloud cover forced the continual adjustment of the output of coal and gas-fired generators. ![SW WA generation fluctuations on a low load intermittently cloudy day](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/07/image-6.png) **Synergy large plant generation on a low-load intermittently cloudy day: 6AM-8PM 19 April 2019** Source: P. Chaperon presentation Chaperon, speaking to an Australian Institute of Energy webinar this week, said open cycle gas turbines handled the peaks and troughs of the day well, but combined cycle gas plants and especially coal-fired power stations were not designed for rapidly varying dispatch. "Historically generators were about sending out megawatts, the more megawatts, the better," Chaperon said. "We need to shift that focus now to be more focussed on reliability, providing essential services and being flexible, being able to change load dramatically. "Thermal generation must become more flexible if we want to play and be relevant in this kind of crazy market that we are in when the loads are up and down all the time." That "crazy market" is caused by the 6.5 per cent annual [growth in rooftop solar](https://www.boilingcold.com.au/coal-to-solar-shift-for-wa/) capacity that the Australian Energy Market Operator expects to exceed 2600 megawatts by 2030, dwarfing current power stations. This so-called behind the meter generation is not controlled and floods into the South West Interconnected System in sunny weather requiring the power stations owned by Synergy and others to adjust their output. ![min south west WA thermal power stations 2018 to 2019](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/07/image-4.png) Source: Clean Energy Regulator The State Government's Energy Transformation Taskforce has recommended that new rooftop solar must be able to be curtailed when required. Significant battery storage on the SWIS would also help. Until then, Chaperon is working on "low cost, low risk, no regrets improvements" to allow the coal-fired generator to keep operating. "'It has one very simple objective, to increase market participation by expanding plant capability," Chaperon said of the work. Aims include a reduction in the start-up time of coal-fired generators which would improve responsiveness and cut costs. Less expensive diesel would be burnt to fire up the plant before coal can be used. Synergy is also reviewing the logic of the plants' control and instrumentation systems as well as operations and maintenance routines, some decades old. The minimum theoretical load of a coal-fired plant is when a single coal mill, that crushes the coal before it goes to the boiler, is operating. Chaperon said normally at least two mills are run to avoid a single trip shutting in the unit, but Synergy would investigate the feasibility of running on a single mill. "This is the same for coal plants across the world, how to reduce that minimum load so they can avoid switching off?" Chaperon said. The utility's generation units and organisation needed to become more responsive ahead of a planned switch in the SWIS from adjusting power despatch every 30 minutes to every 5 minutes. Also, each of Synergy's generation units will have to participate in the market separately, not as a single portfolio as is current practise. Chaperon said Synergy needed to implement a lot of automation, train its people and develop trading systems to manage the change. A new control room at Pinjar, in Perth's north, may be needed. ![South West WA power generation fuel mix - past 12 months - coal 44%, gas 43%, wind 12%](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/07/image-2.png) **South West WA power generation fuel mix - past 12 months**.Source: AEMO WA Wholesale Electricity Market Dashboard Coal is still the most significant source of power in the South West's Wholesale Electricity Market, that does not measure the electricity from rooftop solar. Chaperon said the coal plants were also essential to the security of the grid by providing system inertia, but Synergy received no compensation for providing this service under current market rules. Chaperon skirted questions about the "politically-charged" issue of the closure of coal-fired power stations. Minister for Energy Bill Johnston announced the closure WA oldest generators, Muja Power Station's two "C" units, in August 2019\. The first unit will close in October 2022 and the second two years later. The State Government issued 18 media statements in the first half of this year advertising how much it was doing for Collie, leading some to question whether more bad news for Collie power station workers and coal miners may be on the way. The Australian Energy Market Operator's 2020 [electricity statement of opportunities ](https://aemo.com.au/energy-systems/electricity/wholesale-electricity-market-wem/wem-forecasting-and-planning/wem-electricity-statement-of-opportunities-wem-esoo?ref=boilingcold.com.au)released in June predicted little growth in South-West power demand. Any substantial increase in renewable energy that the Energy Transformation Taskforce is preparing the market for will require the retirement of some existing thermal generation. --- *Main image: Muja coal-fired power station in Collie. Source: Synergy* ### Ancient Aboriginal artefacts now an issue for offshore projects URL: https://www.boilingcold.com.au/ancient-aboriginal-artefacts-seabed/ Last updated: 2020-07-08T00:39:52.000Z Australia's oil and gas industry may need to care for Aboriginal heritage offshore in the same way as when working onshore and Woodside's operations around the World Heritage listing-nominated Burrup Peninsula are especially sensitive. Scientists working in partnership with the local Murujuga Aboriginal Corporation have found ancient Aboriginal artefacts in the waters of the Dampier Archipelago that were once dry land. Murujuga is the traditional Aboriginal name for the Dampier Archipelago and surrounds and includes the Burrup Peninsula: home to Woodside's North West Shelf and Pluto LNG plants. The Australian and WA governments are preparing to [nominate Murujuga for World Heritage listing](https://www.dbca.wa.gov.au/parks-and-wildlife-service/world-heritage-areas/murujuga-world-heritage-nomination?ref=boilingcold.com.au) due to the more than one million petroglyphs, or ancient rock art, found onshore. The [Deep History of Sea Country](https://deephistoryofseacountry.com/?ref=boilingcold.com.au) research project found 269 artefacts in shallow water off Cape Bruguieres that radiocarbon dating indicated were at least 7000 years old. An ancient freshwater spring that is now underwater in Flying Foam passage yielded more finds. ![Aboriginal artefact found by dive](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/07/dsc08874-1.jpg) **Artefact found by diver**. Source: Deep History of Sea Country website. Flinders University scientist Chelsea Wiseman said dry land once extended 160km from the current Pilbara coast and Aboriginal people would have lived there for generations. "Our discovery demonstrates that underwater archaeological material has survived sea-level rise, and although these sites are located in relatively shallow water, there will likely be more in deeper water offshore," Wiseman said. > "Australia is a massive continent, but few people realise that more than 30 per cent of its landmass was drowned by sea-level rise after the last ice age, > "This means that a huge amount of the archaeological evidence documenting the lives of Aboriginal people is now underwater, "The ancient coastal archaeology is not lost for good; we just haven't found it yet." **Deep History of Sea Country: Investigating the seabed in Western Australia**. Source: Flinders University Murujuga Aboriginal Corporation chief executive Peter Jeffries said the discoveries added to the story of Aboriginal people in the Pilbara. "Further exploration could unearth similar cultural relics and help us better understand the life of the people who were so connected to these areas of land which are now underwater," Jeffries said. "With this comes a new requirement for the careful management of Aboriginal sea country as it's not automatically protected by current heritage legislation." Flinders University associate professor Jonathan Benjamin said artefacts found in the sea are often relatively well preserved compared to finds on land. Many of the stone tools found off the Pilbara coast had sharp edges that indicated the sea had not moved them a great distance. ## Make archaeology part of the project Benjamin said it was standard practise in Europe to consider submerged ancient history. He worked on a [study of an area in the English Channel](https://www.wessexarch.co.uk/our-work/seabed-prehistory?ref=boilingcold.com.au) dredged for aggregate where archaeologists found Neanderthal stone tools in the dredged material. "Why wouldn't we consider ancient archaeology around this continent as well in our planning and consent phase, especially now that we've demonstrated beyond a shadow of a doubt that it does exist?" Benjamin said. > "I'm not anti-industry, I don't want to stop any progress and development, but I want to work with industry...just as I want to work with traditional owners that have potentially a spiritual connection to this stuff, "We're not just purely here to make money and extract the resources, but I understand that's the economy we live in." Benjamin said any offshore development should have a heritage management plan that considered ancient artefacts as well as more recent shipwrecks, that legislation does protect. He said it would be best if geologists, geomorphologists and archaeologists worked together from the early stages of a project. High-resolution marine geophysics and analysis of geotechnical cores would help locate areas where artefacts could have survived. "The sooner all industry around Australia engages with this the less of a problem it will be for them," Benjamin said. ## Scarborough pipeline approval under appeal The two finds are to the east of the route of a pipeline Woodside plans to build to take gas from its Scarborough field to the Pluto LNG plant. Benjamin said the WA Environmental Protection Authority and Woodside were told about the finds last year. The Murujuga Aboriginal Corporation said in a submission to the EPA dated September 2019 and obtained by *Boiling Cold* that it understood the pipeline proposal included "both direct (removal of submerged rock are during dredging) and indirect impacts." ![Scarborough pipeline route and location of ancient Aboriginal artefacts](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/07/image-1.png) **Scarborough pipeline route**. Source: Woodside with Boiling Cold annotation A Woodside spokesperson said no rock art, or petroglyphs, would be damaged within Woodside's areas of operation. "Woodside welcomes the Deep History of Sea Country Project study, which took place outside these areas, and which indicates the potential for artefacts rather than rock art," the spokesperson said. "The proposed Scarborough dredging will not impact any igneous (volcanic) rock, which is the type of rock on which Murujuga rock art has been found." Woodside acknowledged a potential for submerged heritage and conducted extensive onshore and nearshore archaeology and ethnographic cultural heritage and geotechnical surveys, the spokesperson said. > "These surveys have not identified submerged heritage materials," > "These surveys identified one nearshore archaeological site within the Pluto LNG foundation lease area which remains intact and protected." In January, the EPA recommended to Environment Minister Stephen Dawson that he give environmental approval to the nearshore part of the pipeline route in State jurisdiction. The Appeals Convenor Emma Gaunt is investigating two appeals against the EPA's recommendation. Gaunt said the matter was a priority for her office and her recommendation would be sent to Minister Dawson, who makes a decision that includes economic and social issues as well the environment. A presentation Woodside made in Karratha recently stated the company expected a decision mid-year. Woodside is currently reviewing the Deep History of Sea Country research, a company spokesperson said, and would engage with the MAC and the researchers to understand the new findings. "Woodside will continue to work with key stakeholders to protect heritage and minimise any impacts both onshore and offshore, including for the proposed Scarborough and Pluto Train 2 development activities," the spokesperson said. The Woodside spokesperson said the Murujuga Aboriginal Corporation had provided feedback about its cultural heritage management and dredging plans and made a submission to the EPA. The company was consulting with MAC about the issues it raised. In the September 2019 submission to the EPA MAC called for the regulator to direct Woodside to identify potential submerged Aboriginal heritage sites in the pipeline project area and develop plans to protect them. Benjamin said Woodside might have underestimated the potential impact of submerged archaeology. "I expect they are not underestimating it now after this discovery has been made," he said. --- *Main image: Archeological dive in the Dampier Archipelago. Source: Flinders University* ### Lost: one lime contract and $645M URL: https://www.boilingcold.com.au/lost-one-lime-contract-and-645m/ Last updated: 2020-07-08T02:16:34.000Z ANALYSIS When Alcoa ended a 50-year old deal to buy lime its supplier Adbri lost $515 million in value in a day as the move threatens the viability of its “jewel in the crown” Perth plant that has long-plagued nearby residents with dust and stench. Adbri, the recently renamed Adelaide Brighton, announced early Friday that the biggest customer of its 1.25 million tonnes a year Munster lime plant would import the essential chemical when the current contract expires in June 2021. Adbri chief executive Nick Miller said he was disappointed with Alcoa’s decision to displace a local product with imports “particularly considering our almost 50-year uninterrupted supply relationship.” The cement and lime giant’s market capitalisation on Tuesday evening, three trading days after the announcement, was down 31 per cent, or $645 million. So, how did the loss of a $70 million a year contract that accounts for less than five per cent of Adbri’s revenue pummel its value? The Cockburn Cement plant in Munster 11km south of Fremantle is uniquely well-positioned to produce lime used to process two of the State’s biggest exports: alumina and gold. Shell sand dredged from the bottom of Cockburn Sound is landed at Woodman Point where it is piped inland to the plant. The adjacent rail line allows coal from Collie’s Griffin Coal to come in and lime to be shipped to Alcoa and South32’s alumina refineries. ## Lack of scale could mean lack of viability Lime sales contributed about 11% of Adbri’s 2019 revenue, or about $167 million. The Munster plant is understood to run at about 80% of its 1.25 million tonnes a year capacity and make the vast majority of Adbri’s lime. The loss of the Alcoa contact will require the plant to produce at about 40% of its capacity. Adbri chief executive Nicholas Miller [told investment analysts](https://finance.yahoo.com/news/edited-transcript-abc-ax-earnings-123331432.html?ref=boilingcold.com.au) in February that Munster had very low variable costs. This was good news when Miller was selling a vision of rising sales that would cost little to produce. The flip side is that the plant has very high fixed costs, and in 12 months they will have to be spread over half the volume of lime. Adbri could trim fuel costs by running one kiln instead of two, but other costs will push up the unit cost of production substantially. Alcoa is a company that takes a long-term strategic view on the procurement of vital inputs, whether it is gas or lime, so it is no surprise that it will be importing from multiple sources to free itself from the risk of a monopoly supplier. The result is that just as Adbri’s production costs soar Alcoa may give several importers the economy of scale to better compete in the rest of the WA market. A likely result is more lost contracts, a closed plant and a loss of about 10 per cent of revenue. Robin Morgan, an analyst with broker Taylor Collinson, described lime as the company’s “[jewel in the crown](https://www.taylorcollison.com.au/wp-content/uploads/2017/05/ABC-201802-FY17.pdf?ref=boilingcold.com.au),” with a contribution to earnings twice that of its share of sales. So, on this reckoning, the snowball effect of this one lost contract is a 20 per cent cut in earnings. A growth in lime sales was one of five key elements of Adbri’s strategy, so shareholders may have factored in a more substantial earnings contribution from lime in the future. Premier Mark McGowan has [called on Alcoa to support local jobs](https://www.afr.com/companies/manufacturing/alcoa-faces-wrath-of-wa-government-over-adbri-snub-20200705-p5593a?ref=boilingcold.com.au), put at about 50, and reconsider its decision. While Adbri said it was disappointed in Alcoa’s lack of support for local jobs, the company did not mention that it imports 2.6 million tonnes of cement materials a year. Alcoa’s announcement may well be a very public display of strength to force a chastened Adbri to accept a price cut. However, the Alcoa contract is not the only barrier to the continued operation of the Munster plant. ## An unwelcome presence When Cockburn Cement, then an independent company, started lime production half a century ago the plant was not surrounded to the north by the suburb of Beeliar. Residents have long complained of dust and a sulphurous stench from the kiln stacks that tower above the houses. When knocking on doors in the area two years ago for a [story for *The West Australian*](https://www.boilingcold.com.au/coal-and-dust-plagues-two-southern-perth-suburbs/), I witnessed plenty of outdoor furniture covered in a grey, gritty dust. Many residents said they spent summer evenings inside to avoid a sulphurous smell driven by the sea breeze. Adbri profits from the residential growth: it made $8.4 million in 2017 by selling 12ha of the plant’s land for a residential subdivision. The cement and lime company has for years fought off concerns with a [slick website](https://www.cockburncementcommunity.com.au/?ref=boilingcold.com.au) aimed at the local community, pointing to what it says are other sources of dust and odour, and numerous legal appeals and other stalling tactics. A length State [parliamentary inquiry](https://www.parliament.wa.gov.au/Parliament/commit.nsf/%28InqByName%29/Inquiry+into+Cockburn+Cement+Ltd,+Munster+?ref=boilingcold.com.au#Report) concluded in 2011 resulted in a $42 million spend on filters to reduce dust emissions, but problems continued. Local group [Cockburn Pollution Stoppers](https://pollutionstoppers.org/?ref=boilingcold.com.au) reinvigorated opposition in late 2016 and appealed against an extension of the plant’s license to operate. Since then there has been a [flurry of scientific and regulatory activity](https://www.der.wa.gov.au/our-work/community-updates/91-cockburn-air-quality?ref=boilingcold.com.au) by the Department of Water and Environmental Regulation. In early 2019 DWER conducted four programs to monitor air quality, including the erection of a scaffold tower near the plant boundary to house a LiDAR (light detection and ranging) device to detect sources of dust. Adbri was required by its environmental license to conduct its own investigations. The Department said on its [webpage for the community](https://www.der.wa.gov.au/our-work/community-updates/91-cockburn-air-quality?ref=boilingcold.com.au) that it planned to publish the studies this year. A DWER spokesperson said concerns about disclosing commercially sensitive information and claims of copyright by Adbri had complicated the release of the information. The Department is waiting on the result of a freedom of information request by a member of the public that may help it release some of the commercially sensitive information, the spokesperson said. Adbri noted in its 2019 annual report in February that DWER was “investigating alleged unreasonable odour emissions from Cockburn Cement’s Munster plant between January and April 2019.” The company denied it had offended. A DWER spokesperson said the matter remained under investigation and “it would not be appropriate to provide further comment at this stage.” In May Adbri acceded to Pollution Stoppers’ highest priority demand and announced it would [burn gas instead of coal](https://www.boilingcold.com.au/cockburn-cement-dumps-coal-for-gas-and-nearby-residents-win/), that contained sulphur and had been blamed for much of the smell and dust. The regulator is reviewing the odour from the plant and, if necessary, will include additional controls in an amended license, a DWER spokesperson said. A later review will be conducted into dust from the plant. --- **Main picture: Cockburn Cement plant in Munster.* **Credit: Imagery ©2020 Google, Data SIO, NOAA, U.S. Navy, NGA, GEBCO, Landsat / Copernicus, Data LDEO-Columbia, NSF, NOAA, Imagery © CNES / Airbus, Maxar Technologies, Map data ©Google* ### How Don helped Kerry win the east coast gas game URL: https://www.boilingcold.com.au/how-don-helped-kerry-win-from-the-east-coast-gas-mess/ Last updated: 2020-07-03T05:48:07.000Z Big-talking American Don Voelte's time at the helm of Woodside is best known for launching the Pluto LNG project that went from discovery to production in the impressive time of seven years. Woodside shareholders also need to thank the Nebraskan for the opportunity he avoided: the rush to make LNG from Queensland's coal seam gas. "When I was at Woodside we sat there and said we can't believe they're doing this coal seam gas to LNG, no calorific value, no hydrocarbon, it was a 70 billion dollar research project," Voelte said last week. > "A lot of us just had an absolute ultimate belief that it wouldn't work, > "We didn't know where the reserves were coming from, > "How do you have 10,000 wells?" Santos, Origin and British Gas planned to separately build three near-identical LNG plants next to each other on an island off Gladstone in Queensland. Gas production in the eastern states needed to triple to supply the new plants and the existing domestic market. Speaking at the annual Credit Suisse Australian Energy Conference Voelte said Woodside analysed the impact on the east coast gas market it was "unbelievable" that governments did not reserve gas for the domestic market. > "Man this was like taking candy from a baby, these guys were putting lipstick not on a pig but on a boar hog...and they were suffocating the rest of the east coast," Voelte said. Voelte said for local proponents Santos and Origin "it was almost like, if you didn't have LNG you gotta go out there and get some." "BG were a different thing, they were doing pump and dump," Voelte told Credit Suisse head of Australian energy research Saul Kavonic. "They just wanted to get that company sold, which they did." Shell bought BG in 2016 for $US53 billion, and the QGC LNG project it got in the deal was a major reason behind a $US8 to $US9 billion [impairment of its gas business](https://www.boilingcold.com.au/shell-slashes-value-of-prelude-floating-lng/) this week. ## Hell for gas buyers, heaven for Seven Voelte took charge of the Kerry Stokes' Seven Group in 2013, two years after he left Woodside. By then all three Gladstone LNG projects were under construction. It was plain to all but the cheerleaders that doubts about the productivity of coal seam gas wells and the practicality of drilling and connecting thousands of wells meant the new LNG plants would need more gas to meet their LNG contacts. That gas could only come from the existing conventional gas fields that would likely enjoy a hefty price increase when demand outgrew supply. Under Voelte Seven Group started a strategy to invest in east coast conventional gas producers not involved in Gladstone LNG. "We would go down and buy some shares, the illiquidity of the market would pump those shares up at Beach and at Drillsearch, and then we waited a few days, they came down, we bought some more," "It was amazing, the strategy just sat there and fell in (place), and everything worked perfectly." ![Woodside, Santos, Beach Energy and Origin Energy share prices](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/06/image-10.png) Source: Analysis and graphic by Boiling Cold Voelte vacated the Seven Group chief executive's chair for Ryan Stokes in August 2015. A few months later, Seven's gas investments came together when Beach took over Drillsearch. Looking back, Voelte said the strategy "came through exactly as we thought." > "It's all about consolidation of that gas position on the east coast, > "So that was kind of fun; in fact, it was a blast." The strategy continued in late 2017 when Beach more than doubled its size by buying Origin's conventional gas assets for $1.6 billion. The deal left Origin with its troublesome coal seam gas production. Voelte said chairman Kerry Stokes, his son Ryan and chief financial officer Richard Richards were leading Seven Group well. "I think they've got some more tricks up their sleeve and they're always thinking ahead," he said. Beach Energy, that Seven Group owns 28.6 per cent of, is thought to be one of the suitors for Exxon's 50% share of the Bass Strait offshore oil and gas fields. ## Western deadlock In the nine years since he left Woodside headquarters the west coast gas industry has generally played out as Voelte expected. He thought that what was Exxon's Scarborough field would be supplying a second and third LNG train at Pluto by now. "We had it pretty well lined up when I left, and I was hoping that would go through," he said. Eventually, Woodside under Voelte's successor Peter Coleman bought Exxon out of Scarborough in 2018 and was planning to sanction the project this year before the COVID-19 oil and gas price crash. What has not changed is the notorious difficulty of progressing a new development that has multiple LNG companies involved. "It's combatted by all the people that are trying to jockey for position and things like the North West Shelf and Browse," Voelte said. > "The biggest hindrances there were not the government, weren't the local issues which could be managed; it was basically all the different people who had interests in the deal and the control issue." Unlike many in the industry, Voelte said he thought demand for fossil fuels would bounce back, but he was less sure about pricing. "I'm sure the next round will be like every other boom and bust, and we'll go in and piss it all away again," he said. --- *Correction 2PM 3 July: First paragraph incorrectly stated that Pluto went from discovery to LNG production in record time. Arun, in Indonesia, did this in less time, and there may be others.* ### Shell slashes value of Prelude floating LNG URL: https://www.boilingcold.com.au/shell-slashes-value-of-prelude-floating-lng/ Last updated: 2020-07-01T05:09:23.000Z Shell will slash about $US8 to $US9 billion from the value of its gas business, mainly from Prelude floating LNG and QCG coal seam gas to LNG in Gladstone, due to a gloomier outlook for oil and gas prices. More than 90% of Shell’s LNG contracts are linked to the oil price, and the Anglo-Dutch giant is now assuming Brent crude will average $US35 a barrel in 2020, $US40 in 2021, $US50 in 2022 and $US60 for the longer-term. Shell [told the market](https://www.shell.com/media/news-and-media-releases/2020/shell-second-quarter-2020-update-note.html?ref=boilingcold.com.au) yesterday to expect post-tax impairment charges in the range of $US15 to $22US billion when it releases its second-quarter results on July 30. Two weeks ago BP said it expected to [cut the value of its assets](https://www.theguardian.com/business/2020/jun/15/bp-expects-covid-19-to-have-enduring-impact-on-global-economy?ref=boilingcold.com.au) by $US17.5 billion after cutting its long-term oil price forecast to $US55 a barrel. Shell said the gas business write down was "primarily in Australia including a partial impairment of the QGC and Prelude asset values." In addition to the gas asset write down Shell’s upstream business will take a $US4 to $US6 billion hit and its downstream activities $US3 to $US7 billion. The total pre-tax impact will be between $US20 to 27 billion. The upstream and gas asset valuations were driven by the more bearish price forecasts “with some impacts due to a changed view on the development attractiveness.” Wood Mackenzie analyst Daniel Toleman said the QCG write-down was linked to the acquisition from BG acquisition that looked increasingly challenged by lower price assumptions. > "Prelude, on the other hand, suffered from cost overruns and schedule delays," Toleman said. > "It is now offline and the leading backfill project, Crux, has been delayed. > "This, and likely also its high CO2 content, has led to a write-down." The $US17 billion Prelude has not produced LNG since early February. [No winners from Shell’s $US17B Prelude floating LNGShell’s giant $US17B Prelude floating LNG is late, expensive, dirty and so far unreliable. An exclusive look at how a failed investment for Shell is a terrible deal for Australia.![](https://www.boilingcold.com.au/favicon.png)Boiling ColdPeter Milne![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/04/aerial-view-of-the-prelude-flng-facility-with-the-valencia-knutsen-berthed-side-by-side-reduced.jpg)](https://www.boilingcold.com.au/after-prelude-few-win-from-shells-floating-lng/) **Read Boiling Cold's exclusive look at Shell's Prelude mess** Taiwan’s CPC, a minor equity holder in Prelude, had written down its investment by 39 per cent at the end of 2019 before the COVID-19 pandemic pushed oil and gas prices off a cliff. Wood Mackenzie upstream research director Angus Rodger said the major oil companies were reassessing long-term oil price assumptions and investment hurdle. “Cutting long-term price assumptions will generally result in a lower valuation, for certain assets to below the accounting value held on the balance sheet,” Rodger said. “That’s what will trigger an impairment charge. > "This process has further to run, and we expect further large impairments to occur across the sector.” Australian investors will be watching the release of Woodside's second quarter results on 16 July followed by Santos on 23 July for any reassessment of asset values by the two local LNG champions. Wood Mackenzie has slashed its valuation of the global upstream sector by US$1.6 trillion, with $200 million occurring in the Asia Pacific region. Wood Mackenzie vice president corporate analysis Luke Parker said Shell’s impairment was more than an accounting technicality or an adjustment to near-term price assumptions. “It’s about fundamental change hitting the entire oil and gas sector,” Parker said. > “Just a few years ago, few within the oil and gas industry would even countenance ideas of climate risk, peak demand, stranded assets, liquidation business models and so on. “Today, companies are building strategies around these ideas.” --- *Update 1PM: Daniel Toleman comments added.* --- *Main image: Prelude receives LNG during commissioning. Source: Shell* ### Offshore maintenance backlog worries unions and safety regulator URL: https://www.boilingcold.com.au/offshore-maintenance-worries-unions-safety-regulator/ Last updated: 2020-06-26T05:17:47.000Z A backlog of vital maintenance on Australia's offshore oil and gas facilities after a cut in workers numbers to the risk to employees and production of a COVID-19 outbreak is worrying the offshore oil and gas safety regulator NOPSEMA. NOPSEMA safety and integrity head Derrick O'Keeffe said the regulator had investigated the consequences of the response to the COVID-19 outbreak at offshore facilities. The NOPSEMA inspections found a lack of workers had resulted in the deferral of some maintenance. "I think it's as an area of concern for industry about how do you clear that backlog?" O'Keeffe said. O'Keeffe compared the backlog to Australian [hospital waiting lists](https://www.theaustralian.com.au/nation/coronavirus-hospitals-facing-18month-backlog-of-elective-surgery/news-story/0a282dc332aca788bf6c432c7ce380a3?ref=boilingcold.com.au) that could take 18 months to clear after the halt in elective surgery The safety chief also had worries about the slump in oil and gas prices hitting the industry as it deals with COVID-19-related operational restrictions > "Given the volatility of the industry I always get concerned when the price of oil goes down and you see evidence of jobs being cut, work not happening," O'Keeffe said. "Generally, when the oil price goes back up again, blowouts tend to increase on a global basis, so I think it's a time for avoiding complacency. "I think potentially now industry has one of the more challenging periods ahead, we all need to keep focussed." O'Keefe was talking at a Petroleum Club of WA webinar earlier this week that brought together regulators, unions and industry groups to discuss lessons learned from the ongoing response to the COVID-19 pandemic. ## Concerns at Ichthys Electrical Trades Union WA organiser Damian Clancy said more than 100 light fittings on the Ichthys Explorer central processing facility had failed a test of operating with battery backup > "They are in safety-critical areas; there is no one on the facility to fix them," Clancy said. "Someone has performed the testing, they've identified the issue, but because the facility is down-manned to the point that it is, there is no one to rectify these issues. "I know they are still producing and know they haven't caught fire and burnt into the ocean just yet, but there will be issues." Clancy said one of his members started to be stood down in late February. "There are things that will have gone by the wayside in that time, and it's imperative that the operators…get the facility back up to speed with the relevant manning." The unionist said there was also a problem in a switchboard room on the Inpex Venturer oil production vessel. An Inergen fire suppression that should put fires out by filling the room with inert gas was not working. NOPSEMA has not received any recent reports electrical issues on the Ichthys facilities, according to a spokesperson for the regulator. "NOPSEMA does not comment on the specific performance of the facility's equipment unless it is subject to enforcement action," the spokesperson said. "If further details are required, you may wish to obtain this information from Inpex." *Boiling Cold* asked Inpex about both safety issues on its Ichthys facilities raised by the ETU and Inpex did not respond. There is a history of electrical safety issues on the Ichthys facilities. In mid-2018 NOPSEMA told Inpex to [improve its safety practices](https://www.nopsema.gov.au/assets/Published-notices/A621342.pdf?ref=boilingcold.com.au) after two workers received electric shocks while working on an isolated 33kV high voltage cable installed on the Ichthys Explorer in a repeat of a [similar to another incident](https://thewest.com.au/business/ichthys-lng-project-on-hold-after-safety-regulator-finds-mistakes-again-ng-b88888971z?ref=boilingcold.com.au) a year before. [Independent audits of the electrical safety](https://thewest.com.au/business/energy/secret-docs-reveal-deadly-blast-risk-at-63b-lng-plant-ng-b881069411z?ref=boilingcold.com.au) of the Ichthys facilities reported by *The West Australian* in early 2019 found "an underlying culture rushing to meet deadlines has compromised the quality and compliance of the electrical installation." ## Regulator called to listen more widely Clancy said NOPSEMA needed to engage more with the workforce, especially contractors. He questioned whether the health and safety representatives NOPSEMA met with during inspections employed directly by the operator were as aware of problems as contractors that do the maintenance work. "When you visit an offshore installation, I think there needs to be a proper auditing system of toolbox meetings," Clancy said. > "And when you find something that has been raised, three, four, five, six months earlier and is still being in quotes' actioned' there needs to be something done." Clancy called for the greater consultation between NOPSEMA, operators and unions put in place to react to the COVID-19 pandemic to continue. "The two weeks in isolation, twelve weeks on roster, four weeks off [that Woodside announced](https://www.boilingcold.com.au/woodside-offers-workers-big-bucks-as-compam-s/), that's not consultation, that's not communication with their workforce," Clancy said. "If we want to talk about health, especially mental health, where was NOPSEMA when Woodside put that on the table?" Maritime Union of Australia research officer Penny Howard said there were still many issues affecting offshore workers including border restrictions, testing regimes, living conditions in quarantine and rosters. > Rosters were "a really important issue for workers who've had their lives turned upside down quite abruptly," Howard said. Howard said in response to the pandemic NOPSEMA had set up structures to improve communication between it, operators and unions. "I think that's a great step forward that we should continue to build on," Howard said. O'Keefe said the regulator was on a pathway to improve and the important conversations were now happening. "I would like to think that the future is better than the past," he said. --- *Main image: Ichthys Explorer central processing platform. Source: Inpex* ### Coleman smells ammonia in Woodside’s future URL: https://www.boilingcold.com.au/coleman-smells-ammonia-in-woodsides-future/ Last updated: 2022-01-08T14:17:38.000Z As climate concerns dampen the prospects for large LNG projects Woodside needs to protect itself with new products, and for chief executive Peter Coleman one answer is ammonia. Coleman told the annual Credit Suisse Australian Energy Conference yesterday that ammonia could be done a sufficient scale for oil and gas companies to invest in, and indicated a preference for making it out of gas, not hydrogen produced with renewable energy. The interest in ammonia is driven in part by the shrinking window to develop LNG mega-projects. Credit Suisse head of Australian energy research Saul Kavonic asked Coleman if investments in LNG projects with 20 to 30-year timeframes were risky given they sometimes were based on demand projections incompatible with Paris Agreement climate goals. "I think we have a risk of over-running, there's no doubt about it," Coleman answered. > "Is the world out there crying out for gas? > "The answer is no." Coleman said there was a push against gas in the developed world because it was a hydrocarbon. Big-picture demand forecasts needed to be treated with caution as they did not allow for government policy and public sentiment that could change very quickly. He said it was already difficult to justify expenditure on greenfield exploration as there was doubt about having enough market demand to support a sizeable long-payback development 10 years later when the gas would be ready to develop. "We need to protect the business by having different product lines," Coleman said. "The world wants a carbon-neutral fuel; gas can produce a carbon-neutral fuel. "So, as you start to think about industrialising hydrogen, don't think of hydrogen, hopefully, think of ammonia." ## Be coal's friend, not its enemy For more than a decade, gas producers have promoted their product as being more climate-friendly than coal. Coleman raised the possibility of Woodside's proposed new product, ammonia, complementing rather than competing with coal. > "Don't think that the coal-fired power station owners are going to simply roll over on their backs and scratch and let you scratch their belly," he said. "If you are in a coal-fired power station...you're going to make sure that you do everything possible to keep that thing on the grid for as long as possible." Coleman said ammonia could contribute to the fuel mix of a coal-fired power station. Japanese manufacturer IHI in 2018 successfully fed a coal-fired power station with [20% of ammonia](https://www.ammoniaenergy.org/articles/ihi-first-to-reach-20-ammonia-coal-co-firing-milestone/?ref=boilingcold.com.au) in the fuel mix. Six Japanese utilities are considering the technology. Woodside joined with IHI, Marubeni and JERA in April to study the [large-scale export of hydrogen as ammonia](https://files.woodside/docs/default-source/media-releases/woodside-joins-japanese-consortium-to-study-exporting-carbon-neutral-hydrogen.pdf?sfvrsn=a10aae6d%5F2&ref=boilingcold.com.au) for use in decarbonising Japan's coal power stations. Woodside's role in the study, according to the company's media release, is to investigate moving from so-called blue hydrogen made from gas to green hydrogen made using renewable-generated electricity. Hydrogen is difficult to transport, and one solution is to combine it with nitrogen from the atmosphere to produce ammonia that is transported to a customer that strips the hydrogen out. Using the ammonia directly as a fuel avoids the final step of separating the hydrogen. "It doesn't require any fancy IP that some of these other stabilising technologies for hydrogen do," Coleman said. ## Growth limits to wind and solar Less than three months after the commitment to look at green hydrogen to produce ammonia, the Woodside boss has strong doubts about the scalability of renewable energy. "If you replace train one at Pluto with solar cells it would require an area of Greater Sydney," Coleman said. "It just doesn't work because you're going to start to get into these other competing uses of land." Coleman said the growth of wind power created concerns about the visual impact of the turbines and the safety of migratory birds. An added barrier to oil and gas companies wanting to invest in large-scale renewable projects was that the relatively low rate of return on the projects meant investors borrowed a large proportion of the cost to increase their return on their capital invested. "We can't get the leverage to be able to compete in some of that market to get the return on equity required to make it sensible for our investors," Coleman said. "You have to split out the business model and change it so that you can suddenly leverage yourself up to 70% to be an investor in solar, for example, because you need that return on equity for your investors." The alternative to green hydrogen is blue hydrogen that combines established technology to produce hydrogen from gas with the development technique of storing the carbon dioxide produced underground. Coleman said Woodside had the skills to implement carbon capture and storage. --- *Main image: Woodside chief executive Peter Coleman. Source: Woodside Energy Limited.* --- ### North West Shelf’s 36-year WA gas reign is over URL: https://www.boilingcold.com.au/north-west-shelf-wa-gas-reign-over/ Last updated: 2020-06-22T22:00:00.000Z Over the last week Woodside has turned down the North West Shelf project’s supply of gas to WA by two-thirds, and after 36 years as the State’s biggest supplier, it is now just sixth in size with less than 10 per cent of the market. It is the end of an era for the North West Shelf that exists only because the WA Government’s State Energy Commission bankrolled it at significant risk to secure gas supplies for the State. The SEC agreed to a long-term purchase of gas and bankrolled the Dampier to Bunbury gas pipeline. The NWS first supplied gas to WA in 1984, five years before it sent LNG to Japan. All later LNG projects have prioritised LNG. The North West Shelf project is equally owned by operator Woodside, BHP, BP, Chevron, Shell and Japan Australian LNG that is owned by Mitsui and Mitsubishi. The 2020 drop in supply from NWS has been known since 2014 when the Barnett State Government [revised the agreement](https://www.mediastatements.wa.gov.au/Pages/Barnett/2014/11/State-gets-new-domestic-NWS-gas-commitment.aspx?ref=boilingcold.com.au) with the North West Shelf. ![WA daily gas supply April 1 to June 20 2020 - terajoules a day](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/06/image-9.png) Data: AEMO WA Gas Bulletin Board, Graphic: Boiling Cold The NWS was shifted to a domestic gas obligation equivalent to 15 per cent of LNG exported. It is the same policy applied in quite different fashions to all later LNG projects in WA. The end this year of long-term gas contracts signed under earlier domestic gas obligations triggered the production cut. One of these contracts was to supply to the States’ biggest gas consumer, alumina producer Alcoa. In 2015 Alcoa signed a 12-year 120 terajoules a day [contract to start in 2020](https://www.alcoa.com/australia/en/news/releases.asp?id=2015/04/alcoa-secures-new-gas-supply-agreement-to-power-its-alumina-refineries-in-western-australia&year=y2015&ref=boilingcold.com.au) with then newly-formed Quadrant Energy to replace NWS gas. Alcoa paid $US300 million upfront and $US200 million in 2016 to help Quadrant’s backers Brookfield and Macquarie with their $US2.1 billion purchase of the majority of US-based Apache’s WA oil and gas assets. Santos bought Quadrant in 2018 and now operates and owns all of the Varanus Island and Devil Creek gas plants and owns 29 per cent of the BHP-operated Macedon plant. ![Santos' Varanus Island - now WA's biggest gas supplier](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/06/Varanus-Island.jpg) **Santos' Varanus Island - now WA's biggest gas supplier.** Source: Santos On Saturday 20 June the WA domestic gas market shares from the AEMO WA Gas Bulletin Board and rounded to the nearest per cent were: - Varanus Island – Santos – 24% - Devil Creek – Santos – 18% - Macedon – BHP - 18% - Wheatstone – Chevron – 18% - Gorgon – Chevron – 12% - North West Shelf – Woodside – 9% - Pluto – Woodside – 2% An increase in output from the Reindeer field that feeds the Devil Creek domestic gas plant has taken the largest chunk of the market vacated by the North West Shelf. While the WA gas demand is now fully met, there are concerns there may not be sufficient reserves from currently developed fields to maintain supply. Before the COVID-19 oil and gas price collapse early this year Woodside had planned to sanction the Scarborough to Pluto project this year and the Browse to North West Shelf project the year after. Under the WA domestic gas policy, both projects, that are currently on hold, would have contributed significantly to the State’s gas supply. In a positive move for gas supplies *Boiling Cold* understands that by the end of 2021 Chevron will have increased the capacity of the Gorgon domestic gas plant to the full 300 TJ a day required under its State Agreement. If the Woodside projects do not proceed, gas from the Perth Basin will likely fill the gap. Mitsui and Beach Energy plan to sanction the 250 TJ a day [Waitsia project](https://www.boilingcold.com.au/waitsia-gives-mcgowan-gas-powered-climate-dilemma/) this year. Nearby, Strike Energy wants to start on a 50 TJ a day plant this year may later expand it to 250 TJ a day. In late 2019 Mitsui and Beach Energy announced a significant discovery below their current small production operation at Beharra Springs. If the Perth Basin became a significant gas source for WA, it would be a partial return to four decades ago before the Dampier to Bunbury Natural Gas Pipeline connected the State’s gas-rich Pilbara to its populous South-West. --- *Main Image: North West Shelf LNG and domestic gas plant near Karratha. Source: Woodside Energy Ltd.* ### Woodside's future hangs on the NWS exit rush Chevron started URL: https://www.boilingcold.com.au/woodside-lng-future-hangs-on-nws-exit-chevron/ Last updated: 2020-06-19T08:00:36.000Z *ANALYSIS* Chevron's planned exit from the North West Shelf LNG project is the public starting gun for the race for Woodside's future. In the convoluted and incestuous world of Carnarvon Basin gas, an asset now regarded as optional in Chevron's Californian headquarters is still at the heart of WA's third-biggest company. All of Australia's LNG players are struggling to develop a strategy for a game with a vastly different set of rules to what they expected when they embarked on a decade-long $200 billion investment splurge. The new rule book is written by Greta Thunberg, COVID-19, the plunging cost of renewable energy and batteries, and a rampant Qatar seeking to dominate the LNG trade. It is a game that many of Woodside's partners may choose to play overseas, not in Australia. Life was simpler when Australia's [$49 billion a year](https://www.lngindustry.com/liquid-natural-gas/06012020/australia-officially-the-worlds-largest-exporter-of-lng/?ref=boilingcold.com.au#:~:text=Australia%20has%20officially%20become%20the,%28results%20to%20be%20confirmed%29.) LNG industry started with the North West Shelf's first cargo leaving for Japan in 1989. For more than 30 years the six equal partners have remained in the venture: operator Woodside, BHP, BP, Chevron, Shell and Japan Australian LNG owned by Mitsui and Mitsubishi. The partners invested $34 billion over the years as pipelines and platforms were added to supply more gas to the plant near Karratha that expanded to five LNG trains. The returns on that investment have been huge, but the project's best days are behind it. Industry consultant Wood Mackenzie expects the NWS will not have enough gas to fill its five trains this year, and the unused capacity will continue to grow. Woodside chief executive Peter Coleman planned to spend $US20.5 billion to pipe gas 900km from the Browse fields to keep the NWS plant full and increase Woodside's share of the LNG produced. Browse together with $US11.4 billion to process gas from Scarborough at a new LNG train at Pluto near the NWS plant formed Woodside's Burrup Hub dream to cement its future. Any NWS partner could veto the plan, but companies with equity in both NWS and Browse were expected to be on board. Last year [Coleman called out Chevron and BHP](https://thewest.com.au/business/energy/woodside-profit-tumbles-23-per-cent-on-pluto-lng-plant-maintenance-setbacks-ng-b881292389z?ref=boilingcold.com.au) as the laggards. A public airing of differences is uncommon among oil and gas companies in joint ventures but is consistent with Coleman's robust approach that has won him few friends in industry or government. ![Ownership of Burrup Hub Projects](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/06/image-6.png) **Ownership of Burrup Hub Projects** Chevron had been clear it wanted to be able to process its gas through the NWS plant. Chevron upstream president Jay Johnson told Wall Street analysts last year he wanted an "interconnected basin with shared infrastructure." Nigel Hearne, the predecessor of current Chevron Australia managing director Al Williams, openly campaigned for access to Woodside's planned Scarborough pipeline. That strategy is now gone. Chevron has received "a number of unsolicited approaches from a range of credible buyers" for its NWS stake according to a company spokesperson. By going public Chevron has signalled it is serious about exiting the NWS and wants maximum competition for its stake. "Chevron will continue to focus on squeezing maximum value from its large LNG projects, Gorgon and Wheatstone, without the distractions of the NWS," according to Wood Mackenzie analyst David Low. Chevron's Australian employees are already feeling that squeeze, with job cuts of between 20 and 30 per cent planned. ## The transition gas does not want Woodside's future may continue to centre on a small area of the Burrup Peninsula that houses the NWS and Pluto LNG plants, but international forces will determine its future. The gas industry happily adopted the label of a transition fuel when that meant moving away from coal. It is not so comfortable with the continuing move away from all fossil fuels. Australia's LNG mega-expansion was an over-hyped, over-priced, tax-avoiding, low local content, Dutch disease-inducing boom for a world that no longer exists. It has left its proponents with a firmer hold on our governments than their own future. In Australia, with a [gas-obsessed National COVID Coordination Commission](https://www.abc.net.au/news/2020-05-21/leaked-national-covid-commission-gas-manufacturing-report/12269100?ref=boilingcold.com.au), it is easy to forget that much of the rest of the world looks at the fuel very differently. Just yesterday the International Energy Agency released its [plan for a sustainable recovery](https://www.iea.org/reports/sustainable-recovery/a-sustainable-recovery-plan-for-the-energy-sector?ref=boilingcold.com.au#summary) for the energy sector and gas without carbon offsets did not tick any of its boxes for creating jobs, boosting the economy or reducing emissions. And it was Woodside that killed the idea of WA producing LNG with carbon offsets when the Environmental Protection Authority pushed it last year. The market share for gas is squeezed on multiple fronts. The greenhouse gas benefits of gas over coal have proved much less than earlier thought due to the leaking of methane to the atmosphere. As battery storage becomes cheaper and demand management more sophisticated, there will be less gas needed to firm up renewable electricity. Consistently low interest rates favour the high capital expenditure but negligible operating expenses of renewable energy. Within a decade, green [hydrogen from renewable energy could be cheaper than using gas](https://www.boilingcold.com.au/time-out-for-hydrogen-from-gas/) and storing the CO2 emitted. None of this points to gas not being a significant industry for some time, but lower growth and lower prices will push new investment to only the most economic projects. ## A harsh new reality for Australian LNG Many in Australia were bedazzled by the potential, achieved in 2019, for Australia to overtake Qatar as the world's largest LNG producer. Now Qatar [plans to boost its LNG capacity](https://www.reuters.com/article/us-qatar-energy-lng-exclusive/exclusive-qatar-petroleum-not-scaling-down-lng-expansion-despite-delay-in-bids-ceo-idUSKBN21O28K?ref=boilingcold.com.au) by 40 per cent while Santos and Woodside struggle to keep their LNG plants at full capacity. Santos' Gladstone plant operates at well under capacity, and its only additional east coast gas is the unpopular and expensive Narrabri development in NSW. The Darwin LNG plant will soon close down due to lack of gas and will wait on the possible sanction of the CO2-heavy Barossa field. As well as the NWS plant's declining production, gas supply to Woodside's Pluto LNG plant is uncertain without either expensive offshore compression or the Scarborough field. The most economic of these so-called backfill projects in Australia is most likely Scarborough, but Wood Mackenzie ranked it as the [most expensive supplier of LNG to Asia](https://www.boilingcold.com.au/woodsides-scarborough-lng-was-uneconomic-before-price-crash-woodmac/) of nine competing new projects. ![Cost of supplying LNG to Asia.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/06/image-7.png) **Cost of supplying LNG to Asia.** Source; Wood Mackenzie Incredibly, Qatar can deliver LNG to Japan for less than Woodside can deliver unprocessed gas from Scarborough to the beach near Karratha. Wood Mackenzie's analysis does not mean that Scarborough cannot go ahead, but it will require investors to accept much lower returns than they could get elsewhere. The returns from Browse would likely be even less. Chevron getting out of the way of Browse going to the NWS will reveal that many of the project's partners apart from Woodside are unenthusiastic. ## Racing to the exit sign BP and Shell have both committed to reducing emissions, so why invest in a low-return project to produce LNG more carbon-intensive than any existing Australian project? They have a world of alternatives to choose from. Additionally, with QGC in Queensland, Prelude and 25 per cent of Gorgon Shell's portfolio is already heavily loaded with Australian LNG. BP this week set its long-term oil price forecast at $US55 a barrel, well short of Wood Mackenzie's estimate for what Scarborough requires to breakeven, never mind Browse. If BP and Shell do not want to go with Browse, then they are in the same position as Chevron, invested in an ageing asset with declining production. Half of the NWS is probably up for sale, perhaps more if BHP decides to offload as well. BHP has a 25 per cent interest in Scarborough it wants to monetise. With Browse looking doubtful Woodside will likely move to improve the economics of Scarborough by avoiding a new LNG train at Pluto and processing Scarborough gas through the NWS. That may be a reason for the big miner to stay or it could decide that its core business is better than the high-risk low-return world of Australian LNG. ## Renovator's delight Woodside is in a strong financial position to buy more of North West Shelf to achieve the capacity and commercial alignment it needs for Scarborough to proceed. It is the perfect deal for a company with few options and a seemingly singular strategic vision of "we're an LNG company" as voiced by chairman Richard Goyder's at the AGM in May. Others will need to think carefully about what they are getting. Certainly, the $34 billion spent on the project to date has no bearing on its value now. NWS spent $205 million on the Echo-Yodel field, but it could [cost $160 million to decommission](https://www.boilingcold.com.au/woodside-shouts-abandon-abandonment-for-echo-yodel/) the subsea infrastructure with additional spend on plugging the wells. The total abandonment cost will be in the many billions of dollars and could be incurred by the end of the decade if third party gas does not use the facility. The first three NWS LNG trains are between 28 and 31 yeas old and produce about 70 per cent more carbon emissions per tonne of LNG produced than trains four and five. The ageing power station is responsible for about 60 per cent of the NOx emissions on the Burrup Peninsula that many worry could damage the extensive Murujuga rock art that is nominated for World Heritage listing. No investor wants to be the next Rio Tinto. There are plans to build a new power station 20km away, but Woodside has not revealed the cost of that, or the other work required to extend the life of the ageing plant. The NWS certainly does not fit the standard low-risk criteria of infrastructure investors. Oil and gas investors will want a sizeable and profitable upstream field to justify investing in the plant, and they seem in short supply. ## An unknown end game The six-way NWS joint venture has notoriously always struggled to make decisions, and that was when they all wanted to stay. Woodside now has a massive task corralling multiple would-be buyers and sellers towards a deal that ends in the final owners of the facilities and gas supply being able to come to a mutually beneficial agreement. It will help that post-COVID 19 oil and gas majors are making decisions in months that they would typically strategise and workshop for years. However, it will be next to impossible to get all the participants to agree on a multitude of transactions on one day. Woodside may be tempted to buy more equity than they want with a plan to sell down later. That approach carries the risk of being left holding the baby if the later transactions do not eventuate. Kevin Gallagher, Coleman's rival at Santos, is in that position now having bought ConocoPhillips out of Darwin LNG and Bayu Undan with follow-on equity sales dependent on the now-delayed Barossa project. Recent moves by the Federal Government to tighten foreign investment restrictions will not help, especially with Chinese buyers. Woodside started the year with a stretch goal of the developing first Scarborough and then Browse. Now, achieving a more limited ambition of sanctioning Scarborough will be tough. The permutations are endless, and the challenge of the low margins and commercial complexity of the Carnarvon Basin gas is enormous. A real option is that it is all too much for prospective investors, and the NWS naturally winds down with no substantial third-party gas processed. In that scenario, Woodside could use its remaining and substantial Pluto and NWS cashflow to invest elsewhere when assets are cheap. That would raise two questions. What are Woodside's competitive advantages in the wider oil and gas world, and could its culture cope with being just another small fish in a large and increasingly warmer pond? --- *Main image: North West Shelf project's Karratha Gas Plant. Source: Woodside Energy Limited.* ### Woodside abandons abandonment for Echo Yodel URL: https://www.boilingcold.com.au/woodside-shouts-abandon-abandonment-for-echo-yodel/ Last updated: 2020-06-18T00:57:53.000Z Woodside wants permission to leave all equipment from its Echo-Yodel field on the seabed forever, including almost 400 tonnes of plastic, saving up to $160 million. The Perth-based gas giant argues that environmental damage from the plastic that will take centuries to breakdown will be outweighed by the benefit from the equipment providing a reef to support marine life. The North West Shelf LNG project expected the $205 million Echo-Yodel development to produce gas for four to five years from 2001 but the gas flowed until 2012. For the past eight years a 23km-long pipeline, a parallel 23-km-long umbilical, two wellheads about 8m high and other equipment have been left on the seabed 130m below the surface 140km from Dampier. In April Woodside submitted a decommissioning plan to the offshore oil and gas safety and environment regulator NOPSEMA. Woodside recommended that all equipment be left on the seabed forever. The hardware included 144 tonnes of high-density polypropylene in the umbilical and 247 tonnes of polypropylene pipeline coating. ![Echo Yodel development schematic](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/06/echo-yodel-schematic.jpg) **Echo Yodel development**. Source Echo Yodel Decommissioning Environment Plan The plan also included the plugging and permanent abandonment of three wells. An offshore operator is required by law to remove all structures and other equipment from a title area when it will no longer be used, according to its [guideline](https://consultation.nopsema.gov.au/environment-division/duty-to-remove-equipment-and-property/user%5Fuploads/maintenance-and-removal-of-property-policy.pdf?ref=boilingcold.com.au) on the removal of property. NOPSEMA will only waive this requirement when the operator "demonstrates that the proposed alternative is expected to have equal or better environmental outcomes when compared to removal of property." NOPSEMA recently [signalled a more robust approach](https://www.boilingcold.com.au/tougher-policing-of-offshore-oil-gas-decommissioning/) to enforcement of this long-standing requirement in response to a direction late last year from then Resources Minister Matt Canavan. If NOPSEMA allows equipment to remain after production ends the titleholders can relinquish the title and have no future responsibility for what is left there in perpetuity. ## Plastic perhaps not fantastic The umbilical has enough HDPE to make about 26 million plastic shopping bags. The Marine Waters [joint education initiative](https://www.fish.wa.gov.au/Education-and-Partnerships/Education/Pages/Marine-WATERs.aspx?ref=boilingcold.com.au#:~:text=Marine%20WATERs%20is%20a%20joint,providing%20support%20for%20management%20decisions.) between Woodside and the WA Government [warns about](https://marinewaters.fish.wa.gov.au/resource/fact-sheet-marine-debris/?ref=boilingcold.com.au) the dangers of plastic in the ocean: > "For many years, oceans have been a dumping ground for rubbish. With modern society's reliance on non-biodegradable plastics, marine debris is now one of the greatest threats facing the world's oceans." > "Marine debris diminishes in size as it breaks down, so it continues to be ingested by smaller and smaller marine organisms, impacting on marine food webs. > "Increasingly, marine debris is believed to be a source of toxic substances in the marine environment." Marine scientist Dr Harriet Paterson, who has published four papers on marine plastics, said plastics in the ocean leached chemicals called plasticisers into the water and formed small particles as the plastic deteriorates. "Plastic and plasticisers are thought to be endocrine disruptors and interfere with estrogen production," Dr Paterson said Paterson said the plasticisers were probably already leaching into the ocean and had the potential to reduce the reproductive output of fauna, but the process was not yet fully understood. "While the plastic may make a reef, the outcomes from the chemicals and fragments could be detrimental to the reef over time," Paterson said. > "You can't demonstrate that it is safe at this stage." Woodside does not mention plasticisers or the leaching of chemicals from plastic in its 816-page plan. A Woodside spokesperson said the plasticisers in the umbilical did not contain chemicals known to affect oestrogen and plasticisers have been reported to leach at temperatures much higher than those experienced at Echo Yodel. The spokesperson said Woodside had considered scientific studies that found the subsea infrastructure could continue to provide a significant habitat for marine life over the longer term. ![Echo Yodel umbilical and fish in 2018](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/06/EY-umbilical-in-2018.jpg) **Echo Yodel umbilical in 2018.** Source: Echo Yodel Decommissioning Environment Plan "The studies found that the majority of the Echo Yodel pipeline would self-bury over time, with a very small part of the pipeline degrading over a period of hundreds to thousands of years," the spokesperson said. > "The pipeline plastic is dense and will not float, does not contain toxins, and provides hard substrate that's created an ecosystem to support marine life in a predominantly sandy and barren subsea environment." Studies commissioned by Woodside predicted that eventually 77 tonnes of the pipeline coating and 29 tonnes of the umbilical HDPE will be dispersed into the environment, about a quarter of the plastic left on the seabed. ## Confused decision-making Woodside's decommissioning plan for Echo Yodel compared leaving the equipment on the seabed to removing it by ranking 18 socio-economic, environmental, health and safety, technical and economic factors. The analysis is inconsistent with how NOPSEMA determines if equipment does not have to be removed: can it be demonstrated that leaving the equipment in place results in an equal or better environmental outcome? The non-environmental criteria considered by Woodside are not relevant. The best long-term environmental outcome is a balance of the damage to marine life from leached chemicals and plastic nanoparticles from degraded material against the benefit of the equipment supporting marine growth and habitat. Remarkably little of Woodside's plan addresses the central question of whether removing or leaving equipment on the seabed achieves the best environmental outcome. In its assessment of the pipeline Woodside weighted the cost of its removal, between $50 million and $100 million, as 27 times more important than the long-term water quality factor used to capture the adverse effects of plastic. The low importance of the pipeline's plastic coating was in part justified as much of it was buried and the "remainder breaking down immeasurably slowly, starting off in large chunks then into smaller fragments over time, which will have very little measurable impact on water quality or sediment quality." Woodside ignored that it is the very small size of the plastic particles that causes environmental damage as the fragments are ingested by plankton and then accumulate in animals up the food chain. Woodside used the same logic to rank the $10 million to $50 million cost of removing the umbilical as eight times more important than the long-term environmental damage from the plastic. The cost to remove the wellheads was estimated to be less than $10 million. ## Consultation gap Equipment should only be left permanently on the seabed in rare cases involving small components of non-polluting infrastructure, according to the Australian Marine Conservation Society. AMCS spokesperson Paul Gamblin said this should only happen after thorough environmental assessment and engagement with conservation and fishing interests. Woodside sought feedback from numerous fishing groups in the preparation of the Echo Yodel plan, but not from conservation groups. *Boiling Cold* asked Woodside why it did not consult with conservation organisations given the plan stated: "Woodside has sought to…ensure all relevant stakeholders are identified and engaged." A Woodside spokesperson said the consultation had occurred with relevant stakeholders. The plan noted comments from an unnamed Pilbara trap fishing license holder consulted by Woodside who supported leaving the equipment on the seabed: "Plastics in subsea infrastructure may garner negative attention stakeholders and hence believed strong position around value of fish/biodiversity may be needed to balance the argument." Gamblin said there was a real risk that some companies might seek to reduce costs by exploiting loopholes and leave a degrading industrial legacy on the seafloor. > "Given the multiple, direct threats to fragile marine ecosystems posed by oil and gas extraction, the very least companies must do is clean up after themselves," Gamblin said. "Governments must uphold and enforce effective regulations and strictly hold companies to their obligations through to the end of a project's life." Offshore Alliance spokesperson Daniel Walton, who is also AWU national secretary, said Woodside was attempting to dodge its responsibility to clean up after itself. > "It is completely possible to remove it responsibly; it's just that Woodside doesn't want to spend the money and employ the labour," Walton said. "That's a violation of the company's social license, frankly. "The economy could really use the employment currently, given COVID-19." Woodside estimated that the removal of the pipeline, umbilical and wellheads would require almost 7000 workdays, mainly on offshore vessels. ## Decision a potential precedent The industry will closely watch NOPSEMA's decision on Echo Yodel. Since NOPSEMA was given authority over offshore environmental issues in 2012 it has accepted three environmental plans that addressed whether equipment can be left on the seabed forever. In 2015 NOPSEMA accepted Sinopec's [plan](https://info.nopsema.gov.au/environment%5Fplans/89/show%5Fpublic?ref=boilingcold.com.au) to remove all equipment from the Puffin oil development near Ashmore reef, including a 23-tonne manifold, flexible pipelines and umbilicals. NOPSEMA accepted Woodside's [plan](https://info.nopsema.gov.au/environment%5Fplans/392/show%5Fpublic?ref=boilingcold.com.au) to leave the Argus-2 wellhead on the seabed of the Browse Basin in 2017\. The next year Woodside was allowed to leave[ four wellheads](https://info.nopsema.gov.au/environment%5Fplans/434/show%5Fpublic?ref=boilingcold.com.au) on the seabed of the Carnarvon Basin. Woodside's Echo Yodel plan is the first to propose leaving umbilicals and pipelines on the seabed. If NOPSEMA accepts that the benefit of a substrate for marine life is greater than the risk from leaching chemicals and plastic nanoparticles it could form a template for other operators to justify an exemption from their current obligation to remove all equipment once production has ended. Leaving equipment on the seabed has been labelled a "rigs to reef" approach and if accepted could make a significant impact on the clean-up bill for Australia's offshore oil and gas industry. Energy consultant Wood Mackenzie has estimated that onshore and offshore oil and gas projects in Australia face a [$76 billion](https://www.boilingcold.com.au/australias-oil-and-gas-industry-will-create-a-76b-clean-up-bill/) decommissioning bill over the next 30 years. NOPSEMA has requested further information from Woodside before progressing its assessment of the plan, a spokesperson for the regulator said. Echo Yodel is part of the North West Shelf project equally owned by six companies, the operator Woodside, BHP, BP, Chevron, Shell and Mitsui and Mitsubishi's Japan Australia LNG. --- *Main Image: Woodside's Perth headquarters, Mia Yellagonga. Source: Woodside Energy Ltd* ### Steady coal to solar shift continues for WA URL: https://www.boilingcold.com.au/coal-to-solar-shift-for-wa/ Last updated: 2020-06-16T03:02:29.000Z The South-West of WA will have enough capacity to generate the electricity it needs for the next decade despite the closure of some Collie coal-fired units, helped by rooftop solar and batteries reducing peak demand. The Australian Energy Market Operator’s 2020 [electricity statement of opportunities](https://aemo.com.au/energy-systems/electricity/wholesale-electricity-market-wem/wem-forecasting-and-planning/wem-electricity-statement-of-opportunities-wem-esoo?ref=boilingcold.com.au) released today concluded that despite Synergy’s plans to retire its Muja unit 5 in 2022 and Muju unit 6 in 2024 there would be enough generation capacity to meet demand to at least 2030. Growth in peak demand that determines how much generation capacity is required will slow over the next few years due to increased rooftop solar, the installation of battery storage systems and improved energy efficiency. Rooftop solar is estimated to have cut 4.4% off-peak demand last summer. AEMO WA general manager Cameron Parrotte said the world-leading adoption of rooftop solar and the changes in the generation mix presented both operational challenges and exciting opportunities. AEMO expects the power generated by rooftop solar at times of low demand to push demand for generation below the 700 megawatts that AEMO regards as the system security threshold. “Below this point, the available synchronous generation and associated inertia and voltage control may not be sufficient to maintain reactive power balance, and the SWIS may be exposed to unacceptable power system risks,” the report said. Synchronous generation has traditionally provided so-called essential system services, including inertia, frequency control, and voltage control. An increase in both utility and behind the meter renewable generation means there is less traditional synchronous generation driven by gas turbines and coal-fired steam turbines that rotate with the grid frequency of 50 cycles a second. “AEMO believes the review of technical standards, regulatory, and market constructs are required, with practical and careful design needed to implement or incentivise new technologies in the SWIS,” Parrotte said. The AEMO report said other technologies, including batteries and synchronous condensers, can supply these services but the rules of the WA Wholesale Electricity Market will need to change to provide financial incentives for the investment. In April the WA Government’s Energy Transformation Taskforce produced a [distributed energy roadmap](https://www.boilingcold.com.au/wa-plan-for-batteries-and-solar/) of measures to deal with uncontrolled nature rooftop solar generation. ## No sunset to renewables growth The total capacity of rooftop solar is expected to grow by 6.5% a year and reach 2612 MW by 2030, but a high growth 9.5% a year scenario could see behind the meter generation capacity reach 3687 MW. The capacity of batteries installed on the South West Interconnected System is expected to grow by 30.5% a year over the decade as costs fall. The combination of rooftop solar and batteries is likely to shift peak demand from between 5 PM and 6 PM to after 6:30 PM. The number of electric vehicles in the South West of WA is expected to soar from about 1000 now to almost 100,000 in 2030 and account for 2% of total demand. However, the forecast has an incredibly wide range with a high estimate of 500,000 EVs in 2030 and a low estimate of 11,000. AEMO noted the influx of utility-scale renewable generation onto the grid. The 130MW Badgingarra Wind and Solar Farm was commissioned in January 2019\. A further 500MW of renewable generation capacity is expected to connect during 2020, including Yandin Wind Farm (210 MW), the Warradarge Wind Farm (180 MW), and the Merredin Solar Farm (100 MW). --- *Main image: power lines. Source: Photo by [Jan Kaluza](https://unsplash.com/@jan%5Fkaluza?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) on [Unsplash](https://www.boilingcold.com.au/s/photos/power-lines?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText)* ### Emissions "business as usual" will hit South-West farming hard URL: https://www.boilingcold.com.au/emissions-business-as-usual-will-hit-south-west-farming-hard/ Last updated: 2020-06-12T02:27:51.000Z The South-West of WA will be significantly more affected by droughts in as little as 20 years if greenhouse gas emissions continue without control, and farming technology may not be able to keep up. The most populated and greenest part of the State, to the south-west of a line from Perth to Albany, will be hardest hit, according to new Australian research. The duration and intensity of droughts will more than double, and their frequency will increase by about 50%. The [research](https://agupubs.onlinelibrary.wiley.com/doi/10.1029/2020GL087820?ref=boilingcold.com.au) led by Dr Anna Ukkola from the Centre of Excellence for Climate Extremes at the Australian National University compared droughts that occurred during 1950-2014, a period already affected by global warming, with forecasts for 2050 to 2100. "Numbers quoted are the high emissions scenario, a business as usual scenario, we keep pumping put greenhouse gas emissions, and for Australia that means approximately a 5℃ increase in the mean temperature by the end of the century," Ukkola said. The work used the latest models of the climate, known as [CMIP6](https://www.carbonbrief.org/cmip6-the-next-generation-of-climate-models-explained?ref=boilingcold.com.au), that require supercomputers to tackle the interrelated changes in the world's air, land and sea. "We found the new models produced the most robust results for future droughts to date and that the degree of the increase in drought duration and intensity was directly linked to the amount of greenhouse gases emitted into the atmosphere," Ukkola said. ![percentage changes in drought duration, frequency and intensity in south-west Western Australia](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/06/SW-three-maps.png) **% changes in drought - detailed maps below.** Source: Anna Ukkola Ukkola said south-west WA was an area where many different climate models produced similar results, leading to high confidence that the results were accurate. > "The concerning part of what I found is that the changes extend further inland than was shown in previous studies and they extend further into the Wheatbelt area," Ukkola said. "I don't know if thresholds will be exceeded for making agriculture non-viable in those regions, but that would definitely be a concern." ## Farming will need to change Murdoch University climate scientist Dr Jatin Kala said business as usual emissions would require agriculture to look very different. "If we keep on the trajectory we are currently on years like the serious drought of 2010 will likely become more common, that's the scary part," Kala said. ![WA wheat production 1990 to 2013](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/06/wheat-production-graph_cropped-1.png) **WA wheat production**. Source ABS and Bureau of Meteorology via DPIRD "That's only one aspect of the story; there is a lot of work happening right now on drought-proofing agriculture. > "There are limits to adaptation; we are trying to maintain yield not necessarily increase yields; we are reaching that limit." Kala said the more marginal farming areas, such as the northeastern Wheatbelt that was hard hit by drought in 2010, may become unviable even with more drought-resistant crops. Department of Primary Industries and Regional Development research officer Ian Foster said while rainfall over the wider south-west of WA region had been declining since the mid-1970s, crop yields had increased. ![South West WA winter rain and wheat yield](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/06/sw-wheat-yield-cropped.png) **South West WA winter rain and wheat yield**. Source: DPIRD "Given a halfway decent season growers can produce new record yields under modern farming systems, but it gets taken away by a dry growing season," Foster said. There has been greater seasonal variability since about 2000, and the rate of increase in wheat yields had flattened. "Thus far, broadscale agriculture has coped with these changes, and leads to the obvious question of how long can it continue to do so?" Foster said. "In the short term we will see continued 'tweaking' of current farming systems to chase further water use efficiency, but the combination of duration, frequency and intensity of dry events will ultimately decide farm viability." Foster said the future for agriculture was not clear. "The scale and type of food production will clearly be determined by the environment, and farming systems in the second part of the century will probably look very different from the first part," Foster said. > "If we retain the bulk of our food and fibre based on rainfed production systems, we will be increasingly constrained on where and when we can produce." Ukkola said while the new research clarified possible future outcomes, the message was unchanged. "The earlier we act on reducing our emissions, the less economic and social pain we will face in the future." --- ### Changes in drought: from average recorded 1950-2014 to average predicted 2051-2100 ![percentage change in drought duration south west WA](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/06/duration.png) **% change in drought duration** Source: A M Ukkola ![percentage change in drought frequency south west Western Australia](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/06/frequency.png) **% change in drought frequency** Source: A M Ukkola ![percentage change in drought intensity south west Western Australia](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/06/intensity.png) **% change in drought intensity** Source: A M Ukkola --- *Main image: Emus in a wheat field, Perenjori, WA. Source:* [Germane Jaws](https://unsplash.com/@germanejaws?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) on [Unsplash](https://unsplash.com/s/photos/wheatbelt?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) ### Chief Scientist calls for WA to ride the energy transition URL: https://www.boilingcold.com.au/chief-scientist-calls-for-wa-to-ride-the-energy-trasntion/ Last updated: 2020-06-10T03:52:00.000Z WA's abundance of wind, sun, gas and battery minerals makes it uniquely well-placed to embrace the transition to cleaner energy, according to the chief scientist of WA Peter Klinken. WA was blessed with natural advantages that needed to be turned into competitive advantages to benefit future generations, Klinken told a Petroleum Club of WA webinar yesterday. "If you are looking at the whole of Australia, the north-west of WA is the place with the greatest potential for solar energy, and the south-west is the best place for wind energy," he said. "The coal-fired stations are ageing, and the government has made it fairly clear that it's going to have a phased shutdown of some of those ageing stations." Klinken said there was a massive opportunity for renewable energy to fill the void left by coal. > "The big oil and gas companies, everyone has got a bit of renewables or a bit of hydrogen as part of their energy mix, so I think that's telling you something," Klinken said. However, the transition will take time, and Klinken sees WA's substantial gas reserves as another plus for the State. "Fossil fuels are not going to disappear overnight," he said. "Natural gas is going to be a really important component; in my view, in this transition." Renewable energy and gas will compete head to head for the production of hydrogen: green hydrogen produced with renewable electricity or blue hydrogen from gas with the carbon dioxide emitted buried underground. "I wouldn't exclude one or the other; I would let them bubble up," Klinken said. Most observers forecast that green hydrogen will be cheaper eventually, but the crucial question is when. Woodside has presented blue hydrogen as the least cost solution for the next three decades, a scenario that supports investment, but [others think green hydrogen will be competitive by 2030](https://www.boilingcold.com.au/time-out-for-hydrogen-from-gas/). Wherever gas is used - industry, power generation or hydrogen production - there will be increasing pressure to bury or offset the greenhouse gases produced. Klinken said he had been sceptical about underground sequestration but was pleasantly surprised by the success of the process at Chevron's Gorgon LNG project. WA's 13,000km long coastline was ideal for another way to deal with the emissions, growing seagrass or mangroves to absorb CO2, he said. ## Renewable energy to beat water disadvantage Whether hydrogen is blue or green, its production needs water: one energy transition resource not abundant in WA. WA had water supply difficulties long before consideration of hydrogen production. In a generation, Perth moved from sourcing about 95% of its water from dams to just 5%. Now about 60% of Perth's water comes from energy-intensive desalination and 30% from aquifers, Klinken said. "And we don't know how well the aquifers are being recharged in a drying climate," he said. "We should be eternally grateful for the Gallop government investing in desalination plants because in the absence of that I'm not sure this city would be viable." The chief scientist advocated greater investment in desalination powered by renewable energy for irrigation, hydrogen production and to supply Perth. One much-touted use of hydrogen is to produce steel without metallurgical coal, which at scale could reduce global carbon emissions by seven to ten per cent. Klinken said the Pilbara had a massive opportunity to pursue green steel due to its combination of iron ore and solar resources. He said increasing automation was making the cost of energy more important than the cost of labour in manufacturing. In addition to hydrogen production, Klinken wants WA to grab as much of the lithium battery value chain as possible. > "There is only one jurisdiction in the world that's got lithium, nickel, cobalt, aluminium, vanadium, zinc, manganese and untapped graphite, and that's WA," he said. > "We've got all the elements to make Li-Ion batteries." "If people are talking about Snowy 2.0 as an opportunity as a nation-building opportunity I would ask the question why don't we look at Lithium 1.0 and start with the comparative advantage we've got here?" The chief scientist is a strong supporter of the State Government's [future battery industry strategy](https://www.jtsi.wa.gov.au/economic-development/economy/future-battery-industry-strategy/future-battery-industry-strategy?ref=boilingcold.com.au#:~:text=The%20State%20Government's%20Future%20Battery%20Industry%20Strategy%20for%20Western%20Australia&text=The%20Future%20Battery%20Industry%20Strategy,%2C%20diversification%2C%20jobs%20and%20skills.). "For the first time, the State is looking beyond exporting rocks and saying what can we do further downstream." "Here in WA are so well placed, were positioned like no other jurisdiction in the world to make this transition," Klinken said. "I see the energy sector being one the real bright lights, and it's a job-creating opportunity." --- *Main image: Chief Scientist of WA Peter Klinken. Source: Department of Jobs, Tourism, Science and Innovation* ### WA's near useless domestic gas deal with Woodside's Pluto LNG URL: https://www.boilingcold.com.au/was-near-useless-domestic-gas-deal-with-woodsides-pluto-lng/ Last updated: 2021-01-29T00:55:53.000Z *EXCLUSIVE* Fourteen years after Woodside and the WA Government announced a domestic gas deal for Pluto LNG its ability to deliver to WA is just a third of what is required and the total amount of gas reserved is much less than expected. The WA policy that LNG projects must commit gas to the local market the equivalent to 15% of the LNG exported has been widely lauded as saving WA from the high gas prices and resultant high electricity process seen on the east coast. The success, however, had little help from Pluto that after eight years of production has delivered gas to WA equivalent to less than one per cent of its LNG production. Premier [Alan Carpenter announced](https://www.mediastatements.wa.gov.au/Pages/Carpenter/2006/12/Woodside-commits-to-domestic-gas-reservation-policy.aspx?ref=boilingcold.com.au) the Pluto gas deal in 2006: > “Woodside has agreed to market and sell the equivalent of 15 per cent of the project’s produced LNG to the WA energy market, providing it is commercially viable. > “Woodside and the State will negotiate in good faith an appropriate test of commercial viability. > “The commencement date of the commitment will occur five years after the date LNG is first exported from Pluto.” There were immediate concerns about how concrete the deal was. The next day opposition leader Colin Barnett in Parliament asked the Premier “Do you have a contract, and is it in writing?” Carpenter’s response that “We have the Woodside position in writing” would have worried any contract lawyer. A Department of Jobs, Tourism, Science and Innovation spokesperson said Woodside and the State formalised the terms in an exchange of letters, not a more conventional agreement signed by both parties. ## More hot air than gas *Boiling Cold’s* inquiries have confirmed doubts about the workability of the deal and raised new issues about its impact. The JTSI spokesperson said the agreement was legally enforceable without an agreed test of commercial viability. “The obligations in the agreement stand unless and until a test has been applied,” the spokesperson said. *Boiling Cold* understands the lack of an agreed commercial viability test is to Woodside's disadvantage as it does not have an avenue to demonstrate why it should not meet its commitments. The fact that the test has remained on the table for 14 years indicates the relationship between the State and Woodside on Pluto domestic gas may not have been harmonious or productive. Neither Woodside or JTSI explained when asked why they have not agreed on the commercial viability test 14 years after the deal and eight years after Pluto loaded its first LNG cargo. A Woodside spokesperson said the discussions were confidential. The JTSI spokesperson said negotiations continued on options for Woodside to meet its obligation. That obligation did not require gas delivery for the first five years of Pluto’s LNG production. In what will be a shock to WA industry *Boiling Cold* can confirm that, according to JTSI, Pluto also does not have to reserve gas for WA equivalent to 15% of the LNG exported in that first five years. ## Industry left out *Boiling Cold* spoke to three participants in the WA gas market who did not know that Pluto enjoyed a five-year holiday from the reservation requirement. The result is that many gas market participants have been misinformed about the amount of gas available. The misunderstanding shows that Governments can sometimes be better at spinning a message than delivering tangible benefits. *Boiling Cold* has analysed Pluto production using data from Woodside reports and the Australian Energy Market Operator’s [WA Gas Bulletin Board](https://gbbwa.aemo.com.au/?ref=boilingcold.com.au#home). Had the 15% obligation applied to the 22.6 million tonnes of LNG Pluto exported in its first five years an additional 184 petajoules of gas would be available to WA: enough to supply the whole State for about six months. That gas would have helped ease a tight gas market if it had been available from when Pluto started producing LNG in 2012. State-owned energy generator and retailer Synergy [signed up for gas from Gorgon](https://www.perthnow.com.au/news/wa/synergy-verve-sign-landmark-gorgon-gas-supply-deal-ng-94dc23e21becd4ea4f1074906ae550be?ref=boilingcold.com.au) in 2011 for delivery from 2015\. Synergy reportedly [paid “boomtime” prices](https://thewest.com.au/business/energy/synergy-pushes-for-bargain-in-gorgon-gas-deal-ng-b881173779z?ref=boilingcold.com.au) as there was a lack of available gas supply at the time. The Government’s free pass for Woodside likely resulted in higher energy bills for WA householders. Domgas Alliance spokesperson Richard Harris said a sustainable supply of domestic gas underpinned industry and jobs in WA. The Domgas Alliance comprises five big WA gas consumers: Alcoa, Coogee Chemicals, Fortescue Metals Group, Norwegian fertiliser giant Yara and Wesfarmers Chemicals, Energy and Fertilizers. “Providing an exemption for gas producers looking to export LNG contributes to the lack of available supply for gas users in WA and is inconsistent with the policy’s intention,” Harris said. Harris said the WA Government should strengthen compliance with the reservation policy and require new LNG projects to sell gas to the WA market within three years of start-up. ## No way yet to deliver enough Pluto gas Woodside’s attempts to supply Pluto gas to WA started late and have delivered little to date. Pluto has the infrastructure in place to deliver just a third of its 115 terajoules a day domgas commitment, according to JTSI. Woodside commissioned a [small 25 terajoules a day pipeline](https://files.woodside/docs/default-source/media-releases/woodside-commisions-pluto-domestic-gas-pipeline.pdf?sfvrsn=d131e6c8%5F6&ref=boilingcold.com.au) from Pluto to the Dampier to Bunbury pipeline in December 2018\. Deliveries from Pluto to the WA market to the end of March 2020 amount to about 0.5 per cent of the LNG exported since the five-year holiday expired. Woodside opened a [facility to load trucks](https://thewest.com.au/business/energy/woodside-opens-its-pluto-lng-to-trucks-facility-ng-b881167039z?ref=boilingcold.com.au) with Pluto LNG in April 2019 that was [shut down in October](https://www.energynewsbulletin.net/maintenance-shutdowns/news/1373000/pluto-trucking-facility-shut-in-after-major-event?ref=boilingcold.com.au) after equipment ruptured. A small number of trucks were loaded before the incident, and COVID-19 has delayed a restart, according to Woodside. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/06/Siem-Thiima--LNG-powered-support-vessel-web.jpeg) **Siem Thiima, Woodside's first LNG powered vessel.** Source: Woodside Energy Ltd. Woodside’s two LNG-powered vessels, the Siem Thiima and Solstad Norman Leader, are being fuelled with LNG trucked 1500km from Wesfarmer’s Kwinana plant. Woodside planned to increase Pluto’s domestic gas capacity to 225 TJ a day when it constructed a second LNG train to liquefy gas from the Scarborough field. However, the Scarborough to Pluto project is now on hold due to low oil and gas prices. The Government has asked Woodside to investigate further options to meet the remainder of its Pluto domgas commitment, including using third party infrastructure, the JTSI spokesperson said. If the Pluto plant is not expanded Pluto gas could be sent to the adjacent North West Shelf LNG project’s domestic gas plant through a [planned interconnecting pipeline](https://files.woodside/docs/default-source/media-releases/woodside-approves-pluto---nws-interconnector-pipeline.pdf?sfvrsn=7025c91%5F10&ref=boilingcold.com.au). The Woodside spokesperson said it would meet its Pluto domestic gas obligations, as agreed with the State. --- *Correction 4PM 5 June 2020: The lack of an agreed commercial viability test denies Woodside an opportunity to show why it should not meet its obligations. The first version of the story incorrectly stated that without a test Woodside did not have an obligation to deliver.* --- *Main image: Pluto LNG plant. Source: Woodside Energy Ltd.* ### Chevron's dodge on Gorgon LNG carbon pollution rejected URL: https://www.boilingcold.com.au/chevrons-dodge-on-gorgon-carbon-pollution-rejected/ Last updated: 2020-06-01T21:40:00.000Z The WA Government has backed the advice of the Environmental Protection Authority that the Gorgon LNG project has to meet requirements to bury some of its greenhouse gases from the start of operations, not two years afterwards as operator Chevron argued. The action by WA Environment Minister Stephen Dawson on Friday makes it almost certain that Gorgon's showpiece carbon storage project will breach its environmental conditions. The $US54 billion ($80 billion) Gorgon LNG project was only allowed on the Class A nature reserve Barrow Island as it was an ideal location to bury carbon dioxide that makes up about 14% of the gas from the Gorgon offshore reservoir. Gorgon - the biggest emitter of greenhouse gases in the State - is required to be able to inject all its reservoir CO2 underground and inject at least 80% of that CO2 over any five-year period. Dawson [asked the EPA](https://www.epa.wa.gov.au/sites/default/files/Extract%5Fof%5Fdetermination/800-CD-300418.pdf?ref=boilingcold.com.au) in April 2018 to determine when the injection requirement commenced. The [EPA concluded](https://www.epa.wa.gov.au/sites/default/files/EPA%5FReport/2818-19%20-%20Gorgon%20Gas%20Development%20Revised%20and%20Expanded%20Proposal%20-%20EPA%20Report%5F0.pdf?ref=boilingcold.com.au) in September 2019 that all reservoir gas vented to the atmosphere after 14 July 2016 should count. Gorgon shipped its first cargo in March 2016 but only used gas from the Jansz reservoir, that has negligible CO2, in the early months of production. Chevron wanted Gorgon's performance against the 80% injection requirement to be measured from July 2018, more than two years after the Gorgon's first LNG cargo sailed. The company argued, according to the EPA report, that the requirement should begin when the plant's current license to operate from the Department of Water and Environmental Regulation was issued. The current licence was issued well after the plant commenced operations as Gorgon had previously operated under two separate licences that were combined. On Friday the EPA posted a [revision to the ministerial statement](https://www.epa.wa.gov.au/sites/default/files/Ministerial%5FStatement/Statement%201136.pdf?ref=boilingcold.com.au) of Gorgon's environmental conditions signed by Dawson that puts the EPA recommendation into effect. ## Gorgon: way worse than "worst-case" *Boiling Cold* used the past three [Gorgon environmental performance reports](https://australia.chevron.com/-/media/australia/our-businesses/documents/gorgon-gas-development-and-jansz-feed-gas-pipeline-environmental-performance-report-2019.pdf?ref=boilingcold.com.au) to the WA Government and carbon emissions data from the Clean Energy Regulator to investigate the greenhouse gas performance of Gorgon. The emissions in the first three years of operation can be compared to Chevron's "worst-case" and "target" emission performances from its 2015 [Gorgon Greenhouse Abatement Program](https://australia.chevron.com/-/media/australia/our-businesses/documents/gorgon-emp-greenhouse-gas-abatement-program.pdf?ref=boilingcold.com.au). ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/06/image-2.png) The principal cause of Gorgon's excessive emissions is that for three years CO2 stripped from the gas flowing from the reservoir was not injected underground but vented to the atmosphere. When the CO2 injection system started operating in 2017 Chevron found [excess water in the gas](https://thewest.com.au/business/oil-gas/carbon-hiccup-for-chevron-with-5-million-tonne-greenhouse-gas-problem-at-gorgon-lng-plant-ng-b88694565z?ref=boilingcold.com.au) that could corrode the equipment. After extensive modifications, the system restarted in August 2019. The Federal Government in 2011 stated the [cost of the CO2 injection](https://www.afr.com/technology/gorgon-lng-project-to-show-business-case-for-carbon-waste-storage-20170619-gwtpk6?ref=boilingcold.com.au) system was to be $2 billion. The final cost is likely to be much higher due to the delays and modifications. Emissions other than reservoir CO2, mainly from gas burnt to power the LNG plant, started much higher than Chevron's target but are decreasing each year. Flaring of excess gas during the troubled start-up of the LNG trains produced about [1.5 million tonnes](https://thewest.com.au/business/energy/environment-pays-big-price-for-tricky-gorgon-start-up-ng-b881067449z?ref=boilingcold.com.au) of greenhouse gases in 16 months. *Boiling Cold* calculated that if Gorgon can perform at its target level for the final two years of the five-year monitoring period, then about 48% of the reservoir CO2 would be stored underground. The shortfall from the 80% target is about 5.4 million tonnes. The Department of Water and Environmental Regulation [said in February](https://www.smh.com.au/business/companies/no-idea-what-enforcement-or-when-flying-blind-on-chevron-s-gorgon-20200203-p53xej.html?ref=boilingcold.com.au) that it would not consider regulatory options until the end of the five-year monitoring period in July 2021. To offset the 5.4 million tonnes of calculated excess carbon pollution at the [current spot price](https://reneweconomy.com.au/taylor-praises-health-of-australias-carbon-markets-but-delays-more-reforms-17756/?ref=boilingcold.com.au) of Australian Carbon Credit Units of about $16 a tonne would cost Gorgon's partners $86 million. In 2018 Chevron was [earning about $32 million a day](https://thewest.com.au/business/oil-gas/chevron-lng-projects-gorgon-and-wheatstone-earning-32-million-a-day-ng-b88734044z?ref=boilingcold.com.au) from its interests in Gorgon and Wheatstone, that was only operating at half capacity. A Chevron spokesperson said the company is reviewing the Minister's decision. ## Breach of Commonwealth limit possible It will be a close call if Gorgon can stay adhere to the Federal Government's safeguard mechanism that sets annual limits for large polluting facilities. Gorgon, and some other plants, have been allowed the extra leeway of being measured over three years, allowing emission in some years to exceed the annual limit. Gorgon's so-called multi-year baseline is 25.0 million tonnes of greenhouse gases during the three years to June 2020\. The average of 8.35 million tonnes a year is a generous 41% higher than Chevron's predicted worst-case outcome. The CO2 injection system that [started operating in August 2019](https://australia.chevron.com/news/2019/carbon-dioxide-injection?ref=boilingcold.com.au) had injected [one million tonnes of CO2 by mid-February](https://www.afr.com/policy/energy-and-climate/chevron-injects-one-millionth-tonne-of-carbon-at-gorgon-20200214-p540xv?ref=boilingcold.com.au). A *Boiling Cold* analysis estimated the CO2 injection system must operate at about 80% of its target capacity of 4 million tonnes a year for the remaining 3½ months of the three-year reporting period for Gorgon not to exceed the baseline. Chevron may avoid breaching the limit due to a [planned maintenance shutdown](https://thewest.com.au/business/energy/long-planned-maintenance-moves-on-for-chevron-ng-b881561506z?ref=boilingcold.com.au) of one of Gorgon's three LNG trains. If Gorgon's emissions do stay under the baseline, it will because it is set well above expected performance. If the limit is breached, Chevron could be required to [purchase carbon credits](http://www.cleanenergyregulator.gov.au/NGER/The-safeguard-mechanism/Managing-excess-emissions?ref=boilingcold.com.au#exceptional-circumstances-exemption). However, Chevron can now extend the three-year monitoring period by 12 months due to a [recent change by the Clean Energy Regulator](http://www.cleanenergyregulator.gov.au/NGER/The-safeguard-mechanism/Baselines?ref=boilingcold.com.au) "in recognition of the widespread disruption that COVID-19 has caused for business operations." This extra year will dilute the effect of the early years without CO2 injection and help Gorgon to not exceed the safeguard mechanism baseline. ## Wheatstone LNG also under carbon scrutiny The US oil and gas major may soon know if it must offset carbon pollution at Wheatstone, its other WA LNG plant. Chevron and its partners approved the Wheatstone investment in 2011 knowing the project had to offset all emissions from reservoir gas, estimated to be about 1.2 million tonnes a year. Two years later the Barnett Liberal WA Government removed the requirement it had imposed on the basis it duplicated the Gillard Labor Commonwealth Government's carbon price. With a carbon price long-gone WA Environment Minister Stephen Dawson in early 2018 [asked the WA EPA](http://www.epa.wa.gov.au/sites/default/files/Extract%5Fof%5Fdetermination/922-CD-220118.pdf?ref=boilingcold.com.au) reconsider the requirement. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/06/sdawson.jpg) **WA Minister for Environment Stephen Dawson.** Source: WA Parliament At the time WA shadow minister for mines and petroleum Bill Marmion incorrectly [said the move created sovereign risk](https://www.afr.com/companies/chevrons-wheatstone-lng-project-caught-in-greenhouse-gas-emissions-row-20180123-h0n0cs?ref=boilingcold.com.au) issues. If the requirement was re-imposed Wheatstone would return to the environmental conditions the investors accepted in 2011. It is understood the EPA delayed a decision until it finalised its greenhouse gas guidelines, that were [released in April](https://www.boilingcold.com.au/carbon-emissions-hurdle-for-wa-projects-finalised-by-epa/). The Wheatstone decision and an [assessment of the Waitsia gas project](https://www.boilingcold.com.au/waitsia-gives-mcgowan-gas-powered-climate-dilemma/) in the Perth Basin due mid-year will be the first clear indications of the EPA's stance of greenhouse gas emissions since March 2019 when it withdrew a recommendation that all emissions be offset. For both projects the EPA will make recommendations to Dawson who is obliged to consider EPA recommendations but free not to implement them. --- *Main picture: Gorgon LNG trains on Barrow Island. Source: Chevron Australia Pty Ltd.* ### Waitsia gives McGowan a gas-powered climate dilemma URL: https://www.boilingcold.com.au/waitsia-gives-mcgowan-gas-powered-climate-dilemma/ Last updated: 2021-02-24T09:35:06.000Z Premier Mark McGowan may soon have to choose between reversing his past efforts in tackling climate change or potentially crossing WA's dominant media owner months before a State election, thanks to the Waitsia gas field near Dongara. Mitsui, the operator of Waitsia, wants to expand a small 20 terajoule a day plant now under construction to be able to produce 250 TJ of gas a day, more than 20% of the state's consumption. Kerry Stokes - chair of Seven West Media, the owner of *The West Australian* and Channel 7 - has a significant stake in Beach Energy that owns 50% of Waitsia. Waitsia will force the McGowan Government to revisit an issue it has struggled with in the past: what responsibility the gas industry should take for making WA the only state with rising carbon emissions. In March 2019, the WA Environmental Protection Authority said it would recommend that new large projects offset all their carbon emissions. Stokes' *The West Australian* put its weight behind Woodside chief executive Peter Coleman's campaign against the proposal. McGowan voiced his [opposition](https://www.abc.net.au/news/2019-03-08/mark-mcgowan-attacks-epa-carbon-emissions-policy/10882946?ref=boilingcold.com.au) to the requirement the day after it was issued and the EPA withdrew its guidance after just seven days. Coleman's Scarborough and Browse LNG projects that would also have delivered gas to the WA market are now [on the backburner](https://www.boilingcold.com.au/woodside-slashes-costs-delays-scarborough-and-browse-lng/) due to plunging oil and gas prices. The uncertainty about when, or if, the Woodside projects proceed could make Perth Basin gas projects unlikely beneficiaries of the dire condition of the international oil and gas industry. The first project that could fill the void - Waitsia Stage 2 - would emit the equivalent of about 300,000 tonnes a year of carbon dioxide, according to Mitsui's [greenhouse gas management plan](https://www.epa.wa.gov.au/sites/default/files/PER%5Fdocumentation2/Greenhouse%20Gas%20Management%20Plan.pdf?ref=boilingcold.com.au) submitted to the EPA in April. About 180,000 tonnes a year of emissions will come from carbon dioxide in gas from the reservoir. The combustion of gas to run the processing plant produces most of the other emissions. ## Offsetting reservoir CO2 standard in WA McGowan started what is now a consistent practice of requiring WA gas plants to offset or bury carbon emissions from reservoir gas when he was Minister for Environment in 2006. McGowan told State Parliament in December 2006 that he had insisted that Chevron's giant Gorgon LNG plant inject underground the CO2 from its reservoir gas. > "That reflects our commitment to doing something very significant about greenhouse gases, which is a world issue," McGowan said. Chevron and its partners had to install a system that could inject all the Gorgon reservoir CO2 underground and ensure that at least 80% of the greenhouse gas was injected. Ever since McGowan's decision 14 years ago, all gas projects approved in WA that vent reservoir CO2 to the atmosphere have had to offset those emissions. In 2007 McGowan's successor Labor Environment Minister David Templeman endorsed the EPA's [recommendation](http://www.epa.wa.gov.au/sites/default/files/EPA%5FReport/2533%5FBull1259.pdf?ref=boilingcold.com.au) that Woodside's Pluto LNG offset its reservoir gas emissions. Since then Woodside and its partners have paid to have more than [26 million Mallee trees](https://www.woodside.com.au/our-business/pluto-lng?ref=boilingcold.com.au) planted and offset more than 500,0000 tonnes of carbon dioxide. Chevron's Wheatstone LNG project received similar treatment in 2011 when Liberal Environment Minister Bill Marmion [implemented](https://www.boilingcold.com.au/woodside-slashes-costs-delays-scarborough-and-browse-lng/) the EPA's [recommendation](http://www.epa.wa.gov.au/sites/default/files/EPA%5FReport/Rep%201404%20wheat%20ERMP%2015611.pdf?ref=boilingcold.com.au) that the plant near Onslow offset the reservoir CO2 is released. The EPA did not require offsets from Santos's [Devil Creek](http://www.epa.wa.gov.au/sites/default/files/EPA%5FReport/2839%5F1307ApacheDevilCreek.pdf?ref=boilingcold.com.au) gas plant in 2009 and BHP's [Macedon Development](http://www.epa.wa.gov.au/sites/default/files/EPA%5FReport/3219%5FRep1360MacedonEPS5710.pdf?ref=boilingcold.com.au) in 2010 as the amount of carbon dioxide in the gas was so low it was not vented but remained in the gas sold to customers. Mitsui has not proposed offsetting the 60% of its emissions that come from reservoir gas. Instead, it plans for Waitsia to reduce or offset 10% of its emissions by 2025 and 26% by 2030\. The later target corresponds to Australia's commitment under the Paris Agreement to reduce carbon emissions by 26% to 28% of 2005 levels by 2030. Under Mitsui's plan, Waitsia Stage 2 would add about 216,000 tonnes of CO2 to WA's 2030 emissions. A Mitsui spokesperson said it would continually monitor for technological improvements to reduce emissions as well as changes to Federal and State Government policies. Waitsia is the first gas project to be assessed under the EPA's [new greenhouse gas guidance](https://www.boilingcold.com.au/carbon-emissions-hurdle-for-wa-projects-finalised-by-epa/) released in April that covers all industries and does not address the treatment of reservoir CO2. The EPA will request evidence that Mitsui has taken "all reasonable and practicable" measures to reduce carbon emissions. CO2 from the reservoir is cheaper to store underground than emissions from gas combusted in the plant as it usually needs to be separated for other reasons before the gas is processed. Separation of CO2 from combustion gas, however, is a significant added cost. It is understood that the EPA is likely to present its recommendations on Waitsia to Environment Minister Stephen Dawson in July. ## Decision time If the EPA does not recommend that Waitsia offset its reservoir gases, it will have drastically weakened a long-standing stance on climate change just as the science is increasingly adamant that emissions must be reduced urgently. However, if the EPA remains consistent then Dawson, in consultation with other ministers such as McGowan, will have to decide whether to impose the offset requirement onto Waitsia. Waitsia will be added to Gorgon and Wheatstone on Dawson's list of difficult decisions to make on gas project emissions, with the added problem that the Waitsia decision cannot be put off. The EPA recommended in September 2019 that Chevron's responsibility for Gorgon reinjecting its reservoir CO2 [start soon after the project began](https://www.epa.wa.gov.au/media-statements/epa-recommends-compliance-start-date-gorgon%E2%80%99s-carbon-dioxide-injection?ref=boilingcold.com.au) operation, potentially making Gorgon liable to provide offsets for the extra emissions caused by long delays to the storing of CO2\. In February 2020 Dawson was [still considering the EPA advice](https://www.smh.com.au/business/companies/no-idea-what-enforcement-or-when-flying-blind-on-chevron-s-gorgon-20200203-p53xej.html?ref=boilingcold.com.au) and his department said it would not consider the issue until mid-2021. Dawson asked the EPA in January 2018 to consider whether to [reimpose the requirement for Wheatstone to offset its reservoir gas emissions](https://thewest.com.au/business/oil-gas/chevron-forced-to-confront-gas-problem-ng-b88721789z?ref=boilingcold.com.au). The Liberal State Government removed the condition in 2013 on the basis that Federal Labor's now rescinded carbon price addressed the issue. More than two years later the EPA has not posted the advice on its website. A Mitsui spokesperson said the company and Beach Energy planned to make a final investment decision on Waitsia by September. If Dawson requires Waitsia to offset its reservoir emissions, there will be a direct financial hit to media mogul Stokes. Stokes owns 61% of Seven Group that owns 28.6% of Beach Energy, that owns 50% of Waitsia. Almost $1 in every $10 spent on offsets would come from Stoke's pocket. The alternative is for the Labor Government to go into the March 2021 State election having signalled that on climate, one of the community's most concerning issues, it has taken a giant step backwards. ## Lifters and leaners The EPA's 2019 proposal for 100% of new emissions to be offset was widely criticised by industry as a job killer. However, it is simple maths that for Australia to achieve its Paris Agreement emissions target any increase in emissions has to be countered elsewhere in the economy by offsets, expenditure to cut emissions or reduced economic activity. If a new project does not offset its emissions the burden shifts to entities not benefitting from the carbon pollution. *Boiling Cold* asked Mitsui what comment it had for other sectors of the economy that will bear a greater burden of emission reductions because Waitsia vents its reservoir CO2\. Mitsui did not respond. Conservation Council of WA director Piers Verstegen said he expected Waitsia would be required to offset its reservoir emissions "at an absolute minimum." "It is disappointing that the proponents have not proposed any meaningful abatement at all for this project," Verstegen said. Verstegen disputed a common claim by the gas industry that its gas would displace coal and therefore reduce overall emissions. > "The supply of more gas into this market hinders the uptake of renewable energy and slows the transition of industrial energy users into cheaper and cleaner energy sources of the future," Verstegen said. The outcome on Waitsia will likely also apply to Strike Energy's nearby West Errugulla gas project as both projects have about 6% of CO2 in the reservoir. Mark McGowan this week gave lead agency status to West Erregulla to help the project through the approvals process. Strike plans to sanction a 50 TJ a day plant this year may later expand it to 250 TJ a day. Like Waitsia, West Errugulla has influential backers. Prominent Perth businessman John Poynton chairs Strike Energy and the head of the National COVID-19 Coordination Commission Nev Power is deputy chair. Power has [temporarily "stepped back"](https://www.theguardian.com/australia-news/2020/may/23/covid-commission-boss-nev-power-steps-back-at-gas-company-amid-conflict-of-interest-concerns?ref=boilingcold.com.au) from the position to address "perceptions of conflict of interest" after he and other Commission members backed gas as an essential part of Australia's economic recovery. --- *Correction 30 May: The "common claim by the gas industry that its gas would displace coal" was incorrectly attributed to the Waitsia GHG plan.* --- *Main image: Waitsia Stage 1 under construction. Source: Mitsui E&P Australia* ### Diversified KBR ready for the downturn but wary of project risk URL: https://www.boilingcold.com.au/diversified-kbr-ready-for-the-downturn/ Last updated: 2020-05-22T04:06:40.000Z American engineering giant KBR is best known in WA as a builder of hydrocarbon projects like Chevron's Gorgon LNG, but its diversity will help KBR ride out the crash in oil and gas prices. KBR chief development and digital officer Greg Conlon told *Boiling Cold* most of KBR's about 1500-strong Australian workforce is in its government solutions business supporting the Defence Department. KBR is in a joint venture to develop the Federal Government's Naval Shipbuilding College to prepare WA and SA workers for 40 years of support to the Royal Australian Navy. "We're still very active in LNG, were still very active in energy solutions," Conlon said from his Melbourne base. Conlon said KBR's energy clients were typically deferring projects, not cancelling them. "We're seeing customers have a longer cycle to funding their projects." KBR is involved in two WA LNG projects that have been pushed back in recent months: Woodside's [Browse to North West project](https://www.boilingcold.com.au/woodside-slashes-costs-delays-scarborough-and-browse-lng/) and Shell's [development of the Crux field](https://www.boilingcold.com.au/shell-extends-prelude-lng-shutdown-and-delays-crux-expansion/) to supply its Prelude floating LNG facility. KBR's energy solutions division will handle the oil price collapse better than it would have done in the past as it has expanded beyond standard hydrocarbon production and is taking on less risk in construction projects. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/05/gorgon-plant-site-aerial-d-cropped-reduced.jpg) **Gorgon LNG project.** Source: Chevron Australia Pty Ltd. Conlon said KBR thought the energy market was transforming. "The great companies out there are going to be very considered about how they engage and how they ensure this industry has a future," Conlon said. "We have an active and defined strategy around sustainable technologies...we are developing and selling process technology which fundamentally reduces carbon footprint or brings new disruptive solutions to the market." "We're very active in the hydrogen and green ammonia conversations," Conlon said, adding that KBR was working on prospects in Australia. > "In the same way that KBR evolved in LNG, we see a similar transition with gas and the other greener solutions beyond gas…so I'm less fearful of the industry surviving and more excited about the industry changing shape." ## Taking on less project risk KBR has "actively moved away" from lump-sum engineering and procurement contracts, according to Conlon. KBR suffered financially from its 30% interest in the JKC joint venture that built the Inpex-led Ichthys LNG plant in Darwin. JKC had to deliver the combined cycle power plant for a fixed price, but the construction went into disarray when JKC's subcontractor walked away from the contract in early 2017. The joint venture is now seeking to recover $US1.8 billion from its power plant subcontractors, according to a recent KBR filing with the US Securities and Exchange Commission. JKC is also in dispute with Inpex on its profit fee, payments for scope changes for areas of the project that were not fixed-price, and responsibility for faulty painting and insulation. "One of the reasons we have moved away from lump-sum EPC is the price you bid is never the price the customer pays," Conlon said. The ex-Worley engineer is optimistic about the future but knows it will be vastly different from the industry pre-COVID-19. "The simple reality is we know the market is going to come under some challenge," Conlon said. > "We've got a concern about the culture that may be developing." > "Our fear is that competitors will take risk in this environment to secure work and that customers might actually take advantage of that." Woodside chief executive Peter Coleman is one customer who recently signalled a push to bring down the cost of its Browse LNG project with a tougher approach to contractors. "Once we get out of this COVID-19 situation we'll be able to go back to the contractors and get them to sharpen their pencils again," Coleman told Woodside's annual general meeting in April. KBR is understood to have recently laid off about 40 engineers in Perth who worked on conceptual studies for oil and gas developments, including Browse and Crux. "Browse was being implemented between Perth and Leatherhead (UK) so it was a global project being delivered into WA," Conlon said. "Both those teams have ramped down as the project has been deferred." ## A new way of working Conlon is responsible for KBR's global business development and its digital strategy. The latter role gave him a view of the giant company's response to COVID-19. "We were lucky that we had a significant presence in South Korea and China that really meant we were an early participant," Conlon said. "We transitioned (to working from home) over 90% of the firm in a matter of weeks and have maintained pretty high productivity levels." Conlon does not believe KBR will deliver projects in the same way after COVID-19. "We do not think we will go back to the old practices. "We're very open that we are reimagining the way we will be delivering projects." --- *Main Image: Greg Conlon. Source: KBR* ### Ten strikes against Nev Power’s west-east gas pipeline URL: https://www.boilingcold.com.au/ten-strikes-against-nev-powers-west-east-gas-pipeline/ Last updated: 2021-12-27T01:33:19.000Z *ANALYSIS* Two months ago, Prime Minister Scott Morrison pulled ex-iron ore miner Nev Power out of semi-retirement to head the Federal Government’s efforts to kickstart the economy after the necessary COVID-19 induced shutdown. Power has a vital and challenging job. While society is freeing up as the number of COVID-19 cases diminish, the economic hit has hardly started. Australia is living off its fat: cash, withdrawn superannuation, finishing contracts signed in better times and an avalanche of funding the Federal Government plans to curtail soon. > “The Commission has two key roles: to help minimise and mitigate the impact of the COVID-19 on jobs and businesses, and to facilitate the fastest possible recovery of lives and livelihoods,” [Power said](https://www.pmc.gov.au/nccc?ref=boilingcold.com.au). The Power-led National COVID-19 Coordination Commission must “through its own inquiries and analysis of matters referred to it, ensure the Government receives the most comprehensive advice available to meet with challenges ahead,” according to its [terms of reference](https://www.pmc.gov.au/nccc/terms-reference?ref=boilingcold.com.au). It did not take long before Power was championing a west to east gas pipeline as a “[great opportunity for Australia](https://thewest.com.au/news/coronavirus/a-qa-with-nev-power-covid-19-co-ordination-commissioner-opens-up-on-australias-road-to-recovery-ng-b881540563z?ref=boilingcold.com.au)” and the Commission has supported the idea, according to a leaked report. Power [supported the pipeline as long as 3½ years ago](https://thewest.com.au/business/oil-gas/fortescue-metals-group-chief-nev-power-backs-gas-pipeline-to-the-east-ng-b88650801z?ref=boilingcold.com.au), but worryingly his stance seems to be unaffected by new information. An [independent report](https://www.acilallen.com.au/projects/resources/west-east-pipeline-pre-feasibility-study?ref=boilingcold.com.au) by ACIL Allen for the Federal Government in 2018 concluded that the pipeline was not “the best or most economical option for dealing with the supply issues currently facing the gas market in Eastern Australia.” The pipeline looks even worse in the new context of ensuring “the fastest possible recovery” from COVID-19. **strike one – jobs start too late** If the Federal Government funded a feasibility study to start in July, the project would not begin until mid- 2022, according to the ACIL-Allen pre-feasibility. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/05/image-4.png) **Schedule for the west-east gas pipeline.** Source: ACIL Allen report. Detailed design and gaining approvals would then take two years before the labour-intensive construction could start. The pipeline is not a so-called shovel-ready project. Jobs are needed now, not in mid-2024, for the Australian economy to recover. **strike two - no help to the east coast for years** The east coast would receive gas from WA in mid-2026 at the earliest. A possible reduction in gas and power prices in six years is hardly facilitating “the fastest possible recovery” Power is charged to deliver. **strike three – the schedule is unrealistic** This already too-late pipeline schedule is impossibly optimistic in assuming the pipeline could achieve financial close in two years. Getting a raft of companies with different drivers to agree on a technical and commercial solution takes time. Woodside has spent two years trying to win approval from participants in the North West Shelf and Pluto LNG projects to build a pipeline a few kilometres long between the plants and has not yet closed the deal. A pipeline across a continent is orders of magnitude more difficult. The gas producers that are all complex joint ventures have to commit to the long-term supply of gas. Customers in the east have to make long-term commitments on gas prices, pipeline tariffs and gas volumes. In the middle, there is some assemblage of financiers and constructors backing the pipeline. Good luck sorting that out in uncertain economic times. **strike four – a vision for the future stuck in the past** Andrew Liveris, the former Dow Chemicals chief executive, is another member of the COVID-19 Commission with a penchant for gas and pipelines. “We could put in gas turbines to replace the coal-fired turbines and retire the coal fleet, and you would get the best of both worlds,” Liveris [told The Australian](https://www.theaustralian.com.au/business/mining-energy/turn-on-the-gas-liveris-urges-scomo/news-story/a6990d8a7b232640e0cb558d329627a3?ref=boilingcold.com.au) last year. With even oil majors like BP [pursuing green hydrogen](https://www.boilingcold.com.au/bp-to-chase-green-ammonia-in-geraldton/) instead of making it from gas and plunging battery costs [threatening the role of gas to firm up solar and wind power](https://www.ge.com/power/transform/article.transform.articles.2018.oct.storage-threat-to-peaker-plants?ref=boilingcold.com.au), a focus on gas as an economic saviour is dangerously out of date. **strike five – not developing a useful capability** The pipeline construction, estimated by ACIL-Allen to take 2½ years, would undoubtedly create jobs but it is a one-off sugar hit of no lasting value. There is no long-term need for the capability to build gas pipelines. Government intervention in the economy is best focused on areas where the expenditure brings long-term gains. **strike six – the pipeline is already built** One argument for the west-east gas pipeline is that it could deliver to support new gas-intensive industries. That pipeline already exists. The Dampier to Bunbury gas pipeline from the Pilbara to the South West of WA can move [845 terajoules of gas a day](https://www.dbp.net.au/the-pipeline/?ref=boilingcold.com.au) and currently has about 200 TJ a day of spare capacity. Investors that want to manufacture with gas in Australia can consider WA. There is no need to wait two or more years to know if WA gas will flow east and then four more years for it to arrive. **strike seven – there is not enough gas** The ACIL-Allen study envisages 600 TJ a day of gas flowing east from WA. The Australian Energy Market Operator’s [review of the WA gas market](https://aemo.com.au/energy-systems/gas/gas-forecasting-and-planning/wa-gas-statement-of-opportunities-wa-gsoo?ref=boilingcold.com.au) in December had a base scenario with potential gas supply exceeding WA demand by less than 300 TJ a day in 2026 when the west-east pipeline could start. **strike eight – the gas will be too expensive** Gas from WA will not be cheap. A simplistic view of vast reserves ignores that gas producers understandably develop the cheapest gas first. As the gas gets deeper, dirtier or more distant, it costs more to produce. The offshore gas game has little in common with coal seam methane in Queensland that, simplistically, involves a few trucks in a Queensland paddock drilling a shallow hole. Chevron spent $82 billion to build its Gorgon LNG project and just two years later committed to [another $5 billion](https://thewest.com.au/business/oil-gas/chevron-to-give-go-ahead-for-51-billion-stage-two-of-gorgon-gas-project-off-the-pilbara-coast-ng-b88805598z?ref=boilingcold.com.au) to drill just 11 additional wells to maintain gas supply. The next stage for Gorgon is the installation of [cutting-edge compression equipment](https://thewest.com.au/business/energy/new-subsea-technology-to-keep-gas-flowing-to-gorgon-ng-b881133455z?ref=boilingcold.com.au) on the seabed to keep pumping the gas as the pressure in the reservoir falls. The days of cheap gas are over. Gas from Woodside’s Scarborough project would [cost about $US4.50 a million Btu](https://www.boilingcold.com.au/woodsides-scarborough-lng-was-uneconomic-before-price-crash-woodmac/), or $6.50 a gigajoule, to land unprocessed at the beach, according to oil and gas consultancy Wood Mackenzie. With a $5.35 a GJ pipeline tariff calculated by ACIL-Allen and ignoring processing the gas at the beach WA gas would cost $11.85 a GJ. Last month Minister for Energy and Emissions Reduction Angus Taylor celebrated the [fall of east coast gas prices](https://www.minister.industry.gov.au/ministers/taylor/media-releases/electricity-and-gas-prices-fall-their-lowest-four-years?ref=boilingcold.com.au) to $5.63 a GJ. **strike nine – the West will be penalised for its smart energy policy** The price of gas in WA is well below the cost predicted for Scarborough because LNG producers must reserve gas for local use. Selling gas to the domestic market is the payment for putting an LNG plant on WA soil. The cost of production does not determine the gas price. Sucking gas east would inevitably push up the price of gas in WA. The proponents of WA gas for east coast jobs need to explain why the future of workers at Alcoa’s gas-intensive alumina operations in the South West of the State should be sacrificed. **strike ten – there are better, cheaper, faster solutions to east coast energy prices** The west-east gas pipeline is a solution without a problem. LNG imports, unblocking transmission constraints to connect more large wind and solar farms, the use of ever-cheaper batteries and yes, gas-fired peakers, are all sensible parts of the east coast energy mix. However, as more batteries, hydro storage and demand management is rolled out, the volume of gas consumed by the peakers will not be huge. **ten strikes and you’re out** The case for the west-east pipeline is so weak it will not happen but is an unfortunate distraction when Australia needs thoughtful and intelligent leadership more than ever. The pipeline is ridiculous purely on medium-term economic grounds. This analysis has not covered the broader problem of committing to large-scale gas infrastructure when the nation needs to reduce its greenhouse gas emissions. That Nev Power and at least some of his fellow commissioners are pursuing such a daft idea shows they are not up to the job. The post-COVID19 recovery is the nation’s most significant economic challenge since the Great Depression. It should not be left to amateurs. --- *Main picture: Possible west east gas pipeline route. Source: ACIL Allen West-East Pipeline Pre-Feasibility Study.* --- ### Win for residents as Cockburn Cement dumps coal for gas URL: https://www.boilingcold.com.au/cockburn-cement-dumps-coal-for-gas-and-nearby-residents-win/ Last updated: 2020-05-20T04:17:05.000Z The Cockburn Cement plant in Perth's southern suburbs will switch from burning coal to gas in a win for residents that have been plagued by dust and a sulphurous stench for years but another blow for Collie coal-miners. Adelaide Brighton chief executive Nick Miller yesterday said its Cockburn Cement lime plant in Munster would phase out the use of coal by early next year. "We believe our progress in this regard will place the company in a better cost-competitive position in the long-term," Miller told the company's annual general meeting. The plant principally produces lime for alumina and gold processing. Shell material scraped from the seabed of Cockburn Sound is piped to the facility and burnt in a kiln to make the lime. The plant has long [attracted controversy](https://www.boilingcold.com.au/cockburn-cement-and-regulator-battle-over-residential-stench/), was subject to a parliamentary inquiry a decade ago and has had numerous battles with regulators. Greg Hocking, who leads local community action group Cockburn Pollution Stoppers, said the move to gas was a significant change the group had sought. Hocking said coal was responsible for dust blowing onto homes and toxic gases and particulates carrying heavy metals coming out of the kiln stack that towers above surrounding suburbs. "The change from coal to gas will eliminate virtually all the particulates, it will substantially reduce the toxic gases and will eliminate the emissions of heavy metals," Hocking said. Residents of nearby Beeliar are likely to get relief from [a stench that often engulfed their homes](https://www.boilingcold.com.au/coal-and-dust-plagues-two-southern-perth-suburbs/) when the summer sea breeze brought the results of burning coal that contained sulphur. "When it's burnt it creates sulphur dioxide, large quantities of it, and related sulphur compounds and that's the main smell that comes from the factory," Hocking said. Hocking said the use of coal was the group's main concern but the crushing of imported clinker at the site to make Portland cement created fine dust that affected nearby residents. "I understand that the company may have some plans to change arrangements there," Hocking said. Cockburn Cement has [applied for permission](https://www.der.wa.gov.au/images/documents/our-work/licences-and-works-approvals/Applications/W6381-2020-1%5Fap.pdf?fbclid=IwAR2pBLp2Wl6TUswxPSoCZIHEo7UB3eN0sm2njuqPQa5Z&ref=boilingcold.com.au) to more than triple the capacity of its Kwinana plant that also crushes clinker. # Fuel switch another blow to Collie Adelaide Brighton was asked at its AGM why it continued burning coal where there were 20,000 residents within 3km of the kiln stack and gas in WA was both plentiful and cheap. Adelaide Brighton deputy chairman Zlatko Todorcevski indicated that negotiations to buy the gas were still underway. "It's fair to say we are focused on assuring that we have that longer-term sustainable, cost-effective gas supply and we hope to make an announcement in the foreseeable future on that," Todorcevski said. Todorcevski said coal use was already declining at Munster. Greenhouse gas emission figures from the Clean Energy Regulator show annual reductions in emissions of about 7% in the past two years. The plant, that is the only facility in the Perth area that burns coal, still emitted the equivalent of 948,000 tonnes of carbon dioxide in the 12 months to June 2019: more than the BP refinery or the CSBP plant in Kwinana. The Munster plant was understood in 2018 to be burning about 250,0000 tonnes of coal a year from troubled Griffin Coal. Shadow environment minister and South West MLC Steve Thomas said there were concerns about the long-term viability of Griffin Coal. "The loss of this one smallish contract by Griffin Coal is not in itself a death sentence, but it is the continuation of the death of a thousand cuts for the coal industry in WA," Thomas said. "The cost of extracting coal has exceeded the price the companies get for it for years now, as the easily-mined coal is replaced by coal with strip ratios greater than 10:1. "At the same time gas prices have stabilised, and reliability of supply has improved, making it an uneven competition in the future." The privately-owned Bluewaters power station that sources its coal from Griffin moved in December to [clarify its rights to step into](https://www.colliemail.com.au/story/6526127/security-given-for-bluewaters/?ref=boilingcold.com.au) the miner's operations if it failed it deliver or became insolvent. Griffin [lost $230 million](https://thewest.com.au/business/energy/writedown-blows-out-griffin-loss-to-230m-ng-b88979321z?ref=boilingcold.com.au) in the 12 months to March 2018\. Griffin filed that annual report and the two previous ones with corporate regulator ASIC by September each year. Griffin's accounts for the year to March 2019 are not yet available from ASIC. Griffin Coal declined to comment. --- *Main picture: Cockburn Cement plant in Munster.* *Credit: Imagery ©2020 Google, Data SIO, NOAA, U.S. Navy, NGA, GEBCO, Landsat / Copernicus, Data LDEO-Columbia, NSF, NOAA, Imagery © CNES / Airbus, Maxar Technologies, Map data ©Google* ### No winners from Shell’s $US17B Prelude floating LNG URL: https://www.boilingcold.com.au/after-prelude-few-win-from-shells-floating-lng/ Last updated: 2026-04-28T07:51:36.000Z *ANALYSIS* Shell's Prelude floating LNG facility off the WA coast was to be the first of many that would open up stranded gas reserves around the world, thanks to the technical and project management prowess of Anglo-Dutch oil and gas giant Shell. It has not turned out that way. When the 488m-long giant arrived in Australia almost three years ago, Shell expected to receive [cashflow from the Prelude in 2018](https://www.shell.com.au/about-us/projects-and-locations/prelude-flng/prelude-e-news/prelude-arrives-in-australia.html?ref=boilingcold.com.au). While the Prelude did export LNG at about half its capacity for the second half of 2019, it is now idle. Moored far off the Kimberley coast, it is plagued with technical problems, dwindling gas reserves and safety processes condemned by the regulator despite Shell and its partners spending about $US19.3 billion ($A30.0 billion) to the end of 2019. Neither Shell and its partners nor Australia have gained anything near what they expected from the giant experiment. Cost overruns, delays, and to date unreliable production means investors in Prelude are unlikely ever to pay Australia for the gas they export as the payment is linked to profit. Company income tax related to Prelude, if any, will be minimal. The Prelude also used negligible local content during construction and is making a significant contribution to Australia's greenhouse gas emissions. Shell has escaped scrutiny over Prelude's cost by not issuing an estimate when the project was sanctioned or supplying updates during construction. Shell chief executive Ben van Beurden was asked about the cost of Prelude in 2018. "We don't disclose cost on projects, so I'm also not in a position to disclose whether it is any different to what we have previously not disclosed and I don't want an make an exception in this case," van Beurden said. However, when Prelude was sanctioned in 2011 then Shell executive director of upstream international business Malcolm Brinded said the [cost would be around $US3 billion to $US3.5 billion per million tonnes of LNG capacity](https://www.reuters.com/article/shell-prelude/update-3-shell-gives-nod-to-worlds-first-floating-lng-project-idUSL4E7GK06E20110520?ref=boilingcold.com.au). So Brinded expected Prelude, that should produce 3.6 million tonnes of LNG a year, to cost between $US10.8 and $US12.6 billion: an average of $US11.7 billion. ## Prelude's cost blowout The cost of Prelude to date may be $US19.3 billion, according to the 2019 accounts of OPIC Australia Pty Ltd, a subsidiary of CPC of Taiwan, that owns 5% of Prelude. OPIC said construction costs had "totalled US$964 million as at December 2019" for its 5% share, indicating a 100% cost of $US19.3 billion. Comparisons of costs are not straightforward. Differing accounting policies covering foreign exchange and other issues muddy the waters. The $US329 million spent by OPIC in 2013 to join the project Shell sanctioned in 2011 may have covered some pre-sanction activities such as exploration and front-end engineering design. However, the OPIC accounts do indicate that the cost estimate of $US17 billion ($A26 billion) from respected oil and gas consultancy Wood Mackenzie, widely [reported last year](https://www.afr.com/companies/energy/australia-reaches-for-lng-crown-as-us200b-boom-ends-20190612-p51x06?ref=boilingcold.com.au) was reasonable. Operators of all the other recent LNG projects offshore WA issued both initial cost estimates and the final cost. A comparison using Wood Mackenzie's estimate shows that Prelude's 45% cost overrun puts it in the same league Chevron's notoriously troubled Gorgon project. ![Australian offshore LNG cost blowouts](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/05/image.png) While the Prelude was designed to [weigh as much as six large aircraft carriers](https://www.shell.com/about-us/major-projects/prelude-flng/prelude-flng-in-numbers.html?ref=boilingcold.com.au), its construction cost was not expected to be more than that for [three new Australian submarines](https://www.macrobusiness.com.au/2020/05/national-disgrace-submarine-debacle-blows-out-to-90-billion/?ref=boilingcold.com.au). Shell's 67.5% share of the cost overrun is $US3.6 billion: substantially more than the [estimated $US2 billion](https://www.theguardian.com/business/2020/jan/03/royal-dutch-shell-may-fail-to-reach-green-energy-targets?ref=boilingcold.com.au) Shell has spent since 2016 moving to lower-carbon energy. [![Want energy and climate news to hold gas giants to account? Support Boiling Cold.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/07/CTA-donate-big-gas-1.png)](https://www.boilingcold.com.au/support/) ## The long road to Prelude Prelude is one of three attempts by Shell to deploy off Australia the floating LNG technology it started developing about 25 years ago. Woodside embraced partner Shell's floating LNG technology for the Sunrise field in 2001 after it failed to gain access to ConocoPhillips' pipeline from Bayu Undan to Darwin. Browse, another Woodside-operated project with Shell as a major partner, chose floating LNG in 2013 after plans to build an onshore plant on the Kimberley coast collapsed. Three years later, Woodside dropped the $US40 billion project. Shell [committed to build a floating LNG facility](https://www.shell.com/media/news-and-media-releases/2011/fid-flng.html?ref=boilingcold.com.au) for its 100%-owned Prelude field in 2011\. Later it sold interests to Japan's Inpex (17.5%), Korea's KOGAS (10%) and Taiwan's CPC (5%). Shell [partnered](https://www.offshore-energy.biz/technip-samsung-consortium-begin-detailed-design-and-construction-of-prelude-flng-australia/?ref=boilingcold.com.au) with Technip to design the facility in France and Malaysia and Samsung to construct the giant in its Korean shipyard. The Prelude facility was due to be delivered to the field off the Kimberley coast in 2015, and first gas would flow in 2016 according to the Prelude [environmental impact statement](https://www.shell.com.au/promos/sustainability/prelude-eis/%5Fjcr%5Fcontent.stream/1475632907147/15a771833defe107c1336c8a4854a95607408b1d/prelude-eis.pdf?ref=boilingcold.com.au). Combining the world's largest floating structure and a complex and novel LNG plant was an enormous [design and construction challenge](https://www.boilingcold.com.au/the-prelude-floating-lng-design-challenge/) that did not go smoothly. The Prelude arrived in Australian waters in July 2017 – 1½ years late – but it was not the end of the problems. > "It's like an offshore platform, and a bunch of pipelines, and an onshore LNG plant, and a storage facility, and utilities, and a hotel for 300 people, and a port, and all of that on a floating facility," Shell vice president for Prelude [Rob Jager told *The West Australian*](https://thewest.com.au/business/oil-gas/shell-prelude-boss-rob-jager-talks-about-the-worlds-biggest-offshorefacility-ng-b881204806z?ref=boilingcold.com.au) in 2019. "Its individual parts in and of themselves are not hugely complex but putting it all together in a confined space is what makes it challenging," Jager said. ## A troubled start-up Prelude shipped its first cargo of LNG in June 2019 but has not had a smooth ride since. The LNG produced is reported to be [unsuitable for some markets](https://thewest.com.au/business/energy/lng-from-shells-prelude-could-be-too-hot-for-customers-to-handle-ng-b881289164z?ref=boilingcold.com.au) as it contains too much ethane. Transferring LNG between the Prelude and an LNG carrier alongside through rigid loading arms that contain the -160℃ liquid has [proven complex](https://thewest.com.au/business/oil-gas/shell-prelude-boss-rob-jager-talks-about-the-worlds-biggest-offshorefacility-ng-b881204806z?ref=boilingcold.com.au). In January offshore safety regulator NOPSEMA [banned many maintenance activities](https://www.nopsema.gov.au/assets/Published-notices/A722042.pdf?ref=boilingcold.com.au) until Shell fixed its procedures for the safety-critical isolation of equipment before maintenance. NOPSEMA said there was a "significant risk to the health and safety of persons at the facility." Weeks later the Prelude's problematic [steam-driven power system failed](https://www.energynewsbulletin.net/workforce/news/1380380/prelude-shutdown%C2%A0?ref=boilingcold.com.au) again, but this time the diesel back-up generator did not power up. Basic amenities such as toilets stopped working, and Shell quickly reduced the number of crew. Shell had [chosen steam-fired power](https://www.shell.com.au/promos/sustainability/lng-eis/%5Fjcr%5Fcontent.stream/1475632799451/33bd79d6c9cf83de3b9b7c72b4a0ff17302657bb/prelude-eis-supplement-response-to-submissions.pdf?ref=boilingcold.com.au) due to its "proven high reliability in a marine setting" instead of gas turbines that are less polluting and more common offshore. The Prelude is currently not in production with a reduced crew due to COVID-19 concerns. *Boiling Cold* understands designer Technip has still not entirely handed over responsibility for the Prelude to Shell. The construction contract requires a Performance Test Report that demonstrates the Prelude has run at full capacity for 72 hours for Technip to complete its commitments. Cost overruns have made Prelude an expensive piece of kit to produce LNG compared to all the recent Australian offshore LNG projects except nearby Ichthys. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/10/image-13.png) Shell said floating LNG would have [significant cost benefits](https://parliament.wa.gov.au/Parliament/commit.nsf/luInquiryPublicSubmissions/00E3FBCD96811E2A48257CD9002A7F43/$file/34%2020131118%20Shell%20Australia%20Submission%202.pdf?ref=boilingcold.com.au) over land-based Australian projects when asked by a WA Parliament inquiry into floating LNG in 2013. CPC's Australian subsidiary has recorded total impairment losses of $US377 million to the end of 2019 on its investment of US$964 million: a write-down of 39%. ## Where is the gas? Between the first cargo in mid-2019 and the shutdown in early 2020 Prelude was producing LNG at about half its design capacity. A late start-up or a slow ramp-up to full capacity typically hurt investors in two ways – more spending and less revenue. Prelude is suffering from the delay in a third way: it is losing gas reserves to the Ichthys facilities about 20km to the south. The two projects have separate adjacent petroleum titles, but a line on a map does not impede the flow of gas through a reservoir. The Inpex-led Ichthys project has drilled subsea wells just 3.5km from Prelude's wells. They are understood to tap the same accumulation of gas and to be enjoying the early high production wells can achieve before the pressure in the reservoir subsides. When Shell sanctioned Prelude it planned to tap the nearby Concerto field next. Later, Shell decided it was necessary to develop the Crux field 160km away instead of Concerto. Shell has now delayed the sanction of Crux planned for 2020 after the recent collapse in oil prices. Prelude's inability to operate reliably at full capacity has delayed the need for more gas. Shell's decades-long development of floating LNG that consumed [more than 1.6 million hours of design](https://www.oxfordenergy.org/wpcms/wp-content/uploads/2018/10/LNG-Plant-Cost-Reduction-2014%E2%80%9318-NG137.pdf?ref=boilingcold.com.au) was not meant to end this way. When Shell approved Prelude in 2011 chair of Shell in Australia Ann Pickard said: "this will be a game-changer for the energy industry." Brinded said Shell's ambition was to develop floating LNG projects across the globe. > "Our design can accommodate a range of gas fields, and our strategic partnership with Technip and Samsung should enable us to apply it progressively faster for future projects," Brinded said. The oil and gas PR machine went into overdrive. In 2017 the University of WA produced a "study" with oil and gas lobby group APPEA called *FLNG The Floating Phenomenon.* ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/04/uwa-reports.jpg) UWA vice-chancellor Dawn Freshwater in the report's introduction said "FLNG remains a strong candidate for the next generation of gas projects" and Australia's challenge was to "ensure we remain at the forefront of innovation." But Australia had little input into Shell's floating LNG innovation and even less into building the giant Prelude facility. The cost, schedule and reliability failures of Prelude, with its very low Australian content in design or construction, should finally put an end to the myth that the problems with recent Australian LNG projects originated in Australia. The recurring themes have been issues missed in the design phase done mostly overseas and problems with facilities built in Asian shipyards that must be corrected when they arrive in Australian waters. Chevron chief executive John Watson said in 2017 that the US giant [should have done additional engineering](https://thewest.com.au/business/oil-gas/do-your-homework-chevrons-outgoing-chief-john-watson-learns-from-gorgon-mistakes-ng-b88643593z?ref=boilingcold.com.au) work and had more robust plans before approving the Gorgon project in 2009\. The company attributed delays at Wheatstone to the late arrival of modules from Malaysia and a lack of engineering before the final investment decision. The Ichthys offshore facilities from Korea were plagued with thousands of electrical fittings in hazardous areas that [could have caused a fatal explosion](https://thewest.com.au/business/energy/secret-docs-reveal-deadly-blast-risk-at-63b-lng-plant-ng-b881069411z?ref=boilingcold.com.au). > One industry veteran described the final stages of recent LNG projects as "Aussies tasked with piecing the Lego together with parts broken or delivered late and half the instructions missing." *Boiling Cold* understands there was a strong push within Shell for the Prelude to leave Korea before it was ready to tick a box on an internal corporate target. ## The floating carbon dioxide factory While Australia saw little benefit from the construction of Prelude, it will have its carbon emissions as a liability on its books for decades. When Shell issued Prelude's [environmental impact statement](https://www.shell.com.au/promos/sustainability/prelude-eis/%5Fjcr%5Fcontent.stream/1475632907147/15a771833defe107c1336c8a4854a95607408b1d/prelude-eis.pdf?ref=boilingcold.com.au) in 2009, it estimated annual greenhouse gas emissions would be equivalent to 2.29 million tonnes of carbon dioxide. A decade later Prelude is allowed to emit 2.72 million tonnes of CO2e a year under the [safeguard mechanism](http://www.cleanenergyregulator.gov.au/NGER/National%20greenhouse%20and%20energy%20reporting%20data/Safeguard-baselines-table?ref=boilingcold.com.au) administered by the Clean Energy Regulator. This 20% increase in allowed emissions compared to what was promised in 2009 means LNG from Prelude is the second most carbon-intensive product from the recent offshore LNG boom in Australia. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/05/image-2.png) When LNG projects start-up emissions are often high for a few months, but Prelude's [initial performance](https://www.boilingcold.com.au/shells-prelude-lng-carbon-disaster/) has been appalling. In the 12 months to June 2019 Prelude emitted 2.3 million tonnes of greenhouse gases for just one cargo of LNG. During the current shutdown gas flowing from the wells is more than Prelude requires to power itself and the [excess gas is being flared](https://www.boilingcold.com.au/shells-prelude-lng-to-keep-flaring-gas-during-shutdown/), adding more carbon emissions with no resultant production. Shell's [environmental plan](https://www.shell.com.au/sustainability/environment/%5Fjcr%5Fcontent/par/toptasks%5F71ab.stream/1496631654655/d576908973bf139b715efb8482c331e1604be146/shell-prelude-flng-ep-risks-and-mitigations.pdf?ref=boilingcold.com.au) to flare only during "emergency situations, shutdowns and unplanned outages" did not contemplate shutdowns becoming commonplace rather than exceptional. The oil and gas giant's total carbon emissions for 2019 were 70 million tonnes. Shell's share of Prelude's allowed emissions is 1.84 million tonnes a year. Floating [LNG](https://www.linkedin.com/feed/hashtag/?highlightedUpdateUrns=urn%3Ali%3Aactivity%3A6653434498119761920&keywords=%23LNG&originTrackingId=D3t03DSJfSJ7KKjalr3dow%3D%3D&ref=boilingcold.com.au) is adding little to Shell's production but an enormous amount to its carbon footprint. Shell, like all investors in Australian LNG, has little incentive to reduce emissions as the Federal Government [routinely lifts allowable emission limits](https://www.theguardian.com/australia-news/2020/apr/01/nearly-one-in-five-of-australias-big-polluters-breach-government-set-emissions-limits?ref=boilingcold.com.au) if they are breached. The Paris Agreement commits Australia to reduce its emissions by 26% to 28% from 2005 levels by 2030\. Every extra tonne of CO2 Prelude emits will eventually have to be countered elsewhere in the economy by spending to reduce emissions, the purchase of offsets or reduced economic activity. ## And Australia gets…? While the broader Australian economy will eventually shoulder the burden of Prelude's carbon emissions, Australia is likely to receive little company tax and no payments for the gas extracted. CPC in Taiwan, for example, does not own its Australian subsidiary OPIC Australia directly but through a company registered in the well-known tax haven Panama. OPIC Australia owed related companies $US1.02 billion at December 2019, more than the total it has spent on Prelude. The interest payments on this debt will reduce any company income tax paid should the Prelude ever turn a profit. Most foreign investors in Australian oil and gas use similar arrangements. Shell will be able to use losses on Prelude to reduce the tax it pays on other Australian investments such as the North West Shelf, Gorgon and QGC LNG projects. The nearby Ichthys project is [forecast never to pay Australia for the gas it extracts](https://thewest.com.au/news/wa/inpex-will-pay-nothing-to-extract-oil-and-gas-ng-b88537261z?ref=boilingcold.com.au) according to the analyst Inpex hired to report on the project's economic impact, ACIL Allen executive director WA and NT Mr John Nicolaou. Prelude is less likely than Ichthys to pay for its gas as the Petroleum Resource Rent Tax rewards delayed projects with annual escalations in credits for capital expenditure. Prelude may operate reliably at full capacity in the future, but the returns to all the investors will be poor at best. Shell, that wants to offload high-carbon projects from its portfolio, will find it difficult to sell out of Prelude. No other company would wish to take responsibility for the unique and complex technology. Australia, after receiving little benefit from Prelude's construction and no gas domestic gas supply, is unlikely to receive financial returns from Prelude apart from operating expenditure with further costs inevitable somewhere in the economy to counter Prelude's carbon emissions. A prelude is defined as an introduction to something important. What Shell's Prelude should introduce is the understanding that Australia should not rely on bright shiny promises from proponents of resource projects. OPIC Australia was asked for comment and did not respond. Shell declined to comment. --- *Correction 15 October 2020: units for "unit cost" in the "cost to build LNG capacity" were "$US/tonne", now corrected to "$US1000/tonne/year* ### Australia's oil and gas industry will create a $76B clean-up bill URL: https://www.boilingcold.com.au/australias-oil-and-gas-industry-will-create-a-76b-clean-up-bill/ Last updated: 2021-12-27T00:47:20.000Z Safely abandoning oil and gas wells, pipelines and platforms in Australia will cost $US49 billion ($76 billion) over the next thirty years, according to industry consultant Wood Mackenzie. The analysis was revealed in a [report commissioned by the oil and gas industry lobby group APPEA](https://www.appea.com.au/media%5Frelease/new-oil-and-gas-investment-needs-policy-stability/?ref=boilingcold.com.au) that the group has used to [call for little change](https://www.appea.com.au/media%5Frelease/new-oil-and-gas-investment-needs-policy-stability/?ref=boilingcold.com.au) to the industry's tax and regulatory arrangements. The Wood Mackenzie projection shows an average annual spend of about $1 billion a year up to about 2037\. From the late 2030s, the industry will have to spend an incredible $4.5 billion a year. ![Abandonment expenditure for the Australian oil and gas industry.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/05/wmac-decomm-cost-plot.jpg) **Abandonment expenditure for the Australian oil and gas industry.** Source: Wood Mackenzie The costs will continue after 2050\. One example is Woodside's North West Shelf LNG plant that the company plans to [operate until 2070](https://www.epa.wa.gov.au/media-statements/woodside%E2%80%99s-browse-and-north-west-shelf-proposals-out-public-comment?ref=boilingcold.com.au). Wood Mackenzie confirmed to *Boiling Cold* that the estimate covers both onshore and offshore facilities. The Australian taxpayer could bear up to 58% of the cost of offshore decommissioning as the expense is deductible against company income tax and can invoke a refund from the government of Petroleum Resource Rent Tax paid. Many offshore projects are unlikely to pay significant amounts of PRRT, effectively getting the gas they produce for free. In those cases, and for onshore facilities, the taxpayer liability will be limited to 30% of decommissioning costs. The worst-case scenario for Australian governments is if they are left with the entire mess, either after a corporate failure or if an international company walks away from a local subsidiary. This year Northern Oil and Gas Australia, owner of the Northern Endeavour oil vessel in the Timor Sea, went into liquidation. The Federal Government has taken over the facility and may face a [decommissioning bill as high as $230 million](https://www.thesaturdaypaper.com.au/news/resources/2020/02/15/decommissioning-oil-vessel-could-cost-taxpayers-230m/15816852009400?cb=1588841589&ref=boilingcold.com.au). New Zealand had a similar problem with a floating oil vessel that sits over the Tui oil field 50km from its coast. The operator of the field Tamarind Taranaki went into liquidation in November 2019, and [New Zealand may have to bear a clean-up cost of about $US100 million](https://www.rnz.co.nz/national/programmes/checkpoint/audio/2018746349/oil-tanker-with-40-000-barrels-waiting-months-off-taranaki-coast?ref=boilingcold.com.au) ($155 million). Tamarind Taranaki was owned by Malaysian Tamarind Resources that says on its website it is "building a profitable, nimble and entrepreneurial oil and gas group." Tamarind Resources is continuing its other oil and gas activities in New Zealand and Australia unaffected by the failure of Taranaki. New Zealand Greenpeace campaigner Amanda Larsson said it was [common practice for oil companies to use subsidiaries](https://www.rnz.co.nz/national/programmes/checkpoint/audio/2018746349/oil-tanker-with-40-000-barrels-waiting-months-off-taranaki-coast?ref=boilingcold.com.au) to absolve the parent company of liability. > "This dangerous debacle could have been avoided if the government had required a parent company guarantee or a decommissioning bond," Larsson said. ## Delay, delay, delay In Australia, the common practice is to delay decommissioning expenditure as long as possible. If the oil price is high, the argument is that the cost of rigs and other equipment and contractors is too high. In an oil price slump as experienced now, when contractors would be available at bargain-basement rates, the industry can claim it cannot afford to do the work. There is rarely a time that is decommissioning time. Italian ENI has been taken to task this month by the offshore safety regulator NOPSEMA about its management of the shuttered Woollybutt oil field offshore from Onslow. Woollybutt ceased production in May 2012 and the floating facility Four Rainbow left a few weeks later. It was not until 18 months after the shutdown that ENI [issued a plan](https://docs.nopsema.gov.au/A334467?ref=boilingcold.com.au) for the decommissioning of just some the equipment that remained. The plan for the final stage of decommissioning, plugging the wells, was [accepted by NOPSEMA](https://www.nopsema.gov.au/assets/epdocuments/A682834.pdf?ref=boilingcold.com.au) in July 2019. The regulator required to work to be completed by July 2024: 12 years after production stopped at Woollybutt. Delay can increase costs and cause safety concerns. [NOPSEMA found](https://www.nopsema.gov.au/assets/Published-notices/A730702.pdf?ref=boilingcold.com.au) that ENI's annual inspections of the condition of chains that attached large buoyant structures called mid-depth buoys to the seabed had been inadequate and the equipment had exceeded its design life. The regulator concluded that if the chains holding the MDB failed the buoys could rise to the surface and "would create a marine vessel collision hazard leading to vessel damage or sinking and could result in injuries to, or loss of life of, vessel personnel." The Federal Government is [reviewing the regulation of the decommissioning](https://www.industry.gov.au/data-and-publications/offshore-oil-and-gas-decommissioning-framework-review?ref=boilingcold.com.au) of offshore facilities. Onshore decommissioning is the responsibility of state and territory governments. --- *Note: The Wood Mackenzie report for APPEA shows a decommissioning spend to 2050 of $US49 billion in a figure, but the accompanying text states $US39 billion. Wood Mackenzie has confirmed to Boiling Cold that $US49 billion is the correct number.* --- *Main image: ExxonMobil platform in the Bass Strait. Source: ExxonMobil* --- ### Time is running out for hydrogen from gas in Australia URL: https://www.boilingcold.com.au/time-out-for-hydrogen-from-gas/ Last updated: 2020-05-13T22:15:00.000Z Hydrogen made with renewable energy could be cheaper than so-called blue hydrogen from gas before the end of the decade, blowing a hole in the case to invest in blue hydrogen production. Wood Mackenzie Asia Pacific head of energy transition research Prakash Sharma said technical improvements and increasing scale could make green hydrogen competitive by 2030. Future demand for hydrogen is based on its ability to provide emissions-free energy where grid electricity or batteries cannot, such as [steelmaking](https://www.boilingcold.com.au/pilbara-too-expensive-for-green-steel-future-report/) and long-distance transport. The fuel can be green hydrogen made by electrolysers powered by renewable energy that separate hydrogen from water. The alternative is blue hydrogen made by the long-established technology of steam methane reforming that separates natural gas into hydrogen and carbon dioxide. The CO2 is then either buried or its global warming effect offset by measures like tree planting. Sharma told an Australian Institute of Energy webinar yesterday that the standardisation of electrolysers, improvements in their efficiency and continued reductions in the cost of renewable would drive the price of green hydrogen down. > “In the case of Australia, with its large solar and wind potential, we think we can get to that pathway by 2030 or even earlier,” Sharma said. Woodside executive vice president sustainability Shaun Gregory [presented a timeline](https://files.woodside/docs/default-source/news-and-media-documents/speeches/shaun-gregory-speech-afr-energy-summit0875ac2b641445cdbbc65a3c06189cfa.pdf?sfvrsn=332cf3a6%5F6&ref=boilingcold.com.au) in October 2019 that showed blue hydrogen would be competitive for three times as long as the Wood Mackenzie view. ![Hydrogen production costs presented by Woodside in October 2019.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/05/h-costs-over-time-from-Woodside.jpg) **Hydrogen production costs presented by Woodside in October 2019.** Source Woodside presentation. “Australia has ample potential sources of renewable power, but there is still a long way to go before those sources are developed to a scale to support mass green hydrogen production for export,” Gregory told a national energy summit. If WA gas giant Woodside’s hydrogen strategy is based on using gas to make blue hydrogen until 2050 and the process is uncompetitive by 2030, as predicted by Wood Mackenzie, then a decade and many billions of dollars could be wasted. Blue hydrogen production until 2050 tallies well with Woodside’s view that it can produce unlimited emissions from its LNG plants until 2050 when the Paris Agreement requires net-zero emissions. This approach is contrary to the science that a gradual reduction in emissions over the next three decades is required to limit global warning sufficiently. Gregory doubted that wind and solar power could be deployed at sufficient scale to support large-scale hydrogen production. “To date, renewable energy has been solely for domestic use – if it is also to support hydrogen exports, we’ll need to build extra capacity dedicated to that purpose,” Gregory said. “In addition, there could be challenges such as land access rights, transmission lines, or climate change impacting weather conditions that underpin renewable power.” The [Asian Renewable Energy Hub](https://www.boilingcold.com.au/pilbara-wind-solar-farm-gets-environmental-tick/) is working through all those problems just five hours up the road from Woodside’s LNG plants near Karratha and plans to export its first clean power in 2027. Oil and gas major [BP has launched a feasibility study](https://www.boilingcold.com.au/bp-to-chase-green-ammonia-in-geraldton/) to make enough green hydrogen near Geraldton to make one million tonnes of ammonia a year. Electricity makes up almost three-quarters of the cost of green hydrogen, according to Wood Mackenzie. ![Cost drivers for green hydrogen in 2019 Wood Mackenzie](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/05/green-h2-pie-chart.jpg) **Cost drivers for green hydrogen in 2019**. Source: Wood Mackenzie presentation Manufacturing at massive scale with continual efficiency improvements has allowed the price of first solar power, then wind power and now battery storage to drop each and every year, exceeding most forecasts. That same effect is possible with electrolysers as they are standard units in a factory, but scale will be required. Green hydrogen made with purchased renewable power is a low capital cost but high operating cost business. This allows electrolysers to be run at much less than full capacity if the power is cheap enough. Sharma said the cheapest green hydrogen could come from electrolysers used for just 50 to 60 per cent of the time. At Woodside’s annual general meeting earlier this month Woodside chief executive Peter Coleman said he was [concerned about investing in rapidly improving technologies](https://www.boilingcold.com.au/woodside-finds-its-not-easy-being-green/) like solar energy as investments can have marginally higher costs than competing projects that follow. The bigger danger might be to invest in blue hydrogen. Steam methane reforming is a stable technology with little prospect of cost reduction. Carbon storage underground is a large infrequent investment so has a slow learning curve made worse by geology making each application unique. As the old saying goes, to a man with a hammer every problem looks like a nail. Perhaps a company with gas has a similar singular focus. --- *Main picture: North West Shelf LNG plant, Karratha. Source: Woodside Energy Limited.* ### Woodside's Scarborough LNG uneconomic before price crash: Woodmac URL: https://www.boilingcold.com.au/woodsides-scarborough-lng-was-uneconomic-before-price-crash-woodmac/ Last updated: 2020-05-24T03:29:13.000Z ANALYSIS Woodside’s $US11.4 billion Scarborough to Pluto LNG project was uneconomic even before the COVID-19 oil price collapse, according to energy consultancy Wood Mackenzie. The project that Woodside had hoped to sanction in mid-2020 before the oil price crashed needs an LNG price of about $US9.30 a million British thermal units to achieve a reasonable return. The breakeven price is well above the “competitive range of $US7-8 a mmBtu” determined by Wood Mackenzie. Wood Mackenzie usually confines such damning assessments to its customer base of mainly large oil and gas companies. Scarborough’s problems were made public by in [report commissioned by Australia’s oil and gas lobby group APPEA](https://www.appea.com.au/wp-content/uploads/2020/05/Australia-Oil-and-Gas-Industry-Outlook-Report.pdf?ref=boilingcold.com.au). The LNG price that Scarborough needs over the life of its production is equivalent to Brent crude price of more than $US70 a barrel. The price of Brent crude is currently about $US30 a barrel. ![Cost to supply LNG to Asia.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/05/woodmac-plot.jpg) **Cost to supply LNG to Asia.** Source Wood Mackenzie. Scarborough gas processed through a new Pluto LNG train was the most expensive way to deliver LNG to Asia of nine proposed LNG projects assessed by Wood Mackenzie. Scarborough had the highest cost to deliver gas to an LNG plant. The proposed new five million tonnes a year train at Woodside’s Pluto project was the second most expensive LNG plant per unit of capacity. Qatar can deliver LNG to Woodside’s Asian customers for less than half the price of Scarborough, according to Wood Mackenzie. The low-cost Qatari gas will be flooding the market in huge quantities at the same time Woodside had planned for its Scarborough and Browse LNG projects to start up. Qatar energy minister Saad al-Kaabi [told *Reuters* last month](https://www.reuters.com/article/us-qatar-energy-lng-exclusive/exclusive-qatar-petroleum-not-scaling-down-lng-expansion-despite-delay-in-bids-ceo-idUSKBN21O28K?ref=boilingcold.com.au) that first production from the country’s expansion of its LNG capacity from 77 million tonnes a year to 110 mtpa would start in 2025\. A second expansion to take total LNG capacity to 126 mtpa in 2027 would continue. > “We are moving full steam ahead with the North Field expansion. There is absolutely no hesitation on that,” Kaabi said. ## Woodside’s road ahead to the Burrup Hub The Wood Mackenzie analysis assumed gas companies required a 12% annual return from an integrated LNG project. This is the same rate that Woodside told its investors in November 2019 was a typical hurdle the company used to screen investments. Woodside could supply LNG for less than the uncompetitive $US9.30 a mmBtu price by accepting a lower return on its investment. However, it is unlikely that BHP, Woodside’s 25% partner in Scarborough, would accept such a cut as it has many more investment options than its smaller and less diversified partner. The conclusion that a Scarborough investment needs to accept sub-par returns to be competitive is unwelcome news for Woodside’s Browse LNG project that the industry widely regards as being less economically viable than Scarborough. Since early 2018 Woodside chief executive Peter Coleman has pushed two transformational projects for the company. Gas from Scarborough would flow to an expanded Pluto plant, and the adjacent North West Shelf LNG plant would process gas from the distant Browse filed. A pipeline connecting the two LNG plants would complete what Woodside dubbed the Burrup Hub. > A Woodside spokesperson said the Perth-based LNG specialist “believes the development of the Scarborough resources through Woodside’s proposed Burrup Hub remains among the world’s most cost-competitive LNG investment opportunities.” Woodside’s conclusion is at odds with Wood Mackenzie’s analysis unless there is a massive improvement in the economics of the Burrup Hub. That change is likely to be a connection of the cheapest source of gas – Scarborough – with the most affordable available liquefaction capacity – the existing NWS LNG plant. The Pluto expansion and the Browse development would be put on the back burner. Woodside has taken a small step towards that end with the [announcement](https://www.woodside.com.au/news-and-media/stories/story/woodside-awards-local-supply-and-fabrication-contract?ref=boilingcold.com.au) that CIVMEC will build the facilities at Pluto to link the two LNG plants. Woodside approved the construction of interconnector pipeline in November 2019, but it still has not got its NWS and Pluto partners on board. Managing the diverse interests and asks of the Scarborough, Pluto and Browse partners for the shrunken Burrup Hub concept of Scarborough to the North West Shelf will be a much tougher fight than getting their agreement on a comparatively trivial pipeline. And then there are the Qataris to worry about. --- *Main Picture: Pluto LNG plant near Karratha. Source: Woodside Energy Ltd.* ### Pilbara too expensive for green steel future: report URL: https://www.boilingcold.com.au/pilbara-too-expensive-for-green-steel-future-report/ Last updated: 2020-05-11T07:17:43.000Z High labour costs in the Pilbara make the sun-drenched global iron ore powerhouse the wrong place in Australia for steel mills fired by green hydrogen, according to a report. Australia could create tens of thousands of jobs in a competitive green steel export industry by using hydrogen produced with renewable energy to replace coal in the steelmaking process, a [Grattan Institute report](https://grattan.edu.au/report/start-with-steel/?ref=boilingcold.com.au) has concluded. Vast resources of solar and wind energy could allow Australia to export green steel to countries such as Japan and Indonesia for less than those countries could make their own with imported iron ore and hydrogen. The twin supports for Australia’s advantage are that it has the climate and space to generate vast quantities of renewable electricity for hydrogen production and that hydrogen is difficult and expensive to export. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/05/global-RE-map.jpg) **Australia's advantage: vast expanses of co-located wind and solar** Source: Grattan The report concluded that other ways to effectively export renewable energy – biofuels, green hydrogen and ammonia and subsea power cables – would produce less Australian jobs than steel making. Australia mines 38% of the world’s iron ore and 18% of its metallurgical coal, yet with those two main ingredients for steel produces just 0.3% of the world’s steel output. ![High quality wind and solar resources in Australia](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/05/RE-map.jpg) **High quality wind and solar resources in Australia.** Source: Grattan Despite having iron ore, wind and solar resources in abundance labour costs in the Pilbara make it too expensive to host a steel mill, according to Grattan. The need to build cyclone-proof infrastructure adds further costs. > “It would be cheaper to take the iron ore to the large pool of workers in central Queensland or the Hunter Valley than to try to attract workers from the south or east to the Pilbara,” the report said. ![Cost to ship semi-finished steel to Indonesia ($A/tonne)](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/05/cost-comparison.jpg) **Cost to ship semi-finished steel to Indonesia ($A/tonne).** Source: Grattan The report sees Australia as “stuck in a climate conundrum.” > “Political leaders need to balance the national interest – which requires strong global action on climate change – with the legitimate interests of regional communities and workers in carbon-intensive industries.” The potential for tens of thousands of green steel jobs in the coal-producing regions of central Queensland and New South Wales’s Hunter Valley is a way to solve that problem. The Pilbara could be a competitive location to produce direct reduced iron, an intermediate product in steel production, as it is less labour-intensive than steelmaking. Governments must act now for Australia to seize the green steel opportunity, the report urged. A “steel flagship project” using the direct reduction process could build steelmaking skills initially using mainly gas as a fuel with increasing amounts of renewable hydrogen over time. If Australia can capture seven per cent of the world’s steel market with a new greener product the prize is 25,000 manufacturing jobs, the report concluded. --- *Main Picture: iron ore at Cape Lambert. Source: Rio* ### Failed oiler Northern Endeavour owes $165M URL: https://www.boilingcold.com.au/failed-oiler-northern-endeavour-owes-165m/ Last updated: 2020-05-08T09:31:59.000Z The liquidator of the failed companies behind the Northern Endeavour oil production vessel has told ex-employees he does not know when they will be paid. He has also written to the companies' sole owner and director Angus Karoll demanding repayment of a $2 million loan made to another of Karoll's companies. The loan forms part of just $6 million of assets the three companies have against liabilities of more than $165 million, according to a [report](https://home.kpmg/content/dam/kpmg/au/pdf/creditors/northern-oil-and-gas-group/noga-statutory-report-by-liquidators-7-may-2020.pdf?ref=boilingcold.com.au) released by liquidator KPMG on Thursday. Today liquidator Robyn Duggan [told ex-employees](https://home.kpmg/content/dam/kpmg/au/pdf/creditors/northern-oil-and-gas-group/noga-circular-to-employees-redundancy-entitlements-8-may-2020.pdf?ref=boilingcold.com.au) that he was unable to determine if there would be sufficient money to pay them after the sale of assets and payments to secured creditor CCMA. The companies are Northern Oil and Gas Australia Pty Ltd and two related entities. Commodity trader Castleton Commodities Merchant Asia is owed $124 million, including about $17 million lent to the companies after the appointment of voluntary administrators in September 2019. A court approved the payment of CCMA's post-appointment $17 million debt ahead of employees as the funds supported their salaries during the administration and increased the prospects for the companies continued operation. No solution was found, and the companies went into liquidation in February. The liquidator quickly disclaimed the assets, a legal procedure that effectively placed the Northern Endeavour, its oil fields and a [decommissioning liability that could be as high as $230 million](https://www.thesaturdaypaper.com.au/news/resources/2020/02/15/decommissioning-oil-vessel-could-cost-taxpayers-230m/15816852009400?cb=1588841589&ref=boilingcold.com.au) into the hands of the Federal Government. "Unfortunately, we are not aware at this stage of what arrangements (if any) are in place between CCMA and the Government in relation to the potential disconnection of the Northern Endeavour and decommissioning of the wells and what, if any, proceeds of realisation may be paid to CCMA," Duggan said in the letter to ex-employees. ## Loan battle The liquidator's report said Northern Oil and Gas Australia Pty is owed $2.02 million by its owner NOGA Holdings Pty Ltd whose director and owner is Angus Karoll. NOGA Holdings was not placed into voluntary administration. "We have written to the Director in his own capacity and as a director of NOGAH demanding repayment of the loan amount. The Director has engaged solicitors to act on his behalf," the liquidators' report said. "The Director has made an offer to settle transactions which he has identified to be of a personal nature. That offer has not been accepted at this stage. "We are also awaiting details of the financial position of NOGAH to assess its ability to repay the loan." Karoll did not respond to a request for comments about KPMG's demand for the loan to be repaid. ## Troubled waters Newly-formed NOGA acquired the Northern Endeavor and the titles to the associated oil fields from Woodside in 2016. Problems at the Northern Endeavor were highlighted in July 2019 when offshore safety regulator NOPSEMA ordered that it stop production in its "current degraded state." The companies entered voluntary administration in September after CCMA refused to supply additional funds for repairs. Karoll said offshore safety regulator NOPSEMA's lack of clarity on what was needed for production to restart led to the funding halt. "NOPSEMA declined to provide a list of repairs required to resume production," Karoll said. "Additionally, NOPSEMA declined to confirm in writing that they would allow a restart of production post requested repairs being undertaken." NOPSEMA head of safety and integrity Derrick O'Keeffe told the Senate economics estimate committee in October 2019 that it was the operator's responsibility, not the regulator's, to determine detailed requirements for the safe operation of the Northern Endeavour. "When we identify areas of defect, we'll bring this to the company's attention," O'Keefe said. In addition to a lack of funds to restart production Karoll attributed the failure to the transfer of a portion of its offshore titles to Timor Leste. In contrast, the [administrators ](https://home.kpmg/content/dam/kpmg/au/pdf/creditors/northern-oil-and-gas-group/noga-administators-report-and-notice-of-creditor-meeting-23-january-2020.pdf?ref=boilingcold.com.au)said significant under capitalisation and the loss of production caused the failure. Karoll believes the companies could have prospered. "We spent over $US50 million on vessel inspection, repairs and upgrades during the period of ownership," Karoll said. "The vessel was purpose-built with a design safety factor of three for a one in 10,000-year storm event. "We had funding available to increase production. Importantly 24 million barrels of proven oil reserves remain unproduced." The failure of the Northern Endeavour has [brought into question Federal Government oversight](https://www.thesaturdaypaper.com.au/news/resources/2020/02/15/decommissioning-oil-vessel-could-cost-taxpayers-230m/15816852009400?cb=1588841589&ref=boilingcold.com.au) of the offshore oil and gas industry, especially smaller companies that buy ageing assets with declining production. The Federal Government [kicked-off a review](https://www.minister.industry.gov.au/ministers/pitt/media-releases/government-ensures-safety-and-security-northern-endeavour?ref=boilingcold.com.au) of the Northern Endeavor in April that will recommend areas for regulatory reform. The oil and gas industry is worried the Federal Government may [impose a levy to cover its costs](https://www.afr.com/companies/energy/oil-industry-threatened-with-abandonment-levy-20200110-p53qbm?ref=boilingcold.com.au). *Boiling Cold* understands that other oil and gas companies are unhappy with Woodside as its sale of the Northern Endeavour has resulted in damage to the industry's reputation and a possible financial cost. --- *Main image: Northern Endeavour oil production vessel. Source:NOGA.* ### BP begins chase for giant green ammonia plant in Geraldton URL: https://www.boilingcold.com.au/bp-to-chase-green-ammonia-in-geraldton/ Last updated: 2020-05-09T02:33:51.000Z Momentum is growing in WA for a switch from gas to renewable energy with BP announcing it will consider the feasibility of building a green ammonia plant near Geraldton with a $4.4 million feasibility study part-funded by the Federal Government. The study will consider a potential pilot plant with the capacity to make 20,000 tonnes of ammonia a year using renewable electricity produced on-site or purchased from the grid. A commercial-scale plant to produce one million tonnes a year of ammonia for local use and export powered by 1.5 gigawatts of renewable electricity could follow. > BP Asia Pacific chief operating officer Frédéric Baudry said BP chose WA for the study due to "its vast solar and wind resources, existing port infrastructure and proximity to large, long-term markets for green hydrogen." Consultant GHD will conduct the feasibility study that is expected to be finished by February 2021\. Lightsource BP, a solar energy company half-owned by BP, will advise on renewable power solutions. Minister for Energy and Emissions Reduction Angus Taylor said the study would increase the understanding of the economic opportunity and technical implications of a fully integrated renewable hydrogen supply chain. "This project will build on the strong ammonia production industry that already exists in Western Australia," Taylor said. > "Utilising renewable hydrogen provides a fantastic opportunity for this industry to reduce emissions and sell a clean, in-demand product to global buyers" ## Existing WA ammonia production all gas Wesfarmers-owned [CSBP can produce 255,000 tonnes a year of ammonia](https://www.csbp.com.au/products/AAN/ammonia?ref=boilingcold.com.au) in Kwinana from natural gas. CSBP's ammonia goes to make explosives for the mining industry, sodium cyanide for gold processing and fertiliser. In February ARENA [contributed almost $1 million](https://www.yara.com/news-and-media/news/archive/2020/arena-announces-funding-for-yara-pilbara-and-engies-feasibility-study-on-a-renewable-hydrogen-to-ammonia-solution-in-fertiliser-production/?ref=boilingcold.com.au) towards a feasibility study on providing renewable hydrogen to the existing Yara gas-fed ammonia plant on the Burrup Peninsula near Karratha. Norwegian Yara, a major international fertiliser manufacturer, has partnered with French electricity utility ENGIE for the study. The [840,000 tonnes a year Burrup plant](https://thewest.com.au/business/energy/yara-aims-to-move-wa-into-green-hydrogen-ng-b881106808z?ref=boilingcold.com.au) makes about 5% of the world's ammonia. The plant first combines water from the sea and natural gas from offshore to produce hydrogen and carbon dioxide. This manufacture of so-called blue hydrogen resulted in just under one million tonnes of CO2 emissions in the 12 months to June 2019, according to the Clean Energy Regulator. The second stage of the process combines the hydrogen with nitrogen from the atmosphere to produce ammonia. Green ammonia replaces the polluting first step of the process with hydrogen made by separating water into hydrogen and oxygen with a process called electrolysis powered by renewable electricity. Yara's study is considering the feasibility of building an electrolyser and solar farm to produce enough hydrogen for 28,000 tonnes a year of ammonia. The [WA Government's hydrogen strategy](http://www.drd.wa.gov.au/projects/EnergyFutures/Pages/Renewable-Hydrogen-Industry.aspx?ref=boilingcold.com.au) is exclusively focused on renewable, or green, hydrogen. In contrast, the Federal Government [contributed $50 million](https://www.abc.net.au/news/2019-02-14/latrobe-valley-coal-to-hydrogen-project-approved/10812464?ref=boilingcold.com.au) towards a pilot project in Victoria's Latrobe Valley that will produce three tonnes of hydrogen from brown coal. This week the Federal Government announced it would direct the renewable energy-focused Clean Energy Finance Corporation to [support its Advancing Hydrogen Fund](https://www.theguardian.com/australia-news/2020/may/04/government-offers-300m-hydrogen-investment-clean-energy-finance-corporation?ref=boilingcold.com.au) with up to $300 million that could support polluting gas or coal-fuelled hydrogen manufacture. --- *Main image: Yara ammonia plant near Karratha. Source: Yara* ### Standalone power system provider bought out as Western Power increases rollout URL: https://www.boilingcold.com.au/standalone-power-system-provider-bought-out-as-western-power-increases-rollout/ Last updated: 2020-05-08T00:56:34.000Z Perth's Pacific Energy, a provider of power to remote mine sites, has moved into smaller systems with the acquisition of Hybrid Systems that supplies standalone power systems to Western Power. Pacific Energy chief executive Jamie Cullen yesterday said Hybrid Systems would help its existing mining customers reduce their carbon footprint and allow Pacific Energy to provide standalone power systems and microgrids. Cullen said the purchase was a significant step in Pacific Energy's growth following its acquisition in November 2019 by a group of funds managed by QIC. "This transaction delivers a talented and cutting-edge team experienced in the integrated renewables market, where decentralisation, decarbonisation and cost reductions are generating significant new growth opportunities," Cullen said. Western Power launched a trial for [57 standalone power systems](https://westernpower.com.au/community/news-opinion/wa-companies-to-lead-88-million-power-system-rollout/?ref=boilingcold.com.au) in 2019, of which 52 were commissioned. Hybrid Systems won the contract to supply 47 of the systems. Hybrid produces a standardised system of solar panels, a battery, an inverter to produce alternating current and a back-up diesel generator that is designed for easy deployment. Western Power is now better placed to roll out standalone power systems after legislation passed in April allows it to recoup the cost as it does with its transmission network. Minister of Energy Bill Johnston told a conference yesterday that Western Power could now decommission overhead transmission lines on the fringe of the grid areas to reduce the cost of supply and bushfire risks, and enhance reliability. "We plan to roll out tens of thousands of standalone power systems to customers right across the Wheatbelt and other parts of regional WA," Johnston said. ![Standalone power system locations across Western Power's network](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/05/Annotation-2020-05-07-144434.jpg) **Proposed early standalone power system locations across Western Power's network.** Source: Western Power Western Power has a second-round underway for an [additional 100 standalone power systems](https://www.mediastatements.wa.gov.au/Pages/McGowan/2020/02/New-technology-for-WAs-electricity-network.aspx?ref=boilingcold.com.au). Johnston said early users of standalone power systems saw them as a sub-optimal option, but now customers are seeking to have them installed. > "The 30-year cost of servicing a customer in the isolated Wheatbelt region, with poles and wires, is 24 times that of a Perth customer," Johnston said in a statement. Cullen said in addition to the standalone power systems market; he saw the opportunity to expand the market for Hybrid Systems' larger-scale battery energy storage systems (BESS) to maximise the use of renewable energy. Hybrid has completed BESS projects in Onslow, Carnarvon and Mt Magnet. Hybrid has been a supplier to Pacific Energy subsidiary Contract Power that recently won a 20-year contract to build, own and operate a renewables hub to power Esperance. --- *Main Picture: Western Power stand-alone power system. Source: Pacific Energy* --- Update 7 May 3:45PM : Added that only 52 SPS systems were completed in round one and Contract Power awarded an Esperance power contract. ### Cheap renewables mean no new coal or gas power for WA's South West URL: https://www.boilingcold.com.au/no-new-coal-or-gas-power-for-wa-south-west/ Last updated: 2020-05-06T07:54:15.000Z All future power generation installed in the South-West of WA will be renewable energy as it is cheaper than using coal or gas, WA Minister for Energy Bill Johnston said today. Johnston told the Renewables-led Recovery virtual conference today that solar, wind and batteries were also increasingly replacing diesel for off-grid power generation. "You can see what can be achieved without any government subsidy because of the cost advantages of renewable energy," Johnston said of the efforts of mining companies. The Minister said the State was seeking funds from the Commonwealth Government's COVID-19 stimulus efforts to accelerate WA's transition from fossil fuels to renewable energy. > "We are continuing to examine what options there are for supporting our grid in the South West and taking advantage of the unique renewable energy opportunities in the remote parts of the State," Johnston said. "That's why we are working with the Commonwealth Government on projects that we believe would support that transition here in WA." Johnston said WA was "very jealous" of the $6 billion the Commonwealth Government invested in 2018 to gain full ownership of the Snowy Mountains hydroelectric scheme by [buying NSW and Victoria out](https://www.abc.net.au/news/2018-03-02/government-buys-out-states-snowy-hydro-shares-for-$6b/9500908?ref=boilingcold.com.au). The WA Government's request may be to support installations like South Australia's [successful Hornsdale grid battery](https://reneweconomy.com.au/tesla-big-battery-at-hornsdale-gets-big-jump-in-revenues-more-to-come-65622/?ref=boilingcold.com.au) installed by Tesla in record time in 2017\. In April the Government released a [plan to manage the increasing amount of solar](https://www.boilingcold.com.au/wa-plan-for-batteries-and-solar/) energy on the South West Interconnected System that called for more battery storage. The plan, the Distributed Energy Resources Roadmap, is the first stage of the Government's energy transformation strategy for the SWIS that covers the area from Kalbarri in the north to Albany in the south and east to Kalgoorlie. The next stage is a Whole of System Plan to be released later in 2020 will guide what investment can achieve the cheapest electricity. Johnston said he was hopeful that new transmission infrastructure would not be needed. ## Coal question unanswered A closely watched aspect of the System Plan will be what it says about the retirement of coal-fired power stations in Collie. Collie's coal-fired power stations produced the equivalent of more than 7.9 million tonnes of carbon dioxide in the 12 months to June 2019, according to the Clean Energy Regulator. The State Government launched a process in September 2019 to [develop a State climate policy](https://www.mediastatements.wa.gov.au/Pages/McGowan/2019/09/Climate-change-consultation-to-help-shape-WA-response.aspx?ref=boilingcold.com.au) to support WA achieving net-zero carbon emissions by 2050. Johnston has resisted the setting of targets for a gradual reduction in carbon emissions to net-zero over the next three decades. WA Environmental Protection Authority chair Tom Hatton told *The West Australian* in 2019 that the scientific consensus was that a gradual fall to zero by 2050 was needed to stop global temperatures going too high. Last August the Government announced that two 40-year old units at the State-owned Synergy's Muja power station would [close in 2022 and 2024](https://thewest.com.au/news/wa/up-to-80-jobs-axed-as-long-awaited-cuts-at-collies-coal-fired-generation-muja-finally-revealed-ng-b881281629z?ref=boilingcold.com.au) respectively. At the time Johnston said Muja's other two units would [operate into the 2030s](https://thewest.com.au/business/energy/shutdown-extension-for-muja-d-power-units-and-collie-station-a-relief-for-coal-mining-town-ng-b881283568z?ref=boilingcold.com.au) and Synergy's Collie power station into the 2040s. Collie is also home the privately-owned Bluewaters power station. If the State acts consistently with the science and requires carbon emission reductions before 2050, the operation of Synergy's coal-fired power stations may be scrutinised. Minister for Environment Stephen Dawson said the Government had temporarily paused work on the State's climate policy while it managed the COVID-19 pandemic. --- *Main image: Muja Power station. Source: Synergy* ### $22B Pilbara wind and solar farm gets environmental tick URL: https://www.boilingcold.com.au/pilbara-wind-solar-farm-gets-environmental-tick/ Last updated: 2020-05-04T07:34:39.000Z A massive $22 billion-plus wind and solar farm in the Pilbara and 3000 construction jobs moved closer to reality today with the approval by the Environmental Protection Authority of the Asian Renewable Energy Hub. Eventually, the Hub will consist of up to 1743 wind turbines and 2000 megawatts of solar panels spread across about 14,000 km2 just inland from Eighty Mile Beach between Port Hedland and Broome. The tip of the wind turbine blades could rise as high as 260m above ground: four times the height of Perth’s Bell Tower. The project would be built by about 3000 workers in stages over 10 years, according to the EPA report. It could then operate for more than 50 years employing about 400 workers bussed in from surrounding towns. An enormous 1500 km of access tracks will link the wind turbines, solar farms and electrical transmission equipment. Only about 2% of the area will be cleared. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/05/map.jpg) **Project site between Port Hedland and Broome.** Source: Asian Renewable Energy Hub. The world’s largest wind turbine manufacturer, Danish Vestas, and two renewable energy project developers - InterContinental Energy and CWP – officially launched the project in late 2017 to supply six gigawatts of wind and solar electrical power to Indonesia through subsea cables. In 2019 the planned capacity increased to 11 gigawatts to service the Pilbara as well as Indonesia, and the Macquarie Group joined the original investors. At the time a final investment decision was planned for 2021. The project now proposes to make a final investment decision in 2025 to build to 15 gigawatts of generation. Construction would start in 2026 to produce the first power the next year. More than half the Hub’s power is now planned for use in the Pilbara to power mines, mineral processing and the anticipated large-scale production of green hydrogen. Typically wind is strongest at night at the project site, allowing the wind and solar together to produce a more consistent power output. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/05/daily-output.jpg) **Expected power output over a day.** Source: Asian Renewable Energy Hub for an earlier lower output project design The project touts itself as “renewable energy at oil and gas scale.” Last week Woodside chief executive Peter Coleman said it was [difficult to find renewable energy projects](https://www.boilingcold.com.au/woodside-finds-its-not-easy-being-green/) to invest in that has the multi-billion scale the company needed. The other mega-scale renewable energy under consideration in Australia is the [Sun Cable ](https://www.suncable.sg/?ref=boilingcold.com.au)project to send solar-generated power to Singapore that has received investment form Andrew Forrest and Mike cannon-Brookes. The EPA released its [report](http://www.epa.wa.gov.au/sites/default/files/EPA%5FReport/EPA%20Report%201673%20-%20Asian%20Renewable%20Energy%20Hub%20-%20assessment%20report.pdf?ref=boilingcold.com.au) on the Hub today. To lessen the impact of the wind turbines on birds, the EPA has recommended the project be able to shut down specific turbines when significant flocks are detected nearby. There is a two-week window for public comments and then the EPA’s recommendations will be sent to environment minister Stephen Dawson to make the final decision. The State Government in 2016 awarded the project exclusive rights to develop a renewable energy project in the area. The area is currently Unallocated Crown Land, and the developers are negotiating a native title agreement with the Nyangumarta people. --- *Main picture: Generic wind turbines. Source: [Rabih Shasha](https://unsplash.com/@rabihshasha?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) on [Unsplash](https://unsplash.com/s/photos/wind-soalr?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText)* ### Woodside finds it's not easy being green URL: https://www.boilingcold.com.au/woodside-finds-its-not-easy-being-green/ Last updated: 2020-05-02T06:18:43.000Z *ANALYSIS* Like Kermit with a stomach upset Woodside's chair Richard Goyder and chief executive Peter Coleman looked uncomfortable trying to be both green and gassy at Thursday's annual general meeting. The big news was the unprecedented support for two votes to push Woodside to take a stronger stance on climate change. A push for Woodside to report each year on how its activities support the Paris Agreement emissions reduction goal was backed by 50.1% of shareholders, and more than 42% wanted to ensure that any lobbying Woodside supported was consistent with the Paris Agreement. However, the majority support for supporting Paris reduction goals will not bind company management as the 7% of shareholders that supported a supporting amendment to the company's constitution was well below the required 75% Shareholders peppered Goyder and Coleman with questions on two themes: was Woodside's gas good for the environment and was the company's embrace of LNG a sound long-term investment choice. When a shareholder of 10 years standing complained that Woodside had been a poor investment Goyder's defence was that oil and gas had had a difficult decade, but Woodside had been in the top quartile of the beleaguered industry. In February, just before the COVID-19 share price collapse, Woodside's share price was $33.20: a drop of more than 20% over 10 years ago. Woodside closed on Friday at $21.13 a share. Goyder did not explain why the next decade for oil and gas will be less challenging than the last. Shell chief executive Ben van Beurden, with 37 years' experience in oil and gas, had a different perspective this week that indicated the coming decade might be tougher than the last one. > "Will demand ever go back to where it was? That is hard to say," [Van Beurden said](https://www.bloomberg.com/news/articles/2020-04-30/shell-sees-lasting-change-in-consumer-behavior-beyond-pandemic?ref=boilingcold.com.au). > "We live in a crisis of uncertainty at the moment; we don't know what is on the other side." > "We probably have to re-establish what is going to be our strategy." When asked if Woodside would match its European counterparts and diversify "beyond pure fossil fuel extraction" Coleman outlined investigations into carbon trading, carbon sinks and small-scale hydrogen plants. "We are going to scan the horizon pretty closely because out of COVID-19 there may be opportunities that present themselves that allow us to accelerate our activities in this area," Coleman said. Coleman's boss Goyder immediately stepped in to clarify there would be no significant change in Woodside's direction. > "One of the things were pretty clear on as a board is that Woodside is a very good LNG company," Goyder said. > "We've got a strong balance sheet, and we've got a capacity to look for new opportunities, but I wouldn't overestimate that in terms of changing what we do, we're an LNG company." A big challenge for oil and gas companies wanting to invest in renewable energy was finding opportunities to invest in with the multi-billion scale they are used to, Coleman said. Presumably, Woodside is unaware of the backing of those two low-profile businessmen Andrew Forrest and Mike Cannon-Brookes for a [$20 billion solar farm](https://www.theguardian.com/environment/2019/nov/20/billionaires-invest-in-giant-australian-solar-farm-to-supply-power-to-singapore?ref=boilingcold.com.au) in the Northern Territory to export power to Singapore. Closer to Woodside's LNG plants, [Macquarie is involved](https://thewest.com.au/business/energy/macquarie-group-plugs-into-22b-asian-renewable-energy-hub-in-pilbara-ng-b88983687z?ref=boilingcold.com.au) in the $22 billion Asian Renewable Energy Hub. Coleman was also concerned about investing in a rapidly improving technology. "The efficiency of solar panels is changing at such a rapid pace that investors in that area can find themselves with marginally higher cost plants very very quickly," Coleman said. The continued driving down of the cost of solar energy, together with wind power and battery storage is [putting the role of coal gas at risk](https://about.bnef.com/blog/scale-up-of-solar-and-wind-puts-existing-coal-gas-at-risk/?ref=boilingcold.com.au), according to a [BloombergNEF report](https://about.bnef.com/blog/scale-up-of-solar-and-wind-puts-existing-coal-gas-at-risk/?ref=boilingcold.com.au) released the same day as Woodside's AGM. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/05/BNEF-Figure-2-LCOE-Report-1H-2020_WP-1.png) **Renewable energy prices plunge.** Source: BloombergNEF The gas industry has marketed itself as a natural partner for renewable energy as open-cycle gas turbines, or peakers, can quickly fire up to supply power when renewable generation drops off. But battery storage was the cheapest technology for up to two hours of peaking power in the Chinese and Japanese gas markets Woodside targets, according to BloombergNEF. Cost reductions in solar and wind energy since 2016 have mainly been driven by the increased size of projects, nit technology, according to Bloomberg NEF. The sort of projects that Woodside cannot find. The threat to gas from renewable energy is acknowledged in the [report Woodside commissioned](https://www.erm.com/public-information-sites/woodside-proposed-gas-fields-lca/?ref=boilingcold.com.au) to defend the environmental credentials of LNG. "This form of power generation is growing at an exceptional pace, supported by maturing technology and falling prices," the report said. > "All of this indicates that renewables will take an ever-greater share of power markets, leaving the various fossil sources to compete for the remaining market share." Woodside is betting its future not just on displacing coal, but that the growth in renewable energy is slower than the rate at which coal disappears. If that does not happen then gas has a diminishing market share. Woodside's report by consultant ERM shows that emissions from Browse LNG used to generate power in China will be greater than the system's average by 2027\. The analysis based on the International Energy Agency's scenario closest to the Paris Agreement shows Browse LNG will be making carbon emissions worse, not better, by the time the project is in production. Coleman acknowledged that Browse had the largest carbon footprint of any Woodside project. When asked about analysis by the Conservation Council of WA's Clean State campaign that confirms the dirty status of Browse Coleman said: "we haven't had a chance at all to critically review the assumptions in it." ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/05/carbon-intensity.jpg) ****Carbon intensity of WA LNG.** Source: Conservation Council of WA. After a barrage of questions querying Woodside's climate credentials, a shareholder took the opposite tack and asked Coleman why the company was planting trees when renewable energy would soon be a thing of the past. > "We've already been clear that our view is that climate change is real," Coleman said. > "It's one of those very difficult things because by the time you start to see the true impact of climate change …it's really too late to rectify it, > "You have to act as though it's going to happen…and that's why we're taking a very measured approach to it." Time will tell if Woodside's cautious approach to changing to its business model is prudent or the corporate equivalent of the slowly warming frog that forgot to jump out of the pot. --- *Main picture: Woodside chief executive Peter Coleman and chair Richard Goyder at the 2020 virtual AGM 30 April 2020\. Source: Screenshot of webcast.* ### Shell’s 2050 zero carbon net has a hole: a very large loophole URL: https://www.boilingcold.com.au/shells-2050-zero-carbon-net-has-a-hole-a-very-large-loophole/ Last updated: 2023-12-04T11:40:02.000Z *ANALYSIS* Shell chief executive Ben van Buerden last week announced that the $US118 billion giant had “a new ambition to be net-zero emissions on all the emissions from the manufacture of all our products” by 2050 at the latest. The next day Shell gave the [go-ahead for Arrow Energy](https://www.shell.com/media/news-and-media-releases/2020/shell-invests-in-arrow-energy-surat-gas-project.html?ref=boilingcold.com.au) that it owns with PetroChina to drill up to 2500 coal seam gas wells over 27 years to supply its QGC LNG plant in Gladstone. The two actions might seem contradictory but a closer look at Shell’s intention to be a “net-zero emissions energy business” shows that none of Arrow’s emissions will count towards Shell’s lofty new aim. Nor will the 3.5 million tonnes of greenhouse gases [emitted in the 12 months to June 2019](http://www.cleanenergyregulator.gov.au/NGER/National%20greenhouse%20and%20energy%20reporting%20data/safeguard-facility-reported-emissions/safeguard-facility-emissions-2018-19?ref=boilingcold.com.au) to produce Shell’s 25% share of the output of the Gorgon LNG project and its one-sixth share of gas from the North West Shelf project. > a. Net-zero emissions (scope 1 and 2) from production and manufacture of Shell’s energy and non-energy products. (2/5) [pic.twitter.com/dFFxG5FBFi](https://t.co/dFFxG5FBFi?ref=boilingcold.com.au) > > — Shell (@Shell) [April 16, 2020](https://twitter.com/Shell/status/1250777472091803650?ref%5Fsrc=twsrc%5Etfw&ref=boilingcold.com.au) How it works is a reminder of the two trusted axioms of “if it’s too good to be true, it probably isn’t” and “always read the fine print.” At the end of his speech, van Beurden said the “manufacture of all our products” is limited to “Shell’s own operations.” Small footnotes in the accompanying slide deck define this further as “operations under direct Shell control.” Arrow Energy is a 50/50 incorporated joint venture between Shell and PetroChina. Theoretically, it is an independent company and Shell is just a shareholder. However, no one in the oil and gas industry would believe that Arrow management makes significant decisions without Shell’s approval. ## Activists unconvinced Australasian Centre for Corporate Responsibility director of climate and environment Dan Gocher said Shell’s investment in coal seam gas was “likely just as dirty as coal when fugitive emissions are properly accounted for.” > “Shell’s masterclass in modern PR may have fooled many in the media and investment community, but long-time watchers of the Dutch giant are inherently sceptical of its environmental credentials,” Gocher said. “For Shell to not accept any responsibility for the emissions from projects it is invested in but not actually operating, is utterly dishonest. “Shell’s planned projects in Australia will limit its ability to deliver on the Paris Agreement.” One of those planned projects is the Woodside-led Browse LNG project that would emit [more greenhouse gases to produce a tonne of LNG](https://www.boilingcold.com.au/woodside-changes-browse-lng-emissions-story/) than any current Australian LNG project. Woodside has pushed the Browse schedule back due to the low oil price but if the project proceeds the emissions to produce the 27% of oil and gas Shell will take from Browse would not count against Shell’s new net-zero target. Browse is an unincorporated joint venture, the most common commercial structure for oil and gas production in Australia. In that arrangement, Shell has a veto as a unanimous vote of the joint venture partners is required for major decisions. Yet, because Woodside is the venturer chosen to manage the day to day operations emissions from Browse would not affect Shell’s new target. The Gorgon LNG project is also an unincorporated joint venture. Shell owns 25% of the reserves in the ground and 25% of the infrastructure built on Barrow Island. Every fourth LNG cargo is allotted to Shell and sold by Shell but because Chevron operates the project it is not “under direct Shell control” and Gorgon’s emissions have no impact on Shell’s new climate goal. While the people in the Gorgon control room in Perth or maintaining the plant on Barrow Island are Chevron employees, a committee of the joint venturers makes the big decisions that affect emissions. What field will be developed next? Will the maintenance budget aggressively manage leaks? Yet again, Shell could claim progress on its net-zero aim regardless of emissions from Gorgon. The North West Shelf project is also an an unincorporated joint venture and its emissions will not counted against Shell's new target. In Canada, Shell owns 40% of LNG Canada that is building an LNG plant on the Pacific Coast to transport shale gas to Asia. LNG Canada is also outside of Shell’s “direct control” despite its [chief executives rotating in and out](https://www.lngcanada.ca/news/lng-canada-ceo-andy-calitz-to-return-to-shell-new-ceo-to-join-company-july-1/?ref=boilingcold.com.au) of the position from Shell. Shell’s definition of direct control does mean emissions from the manufacture of product for other companies will affect its target when it is the project operator, such as the 32.5% of Prelude floating LNG and the 26.5% of QGC it does not own. ## Shell's 2050 goals Shell’s new target to have net-zero emissions from the “manufacture of all our products” covers direct or scope 1 emissions and emissions from the electricity it purchases, the scope 2 emissions. Before last week’s announcement, the oil and gas giant also had a goal to reduce its net carbon footprint of scope 1 and 2 emissions plus the scope 3 emissions produced by its customers burning its products. This target does include scope 1 and 2 emissions not under Shell’s direct control. Shell has increased its net carbon footprint reduction targets from 20% by 2035 and 50% by 2050 to 30% by 2035 and 65% by 2050. A Shell spokesperson said a strategy update in the third quarter would outline how the company’s investment portfolio might change to reflect its updated climate targets. > “As a company, we are conscious that to become a net-zero energy business, we need to be offering our customers a mix of energy products with a progressively lower carbon intensity,” the Shell spokesperson said. “Our portfolio will change to reflect that. “It should be noted, all final investment decisions include strict criteria around environmental impacts. All projects Shell invests in have detailed environmental management plans.” --- *Correction 23 April : Proportion of Prelude not owned by Shell is 32.5%, not 10%.* --- *Main image: mural on wall in Spain. Source:* [*Conor O'Nolan*](https://unsplash.com/@conolan?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) *on* [*Unsplash*](https://unsplash.com/@conolan?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) ### Carbon emissions hurdle for WA projects finalised by EPA URL: https://www.boilingcold.com.au/carbon-emissions-hurdle-for-wa-projects-finalised-by-epa/ Last updated: 2020-04-16T06:26:09.000Z WA’s environmental watchdog will demand to know how new large projects will contribute to net-zero carbon emissions by 2050 with a level of detail beyond the vague aspirations of the State Government and many corporations. WA Environmental Protection Authority chair Tom Hatton said [greenhouse gas guidance](http://www.epa.wa.gov.au/sites/default/files/Policies%5Fand%5FGuidance/EFG%20-%20GHG%20Emissions%20-%2010.04.2020.pdf?ref=boilingcold.com.au) released today would align the management of greenhouse gases in WA with the science that concludes net-zero emission are required by 2050 to avoid the most severe consequences. The guideline is not significantly different from a draft issued in December. However, the EPA’s stance is vastly weaker than its March 2019 proposal to recommend that all new major projects offset all their carbon emissions. The EPA dropped the plan after a week of fierce resistance led by Woodside that was pushing its Burrup Hub concept of the Browse and Scarborough LNG projects through the approvals system. The two projects have since been delayed by the low oil price. > “Over the past year, the serious consequences of greenhouse gas emissions to our State and nation have become more real to many of us, but entirely in line with our scientific understanding,” Hatton said. “The level of public interest and concern has grown, but so has the response from industry.” ![WA Environmental Protection Authority chair Tom Hatton](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/04/Tom-Hatton-reduced.jpg) EPA chair Tom Hatton. Source: EPA Companies with a significant footprint in WA that have some sort of commitment to net-zero operational emissions by 2050 include Worsley alumina operator [South 32](https://www.south32.net/who-we-are/sustainability-approach/climate-change?ref=boilingcold.com.au), LNG producer [Woodside](https://www.woodside.com.au/sustainability/climate-change?ref=boilingcold.com.au) and iron ore miner [Rio Tinto](https://www.riotinto.com/en/sustainability/climate-change?ref=boilingcold.com.au). WA’s other iron ore giant [BHP](https://www.bhp.com/environment/climate-change/?ref=boilingcold.com.au) has aimed for net-zero emissions by “the latter half of this century, consistent with the Paris Agreement.” The EPA noted the Paris Agreement but drew on the more recent and stringent advice from the Intergovernmental Panel on Climate Change’s 1.5C report that net-zero emissions were required by about 2050 to limit global warming to 1.5C. Hatton said the EPA welcomed the corporate commitments and expected to see supporting emission reduction targets when the companies proposed new projects. The McGowan Government own [policy for greenhouse gas emissions](https://www.der.wa.gov.au/images/documents/your-environment/climate-change/Greenhouse%20Gas%20Emissions%20Policy%20for%20Major%20Projects.pdf?ref=boilingcold.com.au) from major projects issued in August 2019 had nothing more than an “aspiration of net-zero by 2050.” Energy Minister Bill Johnston who launched the policy told *The West Australian* at the time that the Government had no plan to legislate the target or nominate interim reduction targets for the 30 years to 2050. ## Detailed plans will be scrutinised New projects that would emit more than the equivalent of 100,000 tonnes a year of carbon dioxide will now need to provide the EPA with a plan on how they will contribute to net-zero emissions by 2050\. The plan must include emission reductions over the life of the project and show that “all reasonable and practicable measures have been applied” to cut emissions. The EPA may also ask for a breakdown of the sources of emissions, a comparison with emissions from similar projects, scope 2 emissions such as from electricity supplied by the grid, and scope 3 emissions that include the transport and use of the product. There is widespread disagreement about whether companies should track and even take responsibility for scope 3 emissions, such as from steel made in China from Pilbara iron ore or gas burnt to generate power in Japan. Companies will be able to purchase carbon offsets for emissions that cannot be eliminated provided they are accountable and enforceable. The EPA is likely to require companies to report every five years on their progress in managing greenhouse gas emissions and may also issue its view on the companies’ efforts. The EPA role is to recommend to Environment Minister Stephen Dawson if on environmental grounds a project should go ahead and any conditions it must meet. Dawson said the EPA guidelines supplied certainty and a framework for major projects to identify creative and flexible solutions to greenhouse gas reduction “It remains the view of the WA Government that primary responsibility for reducing CO2 emissions lies with the Federal Government,” Dawson said. > “It’s important to note that the EPA produces recommendations – the State Government has final say on major projects in WA.” The EPA requirement to produce a detailed public greenhouse gas management plan will ramp up the scrutiny of projects by environmental groups and investors wary of carbon-intensive investments. Conservation Council of WA director Piers Verstegen said it was disappointing that the new guideline did not push for the immediate reduction of carbon emissions and gave more emphasis to flexibility for polluting industries. “Its real outcomes will not be known until we see how it will be applied by the EPA,” Verstegen said. “However, it is concerning that the policy does not send a clear signal to industry about what is acceptable and what is not acceptable. > “Climate change has been the subject of more scientific scrutiny than almost any subject and the science is clear, so policy should be equally clear, “The fundamental test for this policy is whether it will result in an increase in carbon emissions by allowing major new pollution sources such as the Burrup Hub LNG developments proposed by Woodside, Shell, BP and others.” A Woodside spokesperson said the company welcomed the new guideline and looked forward to working with the EPA. --- *Update: March 16 2:30pm - Woodside comment added.* --- *Image: Chimney smoke. Source: [jwvein](https://pixabay.com/users/jwvein-5584447/?utm%5Fsource=link-attribution&utm%5Fmedium=referral&utm%5Fcampaign=image&utm%5Fcontent=3705424) from [Pixabay](https://pixabay.com/?utm%5Fsource=link-attribution&utm%5Fmedium=referral&utm%5Fcampaign=image&utm%5Fcontent=3705424)* ### WA plan for batteries and solar offers cleaner long-term energy URL: https://www.boilingcold.com.au/wa-plan-for-batteries-and-solar/ Last updated: 2020-04-14T08:32:58.000Z The State Government plans to transform the South West’s rooftop solar panels from an uncontrolled danger to the power grid to the key to cleaner and cheaper energy. Every month about 2000 new rooftop solar systems are connected to South West Interconnected System. Within two years on some sunny days demand for power from the traditional large power stations could drop low enough to threaten the stability of the system that serves 1.15 million customers on the SWIS. Energy Minister Bill Johnston said there were three options to keep the system stable: restrict rooftop solar installations; fund a massive investment in Western Power’s network that would drive power prices up; or better integrate so-called distributed energy resources into the system. “The DER roadmap sets up our pathway to that third objective," Johnston told the industry on Thursday. DER includes what households and businesses do for themselves behind the meter, such as solar panels, batteries, electric cars and demand management technology for pool pumps and hot water systems. Front of meter DER includes small solar and wind farms, and grid-scale batteries. Stephen Edwell, the independent chair of the Energy Transformation Taskforce that developed the [DER roadmap](https://www.wa.gov.au/government/publications/der-roadmap?ref=boilingcold.com.au), said WA had “stellar” renewable energy resources and should lead the way in integrating DER. > Edwell said the longer-term “big play” was “how do we bring all of these resources at the household level together to the market in an efficient way to replace thermal carbon-generated power?” “But first and foremost, we've got to take the risk to the power system off the table.” Perth has more cloud-free days than any other Australian capital city, and the cost of a similar-sized rooftop solar installation has halved since 2012, according to the roadmap. Already one-third of households in WA’s South-West have a rooftop solar system and penetration could reach 50% within 10 years. While Queensland and South Australia have a higher penetration of rooftop solar than WA, they can better handle the fluctuation in solar power as their grids are connected to other states. To avoid a system meltdown in 2022, the Taskforce has focussed on inverters: the wall-mounted part of a solar system that converts direct current power from the solar panels to the alternating current used on the power grid and in homes. Modern inverters also monitor and control the performance of the system and communicate with other devices. This year inverter standards will be changed so new systems can react to problems in the system like traditional generators. By 2022 it is planned that new inverters will be able to manage the output of rooftop solar systems remotely. Some more recent already installed inverters may be able to be updated remotely to meet the new requirements. An end to the unrestricted sale of rooftop solar power in the middle of the day is likely. The ability for systems to be controlled will allow companies to become aggregators, or virtual power plants, and coordinate a large number of systems to provide power and stability to the grid. Energy Policy WA DER director Jai Thomas said aggregators would be “front and centre of the provision of services across the value chain.” The 40c a kilowatt-hour net feed-in tariff, a perk of rooftop solar ownership restricted to early adopters, will end over the 12 months from August 2020. One aggregator looking to replace these aging systems is Plico Energy, backed by Perth-based Starling Energy Group and Swiss infrastructure fund manager SUSI Partners. Plico provides and installs solar panels and batteries for a weekly fee instead of an upfront cost. Starling Energy managing director Brian Innes said he was happy that the roadmap would be technology-neutral and chase the lowest cost solutions. > "There are 78,000 houses about to come off a 40c feed-in tariff over the next year,” Innes said. > “If we help them make the right decision and invest their upgrades into technologies that are dispatchable and controllable and have batteries on them ... then we'll have a grid that is far more resilient, "We're already set up to do it, “What we've been looking for as a business is just a clear path for us to be able to negotiate on behalf of the members of Plico Energy.” The taskforce recommended grid owner Western Power identify where battery storage could help the grid work better and expected “a variety of third-party models will emerge to provide required services to Western Power.” Innes said he thought the private sector would deliver the services most cost-effectively. Energy Policy WA, Synergy and Western Power will conduct an “orchestration trial” this year to test how well behind the meter DER can be centrally controlled. The taskforce concluded that the current flat electricity tariff was increasingly unsuitable as more DER was installed, but the pandemic has delayed a planned trial of new tariffs. New tariffs needed to encourage energy use to be moved to the middle of the day, reward investments like household batteries that benefit the entire system and ensure others are not subsidising richer consumers who can afford to install DER. The Energy Transformation Taskforce will deliver to the Government a whole of system plan mid-year that models long term scenarios to identify the best investments in the power system. --- *Main Picture: Graphic. Source: Energy Transformation Taskforce* ### Shell tells Prelude LNG workers to isolate in their own time URL: https://www.boilingcold.com.au/shell-tells-prelude-lng-workers-to-isolate-in-their-own-time/ Last updated: 2020-04-08T05:04:01.000Z Shell wants workers to isolate themselves from their own families in their own home and in their own time for two weeks before arriving on its Prelude floating LNG facility. Workers will lose half of their four weeks onshore to the enforced isolation. The "self-quarantine of individual" is one option for Prelude workers contained in a Shell procedure issued last week and seen by *Boiling Cold*. Workers must not have face-to-face contact closer than 1.5 m with people they share a home with for 14 days before starting work. No visitors are allowed for any household member in that time. The worker must not share eating and drinking items, linen or towels with other people. The procedure says it is "aligning with [guidance from the WA Department of Health](https://healthywa.wa.gov.au/~/media/Files/Corporate/general%20documents/Infectious%20diseases/PDF/Coronavirus/COVID-19%20self-quarantine%20information%20for%20close%20contacts%20and%20returned%20travellers.pdf?ref=boilingcold.com.au)" but, unlike the Government, fails to mention what is required for the isolation to work. "You should stay in an area of the home away from others (preferably with your own bathroom, living and sleeping area) to protect other household members," according to the Health Department. If close contact occurs the Shell procedure requires employees to "immediately self-declare to your line manager, and the self-isolation period is reset." A Shell spokesperson said an extension of self-isolation, and hence a delay in starting work on the Prelude, would not affect the worker's income. "They continue to be paid their standard salary and wages," a Shell spokesperson said. Shell offered two alternatives to the problematic task of avoiding being close to anyone else in a house for 336 hours. If a worker can convince the rest of the family not to leave the house for two weeks, then no one needs to keep their distance. The procedure does not address how shopping is done. Alternatively, Shell will house the worker in a Perth hotel for the two weeks of isolation if "you and your family decide you cannot fulfil the above self-quarantine options." The WA Government requires all FIFO workers from outside WA to undergo 14 days of quarantine at company expense when they arrive in the State. > The Shell spokesperson said the self-quarantine for WA-based workers before a shift was "an additional precautionary measure to best protect the health and safety of workers on our facilities". *Boiling Cold* understands Shell has moved many of its east-coast based workers to WA to avoid ongoing quarantine periods. Any Prelude workers that do come into WA will undergo the two weeks of isolation demanded by the WA Government. Daniel Walton, the spokesperson for the Offshore Alliance of two unions that cover offshore workers blasted Shell's new arrangements. "Shell's proposal, that being quarantined in isolation for two weeks should be considered unpaid leave, is insane," Walton said. "What's arguably even worse is management's suggestion that workers stay in WA for their two week off swing, preventing them from reconnecting with their families." "Asking people to be away from their families for a six month stretch is inhumane." Offshore operators must balance longer work swings to reduce costs and COVID-19 transmission risk with the mental health dangers of self-isolation and more time away from home. The offshore safety regulator NOPSEMA yesterday [warned operators to properly assess the risks](https://www.boilingcold.com.au/offshore-oil-and-gas-warned-long-rosters-affect-mental-health/) of roster changes. "Psychosocial risks associated with extended rosters include onset or exacerbation of psychological injury such as depression, anxiety, and suicidal ideation," the alert said. Boiling Cold understands that the regular Prelude roster of three weeks on/four weeks off followed by three weeks on/five weeks off has changed to four weeks on/four weeks off. The enforced quarantine means Prelude workers now have two weeks out of eight, or 25% of their time, free of company requirements. It had been more than half. Woodside has [adopted a roster](https://www.boilingcold.com.au/woodside-dumps-12-week-work-roster/) of two weeks of isolation, four weeks work and two weeks at home to manage COVID-19 risk. It is effectively the same as Prelude's hotel option. Inpex, that operates two offshore facilities just 20km from Prelude for its Ichthys LNG project, now requires its workers to undergo [two weeks of isolation in a hotel](https://www.boilingcold.com.au/new-virus-roster-inpex-isolation/) followed by three weeks offshore before they return home for four weeks. The deal that was welcomed by unions gives workers 44% of their time to themselves. --- *Update 1:00 PM 8 April 2020: Union comments added.* --- *Main Picture: Prelude floating LNG facility leaving South Korea. Source: Shell.* ### Offshore oil and gas warned long rosters affect mental health URL: https://www.boilingcold.com.au/offshore-oil-and-gas-warned-long-rosters-affect-mental-health/ Last updated: 2020-04-07T08:29:48.000Z The Australian offshore oil and gas industry has been warned about imposing long rosters as they reorganise their operations to reduce the risk from COVID-19. NOPSEMA, the offshore oil and gas safety regulator, [today issued an alert](https://www.nopsema.gov.au/resources/safety-alerts/covid-19-roster-changes/?ref=boilingcold.com.au) to operators to reconsider the risk to mental health from long swings away from home. "Research suggests that fly-in fly-out workers may experience higher rates of depression, anxiety, and stress symptoms than that of the general population," the alert said. The regulator said the general population is likely to be suffering heightened anxiety due to COVID-19 so extended rosters could "represent a greater psychosocial risk than would otherwise be the case" for FIFO workers. NOPSEMA said it had received a range of concerns about operators extending offshore work when they added quarantine periods to rosters. Concerns included insufficient consultation with workers and a lack of consideration of the effects on worker fatigue and the mental health of workers and their families. "Psychosocial risks associated with extended rosters include onset or exacerbation of psychological injury such as depression, anxiety, and suicidal ideation." "Operators should include evidence-based information about the psychological health of their offshore workforce, and should not assume predominantly sound levels of psychological health." The alert also said fatigue from longer rosters increased the chance of errors that could cause accidents with multiple fatalities. In late [March Inpex introduced a roster](https://www.boilingcold.com.au/new-virus-roster-inpex-isolation/) of two weeks in isolation, three weeks offshore and then four weeks at home for offshore workers on the Ichthys LNG project. At the same time, Woodside issued a roster option to workers of [two weeks in quarantine followed by 12 weeks offshore](https://www.boilingcold.com.au/woodside-offers-workers-big-bucks-as-compam-s/). A worker who completed the swing would receive a bonus of up to $80,000. Australian Manufacturing Workers' Union WA state secretary Steve McCartney said [14 weeks away from home could increase suicide rates](https://www.perthnow.com.au/news/coronavirus/coronavirus-crisis-fifo-workers-face-months-away-as-woodside-confirms-it-is-looking-at-14-week-rosters-ng-b881504306z?ref=boilingcold.com.au). "The last time we saw 14-week swings in WA was in the 70s," McCartney said. "I worked those shifts and speak from personal experience. They're no good for family life and no good for mental health." Woodside quickly dropped the option and [introduced a shorter roster](https://files.woodside/docs/default-source/news-and-media-documents/speeches/woodside-will-do-its-bit-during-crisis.pdf?sfvrsn=41caf26%5F1&ref=boilingcold.com.au) of two weeks of quarantine, four weeks work and then two weeks at home. --- *Main picture: Wheatstone offshore platform. Source: Chevron Australia Pty Ltd* ### Tougher policing of offshore oil and gas decommissioning URL: https://www.boilingcold.com.au/tougher-policing-of-offshore-oil-gas-decommissioning/ Last updated: 2020-04-07T08:42:51.000Z Offshore oil and gas regulator NOPSEMA will have a heightened focus on owners of offshore titles that do not decommission facilities when production ends, according to a draft policy issued today. The [draft policy](https://www.nopsema.gov.au/news-and-publications/latest-news/news-announcement/2020/04/07/open-for-comment-nopsema-policy-on-the-requirement-to-remove-equipment-and-property/?ref=boilingcold.com.au) that will apply to vessels, platforms, wells and subsea equipment may mean operators start to spend time and money on an unprofitable activity they often delay as long as possible. “NOPSEMA expects facilities to be designed, constructed, inspected and maintained such that they can be removed in a manner which reduces risks to health and safety to a level that is as low as reasonably practicable,” the policy states. NOPSEMA’s default expectation is that all equipment is removed. The regulator may allow some equipment to remain in place when that option “is expected to have equal or better environmental outcomes when compared to removal of property.” NOPSEMA will request operators of fields no longer in production that have not removed all equipment and made wells safe by plugging and abandoning them to submit a plan to complete the work. If the requests - that are likely to create some work in the beleaguered oil and gas sector - are not met “NOPSEMA may escalate to enforcement action.” *Boiling Cold* understands that operators of fields in production will be required to document how that will carry out decommissioning when the environmental plan for the field next undergoes a five-yearly review by NOPSEMA. More detail will be expected in plans for fields closer to the end of production. NOPSEMA will require a well operations management plan for every well until it is permanently plugged and abandoned. The WOMP “must also contain a justified timetable for carrying out and completing the well activities.” The justification may be difficult for operators of many wells that have long since stopped production but not yet plugged and abandoned to delay the considerable expense. ## Canavan's late move NOPSEMA’s new guidance was produced in response to revised expectations of the regulator issued in October 2019 by then Minister for Resources Matt Canavan. Canavan asked NOPSEMA to “give heightened focus to…obligations in relation to maintenance and removal of property” and only accept alternative arrangements to decommission a field when it was justified. Canavan’s issued his instructions a month after the owner of the Northern Endeavour oil production vessel in the Timor Sea entered voluntary administration. The company, Northern Oil and Gas Australia, later went into liquidation leaving taxpayers with a [decommissioning bill that could reach $230 million](https://www.thesaturdaypaper.com.au/news/resources/2020/02/15/decommissioning-oil-vessel-could-cost-taxpayers-230m/15816852009400?ref=boilingcold.com.au). Most offshore fields are operated by the company with the biggest share of the joint venture awarded the title to the field. The arrangement for the Northern Endeavour was different. The title and facilities were owned by NOGA but operated under contract by Upstream Production Solutions. The new policy makes clear the titleholders are responsible for decommissioning, not the contracted operator. Before October 2019 Canavan’s official expectations of the regulator had not mentioned decommissioning or removal of property. The new NOPSEMA policy does not cover whether operators have the financial resources to perform decommissioning. That issue, made prominent by the Northern Endeavour, is included in the Department of Resources [Offshore Petroleum Decommissioning Guideline](https://www.nopta.gov.au/%5Fdocuments/guidelines/decommissioning-guideline.pdf?ref=boilingcold.com.au). The department is [reviewing how decommissioning is managed](https://www.industry.gov.au/data-and-publications/offshore-oil-and-gas-decommissioning-framework-review?ref=boilingcold.com.au) and plans to issue a new policy in 2020 and implement it in the following years. NOPSEMA will accept feedback on the draft policy until 9 June 2020. The WA Government also has concerns about the performance of the oil and gas industry in decommissioning onshore wells and other equipment. In November the Department of Mines, Industry Regulation and Safety [posted on its website](https://www.dmp.wa.gov.au/News/Decommissioning-rehabilitation-26221.aspx?ref=boilingcold.com.au) that it was "focusing on successful decommissioning, rehabilitation and closure with more petroleum projects nearing the end of field life." DMIRS said it wanted decommissioning plans included in approvals for new projects and to be updated through the project life. "For example, areas no longer required for use are progressively rehabilitated," DMIRS said. *Boiling Cold* understands DMIRS has not changed the regulatory arrangements for onshore decommissioning. --- *Update: 7 April 2020, 4:45PM. WA Government perspective added.* --- *Main Picture: NOPSEMA chief executive Stuart Smith. Source: NOPSEMA* ### Gas pipeline tariffs sparks war of words URL: https://www.boilingcold.com.au/gas-pipeline-tariffs-spark-war-of-words/ Last updated: 2020-04-06T10:14:59.000Z Competing views on WA gas demand will determine if the Dampier to Bunbury natural gas pipeline can charge an extra $194 million to transport gas from the Pilbara for the next five years. The Australian Gas Infrastructure Group that owns the DBNGP is arguing that the assumed end of the economic life of the 1600km-long pipeline be brought forward from 2095 to 2059. AGIG is projecting that WA gas demand will drop due to increasingly affordable renewable energy and the WA Government’s aspiration for net-zero carbon emissions by 2050. AGIG put its argument the WA Economic Regulation Authority in January. The ERA is in the processing of setting the tariffs for the natural monopoly for the next five years. AGIG forecasts that gas demand for that period for will be 16% less than the preceding five years. > The [ERA said AGIG is “seeking to recover capital faster](https://www.erawa.com.au/cproot/21105/2/DBP---DBNGP---AA5---Issues-Paper---Final-Version.PDF?ref=boilingcold.com.au) and reduce its exposure to stranded-asset risk in the event of a decline in the domestic market for natural gas.” The shorter life together with a reallocation of some of the pipeline’s $3.33 billion regulated capital base to different deprecation rates would result in a tariff increase of $194 million during the five years. Hong Kong’s CKI bought AGIG, then called DUET Group, in 2017 for $7.4 billion. In a [submission to the ERA](https://www.erawa.com.au/cproot/21142/2/Gas-Trading-Australia.pdf?ref=boilingcold.com.au) released yesterday Perth-based Gas Trading raised the question why CKI would decide to purchase DUET, whose main asset was the DBNGP, and a few years later argue it had lost significant value. Gas Trading described modelling of the WA gas market by ACIL Allen for AGIG as “woefully out of step” with the current market. The company said the three price scenarios used to justify a shorter economic life and hence a higher tariff for the pipeline were all well above current prices. > “In Gas Trading’s view, DBP tended to use scenarios that placed natural gas at a significant cost disadvantage to drive AGIG’s corporate agenda,” the submission stated. Gas Trading said gas in WA was trading near $2 a gigajoule on the spot market and prices for some long-term contracts were below $5 a gigajoule. The trader argued that low prices could increase gas consumption in WA. Citic Pacific Mining, operator of the Sino Iron ore project, in its submission to the ERA [asked the regulator to consider if AGIG’s demand projections were realistic](https://www.erawa.com.au/cproot/21141/2/CITIC-Pacific.pdf?ref=boilingcold.com.au). The miner said WA gas production capacity that was double current consumption, low gas prices compared to the east coast, ample land for businesses to relocate, new LNG projects in development and mining projects looking to switch from diesel to gas all pointed to an increase in gas demand. The Sino operation consumed an average of almost 56 terajoules of gas a day in 2019, according to the AEMO gas bulletin board. The gas feeds a 480-megawatt gas-fired combined cycle power station for the energy-intensive magnetite production process. Citic also queried the rate of return AGIG would earn from the DBNGP. “AGIG is a smart, sophisticated business and continues to deliver a return on investment greater than that generally accepted by pipeline operators around the world,” Citic said. In an unusually personal approach to a regulator, the author of the Citic submission compared his own home loan rate of 2.8% with the 3.61% rate of return in the AGIG submission. --- *Main Picture: Sign over route of the DBNGP Source: DBP* ### WA reforms power grids north and south URL: https://www.boilingcold.com.au/wa-reforms-power-grids-north-and-south/ Last updated: 2020-04-05T21:59:59.000Z The WA Government has freed up access to power for Pilbara resource projects and supported the rollout of batteries and stand-alone power systems in the South West. The Electricity Industry Amendment Bill passed last week has opened up access to the Pilbara power grid, the North West Interconnected System, and will give companies a greater choice of power supply. Energy Minister Bill Johnston said Pilbara energy reforms had been talked about for 30 years. In 2015 then energy minister Mike Nahan told the leading players, State-owned Horizon Power and Alinta Energy, to [negotiate with each other](https://thewest.com.au/news/wa/horizon-alinta-seek-access-deal-ng-ya-131060?ref=boilingcold.com.au) to achieve an integrated NWIS. Horizon and Alinta [disagreed about who would be liable](https://thewest.com.au/business/infrastructure/risk-kills-alinta-pitch-to-access-horizons-nw-power-ng-b88563391z?ref=boilingcold.com.au) for damages if the power supplied failed and the talks collapsed in 2017. Under the new legislation, a company wanting to start a resource project in the Pilbara can apply for access to the NWIS, most of which is owned by Horizon Power. For access to be granted, it must promote competition, be uneconomic to duplicate the current network and not contrary to the public interest. "The reforms will reduce the regulatory burden placed on Pilbara electricity owners and provide greater certainty to access seekers wishing to invest," Johnston said. Perth law firm Lavan said [only 30 to 40 customers](https://www.lavan.com.au/advice/corporate%5Fservices/western-australia-positioned-for-a-post-covid-19-electricity-sector-boom?ref=boilingcold.com.au) would consume more than the 1200 megawatt-hours a year contestability threshold. "Over time, as the market matures, the WA Government has flagged that the contestability threshold will be reviewed," Lavan said. The price to access the NWIS will include a 10c a kilowatt-hour charge that effectively compensates Horizon Power for the effect of competition on its fixed generation costs. "Third party access obviously means the prospect of retail competition in the Pilbara and the WA Government considers that this will put downward pressure on electricity prices in the Pilbara, assisting in the establishment of new projects," Lavan said. ## Western Power freed up ![Western Power standalone power system](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/04/WP-SPS.jpg) **Standalone power system.** Source: Western Power The Amendment Bill also allows Western Power, the State-owned monopoly transmission company, to replace network connections in rural WA with stand-alone power systems and include battery storage systems on its network. The utility has installed a number of stand-alone power systems - that usually combine solar panels, a diesel generator and battery storage – but the new law removes regulatory hurdles for a wider rollout. Western Power manager of stand-alone power systems Margot Hammond said regional customers serviced by long stretches of power lines at the mercy of the weather, trees, lightning and bushfires had more outages and power quality problems than urban users. Hammond said more than half of Western Power's network serviced less than 3% of its customers. "Our modelling shows that we can install thousands of SPS units over the next 30 years, avoiding hundreds of millions of dollars in replacing poles and wires." Lavan said the reform would provide incentives for low carbon technology and, in many cases, increase the security and reliability of the power supply. Western Power now also has the authority to install large-scale batteries that could help stabilise its network that is struggling to cope with a surge in the amount of intermittent rooftop solar. --- *Main Picture: Transmission Tower. Source: [Lukas Bato](https://unsplash.com/@lks%5Fbt?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) on [Unsplash](https://unsplash.com/s/photos/power-transmission?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText)* ### Shell's Prelude LNG to keep flaring gas during shutdown URL: https://www.boilingcold.com.au/shells-prelude-lng-to-keep-flaring-gas-during-shutdown/ Last updated: 2020-04-06T00:23:21.000Z The Prelude floating LNG facility will continue to burn, or flare, unwanted gas during an extended shutdown of many months adding to its incredibly high initial carbon footprint. Production from Shell's 488m-long showpiece off the Kimberley coast shut down in February and is [not expected to recommence until the third quarter of 2020](https://www.boilingcold.com.au/shell-extends-prelude-lng-shutdown-and-delays-crux-expansion/). *Boiling Cold* understands that Shell has shut-in most of the subsea wells to reduce gas flow, but the Prelude is still receiving more gas than it can consume. The Prelude emitted [2.32 million tonnes of greenhouse gases](https://www.boilingcold.com.au/shells-prelude-lng-carbon-disaster/) in the 12 months to June 2019 for just one shipment of LNG. The Prelude first received gas from its subsea wells in December 2019 but has been [powered by gas from as early as June 2018](https://www.shell.com.au/about-us/projects-and-locations/prelude-flng/prelude-e-news/hydrocarbons-introduced-to-prelude-for-the-first-time.html?ref=boilingcold.com.au) when it received a load of LNG. *Boiling Cold* asked Shell why the Prelude could not be powered by diesel during the shutdown, as it was before June 2018, to stop flaring. A response was not received. LNG plants are expected to flare more gas than average in the early stages of operation. Still, new facilities generally do not operate for as long as Prelude while producing so little. The excess gas is burnt safely from a flare tower. The carbon dioxide released has a much lower greenhouse gas effect than unburnt methane but reducing flaring as much as possible is regarded as oil and gas industry best practice. The LNG industry's case that its product is a net benefit to climate change rests the emissions saved by consumers burning gas instead of the dirtier fossil fuel coal exceeding the significant carbon emissions from LNG production. A Shell spokesperson said the amount of gas flared each month was now 60% less than when the Prelude commenced operations. "We are committed to further improving performance over time," the spokesperson said. "Shell's policies aim to minimise all types of flaring, managed through annually updated greenhouse gas and energy management plans." --- *Main Picture: Prelude floating LNG facility off the Kimberley coast. Source: Shell* ### Woodside gets environmental OK for Scarborough LNG URL: https://www.boilingcold.com.au/woodsides-scarborough-lng/ Last updated: 2020-04-02T03:25:22.000Z Woodside's proposal to develop the Scarborough gas field for LNG was today accepted with gushing praise by the environment regulator NOPSEMA, less than a week after go-ahead for the $US11.4 billion project was delayed to 2021. Greenhouse gas emissions from the Scarborough offshore facility of about 0.5 million tonnes of CO2 equivalent a year form a "small fraction of emissions relative to the overall project" according to Woodside's [offshore project proposal](https://www.nopsema.gov.au/environmental-management/offshore-project-proposals/offshore-project-proposals-public-comment/scarborough/?ref=boilingcold.com.au) lodged in June 2019. Emissions from an additional LNG train to be built at Pluto to process gas from Scarborough will be up to 2.1 million tonnes of CO2e a year, according to the proposal. The emissions from Pluto are not within the scope of the NOPSEMA approval. NOPSEMA's [announcement](https://www.nopsema.gov.au/news-and-publications/latest-news/news-announcement/2020/04/02/acceptance-of-woodside-scarborough-project/?ref=boilingcold.com.au) was effusive in its praise for the environmental benefits of Woodside's project and used language some may find unusual for an independent regulator. > "In recognising the need to transition to a lower-carbon future, Woodside's proposal positions Scarborough gas to play a key role in the future global energy mix," according to NOPSEMA. "Woodside will be contributing to global efforts to reduce global greenhouse gas levels by actively displacing more carbon-intensive power generation with gas." NOPSEMA will issue the approved offshore project proposal and the reasons for its decision within 10 days. There will be "provision for monitoring and adaptation to changes arising as a result of uncertainty in the context of global climate change," according to the NOPSEMA statement. Woodside chief executive Peter Coleman said the acceptance was a significant step forward for the Scarborough. "Although we are now facing challenging market conditions due to the impact of COVID-19 and volatile oil prices, Scarborough is a world-class resource which we plan to develop at a globally competitive cost through our proposed Burrup Hub," Coleman said. "Woodside is continuing work to ensure we have all the necessary regulatory approvals and commercial agreements in place to ensure a final investment decision can be taken for Scarborough in 2021." The Scarborough field contains an estimated dry gas contingent resource (2C) dry of 11.1 trillion cubic feet. It operated by Woodside and BHP owns 26.5%. --- *Main Picture: Schematic of Woodside's Burrup Hub plan consisting of the Scarborough and Browse LNG projects. Source: Woodside Energy Limited.* ### Shell shutters Prelude LNG and delays Crux expansion URL: https://www.boilingcold.com.au/shell-extends-prelude-lng-shutdown-and-delays-crux-expansion/ Last updated: 2020-04-02T01:59:43.000Z Shell has extended the shutdown of its beleaguered Prelude floating LNG facility and postponed the Crux development to supply more gas to the giant investment. The moves relayed to *Boiling Cold* by a number of industry sources were confirmed by Shell this morning "Work continues to restore full operations on Prelude," a Shell spokesperson said. "Our focus remains on a facility that is safe, robust and reliable, and we are working to restart production with that in mind. > "We won't speculate on timeframes." *Boiling Cold* understands the shutdown will extend at least into the third quarter of 2020. The 488m-long giant was thrown into [disarray in early February](https://www.energynewsbulletin.net/workforce/news/1380380/prelude-shutdown%C2%A0?ref=boilingcold.com.au) when ongoing power generation problems forced multiple musters, and the backup diesel-powered system failed. Toilets stopped working and a fleet of helicopters quickly reduced crew numbers. It has not exported LNG, LPG or condensate since. In January Shell suffered the humiliation of being directed by the offshore regulator NOPSEMA to fix basic safety procedures such as tagging and isolating equipment before recommencing some maintenance activities on its high technology showpiece. NOPSEMA has not yet lifted the direction. The extended shutdown will help Shell reach its [goal to cut its 2020 operating expenses](https://www.shell.com/media/news-and-media-releases/2020/shell-acts-to-reinforce-business-resilience-and-financial-strength.html?ref=boilingcold.com.au) to $US3 to $US4 billion less than 2019 in response to the collapse in prices and demand for oil and LNG. ## Crux backfill gas pushed back A delay to the sanction of the Crux project planned for 2020 will contribute to the Anglo-Dutch company's target to slash capital expenditure by $US5 billion this year. "Due to the global economic downturn, including the sharp drop in oil price, declining markets and uncertainties with regard to the COVID-19 pandemic, Shell Australia and its joint venture partners, SGH Energy and Osaka Gas, have decided to delay a final investment decision on the Crux Project that was planned for 2020," the Shell spokesperson said. "We remain committed to the development of Crux. When evaluating projects, we will continue take a long-term view, taking into account the fundamentals of supply and demand." The Crux project will supply gas to the Prelude facility 165km away and ensure continued production from the enormous investment. It is likely that the low level of production Prelude achieved before the February shutdown has pushed back the need for additional gas. Crux joins Woodside's Scarborough and Browse projects and the Santos-operated Barossa project on the growing list of Australian LNG projects delayed in the last few weeks. In February 2019 Wood and KBR started the front-end engineering design for a not normally platform manned in 165m of water with a design life of 20 years and five production wells. Nearby fields could be tied into the platform when production for the Crux field declined. Progressing a project amidst the uncertainty created by the COVID-19 pandemic would have risked significant delays from disruptions to the manufacture and transport of equipment and the movement of international specialists. Next year Shell may also have a clearer outlook on oil and LNG prices and a better understanding of when gas from the Prelude field will begin to decline. The delay to Crux is a blow to Kerry Stokes' Seven Group that [reportedly](https://www.theaustralian.com.au/business/dataroom/bidders-line-up-to-buy-sevens-stake-in-crux-gas-field/news-story/870e654f9066bc017a5eebba3c9be071?ref=boilingcold.com.au) wanted to sell it 15% equity in the field. Japanese Inpex that owns 17.5% of Prelude may be a net winner from Shell putting Prelude's production on hold. Inpex also operates and owns 66% of the Ichthys project about 20km from Prelude. The two gas fields are connected and Ichthys may be able to gain a greater share of the gas by producing while Prelude is idle. The situation was [described in 2017](https://www.afr.com/companies/infrastructure/inpex-shell-in-race-for-browse-lng-startup-20170127-gtznh1?ref=boilingcold.com.au) as "whoever sucks gas first, will suck most" by then Wood Mackenzie analyst Saul Kavonic. --- *Main Picture: Shell's Prelude floating LNG facility. Source: Shell* ### Analysts agree 2020 tough for LNG sellers URL: https://www.boilingcold.com.au/analysts-agree-2020-tough-for-lng-sellers/ Last updated: 2020-04-01T07:28:06.000Z LNG producers in 2020 will be crunched by booming US production, stalled or falling demand, and limited opportunity to offload gas to Europe; is the gloomy view from both Wood Mackenzie and Bloomberg. Bloomberg New Energy Finance head of commodities Ashish Sethia yesterday said the increasingly globalised LNG market had suffered three shocks. "It was clear in advance that a big increase in US LNG supply was going to hit the global LNG market this (northern) summer,” Sethia said. Europe that was often a major swing buyer the LNG market had the equivalent 6.6 million tonnes of LNG of additional gas stored than 12 months ago after an extremely mild winter last year, according to BNEF LNG analyst Fauziah Marzuki. "This is a big factor in reducing the flexibility to absorb the supply glut,” Sethia said. And, as with all aspects of the economy, the COVID-19 pandemic had upended demand forecasts. Bloomberg forecast LNG supply will increase by more than 6 million tonnes over the northern summer while demand drops by about 3 million tonnes. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/04/LNG-market-chart-BNEF.png) **2020 LNG demand dips as supply soars.** Source: Bloomberg New Energy Finance "It's going to be a painful year for suppliers," Marzuki said. Wood Mackenzie research director Robert Sims today said a turn down in gas production from the US Gulf Coast was the only likely action that could balance the market. > “At a lower $US35 per barrel oil price, we could expect about 2 billion cubic feet per day of US gas production to be impacted by middle of next year,” Sims said. Gas associated with the production of oil from America’s shale fields may continue to flow even if oil production is curtailed as remaining producers will sell gas they had been flaring, Marzuki said. Reductions in on-site workforces to reduce the risk from COVID-19 has closed off one option t deal with the oversupply of LNG. "If the suppliers cannot conduct maintenance during the summer due to health and safety reasons this opportunity to curb supply at a time when prices are low isn't there anymore,” Marzuki said. Wood Mackenzie predicted more power generation could switch from coal to gas in Japan and South Korea if the oil price that most their LNG imports are linked to remained low, in one piece of positive news for LNG producers. “We expect Japan’s LNG demand to grow 5.1% to 81 million tonnes in 2020, compared to last year. At the same time, South Korea’s LNG demand is expected to rise 7.7% to 42 million tonnes, as more LNG displaces coal in the power sector of both countries,” Sims said. --- *Main picture: First cargo departs Wheatstone LNG project in 2017\. Source: Chevron Australia Pty Ltd* ### Woodside dumps 12-week work roster URL: https://www.boilingcold.com.au/woodside-dumps-12-week-work-roster/ Last updated: 2020-03-31T04:47:03.000Z Woodside has dropped plans for a 12-week work roster that were blasted by unions as "catastrophically unsafe". In response to COVID-19 Woodside will move its onshore and offshore workers to a temporary roster of two weeks of isolation, four weeks work and then two weeks at home. This roster is "still the worst in the industry" according to Daniel Walton, the spokesperson for the Offshore Alliance of two unions that covers offshore workers. The Alliance had earlier described the longer roster of two weeks of isolation followed by 12 weeks of work as "catastrophically unsafe". "Management should be hugely embarrassed they were able to even suggest a 14 week-on roster with a straight face," Walton said. "But if the idea was to make the new proposal look good by comparison, it's fooled no one." Japanese company Inpex, that operates two facilities off the Kimberley coast for the Ichthys LNG project will implement a [roster of two weeks in isolation, three weeks offshore and then four weeks at home](https://www.boilingcold.com.au/new-virus-roster-inpex-isolation/). Some workers will work a 2/2/2 roster. Woodside's now-dumped longer roster option had included a [bonus of at least $50,000](https://www.boilingcold.com.au/woodside-offers-workers-big-bucks-as-compam-s/) for completing the three months of work and was later changed to have 10 weeks at home. The Offshore Alliance had called for the offshore safety regulator NOPSEMA to reject both roster options. "How much is a suicide, marriage bust-up or depression worth on a Woodside offshore facility?" the Offshore Alliance asked on its Facebook page. Most Woodside offshore workers are on platforms that provide gas to the North West Shelf project near Karratha that is a major supplier of gas to the WA market. Woodside chief executive Peter Coleman said he was proud that the Woodside workforce agreed to temporary changes to how they work. Woodside has also offered accommodation for interstate employees and their families affected by the introduction of a ["hard border" by WA](https://www.abc.net.au/news/2020-03-30/wa-coronavirus-hard-boarder-closure-to-eastern-states/12101852?ref=boilingcold.com.au) that will only allow freight, essential workers and people travelling for compassionate reasons to travel from the eastern states. They will be put up in now vacant hotels, motels and short-stay accommodation. --- Update 12:45 PM March 31: New Offshore Alliance comments added. --- Main Picture: Woodside Headquarters in Perth. Source: Woodside Energy Limited ### Woodside offers workers big bucks as inspiration against exhaustion URL: https://www.boilingcold.com.au/woodside-offers-workers-big-bucks-as-compam-s/ Last updated: 2020-03-30T08:48:05.000Z Woodside has proposed offering offshore workers a bonus of at least $50,000 to work 12-weeks straight as it rejigs its rosters to reduce the risk to production from a COVID-19 outbreak. The long stretch is part of a roster option seen by *Boiling Cold* that Woodside has sent to some direct employees and contractors. The 12 weeks of work is preceded by two weeks in quarantine. A Woodside spokesperson said a 10-week break would follow the long stint, not the four weeks described in the document. The bonuses for each month worked offshore are $10,000, $30,000 and $50,000\. It is not clear if after three months a worker would receive $50,000 or a total of $80,000. Onshore workers would receive slightly smaller bonuses of $10,000, $20,000 and $30,000 for each month. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/03/Woodside-roster-pic-metadata-redacted.png) **Roster options given to some Woodside workers** Another roster option has two weeks of isolation followed by four weeks of work and then two weeks home with no monthly bonuses. Both rosters include a $3000 a month family support allowance, psychological preparation, counselling and release from the roster if a family member is terminally ill. The Offshore Alliance of unions that represent offshore workers called for the offshore safety regulator NOPSEMA to reject both roster options. > "How much is a suicide, marriage bust-up or depression worth on a Woodside offshore facility?" the Offshore Alliance asked on its Facebook page. A Woodside spokesperson said the proposed rosters are temporary and subject to ongoing review. "We are committed to ensuring the health and safety of our workforce and communities, reducing their exposure to risk, and guaranteeing ongoing essential gas supplies to WA," the spokesperson said. ## NOPSEMA the offshore safety cop Offshore facilities run under a safety case, a set of safety rules developed by the operator of each offshore facility and approved by NOPSEMA. If changes to a facility or its working practices fall outside what the safety case covers, operators are obliged to revise the document and submit it to NOPSEMA for approval. The Offshore Alliance said if NOPSEMA approved Woodside's application to vary its safety cases "it will be clear to hydrocarbon workers that there is, in fact, a price on our health and safety." A NOPSEMA spokesperson said the regulator had the power to step in and assess the suitability of a safety case if significant changes are implemented without a revision. NOPSEMA today announced that during the COVID-19 outbreak it would focus on supporting operators efforts to operate in a way that is safe for workers. [Facilities that supply energy to Australia would be given priority.](https://www.nopsema.gov.au/assets/Policies/A722953.pdf?ref=boilingcold.com.au) "The COVID-19 pandemic presents major challenges to the offshore energy industry in terms of protecting offshore worker health and ensuring the energy security needs of the Australian community," The NOPSEMA policy stated. Operators are "expected to make prudent decisions regarding the continued conduct of activities." The Woodside-operated North West Shelf project is a major supplier of gas to Western Australia. Woodside is talking to contractors about implementing the rosters and contractors will consult with their employees this week to put a suitable roster in place, according to Woodside. The acrimony of the unions to Woodside is in contrast to the welcome given to the two weeks isolation / two weeks work / two weeks home [roster Inpex will use](https://www.boilingcold.com.au/new-virus-roster-inpex-isolation/) on its two Ichthys offshore facilities. Inpex workers not put on the roster due to reduced numbers offshore to minimise COVID-19 risk will receive half-pay. Woodside, like most resource companies, is also grappling with the management of eastern states-based FIFO workers. *Boiling Cold* understands that about 200 Woodside workers live outside WA, and the company is considering moving some of them to WA temporarily. Those relocations may have to happen in the next few days after [Premier Mark McGowan today announced a hard border](https://www.abc.net.au/news/2020-03-30/wa-coronavirus-hard-boarder-closure-to-eastern-states/12101852?ref=boilingcold.com.au) with other states that could be in place as early as this weekend. Only freight, essential workers and people travelling on compassionate grounds allowed to head west. --- *Main Picture: North Rankin complex. Source: Woodside Energy Limited* ### New virus roster at Inpex: isolation, offshore, home URL: https://www.boilingcold.com.au/new-virus-roster-inpex-isolation/ Last updated: 2020-03-29T08:33:20.000Z Workers on the Ichthys offshore facilities will be put in isolation for two weeks before going to work on the project's facilities off the Kimberley coast under a deal struck between operator Inpex and unions. *Boiling Cold* understands most workers will have two weeks in isolation, three weeks offshore and then four weeks at home. Some workers will work a 2/2/2/ roster. It is understood the workers will be individually isolated in hotel rooms in Perth or Broome while paid for 7.5 hours a day. Offshore Alliance spokesperson Daniel Walton said the deal was an outstanding example of unions and employers working together in good faith. "From the moment this crisis hit, Inpex management's approach has shown they understand the responsibility they have as employers and as Australian corporate citizens," Walton said. The regular roster is three 84-hour weeks offshore followed by three weeks at home. *Boiling Cold* understands that most workers will not be required while offshore activities are reduced to minimise the risk from COVID-19\. They will be paid for 21 hours a week, half the average pay over the regular six-week cycle. *Boiling Cold* spoke to one Monadelphous worker who had just moved into a new house bought before the economy collapsed. > "I thought we were buggered," he said. > "That 21 hours minimum keeps the wolves from the door. > "It’s a very, very happy household right now.” The Offshore Alliance of the Australian Workers Union and the Maritime Union of Australia has been vigorously unionising the oil and gas industry’s offshore workforce. After a [brief protected action](https://www.energynewsbulletin.net/workforce/news/1372067/ichthys-workers-go-on-strike?ref=boilingcold.com.au), or strike, on the Ichthys offshore facilities in September Inpex contractor Monadelphous agreed to [significant pay rises](https://www.awu.net.au/national/news/2020/01/8711/big-win-at-monadelphous-signals-a-bright-new-future-for-oil-gas-workers/?ref=boilingcold.com.au) and 130 of its 180 casual workers were placed in permanent positions. All oil and gas companies with offshore facilities are scrambling to find a solution to keep production flowing safely while avoiding a shutdown from a COVID-19 outbreak amidst a collapse in revenue from a collapse in oil and gas prices. ## An industry-wide problem The major players are Inpex, Shell’s Prelude floating LNG facility, Chevron’s Wheatstone platform and Woodside’s platforms that supply gas to the North West Shelf LNG plant. In a statement, the Offshore Alliance said Woodside had discussed with its contractors a roster of two weeks isolation, 12 weeks offshore and possibly four weeks at home that was “catastrophically unsafe.” Walton, who is also AWU national secretary, said the “decent, honest, and rational approach to negotiation” of Inpex was in stark contrast to Woodside. > “Woodside's response to COVID-19 so far has been, frankly, unhinged,” Walton said. “At a time when Australians everywhere are putting aside differences and pulling together, Woodside management is apparently relishing the pandemic as a chance to crack the whip brutally on an already alienated workforce. “That any management team could countenance a 14-week stint away from home is jaw-dropping. A 12-week on-swing on a platform runs counter to safety standards, mental health guidelines, and common sense. “I strongly urge Woodside management to take a deep breath, to take a look at the world around them, and to start acting like half-decent corporate citizens.” Woodside were asked to comment on the the 12-week proposal. A Woodside spokesperson said the company is collaborating its employees and contractor employees to implement working arrangements to ensure the health and safety of its workforce, continue gas supply to WA, provide security for its 3,800 employees and retain around 400 jobs across its contractor workforce. "Recent social media posts by some parties suggesting otherwise are disappointing because they are inaccurate, out of touch with the challenges facing the broader Australian community, and inconsistent with the supportive and collaborative approach generally being taken by the trade union movement," the spokesperson said. "These very challenging circumstances should not be used as an opportunity for ill-informed criticism." --- **Main Picture: Ichthys Explorer central processing facility. Credit: Inpex* --- *Updates:* *March 29, 4:30 PM Woodside comments added.* --- ### Woodside changes story on Browse LNG emissions URL: https://www.boilingcold.com.au/woodside-changes-browse-lng-emissions-story/ Last updated: 2020-04-20T13:01:03.000Z Woodside has battled for a year for the massive greenhouse gas emissions from its planned Browse LNG project to be unimpeded by regulatory limits or costs. However, the reality of a strengthening fight to tackle climate change may have forced the company to change its plans. When the WA Environmental Protection Authority recommended in March 2019 that all large new projects offset all their emissions Woodside marshalled the oil and gas industry into a ferocious one-week campaign that saw the proposal withdrawn. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/03/climate-ad.jpg) **Page 1 ad in The West Australian**, March 11 2019 Gas from the Browse reservoirs contains between 8% and 12 % CO2 that Woodside plans to vent to the atmosphere. Gas burnt to pump gas 1000km to shore will produce more emissions. The result is that Browse will emit more CO2 to produce a tonne of LNG than any current Australian LNG project. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/03/carbon-intensity.jpg) **Carbon intensity of WA LNG.** Source: Conservation Council of WA. Woodside chief executive Peter Coleman told investors on Friday that the company had delayed the go-ahead for the $US20.5 billion Browse project slated for 2021 for an unspecified time. The move is part of [Woodside's cost-cutting](https://www.boilingcold.com.au/woodside-slashes-costs-delays-scarborough-and-browse-lng/) in the face of an oil price that has more than halved this year. "The key thing for Browse is that the further it goes out, then the more likely that (carbon) sequestration will be part of the base plan for Browse," Coleman said. "We're looking at options now around sequestration. Not just in the immediate field area, but other aquifers, some distance from Browse. "So, I think what you'll find is that's where it will be. Now the breakeven cost for that, at the moment, is just north of $US100 per tonne. Coleman said he could see a world where Browse would have to bury some of its greenhouse gases to achieve a social license to operate. > "It doesn't affect the economics in a material way. I’d hate to say that to a regulator," Coleman said. Indeed, just three months ago Woodside’s message to WA and Commonwealth environmental regulators was very different. The environment impact assessment for Browse submitted in December stated that Woodside had considered more than 30 nearby sites to reinject CO2 underground and identified one location as potentially viable. > Further investigation showed the option was a "high-risk, high-cost mitigation option for Browse reservoir CO2," the report to regulators stated. ### What changed? *Boiling Cold* understands some partners in Browse have been unimpressed with Woodside’s investigations of ways to reduce the project’s carbon footprint and demanded more work. Also, the pressure from activist investors applying environmental, social and governance criteria is unrelenting. "Climate change is not going away, it's real," Coleman said. "We've been talking to investors recently, the ESG guys haven't forgotten about the long term." Colman said Woodside was looking at locations for sequestration near the Browse facilities and some distance away. "I think you may see a revised development plan that's more likely to include sequestration from day one." A Woodside spokesperson later said that carbon capture and storage was one of many options considered for Browse, however carbon offsets, such as tree planting, was currently the most feasible option. The current design for the Browse offshore facilities has space to later install equipment to reinject CO2 extracted from reservoir gas, the spokesperson said. Conservation Council of WA director Piers Verstegen said he welcomed Woodside’s decision to delay its Browse and Scarborough LNG projects it refers to as the Burrup Hub. Verstegen said Woodside should rule out the projects altogether and transition to renewable energy and clean hydrogen to supply growing export markets. "The Burrup Hub projects are totally inconsistent with a safe climate," Verstegen said. "They do not align with the Paris Agreement and would prevent Australia from meeting our national obligations to cut pollution." --- *Main picture: generic exhaust stack. Source: [veeterzy](https://unsplash.com/@veeterzy?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) on [Unsplash](https://unsplash.com/s/photos/emissions?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText)* ### Woodside halves 2020 spend, delays Scarborough and Browse URL: https://www.boilingcold.com.au/woodside-slashes-costs-delays-scarborough-and-browse-lng/ Last updated: 2020-03-26T23:19:51.000Z Woodside will slash about $US2.4 billion from its 2020 expenditure, delay investment decisions on the Scarborough and Browse LNG projects, slow down spend on its recently approved Sangomar oil project and cancel or defer non-essential activities to manage its cash after the collapse of oil and LNG prices. Woodside chief executive Peter Coleman said the company's immediate priority was to minimise the risk from COVID-19 and maintain production. "We are also responding to the lower, more volatile oil price environment by taking difficult but prudent decisions to reduce our expenditure for this year and to delay targeted final investment decisions on our growth projects at Scarborough, Pluto Train 2 and Browse," Coleman said in a [statement to the ASX](https://files.woodside/docs/default-source/asx-announcements/2020-asx/response-to-market-conditions.pdf?sfvrsn=31d33c3d%5F1&ref=boilingcold.com.au) this morning. > "These are extraordinary times, that no one could have foreseen." Woodside will reduce operational expenditure by about $US100 million, freeze recruitment except for graduates and move work from contractors to Woodside staff. To achieve the remainder of the $US20.4 billion cut from capital expenditure Woodside will: - Delay sanction of the $US11.4 billion Scarborough to Pluto project one year to 2021 - Delay sanction of the $US20.5 billion Browse to North West Shelf project that was planned for 2021\. A target year for sanction was not given. - Delay major planned maintenance shutdowns - Defer most exploration - Consider cost reduction and deferral at the Sangomar oil project in Senegal ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/03/investment-cuts.jpg) **Cuts in investment.** Source: Woodside. Commercial negotiations, regulatory approval work and some engineering will continue to prepare the Scarborough and Browse projects for final investment decisions. Coleman said Woodside would take a prudent approach to managing its cash "given the considerable uncertainty in the near-term investment environment and the magnitude of forward capital investment decisions." Facing the toughest time of his nine years leading Woodside Coleman said the company would ensure its credit rating remained robust. Earlier this week [S&P had warned Woodside](https://www.boilingcold.com.au/bad-news-for-woodsides-lng-growth-plans-from-s-p-and-shell/) to make the sort of cuts it announced today or its rating would drop. Coleman would have expected his year to have been dominated by pushing the Scarborough and Browse LNG projects forward. They have now been put on the backburner but not forgotten. “The development of the Scarborough and Browse gas resources through Woodside’s proposed Burrup Hub remains among the world’s most cost-competitive LNG investment opportunities and one which will provide significant economic returns to shareholders, governments and communities for decades to come,” Coleman said. Woodside has been [criticized by unions](https://www.boilingcold.com.au/flow-of-lng-and-dividends-unaffected-as-jobs-culled/) over the treatment of up to 800 maintenance laid off in the last week. Woodside's statement said it had provided financial assistance for contractor personnel. --- *Main Picture: North West Shelf project LNG plant near Karratha. Source: Woodside* ### Shell's Prelude LNG is a carbon disaster URL: https://www.boilingcold.com.au/shells-prelude-lng-carbon-disaster/ Last updated: 2020-03-26T06:58:45.000Z Shell's Prelude floating LNG facility produced 2.3 million tonnes of greenhouse gases for one solitary LNG cargo, making it the fifth biggest industrial emitter in Western Australia. The Prelude first received gas from its subsea wells in December 2018 and by the end of June 2019 had produced 2.32 million tonnes of greenhouse gases, according to [emissions data](http://www.cleanenergyregulator.gov.au/NGER/National%20greenhouse%20and%20energy%20reporting%20data/safeguard-facility-reported-emissions?ref=boilingcold.com.au) released by the Clean Energy Regulator today. In those seven months just two condensate tankers and one LNG carrier were loaded from the facility that is moored off the Kimberly coast. Conservation Council of WA director Piers Verstegen said the emissions data was absolutely shocking and suggested that Shell was making no effort to reduce Prelude's emissions. "It is clear that an effective policy solution is urgently required to control emissions from Australia’s LNG export industry," Verstegen said. "The outcome of this is that Australian taxpayers will have to pick up the bill for Shell’s pollution increases. > "At a modest carbon price of $25 per tonne, Australia taxpayers or other industries will have to bear a cost of nearly $60m to cover Shell's 2.3 million tonnes of pollution for the last year." The Prelude is permitted emit 2.7 million tonnes of carbon emissions a year to produce its [annual capacity](https://www.shell.com/about-us/major-projects/prelude-flng.html?ref=boilingcold.com.au) of 3.6 million tonnes of LNG, 1.3 million tonnes of condensate and 0.4 million tonnes of liquefied petroleum gas. Under those condition the carbon intensity of LNG from Prelude should be 0.75 tonnes of CO2 equivalent for each tonne of LNG, much higher than most Australian LNG projects. LNG projects are normally more carbon intensive in the first few months of commissioning as production is low and intermittent production shutdowns cause large amounts of excess gas to be flared. However the initial emissions performance of the Prelude is way beyond the norm. *Boiling Cold* asked Shell what portion of the emissions resulted from flaring. Shell did not provide an answer. A Shell spokesperson said controls on the Prelude have been improved and monthly flaring rates have fallen by more than 60% since the facility started up. The Valencia Knutsen LNG carrier that shipped the first LNG cargo in June 2019 can hold 173400 cubic metres of LNG, or about 83,000 tonnes. So last financial year the carbon intensity of Prelude LNG was almost 28 tonnes of CO2 equivalent for each tonne of LNG. *Boiling Cold* asked if the continued operation of Prelude was consistent with Shell's stated commitment to a less carbon-intensive world. The Shell spokesperson said Prelude was an integral part of Shell’s global portfolio and played "an important role in meeting the growing demand for more and cleaner energy." The Prelude was completed late, is reportedly hugely over budget, is subject to an order by the offshore regulator NOPSEMA to fix basic safety procedures. Production was shut down in February due to power generation problems. "Work is underway to restart production on Prelude, with our focus on a facility that is safe, robust and reliable," the Shell spokeperson said. --- *Updates from 1PM 26 March 2020* 1. *3PM 26 March - Shell comments added.* --- *Main Picture: Prelude floating LNG facility with an LNG carrier alongside.* *Source: Shell Australia* ### Woodside and Chevron dividends flow as LNG jobs culled URL: https://www.boilingcold.com.au/flow-of-lng-and-dividends-unaffected-as-jobs-culled/ Last updated: 2020-03-25T09:27:11.000Z WA LNG producers Woodside and Chevron, beset by low prices and COVID-19 work restrictions, are maintaining dividends to shareholders and gas to customers as they shed workers, with unions describing Woodside’s actions as “brutal, cold, and unnecessary.” Local LNG producer Woodside last week [reduced its offshore workforce by about 400 workers](https://thewest.com.au/business/energy/coronavirus-crisis-hundreds-more-job-go-at-woodsides-lng-operations-ng-b881498271z?ref=boilingcold.com.au), and on Monday up to [500 workers were stood down](https://thewest.com.au/business/energy/coronavirus-crisis-hundreds-more-job-go-at-woodsides-lng-operations-ng-b881498271z?ref=boilingcold.com.au) at the North West Shelf LNG plant near Karratha. It is understood that about half the workers at the LNG plant were employed on a casual basis, despite some having worked there for many years, so have accrued no sick or annual leave and have no right to a redundancy payment. Any worker stood down before the end of their swing will be paid out for those days not worked, a Woodside spokesperson said. Almost all the offshore workers were casuals. Australian Workers Union national secretary Daniel Walton, who is also the spokesperson for the Offshore Alliance, said everyone understood changes were necessary, but the pain should be shared. “Woodside’s treatment of its workers is brutal, cold, and unnecessary,” Walton said. > “The nation of Australia has been spectacularly good to Woodside over recent years, you’d think it’s now time for Woodside to return just a little of the favour. “Summarily sending hundreds of workers back to the airport without a word of explanation is just a woeful abdication of responsibility during this pandemic crisis.” Amidst the job losses, Woodside paid out more than $790 million of dividends to its shareholders on Friday. *Boiling Cold* asked Woodside if leaving dividends unaffected in this crisis while workers lost their jobs was fair. Woodside did not respond. Unlike most Australian and international oil and gas companies, Woodside has not yet released a statement on its plans to respond to low oil and gas prices. Chevron, the operator of the Gorgon and Wheatstone projects, is also planning job cuts. Chevron is starting to demobilise non-essential personnel to deal with the “extraordinarily challenging circumstances related to COVID-19,” according to a company statement [reported in *The West Australian*](https://thewest.com.au/business/energy/coronavirus-crisis-chevron-workers-join-mass-north-west-staff-exodus-ng-b881499359z?ref=boilingcold.com.au). “We do not take these measures lightly and understand the impact this will have on some of our workforce.” In Australia, the Chevron’s message was “our priorities are the health and safety of our employees, contractors and the community as well as maintaining vital supplies of natural gas to WA.” Chevron chief executive Mike Wirth communicated a different priority to CNBC TV in the United States yesterday. > “Our dividend is our number one priority. It is very secure. We haven't cut the dividend since 1934,” Wirth said. Wirth said the company entered this downturn in a strong position. “We’re taking action to preserve that strength,” Wirth said after the company announced it would cut capital spending by $US4 billion this year. Conventional upstream activities that include the Australian business will suffer cuts of $US1.2 billion. --- *Main Picture: Chevron's Wheatstone LNG plant near Onslow. Source: Chevron Australia Pty Ltd.* ### Iron ore finally gets the virus: WoodMac URL: https://www.boilingcold.com.au/iron-ore-finally-gets-the-virus-woodmac/ Last updated: 2020-03-25T02:40:56.000Z The resilient iron ore price is unlikely to last according to industry consultant Wood Mackenzie, and that is bad news for WA and Federal budgets. “Having demonstrated remarkable resilience for the past two months, the price of iron ore has taken a big hit in the past two days,” Wood Mackenzie research director Paul Gray said yesterday. Gray said benchmark 62% Fe fines closed at $US80.20 a tonne on Monday, back to the lows seen in early February but more than Wood Mackenzie’s pre-crisis forecast made in December of $US85 a tonne. The price had been held up by continued strong Chinese hot metal production and supply constraints in Brazil and Australia. > “We think iron ore's sell-off over the past few days is the start of a trend, not a blip,” Gray said. "We are not yet looking at a glut of seaborne iron ore. But risks are escalating, and the balance is tilting towards a bigger hit to iron ore demand than supply.” Wood Mackenzie now forecasts the price of iron ore to move towards $US70 a tonne this year, but it could plunge much lower. > "If demand turns out to be weaker than forecast and the iron ore market moves into acute oversupply, prices could fall as low as US$50/tonne,” Gray said. Gray said the price was unlikely to drop below US$50/tonne as it was near the break-even price where some major iron ore producers would curtail supply. Any drop in the iron ore price is bad news for both the WA and Australian Governments as they pour money into the COVID-19 response. The WA budget assumed an iron ore would fetch $US66 a tonne this financial year and $US73.5 a tonne in 2020-21\. Every $US1 drop gives State Treasurer Ben Wyatt $81 million less to fight COVID-19 and finance the economic recovery afterwards. That same movement costs would cost the Commonwealth Treasury $120 million in revenue this fiscal year and $370 million in 2020-21, according to the mid-year economic and fiscal outlook released in December. A $US20 a tonne price fall would knock more than $27 billion from Australia's GDP next financial year, according to the outlook, and cut $1.6 billion from WA State revenue. --- *Main image: FMG autonomous haulage truck. Source: Fortescue Metals Group* ### Bad news for Woodside's LNG growth plans from S&P and Shell URL: https://www.boilingcold.com.au/bad-news-for-woodsides-lng-growth-plans-from-s-p-and-shell/ Last updated: 2020-03-24T00:07:28.000Z Prospects for Woodside progressing its Scarborough and Browse LNG projects in 2020 faded today with S&P warning Scarborough could affect its credit rating and Browse partner Shell announcing spending cuts. Standard and Poors has placed Woodside on credit watch "with negative implications to reflect the heightened risk of a downgrade" if the company did not manage its finances well. > "We believe growth projects sanctioned in the current environment would indicate a heightened risk appetite, and would likely be negative for the company's credit profile," the ratings agency said in a statement today. Woodside had planned to sell down its 75% equity in the Scarborough to Pluto LNG project to about 50% before sanctioning the $US11.4 billion project mid-2020. In mid-February when the economic impact of COVID-19 was less clear Woodside chief executive Peter Coleman said Scarborough could go ahead without a sell down. S&P made it clear today that it did not favour that option. "A willingness to progress projects with a high ownership stake and on a lowly contracted basis, amid a depressed oil and LNG spot price environment, would translate to incremental project and commodity price risk, in our view." S&P said Woodside's funds from operations to debt ratio could materially breach 30% in 2020 if it went ahead with Scarborough without an additional partner. There was a "high likelihood" of a reduction of one notch in its current BBB+ credit rating if Woodside did not signal a change of course in the next month or so. Woodside's wish to start front end engineering on the $US20.5 billion Browse to North West Shelf LNG project this year also suffered a setback today. Shell that owns 27% of Browse announced it would [cut its 2020 capital budget](https://www.shell.com/media/news-and-media-releases/2020/shell-acts-to-reinforce-business-resilience-and-financial-strength.html?ref=boilingcold.com.au) by at least 20% to $US20 billion or below. Last week BP, with a 17.3% interest in Browse, announced it would cut captial spending by abut 20%. Shell chief executive Ben van Beurden said the company was "taking immediate steps to ensure the financial strength and resilience of our business,” in response to the unique combination of steeply falling oil demand and rapidly increasing supply. Shell's contribution that could exceed $US100 million may be an early candidate for a budget cut given widespread industry chatter that Shell did not favour the high emissions from the project. The Anglo-Dutch giant is already highly exposed to LNG production in Australia with a 25% interest in Gorgon, one-sixth of the North West Shelf, a majority stake in QGC in Queensland and 67.5% of the troubled Prelude floating LNG facility. Shell was slapped down by offshore safety regulator NOPSEMA in January for inadequately performing the fundamental safety procedure of isolating equipment before it is worked on. Two weeks later [production was halted](https://www.energynewsbulletin.net/workforce/news/1380380/prelude-shutdown%C2%A0?ref=boilingcold.com.au) after recurring power failures rendered even the toilet system out of action. A [revised notice](https://www.nopsema.gov.au/assets/Uploads/A722042.pdf?ref=boilingcold.com.au) posted by NOPSEMA today extended until May 31 the time for Shell to fix its safety procedures due to added difficulties from measures to contain the spread of COVID-19. The NOPSEMA direction said Shell had made significant progress in rectifying the problems identified by the regulator. --- *Main Picture: Schematic of the Burrup Hub developments. Credit: Woodside.* ### Woodside slashes offshore maintenance workforce URL: https://www.boilingcold.com.au/woodside-slashes-offshore-maintenance-workforce/ Last updated: 2020-03-20T07:09:06.000Z Woodside is cutting its offshore maintenance workforce as it responds to a cratered oil and LNG market and COVID-19 risk leaving safety questions unanswered and possibly about 360 casual workers with no income for six months. Woodside's two offshore platforms that supply gas to its North West Shelf LNG plant near Karratha are maintained by workers employed through Monadelphous. *Boiling Cold* has been told the North Rankin Complex that usually has about 170 workers will lose about 60 to 70 workers. Personnel on the Goodwyn platform, usually about 130, will also drop by about 60 to 70 workers. It is understood that about 50 workers, mainly employed by Legeneering, are to be cut from two Woodside floating oil production vessels, the Okha and the Ngujima-Yin. In total, about 360 workers could be affected as the facilities have two alternating swings of workers. One industry insider said the number of positions affected is less. It is understood that the Monadelphous workers, who accrue no sick or annual leave entitlements, have been told not to expect to work on Woodside facilities for six months. Some have worked on Woodside facilities for more than ten years. This morning Monadelphous confirmed the cuts in an email to its North Rankin Complex workers. > "Following the completion of your current assignment with Woodside NRC, we currently do not have any further work scope for your role," the email said. > "Thanks for being part of the Woodside NRC team." Workers on Goodwyn received a similar email. Woodside said in a [statement](https://files.woodside/docs/default-source/media-releases/support-for-community-suppliers-and-contractors-in-response-to-covid-19.pdf?sfvrsn=5efcc024%5F2&ref=boilingcold.com.au) this afternoon that it was reducing the number of people at its facilities to "to comply with expert health and Government guidance." Woodside said that together with its contractors it would consider measures to keep as many employees of contractors in work as possible and consider sick leave payments for casual employees affected by COVID-19. “This is not business as usual. We all need to be more agile, think differently and take the appropriate steps to get through this together," Woodside chief executive Peter Coleman said. In a COVID-19 [update](https://www.woodside.com.au/news-and-media/stories/story/covid-19-update?ref=boilingcold.com.au) yesterday Woodside said it entered the current uncertainty with "with one of the strongest balance sheets in the oil and gas industry and world-class, low-cost producing assets." ### Offshore safety always critical Woodside manages safety and prevents oil and gas leaks on its facilities through "rigorous inspection and maintenance schedules," according to its 2019 [Sustainability Report](https://files.woodside/docs/default-source/investor-documents/major-reports-%28static-pdfs%29/2019-sd-report/sustainable-development-report-2019.pdf?sfvrsn=73cea616%5F14&ref=boilingcold.com.au) released in February. > "Our people operating our facilities are key to prevention and mitigation of process safety events," Woodside stated. The safety of all Australian offshore facilities is managed by a safety case: a set of procedures developed by the operator and approved by the safety regulator NOPSEMA. Operators are [required](https://www.nopsema.gov.au/assets/Guidance-notes/A86483.pdf?ref=boilingcold.com.au) to submit a revised safety case to NOPSEMA for approval if, among other reasons, there is "a significant change in organisational structure" that may impact safety. Woodside was asked how it could continue to adhere to the safety cases of its offshore facilities through a prolonged period of reduced manning but did not respond. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/03/part-of-Woodside-compass.jpg) **Part of the "Compass" of Woodside values.** Source: Woodside website It is understood that no WA offshore operators have recently submitted revised safety cases to NOPSEMA related to COVID-19 or significant reductions in personnel. The Offshore Alliance of the Australian Workers Union and the Maritime Union of Australia [said on its Facebook page](https://www.facebook.com/Offshore-Alliance-524335271311416/?%5F%5Ftn%5F%5F=kC-R&eid=ARCKthZoo87wvxCFlcIviJjhkKQ2NweKGClne8%5FBV5bHL6aM%5FZAf5o7T9eocIsqlHpoAXN7-5hKARYJR&hc%5Fref=ARQmcxz4ZjCHKRq%5FR81Ll02ZkrCrQbFGgAZyACjx3mAG1yYDX6-eUq43yh5tSLdrp4M&fref=nf&%5F%5Fxts%5F%5F%5b0%5d=68.ARA4caghj0U6bgDL7VZ10KHmy%5FnHCEN8NIxtitcoav5t9SrsyG-fwQ4hXUUkX0J3ABe638EkSZVaqvycyiT3zU2milKcJ82d6Q4HiaCuYsEdcsdI9xJ6z7PzWO49KJBFw3GOsvIucB6dXtaKx1CvjwsW34XRXKrCI5dolsbH3iJiDRh2APxQwJKglRZbGkCvAjtKZr6ifsiNNo24cOY-YNr9kKvz-2nSjOgF-vzTVIxPjM1Ff3VSOecRU2t-jMTKeXcUJIQljoqFoUW3DzvF4xVzwEtXSPUXWK6i1h0uW2edXwKsPl9zzasw8XDLbBiEQw8f3XS0SGjjoGJuYouILB4) that Woodside had "callously punted" its skilled offshore workforce. "Woodside created a casual workforce on the offshore platforms. They then forced these same workers to take a 42% pay cut in 2017 and are now dumping them on the unemployment scrap heap," the post said. The union called for Woodside to give "due consideration to the financial interests of all industry stakeholders – including the employees who make them their massive profits." The number of personnel on Chevron's Wheatstone platform is also being reduced with workers for Chevron subcontractor AGC receiving a short note been by *Boiling Cold*: "We regret to inform you that you have been demobilised from the Chevron Contract, effective 18 March 2020. "Please find attached your demobilisation letter." --- *Main Picture: North Rankin complex. Source: Woodside Energy Limited* ### Virus likely to stall Woodside and Santos LNG growth plans: WoodMac URL: https://www.boilingcold.com.au/virus-likely-to-stall-woodside-and-santos-lng-growth-plans-woodmac/ Last updated: 2020-03-18T10:41:09.000Z The ambitions of Woodside and Santos to sanction the Scarborough and Barossa LNG projects this year may be thwarted by an oil price slump likely to last until next year, according to energy consultancy Wood Mackenzie. Wood Mackenzie oil market analyst Sushant Gupta today said that the oil market was “hugely over-supplied” and he did not expect a sharp rebound in prices this year. The price of Brent crude is $US28.3 a barrel, about half what it was three weeks ago. LNG prices in Asia are linked to oil, so one of Australia’s biggest exports has been hit by the oil price plunge driven by a COVID-19 demand slump and production surges planned by Saudi Arabia and Russia. The market has savaged Australia’s two leading oil and gas companies during the last month: Woodside is down 48%, and Santos has plummeted a calamitous 62% against an overall market drop of 26%, as measured by the ASX200. The market chaos has come just as Santos was preparing to approve the $US4.7 billion Barossa project to supply gas to the Darwin LNG plant and Woodside looked to kick off the $US11.4 billion Scarborough to Pluto LNG project. Wood Mackenzie Asia Pacific upstream research director Andrew Harwood said there was a real risk that the projects would be pushed back. According to Wood Mackenzie Santos needed an oil price of about $US60 a barrel to fund its growth plans without increasing debt and Woodside’s 2020 revenue could drop by 40% is the current oil price persisted. > “Neither of these companies are going to be keen to push the go button on these projects until there is more clarity in the direction of the oil price,” Harwood said. Harwood said the oil and gas industry survived the last oil price slump five years ago by squeezing the supply chain, restructuring internally and divesting non-core assets. “There is probably less scope this time around for a repeat performance,” Harwood said. “Discretionary spend, therefore, will be firmly in focus this time and we expect the cuts to be hard and deep.” Woodside executive vice-president development Meg O’Neill last week said the company was having “[a real hard look](https://www.afr.com/companies/energy/woodside-s-hard-look-casts-more-doubt-on-lng-projects-20200311-p5491m?ref=boilingcold.com.au)” at the effect of the oil price drop on its business. Santos chief executive Kevin Gallagher yesterday told Reuters the Adelaide-based company was [reviewing](https://www.reuters.com/article/santos-lng/update-2-australias-santos-reviews-145-bln-capital-spending-due-to-oil-price-crash-idUSL4N2B9699?ref=boilingcold.com.au) all discretionary capital expenditure. Santos is due soon to complete a $US1.4 billion purchase of ConocoPhillips 57.1% interest in the near-empty Bayu Undan field and the Darwin LNG plant it supplies gas to, as well as a 37.5% share of the Barossa field. The deal was to smooth the way for the Barossa project to go ahead in early 2020 and produce LNG from the Darwin plant. Last week it announced the sale of 25% of Bayu Undan and Darwin to South Korean SK E&S for $US390 million. The sale to SK E&S, that already has an interest in Barossa, only goes ahead if the Barossa project is approved. Low LNG prices are a problem for the overall Australian economy, not just oil and gas companies, with exports last financial year worth more than $50 billion. --- Main Picture:Four avian infectious bronchitis virus. Credit: Photo by [CDC](https://unsplash.com/@cdc?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) on [Unsplash](https://unsplash.com/s/photos/virus?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) ### Demobbed Inpex offshore casuals gain temporary financial reprieve URL: https://www.boilingcold.com.au/demobbed-inpex-offshore-casuals-gain-a-limited-reprieve/ Last updated: 2020-03-18T00:53:44.000Z Offshore casual workers unexpectedly demobilised last week by Inpex to reduce COVID-19 risk have a temporary financial reprieve with pay continuing until next week in a similar arrangement enjoyed by workers taken off Prelude, Shell’s troubled floating LNG facility, in February. Boiling Cold understands that maintenance contractors on the two Ichthys LNG facilities off WA, including Monadelphous and Trace, have received approval to continue the payments until March 26\. Demobilised employees, including casuals, have been placed on standby. Inpex has told Monadelphous that it wants to reduce the risk of the spread of COVID-19 by having just one worker in each cabin. The demobilisation started last week by Inpex surprised workers, who at that stage did not know when they would next have paid work. [At the same time](https://www.boilingcold.com.au/casual-offshore-workers-left-behind-as-inpex-prepares-for-virus/) Chamber of Minerals and Energy chief executive Paul Everingham was saying the resources sector had employee “wellbeing and their safety at heart and as a priority”. “We are keen to keep on the contractors and employees that, rightly, have been a big part of our members’ successes,” Everingham said last week. In early February Shell [drastically reduced the workforce](https://www.energynewsbulletin.net/workforce/news/1380380/prelude-shutdown%C2%A0?ref=boilingcold.com.au) on its Prelude floating LNG facility after persistent problems with the power supply meant even the toilet systems were not fully functional. It is understood those workers have been on standby for about five weeks now, an arrangement that provides them with almost eight hours of pay a day. The treatment of the casual workers demobilised from Ichthys to help contain the virus is similar to concerns for the [3.3 million Australian workers who do not accrue sick leave](https://www.theguardian.com/world/2020/mar/10/australian-government-warned-not-to-drag-its-feet-on-help-for-casual-workers-in-coronavirus-crisis?ref=boilingcold.com.au) but may need to self-isolate to protect the wider community from the spread of the COVID-19. This morning Prime Minister Morrison said the Government’s next set of economic measures in response to the virus breakout would deal with strengthening the safety net, especially for individuals and small businesses. --- **Main Picture: Ichthys Explorer central processing facility. Credit: Inpex.* ### Hazer's clean hydrogen plant gets funded URL: https://www.boilingcold.com.au/hazers-clean-hydrogen-plant-gets-funded/ Last updated: 2020-03-16T03:59:24.000Z Hazer Group’s plans to transform gas from Perth sewerage into hydrogen and graphite has been boosted by the execution of a $9.4 million funding agreement with the Australian Renewable Energy Agency. The Hazer technology uses iron ore as a catalyst to produce hydrogen for fuel and graphite for batteries from methane. Globally, almost all hydrogen is made by extracting hydrogen from methane and releasing carbon dioxide into the atmosphere. The Hazer technology was developed at the University of WA by Andrew Cornejo, who is now Hazer’s chief technology officer. It has the promise of not only eliminating the production of greenhouse gases from hydrogen manufacture but also adding a valuable revenue stream from the graphite. In May 2019 the ASX-listed company and the Water Corporation agreed to look at developing a commercial demonstration plant at the Woodman Point wastewater treatment plant to produce 100 tonnes a year of hydrogen. The ARENA funds will go towards the construction and operation of the $16.5 million plant on condition that Hazer finalises agreements to purchase the biogas from the Water Corporation and sell the hydrogen to BOC Limited. The Woodman Point plant treats the solids from wastewater with anaerobic – or without oxygen - digestion that produces a solid product suitable for composting and the gas that will be used by Hazer. After the Woodman Point plant, Hazer plans commercial-scale plants producing about 2500 tonnes of hydrogen a year. --- Main Picture: The Hazer Advantage. Source: Hazer presentation, September 2019. ### Woodside’s LNG projects a risky bet: Paris Agreement chief URL: https://www.boilingcold.com.au/woodsides-lng-projects-a-risky-paris-agreement-chief/ Last updated: 2020-03-23T02:03:04.000Z The leader of the Paris climate agreement negotiations thinks “the writing is on the wall” for gas and questions the economic wisdom of Woodside betting its future on the Scarborough and Browse LNG projects. Christiana Figueres took the reins of the world’s climate negotiations in 2010 after talks collapsed in Copenhagen. Six years later, every country in the world signed the Paris Agreement and committed to keep global warming to well below 2℃ and to aim for 1.5℃. Figueres, who spoke in Perth on Saturday, was asked by *Boiling Cold* how Woodside’s plans to build the $US11.5 billion Scarborough LNG project and the $US20.5 billion Browse LNG project fitted with the goals of the Paris Agreement. Production of the LNG will create millions of tonnes of carbon dioxide every year. Woodside has argued that these emissions in Australia are more than offset by emission reductions from its customers burning gas instead of coal. The former Costa Rican diplomat said gas, or methane, was cleaner than coal provided there was complete control of leaks. Methane has a warming effect 85 times greater than carbon dioxide over 20 years. “But I don't think that is the question,” Figueres said. > “I think the question is, what is the future of that industry?” Figueres said she worked with many chief executives of large oil and gas companies and they were of one mind about gas. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/03/Christina-Figueres.jpg) **Christiana Figueres.** Source: Global Optimism “They know that there's going to be a demand for gas, for sure, over the next five years.” “They also know that there's likely not going to be any demand, or very little demand, 30 years from now.” Figueres said the chief executives were uncertain when between five and 30 years gas would feel the crunch. “But they totally know that it is not a technology that can continue in a fully decarbonized economy unless they invest enough into carbon capture and storage.” There are [19 projects around the world](https://www.globalccsinstitute.com/resources/global-status-report/?ref=boilingcold.com.au) that store carbon dioxide underground. Figueres said thousands of carbon storage projects would be needed in the next 30 years for the gas industry to thrive. “It’s not doable.” Figueres said the smaller gas companies were most reluctant to believe the demise of gas as they had less flexible business models. “A company knowing that it has a thirty-year lifetime. Is that the legacy of a CEO?” “The very, very large oil and gas companies are already moving…the writing is on the wall.” ### Cleaner and cheaper competition Figueres said solar already provided cheaper power than gas in most of Asia, and as the cost of solar and wind power continued to drop more developing countries would choose renewable energy. She said financial institutions increasingly saw oil and gas as a risky investment, tracking the recent experience of coal. “So, if you have cost of capital, or in fact starvation of capital, on the one side and you have dwindling demand on the other side you are kind of getting squeezed in the middle,” Figueres said. > "It's going to be very difficult to have any decent payback." Woodside executive vice president development Meg O’Neill last week cited a Woodside-commissioned [report](https://www.erm.com/public-information-sites/woodside-proposed-gas-fields-lca/?ref=boilingcold.com.au) by consultancy Environmental Resources Management in defence of LNG’s climate credentials when speaking at at the Australasian Oil and Gas Conference. ERM calculated the overall greenhouse effect of gas from Browse and Scarborough going to different Asian markets. The report compared emissions from producing the LNG in Australia and burning it overseas the emissions from burning the current fuel mix. The report confirmed the two concerns for investors in gas that Figueres identified – it is beaten by renewables on cost and has a limited life in a carbon-constrained world. > ERM stated renewable energy was “growing at an exceptional pace, supported by maturing technology and falling prices” and would take an ever-greater share of power markets. O’Neill, who is charged with delivering the Scarborough and Browse projects, said under the International Energy Agency’s sustainable development scenario that describes a path towards meeting the upper bound 2℃ goal of the Paris Agreement more gas is needed. When ERM looked at how that sustainable scenario played out in China power generated by burning gas from Scarborough produced more emissions than China’s average fuel mix by 2030, six years after the project is slated to start production. The power generated from Browse gas produced more than the average CO2 per unit of electricity from 2027, just a year after the first cargo is scheduled to sail. The trouble for Woodside's product is that as more nuclear, hydro and renewable power is installed in China the advantage of gas over coal is overwhelmed by its dirtiness compared to the growing sources of emission-free power. For Japan ERM concluded that the market share of gas-fired power would halve by 2040 under the sustainable scenario. --- Main Picture: Woodside headquarters in Perth. Credit: Woodside Energy Ltd. ### Casual offshore workers left behind as Inpex prepares for virus URL: https://www.boilingcold.com.au/casual-offshore-workers-left-behind-as-inpex-prepares-for-virus/ Last updated: 2020-03-17T06:47:08.000Z To reduce the risk from COVID-19 Inpex is slashing the number of contractors on its facilities offshore WA and the casual workers do not know when they will next have paying work. The move is the opposite of the support for all employees that the resources sector promised Premier Mark McGowan this week. One Ichthys offshore worker told *Boiling Cold* that the move by Inpex to cut staffing to reduce risks to operations from the virus was like an insurance policy, except the company was not paying for it. Maintenance contractors employ a large portion of the workers on two Inpex-operated facilities off the Kimberley coast. In a note to its staff on Inpex facilities dated Wednesday, March 11 Monadelphous said manning would be reviewed over the next week and it expected numbers would reduce. “Casual employees will be affected by this review and, depending on numbers identified, some full-time employees may also be affected,” the note read. Monadelphous said it was seeking other positions for affected employees and offered them confidential counselling. Other contractors for Inpex are also reducing headcount on the Ichthys Explorer platform and the Ichthys Venturer oil vessel. *Boiling Cold* understands a significant number of workers are scheduled to leave today. On Wednesday, the same day Monadelphous issued the note to its offshore Ichthys employees, Premier Mark McGowan told resources industry leaders to “keep their hardworking staff employed” during the COVID-19 outbreak. Chamber of Minerals and Energy chief executive Paul Everingham [told *The West Australian*](https://thewest.com.au/business/mining/coronavirus-crisis-inside-premier-mark-mcgowans-covid-19-crisis-talks-with-mining-industry-leaders-cme-bhp-fmg-rio-chevron-woodside-ng-b881485457z?ref=boilingcold.com.au) that for both employees and contractors the resources sector had “their wellbeing and their safety at heart and as a priority”. > “We are keen to keep on the contractors and employees that, rightly, have been a big part of our members’ successes,” Everingham said. The CME declined to comment on the actions of Inpex. Inpex was asked if it felt it had any responsibility to its casual workforce in these unprecedented circumstances. Inpex did not respond. Positions to be left vacant include electricians working on electrical equipment in hazardous areas that Inpex had deemed critical to safety before a protected action, or strike, on the two facilities in September. EEHA technicians ensure that the tens of thousands of electrical fittings in hazardous areas on the Ichthys facilities are properly sealed so a spark cannot cause gas to explode. A [review](https://thewest.com.au/business/energy/secret-docs-reveal-deadly-blast-risk-at-63b-lng-plant-ng-b881069411z?ref=boilingcold.com.au) commissioned by Inpex and revealed in January 2019 showed about half the fittings failed safety tests. Prior to the planned protected action by Monadelphous workers Monadelphous argued that continued EEHA work was essential to safety. In an email seen by *Boiling Cold* Monadelphous listed EEHA inspection as one of 12 activities that were essential for Inpex to comply with its safety case that documents the procedures agreed with the offshore safety regulator NOPSEMA. The email stated that the listed work was required to manage the risk of events that could cause multiple fatalities. Inpex was asked if all safety-critical maintenance and inspection work could continue with reduced manning but did not respond. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/03/Inpex-home-page-1.jpg) **Inpex Australia home page.** Source: Inpex A NOPSEMA spokesperson said Inpex is not required to inform them of reduced manning as long as it continues to comply with each facility’s safety case. > “Where a duty holder is unable to undertake certain works onboard offshore facilities, they must keep these areas safe and protect the personnel from risks,” the NOPSEMA spokesperson said. NOPSEMA is promoting the sharing of best practices for dealing with the virus risk. “NOPSEMA expects duty holders to focus on this rapidly developing health risk in addition to their continued attention to other activity risks.” Monadelphous did not respond to a request for comment. Yesterday in a company internal message Inpex president director Australia Hitoshi Okawa said most office employees would start working from home next Monday March 16 “to support your wellbeing and our company’s business continuity during the COVID-19 outbreak.” Inpex will review the situation weekly and aimed to return to normal business as soon as possible. Woolworths, Telstra and the Commonwealth Bank yesterday all [agreed to pay](https://www.theaustralian.com.au/business/companies/woolworths-to-pay-casuals-coronavirus-leave/news-story/ec29168b685d433e8d690c21bf4cacae?ref=boilingcold.com.au) casuals in some virus-related circumstances. The Commonwealth will pay its casuals if they are sick or need to go into isolation. None of the reported criteria for paid leave covered the circumstances on the Ichthys facilities where the employer decided it no longer required healthy workers. --- *Main Picture: Ichthys Explorer central processing facility. Credit: Inpex.* ### WA Government wants gas-powered growth URL: https://www.boilingcold.com.au/wa-wants-gas-growth/ Last updated: 2020-03-11T22:25:36.000Z The WA State Government wants to launch new industries off the back of the gas LNG producers are forced to reserve for local use just as Woodside warns that the Scarborough and Browse LNG projects are facing headwinds from price and partners. Rebecca Brown, the director general of the Department of Jobs, Tourism, Science and Innovation, yesterday said the Government would pursue value-adding downstream processing industries as well as future energies such as hydrogen production. The move supports Premier Mark McGowan's [call last year](https://thewest.com.au/business/oil-gas/mcgowan-uses-gas-lure-but-wa-has-own-woes-ng-b88819235z?ref=boilingcold.com.au) for the Federal Government to help east coast gas industries hit by soaring gas prices to move west. Speaking at the Australasian Oil and Gas Conference in Perth Brown said the Government would undertake an independent study this year to identify opportunities to develop gas-consuming industries and recommend how to remove any issues that may be blocking new entrants. > "It's about recognising the importance of LNG as a resource to the broader economy," Brown said. New transport uses, petrochemicals and hydrogen are among the industries to be studied. The report will consider the volume of gas required, the gas price that would allow the investments to breakeven, schedules, potential economic impact and likely future sources of gas as well as factors unrelated to gas, such as the availability of industrial land, infrastructure and proximity to markets The work is part of a [push to diversify](https://www.wa.gov.au/organisation/department-of-the-premier-and-cabinet/diversify-wa-economic-development-framework?ref=boilingcold.com.au) the WA economy launched by the McGowan Government last year that named energy as one of the priority sectors. Brown said the Government would also consider collaborating with industry to develop carbon capture and utilisation hubs in WA. How growth in investment in gas-consuming industries that are likely to operate for decades fits with the Government's aspiration for [net-zero carbon emissions by 2050](https://www.mediastatements.wa.gov.au/Pages/McGowan/2019/08/State-Government-details-emissions-policy-for-major-projects.aspx?ref=boilingcold.com.au) announced in August was not addressed in Brown's speech. The Australian Energy Market Operator's recent [review](https://aemo.com.au/-/media/files/gas/national%5Fplanning%5Fand%5Fforecasting/wa%5Fgsoo/2019/wa-gas-statement-of-opportunities---december-2019.pdf?la=en&ref=boilingcold.com.au) of the WA gas market predicted demand would remain dominated by the mining and industrial sectors with gas-powered generation a relatively minor user. ![Western Australia domestic gas demand forecast 2019 AEMO](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/03/image.png) **WA gas demand forecast** (AEMO, 2019) AEMO's base scenario that gas supply would exceed demand for the next decade assumed Woodside's Scarborough and Browse LNG projects go ahead and provide up to 380 terajoules of gas a day from the middle of the decade. Under the WA domestic gas reservation government policy 15 units of gas must be reserved for use in WA for every 100 units of LNG exported. Woodside executive vice president development Meg O'Neill told the AOG conference that with plunging oil and gas prices "none of us know how this will play out." This year Woodside plans to sanction the $US11.5 billion Scarborough project and approve the start of front end engineering and design to bring gas from the Browse fields the North West Shelf LNG plant. Last year Woodside chief executive Peter Coleman [accused BHP and Chevron](https://thewest.com.au/business/energy/woodside-profit-tumbles-23-per-cent-on-pluto-lng-plant-maintenance-setbacks-ng-b881292389z?ref=boilingcold.com.au), the two North West Shelf partners not in the Browse venture, of slowing down negotiations to process Browse gas through the NWS plant. > "In the event that industry can't agree on opening up facilities to third parties it would be understandable if governments were to intervene, and none of us wants that," O'Neill said. Giles Farrer, a research director with energy consultancy Wood Mackenzie, said projects that had not taken a final investment decision would be the sector of the LNG industry most affected by the oil price crash of the last week. "Record LNG supply investments last year and plunging LNG spot prices this year were already testing the appetite of LNG project developers to sanction new LNG projects in 2020, but the drop in oil price will make these decisions more complicated," Farrer said. "As a result, there will be fewer LNG projects taking FID in 2020 and 2021." --- *Main Picture: Schematic of the Burrup Hub developments. Credit: Woodside.* ### Big taxpayer bills for failed Northern Endeavour start URL: https://www.boilingcold.com.au/big-taxpayer-bills-for-failed-northern-endeavour-start/ Last updated: 2020-03-06T02:45:02.000Z The Northern Endeavour oil vessel will cost the taxpayer $10 million every few months to keep it safe while the Commonwealth Government works with industry to avoid taxpayers suffering decommissioning costs of up to $200 million. Woodside, that had planned to decommission the Northern Endeavour, in 2016 paid newly-formed Northern Oil and Gas Australia $24 million to take over the vessel and the Laminaria Corallina oil field in the Timor Sea. NOGA suffered [numerous technical and financial issues](https://www.thesaturdaypaper.com.au/news/resources/2020/02/15/decommissioning-oil-vessel-could-cost-taxpayers-230m/15816852009400?ref=boilingcold.com.au) for the next three and a half years before offshore safety regulator NOPSEMA shut production down in July 2019 to allow a long list of safety issues to be fixed. The company went into administration in September and was liquidated in February, effectively leaving the Commonwealth Government in charge of the facility. Department of Industry deputy secretary Mike Lawson told the Senate economics estimates committee on Wednesday night that the sale by Woodside did not require approval by the National Offshore Petroleum Titles Administrator as the company holding the titles remained the same, just its ownership changed. Senator Rex Patrick described the failure of NOGA as "only the tip of the iceberg." "There are a number of older rigs all around Australia, and in some sense, you've got these entities like Woodside selling off an older product," Patrick said. > "Surely there must be a risk in places like the Bass Strait where this could occur again?" ExxonMobil announced in September that it would try to sell its 50% share in the Bass Strait oil and gas operations it owns with BHP. The operation includes the oldest offshore facilities in Australia, with some built in the 1960s. Patrick said the Government and former Resources Minister Matt Canavan could have done more to avoid NOGA going onto liquidation. "The taxpayer now owns an FPSO (floating production and storage vessel). Who would have thought?" he said. ### Future costs a mystery The Senator repeatedly pushed to get an estimate of what the eventual cost to the taxpayer might be. Lawson said that "even a rough order of magnitude of the likely cost" was unavailable. The Government is seeking approval from Parliament for $10 million to keep the vessel in a safe "lighthouse mode." The charge is an additional cost to any eventual decommissioning of the vessel and fields that [could cost up to $200 million](https://www.afr.com/companies/energy/oil-levy-threat-grows-as-noga-sinks-20200210-p53z8j?ref=boilingcold.com.au). "We are working with industry; we have no reason to believe we can't find a better solution to this than...a cost being imposed on the taxpayer," Lawson said. Patrick was doubtful the industry would help the Government out of its predicament. > "What leverage do you have over industry?" Patrick asked. "Why wouldn't they say 'your problem government'?". NOPSEMA chief executive Stuart Smith told the committee that the regulator's action to close down production on the Northern Endeavour was not responsible for the failure of NOGA. He said it was NOPSEMA's view that NOGA had been undercapitalised for some time before NOPSEMA issued its notices. "That resulted in inadequate investment in maintenance on the facility that led to an increasing number of issues," Smith said. "By July last year, you had pieces falling from the roof significant enough that if they hit a worker, it would have been a fatality." --- **Main Picture: Northern Endeavour oil production vessel in the Timor Sea. Credit: Northern Oil and Gas Australia.* ### Chevron stays the carbon course as it hints at Woodside deal URL: https://www.boilingcold.com.au/ph-chevron-sam/ Last updated: 2020-03-03T23:06:03.000Z Chevron will stick to pumping petroleum with no preference for cleaner gas over oil as it chases long-term demand growth it expects despite growing alarm that the decarbonisation of the world’s energy supply needs to speed up. A focus on returns with less risk will see Chevron continue to push its Gorgon and Wheatstone LNG projects to cut costs and lift performance and perhaps cut a deal with Woodside to access the planned Scarborough project. Speaking to Wall Street analysts last night Chevron chief executive Mike Wirth said with current policy and technology trends the International Energy Agency predicted energy demand would increase by a quarter to 2040 and oil and gas would maintain its market share. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/03/CVX-global-energy-demand.jpg) **Chevron's view on demand for its products.** Source: Chevron “Even in the IEA’s sustainable development scenario which is Paris (Agreement) aligned oil and gas is expected to be about half the total energy demand,” Wirth said “Any way you look at it, the world will need more of what we produce, not less.” While some investors are alarmed that the world’s response to climate change threatens the existence of the oil and gas sector, Wirth saw it as more of a temporary blip > “Short term dynamics have led investors to focus their capital elsewhere,” Wirth said. “Chevron recognizes this reality and is focused on self-help, not commodity prices, to deliver better returns.” While across the Atlantic BP and Shell talk of net zero emissions by 2050 and diversification into renewable energy, Chevron wants to carry on much as before except with less cost and risk. Wirth, who has led the US major for two years, said investment in renewable energy would be limited to powering its operations. ### Leaner and meaner in the Pilbara So low profile was the issue of climate in Chevron’s annual presentation of its long-term strategy that company management did not mention the benefits of gas over oil in a world tackling climate change. Climate-driven demand for LNG was a main reason for Chevron’s development of the Gorgon and Wheatstone LNG projects in WA. Unfortunately, Chevron’s project management skills were not up to the task of completing two simultaneous mega-projects. Chevron planned to build Gorgon for US$37 billion, but it cost US$54 billion. The Wheatstone budget blew out from US29$ billion to US$34 billion. Chevron chief financial officer Pierre Breber revealed that the two projects, while great generators of cash, but due to high initial costs were achieving a return on capital employed of less than 10%. Wirth said improved reliability and performance was the first step to improve the returns from the Pilbara projects. Capacity at Gorgon has increased by 2% and by 7% at Wheatstone, and he expected continued improvement. ![Gorgon, Wheatstone, LNG, gas, production](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/03/CVX-Au-production.jpg) **Chevron production in Australia.** Source Chevron. ### Hang on Mr Coleman The second step in Wirth’s plan to extract better returns from Australia is to use other facilities. “We’ve got a lot of gas in Australia,” Wirth said. “There are other infrastructure opportunities to move that gas through without capital investment.” That infrastructure opportunity is the pipeline to the Pluto LNG plant for Woodside’s Scarborough project. Chevron has wanted to hop onto the pipeline since then Chevron Australia managing director Nigel Hearne cheekily renamed Woodside’s planned asset as the collaborative Trans-Carnarvon pipeline in May 2018. Chevron’s intent for its Clio and Acme fields is evident in its [2019 annual report](https://chevroncorp.gcs-web.com/static-files/d48834df-b4a4-440f-853e-308c08bf2d15?ref=boilingcold.com.au) filed with the US Securities and Exchange Commission in late February. “The company is collaborating with other Carnarvon Basin participants to assess the opportunity of Clio Acme being developed through shared utilisation of existing infrastructure,” the report stated. Woodside chief executive Peter Coleman only needs a deal with co-venturer BHP to sanction the Scarborough to Pluto project by his mid-2020 target. Chevron cannot stop Scarborough, but its one-sixth stake in the North West Shelf LNG plant gives it leverage over Woodside. It could veto the processing of excess Scarborough gas at the nearby NWS plant or stymie Woodside’s larger Browse to NWS project. While achieving agreement between BHP and Woodside has been the most discussed obstacle to the sanction of Scarborough, it may be that a three-way deal is required. Expanding Chevron’s LNG portfolio is a lower priority for Wirth than wringing maximum value out of his existing assets, but it is not an option he has excluded. He said Chevron would be particular about any new LNG investment given the current over-supply. > “Everybody who is looking to make FID decisions on LNG is going to have to be pretty thoughtful on when and how they step into that market,” Wirth said. “We're in no hurry to do anything there so stay tuned." --- *Main Picture: First shipment of LNG from the Gorgon Project. Credit: Chevron.* ### WA faces up to microgrid challenges URL: https://www.boilingcold.com.au/wa-faces-up-to-microgrid-challenges/ Last updated: 2023-12-04T11:41:53.000Z *This article was first published in Australian Energy Daily © Peter Milne.* WA should embrace distributed energy with a reform process for its unique electricity market that could progress free of the complexities of the National Electricity Market, according to a WA parliamentary committee. The [report](https://www.parliament.wa.gov.au/Parliament/commit.nsf/%28Report+Lookup+by+Com+ID%29/444FE5266D8EDEA14825851300106DCD/$file/EISC%20Report%208%20for%20web%20FINAL%20REPORT.pdf?ref=boilingcold.com.au) Taking Charge: Western Australia’s transition to a distributed energy future tabled yesterday found distributed energy resources could help manage network costs and bushfire risk as well as provide everyday benefits such as greater reliability, ancillary services and balancing. Committee chair Jessica Shaw told parliament that WA was well-placed to implement reforms as it did not need to deal with the “toxicity and total energy policy dysfunction” of the federal government and could learn the NEM’s mistakes. The principal DER in WA is rooftop solar - that AEMO has predicted will put system security at risk by 2026 as penetration increases - but the report also considered the future impact of increasing connection of batteries and electric vehicles to the South West Interconnected System. State-owned Western Power uses 52% of its transmission assets to serve 3% of its customers with the result that an average connection in Perth costs between A$10,000 and A$20,000 over 50 years but in many parts of the network this cost exceeds A$240,000. The Legislative Assembly committee found DER could sometimes defer, reduce or even eliminate pole and wire replacement and also often result in improved reliability and power quality. A fatal 2015 [bushfire](https://www.abc.net.au/news/2019-12-07/esperance-bushfires-2015-inquest-fire-coronial-report-coroner/11767300?ref=boilingcold.com.au) near the south coast town of Esperance that destroyed a swathe of electrical infrastructure instigated the state’s [first trials](https://www.abc.net.au/news/2019-10-05/standalone-solar-replaces-power-lines/11572762?ref=boilingcold.com.au) of connected DER, or microgrids, that provided solar/battery/diesel systems instead of a reconnection to the grid. The WA Department of Fire and Emergency Services told the committee microgrids allowed network operators to better manage voltage, reducing the incidence of power spikes and asset failures that can ignite bushfires. The technology also reduced fire risk when it allowed the retirement of transmission lines that could ignite fires when objects fell on them and created sparks. DEFS said that microgrids, especially with batteries, could also aid fire response by providing power to communications equipment and water pumps when distribution networks were damaged. Shaw said WA's market structures, untouched since the wholesale electricity market was introduced in 2006, no longer reflected the physical realities of the system and was “not sending efficient signals for asset development and system operations”. The WA Government established a [taskforce](https://australianenergydaily.com.au/node/3592?ref=boilingcold.com.au) in May 2019 to overhaul the market in the South West. Two government trading enterprise dominate that market: monopoly transmission provider Western Power and the states’s largest generator Synergy that also has the small retail market to itself. The state also owns Horizon Power, that generates and retails power in communities not connected to the SWIS. Shaw said for microgrids there was “considerable scope for duplication and overlap” between the three organisations and the report called for energy minister Bill Johnston to clarify their roles and ensure they collaborated. Government ownership of the enterprises would make reform easier for the government, Shaw said. “Network regulation and asset return structures can change without the need to negotiate or compensate multiple private network owners.” The committee also wants Johnston to change regulations to allow operators visibility and control of microgrids and expand incentives for the development of cost-effective assets on a technologically neutral basis. A review of network tariff to consider time of use and location pricing was called for, as were trials of different retail tariffs. A revised network access code that encourages innovation was called for in response to the WA Economic Regulation Authority ruling that prevented Western Power from recovering some costs associated with its [rollout](https://westernpower.com.au/energy-solutions/projects-and-trials/advanced-meters-puts-the-power-in-your-hands/?ref=boilingcold.com.au) of 238,000 smart meters. ERA chair Nicky Cusworth said the authority had stated for some time that WA’s energy rules were “written for a world that no longer exists”. “As the independent regulator, we do not have the power to change those rules, meaning that we are limited in how we can view and assess new technologies like microgrids, distributed energy resources and batteries, ” Cusworth said. “We discussed the smart meter expenditure with Western Power many times, but ultimately concluded that the proposed expenditure did not meet the requirements of the rules.” --- *Main image: Kalbarri microgrid schematic. Source: Western Power* --- ### Government asleep as offshore failure developed URL: https://www.boilingcold.com.au/government-asleep-as-offshore-failure-developed/ Last updated: 2023-12-04T11:40:49.000Z *This article was first published in Australian Energy Daily © Peter Milne.* A newborn oil and gas company that four years ago bought an ageing offshore facility for a pittance and allowed Woodside to reverse a A$140 million impairment has now failed, and Australian taxpayers may be left with a clean-up bill of more than A$200 million. Creditors of Northern Oil and Gas Australia voted in Perth on Friday to liquidate it and two associated companies that owned the Northern Endeavor oil vessel, now[ without crew](https://australianenergydaily.com.au/node/4451?ref=boilingcold.com.au), and the Laminaria and Corallina oil fields. New resources minister Keith Pitt[ announced](https://www.minister.industry.gov.au/ministers/pitt/media-releases/future-northern-endeavour?ref=boilingcold.com.au) in his first media release the establishment of a taskforce to look at long-term solutions “in the safest and most cost-efficient manner, and limit any costs to Australian taxpayers”. “It is regrettable that a commercial solution could not be found to prevent NOGA entering liquidation, but the Government will do everything it needs to do to protect the safety and security of the Northern Endeavour production vessel to protect the environment and keep workers safe,” the minister said. A Woodside spokesperson said the transfer to NOGA was properly undertaken under Australian laws and regulations. Pitt could ponder the warning signs missed by his predecessors Josh Frydenberg and Matt Canavan in administering those laws and regulations before NOGA entered[ voluntary administration](https://australianenergydaily.com.au/node/3651?ref=boilingcold.com.au) in September. Oil and gas, particularly offshore, is a risky, technically complex and capital expensive business. Large experienced petroleum companies manage this risk with a portfolio of different assets and rarely hold 100% equity in any of them. NOGA did it differently – small and inexperienced, it owned 100% of a single asset. The company was established by its owner and sole director Sydney-based Angus Karoll in August 2015, just one month before a conditional deal was struck with Woodside. One area of concern should have been to ensure there would be enough funds for the decommissioning of the fields and equipment – a process the government describes as “robust” and is now[ reviewing](https://www.industry.gov.au/data-and-publications/offshore-oil-and-gas-decommissioning-framework-review?ref=boilingcold.com.au). Woodside had provisions of US$156 million ($234 million) for the asset it sold to NOGA, according to its 2015 annual report. Plugging and abandoning subsea wells in 380m of water is an expensive business. Operators normally decommission after years of eking out the last barrels of production until revenue finally drops below operating expenses. The mammoth bill comes many years after the strong cashflows of peak production. Diversified producers source the funds from other operations. Where did the government think NOGA would find the cash? Nevertheless, the deal was completed in April 2016 for, in offshore oil and gas terms, the pocket money of US$900,000\. Woodside recorded an impairment reversal of US$95 million. The warning signs continued after the sale, including doubts about the condition of the Northern Endeavour and how it was run. In early 2017 an[ investigation](https://www.nopsema.gov.au/assets/Freedom-of-information/F095/A554483.pdf?ref=boilingcold.com.au) by Upstream Production Solutions, the company contracted by NOGA to operate the vessel, into the potentially fatal fall of a piece of corroded equipment stated that Woodside’s earlier intent to abandon the facility, instead of selling it, had “led to a strategy of maintenance minimisation”. The same report, that was submitted to the National Offshore Petroleum Safety and Environmental Authority, stated that the crew perceived a need to not follow procedures to “expedite resumption of normal production”. In August 2017 the National Offshore Petroleum Titles Administrator approved the registration of a US$20 million mortgage over the production licences by Castleton Commodities, a US-based commodity trader. Two months later Timor Sea Oil and Gas Australia, the entity bought from Woodside and owned by NOGA, lodged its 2015 annual report with ASIC more than a year late and revealed a US$30 million loss. Auditors Ernst and Young noted “a material uncertainty that may cast significant doubt about the Company’s ability to continue as a going concern”. Viability required all wells to produce as expected with minimal operational issues and no significant decline in the oil price. ## Everything had to go right, but it did not. In 2016 the Northern Endeavour shipped just one cargo of oil and NOGA Holdings Pty LImited, the holding company of the liquidated companies that was not put into administration, lost US$19 million. Ernst and Young repeated its doubt about remaining an ongoing concern. Again, in 2017, there was only one oil shipment and losses grew to US$48.5 million according to the NOGA Holdings report lodged in April 2019. In the same month last year, NOPSEMA pulled up NOGA over not having the [financial arrangements](https://www.nopsema.gov.au/assets/Published-notices/A663879.pdf?ref=boilingcold.com.au) in place to deal with an oil spill and [doubts](https://www.nopsema.gov.au/assets/Published-notices/A669142.pdf?ref=boilingcold.com.au) over the continuation of its contract with UPS to operate the vessel. In July NOPSEMA ordered the Northern Endeavour [cease production](https://www.nopsema.gov.au/assets/Published-notices/A682075.pdf?ref=boilingcold.com.au) in its “current degraded state” and shortly after required a [backlog of maintenance](https://www.nopsema.gov.au/assets/Published-notices/A683466.pdf?ref=boilingcold.com.au) to be done before production could recommence. Karoll placed the companies in voluntary administration in September after Castleton refused to find further repairs unless NOPSEMA supplied a definitive list of work to be done, according to the [report](https://home.kpmg/content/dam/kpmg/au/pdf/creditors/northern-oil-and-gas-group/noga-administators-report-and-notice-of-creditor-meeting-23-january-2020.pdf?ref=boilingcold.com.au) of administrator’s KPMG. Castledon, a secured lender, is owed US$82 million and ASX-listed GR Engineering, owner of UPS, has suffered a [$17 million impairment](https://www.asx.com.au/asxpdf/20200207/pdf/44dxb399nl2hkf.pdf?ref=boilingcold.com.au). The Woodside spokesperson said the company, through industry lobby group APPEA, is contributing to industry discussions on this matter. “Discussions are ongoing, and it is premature to speculate on the specific issue,” the spokesperson said. “As Australia’s industry matures there will be significantly more decommissioning activities, so it is important that the right precedents are set.” The most significant offshore decommissioning work ahead in Australia are the ageing Bass Strait facilities operated by ExxonMobil. The oil major is understood to have slowed its sale process due to concerns in Canberra stemming from the Northern Endeavour. The lasting effect of NOGA’s brief four years of existence may well be the transfer of a nine-figure liability from Woodside’s shareholders to the Australian taxpayer. It is a result that may surprise some in Canberra but had been considered a likely outcome by many in the industry for a few years. A revised decommissioning framework would be an improvement if it included the requirement to act on copious amounts of publicly available information. --- *Main image: Northern Endeavour oil vessel in the Timor Sea Source: Northern Oil and Gas Australia.* --- ### Northern Endeavour headed for liquidation, govt on the hook URL: https://www.boilingcold.com.au/northern-endeavour-headed-for-liquidation-govt-on-the-hook/ Last updated: 2022-01-08T13:55:55.000Z *This article was first published in Australian Energy Daily © Peter Milne.* Administrator KPMG has recommended the companies behind the troubled Northern Endeavour oil production vessel be wound up, in a move likely to leave the Commonwealth Government exposed to a A$100 million + bill to make the oil fields safe. Northern Oil & Gas Australia (NOGA) and two associated companies went into [voluntary administration in September](https://australianenergydaily.com.au/node/3651?utm%5Fmedium=email&utm%5Fcampaign=Energy%20Daily%20Paid%20Sep%2025&utm%5Fcontent=Energy%20Daily%20Paid%20Sep%2025+CID%5F97e5fb3e80691413bfc7dfc1ab4c6afb&utm%5Fsource=Campaign%20Monitor&utm%5Fterm=Offshore%20oil%20%20gas%20sell-off%20puts%20focus%20back%20on%20decommissioning%20policy). They ceased production in July when the offshore safety regulator NOPSEMA demanded a suite of maintenance issues be fixed after two dangerous accidents. The companies had already lost a total of US$104 million in the three years to December 2018. The failure will put a sharp focus on the Commonwealth’s overdue[ review of offshore oil and gas decommissioning](https://www.industry.gov.au/data-and-publications/offshore-oil-and-gas-decommissioning-framework-review?ref=boilingcold.com.au) and ExxonMobil’s wish to sell out of its ageing Bass Strait operations. In the UK decommissioning costs are only borne by the government as a last resort. If the owner of a facility offshore the UK cannot pay for decommissioning the [liability first falls to the previous owners](https://www.nao.org.uk/wp-content/uploads/2019/01/Oil-and-gas-in-the-UK-offshore-decommissioning.pdf?ref=boilingcold.com.au). Woodside Energy, that sold the Northern Endeavour to NOGA, does not face that liability under Australian law. Castleton Commodities Merchant Asia, that claims to be owed A$108 million by NOGA, funded operations during the administration with a further A$16 million but turned off the tap last week after the Commonwealth Government refused regulatory relief from decommissioning liabilities, according to the [administrators’s report](https://home.kpmg/content/dam/kpmg/au/pdf/creditors/northern-oil-and-gas-group/noga-administators-report-and-notice-of-creditor-meeting-23-january-2020.pdf?ref=boilingcold.com.au). “In the absence of funding, the Administrators are unable to maintain the Group’s operations or meet the regulatory requirements of NOPSEMA,” the report said. Castleton had wanted to disconnect and sell the Northern Endeavour vessel but its plan would have left the Commonwealth responsible for the expensive plugging and abandonment of the oil wells in the remote Timor Sea, 550km north west of Darwin. Creditors will meet in Perth on Friday to vote on KPMG’s recommendation that the companies be liquidated, as action that KPMG expects will lead to the liquidator disclaiming liabilities associated with the assets. “Given the stringent regulatory requirements to maintain the NE, we expect that the appointed liquidator would have little alternative than to disclaim the NE,” the report said. “In the absence of continued funding, any liquidator would be unable to satisfy NOPSEMA’s regulatory requirements. In any case, we expect the ABEX (abandonment expense) to be greater than the realisable value of the NE.” NOGA estimated decommissioning costs to be US$99.4 million (A$147 million) as at December 2018. KPMG pinpointed the companies’ troubles to undercapitalisation, reliance on funding from Castleton and loss of production after NOPSEMA closed the Northern Endeavour down for maintenance. Minister for Resources Matt Canavan told *Australian Energy Daily* that the government’s priority was the safety of workers and the environment He said that decommissioning was the responsibility of the registered title holder, and it must ensure its obligations and liabilities are met. “Failure to comply with the property removal, maintenance or repair obligations may attract criminal or civil penalties,” the minister said. “The government is monitoring the administration process and does not want to pre-judge the outcome. A commercial or industry-led solution to the voluntary administration remains the government’s preference. “At the same time, the government is considering its options so it is ready to respond if and as needed.” The government is also considering its long-term policy options after the Northern Endeavour with the Department of Industry’s offshore oil and gas decommissioning framework review expected to release a revised framework in coming months, according to Senator Canavan. Last month Canavan told the [*AFR* ](https://www.afr.com/companies/energy/oil-industry-threatened-with-abandonment-levy-20200110-p53qbm?ref=boilingcold.com.au)that options to avoid a repeat of the Northern Endeavour included a levy on the industry, changes to transfer dealing decisions, changes to financial assurance requirements and consideration of petroleum resources rent tax credits. --- *Main image: Northern Endeavour oil vessel in the Timor Sea Source: Northern Oil and Gas Australia* --- ### Browse LNG faces huge carbon offset buy URL: https://www.boilingcold.com.au/browse-lng-faces-huge-carbon-offset-buy/ Last updated: 2023-12-04T11:41:29.000Z *This article was first published in Australian Energy Daily © Peter Milne.* Woodside’s Browse LNG project may have to purchase more carbon offsets than the entire Emissions Reduction Fund has delivered to date due to upcoming changes in the safeguard mechanism applied to large emitters. The possible commitment to offset 50 million tonnes of CO2 was detailed deep inside a near 700-page [environmental impact statement](https://www.woodside.com.au/our-business/burrup-hub?ref=boilingcold.com.au) the Perth-based company lodged in December for the US$20.5 billion project. The Browse offset would dwarf the one million tonne [offset commitment](https://www.greeningaustralia.org.au/woodside-and-greening-australia/?ref=boilingcold.com.au) Woodside made in October that requires 5,000 hectares to be planted in WA and will take some sting out of the up to [285 million tonnes of carbon emissions ](https://australianenergydaily.com.au/node/4277?ref=boilingcold.com.au)Browse will emit over its life. The offsets would cost US$2 billion if purchased at the carbon price of about US$40 a tonne that Woodside [uses](https://australianenergydaily.com.au/node/4016?ref=boilingcold.com.au) to test its investments. The offsets would cover between 17% and 25% of the project’s emission, depending on the amount of CO2 in the reservoir and how long the fields produce for. The significant impost is well short of the 100% offset called for by the WA Environmental Protection Authority in March 2019 but quickly rebuffed by industry and the WA government. A Woodside spokesperson said the cost of complying with the safeguard mechanism was factored in and Browse remained a compelling investment. “The Browse resources are perfectly poised for progressing towards commercialisation,” the spokesperson said. Progress on the project that will pump gas 900km from offshore the Kimberley to the existing North West Shelf Plant in the Pilbara is currently stalled until a deal is finalised between the Browse partners that own the gas and the NWS partners that control the LNG plant. All facilities in Australia outside the power sector that emit more than the equivalent of 100,000 tonnes of CO2 a year have a baseline level of emissions set by the Clean Energy Regulator. Carbon credits have to be bought to offset any emissions above the baseline but that has rarely been required as the baselines have generally been set at the maximum expected emission level. In a [new approach](http://www.cleanenergyregulator.gov.au/NGER/The-safeguard-mechanism/Baselines?ref=boilingcold.com.au) starting as early as July, new or significantly expanded facilities will have a so-called benchmark baseline applied based on industry best practice. “Woodside expects that best practice will be based on top 10% of comparable facilities,” the spokesperson said. According to the environmental submission, Woodside expects the high amount of CO2 in the Browse reservoir to contribute to the project exceeding its likely benchmark baseline by 50 million tonnes. *Australian Energy Daily* asked Woodside if it was confident it could secure such a large amount of offsets within Australia given the federal government does not allow international offsets to be used. The Woodside spokesperson said the offsets may be secured by Woodside as the operator of the project, or by the individual joint venture partners. “Offsetting opportunities that will be investigated include industry methods or land-based solutions for carbon sequestration, which may include indigenous fire management projects, environmental native tree planting, and human-induced land restoration,” the spokesperson said. “These solutions offer potential co-benefits resulting from the additional ecosystem services provided when carbon is bio-sequestered, as well as social, economic and environmental benefits.” Woodside owns 30.6% of Browse, Shell has 27%, BP 17.3%, PetroChina 10.7% and Japan Australia LNG - owned by Mitsui and Mitsubishi - owns 14.4%. --- *Main image: North West Shelf LNG plant near Karratha. Source: Woodside Energy Limited.* --- ### Woodside’s Browse nixes net-zero for cheap and dirty URL: https://www.boilingcold.com.au/woodsides-browse-nixes-net-zero-for-cheap-and-dirty/ Last updated: 2023-12-04T03:25:09.000Z *This article was first published in Australian Energy Daily © Peter Milne.* Woodside has all but ignored the WA Government’s aspiration of net-zero emissions by 2050 in its environmental approval [submissions](http://www.epa.wa.gov.au/media-statements/woodside%E2%80%99s-browse-and-north-west-shelf-proposals-out-public-comment?ref=boilingcold.com.au) released yesterday for the Browse LNG project that could produce up to 285 million tonnes of carbon emissions. Woodside is seeking one approval for the $US20.5 billion offshore facilities and pipeline and another for the refurbishment of the North West Shelf LNG plant that will process the gas from Browse. Only the LNG plant produces significant emissions in WA’s jurisdiction and is affected by the state’s greenhouse [policy](https://www.der.wa.gov.au/images/documents/your-environment/climate-change/Greenhouse%20Gas%20Emissions%20Policy%20for%20Major%20Projects.pdf?ref=boilingcold.com.au) for major projects released in August. The policy sets an “aspiration” of net-zero emissions by 2050. Woodside is extending the life of the five trains at Australia’s original LNG plant at Karratha - two of which are 30 years old - rather than build new trains. The cost saving is enormous. Oil and gas consultancy WoodMackenzie [estimated](https://thewest.com.au/business/energy/woodside-opts-for-cheaper-north-west-shelf-gas-train-upgrades-over-replacement-ng-b881076780z?ref=boilingcold.com.au) new trains would cost between US$4 billion and US$6 billion each but all five could be refurbished for a total cost of between US$7 billion and US$8 billion. The oldest three NWS trains produce more greenhouse gases per tonne of LNG than any other Australian LNG facility once the different levels of CO2 in the incoming gas is allowed for, according to Woodside’s greenhouse gas benchmarking [report](http://www.epa.wa.gov.au/sites/default/files/PER%5Fdocumentation2/NWS%20Project%20Extension%20-%20Appendix%20F%20-%20Greenhouse%20Gas%20Benchmarking%20Report.pdf?ref=boilingcold.com.au). After saving money by not replacing the ageing inefficient trains, Woodside has pointed to the old equipment as a unique circumstance that makes addressing the state’s net-zero policy more difficult. “The costs associated with modifying an existing operating facility are significantly higher than for modifying the design of a new facility,” according to the NWS [greenhouse gas management plan](http://www.epa.wa.gov.au/sites/default/files/PER%5Fdocumentation2/NWS%20Project%20Extension%20-%20Appendix%20B%20-%20Greenhouse%20Gas%20Management%20Plan.pdf?ref=boilingcold.com.au). Instead “Woodside proposes to contribute to the State GHG policy through its compliance with the safeguard mechanism,” the federal government policy that Woodside’s NWS [environmental review document](http://www.epa.wa.gov.au/sites/default/files/PER%5Fdocumentation2/NWS%20Project%20Extension%20-%20Environmental%20Review%20Document.pdf?ref=boilingcold.com.au) described as a measure to keep emissions at business as usual levels. ## Different expectations Premier Mark McGowan, when asked for comment on Woodside’s efforts to reduce carbon emissions, told *Australian Energy Daily* his government expected project proponents to “develop greenhouse gas management plans that detail their contribution towards achieving the State's aspiration of net zero emissions by 2050”. *Australian Energy Daily* asked Woodside how compliance with a business-as-usual mechanism could contribute to net-zero emission by 2050. A Woodside spokesperson said the company had incorporated best practice management and mitigation measures in its submission. “We have committed to avoid, reduce or offset 330,000 tonnes per annum of CO2e from the Karratha Gas Plant by 2030,” the spokesperson said. This would be a 4% reduction in predicted annual carbon emission from the plant of 7.7 million tonnes. Yesterday’s submissions made no mention of plans previously [touted](https://thewest.com.au/business/energy/woodside-keeps-hybrid-power-option-alive-ng-b881247807z?ref=boilingcold.com.au) by Woodside to build a hybrid solar-gas power plant away from the NWS. This would reduce carbon emissions and take pollution away from the invaluable ancient [rock art](https://thewest.com.au/business/infrastructure/burrup-peninsula-players-ponder-move-in-push-for-world-heritage-status-looms-ng-b88966863z?ref=boilingcold.com.au) of the Burrup Peninsula that is being [considered](https://thewest.com.au/news/pilbara-news/world-heritage-status-for-burrup-another-step-closer-ng-b881377089z?ref=boilingcold.com.au) for the World Heritage List. Woodside is continuing to assess the hybrid renewable power plant, the spokesperson said. The NWS plant is predicted to produce 385 million tonnes of carbon emissions to 2070 by processing gas from Browse and other fields. The Browse field will account for almost a third of those NWS plant emissions over an expected 31-year life and its offshore operations will produce an additional 112 million tonnes. If Browse operates longer than expected and the CO2 level in the reservoir is at the high end of expectations Browse will be responsible for 285 million tonnes of carbon emissions. WA Environmental Protection Authority chair Tom Hatton said for the first time the EPA was hosting the consultation on behalf of the Commonwealth and feedback could be provided on the separate state and Commonwealth assessments on the same website at the same time. “These are complex and individual proposals that will require detailed assessment to determine the extent of the proposals’ impacts and how the environmental issues could be managed, and I encourage the community to review the proposals and provide feedback,” Hatton said. Public submissions on the onshore NWS and offshore Browse proposals are open until February 13, 2020. Woodside operates the Browse and NWS projects that have BP, Shell and Japan Australia LNG - owned by Mitsui and Mitsubishi - as common partners. BHP and Chevron are the other NWS owners and PetroChina participates in Browse. --- *Main image: North West Shelf LNG plant near Karratha. Source: Woodside Energy Limited* --- ### WA EPA falls back to public accountability on emissions URL: https://www.boilingcold.com.au/wa-epa-falls-back-to-public-accountability-on-emissions/ Last updated: 2023-12-04T11:43:57.000Z *This article was first published in Australian Energy Daily © Peter Milne.* Large carbon polluting projects in WA will have to submit detailed emission reduction plans that will be made public and are likely to be followed by regular progress reports under a draft guideline released by the WA Environmental Protection Authority yesterday. The EPA has dropped its March plan to recommend all emissions from large new projects be offset, as revealed by *Australian Energy Daily* [last week](https://australianenergydaily.com.au/node/4107?ref=boilingcold.com.au), and instead has added some meat to the skeleton of the WA government’s new “aspiration of net-zero emissions by 2050”. The EPA’s plan for 100% offsets lasted just seven days after it caused an industry furore despite the government only having an obligation to consider EPA recommendations, not follow them. EPA chair Tom Hatton said the State government “owns” the 2050 target and the EPA aimed to inform it on the implications of major new projects for meeting the target. “It is the EPA's role to hold everyone accountable to those commitments, we will make those commitments on the projects we assess public and accessible and we will publicly report on industry and government progress,” he said. In WA the EPA assesses the environmental implications of projects and recommends to the environment minister what conditions should be imposed. Under its [Greenhouse Gas Emissions Policy for Major Projects](http://www.dmp.wa.gov.au/Documents/Petroleum/Greenhouse%5FEmissions%5FGas%5FPolicy-Major%5FProjects.pdf?ref=boilingcold.com.au), released in August, the government “may” consider requiring a plan detailing the project’s contributions to the 2050 target, after receiving recommendations from the EPA. While the EPA can only recommend conditions to be imposed on projects it assesses, it can determine what information the projects provide. “If they can't give us the basic information we need to assess their project then we can’t move to assessment, so that's problematic,” Hatton said. The EPA’s [draft guidance](http://www.epa.wa.gov.au/sites/default/files/EPA%5FEFG%5FGHG%5FEmissions.pdf?ref=boilingcold.com.au) will require projects with direct emissions greater than 100,000 tonnes of CO2e a year to submit greenhouse gas management plans to the EPA. Submissions to the EPA are published on its website. The plans at a minimum must outline interim and long-term targets for reductions in direct emissions and “demonstrate all reasonable and practicable measures have been applied to avoid, reduce and offset a proposal’s scope 1 emissions”. “This guideline does not expect them to show how their proposal gets to net zero in 2050, its how it helps the State get there and what the implications are if it doesn't, how big that gap is,” Hatton said. The guidance stated the EPA supported projects being required to report progress against emission targets and the Authority would also consider producing its own reports on the projects. As the number of projects with greenhouse gas management plans accumulates “it will make very visible to the public what different companies...are achieving, or prepared to achieve, or not achieving,” Hatton said. The EPA could require greenhouse gas management plans for an entire project if an expansion or change in operations required the project to be reassessed by the EPA for greenhouse gas emissions. Hatton said this would be considered on a case by case basis. After further consultation, the EPA plans to publish the final guideline in March. Woodside, that plans to sanction to WA LNG projects in the next two years, was the most vocal critic of the EPA’s plan to recommend full offsets. The offshore emissions of its Scarborough and Browse projects are outside the jurisdiction of the EPA in Commonwealth waters however the EPA does assess the onshore LNG plants. The EPA is assessing work on the North West Shelf LNG plant to allow it to process gas from Browse. Hatton said the EPA would also provide advice on the suitability of the greenhouse gas management plan for the Pluto LNG project where a second train is to be built for gas from Scarborough. Hatton said the EPA board normally used the current guideline when it considered a project at the end of its assessment process. He said proponents of projects already in the process had been advised that it “it would be very wise to anticipate...the State policy” of net-zero by 2050. Compared to the vocal response in March to the previous plan requiring full offsets, government and industry comments were muted. Environment Minister Stephen Dawson merely looked forward to receiving the final guideline. A Woodside spokesperson said it was acting to reduce emissions, including the offsetting of its equity share of CO2 vented from reservoirs. “Woodside supports and shares the WA State government’s aspiration of net zero emissions by 2050, which is implicit in the Paris Agreement,” the spokesperson said. Chamber of Minerals and Energy of WA chief executive Paul Everingham said he was pleased the EPA draft guideline was consistent with the State government’s policy. “Today’s draft guideline clearly acknowledges the need to assess new proposals on a case by case basis on their merits, which is something CME advocated for,” Everingham said. Hatton said he did not know if the State’s net-zero by 2050 aspiration was realistic. “I can't forecast that, we only look at the big projects,” Hatton said. --- *Main image: Chimney stack. Source:* [*veeterzy*](https://unsplash.com/@veeterzy?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) *on* [*Unsplash*](https://unsplash.com/s/photos/emissions?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) --- ### WA EPA drops offsets but adopts net-zero emissions plan URL: https://www.boilingcold.com.au/wa-epa-drops-offsets-but-adopts-net-zero-emissions-plan/ Last updated: 2023-12-04T11:44:58.000Z Major new projects in WA may be required to show the WA Environmental Protection Authority how they would contribute to WA achieving net-zero emissions by 2050. It is a huge back down from the EPA’s tough stance in March - that all new projects with emissions greater than 100,000 tones a year offset all their emissions - that was withdrawn a week later after intense pressure from industry and the state Labor government. The strong pushback - led by Woodside chief executive Peter Coleman and Perth’s pro-resources daily newspaper The West Australian - was despite the EPA only having the power to make recommendations to the Environment Minister Stephen Dawson who must consider the advice but is not obliged to accept it. The EPA’s new approach was revealed in what appears to be an inadvertent posting on its website late yesterday, now removed, that stated: *“The revised guideline requires proponents of major greenhouse gas emitting projects to show how they can reasonably and practicably avoid, reduce and offset emissions to contribute to the State’s aspiration of net zero emissions by 2050.”* *Australian Energy Daily* understands that while the new guideline is still being finalised the posted text is consistent with the intent of the guideline. The WA Government in August [released](https://www.mediastatements.wa.gov.au/Pages/McGowan/2019/08/State-Government-details-emissions-policy-for-major-projects.aspx?ref=boilingcold.com.au) a policy for greenhouse gas emissions from major projects that was seen by some as an attempt to circumvent the development of the EPA’s new guideline. The policy had “an aspiration of net zero by 2050” and stated that the Government may, after receiving recommendations from the EPA, ask projects to detail how they would contribute to the net-zero goal. Energy Minister Bill Johnston at the time said the planned cuts, like the state’s goal, would be aspirational only. The EPA’s draft guideline appears to have brought the requirement for this plan forward into its own process in a move that will make it both mandatory to produce and publicly available. Woodside, which is wrangling with partners to achieve final investment decisions to sanction the US$11.4 billion Scarborough LNG project in early 2020 and the US$20.5 billion Browse LNG project a year later, is sensitive to any perception that the projects’ high emissions create an investment risk. Last month Coleman [assured investors](https://australianenergydaily.com.au/node/4016?ref=boilingcold.com.au) that returns from both projects were resilient to a future carbon price of about US$40 a tonne. The EPA is yet to make recommendations on the components of the two projects that are within its jurisdiction - the LNG plants and the nearshore sections of the pipelines that transport the gas from the offshore facilities that sit in Commonwealth waters. After the State Government released its policy in August EPA chair Tom Hatton told *The West Australian* that the scientific consensus was that emissions had to taper to net-zero by 2050 to keep total emissions and the resultant temperature rise in check. When asked if a project that planned to maintain full emissions to 2050 would comply with the policy he said: “I suspect there might be questions asked if that is an ambit approach.” Demonstrating how Browse could gradually move to be net-zero by 2050 could be difficult for Woodside as it is 2.4 times [more carbon-intensive](https://australianenergydaily.com.au/node/4011?ref=boilingcold.com.au) than Scarborough and is planned to operate until 2070. Woodside has said it would offset its 31% interest in the CO2 in the Browse reservoir that has about a 10% CO2 content. While the EPA does not have jurisdiction over offshore facilities in Commonwealth waters emissions from these platforms and vessels are allocated to WA in the national emissions accounts. The offshore oil and gas industry will watch closely if the EPA’s application of the State’s net-zero goal will mean that these emissions are considered by the EPA in the future. The new draft guideline will be published on Monday 9 December and be considered by the Authority’s [stakeholder reference group](https://www.epa.wa.gov.au/stakeholder-engagement?ref=boilingcold.com.au) of leading industry and conservation groups, according to the website post. Although the public consultation period ended in September the EPA said it is open to new information. The EPA board will meet in February to consider feedback from the SRG and revised guidelines will be published in March. --- *Main image: Smoking chimney stack. Source:* [*koushik das*](https://unsplash.com/@7890857439kd?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) *on* [*Unsplash*](https://unsplash.com/s/photos/emissions?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) --- ### Woodside carbon plan comes with big loophole URL: https://www.boilingcold.com.au/woodsides-carbon-plan-comes-with-big-loophole/ Last updated: 2023-12-04T11:40:25.000Z *This article was first published in Australian Energy Daily © Peter Milne.* Woodside chief executive Peter Coleman yesterday assured investors that returns from the company’s planned projects were resilient to a future carbon price of about US$40 a tonne, but the fine print on the presentation told a different story. Woodside plans to sanction the US$11.4 billion Scarborough project in 2020 and the US$20.5 billion Browse project the year after. As *Australian Energy Daily* reported on Monday, a [report](https://www.erm.com/woodside-proposed-gas-fields-lca/?ref=boilingcold.com.au) commissioned by Woodside showed LNG from Browse would be almost 140% more carbon-intensive than the average of current Australian production. Coleman told investment analysts in Sydney that a carbon price of US$40 a tonne was “not far off” the price Woodside used to assess its projects. “With the way the world is really changing very rapidly we want to make sure that our projects are resilient to any changes in carbon price over time,” Coleman said. “We also test it at a higher carbon price...because some of these projects are going out 30 or 40 years so we just need to make sure that as things change these projects will still stay resilient.” On the slide behind the Woodside boss was a footnote: “Carbon pricing applies to emissions that exceed a forecast facility-specific baseline, determined with reference to country-specific policies, for example, Australia’s Safeguard Mechanism.” Baselines determined by the Clean Energy Regulator are [generally set](http://www.cleanenergyregulator.gov.au/NGER/The-safeguard-mechanism/Baselines?ref=boilingcold.com.au) at a level of normal production, or even a historical high point, so a project that operates as planned would have no emissions above the baseline. This means that in Woodside’s tests of resilience against a future carbon price - if conducted in line with the footnote on its slide - there would be no emissions above the baseline to attract a carbon price and hence no financial impact. Woodside was asked if this was a correct description of their analysis but did not provide a direct response. “In testing the resilience of our portfolio, we consider sensitivities across a range of variables, including commodity prices, carbon prices, exchange rates and interest rates,” a Woodside spokesperson said. Investors are left to wonder if returns from the high-emitting Browse project would still stack up if a carbon price was applied to all its emissions. The high CO2 in gas from the Browse fields has, according to Woodside executive vice president development Meg O’Neill, prompted the oil and gas company to want to “control its own fate when it comes to managing offsets”. O’Neill said Woodside would offset its share of carbon dioxide vented from reservoirs from 2021 across all its projects. This is in line with past WA government requirements for LNG projects to sequester or offset all reservoir CO2. Most emissions from LNG production come from the liquefaction plants, not from gas production. The commitment will affect Woodside’s 17% stake in the North West Shelf that preceded offset requirements and its 13% interest in Wheatstone, that had its offset requirement lifted when the last federal Labor government introduced a carbon price. The WA Environmental Protection Authority is [investigating](https://www.afr.com/companies/chevrons-wheatstone-lng-project-caught-in-greenhouse-gas-emissions-row-20180123-h0n0cs?ref=boilingcold.com.au) whether Wheatstone’s obligation should be reimposed. Woodside’s Pluto plant is already offsetting its reservoir CO2 and the proposed US$11.4 billion Scarborough project has almost no CO2 in its gas. However, Woodside could incur a significant offset expense from its 31% interest in Browse that has about a 10% CO2 content. Coleman said an [agreement](https://www.greeningaustralia.org.au/woodside-and-greening-australia/?ref=boilingcold.com.au) last month with Greening Australia would help “to offset the emissions from our projects and to get neutral on these projects by 2050”. *Australian Energy Daily* understands this is not a firm target and Woodside is only aspiring to be carbon neutral by 2050\. This matches the WA State Government’s “aspiration” for the State to be net-zero by 2050 [announced](https://www.mediastatements.wa.gov.au/Pages/McGowan/2019/08/State-Government-details-emissions-policy-for-major-projects.aspx?ref=boilingcold.com.au) in August. --- *Main image: Woodside headquarters Mia Yellagonga in Perth. Source: Woodside Energy Limited* --- ### Woodside study says gas uncompetitive against renewables in Asia URL: https://www.boilingcold.com.au/woodside-study-says-gas-uncompetitive-v-renewables-in-asia/ Last updated: 2023-12-04T11:42:32.000Z *This article was first published in Australian Energy Daily © Peter Milne.* A Woodside-commissioned report on the total emissions impact of its proposed Browse and Scarborough LNG projects has assumed gas will not compete with renewables in target Asian markets. The [study](https://www.erm.com/woodside-proposed-gas-fields-lca/?ref=boilingcold.com.au) by international sustainability consultants ERM Asian markets concluded that additional LNG imports would lower the average emissions intensity of fossil-fuelled power in China, Japan, India and ASEAN countries. ERM stated that the assumption that gas would compete directly with renewables should be treated with caution as they had a near-zero short-run marginal cost and their growth would more likely be limited by physical capacity constraints than economics. “All of this indicates that renewables will take an ever-greater share of power markets, exacerbating inter-fuel competition in the process,” ERM stated. If gas is to compete with coal on the basis of lower emissions then Woodside’s US$11 billion project to take Scarborough gas to the Pluto LNG plant is better placed than the US$20.5 billion Browse project that will supply the North West Shelf LNG plant through about 1000km of pipelines. ERM calculations showed that delivering LNG into a ship from the Browse project produced almost 140% more carbon emissions than the same quantity of LNG from Scarborough. The higher carbon intensity of LNG from Browse, mainly driven by the venting of carbon dioxide in the gas from the reservoir and the energy used to pump the gas to shore, could make the project a hard sell to climate-sensitive partners Shell and BP. Tomorrow Woodside holds its investors’ briefing day where analysts will be looking for substantiated progress on much-delayed negotiations between the Browse and North West Shelf joint ventures. --- *Main image: Woodside headquarters Mia Yellagonga in Perth. Source: Woodside Energy Limited* --- ### BHP doubles down on high margin oil and gas URL: https://www.boilingcold.com.au/bhp-doubles-down-on-high-margin-oil-and-gas/ Last updated: 2021-02-13T08:22:51.000Z *This article was first published in Australian Energy Daily © Peter Milne.* If some in the resources game thought BHP chief executive Andrew Mackenzie’s July climate speech was too much like Al Gore’s “inconvenient truth” then conversely yesterday BHP petroleum head Geraldine Slattery echoed Sarah Palin’s “drill baby drill” chant. Slattery, a member of the mining giants executive leadership team, told investment analysts in Sydney that BHP could grow its annual production by 3% a year over the next decade. “We have a pipeline of competitive growth opportunities with average rates of return of around 25%,” Slattery said. BHP’s enthusiasm for oil and gas can be explained by the division delivering margins greater than 65% during the past five years, the highest in the group, with an average return on capital employed of about 15%. The Anglo-Australian company believes the success can continue due to its analysis that the oil price will rise even if demand peaks as there is not enough cheap US shale gas to replace declining production from existing fields. BHP petroleum sales and marketing officer Michiel Hovers regards the electrification of the world’s light vehicles as inevitable with buses likely to follow. However, BHP expects growing demand from industry and trucks will more than compensate for the loss of the light vehicle market. It does not expect significant electrification of trucks until well past 2050 when there would be a global fleet of 100 million trucks, up from 60 million today. “We believe that battery technology the weight and cost dynamics of batteries will impede an accelerated adoption,” Hovers said. BHP is less bullish on the price of gas as it is more abundant. “We like gas but...we need to be very selective in the opportunities we pursue,” Hovers said. “It is therefore that we favour oil, but still find gas attractive when advantaged.” ## Australia is about gas One of those advantaged gas assets is BHP’s 50% share of the ExxonMobil-operated Bass Strait production. “Very valuable to us, lots of cash, and we continue to invest...because of its access to such a strong market,” Slattery said, showing that its Bass Strait operations were the big winners from the Gladstone LNG projects, gaining a link to higher international gas prices without spending a cent. Slattery said BHP was considering all its options after ExxonMobil’s announced in September it wanted to sell out of the Bass Strait and she expected a deal would take a couple of years. “The Bass Strait has a big importance to the security of the eastern Australia gas market and so, of course, that does give us pause for thought,” Slattery said. BHP would concentrate on extracting as much value as possible from the Bass Strait for the next few years. “Beyond the mid-2020s...we don't see material upside, but we continue to test it because that's some of the highest returns that would likely see from any of our assets,” Slattery said. BHP also owns 25% of the $US11 billion Scarborough LNG project that Woodside wants to sanction in the first half of next year but BHP is working at a slower pace. “We have increasing confidence in a sanction decision readiness in 2020,” Slattery said. Hovers said BHP would invest in Scarborough if returns were sufficient under the company’s low LNG price scenario that included Qatar accelerating the development of its giant low-cost North field. --- Please support **Boiling Cold* to keep yourself and others informed about energy, industry and climate in WA. Independent news and analysis free of government and big business spin. ![Boiling Cold soil sun sea logo](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2020/10/bc_logo.png) [Soil $5/month](https://boilingcold.memberful.com/checkout?plan=54843&ref=boilingcold.com.au) [Sun $10/month](https://boilingcold.memberful.com/checkout?plan=54842&ref=boilingcold.com.au) [Sea $20/month](https://boilingcold.memberful.com/checkout?plan=54841&ref=boilingcold.com.au) Or a bit more with a monthly contribution of your choice. --- *Main image: BHP's Pyrenees floating production storage and offloading oil vessel off the WA coast . Source: BHP.* --- ### Star of the South still in regulatory abyss URL: https://www.boilingcold.com.au/star-of-the-south-still-in-regulatory-abyss/ Last updated: 2022-01-08T14:01:46.000Z *This article was first published in Australian Energy Daily © Peter Milne.* While offshore wind power is now competitive in Europe and expanding to China the A$8 billion Star of the South project off Gippsland has to move forward with no clear idea of the regulatory hurdles it has to jump. This stands in contrast to an oil and gas company with an exploration permit in waters off Gippsland. It has an established regulatory system outlining its rights to produce if exploration is successful. Copenhagen Offshore Partners, the Danish backer of the 2,000 megawatt Star of the South, was [awarded](https://minister.environment.gov.au/taylor/news/2019/morrison-government-approves-licence-explore-possibility-australias-first-offshore?ref=boilingcold.com.au) a deed of license by the Commonwealth Government in March allowing it to undertake studies off the Gippsland coast. It’s not the only proponent interested in offshore wind developments in the area, but investment won’t come until the regulatory model becomes clearer, according to Stuart Smith, chief executive of the National Offshore Petroleum Safety and Environmental Management Authority. Smith toured Europe, the home of offshore wind, earlier this year to [report](https://www.churchilltrust.com.au/media/fellows/Smith%5FS%5F2018%5FLeading%5Fglobal%5Fpractice%5Fin%5Foffshore%5Frenewable%5Fregulation.pdf?ref=boilingcold.com.au) on how best to regulate offshore renewable energy in Australia. Speaking for himself, not the government or NOPSEMA, Smith told *Australian Energy Daily* that some big players were interested in investing in Australia but “it's on the basis that Australia has an established regulatory model and until that’s in place, they will not consider investing here”. In Europe Smith saw that countries varying regulatory approaches produced very different offshore wind industries. ## Lessons from Europe Supportive government policies that reduce risk can drive down financing costs that account for between 35% and 50% of the cost of offshore wind power according to the International Energy Agency’s [Offshore Wind Outlook 2019](https://www.iea.org/offshorewind2019/?ref=boilingcold.com.au) released in October. The Danes became the early adopters of offshore wind power after suffering heavily from the 1970s oil shocks as they lacked indigenous energy supplies. The Danish Energy Agency identified sites, built connections to the grid and specified the turbine design, then went to tender for the best price. Smith said controlling the design used in early days of offshore wind has helped Denmark capture a market share of wind turbine manufacture well beyond its economic size. In 2018 Vestas was the largest manufacturer in the world with a [20% market share](https://www.nsenergybusiness.com/features/top-wind-turbine-manufacturers-2018/?ref=boilingcold.com.au). In contrast Germany did not favour its own manufacturers and now has less market share than Smith would have expected from a giant in sophisticated manufacturing. France allowed any party to appeal the approval of a wind farm project and as a result no offshore wind farms have yet been constructed. One tender called in 2012[ finally cleared its last legal hurdle](https://www.4coffshore.com/news/french-court-gives-offshore-wind-farms-the-greenlight-nid13983.html?ref=boilingcold.com.au) in July. Smith said the original tenders specified turbine designs that were out of date by the time projects are approved. Scotland has backed offshore wind as a replacement for its offshore oil and gas sector. “As one industry goes into decline the other industry emerges and skills can be transferred,” Smith said. ## An Australian solution required Victorian unions last week supported offshore wind for the same reason in a [report](https://www.mua.org.au/sites/mua.org.au/files/uploads/Submissions/2019%20just%20transition%20offshore%20wind%20report%20FINAL.pdf?ref=boilingcold.com.au) that called for the Commonwealth Government to urgently develop an offshore renewables act and work with state governments identify the best locations. The sea off Gippsland chosen by Star of the South is one of those locations. Smith said a number of proponents were interested as the water was not too deep, it was close to existing transmission infrastructure in the Latrobe Valley and the wind had a supply profile that matched Melbourne’s needs well. The IEA compared the high capacity and low variability of offshore wind to other so-called baseload technologies. Smith said while offshore wind installations could be 40% more expensive than onshore wind turbines the wind was stronger and more consistent, bigger turbines that are more efficient could be installed and there were less community and environmental concerns including fewer birds killed. In Europe specialised ships are used to install wind turbines efficiently. Smith said installation in Australia could cost more as a single wind farm would be unlikely to offer enough work to justify the mobilisation of one of these vessels to Australia. Floating wind turbines have been developed that would allow the wind turbines to be assembled onshore. Last week Shell [bought](https://www.shell.com/energy-and-innovation/new-energies/new-energies-media-releases/shell-agrees-to-acquire-eolfi.html?ref=boilingcold.com.au) French offshore floating wind developer EOLFI as it grows its non-oil and gas New Energies division. Smith said these could open up new areas such as off Sydney where the water is too deep for fixed structures. While Australia decides how to progress its offshore wind industry the IEA expects it to expand 13% a year globally under current policies to reach 20 gigawatts of new capacity annually by 2030 - the equivalent of 10 Star of the South projects. Offshore wind farms In Europe are now winning power supply tenders without subsidy and the IEA expects the levelised cost of electricity to decline 60% by 2040. *Australian Energy Daily* asked Energy Minister Angus Taylor what progress was being made towards a regulatory mechanism for offshore wind farms but the question was not answered. Instead, a Department of Environment and Energy spokesperson said any regulatory framework for offshore energy infrastructure should be technology agnostic, cover both transmission and generation and consider concerns such as freedom of navigation and environmental impacts. The Star of the South is preparing to conduct site investigations this month for its 250 turbine project. “It’s still early days and we’re continuing to work with government, the community and other stakeholders to progress this massive project,” a spokesperson said. --- *Main image: NOPSEMA chief executive Stuart Smith. Source: NOPSEMA.* --- ### Industry tells WA EPA to listen to Canberra URL: https://www.boilingcold.com.au/industry-tells-wa-epa-to-listen-to-canberra/ Last updated: 2023-12-04T11:38:04.000Z *This article was first published in Australian Energy Daily © Peter Milne.* Industry has firmly told the WA Environmental Protection Authority to leave greenhouse gas emissions reduction to the federal government and align itself with the WA government’s emerging climate policy. There was also no support from major players for the EPA to follow BHP’s [drive](https://www.bhp.com/media-and-insights/reports-and-presentations/2019/07/evolving-our-approach-to-climate-change?ref=boilingcold.com.au) to consider scope 3 emissions - the greenhouse gases produced by the use of a company’s products. Yesterday the EPA released the almost 7,000 [submissions](http://www.epa.wa.gov.au/public-submission/3159?ref=boilingcold.com.au) it received into a review of how it assesses the greenhouse gas impact of projects. Environmental action groups spurred the majority of submissions, which followed a pro-forma template. The submissions from industry showed it is still reeling from the EPA’s March [guidance](http://www.epa.wa.gov.au/media-statements/epa-releases-revised-guidance-proponents-greenhouse-gas-emissions?ref=boilingcold.com.au) that it would recommend new large projects offset all their carbon emissions. Sustained industry condemnation led by Woodside chief executive Peter Coleman resulted in the EPA [withdrawing](http://www.epa.wa.gov.au/media-statements/further-consultation-environmental-protection-authority-greenhouse-gas-guidance?ref=boilingcold.com.au) the guideline a week after issuing it for further consultation. At the time EPA chair Tom Hatton said the authority “does not resile from the need to reduce WA’s greenhouse gas emissions” but understood the advice had to be more detailed and practical. Since the Paris Agreement benchmark year of 2005 WA emissions have [risen](https://australianenergydaily.com.au/node/3566?ref=boilingcold.com.au) 23% while emissions from all other states have dropped 10% or more. Woodside argued in it submission that while the EPA may believe the federal government's emissions reduction efforts were insufficient, that did not justify usurping the role of the national government “any more than if a WA Treasurer is dissatisfied with monetary policy settings pursued by the Reserve Bank of Australia they should set an independent WA interest rate”. The Association of Mining and Exploration Companies that represents smaller miners called for a bipartisan approach that limited the 2030 reduction target to between 26% to 28% and included the controversial Kyoto carryover credits, effectively opposing the climate policy Labor took to the May federal election. Woodside, however, acknowledged that the level of Australia's emissions reduction “remains contested within the political debate” and “this contest is expected to continue for the foreseeable future”. Woodside stood to be most affected by the March guidelines as it plans to sanction its Browse and Scarborough LNG projects next year. It said the EPA should not duplicate the federal government’s efforts to control industrial emissions through the safeguard mechanism and emissions reduction fund. The Chamber of Commerce and Industry of WA acknowledged that the safeguard mechanism was not intended to drive down emissions. This leaves the emissions reduction fund, now renamed the [climate solutions fund](https://theconversation.com/morrison-to-announce-2-billion-over-10-years-for-climate-fund-112387?ref=boilingcold.com.au) with A$200 million a year for 10 years to purchase offsets, as the principal mechanism to reduce Australia’s industrial emissions to 2030. Origin, that has limited operations in WA, made a pitch for selling offsets to the industrial sector. “The electricity sector can do more than its pro-rata share of the target as it has cost-effective abatement options available to it which could be unlocked given the right policy settings,” it said. ## Stick to local issues Pointing to the federal government’s efforts was a common theme of industry submissions The Business Council of Australia said it favoured a consistent national approach and the EPA’s March guidelines targeted a minority of large emitters in one state that needed environmental approvals. Alinta Energy politely said “the EPA produces high-quality regulatory outcomes when its focus is firmly on the local”. A Canberra-led approach was also supported by the Australian Petroleum Production and Exploration Association instead of “duplicative and inconsistent requirements...imposed through the actions of a single regulatory agency”. “The major challenge to the industry’s continued growth is maintaining WA’s international competitiveness in the face of growing global competition,” APPEA said. “A relatively high-cost local environment, growing policy and regulatory challenges and the emergence of new LNG competitors increases the level of competition WA faces, as it seeks to win market share and attract investment.” APPEA, along with others including Shell, FMG and Chevron, wants the EPA to coordinate its revised guidelines with the WA government proposed [State Climate Change Policy](https://www.mediastatements.wa.gov.au/Pages/McGowan/2019/09/Climate-change-consultation-to-help-shape-WA-response.aspx?ref=boilingcold.com.au) planned for release in 2020. The EPA plans to publish its new greenhouse guideline early in 2020 and *Australian Energy Daily* understands a draft will be released in about one month BHP, that has its most valuable operations - the Pilbara iron ore mines - in WA, did not directly reject the EPA’s approach in March. It called for the interaction of state and federal policy to be fully assessed and implemented in a way that avoided an “uneven playing field”. In contrast, fellow Pilbara iron or miner Rio Tinto said it did not support the approach of the original EPA guidelines and the regulation of scope 3 emissions should be left to the country they occur in. Rio Tinto said in some circumstances it would be appropriate for the EPA to consider scope 2 emissions. These are the emissions related to power purchased by a project. Consideration of scope 3 emission was explicitly rejected by others, including BP, the BCA and the Chamber of Minerals and Energy of WA. A tough approach by the EPA was supported by many environmental groups, including the Conservation Council of WA. “Carbon pollution from WA LNG projects cancels out the entire savings achieved by all renewable energy capacity installed under the Renewable Energy target across the nation so far,” the CCWA said. --- *Main image: Parliament House, Canberra. Source:* [*Social Estate*](https://unsplash.com/@socialestate?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) *on* [*Unsplash*](https://unsplash.com/s/photos/canberra?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText)*.* --- ### How big gas drives the story to keep its licence URL: https://www.boilingcold.com.au/how-big-gas-drives-the-story-to-keep-its-licence/ Last updated: 2023-12-04T11:39:08.000Z *This article was first published in Australian Energy Daily © Peter Milne.* The Australian oil and gas industry has chalked up some wins with governments in recent years but knows it also needs to build popular support - and is doing it with research-backed tailored messages for different audiences. When Zoe Yujnovich, chair of the Australian Petroleum Production & Exploration Association, opened the industry’s annual conference in May she listed the NT overturning its onshore gas ban, the WA government inquiry that supported fracking and the release of new acreage for gas exploration in Queensland as recent wins for the lobby group. But Yujnovich said she did not expect the climate and energy debate to recede despite the reelection of the Coalition government It was in the cities, Yujnovich said, that the gas industry faced its strongest ideological opposition. “Armed with a megaphone or iPhones an increasing number of professional activists and huge armies of ideologically-driven volunteers are waging a virtual war with religious zealotry,” the Shell Australia chair said. “Our opponents are well-orchestrated, well-funded and well-drilled on tactics aiming to destroy an industry that has overwhelmingly been a force for good.” In mid-2018 the gas industry decided it needed to talk directly to the community and rejigged how it fights the information battle. ## Listen then speak Maintaining social license is an issue that APPEA communication director Sarah Browne said “kept executives awake at night”. To work out how big an issue this was it conducted a survey of community attitudes in August 2018. When asked to what extent they supported or opposed the gas industry, 9% of Australians were strong supporters, 35% somewhat supported the industry, 37% were neutral or did not know and 18% were totally opposed. In WA where gas is a big employer 20% strongly supported the industry and 10% were totally opposed. Browne said the results showed there was not widespread opposition to the gas industry and attributed the 72% of people nationally who were not strong supporters or opponents to “a lack of awareness”. The two main lessons Browne learnt from other social license campaigns was the importance of long-term engagement and “talking to people about issues they were interested in”. This led APPEA to launch its [Brighter](https://bright-r.com.au/?ref=boilingcold.com.au) campaign in October 2018 to promote issues such as jobs, small business, how gas worked with renewables and its use in everyday life. In a tailored approach that Browne outlined to the Energy in WA Conference last month, the Brighter campaign sends different messages to different groups using the channels that work best for them. ## Multiple messages Rural retirees are told how the gas industry benefits their area over sponsored barbecues, truckies hear the message via [support](http://www.truck.net.au/media/media-releases/brighter-support-australian-trucking?ref=boilingcold.com.au) of the Australian Trucking Association, and [programs in schools](https://petroleumclub.org.au/education/next-generation-school-program?ref=boilingcold.com.au) promoting oil and gas careers reach parents concerned about jobs for their children. Brighter connects with people uninterested in gas indirectly, such a providing [videos](https://bright-r.com.au/the-chefs-secret-bbq-pork-yiros/?ref=boilingcold.com.au) for keen cooks. “Our research shows that while she's there she reads two other pieces of content on issues like carbon futures, or fracking, or mutual use, or environment that she would not otherwise have read,” Browne said. “Because we're talking to people about what they want to do and then they are connecting with the other content.” APPEA uses another channel - [Energy Information Australia](https://www.energyinformationaustralia.com.au/?ref=boilingcold.com.au) \- to convey specific information on issues such as gas co-existence with farming, environmental impacts and price. The original APPEA brand is still used for hard policy issues such as taxation. It regularly issues [statements](https://www.appea.com.au/media%5Frelease/oil-and-gas-industry-paying-substantial-tax-despite-record-operating-loss/?ref=boilingcold.com.au) detailing how much tax the sector pays. Browne told *Australian Energy Daily* APPEA was comfortable EIA provided robust, independent scientific material. Only two of the 15 [fact sheets](https://www.energyinformationaustralia.com.au/resources/?ref=boilingcold.com.au) on the EIA website disclosed it was an initiative of APPEA and the lobby group was not mentioned on the home page. Browne said the link with APPEA was on the website’s about page and appeared on all printed material. In August APPEA again surveyed community attitudes to gas and while 18% still strongly opposed the gas industry strong support had risen from 9% to 12%. Brighter has collected more than 8,000 Facebook followers in 12 months but this is dwarfed by the 124,000 following Lock the Gate and Greenpeace’s 443,000 followers in the Asia Pacific. “We're happy, although we obviously need to keep going and that's why I mentioned longevity is one of the key learnings from (other) successful activities,” Browne said. --- *Main image: Chevron Australia headquarters in Perth. Source: Peter Milne* --- ### Offshore oil & gas sell-off puts focus back on decommissioning policy URL: https://www.boilingcold.com.au/offshore-oil-gas-sell-off-puts-focus-back-on-decommissioning-policy/ Last updated: 2023-12-04T11:39:45.000Z *This article was first published in Australian Energy Daily © Peter Milne.* The importance of who buys ExxonMobil’s Bass Strait infrastructure and takes responsibility for an eventual multi-billion-dollar cleanup bill has been highlighted by the move into voluntary administration of the owner of an offshore oil vessel with a A$144 million decommissioning liability. Northern Oil and Gas Australia, the unlisted owner of the Northern Endeavour oil production vessel in the Timor Sea, went into [voluntary administration](https://insolvencynotices.asic.gov.au/browsesearch-notices/notice-details/Northern-Oil-and-Gas-Australia-Pty-Limited-607646579/2f5a4fc2-d451-4896-ad60-0335063f4f73?appointment=Voluntary%20Administration&ref=boilingcold.com.au) on Friday. It comes as the federal government prepares to issue policy options in the wake of an almost year-long[ review](https://www.industry.gov.au/data-and-publications/offshore-oil-and-gas-decommissioning-framework-review?ref=boilingcold.com.au) of the offshore oil & gas decommissioning framework. Production was halted on the Northern Endeavour in July after two dangerous accidents led the offshore safety regulator NOPSEMA to [demand](https://www.nopsema.gov.au/assets/Published-notices/A683466.pdf?ref=boilingcold.com.au) a maintenance backlog be cleared, a fire-fighting system fixed and corrosion addressed. The vessel and the associated Laminaria and Corallina oil fields have a provision for “rehabilitation and restoration” of US$97.5 million (A$144 million), according to the group’s most recent accounts filed with ASIC for the year ending December 2017. If the administrators are unsuccessful in either revitalising the company or selling the vessel then the Australian government will be left with the cleanup bill. In contrast in the UK decommissioning costs are only borne by the government as a last resort. If the owner of a facility offshore the UK cannot pay for decommissioning the [liability first falls to the previous owners](https://www.nao.org.uk/wp-content/uploads/2019/01/Oil-and-gas-in-the-UK-offshore-decommissioning.pdf?ref=boilingcold.com.au). Woodside Energy, that sold the Northern Endeavour to NOGA, does not face that liability under Australian law. Woodside had initially planned to decommission the vessel itself. Instead, in 2016 it paid NOGA US$16.5 million to take the vessel, fields and decommissioning liability, according to NOGA’s 2016 accounts. A spokesperson for Minister for Resources Matt Canavan told *Australian Energy Daily* that the National Offshore Petroleum Titles Administrator is engaging with the administrator KPMG about the obligations of holders of offshore titles, including decommissioning costs. “It is premature to discuss any decommissioning liability falling to the Commonwealth,” the spokesperson said. ## Large liability for sale NOPTA may soon have to consider the transfer of Australia's first offshore production facilities, the ExxonMobil-operated system of 23 platforms and 600km of pipelines in the Bass Strait. The US giant announced last week it would sell its half share of its joint venture with BHP that has produced four billion barrels of oil and eight trillion cubic feet of gas since Australia’s first offshore well was drilled in 1965\. BHP has not said if it also intends to sell. Major oil companies often lose interest in older assets as production declines and look to sell them to smaller companies that can operate them at less cost. The question for regulators is whether the lean cashflow towards the end of a field’s life is sufficient to cover the abandonment of the wells, platforms and pipelines built in more profitable times. Decommissioning costs were thought to be the main reason the two companies [abandoned an attempt to sell](https://www.afr.com/companies/energy/sands-shifting-under-local-petroleum-sector-20190920-p52t92?ref=boilingcold.com.au) just the joint venture’s oil assets in 2016. Canavan’s spokesperson said he understood that before NOPTA approved the transfer of a title it considered the financial capability of the new owner to meet its obligations, including decommissioning. “NOPTA would not approve the application unless it was satisfied on these matters at the time the transfer was approved,” Canavan said. Senator Canavan’s spokesperson said a [review](https://www.industry.gov.au/data-and-publications/offshore-oil-and-gas-decommissioning-framework-review?ref=boilingcold.com.au) of offshore oil and gas decommissioning is due to issue policy options towards the end of this year and the government would make a final policy decision in 2020. With a sale likely to take [two to three years](https://www.theaustralian.com.au/business/mining-energy/beach-santos-tipped-a-suitors-for-exxons-bass-strait-assets/news-story/428856273ab08cbc2e0b00d32c22f46d?ref=boilingcold.com.au) Exxon and possible buyers such as Beach Energy and Santos will be watching the outcome closely. --- *Main image: Marlin B platform in the Bass Strait. Source: ExxonMobil Australia* --- ### Carbon investor stampede can't be stopped URL: https://www.boilingcold.com.au/carbon-investor-stampede-cant-be-stopped/ Last updated: 2023-12-04T11:44:36.000Z *This article was first published in Australian Energy Daily © Peter Milne.* Hydrocarbon companies’ increased focus on gas and petrochemicals and forays into renewable energy will not stop investors fleeing the sector, a conference in Perth was told yesterday. The world’s hydrocarbon-focussed “energy establishment” was “seriously underestimating the speed and depth of the transition” to a less carbon-intensive world, according to Paul Stevens, a Chatham House energy specialist. Stevens said the energy establishment - that he defined as the big oil companies, the International Energy Agency, the OPEC secretariat, and the US Energy Information Administration - portrayed the view that “hydrocarbons are going to continue to play a huge role in the global energy mix” as they had a vested interest. "What else are they going to do, write a letter to the shareholder and say ‘it’s been nice knowing you, goodbye,’" Stevens told the [Energy in WA Conference](http://www.energywa.org.au/?ref=boilingcold.com.au). While climate change was the initial trigger for the energy transition Stevens said air quality was increasingly driving the change, especially in Asia. "The reason for this is that you don't need a panel of international scientists to tell you its a bad thing, just try and walk down the street," Stevens said. Geopolitical risk, highlighted by the recent attack on the Saudi oil refinery, would hasten the move away from hydrocarbons. Oil demand lost to electric vehicles would not be replaced by the needs of the petrochemical industry as the industry hoped Stevens said as petrochemicals “were becoming the new tobacco.” Stevens said the investments in renewable energy by the big oil companies were “almost doomed to fail” as it was a lower margin and more competitive industry. “People make money investing in renewables but not the sort of economic rent that the oil companies were able to capture in the 20th century.” "The question is how much longer will shareholders retain loyalty to the companies, because at some point the penny is going to drop and there is likely to be a rush to the door," Stevens said. ## Role of gas questioned Stevens said gas would likely be “last man standing for hydrocarbons”, but questioned the long-term future of gas as a “transition fuel.” “Given the falling costs of renewables what I am seeing is people moving from coal directly to renewables without going through the gas phase." Woodside chief executive Peter Coleman is an advocate for the emissions benefits of gas but warned the gas industry not to “feel superior” and assume the community accepted the argument. “We risk lulling ourselves into a false sense of security,” Coleman told the Gastech conference in Houston this week. The LNG boss warned that gas producers were at risk of unpredictable regulatory clampdowns. “It would only take one cataclysmic weather event in the developed world which, rightly or wrongly, is attributed to climate change, for governments to act in a way that industry may not be ready for,” Coleman said. Woodside plans to sanction the Scarborough and Browse LNG projects next year. Stevens said the long-term nature of LNG investments made them potentially risky in the current environment and he queried the appetite from investors “especially at the moment given the potential oversupply.” Energy industry research firm Rystad expected [$US103 billion to be committed](https://www.rystadenergy.com/newsevents/news/press-releases/2019-to-be-a-record-year-for-LNG-project-sanctioning/?ref=boilingcold.com.au) this year to expand global LNG production by more than 100 million tonnes a year. Robert Sims, head of Asian gas research for energy industry consultancy Wood Mackenzie, told the Perth conference that the LNG market would be oversupplied to 2022 and after a few years of price recovery would again be oversupplied until the late 2020s. ## Investors pushback Bloomberg New Energy Finance head of Australian research Leonard Quong said the capital markets had an increasing appetite for low carbon assets. Today the AGL board faces pushback of its rejection of a shareholder resolution for it to reduce emissions in line with Paris Agreement. Market Forces legal analyst Will van de Pol said major investors that have repeatedly backed the Paris Agreement could put their pledges into practise by supporting a resolution calling on AGL management outline to outline how they would manage the energy transition in line with Paris. “While the Australian Government continues to debate the shape of the earth, investors must get on with the serious business of managing material climate risk,” de Pol said. Quong told the Energy in WA conference that the energy transition needed to accelerate beyond BNEF’s most bullish forecast for fossil fuel reduction to meet the Paris Agreement target of limiting global warming to two degrees C. There was a real chance of much higher climate risk for investors. “By the [latest IPCC report](https://www.ipcc.ch/sr15/?ref=boilingcold.com.au), if we are to limit the runaway effects of climate change we might need to limit global to within a 1.5 degree pathway,” Quong said. The bleak outlook for hydrocarbon investments is not good news for Australia as the world’s [third-largest fossil fuel exporter](https://www.tai.org.au/sites/default/files/P667%20High%20Carbon%20from%20a%20Land%20Down%20Under%20%5BWEB%5D%5F0.pdf?ref=boilingcold.com.au) due to its coal and LNG exports. Stevens said Australia had suffered badly from the “resource curse” and the government needed to push the development of renewable energy technology. “There is always more money from exporting technology than from exporting resources.” --- *Main image:* Pump-jack producing oil*. Source:* [Zbynek Burival](https://unsplash.com/@zburival?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) on [Unsplash](https://unsplash.com/s/photos/oil-and-gas?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) --- ### Edwell sees 'happy place' for WA energy URL: https://www.boilingcold.com.au/edwell-sees-happy-place-for-wa-energy/ Last updated: 2023-12-04T11:38:33.000Z *This article was first published in Australian Energy Daily © Peter Milne.* While Stephen Edwell’s first job in readying WA’s power grid for the future is taming the “clear and present danger” of soaring amounts of rooftop solar he thinks the technology will eventually take Australia’s energy markets to a “happy place” of lower prices. Edwell, appointed independent chair of the WA Government’s energy transformation taskforce in May, has reshaped energy markets before. He prepared Queensland to enter the NEM and later set up the WA Wholesale Electricity Market. The first full-time chair of the Australian Energy Regulator sees the hollowing out of daytime demand by rooftop solar as a threat to maintaining the minimum level of generation the South West Interconnected System needs. “If we do nothing, and the level of rooftop solar continues to grow at current forecast rates we'll be, within three or four years, right on the limit,” Edwell told *Australian Energy Daily*. The 1,000 megawatts of rooftop solar installed in the SWIS has [three times the capacity](https://www.wa.gov.au/organisation/energy-policy-wa/energy-transformation-strategy?ref=boilingcold.com.au) of the network’s largest power station AEMO [expects ](https://www.aemo.com.au/-/media/Files/Electricity/WEM/Planning%5Fand%5FForecasting/ESOO/2019/2019-WEM-ESOO-report.pdf?ref=boilingcold.com.au)behind the meter PV systems to generate 1,657 gigawatt-hours in the South West Interconnected System this financial year and increase an average of 13% a year for the next three years. “We certainly have to get to a situation fairly quickly where rooftop solar is visible, it's controlled by the market operator and it works for the good of the whole power system,” Edwell said. To do that his taskforce will deliver a distributed energy resources roadmap to the state government by December. Edwell said buyers of rooftop solar needed a return on their investment and the government did not want to be “to be putting a foot on the hose” of growth but “they have to operate in a way which is predictable, which is transparent, which is controllable, based on automation.” The key is connection standards to allow the technology in modern inverters to be used to ramp the PV systems up and down to suit system needs. Edwell said the taskforce would prefer to use the same standards as the NEM but will go its own way rather than be held up. ## Same country but a very different market The taskforce has an advantage that energy reformers in the east can only dream of - a single jurisdiction that can make timely decisions. The grid in the west also differs in fuel mix, ownership and regulatory structure. The NEM was [powered by](https://www.aemo.com.au/Electricity/Wholesale-Electricity-Market-WEM/Data-dashboard?ref=boilingcold.com.au#generation-fuelmix) 74% coal, 8% each from gas, hydro and wind and 2% from solar in the 12 months to July. The [fuel mix for the WEM](https://www.aemo.com.au/Electricity/Wholesale-Electricity-Market-WEM/Data-dashboard?ref=boilingcold.com.au#generation-fuelmix), with cheaper gas and no mountains for hydroelectricity, was 49% black coal, 40% gas, 9% wind and just 0.3% utility-scale solar. State ownership is strong. Western Power runs the grid and its sister company Synergy has a [38% share](https://www.aemo.com.au/Electricity/Wholesale-Electricity-Market-WEM/Data-dashboard?ref=boilingcold.com.au#market-diversification-generation) of generation and a retail monopoly for residences and small businesses. AEMO operates the market in WA but it is based on capacity, not energy. “A capacity market is a better place than an energy market to respond to the challenges that the power system currently has with renewable energy and distributed energy,” Edwell said. Put simply, a capacity market provides payments for capacity to be available that gives a return on capital and variable costs are covered by a payment for energy provided. Edwell said it provides greater certainty for investors in new generation but can lead to excess capacity. ## Economics will solve emissions Once the DER roadmap is delivered the taskforce will focus on a whole of system plan for the south-west similar to the NEM integrated system plan produced by AEMO. The plan will outline the capacity mix required over 10 and 20-year time frames for four different demand and technology scenarios. Two scenarios outline a future with very low emissions but no type of carbon price is modelled. “My view of the world is that a carbon price is almost yesterday's problem,” Edwell said. “Because the economics of renewable energy now is such that if we ensure we've got open access we'll get the benefits of lower carbon emissions over time.” Another aim of the WA [energy transformation strategy](https://www.wa.gov.au/organisation/energy-policy-wa/energy-transformation-strategy?ref=boilingcold.com.au) is to free up access to Western Power’s grid from unconstrained to constrained access as the NEM has. Edwell is planning to move to the new model in 2022 but incumbents will retain their capacity credits for some years as part of the transition. For Edwell data is essential to transforming WA’s energy system. “If we just had renewable energy without the ability to capture data, analyze data - massive amounts of data at the consumer end - this would be a bigger challenge,” Edwell said. “It's not about Big Brother controlling things, it's about having good data analytics, smart networks, and value streams for small scale producers of electricity to get a return on their investment.” The data will require strong regulation to protect consumers and maintain competition. Edwell is optimistic that a decentralised digitalised power system with distributed energy at a low or zero marginal cost combined with storage will lower prices. In the flat terrain of WA that storage will mainly be batteries, not hydropower or pumped hydro. “So we're all going to end up in a happy place, the trick is making sure that we can avoid upheaval in getting there,” Edwell said. --- *Main image: Warradarge wind farm. Source: Synergy* --- ### WA emissions leave other states to cut deeper URL: https://www.boilingcold.com.au/wa-emissions-leave-other-states-to-cut-deeper/ Last updated: 2023-12-04T11:37:31.000Z *This article was first published in Australian Energy Daily © Peter Milne.* A surge in emissions in resource-rich WA means other states will have to do the heavy lifting on the Paris targets. Both NSW and Victoria have committed to net zero emissions by 2050, but WA’s recent move to label it an “aspiration”, combined with new projects coming online next year have paved the way for more division on state and federal energy and emissions policy. NSW Minister for Energy and the Environment Matt Kean said his state was already feeling the effects of climate change the public expected responsible action to address it. “Our government was elected on a policy of net zero emissions by 2050 and we are working towards delivering that,” Kean said. Victorian minister for energy, environment and climate change Lily D’Ambrosio said climate change affected all states “which is why it would be nice to see some federal government leadership on this issue”. “We’re delivering on our promise to achieve zero net emissions by 2050, regardless of what action other states take – but the more we work together the better off we’ll all be,” D’Ambrosio said. The federal government expects east coast states to cut carbon emissions by more than the Paris Agreement target of 26% to 28% by 2030 to make up for LNG-powered increases in emissions from WA, according to the WA state government. WA energy minister Bill Johnston recently said he expected WA’s 2030 emissions would be higher than its emissions in the 2005 Paris benchmark year. “But there's other stuff going down to accommodate the increase in WA,” Johnston told Perth radio station 6PR. “That's how I understand from the federal Liberal government is how they are saying they will meet the target that they've set.” Emissions from the resource-rich state [increased](http://www.environment.gov.au/system/files/resources/917a98ab-85cd-45e4-ae7a-bcd1b914cfb2/files/state-territory-inventories-2017.pdf?ref=boilingcold.com.au) 23.4% from 2005 to 2017 - while all other states recorded drops of at least 10 per cent. Johnston told *Australian Energy Daily* that the federal government had set a single national target, not pro-rata targets for each state. “WA’s resources economy is essential to the economic health of our nation and underpins our trade relationships,” Johnston said. “Without a successful WA resources sector, every Australian would have much lower incomes.” The Wheatstone and Prelude LNG projects - that together are [permitted ](http://www.cleanenergyregulator.gov.au/NGER/National%20greenhouse%20and%20energy%20reporting%20data/Safeguard-baselines-table?ref=boilingcold.com.au#Safeguard-baselines-table)to emit 6.8 million tonnes a year under the federal government's safeguard mechanism - have started operating since the 2017 figures. ## Browse the carbon machine Next year Woodside plans to sanction the US$11 billion Scarborough and US$20.5 billion Browse LNG projects. Carbon emissions from Browse’s offshore facilities will [average ](https://epa.wa.gov.au/sites/default/files/Referral%5FDocumentation/Browse%20to%20NWS%20Development%20Supporting%20Document.pdf?ref=boilingcold.com.au)4 million tonnes a year due to the high level of CO2 in the reservoir and the fuel burned to pump the gas 900km to the existing North West Shelf LNG plant. There a further 4.5 million tonnes of carbon emissions will be produced - if the plant operates at its current carbon intensity - to make 10 million tonnes a year of LNG. The Browse project alone will negate about half the estimated base case emissions [savings](https://www.snowyhydro.com.au/wp-content/uploads/2018/12/MJA-NEM-Study-Public-Report-3Dec2018.pdf?ref=boilingcold.com.au) from Snowy 2.0 in 2030. The WA government released its policy days before the state’s Environmental Protection Authority closed [consultation](http://www.epa.wa.gov.au/pages/greenhouse-gas-emissions-assessment-guidance-consultation?ref=boilingcold.com.au) for its own greenhouse gas guidelines. In March the WA EPA said its non-binding [recommendations](http://www.epa.wa.gov.au/media-statements/epa-releases-revised-guidance-proponents-greenhouse-gas-emissions?ref=boilingcold.com.au) to the WA Government on new major projects would include the requirement to offset all carbon emissions. The EPA [backed off](http://www.epa.wa.gov.au/media-statements/further-consultation-environmental-protection-authority-greenhouse-gas-guidance?ref=boilingcold.com.au) from its stance a week later after an industry backlash led by Woodside chief executive Peter Coleman and a lack of support from the WA government. *Australian Energy Daily* asked Woodside how it could reconcile significantly increasing its emissions with statements that it would work towards Australia meeting its Paris target. A Woodside spokesperson said its projects would comply with the safeguard mechanism set by the federal government to meet the Paris target. Woodside did not accept the premise put to them by *Australian Energy Daily* that other sectors of the Australian economy would have to make deeper emissions cuts to offset the growth in emissions from Woodside’s investments. ## Different states, different rates Johnston’s comments on emissions in other states came after the launch last month of a [new policy](http://www.dmp.wa.gov.au/Petroleum/New-emissions-policy-25793.aspx?ref=boilingcold.com.au) on greenhouse gas emissions from major projects in the west. The policy included an “aspiration” for net-zero emissions in WA by 2050, an acknowledgement of “the Commonwealth Government’s” 2030 target and the possible requirement for major projects to submit a non-binding plan on how they will contribute to achieving net-zero emissions by 2050. The plan does not include a trajectory of gradual emission reductions to 2050. The WA Labor government's initiative is less potent than the NSW Liberals that in the last week [clarified ](https://www.smh.com.au/environment/climate-change/silicon-valley-of-solar-nsw-to-set-interim-carbon-reduction-targets-20190908-p52p6d.html?ref=boilingcold.com.au)that net-zero emissions by 2050 was a target not just an aspiration and that they would develop interim carbon reduction targets to guide the way. ## Taylor says Australia on track for Paris Federal minister for energy and emissions reduction Angus Taylor said the government's $3.5 billion Climate Solutions Package mapped out how it would meet the 2030 Paris target “down to the last tonne”. “We are taking a sensible and balanced approach to securing a better future for Australians, reducing emissions while ensuring our economy remains strong,” Taylor said. The [climate solutions package](https://www.environment.gov.au/system/files/resources/bb29bc9f-8b96-4b10-84a0-46b7d36d5b8e/files/climate-solutions-package.pdf?ref=boilingcold.com.au) includes: - A $2 billion contribution over 10 years to the emissions reduction fund, now renamed the climate solutions fund, to purchase offsets and emission reductions estimated to total 100 million tonnes by 2030. - Increases in the energy efficiency of appliance and buildings to cut 63 million tonnes of emissions by 2030. - An additional subsea link to expanded Tasmanian hydroelectric capacity - An electric vehicle strategy [Controversially](https://www.smh.com.au/environment/climate-change/scott-morrison-s-pea-and-thimble-trick-20190226-p51090.html?ref=boilingcold.com.au) the federal government relies on using a credit of 367 million tonnes from the Kyoto targets that pre-dated the Paris Agreement to claim the 2030 target will be met. --- *Main image: First LNG cargo departs Gorgon LNG project in March 2016\. Source: Chevron Australia Pty Ltd* --- ### Chevron preps to cull 400 workers URL: https://www.boilingcold.com.au/chevron-preps-to-cull-400-workers/ Last updated: 2022-07-30T03:40:42.000Z *This story was originally published in The West Australian on 28 June 2018 with the headline "Chevron set to axe 400 jobs." © Peter Milne.* Chevron is preparing to shed about 400 employees from its WA business, just months after approving a new construction project and backing an LNG jobs initiative. WestBusiness understands the operator of the Gorgon and Wheatstone LNG projects told senior staff in Perth of the planned lay-offs this week. The job losses will occur over the next 12 months and affect about 15 per cent of the workforce. It is understood Boston Consulting Group is conducting a so-called value chain alignment study to review the roles required to support Chevron’s LNG operations. The high-powered international firm has had up to 30 consultants scouring Chevron’s Australian operations over the past 18 months with the total cost approaching $30 million. Chevron would not confirm the number of job losses. A spokeswoman said the company was moving from building projects to operating them and expected a reduction in staff numbers given the change in business activities. “As we transition the business. . . we continually review and align our business needs to have the right skills and competencies in place to meet our future requirements,” she said. Chevron approved in April stage two of the Gorgon project — additional offshore wells and pipelines to keep sufficient gas flowing to the Pilbara’s Barrow Island — expected to cost US$4 billion. The jobs news comes three months after Premier Mark McGowan launched an LNG jobs taskforce that aimed to build on the State’s existing LNG industry to create more long-term local jobs. At the time, Chevron Australia managing director Nigel Hearne welcomed the move and said it was the LNG industry’s obligation to strengthen local capability and unlock jobs. The US oil and gas major is nearing the end of 10 years of construction to build the two plants in WA at the cost of $119 billion. The spokeswoman said Chevron had spent more than $60 billion on goods and services in Australia during the past seven years. The second train of the $US$34 billion Wheatstone LNG project near Onslow commenced production two weeks ago. Start-up of Wheatstone’s domestic gas plant, scheduled by the end of this year, will bring Chevron’s initial construction marathon to an end. ### Prelude and Ichthys cool down ahead of first production URL: https://www.boilingcold.com.au/prelude-and-ichthys-cool-down-ahead-of-first-production/ Last updated: 2024-11-29T02:25:25.000Z *This story was originally published in The West Australian on 9 June 2018 with the headline "Cool moves bring LNG production closer." © Peter Milne.* Shell’s Prelude floating LNG vessel and Inpex’s Ichthys LNG plant in Darwin have moved closer to production with the cooling of their plants with LNG. A Shell spokeswoman said the LNG carrier Gallina had introduced gas to the Prelude to cool the tanks and pipes. The Gallina arrived on Wednesday and left Prelude yesterday afternoon according to vessel tracking site MarineTraffic. Prelude project director Didrik Reymert stressed the importance of safety now the facility was “live”. “The risk profile of the facility has changed fundamentally and this has a great impact on how we work,” he said. The LNG plant on board Prelude will be tested in preparation for the subsea wells being opened. An Inpex spokesman said its Darwin plant had received LPG and LNG to cool parts of the plant in preparation for start up. The loading of LNG from the Gallina to the Prelude is the first test of the systems Shell designed to allow LNG to be transferred between two moving vessels. Prelude required loading arms that can swivel, rotate and follow the motion of the LNG carrier for the usual 15-hour offloading process that will occur every five to six days when production starts. The recently completed loading was unique, as the LNG was flowing in the opposite direction into the Prelude. Before installation on the Prelude the unique loading arms were tested using liquid nitrogen and a rig that simulated movement in extreme sea conditions. The loading arm had to be able to pull itself into place to connect and release quickly in an emergency. The giant LNG projects off the WA coast draw gas from adjacent fields in the Browse Basin 475km north-east of Broome. ### Big WA gas players look to a claner future URL: https://www.boilingcold.com.au/big-wa-gas-players-look-to-a-claner-future/ Last updated: 2022-07-30T03:33:18.000Z *This story was originally published in The West Australian on 5 June 2018 with the headline "Gas giants look to renewables to cut energy expenses." © Peter Milne.* Ten years after the Varanus Island gas explosion caused an energy crisis, there is plenty of change in the future mix of WA’s power generation. Two of the biggest players in WA’s gas-propelled economy, Woodside Petroleum and Alcoa, are starting to look to renewables to slash their gas use as doubts rise about how big a role the fossil fuel will play in the transition to clean energy. The Woodside-operated Karratha Gas Plant consumes 7 per cent of the gas it gets from offshore to generate power to run itself, and this creates about 70 per cent of the plant’s carbon emissions. Chief executive Peter Coleman told the oil and gas industry last month that cutting the amount of gas used for fuel by combining solar panels and batteries with gas generation would increase LNG exports and made environmental and economic sense. Mr Coleman expects power generation at the North West Shelf Venture’s KGP and Woodside’s Pluto to be significantly different by the mid-2020s. Concentrating solar thermal (CST) generation, where mirrors allow the sun to heat a liquid that produces steam 24 hours a day to generate power, could eventually also be used. Alcoa, the State’s biggest gas consumer, is a partner in a $15 million research effort at the University of Adelaide into the use of CST in alumina production. The first stage is looking to use waste heat from the CST steam turbine for the required heating that currently comes from burning gas. University of Adelaide Centre for Energy Technology director Professor Gus Nathan, who is leading the research, said the team would have a good understanding of the preferred technology to use for the first stage and its economic and technical feasibility by the end of this year. If successful, the full three stages of the research program could cut Alcoa’s gas use by up to 45 per cent. Meanwhile, the backers of the Asian Renewable Energy Hub in the East Pilbara, who aim to send power to Indonesia, have added 1.2 gigawatts of capacity for the Pilbara market to their plans at the cost of $5 billion. The hub would generate power constantly from solar panels by day and wind turbines that are most productive at night. As big industrial users work to lessen their dependence on gas, the Public Utilities Office is considering the best fuel mix for the State’s power grid. Sustainable Energy Now chairman Ian Porter said the State should take care not to sign long-term contracts for power it may not need. The group’s analysis showed that 85 per cent of the South West grid could be supplied with renewable energy by 2030 at a similar cost to maintaining the current mix of coal, gas and renewables. The change would reduce the power generated by gas to one-third of current levels. Climate Analytics director Bill Hare said gas turbines would be used to back up power supplies for some time, but not to the degree that has been predicted. “What is changing the equation. . . is the rapid price reductions for renewable energy and storage, so the combination is already beginning to compete effectively with natural gas backup and peaking capacity,” he said. Despite question marks over gas demand in WA, Woodside is optimistic about demand for its LNG. A Woodside presentation to analysts last month predicted annual LNG demand would grow 4 per cent a year until 2035. Dr Hare said forecasts of gas demand soaring until the mid-2030s had to assume the Paris Agreement to limit the average temperature rise to 1.5C was breached and substantial use of carbon capture and storage. He said investors in carbon capture and storage faced not just technical risks, but the prospect that their investment would be underutilised. Dr Hare, who heads the Berlin-based climate institute from Perth, said it was important for WA to embrace change and a strategy for the State’s industry to transition to a renewable base was critical. “Western Australia could use its vast renewable energy potential to transition from a natural gas giant to a renewable energy superpower, generating significant wealth and employment for the State,” he said. In the meantime, gas producers will be gambling that the high gas prices required to bring new resources to market do not make their product uncompetitive against renewable energy. ### WA gas supply more robust a decade after Varanus explosion URL: https://www.boilingcold.com.au/wa-gas-supply-more-robust-a-decade-after-varanua-explosion/ Last updated: 2022-07-30T03:28:14.000Z *This story was originally published in The West Australian on 4 June 2018 with the headline "Gas still has role to play in energy supplies." © Peter Milne.* A decade after fire seriously threatened WA’s power grid, Peter Milne asks what has changed to make it more reliable Nuclear energy, coal, renewables and a link to the Eastern States power grid were among the suggestions thrown around on the day after the fire at the Varanus Island gas plant was extinguished 10 years ago. Having gone to the precipice, West Australians were keen to avoid a repeat of the chaos in the State’s energy supply that saw industry shut down and blackouts threatened. A decade on, these ideas have either been discarded, implemented to make today’s energy supply more robust or still wait in the wings. Nuclear energy, more coal-fired power stations and renewable energy all offered the possibility of lessening the State’s reliance on gas to generate electricity. Nuclear power went nowhere. Labor was totally opposed. Colin Barnett, who became premier months after the explosion, supported the technology but thought the WA market and grid were too small to handle such a large power source. More coal-fired power was already under construction when Varanus blew in 2008\. Griffin Energy’s 400MW Bluewaters power station came online the next year. In the aftermath of the explosion, Alan Carpenter’s Labor government decided to spend between $3 million and $4 million to temporarily restart the 40-year-old State-owned Muja AB power station that had been decommissioned in 2007. The next year the new Liberal government went a step further, with a $100 million plan to refurbish the 240MW station to generate power for the long term. However, the increase in coal-fired capacity did not lead to a successful decade for coal power or its investors. The refurbishment of Muja AB eventually cost the State government over $300 million, was 18 months late and generated electricity for just 20 per cent of the time. It is now closed. Ten years on from the Varanus Island explosion, the State’s power is less dependent on gas. Last month, gas generated 40 per cent of the power in the WA wholesale electricity market, down from 45 per cent in May 2008. The biggest change, according to data from the Australian Energy Market Operator, is that wind generated 10 per cent of the electricity last month, compared with 3 per cent a decade ago. The most significant source of renewable electricity in WA, rooftop solar, is not reflected in the data as it sits behind the meter. WA has a more robust gas supply system than a decade ago. Then there were only two significant gas producers, Woodside’s North West Shelf and Apache’s Varanus Island that sent gas south through a single pipeline and no gas could be stored for emergencies. Apache started up the Devil Creek in 2011 and BHP opened the Macedon gas plant in 2013\. Chevron’s Gorgon project began sending gas from Barrow Island to the mainland in 2016 and the US company expects Wheatstone to start deliveries this year. Gas from all these projects arrives in Perth via the Dampier-to-Bunbury gas pipeline. The State’s reliance on this single pipeline has long been a source of concern. But the pipeline has been expanded by installing additional parallel pipelines, or loops, between the compressor stations. It also allows gas to keep flowing if one pipeline is out of action. WA is now less reliant on gas and, more importantly, the supply is more reliable. However, ideas from 10 years ago to connect the State to the east have gone nowhere. Importing LNG into the South West would have reduced WA’s reliance on gas but was dismissed because of the high cost of a re-gasification plant to receive the shipments. Now the only LNG import terminals proposed for Australia are on the east coast. These may now be viable due to cheaper floating re-gasification facilities and the soaring cost of gas in the east as the Queensland LNG projects force a link to international gas prices. Connecting WA’s electricity grid to the east was thought unlikely because the common technology of the day, overhead alternating current transmission wires, would have massive energy losses along the route. Now high voltage direct current cables, which lose far less energy, are proven technology. One proposal for an east-west connection, however, involves exporting solar energy from the Pilbara, not connecting the south-west grid to the east. Ten years on from Varanus, WA still has isolated gas and electricity networks but at least the vital gas supply is a lot more reliable. ### The Varanus Island gas explosion that shook the WA economy URL: https://www.boilingcold.com.au/the-varanus-island-gas-explosion-that-shook-the-wa-economy/ Last updated: 2023-10-24T04:53:38.000Z *This story was originally published in The West Australian on 2 June 2018 with the headline "How a remote blast set off a WA gas crisis." © Peter Milne.* Ten years ago (*note: 2008*), a gas explosion on a remote North West island took out 30 per cent of WA’s gas supply and resulted in factory layoffs and calls for shorter showers. It cost the State’s economy up to $3 billion and led to years of blame-shifting and litigation. It took days to extinguish the fire, two months to restart gas supply, a year to complete the final incident investigation, more than a year to resume full gas production, four years for the investigation to be made public and seven years for the last legal cases to be settled. US oil company Apache operated a plant on Varanus Island, about 100km west of Karratha, that gathered gas from offshore fields, treated it and sent it to the mainland through high-pressure pipelines. At the beach, unknown to Apache, the wall of one pipeline had corroded from 11mm thick to only 1.5mm. About 1.30pm on June 3, 2008, the high pressure gas inside the pipeline finally overcame the thinning steel wall, escaped, and exploded in a ball of flames. The blast destroyed an adjacent gas pipeline, dug an 8m by 30m crater and flung rocks weighing as much as 17kg into the nearby plant area. Twenty minutes later, all 150 workers on the island had been accounted for. By sheer luck none had been near the explosion and no one was injured. Two more pipelines exploded less than an hour later. One worker saw flames shoot 40m above the plant. “That’s when everyone just stood up and started running to the southern point of the island and some people actually started jumping into the water and started to swim,” the worker said. By early evening, as the fire raged, all workers except for a skeleton crew of 14 had been evacuated by helicopter. The immediate problem for State authorities was how to cope with a 30 per cent cut in the gas supply that fuelled industry and generated 60 per cent of the State’s electricity, with no indication of when the gas would flow again. The day after the explosion, Alinta called for customers to have fewer showers and cut their use of gas heaters. Western Power asked customers not to use air-conditioners. Some big industrial gas users, such as CSBP Fertiliser, Alcoa and milk processor Fonterra, burnt expensive diesel instead of gas. Others curtailed production or shut down. Then-premier Alan Carpenter described the crisis as the biggest challenge the Labor government had faced. “It is going to cost our economy a hell of a lot of money,” Mr Carpenter said at the time. He was right. State-owned electricity generator Verve was spending about $3 million a day on extra diesel. The accident could not have come at a worse time as the State looked to ramp up use of the other alternative to gas — coal. A 120MW plant in Kwinana was closed for maintenance for weeks. Five days before the explosion damage to a turbine blade shuttered a 300MW plant in Collie. Two weeks after the event, with cold mornings increasing gas demand and still no clear date for a resumption in supplies, the premier took the unprecedented step of addressing the State on TV and radio. Mr Carpenter said the Government could guarantee gas supplies to essential services and households, but not all businesses. One week on, power supply was still tenuous. The manager of Western Power’s transmission system, Ken Brown, said he had “another 10 days of real knife-edge operating” ahead before more diesel started to arrive and the coal-fired power stations restarted. Some gas started flowing again from Varanus Island in September, in the midst of a State election campaign that ended with Colin Barnett forming a government. Within weeks, the National Offshore Petroleum Safety Authority handed the Barnett government an initial report that damned Apache. The report found that the pipeline’s anti-corrosion coating and cathodic protection system were ineffective and Apache had not done any maintenance on the pipeline for 16 years. The Federal and State governments launched a $1 million inquiry in January 2009 that produced a draft report in April. Apache started a relentless and aggressive legal campaign to suppress the report. Many in the industry thought this was partly driven by Apache wanting to limit the information available to customers suing them, reportedly for as much as $1 billion, for losses caused by the interrupted gas supply. A regulatory error that classified a section of the pipeline as “piping” instead of “pipeline” contributed to the collapse of the State’s prosecution of Apache in March 2012\. The report was finally made public in May 2012, three years after it was completed, when State mines and petroleum minister Norman Moore tabled it in Parliament. The Bills-Agostini report pointed to Apache’s focus on cost and urgency and a confused understanding of the system intended to protect the pipeline against corrosion. At an estimated cost of $2.4 to $3 billion, the Varanus blast was an expensive and drawn-out reminder of the fragility of the complex combination of technology, profit drivers, law and regulatory enforcement that underpins our daily needs. --- *Main image: Varanus Island today. Source: Santos.* ### Chevron pays $866m after tax case loss URL: https://www.boilingcold.com.au/chevron-pays-866m-after-tax-case-loss/ Last updated: 2022-07-30T03:14:42.000Z *This story was originally published in The West Australian on 25 May 2018 with the headline "Chevron pays $866m to ATO." © Peter Milne.* Chevron has paid the Australian Taxation Office $US654 million ($866 million) under a partial settlement of its dispute with the tax office over intercompany loans and slashed the interest rate it charges its Australian subsidiary. The energy giant lost an appeal in the Federal Court last year over a $2.5 billion loan from a subsidiary in the US to Chevron Australia that charged an interest rate of about 9 per cent. The court determined the interest paid by the Australian company was higher than it would have been under an arms-length deal between independent parties. Chevron made a settlement with the ATO in August for the loans considered in the case over a $340 million tax bill, as well as tax for other, similar loans. WestBusiness understands the $US654 million bill is not the full payment for the settlement. The operator of the Gorgon and Wheatstone LNG projects has now consolidated its borrowings into a single 20-year $39.5 billion loan. The much lower variable interest rate, currently 2.78 per cent, would still produce an annual interest bill of about $1.1 billion. The details were revealed in Chevron’s 2017 annual report, which became publicly available yesterday. Chevron’s revenue in Australia last year soared from $US1.65 billion in 2016 to $US4.01 billion, driven by Gorgon’s first two LNG trains increasing production and the third train coming online. A company spokesman said that with production underway the company was earning revenue but not generating a taxable profit. Depreciation of $US1.77 billion on its massive construction spend, finance costs of $US981 million and a foreign exchange loss of $US2.74 billion saw the US major lose $US2.36 billion in Australia last year. Chevron paid $US306 million in income tax last year from the $US654 million due, less a withholding tax refund of $US348 million. It last paid income tax in 2012 and excluding any further settlement payments may not do so again for some years. Pitcher Partners managing director Leon Mok said Chevron’s significant carried forward tax losses of about $US5.86 billion and the interest deductions from the $39.5 billion loan would reduce any future tax payable. Chevron also has a $US731 million petroleum resource rent tax credit that will delay the start of payments for the gas its LNG plants consume. The spokesman said the company had paid $5.3 billion in Federal and State taxes and royalties in Australia since 2009. ### Kidman and SQM plan Kwinana lithium refinery URL: https://www.boilingcold.com.au/kidman-and-sqm-plan-kwinana-lithium-refinery/ Last updated: 2022-07-30T03:01:00.000Z *This story was originally published in The West Australian on 5 May 2018 with the headline "Kidman’s power play with plant in Kwinana." © Peter Milne.* The State’s charge into the battery minerals industry is gathering pace, with Kidman Resources and Chilean lithium giant SQM looking to build Kwinana’s second lithium refinery. The joint venture, tagged WA Lithium, yesterday secured an option on a site to process ore from Kidman’s Mt Holland project near Southern Cross. Premier Mark McGowan, speaking at Kwinana yesterday, said WA was in the box seat to take advantage of the surge in demand for batteries to power electric vehicles and support renewable energy. “We want more lithium mines here, we want it processed here, we want to be part of the solution to climate change,” he said. WA Lithium is expected to release a feasibility study for the refinery this year and for the plant to start operations in 2021. Mr McGowan said he expected an investment decision late this year or early next year. Construction of the refinery is expected to create 400 jobs, with a further 300 workers building the Mt Holland mine and concentrator. In operation the refinery and mine would require about 150 workers each. Kidman Resources chief financial officer Charles McGill said the plant would be able to switch between producing lithium hydroxide, at a rate of 44,000 tonnes a year, or 37,000 tonnes a year of lithium carbonate. Mr McGill said lithium hydroxide was in favour with the market, and demanded by high end battery manufacturers such as Tesla, but the joint venture wanted flexibility in case the market changed. He said it was cheaper to extract lithium hydroxide from hard rock, which primarily occurred in WA, than the brine that is worked in Chile. A cost estimate for WA Lithium’s plant was not released but Tianqi’s similarly-sized 48,000 tonnes a year lithium hydroxide plant, under construction in Kwinana, will cost about $860 million. US firm Albemarle is looking to build a third lithium plant in Kemerton. The global lithium value chain is expected to grow from $165 billion to $2 trillion by 2025, according to a recent Association of Mining and Exploration Companies study. In a further push for the State’s battery minerals industry, Mines and Petroleum Minster Bill Johnston pledged $5.5 million to a mooted New Energy Industry Co-operative Research Centre if the Federal Government decided to base it in Perth. “WA is the only place that makes sense for a CRC in this area, we have every element that you need for a battery,” he said. Last year Kidman handed over 50 per cent of the project to SQM for an initial $US30 million, staged payments of $US80 million and a convertible loan of $US21.5 million. Kidman has an option to take a 50 per cent stake in the refinery. Kidman shares closed steady at $2.05 a share. ### Inpex suffers $US6b cost blowout at Ichthys URL: https://www.boilingcold.com.au/inpex-suffers-us6b-cost-blow-out-at-ichthys/ Last updated: 2022-07-30T03:10:17.000Z *This story was originally published in The West Australian on 17 May 2018 with the headline "$8b cost blowout for Ichthys." © Peter Milne.* Inpex’s Ichthys LNG project will cost $53 billion, $8 billion more than planned, and may not see substantial production until early next year in a blow to the Japanese operator that is waiting on the Darwin plant to more than double its cashflow. Inpex chief executive Toshiaki Kitamura told a recent investor meeting that the Ichthys project would cost about $US40 billion ($53 billion), a $US6 billion ($8 billion) jump from early 2012 when the project was approved with a late 2016 production target. Inpex finance vice-president Masahiro Murayama said Ichthys production would make a limited contribution for some months but a significant effect was expected towards the end of the fiscal year in March 2019 as production ramped up. Six months ago Mr Kitamura said condensate, LNG and LPG would all be produced by March. Inpex shares dived 4.5 per cent on Friday and by the close of trade yesterday had shed a further 2.7 per cent. The cost hike had been flagged in February by Patrick Pouyanne, the chief executive of Total, that owns 30 per cent of Ichthys, but not the delay in significant production. Mr Kitamura said he expected Inpex to receive about 2.5 trillion yen ($30.3 billion) of cash flow from operations over the next five years and more than half would come from the company’s 62 per cent stake in Ichthys. The final element of the project to be commissioned, the Ichthys Explorer processing facility off the Kimberley, is expected to receive gas from the subsea wells by the end of May. Readying the 120,000 tonnes giant had been holding up the project after commissioning of the subsea equipment, Ichthys Venturer floating production facility, a pipeline to Darwin and the first of two LNG trains was announced in March. Mr Kitamura said the operating cost of Ichthys at full production would be similar to the current company average of $US5.9 per barrel. In a clear signal of the importance Inpex placed on Ichthys, the company will pay a commemorative dividend when the first cargo sails. The Ichthys Venturer may produce condensate a month after commissioning, according to a project schedule lodged with regulator NOPSEMA. In a move likely to bring forward the production of LNG and LPG from the Darwin plant, it is understood that Inpex has filled the 890km pipeline with gas bought from the NT Power and Water Corporation rather than use Ichthys gas. ### Buru look for oil exploration partners URL: https://www.boilingcold.com.au/buru-look-for-oil-exploration-partners/ Last updated: 2022-07-30T03:47:13.000Z *This story was originally published in The West Australian on 9 May 2018 with the headline "Buru keen to explore gas field." © Peter Milne.* Canning Basin oil producer Buru Energy wants to partner up for oil exploration in the wake of its joint venture with Mitsubishi ending. Buru executive chairman Eric Streitberg told the company’s annual meeting yesterday that he was hopeful he could soon announce a farm-in to support the drilling of three exploration wells this year in the vicinity of Buru’s producing Ungani oil field. He said that the exploration was needed as the full flush of Ungani production would last only three to five years and then slowly tail off over 20 years. Ungani production has restarted in the past week after heavy flooding cut access to the site in January. Mr Streitberg said the flooding occurred just after two additional wells had been drilled and two others fitted with pumps to boost output. “We were ready to go but unfortunately were hit by three cyclones in a row,” he said. The access road has now been improved. After the split last year with Mitsibushi which gave the Japanese company the Valhalla gas prospect, Buru retained Ungani and the Yulleroo gas field, about 170km east of Broome. “The oil is immediate and highly profitable but relatively short-term whereas the gas is very long term but a huge resource,” Mr Streitberg said. Development of Yulleroo requires a positive outcome from the State Government’s fracking inquiry that is due to report by the end of the year. Mr Streitberg said the inquiry was consulting widely and the process appeared to be working well. “We’re pretty confident that we’ll get a clean bill of health,” he said. “There may well be some changes to regulations.” ### Pilbara green energy hub looks to WA market URL: https://www.boilingcold.com.au/pilbara-green-energy-hub-loke-to-wa/ Last updated: 2022-07-30T02:56:27.000Z *This story was originally published in The West Australian on 1 May 2018 with the headline "Pilbara wind hub eyes local market." © Peter Milne.* Backers of a giant Pilbara wind and solar farm that will send electricity to Indonesia also want to power local industry and produce hydrogen through a 50 per cent capacity increase which bolsters the project’s budget to about $20 billion. The Asian Renewable Energy Hub plans to install six gigawatts of wind generation, from about 1250 turbines, and 3GW of solar panels on a 6400sqkm East Pilbara site. The hub’s backers, wind farm investor CWP Energy Asia, privately owned Intercontinental Energy, and Danish wind turbine manufacturer Vestas, are targeting a final investment decision in 2020 or 2021. The initial plan was to only send power to Java, Indonesia’s most populous island, through two high voltage direct current subsea cables. The extra generation could power mines, minerals processing or the splitting of water into hydrogen and oxygen using electrolysis. Hydrogen produced by renewable energy is attracting increasing interest as a greenhouse-friendly fuel. CWP business development manager Andrew Dickson said exporting power would cost about $15 billion, including the subsea cables, and the domestic generation and overhead transmission lines about $5 billion. He said the 3GW capacity to Java would export an average of 2.1GW over a year and 2GW of overhead transmission capacity would deliver an average of 1.2GW to the Pilbara. ### McGowan calls for business to move west for cheap gas URL: https://www.boilingcold.com.au/mcgowan-calls-for-business-to-move-west-for-cheap-available-gas/ Last updated: 2023-12-04T11:43:05.000Z *This story was originally published in The West Australian on 28 April 2018 with the headline "McGowan uses gas lure but WA has own woes." © Peter Milne.* The McGowan Government has called for Canberra to help industries hit by soaring gas prices to move to WA rather than push gas east, but supply in the State has its own issues. A spokeswoman for Premier Mark McGowan’s office yesterday said the Commonwealth should add value to the nation’s gas resources by having energy intensive industries located here. > “Any investment by the Commonwealth Government that effectively subsidised transporting gas from WA to the Eastern States would be better spent in assisting industries with a heavy energy requirement to relocate to closer to the source of that gas,” she said. The call came after contradictory signals regarding the Burrup Peninsula clouded views of the State’s gas supply. Woodside said Thursday it was looking to supply 125 terajoules a day of gas from its proposed Scarborough LNG project to a Perdaman Chemicals urea plant. On the same day it was reported that a methanol plant backed by Coogee Chemicals, Mitsubishi and Wesfarmers, also proposed for the Burrup had struck problems when Chevron made its gas unavailable. In reality, the good news from Woodside is only a non-binding memorandum of understanding with a gas project two years from sanction. And WestBusiness understands that Chevron is still discussing gas supply with the methanol proponents. Mr McGowan’s spokeswoman said gas reserved for domestic use from the Gorgon, North West Shelf and Wheatstone LNG projects could meet meet half of WA’s needs over the next two decades, at current levels of demand. However, any industry relocating west needs to know where the rest of the gas will come from. The Australian Energy Market Operator’s 2017 WA Gas Statement of Opportunities predicted a balanced market, with Gorgon doubling its domestic gas output to 300TJ a day and the prospect of higher gas prices driving successful exploration to keep the Macedon, Varanus Island and Devil Creek plants full. The Government expects Gorgon to lift its supply from 2021 but continued production from the three gas plants not linked to LNG projects is uncertain. It requires companies with reduced income from low gas prices to fund high-risk exploration which succeeds in finding sufficient reserves that are economic to produce. If that tall order does not come off there is a mixed bag of other options. Wood Mackenzie head of oil, gas and energy for Australasia Saul Kavonic said Scarborough was likely to go ahead as Woodside was in control of both the field and the Pluto LNG plant which would process the gas. He expected Woodside’s Browse project, which would backfill the NWS plant, to be approved significantly later than Woodside’s target of 2021 because of difficult negotiations between the two ventures. Mr Kavonic said developing Western Gas’ Equus project would be difficult without a significant increase in domestic gas prices or the use of existing infrastructure. He said Waitsia, the onshore Perth Basin field of which Mitsui has gained 50 per cent after taking over AWE, was the lowest-cost new gas that could be developed in WA. However, it may not be available as soon, or as cheaply, as buyers would hope. “AWE were willing to be more aggressive and contract at lower prices to get the project up but Mitsui may be willing to exercise more patience and wait for the better market openings ... as the market tightens,” he said Gas demand has some potential upside from remote diesel power generation switching to gas, but gas use for power to the grid faces uncertainty. A spokesman for Treasurer Ben Wyatt said the Public Utilities Office was expected to complete a review of the State’s electricity generation mix by June, after which industry would be consulted before any Cabinet decisions. While most would expect more renewables and less coal, how much gas-fired power is planned for the next 20 years is unknown. No one knows where the balance is between the price industry can afford to pay and what the producers need for new supply. Hopefully, new supply will not wait for increased prices and come in too late, leading to price spikes that kill off industries, never mind attract new ones from across the Nullarbor. --- *Main image: Parliament House in Perth. Source:* Orderinchaos, CC BY-SA 4.0 [https://creativecommons.org/licenses/by-sa/4.0](https://creativecommons.org/licenses/by-sa/4.0?ref=boilingcold.com.au), via Wikimedia Commons --- ### Cockburn Cement and regulator battle over residential stench URL: https://www.boilingcold.com.au/cockburn-cement-and-regulator-battle-over-residential-stench/ Last updated: 2022-01-08T14:02:50.000Z *This story was originally published in The West Australian on 24 April 2018 with the headline "Suburban stink over Cockburn Cement." © Peter Milne.* Residents of the southern suburbs of Beeliar and Munster say they are plagued by dust and stench from a coal-burning lime plant that is resisting a pollution crackdown by the State Government despite its emissions being deemed high risk. The future of the Cockburn Cement plant in Munster, owned by the $4 billion Adelaide Brighton, will soon be considered by the Environment Minister Stephen Dawson after appeals by residents and the City of Cockburn driven by years of dust and sulphur-like odours. The site has been operating since the early 1950s but it is now encroached by subdivisions in Munster and Beeliar that stop at a 1.5km buffer zone. Up to 1.25 million tonnes of lime can be produced each year by heating in two giant coal and gas-fired lime kilns sand dredged from Cockburn Sound and piped 7km to the plant. The plant is vital to the State’s alumina and gold industries. Alcoa’s three refineries and South32’s Worsley refinery need 70 per cent of the production as an ingredient in extracting alumina from bauxite. Gold refining consumes another 20 per cent of the lime. Community concerns drove a parliamentary inquiry that reported in 2011. Since then, two smaller kilns have been put into care and maintenance, and $42 million was on spent on filters to reduce dust emissions from the stacks of the two operating lime kilns. ## A regulatory battle The Department of Water and Environmental Regulation received 187 complaints about the plant last year. The regulator imposed more stringent conditions in December 2016 after it concluded that odour from the two lime kilns and dust were a high risk. A 200-page appeal by nearby resident and retired lawyer Greg Hocking claimed the proposed new licence conditions were insufficient. It urged extra measures including a ban on coal, filtering of sulphur from ground water used by the plant, stricter monitoring of emissions and for Cockburn Cement to be liable for cleaning homes covered in dust. The City of Cockburn has appealed against a 20-year licence extension awarded by the Barnett government as part of a broader move to slash environmental green tape. The council said in a January 2017 letter to the Appeals Convenor that the dust and odour impacts on the community were unacceptable, the plant had not taken reasonable measures to reduce them or been open and transparent with the community. The council said it supported the intent of Mr Hocking’s appeal. Cockburn Cement has appealed on 21 grounds, claiming some of the conditions imposed in December 2016 were impossible or unreasonable to achieve, according to the City of Cockburn letter. While the appeals are investigated, the plant can operate under the less stringent conditions of the earlier licence. Adelaide Brighton cement and lime manager Brad Lemmon said the company believed its current licence was broadly appropriate and it had appealed because of a range of reasons, mainly technical. He said the company received reports from residents of intermittent odours and continued to try to find the source at its plant and improve its environmental performance. Appeals Convenor Emma Gaunt said her investigation was nearly done and then she would provide recommendations to the minister. Mr Dawson said he had great sympathy for the residents and would resolve the appeal as soon as he could. --- **Main picture: Cockburn Cement plant in Munster.* **Credit: Imagery ©2020 Google, Data SIO, NOAA, U.S. Navy, NGA, GEBCO, Landsat / Copernicus, Data LDEO-Columbia, NSF, NOAA, Imagery © CNES / Airbus, Maxar Technologies, Map data ©Google* --- ### Coal and dust plagues two southern Perth suburbs URL: https://www.boilingcold.com.au/coal-and-dust-plagues-two-southern-perth-suburbs/ Last updated: 2022-01-08T14:09:39.000Z *This story was originally published in The West Australian on 24 April 2018 with the headline "Coal-fired plant makes sea breeze a reeking nightmare for residents of Beeliar and Munster." © Peter Milne.* Opening your house to the cool sea breeze is a treasured summer tradition in Perth but one that Beeliar’s Gloria Horton can’t enjoy. “You close the place up, you close the doors, you stay inside or you go out,” she said. The alternative, she says, is to suffer itchy, watery eyes from [fumes generated by the immensely profitable Cockburn Cement lime plant in nearby Munster](https://thewest.com.au/business/manufacturing/environment-minister-stephen-dawson-to-consider-future-of-cockburn-cement-plant-in-munster-owned-by-the-4-billion-adelaide-brighton-ng-b88780109z?ref=boilingcold.com.au). “We tend to go to the beach for walks a lot and when you breathe in that beautiful fresh air that’s what you should be breathing here,” she said. As well as smell, residents say they have to cope with dust falling on their houses two or three times a week. Mrs Horton and her husband found out about the long-running problems in the area only when they smelt the fumes while visiting their then under-construction house. “I felt cheated and I felt this should never have been developed as a residential area,” she said. It is only by chance that the State Government will soon decide on calls for the plant, which is the jewel in the crown of publicly listed construction materials company Adelaide Brighton, to clean up its act above and beyond what the environmental regulator wants. ## The campaigner Two Christmases ago, Greg Hocking’s neighbour in Beeliar told him he had spotted a mention in a public notice that the plant’s licence had been amended. Mr Hocking, a retired lawyer, worked over Christmas to beat the deadline and lodge an appeal on behalf of his neighbour. Mr Hocking spent a good part of last year building his case and by February this year the appeal had grown to a 200-page, point-by-point demand for more stringent conditions on the plant and tougher enforcement by the Department of Water and Environmental Regulation. Mr Hocking had to base his initial appeal on a report that had been heavily redacted by DWER after Cockburn Cement claimed the information was commercially sensitive. After a yearlong freedom of information process, Mr Hocking received a less redacted report and supporting studies in February. He learnt that while the company claimed it was not the primary source of odours in the area, the regulator had determined that it was. Expensive filters installed in 2012 and 2013 successfully reduced dust from the kilns, but there was still dust from the storage and handling of loose cement, clinker and lime. The report classified this dust as a high risk without the extra controls that DWER proposed in December 2016. Major consequences of dust exposure included permanent prolonged adverse health effects for a small number of people. Odours from the kilns also attracted a high risk rating but with less severe consequences, including expected short-term effects requiring treatment. The plant is the only facility in the Perth metropolitan area that burns coal, according to a DWER letter to Mr Hocking. “They should change the fuel from burning dirty coal to burning natural gas which will substantially reduce the range and the quantity of the pollutants that are going into the air,” Mr Hocking said. A DWER study of stack emissions, obtained from the FOI request, stated “it is well known that emissions of sulphur dioxide and particles from natural gas combustion are negligible compared to coal”. The regulator’s report concluded that the sulphur content of kiln fuel was a vital factor in generating the odours. The report revealed the regulator had rejected a request from Cockburn Cement to increase the allowable sulphur content in its coal from 0.7 per cent to 0.8 per cent. The company said it was concerned about the future availability of lower sulphur coal. It is understood that the plant burns about 250,000 tonnes of coal a year. ## Dusty, smelly profits The Munster plant is one of the biggest and lowest-cost lime operations in the world, Adelaide Brighton’s recently released 2017 annual report says. The plant has operated at about 80 per cent of its capacity, or one million tonnes a year, for the past three years, according to company reports. The Munster plant accounted for about 95 per cent of the company’s total production. It was estimated the operation produced lime worth $3 million in sales a week last year. Taylor Collison head of research Robin Morgan estimated that lime’s share of earnings at Adelaide Brighton was double its share of sales. If correct, that analysis suggests the South Australian-headquartered company made more than $38 million in after-tax profit from the two lime kilns in Munster. Lime production could be increased because the two operating kilns can produce an extra 250,000 tonnes a year and the two kilns under care and maintenance could be restarted. East Churchill Avenue, Beeliar, sits at the top of a 1.5km-radius buffer zone. Local resident Sharon Polkinghorne said her nose felt burnt by the sulphur smell and in the morning her car could be covered in a fine, white gritty dust. A few houses down the road, Lisa Rainsford has had the same experience. Both are concerned about their health. Soon, a few hundred metres to the east, there will be more people living on the buffer’s edge. In October, Adelaide Brighton made $8.4 million profit from selling 12ha of old quarry south of McLaren Avenue, Beeliar, that is approved for subdivision. Environment Minister Stephen Dawson said once he had read the Appeals Convenor’s investigation he would form an opinion on the adequacy of the current conditions and the performance of DWER. He said he was aware of the significant community concern about the emissions. --- **Main picture: Cockburn Cement plant in Munster.* **Credit: Imagery ©2020 Google, Data SIO, NOAA, U.S. Navy, NGA, GEBCO, Landsat / Copernicus, Data LDEO-Columbia, NSF, NOAA, Imagery © CNES / Airbus, Maxar Technologies, Map data ©Google* --- ### Quadrant preps to drill Bedout Basin URL: https://www.boilingcold.com.au/quadrant-preps-to-drill-bedout-basin/ Last updated: 2022-07-29T23:43:24.000Z *This story was originally published in The West Australian on 5 April 2018 with the headline "Quadrant rig watched by investors." © Peter Milne.* A rig has arrived off the North West to drill the first of two wells for Quadrant Energy which potential investors will monitor closely in coming months. The Phoenix South and Dorado gas and condensate prospects, and nearby Roc in the Bedout Basin north of Port Hedland, are operated and 80 per cent owned by the privately owned producer. Carnarvon Petroleum holds the remainder. Carnarvon managing director Adrian Cook said drilling Phoenix South would take about 90 days, with the two wells to help determine the resources available for the three prospects to be developed together. An offshore facility could export the condensate and pipe the gas either directly to Port Hedland or to Karratha via the Woodside-led North West Shelf venture’s existing infrastructure, according to Carnarvon’s latest investor presentation. Transocean’s Development Driller-1 semi-submersible rig will drill an appraisal well in Phoenix South, discovered in 2015\. Carnarvon yesterday reported its arrival. Next month an Ensco 107 jack-up drilling rig will start on the yet to be drilled Dorado prospect. The Development Driller-1 will go on to drill two wells at Quadrant’s Van Gogh oil field, 47.5 per cent of which is held by Japan’s Inpex. A float of Quadrant Energy has reportedly been shelved but major shareholder Brookfield Asset Management is looking to offload its equity. Potential buyers will be interested in the producer’s supply to about 20 per cent of the State’s domestic gas market as well as any upside from the Bedout Basin. While gas prices in WA are low, a possibly tighter market early next decade is encouraging investor interest. Equity in Quadrant could be considered the best way for investors to gain from any gas price rises in the State. ### Tubridgi gas storage to expand URL: https://www.boilingcold.com.au/tubridgi-gas-storage-to-expand/ Last updated: 2022-07-29T23:34:22.000Z *This story was originally published in The West Australian on 23 March 2018 with the headline "Gas store expands to meet demand." © Peter Milne.* WA’s biggest gas storage facility is expanding less than a year into operation as it fills with surplus gas bought by Citic Pacific. The Tubridgi facility uses an old gas reservoir south-west of Onslow that the Australian Gas Industry Group, owner of the Dampier to Bunbury gas pipeline, bought from BHP. Gas storage started about nine months ago after $74 million of works had been completed. AGIG commercial manager Jon Cleary said Tubridgi could store 42,000 terajoules of gas that could be injected or withdrawn at a rate of 50 TJ a day. The storage is equivalent to about 40 days of WA’s annual domestic gas production, and the withdrawal rate is about 5 per cent of daily production. AGIG plans to expand the withdrawal rate to 60TJ/d and the injection rate to 90TJ/d. Mr Cleary told the Australian Institute of Energy on Wednesday night that foundation customer Citic Pacific secured 32,000 TJ of storage and about half the rest was contracted. “CP came to us with a problem, they had a large gas book, and they wanted something to do with that gas,” he said. “So rather than sell it cheaply into the spot market we decided to work together to develop the Tubridgi gas storage facility.” Mr Cleary said gas would be injected for three to four years. ### ATCO boss looks to grow in Australia URL: https://www.boilingcold.com.au/atco-boss-looks-to-grow-in-australia/ Last updated: 2022-07-29T23:27:39.000Z *This story was originally published in The West Australian on 21 March 2018 with the headline "Power, pipes, dongas keep Canadians busy." © Peter Milne.* It has been a long, convoluted journey for Canadian company ATCO to own Perth’s gas distribution network, build yellow topped dongas in Kwinana and soon start research on solar-generated hydrogen. ATCO chief executive Nancy Southern runs the $4.8 billion conglomerate started by her father and grandfather in 1947 as the Alberta Trailer Company. The company followed the oil drillers that bought their accommodation from Canada in opening up the Cooper Basin in South Australia in the early 1960s. By 1980 Ms Southern’s father thought the transportable housing business was too exposed to the boom and bust commodity cycle, so he diversified by buying Canadian Utilities. It was “like a minnow swallowing a whale,” she said. When the next bust arrived the debt-laden ATCO was hit by interest rates of up to 22 per cent. An expansion designed to provide steadier long-term cash flow had the opposite effect. “We barely hung on to the company,” Ms Southern said. ATCO shed assets to survive, including its Australian operation in 1986. It returned to the donga business in Australia after a noncompete agreement expired and now manufactures in Jandakot and Brisbane. Ms Southern said that during the resources boom ATCO lost some contracts to cheaper accommodation from Asia, but higher quality, knowing what the customer wants and lower transport costs had kept them competitive. In 2011 WA’s gas distribution networks came into the fold at the cost of about $1 billion. The third arm of the conglomerate is power, including a Karratha station that supplies Horizon Power. While power, pipes and dongas may seem a disparate collection of activities, Ms Southern sees the engineering and operating skills of the regulated businesses complementing the more entrepreneurial side of ATCO. “Our tip of the spear is the hut business,” she said. Supporting the construction of a project gives the company the chance to spot opportunities for longer term investments. Canada provides 89 per cent of ATCO’s revenue, with Australia providing most of the rest. Following her resource customers as her father did, Ms Southern is focussed on expansion in Australia, Chile and Mexico. She said the countries share relatively good regulatory regimes and lots of sunshine that can be used to displace diesel fuel. ATCO is building a clean energy hub in Jandakot for applied research on how to “green the grid.” The first project will be using solar-generated electricity to split water into oxygen and hydrogen. The hydrogen would be mixed with natural gas and appliances will be tested for how well they can burn the blended hydrogen and natural gas fuel. Ms Southern said it was an opportunity to use existing pipeline infrastructure as a huge battery to store excess solar power for later use. “We're not building new storage, we’re just using the excess capacity in the pipes as the storage vehicle,” she said. She said using hydrogen in pipelines would help ATCO future-proof its pipeline investments in the long term as the world decarbonises. She sees similarities between the business environments of Australia and her native Canada. Both are federations with multiple layers of regulation. She said differences in requirements between the states in Australia and the provinces in Canada, made it next to impossible to achieve economies of scale in the accommodation business. ### Australia moved to stop warehousing of gas reserves URL: https://www.boilingcold.com.au/australia-moved-to-stop-warehousing-of-gas-reserves/ Last updated: 2022-07-29T23:23:14.000Z *This story was originally published in The West Australian on 15 March 2018 with the headline "Lose it or use it rules to crack down on gas fields." © Peter Milne.* The next wave of LNG investment off WA will be subject to more government direction under a “use it or lose it” approach, starting with a report due soon on leases that could supply gas to the North West Shelf project. The retention lease system has been criticised for allowing big LNG players to sit on gas reserves that others could develop earlier. The best-known example is a 27-year-old retention lease for the West Tryal Rocks, owned by the Chevron led Gorgon joint venture. The renewal of each lease is normally considered every five years by industry regulator the National Offshore Petroleum Titles Administrator. If a lease is likely to be commercially viable within 15 years, it can be retained for a further five years. Capacity at the North West Shelf’s Karratha gas plant becoming available early next decade prompted NOPTA to kick off a combined review of 10 retention leases last year. The report will go to Federal Resources Minister Matt Canavan within weeks. Titles administrator Graeme Waters told a Senate estimates hearing this month the leases had sufficient technical development and access to infrastructure to be brought online. He said viewing the leases collectively instead of piecemeal allowed a more strategic approach to managing the resources. Chevron Australia managing director Nigel Hearne told the Australasian Oil and Gas Conference in Perth yesterday it was time for LNG producers to drop the go-it-alone culture of the past and collaborate to deliver the best outcome for the country. Senator Canavan told the committee that if operators did not have credible plans to use gas from a lease, it could be returned to the market. The Woodside-led Browse project has five leases under review. Woodside last year flipped back to a plan to pipe the gas 800km to the Karratha plant. Since the review started, plans for two of the leases have changed, with Woodside proposing to pipe gas from the Scarborough field to the Pluto LNG plant and Western Gas acquiring the Equus project from Hess. Chevron did not answer questions about plans for Gorgon’s Orthrus, Geryon and Chandon leases under review or West Tryal Rocks. A spokeswoman said the next effort was additional wells at the existing Gorgon and Jansz-Io fields. ### Woodside and East Timor still apart on Sunrise gas destination URL: https://www.boilingcold.com.au/woodside-and-east-timor-still-apart-on-sunrise-gas-destination/ Last updated: 2022-07-29T23:16:22.000Z *This story was originally published in The West Australian on 8 March 2018 with the headline "Sunrise stalled in Timor deal." © Peter Milne.* Woodside’s Sunrise LNG project remains stalled as East Timor slams negotiations to agree on a development concept and dismisses incentives to send the gas to Darwin that include a share of the project and $US300 million towards a gas pipeline to the impoverished nation. A maritime border treaty between Australia and East Timor was signed in New York yesterday without the planned agreement on how to develop Sunrise, which lies in the long-disputed waters. To settle the border dispute, East Timor in 2016 called for a compulsory negotiation under the UN Law of the Sea. Last August the two countries decided to agree to the Sunrise development concept by February. With no agreement, the conciliation commission that ran the negotiations yesterday published an assessment of the options favoured by either side. East Timor wants gas from the Sunrise field, first discovered in 1974, piped to an LNG plant built on its southern coast. The Sunrise joint venture’s concept is to send the gas to the existing Bayu-Undan pipeline and on to the Darwin LNG plant. Sunrise offered East Timor many incentives to choose Darwin. They included 3 per cent of the offshore project and 0.9 per cent of the Darwin LNG project free, $US200 million towards a gas pipeline to East Timor for local use and basing the offshore operations there. The Australian Government offered an extra $US100 million towards the pipeline. The commission said it did not wish to recommend a concept, but that based on the assessment East Timor would have to subsidise the cost of building an LNG plant in its country by $US5.6 billion. East Timor chief negotiator and former president Xanana Gusmao, in a letter to the commissioners leaked to the ABC, said the commission was not impartial and the “superficial” assessment had focused on building up the Darwin LNG concept, not treating both options equally. He said Australia’s promised contribution to the pipeline appeared to be an unjustified payment to secure an unfair business advantage for the Sunrise and Darwin LNG joint ventures. A Woodside spokeswoman said it was disappointing the conciliation process did not result in an agreed development concept. Woodside plans to develop Sunrise after 2026. ### Fears of higher WA power prices from tighter gas market URL: https://www.boilingcold.com.au/fears-of-higher-wa-power-prices-from-tighter-gas-market/ Last updated: 2023-12-04T11:43:34.000Z *This story was originally published in The West Australian on 6 March 2018 with the headline "WA power price fears if our gas goes East." © Peter Milne.* WA may find its gas prices linked to the turbulent international market if this State comes to the rescue of Australia’s energy-muddled Eastern States. The future of the WA gas market depends on how any gas that might be piped or shipped to the east is drawn from the gas currently reserved for use in this State. Our eastern neighbours have experienced soaring gas prices in recent years and are looking to WA’s gas. One national paper even asked: “Can WA piped gas save east coast industry?” The more important question for WA is what our gas heading east will do to our gas-hungry industry and power sectors. Department of Industry economic adviser Tim Bradley said at the Australian Domestic Gas Outlook Conference in Sydney last week that with LNG now exported from Queensland, the east coast gas market was linked to the ebbs and flows of international supply and demand. Yet WA has been exporting LNG for decades without gas prices being linked to international markets. This is due to the long-standing domestic gas reservation policy. The policy required WA’s LNG exporters to set aside 15 units of gas for domestic consumption for every 100 units of LNG produced. The reserved gas could never be sold overseas, so the producers had to take the best price they could get in WA, no matter how high international prices were. Half the gas consumed in WA last year was produced by LNG projects that had to reserve gas for the local market, North West Shelf and Gorgon. This year they will be joined by Wheatstone and Pluto. Alcoa of Australia managing director Michael Parker said the reservation policy helped ensure local gas supply, which is critical the success of Alcoa and other consumers. “Australia needs to play to its strengths if it wants to remain globally competitive and keep manufacturing jobs in this country,” he said. “The WA case study proves this is possible.” The local market or overseas were the only destinations for WA gas when the reservation policy was developed. Now there are at least three proposals to send it east. The Federal Government is funding a pre-feasibility study for a west-to-east gas pipeline. AGL is well advanced on plans to import LNG into Victoria. A consortium including Andrew Forrest’s Squadron Energy and Japanese giant JERA, has announced plans for an LNG import terminal to service NSW. Former premier Colin Barnett said the pipeline, estimated to cost about $5 billion, could be privately funded and provide the east coast with a long-term secure supply. Mr Barnett said the Victorian LNG terminal could help AGL meet high gas demand in winter, but he did not believe LNG was suitable for long-term supply needs of industry in NSW. Even without sales to the east, gas in WA is predicted to either be in short supply early next decade or be increasing in price to support the development of new fields, according to the WA Gas Statement of Opportunities released in December. How the gas sent east is treated under the domestic reservation policy treats will decide if the WA market gets even tighter. The policy has been put into practice differently for each project. North West Shelf and Gorgon has legislated requirements while confidential agreements cover Pluto and Wheatstone. If gas to the east can come out of the amount reserved for domestic consumption, then any producer can sell to the east, whether by pipeline or ship, as soon as the price they receive from that sale is higher than a local sale. The WA gas market would be linked to the international market, via the east coast, for the first time. Mines and Petroleum Minister, Bill Johnston, would not say whether the State had received legal advice on whether existing domestic gas reservation rules would stop gas reserved for WA being siphoned east. --- *Main image: Transmission Tower. Source: Main Picture: Transmission Tower. Source:* [*Lukas Bato*](https://unsplash.com/@lks%5Fbt?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) *on* [*Unsplash*](https://unsplash.com/s/photos/power-transmission?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) --- ### Forrest looks to import gas to east coast URL: https://www.boilingcold.com.au/forrest-looks-to-import-gas-to-east-coast/ Last updated: 2022-07-29T10:04:11.000Z *This story was originally published in The West Australian on 27 February 2018 with the headline "Forrest plans NSW gas ships." © Peter Milne.* Andrew Forrest is considering joining the world’s biggest LNG buyer to ship gas to NSW to alleviate the east coast gas shortage caused by soaring LNG exports from Queensland. Forrest-owned Squadron Energy, Japanese trading house Marubeni and LNG buying giant JERA are targeting gas-hungry industries in NSW hit by soaring wholesale gas prices. The trio at this stage have agreed to conduct a feasibility study. Squadron Energy chief executive Stuart Johnston said they were targeting gas flowing to NSW in 2020. A vessel, known as a floating storage and regasification unit, would be anchored off an as yet to be chosen NSW port to receive the liquified gas and send it to the onshore pipeline network. Mr Johnston said an FSRU was a proven relatively low-cost technology with readily available vessels that required limited additional infrastructure at the location. AGL’s more advanced proposal to use an FSRU to import LNG into Victoria is also targeting a 2020 start. Mr Johnston said the two proposals targeted different markets, with AGL having a big retail presence in Victoria. He said they were considering a broad range of prices, $8-$12 a gigajoule, while details of the project were progressed. A third option for getting gas to the east coast is the west-to-east pipeline being advanced by the Federal Government, with a pre-feasibility study due to be delivered next month. Mr Johnston said the pipeline was technically sound, but it would take time to get commitments from buyers to take the big volume of long-term gas flows needed to justify the expense. If either FSRU project imported LNG from WA, it would form a virtual east-west pipeline. JERA is the overseas energy arm of Japanese utilities TEPCO and Chubu, It said in a statement that during the feasibility the consortium would look at sourcing LNG from projects in which JERA had equity. In Australia, JERA has interests in the Gorgon, Wheatstone, Ichthys and Darwin projects. Mr Johnston said FSRUs were suitable even for short-term market needs as they could be moved elsewhere if demand diminished. He said gas would be important in Australia for several decades as a transition fuel towards a renewable-energy future. ### WA's top ten carbon polluters: 2017 URL: https://www.boilingcold.com.au/was-top-ten-carbon-polluters-2017/ Last updated: 2022-07-29T08:41:56.000Z *This story was originally published in The West Australian on 26 February 2018 with the headline "WA’s big polluters revealed." © Peter Milne.* Big businesses in WA are allowed to spew into the air more than 64 million tonnes of greenhouse gases — almost 18 per cent of Australia’s self-imposed limit. The Clean Energy Regulator this month released an updated list of the greenhouse emissions permitted for the 353 facilities in Australia, including 93 in WA, that emit the equivalent of more than 100,000 tonnes of CO2 each year. ### WA's top 10 greenhouse gas emitters: 2016-2017 (million of tonnes CO2e) | Gorgon LNG - Barrow Island | Chevron | 8.3 | | ------------------------------- | -------------------------- | ---------- | | North West Shelf LNG - Karratha | Woodside | 7.6 | | Muja Power Station - Collie | Synergy | 4.5 | | Wheatstone LNG - Onslow | Chevron | 4.0 (est.) | | Worsley Alumina Refinery | South 32 | 3.7 | | Bluewaters Power - Collie | Sumitomo & Kansai Electric | 3.0 | | Pluto LNG - Karratha | Woodside | 2.4 | | Collie Power Station - Collie | Synergy | 2.1 | | Yara Pilbara - Karratha | Yara | 1.6 | | Pinjarra Alumina Refinery | Alcoa | 1.6 | Up to 1000sqkm of mallee would need to be planted in the Wheatbelt to absorb 100,000 tonnes of CO2 annually, assuming the woodland performed like a Kalannie reforestation project described in Australia’s Carbon Project Registry. Production of LNG for export and gas for domestic use accounted for over 30 per cent of the State’s permitted emissions from big facilities, an analysis by WestBusiness shows. The share will rise when the limit for the Wheatstone LNG Project, which will produce about four million tonnes a year, is published. Collie’s coal-fired power stations take two-thirds of the limit for power generation. Gas-hungry alumina production has almost 14 per cent of the State’s total allowed emissions, more than the massive iron ore sector. Citic Pacific’s Sino Iron Ore has the most emissions from a single iron ore facility, with a limit of almost 1.3 million tonnes a year. Production of a type of iron ore called magnetite concentrate is energy intensive but requires less energy than haematite to be turned into steel. Most of the iron ore miners that produce haematite, including Rio Tinto, BHP and Fortescue Metals Group, have carbon footprints linked to earth moving. Their rail operations together account for more than 1.4 million tonnes of emissions. The International Energy Agency, in a review of Australia’s energy policies released this month, described the Emissions Reduction Fund — which encourages businesses to reduce emissions — as being ineffective at restricting Australia’s carbon emissions for both the power and industrial sectors. Under environmental laws, big emitters have to stay under their highest annual emissions over a five-year period. Power generators have to stay within that limit only if the sector as a whole exceeds 198 million tonnes a year. Synergy said that, because of the closure of a number of coal-fired power stations across Australia, it was unlikely that the sector would breach its limit. The IEA said that though the power sector had the greatest potential to contribute to Australia meeting its emission reduction goals, it was not subject to any effective cost for its emissions. Emissions from the industrial, or non-power, sector were not affected by the ERF because of high allowable emissions limits, according to the IEA. Limits can be lifted if the facility exceeds its limit in the first year of the scheme, expands, or, for mining and oil and gas, if the properties of the resource extracted changes. The Gorgon LNG project may emit 8.3 million tonnes a year — more than any other facility in the State. Its limit is higher than the 6.4 million tonnes operator Chevron estimated when it sought environmental approval. A Chevron spokeswoman said the company would look at opportunities to minimise emissions once the plant achieved stable operations and the lower number from the environmental approval represented the anticipated level of emissions during steady-state operations. Gorgon planned to inject underground carbon dioxide extracted from gas flowing from the reservoirs. Technical problems mean injection may not start until the first half of next year. Emissions from cement production are missing from the published data. The baseline limits for Cockburn Cement’s Munster cement and lime and Dongara lime operations are withheld, as are six other cement facilities across the country. Companies can apply for their information not to be published if doing so could reveal matters of commercial value. Adelaide Brighton, the owner of Cockburn Cement, declined to comment on why its limits could not be published, citing commercial sensitivity. Emissions from cement production differ from other industries as over 60 per cent of the carbon dioxide comes from chemical reactions during the process, rather than the burning of fossil fuels. ### Chevron reaps $32m a day from Australian gas URL: https://www.boilingcold.com.au/chevron-reaps-32m-a-day-from-australian-gas/ Last updated: 2022-07-29T08:04:04.000Z *This story was originally published in The West Australian on 5 February 2018 with the headline "$32m a day from Chevron LNG." © Peter Milne.* The Gorgon and Wheatstone LNG projects are now enjoying cash margins of more than $US30 a barrel at a $US50 price, Chevron says, and production from the $111 billion mega-projects is expected to increase this year. New Chevron chief executive Mike Wirth told Wall Street analysts on Friday night that the US major’s two Australian LNG projects were “becoming strong cash generators with cash margins of more than $US30 per barrel at a $US50 Brent price.” Last month, Gorgon produced an average of 459,000 barrels of oil equivalent a day and Wheatstone achieved 86,000 boe a day. Brent crude is currently fetching about $US68 a barrel. The margin achieved at $US50 indicates the two LNG projects could be producing more than $US26 million ($32.8 million) of cash a day if the price received for the LNG under long-term contracts and on the spot market moved up in line with the oil price. Mr Wirth said Gorgon’s three trains and the first Wheatstone train were running well. He said LNG in Australia, where Chevron also owns 16.7 per cent of the North West Shelf project, and unconventional production in North America would be the two principal sources of production growth for the company this year. Gorgon has had numerous shutdowns since the $US54 billion project first shipped LNG in March 2016. Mr Wirth said planned shutdowns on Gorgon’s trains one and three had been completed last quarter to improve reliability and production. It is understood that one issue the shutdowns addressed was overheating of the trains because of poor air circulation. Production from Gorgon’s three trains was 24 per cent higher than the average over the last quarter of 2017. Mr Wirth said Gorgon, where the third and final train first produced LNG in late March, shipped 170 LNG cargoes in 2017. Gorgon has a design capacity of 15.6 million tonnes a year of LNG. If the average size of the 170 cargoes is similar to Chevron’s fleet, about 155,000 cubic meters, Gorgon produced about 12 million tonnes of LNG last year. There is further production upside due from the $US34 billion Wheatstone project with the second train with a 4.45 million tonnes a year capacity on schedule to start in the second quarter. The 200 terajoules-a day domestic gas plant is expected to start in the third quarter. ### New owner predicts Equus gas by 2023 URL: https://www.boilingcold.com.au/new-owner-predicts-equus-gas-by-2023/ Last updated: 2022-07-29T08:23:42.000Z *This story was originally published in The West Australian on 12 February 2018 with the headline "Confidence high for Equus gas." © Peter Milne.* Energy greenhorn Western Gas believes it will have the Equus gas field on the North West Shelf producing by 2023 — something oil major Hess failed to achieve despite pumping $1.5 billion into the project over 10 years. Western Gas executive directors Will Barker and Andrew Leibovitch surprised the industry in November when the company purchased the 10 Equus fields from Hess to target the WA domestic gas market. There has since been plenty of scepticism from industry insiders about how the minnow can succeed where the giant failed. The directors, who each own 30 per cent of the company, believe their focus, flexibility and independence will make the difference. Hess won the rights to explore Equus in 2007 with a record work commitment of more than $500 million. Mr Barker said at the time that Hess envisaged the discovery of five to 10 trillion cubic feet of gas and spent about US$1.5 billion to pursue an LNG project to be a material part of a portfolio that lacked LNG. Negotiations with Woodside to send to the North West Shelf LNG plant the two trillion cubic feet of gas reserves Hess did find ended in late 2016. The Browse and Scarborough projects are now frontrunners to fill the Karratha Gas Plant early next decade. Mr Barker said the NWS deal pursued by Hess required 350 million cubic feet of gas a day to flow to the NWS for 20 years with extremely high availability and redundancy as the “toll or pay” contract required payments even if gas was not delivered. Hess would have needed further exploration success to supply that quantity of gas so was not able to approve the project. Mr Barker said they were downsizing the Hess concept to about 150 to 250 million cubic feet of gas a day focused first on the four fields that contain about 40 per cent of the reserves. Perth-based offshore oil and gas engineer Peritus, which also worked for Hess on Equus, will deliver the smaller concept next month that sees pipeline-quality gas piped to shore. Mr Leibovitch said the work would demonstrate how Western Gas was different to Hess and allow prospective gas customers or investors to perform due diligence. He said the oil price rise from about $US45 a barrel when Equus was purchased to about $US70 now had made gas for LNG more attractive. ### Total fears Ichthys cost blowout to $US40b URL: https://www.boilingcold.com.au/total-fears-ichthys-cost-blowout-to-us40b/ Last updated: 2022-07-29T08:08:59.000Z *This story was originally published in The West Australian on 10 February 2018 with the headline "Ichthys LNG project facing cost pressure." © Peter Milne.* The cost of the Ichthys LNG project may increase to $US40 billion, according to French oil major Total. Reuters reported that Total chief executive Patrick Pouyanne, whose company owns 30 per cent of Ichthys, said on Thursday that the cost, now estimated at $US37 billion, could reach $US40 billion. Ichthys operator Inpex was more optimistic about costs. Reuters reported Inpex executive Masahiro Murayama had described any further expenses as “minimal” on Thursday. An Inpex spokeswoman in Perth said the project was proceeding safely towards start-up. “There is no change to the plan to begin production from the wellhead within the fiscal year ending March 2018, after which, products will be shipped out in sequence,” she said. Three months ago Inpex chief executive Toshiaki Kitamura said condensate, LNG and LPG would all be produced by March. It is understood project members in Perth were told before Christmas to focus on a mid-year start-up. For hydrocarbons to flow from a wellhead on the seabed of the Browse Basin to the plant in Darwin, two giant offshore facilities need to start up successfully, then an 890km pipeline must be filled. The intricate process of starting up the 8.9 million tonne-a-year LNG plant can then begin. It is believed Inpex is considering using temporary power generation because its power station is not ready. ### Cutbacks and haste spell danger on Northern Endeavour URL: https://www.boilingcold.com.au/cutbacks-and-haste-spell-danger-on-northern-endeavour/ Last updated: 2022-01-08T14:13:25.000Z *This story was originally published in The West Australian on 9 February 2018 with the headline "Triple failures in Northern Endeavour report." © Peter Milne.* Maintenance reductions, a rush to restart production and a failure to act after a similar incident contributed to a worker nearly being killed on the Northern Endeavour oil production facility in the Timor Sea last February according to a report by the vessel operator. An almost 4kg piece of corroded piping fell 8m and landed within 1.5m of a worker who had gone to investigate unusual loud banging noises coming from equipment being started up. The worker would most likely have died if struck by the object, according to a detailed investigation report by operator Upstream Production Solutions lodged with the oil and gas industry safety regulator NOPSEMA. *WestBusiness* obtained the UPS report after a Freedom of Information request to NOPSEMA. The 273m Northern Endeavour has produced oil for more than 18 years from the Laminaria and Corallina fields about 550km north-west of Darwin. Northern Oil and Gas Australia bought the vessel and fields from Woodside in a deal in April 2016 reported to be worth $100 million to $300 million. Woodside continued to operate the vessel until UPS, which is contracted by NOGA, took over in September 2016. The UPS report approved by NOGA identified the causes of the incident as a significant amount of elevated corroded equipment and a lack of action after an earlier so-called dropped object incident. The report stated that maintenance was minimised due to plans to abandon the vessel in 2016\. Corrosion that was not critical to production was monitored rather than dealt with and equipment no longer in use was not monitored for corrosion at all. This lack of inspection continued after UPS took over as operator. The valve shroud that dropped near the worker was unused equipment and later inspection revealed three severely corroded valve shrouds were "in a state of failure". A smaller dropped object incident in October 2016 resulted in a recommendation to review risks from dropped objects. The review was mistakenly not done by UPS, so an opportunity to identify the corroded valve shrouds was missed. Woodside did not respond to questions about whether it had intended to abandon the Northern Endeavour and if this affected maintenance plans. A Woodside spokeswoman said the company was committed to properly maintaining its facilities and it operated the Northern Endeavour under a safety case that "included a description for Inspection and maintenance as part of management of corrosion". A safety case document describes how an operator identifies and controls risks and is accepted by NOPSEMA if the risks are reduced to as low as is reasonably practicable. The valve shroud fell when it did due to severe vibration of the equipment when it was started up without following the standard operating procedure. The report stated: "At the time of the incident there was a high level of perceived pressure from management to re-establish normal rates of crude production." This perception contributed to the deviation from normal practice, according to the report. UPS and NOGA were asked why the workforce perceived pressure to restart production. Spokespeople for both companies said all of the required safety cultures, procedures and practices were in place. NOGA owns the Northern Endeavour, its only producing asset. NOGA is owned by its managing director Angus Karoll. --- *Main image: Northern Endeavour in the Timor Sea. Source: Northern Oil and Gas Australia Pty Ltd.* --- ### Wheatstone faces return of carbon curb URL: https://www.boilingcold.com.au/wheatstone-faces-return-of-carbon-curb/ Last updated: 2022-07-29T07:58:38.000Z *This story was originally published in The West Australian on 23 January 2018 with the headline "Chevron forced to confront gas problem." © Peter Milne.* The Wheatstone LNG project may need to offset more than one million tonnes of greenhouse gas emissions each year if restrictions that were removed by Colin Barnett in 2013 are reinstated. State Environment Minister Stephen Dawson has asked the Environmental Protection Agency to investigate the current requirement for Chevron to only report annual emissions. When Wheatstone was approved in 2011 operator Chevron had to demonstrate it had minimised greenhouse emissions as far as practicable and performance was to be independently assessed every two years. Additionally, offsets at least equal to the carbon dioxide in the reservoir gas piped to the LNG plant near Onslow were required. Conservation Council of WA director Piers Verstegen said any requirement to offset carbon emissions would not only help the environment but also drive a significant expansion of the State’s carbon farming industry. Chevron’s 2010 draft environmental impact statement indicates the $US34 billion ($42.5 billion) project would produce about four million tonnes of greenhouse gases when it reaches full production this year. About 1.2 million tonnes would be from the reservoirs and require offsets if the original requirements were reinstated. A Chevron spokeswoman said the company was disappointed at the State Government’s action because Wheatstone’s emissions were already regulated by the Federal Government. WA’s other LNG projects — North West Shelf, Pluto and Gorgon — have some State requirements to minimise greenhouse emissions. A Woodside spokeswoman said the Browse venture was considering the environmental approvals that may be required if its gas was piped to the North West Shelf project. An EPA spokeswoman said the authority would determine if Wheatstone’s requirements were in line with contemporary best practice and recommend any changes to the minister. ### North West Shelf partners bicker over maintenance bucks URL: https://www.boilingcold.com.au/north-west-shelf-partners-bicker-over-maintenance-bucks/ Last updated: 2022-07-23T04:02:24.000Z *This story was originally published in The West Australian on 19 January 2018 with the headline "Oil giants clash over NWS costs." © Peter Milne.* Buck-passing between oil giants over who pays for the upkeep of the ageing North West Shelf LNG plant has emerged as the biggest hurdle to Woodside sending its Browse gas to the facility. Speaking after Woodside issued its fourth-quarter 2017 report yesterday, chief executive Peter Coleman said technical work on developing Browse and building a 1000km pipeline to the NWS plant was progressing well but there was more to do on the deal with the NWS to liquefy the gas. “It’s not so much about price, as it’s about risk sharing,” he said. Mr Coleman said the Browse venture needed assurance that when NWS gas no longer flowed through the 29-year-old plant there would be sufficient investment to keep it safe and reliable. He said possible solutions ranged from the NWS taking the risk of maintaining the plant for a flat fee to Browse paying for the plant upkeep, but equity transfers to make the ownership of the two projects more similar was not being considered. The Perth-based company yesterday revealed 2017 production of 84.4 million barrels of oil equivalent — just within its guidance of between 84 million and 90 million boe. The 2018 target has been increased to between 85 million and 90 million boe as LNG from Wheatstone is partially offset by lower oil, condensate and domestic gas volumes. Wheatstone’s contribution has been welcomed but does not address concerns from analysts about Woodside’s medium-term growth strategy, with both the NWS and nearby Pluto LNG plant seeking supplies. Mr Coleman said more gas could go to shore at Pluto by either drilling planned Pluto wells earlier or developing the Pyxis field discovered in 2015\. Woodside is considering processing this gas by expanding the Pluto plant or building a short pipeline to the NWS plant. ExxonMobil’s preferred option for gas from the Scarborough field had been a floating LNG facility. It is now negotiating with the NWS and is in discussions with Pluto. Adding to the possible combinations of upstream gas and downstream LNG plants, Pluto has been approached by Browse and is understood to be talking to Chevron. Mr Coleman said Pluto would compete to supply plant capacity. “We’re not going to be left behind, and the North West Shelf is not the only answer,” he said. He said Woodside had the advantage of having a foot in every camp. Woodside shares closed at $33.40 yesterday, down 0.8 per cent. ### Big gas egos destroy national wealth URL: https://www.boilingcold.com.au/big-gas-egos-destroy-national-wealth/ Last updated: 2022-07-29T07:45:24.000Z *This story was originally published in The West Australian on 19 January 2018 with the headline "Posturing a problem for all of us." © Peter Milne.* ANALYSIS Some of the biggest resources companies in the world are playing a game of brinkmanship in the North West of the State — and the outcome will affect all West Australians. Woodside, Chevron, Shell, BP, ExxonMobil and BHP have created uncomfortable alliances to develop the oil and gas fields off WA’s northern coast. They each want to prioritise the development of the field in which they have the greatest equity. How much they are willing to pay for that gas to be liquefied in either the Pluto or North West Shelf LNG plants depends on whether their share of the plant is greater than their share of the field. So, if their stake in the plant is greater than the stake in the field that feeds it, then they want the plant to charge more. If they own a bigger chunk of the field, they want the toll to be lower. It is a complicated, incestuous game that has produced some ridiculous outcomes. Gas from Woodside’s Pluto field went to a new LNG plant built right next to the NWS plant because the ventures could not agree on the terms for what would have been a much cheaper expansion of the existing plant. When Chevron discovered the Wheatstone field next to Pluto, again no agreement was reached. So another LNG plant was built, this time near Onslow. Tens of billions of dollars have been wasted. Gorgon was delayed for years until Chevron, Shell, and ExxonMobil agreed to have the same interests in all the fields and the plant. About 15 per cent of any gas flowing to the NWS plant must go to the domestic market. Pluto has a similar arrangement. If projects are delayed, or perhaps never happen, there will be less gas flowing south, affecting both the price and supply of gas. WA does not want to see the loss of industry that the Eastern States is seeing. And a lack of projects means fewer jobs. The energy companies plundering the waters off the North West pay the Federal Government for the gas they extract. This is done through the petroleum resources rent tax, which is based on the profit generated by each project. A less profitable industry, courtesy of inefficient use of infrastructure, means less tax received. It’s not just the bottom lines of the companies that take a hit from poor decisions. ### Korean-built gas giants arrive in WA URL: https://www.boilingcold.com.au/korean-built-gas-giants-arrive-in-wa/ Last updated: 2022-07-23T04:03:04.000Z *This story was originally published in The West Australian on 30 December 2017 with the headline "Offshore gas giants on station." © Peter Milne.* This year Australia’s made-in-Korea offshore LNG boom saw three giants towed 5600km south, but next year is crunch time: making it all work. The world’s biggest vessel, Shell’s almost half-kilometre long Prelude floating LNG facility, and two other maritime giants for Inpex’s Ichthys project, were towed from South Korea to the Browse Basin off the Kimberley coast. Further south, in the Carnarvon Basin where the Australian LNG industry began, the third and final train of Chevron’s Gorgon project, which kicked off the construction spree eight years ago, started production. The US major’s Wheatstone project near Onslow shipped its first cargo in October. All three huge vessels now anchored to the seabed off WA, along with Wheatstone’s production platform installed in 2015, were made in two shipyards on South Korea’s Geoje Island. Geoje Island may well have benefited from more Australian LNG construction expenditure than Barrow Island with Gorgon, or Queensland’s Curtis Island that is home to three LNG plants fed by coal seam methane. The Ichthys Explorer led the migration from Samsung Heavy Industry’s shipyard to the Ichthys field, about 200km off the Kimberley coast. The 130m by 120m giant, the world’s biggest semi-submersible platform, will separate the gas, which is piped to the LNG plant near Darwin, from the liquids, that will be sent to the Ichthys Venturer and then loaded on to tankers. The Ichthys Explorer, which will be home for 200 workers over 40 years, is permanently moored to the seabed. In its wake was Shell’s floating LNG facility Prelude, the world’s biggest-ever vessel. Containing as much steel as 36 Eiffel Towers, it spans three times the length of the oval at Optus Stadium. Unlike the Ichthys Explorer, which is fixed in position, Prelude weathervanes around a turret. Prelude cannot be disconnected for cyclones over its life of 20-25 years, so the turret is built to withstand the load of the fully laden vessel in the worst storm you could expect in 10,000 years. Prelude is not only massive, but also complicated. Shell’s engineers had to make an ordinarily land-based technology operate in a moving sea in a fraction of the usual space, and safe for the workers who live metres from the plant, not kilometres. The most hazardous plant is located above deck, where any gas clouds or blasts can disperse, and far away from the crew’s accommodation. Loading arms that transfer the LNG from Prelude to carriers must swivel and rotate to follow the motion of the ship for the 15-hour loading process while Prelude is steadied by giant thrusters underneath. In July, the 336m-long Ichthys Venturer floating production, storage and offloading facility left Daewoo Shipbuilding and Marine Engineering, about 20km away from the Samsung yard that built Prelude and its Ichthys sistership. When the Ichthys Venturer arrived at its final location in the Browse Basin, it was still about 20km from Prelude. With all the multi-billion-dollar pieces of kit now in place, the focus has turned to perhaps the more significant challenge of producing LNG reliably at design capacity. After an investment of almost $190 billion, the pressure is on to generate returns from late, overbudget projects that were launched in an LNG market boom but are selling into a bust. Experience this year onshore has shown these final steps are difficult. Chevron’s Gorgon, the nation’s biggest resource project, is still struggling nine months after the final train started up with reduced production from inadequate cooling of the plant and a delay to its landmark carbon dioxide injection. First LNG from Wheatstone slipped from mid-year to October, and in May Inpex, after contractors walked off its Darwin plant site, pushed back first production six months to next March. The industry also worked hard to extract more value from existing projects. In March, Woodside went full circle in how to develop its Browse fields. It announced a return to the plan to pipe the gas over 400km to its North West Shelf plant, which begins to run out of its own gas early next decade, after spending years and billions considering floating LNG and a processing plant near Broome. ConocoPhillips faced a similar lack of gas for its Darwin LNG plant and in November said the Barossa field in the Timor Sea might fit the bill. Pluto is not short of gas and in February Woodside said it was considering a small, one million tonnes-a-year expansion train that could be moved to site as a single module. However, by October the favoured option was to pipe surplus Pluto gas to the nearby NWS plant. It was not just engineers toiling in 2017\. The industry’s legal, media and government affairs staff fought demands that Australia receive tax revenue commensurate with the vast volumes of gas to be exported over coming decades. The industry scored a comprehensive victory in April when the Federal Government’s Callaghan inquiry did not recommend any substantial changes to the petroleum resource rent tax. The energy giants had stood accused of gaming the PRRT — how producers are meant to pay for the nation’s oil and gas they extract — to avoid payment. Things didn’t go as well for Chevron when the Full Federal Court upheld an Australian Taxation Office victory on the pricing of its inter-company loans. Financial Services Minister Kelly O’Dwyer has said the decision’s wider effect could boost government revenue by $10 billion over the next decade. Amid billions of dollars and tonnes of steel, any industry really consists of its people. Tragically, late last month Carl Delaney, who worked on the Ichthys LNG tanks in Darwin, died in an accident on site. It was a year-end reminder of the importance of safety efforts through this once-in-a-lifetime build of vast projects of mindboggling complexity with tight schedules. ### Gorgon CO2 injection stopped by leaks and corrosion URL: https://www.boilingcold.com.au/gorgon-co2-injection-stopped-by-leaks-and-corrosion/ Last updated: 2022-01-08T14:06:27.000Z *This story was originally published in The West Australian on 19 December 2017 with the headline "Carbon hiccup for Chevron with 5 million-tonne greenhouse gas problem at Gorgon LNG plant." © Peter Milne.* Technical problems with Chevron’s landmark effort to store carbon dioxide from the Gorgon LNG project may see more than five million tonnes of greenhouse gas released into the atmosphere over two years. The $2.5 billion program to inject CO2 from the offshore Gorgon gas field underneath the Pilbara’s Barrow Island is a major plank of the $US54 billion project and the recipient of $60 million in Federal Government funding. A Chevron report to the State Government released yesterday said start-up checks this year found leaking valves, valves that could corrode and excess water in the pipeline from the LNG plant to the injection wells that could cause the pipeline to corrode. The report to the Department of Water and Environmental Regulation said the necessary remedial work meant CO2 would not be injected any earlier than the December quarter of next year. Chevron had told the Department of Mines and Petroleum in February — when gas from the CO2-rich Gorgon field first flowed — that work to start up the injection would begin in the first half of this year. *WestBusiness* understands that carbon injection will most likely start in the first half of 2019, meaning CO2 from the Gorgon field would have been be vented to the atmosphere for about two years. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/07/image-2.png) *Source: Chevron* The project’s Jansz-Io gas field has been operating about a year longer but produces little CO2. Chevron estimated in its 2015 greenhouse gas abatement program it would inject between 5.5 and 7.8 million tonnes of CO2 in the first two years of production from the Gorgon field. It is equivalent to the greenhouse gases emitted by all of Collie’s coal-fired power stations for about seven to 10 months. The extra CO2 vented may be less than that because of continuing problems with LNG production that have required numerous plant shutdowns. The delay will make it difficult for Chevron to meet a condition imposed by the Environmental Protection Act in 2009 that at least 80 per cent of the CO2 extracted from the gas reservoirs over any five-year period is injected underground. ![](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/07/image-3.png) *Source: Chevron* A Chevron spokeswoman said the carbon capture project was complex and bigger than anything undertaken anywhere in the world. > “It is critical we commission and start this system carefully and safely as the Gorgon CO2 injection project will run for more than 40 years,” she said. Environment Minister Stephen Dawson said Chevron had strict environmental conditions for operating on Barrow Island, which he expected to be met. Conservation Council WA director Piers Verstegen said Gorgon was one of the biggest sources of carbon pollution in Australia. If the CO2 injection could not be made to work then the emissions must be offset in some other way, he said. --- *Main image: Gorgon LNG project. Source: Chevron Australia Pty Ltd.* --- ### Exploration needed to keep WA supplied wth gas URL: https://www.boilingcold.com.au/exploration-needed-to-keep-wa-supplied-wth-gas/ Last updated: 2022-07-23T02:44:18.000Z *This story was originally published in The West Australian on 15 December 2017 with the headline "Explore more for gas: report." © Peter Milne.* The WA domestic gas market needs an exploration boost and more supply from the Gorgon project if it is to meet rising demand over the next 10 years, a report by the nation’s energy market operator warns. The Australian Energy Market Operator’s WA Gas Statement of Opportunities report yesterday said there would be less gas early next decade from the State’s biggest producer, the North West Shelf, as its legacy gas supply contracts expired. Gas supplies would be further constricted by the wind-down of other projects serving the domestic market because of depleted reserves. BHP Billiton’s Macedon and Quadrant Energy’s Varanus Island and Devil Creek plants are the principal domestic-only suppliers, with most other supply coming from LNG projects with domestic gas obligations. AEMO forecast that the tighter demand would lift average gas prices at the plant gate by 46 per cent over the next decade, encouraging more exploration to find additional reserves. However, the report noted a conventional gas field could take up to five years to develop after discovery. This presented a risk that it may already be too late to avoid a shortfall in supply. The WA spokesman for the Australian Petroleum Production and Exploration Association, Stedman Ellis, said exploration for unconventional shale gas had stopped in WA because of the State Government’s moratorium on hydraulic fracturing. “It makes no sense to continue to lock away a potentially massive resource,” he said. The report also noted that the Gorgon domestic gas plant was producing 155 terajoules a day but could supply up to 300TJ/d. ### Fortescue to decide on native title appeal URL: https://www.boilingcold.com.au/fortescue-to-decide-on-native-title-appeal/ Last updated: 2022-07-23T02:37:54.000Z *This story was originally published in The West Australian on 4 December 2017 with the headline "D-day for native title fight." © Peter Milne.* Mining companies, pastoralists and native title claimants across the county will be watching Fortescue Metals Group closely today — the deadline for the miner to appeal against a landmark native title decision that awarded exclusive title over the Solomon Hub iron ore operation in the Pilbara. The Yindjibarndi People in July won a fight they started in 2003 and gained exclusive rights over vast areas of their 2700sqkm Pilbara claim, including Fortescue’s Solomon Hub. The win may not reap the Yindjibarndi the sort of money Andrew Forrest would notice missing but the precedents set by the case may be a boost for title claimants across the country. Ten years ago, the Yindjibarndi gained rights to a much bigger area north of the area covered by this year’s win, the Moses land, but were awarded only non-exclusive possession. The legal reasoning behind the Yindjibarndi winning much stronger native title rights this time could affect the outcome of native title cases across Australia. Native title gives the recognised indigenous people rights to use the land in traditional ways, including living there, holding ceremonies, hunting and fishing. Non-exclusive possession means these traditional rights must co-exist with non-indigenous rights, such as those linked to pastoral leases. Exclusive possession, which the Yindjibarndi won this year, comes, in some circumstances, with the right to exclude others. For the Yindjibarndi to gain exclusive possession, the Native Title Act required them to demonstrate first that they had a right to exclusive possession and second that any previous tenure on the land that may have extinguished those rights could be disregarded. In his July judgment, Federal Court Justice Steves Rares set a lower bar for clearing these hurdles. Clayton Utz special counsel Pauline Gartlan said the different outcome this time was not primarily due to different facts, but that the judge had drawn on other decisions over the past decade to reach a different conclusion. The Moses case found that the Yindjibarndi had required others to obtain permission to enter the land as a matter of respect. Justice Rares decided that the requirement came from more than a matter of respect; it was driven by spiritual necessity. This gave rise to a right of exclusive possession. Clayton Utz partner Brad Wylynko said the importance the decision granted to spiritual and emotional connection meant it had moved significantly away from an earlier focus on physical connection. However, having the right to exclusive possession was not enough. The Yindjibarndi also had to show that any previous tenure on the land could be disregarded. To do this, the law required them to demonstrate two things: they occupied the area, and it was not required for any “particular purpose.” Clayton Utz special counsel Tosin Aro said while most people thought occupation meant to live or spend a lot of time somewhere, in this case it was enough that members of the claim group from time to time went on to the claim area to look after sacred sites, or exercise their native title interests in some other way. Mr Aro said the judge also determined that this exercising of native title interests could occur anywhere in the claim area to be legally effective over the entire claim area. This meant that to determine if native title extinguishment in a part of the claim area covered, say by a lease, could be disregarded, the Yindjibarndi did not have to have physically occupied the lease area, just any part of the claim area. The final step for the Yindjibarndi to gain exclusive possession was to show that the land was not “required” for a “particular purpose.” Justice Rares ruled that Fortescue’s railway corridor was required for a particular purpose so exclusive native title right could not be granted over it. However, in an unpleasant surprise for the mining industry, the judge found that six exploration licences, including one for Fortescue, did not require the land to be used for a particular purpose. Clayton Utz partner Damien Gardiner said the judge found that as exploration could not start without additional permissions, the licence by itself was not enough to conclude that the land was required for a particular purpose. “The problem with that analysis is . . . is there ever going to be an exploration licence that would fall into that category? That’s one of the key issues we see with the judgment,” he said. Mr Gardiner said the outcome differed to native title practice for the past 25 years, where the impact a lease or licence on native title took effect when it was granted, not when the last approval for the exercise of that interest occurred. Justice Rares last month held a court sitting at the Millstream Chichester National Park to the north of the claim area to hand down his determination. “That order acknowledges that the Yindjibarndi people not only possess today, but also have continuously possessed, since before the British Crown claimed sovereignty over Australia, specific native title rights and interests in the claimed area that have not been wholly or partially extinguished,” Justice Rares said. Befitting a case that has continued for 14 years, the outcome is not simple. The Yindjibarndi now have a patchwork of different rights across the area. Maps of the final native title determination show four areas of exclusive possession separated by expanses with non-exclusive rights. Roads and a railway traversing the area are classified as unclaimed, as are some mining leases. Even where exclusive possession has been awarded, the rights are not as absolute as they may sound. Another party can still apply for tenure, such as a prospecting or exploration licence, that would allow them to enter the area. Aboriginal Affairs Minister Ben Wyatt told State Parliament that, acting on advice from the State’s Solicitors Office, the Government would not appeal against the decision. He called on Fortescue to do the same. Fortescue chief executive Nev Power said he was proud of the company’s “longstanding relationships with Aboriginal people and our commitment to ending Aboriginal disparity”. “Through our seven Land Access Agreements with native title groups across the Pilbara, we have delivered employment to over 1200 Aboriginal people, nearly $2 billion in contracts to Aboriginal businesses and made in excess of $55 million on compensation payments,” he said. “Consistent with our position during the trial, Fortescue welcomes the recognition of Yindjibarndi native title. However, the Federal Court decision relating to the concept of exclusive possession has potentially wide-ranging implications for new investment in resources, agriculture and tourism.” Yindjibarndi Aboriginal Corporation chief executive Michael Woodley said it was Fortescue’s prerogative to appeal, but he would rather have the opportunity to get back to the negotiating table with them after a break of several years. If the two parties did meet, compensation would be the topic. If the compensation was determined in the courts, not by negotiation, the amount could not exceed the value of the land if it was sold as freehold, and there would be no compensation for the value of any minerals. If the decision stands, the Yindjibarndi people may benefit further. In May, they lodged an application for a redetermination for parts of the 2007 Moses area that are unallocated Crown land. Mr Woodley said the application was before the Federal Court and with the Government. With the law created in this year’s case there is a real chance that the same facts could lead to another award of exclusive possession to the Yindjibarndi. ### Finder chases $200m to explore offshore WA URL: https://www.boilingcold.com.au/finder-chases-200m-to-explore-offshore-wa/ Last updated: 2022-07-23T02:32:02.000Z *This story was originally published in The West Australian on 18 November 2017 with the headline "Finder seeks drill-plan backer." © Peter Milne.* Private Perth-based oil and gas explorer Finder Exploration is chasing about $200 million of private equity investment to fund a five-well WA offshore drilling program due to start late next year. If the $US150 million ($198 million) is raised, Finder will be split into an offshore business with new equity investors and an onshore business with current ownership. Finder is led by chief executive Shane Westlake. Damon Neaves, who joined Finder in May after six years as chief executive of ASX-listed African oil and gas explorer Pura Vida Energy, will head up the new offshore company. “It will be a big program, it’s exciting,” Mr Neaves said. He said the current preference was to keep the company private, but a future float had been considered. Finder plans to mobilise a jack-up rig to drill the Eagle gas prospect west of Onslow in the third quarter of next year. Mr Neaves said Eagle was attractive as it sat in shallow water close to shore and is traversed by the existing pipeline to BHP’s Macedon domestic gas plant. He hopes to start production by 2024 to capitalise on a shortfall in gas supply for WA that Finder predicts for early next decade. Finder intends to start drilling four oil prospects in early 2019 — Kanga and Gretzky in the Carnarvon Basin and Gem and Alpha in the Browse Basin — with a more expensive semi-submersible rig suitable for deeper water. If drilling is successful floating production facilities would produce the oil. Unusually, in an industry dominated by joint ventures to share the risk, all five prospects are fully owned and operated by Finder. ### Inpex has Ichthys on track to start in March URL: https://www.boilingcold.com.au/inpex-has-ichthys-on-track-to-start-in-march/ Last updated: 2022-04-23T15:04:48.000Z *This story was originally published in The West Australian on 11 November 2017 with the headline "Ichthys gears up for production." © Peter Milne.* The $US37 billion Ichthys LNG project is on track to start up next March as its two giant vessels moored about 200km off the Kimberley are readied for production. Toshiaki Kitamura, chief executive of operator Inpex, told analysts in Tokyo this week that the first production of condensate, LNG and LPG would meet the target of March 2018 and shipments would follow after that. The project had a difficult start to the year. Contractors building the power plant and the LNG tanks walked off the Darwin LNG site in January and March, respectively, and in April first production was pushed back six months. Now the offshore central processing facility, the Ichthys Explorer, and the floating production and storage facility Ichthys Venturer (pictured with the crane ship Jascon 25) are undergoing hook-up and commissioning after 6000km tows from South Korea. Mr Kitamura said the company had completed 14 of the planned 17 wells, enough to start production, and was working to connect piping near the subsea wells. He said construction at two of the six areas at the Darwin processing plant was complete. Yesterday the gas turbines at the power plant, for which Monadelphous was brought in to help finish in June, started up for the first time. Construction of the Ichthys project started in 2012 and the activity peaked last year. It is expected to operate for 40 years, producing 8.9 million tonnes of LNG, 1.65 million tonnes of LPG and at the peak 100,000 barrels of condensate a year. Inpex owns 62 per cent of Ichthys. ### Chevron "missed a few things" designing Gorgon: John Watson URL: https://www.boilingcold.com.au/chevron-missed-a-few-things-designing-gorgon-john-watson/ Last updated: 2026-04-28T07:43:23.000Z *This story was originally published in The West Australian on 30 October 2017 with the headline "Do your homework: Chevron’s outgoing chief John Watson learns from Gorgon mistakes." © Peter Milne.* Chevron’s departing head has told Wall Street the $US17 billion cost blowout at Chevron’s Gorgon LNG project taught the US oil major it needed to do more homework before starting mega-projects. Chevron chief executive John Watson told investment analysts on Friday that it was now clear that Chevron should have done additional engineering work and more thoroughly checked planning for the project before going ahead with construction in 2009. > “It’s a complex project on Barrow Island and if you miss a few things you’re going to incur some additional costs,” he said. “We have to verify every single aspect of these projects in advance, because we’re on the hook for them, regardless of the kind of contract that we sign.” Mr Watson said Chevron had a different mindset a decade ago. The Gorgon project was to cost US$37 billion when approved in 2009, with the first LNG planned for 2014. The most recent cost estimate, four years ago, indicated a 46 per cent overrun to $US54 billion. Gorgon started exporting LNG in March 2016. Mr Watson, who has headed Chevron since 2010, made the comments at his last presentation to Wall Street analysts before he retires in February. A year ago, Chevron announced a smaller 17 per cent cost increase to $34 billion for the Wheatstone project. At the time Chevron chief financial officer Pat Yarrington said the primary reason was the late arrival of modules from Malaysia but, like Gorgon, a lack of engineering before the final investment decision was a significant factor. Wheatstone’s first LNG cargo is now being loaded. Mr Watson said the project’s first train was running at 65 per cent capacity. He expected it to achieve full capacity this year and the second train to produce LNG in the second quarter of next year. He indicated there would continue to be significant work on the Gorgon and Wheatstone projects over the next few years. “We have to ramp those up, fine-tune them ... and then de-bottleneck them over time,” he said. Despite the two LNG projects’ cost and schedule problems, Mr Watson was optimistic. “I expect Australia will deliver earnings and cash flow for decades,” he said. Most of that cash flow is likely to come from the North West, after Chevron this month withdrew from oil exploration in the Great Australian Bight and announced a joint exploration program with Woodside in the North Carnarvon Basin. [![Want energy and climate news to hold gas giants to account? Support Boiling Cold.](https://storage.ghost.io/c/f1/e6/f1e6ac34-dd15-4046-a261-93b6cf1963bf/content/images/2021/07/CTA-donate-big-gas-1.png)](https://www.boilingcold.com.au/support/) ### Chevron's $US54 Gorgon LNG hits overheating glitch URL: https://www.boilingcold.com.au/chevrons-us54-gorgon-lng-hits-overheating-glitch/ Last updated: 2022-04-23T15:01:32.000Z *This story was originally published in The West Australian on 27 October 2017 with the headline "Hot air slows Gorgon trains." © Peter Milne.* Too much hot air around the LNG trains on Barrow Island has caused Chevron to flag a production cut at Gorgon as the US giant tackles problems onshore and offshore 19 months after the $US54 billion project’s maiden cargo. WestBusiness understands Chevron told project participants last month expected production for the lifting year from April 2018 was 14.6 million tonnes, one million tonnes, or 13 per cent, less than nameplate capacity. The difference is worth almost $500 million at the $9.10 a gigajoule price the Office of the Chief Economist forecast Australian LNG will average in 2018-2019. In contrast, PNG LNG, operated by Gorgon participant ExxonMobil, started production in 2014 and operated at 14 per cent above nameplate capacity in 2016. All LNG trains are more productive at lower temperatures, and Gorgon’s trains have air-cooled heat exchangers mounted on top for cooling. Industry sources say the air is not circulating as predicted, causing some of the hot exhaust to be sucked into the heat exchangers of other trains, reducing their cooling effect. The problem stems from the plant layout so is difficult to fix. Baffles have been retrofitted on to some trains to improve the air flow. It’s understood the Gorgon annual delivery program, a requirement in LNG contracts, is 13.3 million tonnes for the 12 months from April 2018. It is less than the expected production to ensure commitments can be met. Chevron upstream executive vice-president Jay Johnson told Wall Street three months ago all three trains had achieved or exceeded nameplate capacity and were operating smoothly. A joint-venture partner was uncomfortable with LNG output achieved during the more productive cooler part of the year being equated to nameplate capacity — an annual average. Industry sources have pointed to other problems not yet factored into production expectations. Flow meters, of a type known as a V-cone, are cracking and fragments could damage equipment downstream of the meters. Fixing the problem may require further shutdowns. Offshore, the gas from the Gorgon field has unexpected wax that may require the injection of chemicals. Until the injection equipment is installed, the Jansz-Io field is supplying more than the planned 50 per cent of gas, which may bring forward the need for expensive planned extra wells and compression. A spokeswoman said Chevron did not discuss day-to-day operations. Its next quarterly update is due late tonight. ### Chevron faces its CO2 challenge at Gorgon URL: https://www.boilingcold.com.au/chevron-faces-its-co2-challenge-at-gorgon/ Last updated: 2022-04-23T14:57:16.000Z *This story was originally published in The West Australian on 27 September 2017 with the headline "Gorgon’s next big challenge." © Peter Milne.* Chevron’s Gorgon project has been producing LNG from all three trains since February, but one task remains: to start injecting carbon dioxide underground. Without the $2 billion CO2 injection effort, Gorgon can emit more CO2 than all of Collie’s coal-fired power stations. In the 28 years from discovery in 1981 to project go-ahead in 2009 Gorgon gained the tag within the oil and gas industry of being deep, dirty, distant and dry. The depth was 220m of water, the distance was 130km from the mainland, dry meant the gas had little valuable condensate, and the dirt was the 14 per cent of carbon dioxide in the gas from the Gorgon field, one of two that feeds the project. In the end, reducing CO2 emissions shaped the whole project. It resulted in construction on Barrow Island with limited land area, little infrastructure, strict environmental and quarantine conditions, and the need to transport almost everything in by sea. However, Barrow Island had one advantage, a sandstone formation called the Dupuy, 2500m below the island, that could store CO2. Gorgon will emit 6.1 million tonnes of CO2 a year and inject a further 3.4 million tonnes a year under Barrow Island, according to Gorgon’s Greenhouse Gas Abatement Plan. The total CO2 produced by Gorgon is greater than the 9.1 million tonnes that is emitted from Collie’s coalfired power stations. Injecting 80 per cent of the CO2 from the reservoirs will make Gorgon the second biggest CO2 storage project in the world. The cost was estimated to be $2 billion in 2010 before the cost of the whole Gorgon project increased by 46 per cent. Separating the CO2 from the reservoir gas was required to avoid the CO2 causing corrosion and freezing into solid dry ice in the LNG plant, so was not an additional cost. Gorgon has a long long-term target to store 95 per cent of the reservoir CO2, or almost four million tonnes a year. Gorgon will not separate and store the CO2 from the turbines that generate power and liquefy the gas. The only two projects that store C02 from combustion, in Canada and the US, are on a smaller scale than Gorgon and recoup the expense by injecting the CO2 into depleted oil reservoirs to increase production. Only four of the 17 operating carbon storage projects do not use the CO2 for increased oil production The first step in storing the CO2 underground it is to compress it to a pressure sufficient to force it down the injection wells and then deep into the sandstone and siltstone of the Dupuy Formation. When compressed the CO2 is neither a true gas or liquid, but is kept at a so-called super-critical phase by controlling the temperature and pressure of the gas. The supercritical CO2 is easier to drive into the Dupuy, because it flows like gas but requires less storage volume as it is dense like liquid. The 7km pipeline from the compressors at the LNG plant to the injection wells was at risk as CO2 mixed with water is highly corrosive. The configuration of the compressors ensured the water is entrapped in the CO2 flow and doesn’t become so-called free water where it can cause corrosion. Nine wells have been drilled to inject the CO2 into the Dupuy. Up to nine more may be required, depending on the performance of the injection, to keep the gas pressure at the bottom of the wells low enough to avoid fracturing the formation and disturbing the planned flow of over seven tonnes of CO2 a minute into the sandstone. Once underground the CO2 sticks to the surface of rock grains or dissolves into the water between them. As more CO2 is stored underground, the pressure in the Dupuy could increase and reduce the flow through each injection well. This pressure increase is managed by extracting water from one side of the Dupuy at the same CO2 is injected into the other. Several kilometres west of the injection wells are four wells with electric submersible pumps that can lift over 12,000 tonnes of water a day to the surface. This water is then reinjected into a formation above the CO2. A Chevron spokeswoman said: “Construction of the Gorgon Carbon Dioxide Injection Project is in the final stages which includes final testing and commissioning activities. This is expected to take some time to ensure the system is ready for safe and reliable operations.” ### Norway's trillion-dollar oil and gas trick that Australia missed URL: https://www.boilingcold.com.au/norways-trillion-dollar-oil-and-gas-trick-that-australia-missed/ Last updated: 2023-12-04T11:36:37.000Z *This story was originally published in The West Australian on 25 September 2017 with the headline "Oil, gas ‘ownership’ attitude nets Norway $US1 trillion in savings." © Peter Milne.* Norway’s savings from exploiting its oil and gas resources reached $US1 trillion this week, a staggering amount for a nation of just over five million people. They have turned finite resources into lasting wealth by thinking long-term, being firm and taking charge. Paul Cleary, an Australian journalist who studied what the Norwegians did for his book *Trillion Dollar Baby*, thinks a key to Norway’s success was their attitude. > “From the very beginning their mindset was we own this, this is ours, and we are going to control it, and we are going to get the maximum amount of economic benefit ... for our country,” he told a Committee for Economic Development of Australia lunch in Perth on Friday. “In Australia, I don’t think we have the same attitude; we think ‘you can take it, give us some tax and royalties and a few jobs’, but we don’t have that sense of ownership.” Dr Cleary said the Norwegian policy was to go slowly and maximise the local benefits. In contrast, in Australia mid last decade the debate was about how to spend the money as quickly as possible. When negotiating with multinational oil companies the Norwegians knew what they wanted and were firm, Dr Cleary said. When US oil giant Phillips had drilled 32 unsuccessful wells in the North Sea by 1969 and wanted to stop, the Norwegians not only insisted they continued but told Philips where to drill next. The 33rd well discovered the giant Ekofisk field that may produce until the middle of this century. State Treasurer Ben Wyatt, who was in the audience, said the Norwegians had the confidence to say they owned the resource and what the terms were to exploit them. --- *Main image: Norwegian scenery. Source:* [*Vidar Nordli-Mathisen*](https://unsplash.com/@vidarnm?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) *on* [*Unsplash*](https://unsplash.com/s/photos/norway-oil-gas?utm%5Fsource=unsplash&utm%5Fmedium=referral&utm%5Fcontent=creditCopyText) --- ### Safety concerns on MODEC Venture 11 oil vessel URL: https://www.boilingcold.com.au/safety-concerns-on-modec-venture-11oil-vessel/ Last updated: 2022-04-23T14:52:41.000Z *This story was originally published in The West Australian on 8 September 2017 with the headline "Fear of riser failure curbed crew access offshore." © Peter Milne.* Concerns about potential oil leaks caused the safety regulator to bar workers from an area of a floating production facility about 150km north of Dampier for over a week. Access was not allowed to the turret area of the MODEC Venture 11 vessel, where flexible risers and chains anchored to the seabed are attached to the vessel, according to the prohibition notice on the NOPSEMA website. An inspector from NOPSEMA issued the prohibition notice on August 28 and cited concerns that the integrity of a riser was unknown. “The failure of a riser could result in the release of process hydrocarbons from the risers . . . which may result in fatalities in the turret area,” the notice said. A NOPSEMA spokesman said the notice was lifted yesterday after a review of plans submitted on Monday satisfied the regulator that Japanese-owned facility operator MODEC had implemented measures to reduce the risk to as low as reasonably practical. It is understood that the regulator and vessel operator worked together while the prohibition notice was in place. MODEC constructs, installs and operates floating production storage and offloading vessels around the world. The facility has produced oil from the Mutineer-Exeter fields since 2005, with additional production from the Fletcher-Finucane fields from 2013. The fields are operated by Santos, with Kufpec and JX Nippon Oil and Gas holding additional equity. ### Chevron looks to new subsea compression technology for Gorgon URL: https://www.boilingcold.com.au/chevron-looks-to-new-subsea-compression-technology-for-gorgon/ Last updated: 2022-01-08T14:00:19.000Z *This story was originally published in The West Australian on 21 August 2017 with the headline "New subsea tech plan to feed Gorgon LNG plant." © Peter Milne.* Chevron is considering using a radical new technology known as subsea compression to keep gas flowing to the Gorgon LNG project and avoid a multibillion-dollar offshore structure. Two giant gas fields, Gorgon and Jansz, feed the 15.6 million tonne-a-year Gorgon LNG plant and the domestic gas plant on Barrow Island. The pressure in the reservoirs drives the gas to the island but ongoing production drops the pressure and eventually the gas must be compressed to keep the operation at full capacity. The favoured option had been a semi-submersible compression platform. Gas from the Jansz wells would have flowed to a giant floating structure weighing up to 20,000 tonnes anchored in 1km of water. There it would be compressed and returned to the existing subsea pipeline headed to Barrow Island. Industry sources said that late last month Chevron and its partners switched focus to compressing the gas on the seabed using electrically driven compressors powered from Barrow Island, 130km away. Work on the semi-submersible by WorleyParsons in Perth has been suspended while subsea compression is investigated. Subsea compression has worked in the Statoil-operated Asgard field off Norway since 2015\. Norwegian engineering company Aker Solutions led the development of the technology for the 67 per cent state-owned oil and gas producer. WestBusiness understands that Gorgon will also use Aker for the study of subsea compression. ExxonMobil, which owns 25 per cent of Gorgon, is familiar with the Aker technology as it also has a 7 per cent interest in Asgard. The equipment on the seabed, 260m below the surface of the North Sea, is complicated. The raw gas from the wells is cooled, separated into gas and liquid streams that are compressed and pumped respectively, then the gas is cooled, combined with the liquids and flowed through a 40km pipeline. Poten & Partners upstream and LNG adviser Will Pulsford said reliability was the biggest concern with subsea compression. He said the equipment on a semi-submersible had workers to maintain it, but access to equipment on the seabed was more challenging. Statoil manager technology management Simon Davies said at the AOG conference in Perth in February that the benefits of subsea compression increased with water depth and distance the gas had to move. The ability of subsea compression to make extracting gas from deep and distant wells cheaper has applications for Chevron in Australia well beyond the Jansz field. Chevron subsea factory champion Mark Wagstaff, also speaking at the AOG conference, said the company had launched an initiative that aimed to increase recovery of oil and gas by 20 per cent and reduce capital costs by 25 per cent. It is believed the Gorgon joint venturers planned to select a Jansz compression solution in the first quarter of next year and commence front-end engineering and design in late 2018. A Chevron spokesman said ongoing work to maintain gas supply to Gorgon had been anticipated. “This includes additional wells, subsea infrastructure and compression facilities at the existing Gorgon and Jansz-Io fields,” he said. --- *Main image: Woodside headquarters Mia Yellagonga in Perth. Source: Chevron Australia Pty Ltd* --- ### Chevron surrenders in $1B tax fight with ATO URL: https://www.boilingcold.com.au/chevron-surrenders-in-1b-tax-fight-with-ato/ Last updated: 2022-04-23T14:47:15.000Z *This story was originally published in The West Australian on 19 August 2017 with the headline "Chevron folds in $1b tax case." © Peter Milne.* Chevron has surrendered in its $1 billion fight over interest charged on inter-company loans, leaving an emboldened Australian Taxation Office ready to tackle more multinationals for a predicted $10 billion haul. The US oil and gas giant said yesterday it had abandoned its appeal to the High Court against a Full Federal Court decision in favour of the ATO, and had reached an agreement with the ATO in the dispute. “Chevron believes the agreed terms are a reasonable resolution of the matter,” a company spokesman said. The total amount in dispute was $1.062 billion, according to an answer by Chevron to a question from the Senate committee on corporate tax avoidance in May. Federal Minister for Revenue and Financial Services Kelly O’Dwyer said the ATO’s initial estimate was that the court’s ruling would reap more than $10 billion over the next decade in relation to pricing of intercompany loans alone. Chevron’s settlement of the dispute is in contrast to its initial reaction to the Full Federal Court decision. Chief financial officer Pat Yarrington said in May Chevron was hugely disappointed at the ruling, and the Australian court had failed to follow recognised international transfer pricing guidelines. “There's an awful lot at stake with this ruling, not just for Chevron but for any inter-company lending in Australia,” she said at the time. The ATO agreed. A spokesman said the impact would be across the entire economy, not just the oil and gas sector. The ATO spokesman said the case would have direct implications for related party loans cases it was pursuing and indirect implications for other transfer pricing cases. “The judgment in Chevron is one of the most important decisions in corporate tax in Australia,” he said. “The ATO will not shy away from lengthy or complex cases. We have the laws, the powers and the capability to hold these multinational companies to account.” BDO accounting global lead transfer pricing Zara Ritchie said some positions the ATO was taking were not consistent with international practice. “Everyone was expecting and hoping it would go to the High Court,” she said of the case. KPMG national leader tax dispute resolution Angela Wood said KPMG had seen many multinationals scrutinising their existing inter-company loan arrangements for compliance with the ruling. ### Inpex likely to never pay Australia for gas for Ichthys LNG URL: https://www.boilingcold.com.au/inpex-likely-to-never-pay-australia-for-gas-for-ichthys-lng/ Last updated: 2022-01-08T13:59:14.000Z *This story was originally published in The West Australian on 15 July 2017 with the headline "Inpex will pay nothing to extract oil and gas." © Peter Milne.* The Inpex-led Ichthys LNG project will export $195 billion of LNG, LPG and condensate from Darwin over the next three decades but will not pay Canberra anything for the gas it extracts from its field 450km north of Broome. The Ichthys LNG project started construction in 2012 and next year is expected to begin shipping condensate from its offshore facilities and LNG and LPG from its Darwin plant. Inpex yesterday released a report by ACIL Allen on the economic benefit to Australia from its $US37 billion ($47.7 billion) investment. Inpex president director Australia Seiya Ito said Ichthys, funded by a US$20 billion project finance deal, was the biggest overseas investment ever by a Japanese company. “My nickname is King of Debt,” he said. Despite the LNG plant itself being located in Darwin, WA is predicted to benefit from the project. Mr Ito said Perth, with 1500 workers, houses the biggest Inpex office in the world, surpassing even Tokyo. The report forecast the project would create an average of 1100 equivalent full-time jobs a year in WA over the next 40 years, based in Perth, Broome and offshore. ACIL Allen executive director WA and NT Mr John Nicolaou said that even under the highest oil price considered, his company forecast that the Ichthys project would pay no Petroleum Resource Rent Tax. However, the report forecast the project would generate $73 billion of taxation to various Australian governments. Minister for Finance Senator Mathias Cormann, said the Australian Government was very keen for Inpex and the Ichthys project to be as successful and profitable as possible. > “PRRT arrangements remain the preferred way for the Australian Government to achieve a fair return to the community from LNG production and exports without discouraging investment,” Cormann said. Senator Cormann ruled out any significant changes to the PRRT applied to existing projects or those “already underway or in the pipeline”. He said that the Government was very aware of sovereign risk concerns from a sector exposed to highly volatile commodity prices and required capital intensive investment. An Inpex spokeswoman said PRRT was one of many taxes Inpex forecast it would pay in Australia, in addition to significant company and payroll tax payments to State, Territory and Federal Governments. The Treasurer’s office said the Government supported the PRRT but there were some elements of the PRRT that posed revenue risks. The Government is seeking stakeholder and industry feedback on potential longer-term reforms to the PRRT. --- *Main image: Ichthys LNG plant in Darwin. Source: Inpex Australia Pty Ltd.* --- ### Woodside and ConocoPhillips look to new Australian LNG projects URL: https://www.boilingcold.com.au/woodside-and-conocophillips-look-to-new-australian-lng-projects/ Last updated: 2022-04-23T14:17:36.000Z *This story was originally published in The West Australian on 14 July 2017 with the headline "Woodside, Conoco eye LNG capacity options." © Peter Milne.* Woodside and ConocoPhillips, operators of Australia’s two oldest LNG plants, are gravitating towards the cheapest development options for their Browse and Barossa gas fields, as low-cost Qatar targets the same market window as local producers. Capacity opening up early next decade in the North West Shelf and Darwin LNG plants offers low-cost production options for upstream projects that need funding in the next few years, while oil prices are low, to be ready for an expected turn in the market mid-next decade. An LNG oversupply exacerbated by booming US LNG exports had already made the cost and risk of building an LNG plant unattractive. Low-cost LNG giant Qatar added to the woes of Australia’s LNG players last week when it announced a planned 23 million tonne-a-year increase in exports. Wood Mackenzie commercial director of gas and LNG Chris Graham said the high liquids content of Qatar’s North Field made producing gas very economical and, at some oil prices, the gas was essentially free. Plans for the Barossa field, operated and 37.5 per cent owned by ConocoPhillips, to supply gas to Darwin LNG were published on the website of industry regulator NOPSEMA yesterday. A floating facility about 300km north of Darwin would extract and export valuable condensate and send gas to the existing Bayu-Undan to Darwin pipeline through a 260km long pipeline. Production of 3.7 million tonnes of LNG a year, enough to fill the Darwin LNG plant, and 1.5 million barrels of condensate a year is targeted to start in 2023 and last for 20 years. Front-end engineering is expected to start next year, with project sanction in 2019 followed by first gas four to five years after that, the proposal says. Woodside is on track with its negotiations to find gas to fill its North West Shelf plant where existing supplies start a gradual decline early next decade. A North West Shelf spokesman said they had sent nonbinding terms to prospective gas owners. Woodside chief executive Peter Coleman has made clear his preferred option is for gas from the 30.6 per cent Woodside owned Browse field to displace existing 16.7 per cent-owned gas. Both operators will need to get other LNG plant participants onside, some with interests in other fields, for Barossa and Browse to produce LNG without having to finance an LNG train. ### Revamp planned for WA safety laws URL: https://www.boilingcold.com.au/revamp-planned-for-wa-safety-laws/ Last updated: 2022-07-30T03:50:57.000Z *This story was originally published in The West Australian on 17 July 2017 with the headline "Overhaul for ‘out of date’ work safety laws." © Peter Milne.* The State’s work health and safety laws will undergo a major revamp, streamlining three Acts into a single one more consistent with national legislation. Commerce and Industrial Relations Minister Bill Johnston will today announce the Government is to develop a new Work Health and Safety Bill. Based on national laws, it will be the primary safety legislation for all industries in the State. “Occupational, health and safety legislation in WA is 30 years old and is out of date,” Mr Johnston said. The move comes more than five years after all States and Territories, except WA and Victoria, adopted consistent occupational health and safety laws. The Government does not expect to introduce a Bill to Parliament until mid-2019. The announcement comes as the Legislative Council starts an inquiry into WorkSafe, which regulates safety outside the resources sector. Construction, Forestry, Mining and Energy Union State secretary Mick Buchan said WorkSafe failed to ensure construction workers’ safety. It should be more transparent and better resourced, with experienced inspectors to issue on-the spot fines. “We are still waiting for the findings of the WorkSafe investigation into the fatality of two young Irish workers on a Jaxon Construction site in Bennett Street in 2015,” he said. Inquiry chairwoman Labor MLC Adele Farina said there had been 315 work-related deaths in WA since 2001 with almost 20 fatalities a year over the past decade. Ms Farina said the inquiry would examine the performance and funding of WorkSafe. Chamber of Mines and Energy chief executive Reg Howard-Smith said the inquiry was an opportunity to highlight the importance of modernised work health and safety legislation. ### The Prelude floating LNG design challenge URL: https://www.boilingcold.com.au/the-prelude-floating-lng-design-challenge/ Last updated: 2021-02-13T03:54:54.000Z *This story was originally published in The West Australian on 1 July 2017 with the headline "Prelude crew in a safe space." © Peter Milne.* Containing as much steel as 36 Eiffel Towers and spanning three times the length of the oval at Perth Stadium, Shell’s Prelude floating LNG facility will cut an imposing figure even in the vastness of the open seas between Asia and Australia. The world’s biggest vessel was last night continuing on it journey from South Korea to its new home, 475km north-east of Broome. It’s jaw-dropping scale presented more than a few headaches for engineers but the main difficulty was not accommodating the vessel’s girth, it was dealing with how close its crew would be to the millions of tonnes of gas that Prelude would process. The greatest danger in the oil and gas industry is the low but very real probability of a release of gas or an explosion. To reduce the effect of any incident, areas of the process plant are separated from each other and from where the most workers are. Prelude’s engineers had little room to play with to achieve this separation. Woodside’s Pluto plant, that produces 4.9 million tonnes of LNG a year, spreads over an 80ha site near Karratha. Prelude will produce 5.3 million tonnes of LNG, condensate and LPG a year on less than 4ha. The confined spaces below deck, where gas clouds and blast pressure from an explosion cannot disperse, contain the least hazardous equipment, the product tanks. On deck, the most safety- sensitive gas-processing plant, the turret and the flare tower were placed as far from the living quarters as possible. Lower-risk equipment like the power generation was placed nearer the living quarters that are protected by a blast wall. The four big process plant modules are separated by 20m-wide safety gaps to help disperse any gas released and impede the spread of any fire. The layout also allowed for possible LNG spills that, at -162℃, can make steel brittle. ## Dealing with a moving sea Safety was the primary concern in the Prelude layout, but there were other layout problems caused by vessel motion. Some equipment that contains a mix of liquid and gas is sensitive to motion and was placed near the centre of gravity of the ship, where the movement is least. The motion of the Prelude also creates repetitive loads on the equipment and piping that would never occur on land. Unless addressed in the design, these could cause a fatigue failure, where small micro-cracks in the metal gradually grow with each movement until, after many years and millions of movements, the components fracture. LNG carriers are usually near full when they deliver cargoes and near empty when they return. In either case, there is little force on the tank’s insulated walls from sloshing of the LNG inside the tanks when the ship moves. On the Prelude, though, the interiors of its LNG tanks were designed to withstand the forces of LNG sloshing about in a half-empty tank during a cyclone. At onshore LNG plants, an LNG carrier is tied up to a stationary jetty before LNG loading arms connect and fill the tanks. Prelude required loading arms that can swivel, rotate and follow the motion of the LNG carrier for the 15-hour loading process that occurs every five to six days. These loading arms were built and tested in France using liquid nitrogen and a rig that simulated movement in extreme sea conditions. The loading arm had to be able to pull itself into place to connect and release quickly in an emergency. During loading, an LNG carrier will not face the worst case of being pushed sideways by the weather as Prelude rotates around its turret to face the prevailing sea state. Three giant thrusters under the vessel will keep the Prelude steady as the carrier is loaded. ## Keeping Prelude attached to the seabed While some of Prelude’s engineers were challenged by how small Prelude was for an LNG plant, the engineers designing the turret had to deal with Prelude’s massive size. The turret is a vertical rotating cylinder built into and protruding below the hull. It has the dual role of attaching the Prelude to mooring lines while allowing production from the subsea wells to flow into the vessel as it swivels about the turret. The turret must withstand the load of a fully laden 600,000-tonne Prelude subject to the worst storm expected in 10,000 years while fixed to the seabed 250m below by 16 huge mooring chains. Unsurprisingly, the turret is the biggest ever built: 94m high, 26m wide and weighing over 11,000 tonnes. The Prelude is not only connected securely to the mooring chains by the turret; it is connected permanently. Prelude is designed for a field life of 20-25 years and cannot disconnect for cyclones or go into port for maintenance. Under the Prelude, away from the mooring lines, are eight water intake risers. To cool the machinery the riser suck in 50,000 tonnes of water an hour from 150m below the surface where the water is 6-10℃ cooler. When the Prelude starts producing LNG off Australia’s coast, it will be due to the extraordinary number of problems identified and solved by its design engineers. --- *Main image: Prelude floating LNG facility leaving shipyard in Korea. Source: Shell* ### Chevron tax tale crumbles under questioning URL: https://www.boilingcold.com.au/chevron-tax-tale-crumbles-under-questioning/ Last updated: 2022-04-23T05:08:06.000Z *This story was originally published in The West Australian on 14 June 2017 with the headline "Senate questions tax Chevron." © Peter Milne.* ANALYSIS The credibility of estimates from US giant Chevron, Australia’s biggest holder of gas reserves, of the tax it will pay from its LNG production has been undermined by questions put to the company by the Senate committee on corporate tax avoidance. To demonstrate how Australia’s current tax arrangements “give the taxpayers a supercharged return”, Chevron Australia managing director Nigel Hearne told the Senate in April that Chevron expected to pay between $60 and $140 billion in petroleum resource rent tax. “That is a significant number, and I would like to restate it. We expect to pay $60 billion to $140 billion in PRRT,” Mr Hearne said. Mr Hearne was unable to provide the assumptions used by his employees to produce this “significant number” when questioned by the senators. Chevron’s recent response to questions on notice from the Senate committee showed a high-price scenario, provided by industry consultant Wood Mackenzie, was used to calculate the higher PRRT estimate of $140 billion. However, to calculate the lower estimate of $60 billion, Chevron used the mid-price scenario. As the difference in PRRT paid between the high and medium price assumptions was $80 billion, it is possible much of the $60 billion lower PRRT estimate would disappear if Chevron had used the low-price scenario. The response to the committee’s questions also showed Chevron relied on an unspecified number of gas discoveries to be approved as projects, starting mid next decade. These projects still on the drawing board accounted for $59 billion, or 42 per cent, of Chevron’s higher PRRT estimate. Chevron did not respond when asked why it did not use the Wood Mackenzie low-price scenario for its lower PRRT estimate and what the nature of the additional gas projects was. A Chevron spokesman said an independent economic analysis showed that between 2009 and 2040 “Chevron Australia’s projects” would produce more than $338 billion of revenue to the Federal Government. This analysis, performed by ACIL Allen for Chevron in 2015, predicted total government revenue of $355 billion when State revenue was included. This total included tax from the 53 per cent of Gorgon, 36 per cent of Wheatstone and 83 per cent of the North West Shelf project that Chevron does not own, as well as the multiplier effect of taxation from people and companies associated with the projects. The amount of tax Chevron paid was estimated to be $68 billion — 19 per cent of the headline number. ACIL Allen noted that Chevron supplied the estimates of taxation revenue from the Gorgon and Wheatstone projects based on ACIL Allen’s price and exchange-rate forecasts. For the two projects that will provide the vast share of Chevron Australia’s revenue, the tax was calculated by the recipient of the report, not the author. ACIL Allen was asked whether the estimate of tax to be paid by Chevron in its report could be considered independent but it was not able to respond before publication. Chevron used the $338 billion tax estimate in a November 2015 media statement that said Chevron Australia “is testament to the sound working of the PRRT in attracting investment into Australia”. What the statement did not say, but Chevron’s recent answers to the Senate committee have revealed, is that the government revenue estimates from the ACIL Allen report “did not include an estimation of PRRT”. Therefore, Chevron supported its argument that PRRT is “designed to deliver substantial returns” with a “high 40 per cent tax rate” with analysis that predicted no PRRT payments from Chevron. As well as selective assumptions in the Chevron analysis and a lack of clear independence in the ACIL Allen report, the predicted timing of the tax payments needs consideration. The further out predicted revenue is, the greater the uncertainty that it will occur. It is also less useful to the Australian Government for two reasons. Inflation will erode the purchasing power of the revenue, which was factored in by ACIL Allen but not in the Chevron analysis. More importantly, the nation gets more utility out of a bridge or hospital built now than one built in a few decades. The Chevron analysis predicted PRRT payments to start as late as the mid-2030s and finish in 2062. Mr Hearne had a positive portrayal of the delayed payment in an opinion piece in a national newspaper in March. “The PRRT should be viewed as a form of ‘Future Fund’, delivering large returns at a time in the future when Australia’s demographic challenges will be at their greatest,” he wrote. However, a future fund would receive money now and invest it for future use. Receiving first payment for gas over a decade after production starts is not a future fund, it is merely delayed (and uncertain) payment for goods provided. No other industry in Australia gets that deal from their suppliers. ### Bill Johnston tells frackers to get community onside URL: https://www.boilingcold.com.au/johnston-tells-frackers-to-jet/ Last updated: 2022-04-23T05:03:16.000Z *This story was originally published in The West Australian on 25 May 2017 with the headline "Industry told to get community behind fracking." © Peter Milne.* The onshore oil and gas industry needs to get the community behind fracking, the future of which in the State depends on the outcome of a McGowan Government inquiry, according to Mines and Petroleum Minister Bill Johnston. Mr Johnston maintained Labor’s stance that there would be no hydraulic fracturing in the South West, the Peel region or Perth. Fracking in the rest of the State was on hold until the broad-based scientific inquiry, which would include the impact of climate change, was complete. He told the Petroleum Club of WA yesterday the Government appreciated the importance of the onshore gas industry but to succeed it needed a proper social licence. Mr Johnston gave an example as an impact of social media his brother, a NSW farmer who posted support for the Lock the Gate campaign on Facebook. “It drives me crazy,” he said. The opponents of onshore oil and gas extraction were not telling the whole story, he said. In the past the resource sector could rely on support from farmers. “We won’t allow fracking to take place in WA until we’ve conducted that broad-ranging inquiry . . . so stakeholders have gotten their opportunity to have their say and can see it has been done in an open and transparent way,” he said. Piers Verstegen, director of the Conservation Council of WA, said fracking could have serious irreversible impacts on the environment, particularly on groundwater. The oil and gas industry had failed to make the case that fracking was necessary for WA, where there is sufficient gas supply from offshore fields and access to world-class renewable energy resources, he said. Stedman Ellis, WA chief operating officer for oil and industry group APPEA, opposed the Government’s review. “The WA Parliament has already held a two-year inquiry which concluded fracking posed a negligible risk,” he said. Mr Ellis said if there must be another inquiry it should be short, focused on facts and report back in a matter of months. Much of the opposition to fracking was from people ideologically opposed to natural gas who spread misinformation and ignored the fact that fracking had been performed safely for decades, he said. ### Woodside field leaks oil for two months URL: https://www.boilingcold.com.au/woodside-field-leaks-oil-for-two-months/ Last updated: 2022-04-23T04:54:18.000Z *This story was originally published in The West Australian on 19 May 2017 with the headline "Woodside well leaked for nearly two months." © Peter Milne.* A subsea oil well that leaked for up to two months off the Pilbara coast last year but was not disclosed until this week belonged to the Woodside Petroleum-operated North West Shelf project. The leak, the biggest reported offshore of Australia last year, was conservatively estimated by Woodside to total up to 10,500 litres of fluid over two months, a spokesman for regulator NOPSEMA said. While no release of oil into the marine environment was acceptable, a relatively slow release rate and not all the fluid being oil reduced the effect, the spokesman said. He said Woodside in early February 2016 moved the Okha floating production facility away from its oil fields, about 150km north of Karratha, because of an approaching cyclone. A subsea remotely operated vehicle inspected the wells two months later, before the vessel returned from routine maintenance, and spotted a leak from a valve control line on the Cossack 4 well and isolated the line. The 274m long Okha sits in 80m of water and collects oil from the Cossack, Wanaea, Lambert and Hermes oilfields that have produced oil for over 20 years. The vessel, commissioned in 2011, is a converted oil tanker. A degraded valve seal caused the leak and Woodside changed its procedures so in the future the valve would be checked before the vessel was disconnected, NOPSEMA’s spokesman said. The regulator took no further action because Woodside made immediate steps to ensure the incident did not happen again. The leak was disclosed in NOPSEMA’s annual offshore performance report without naming the operator or location. Woodside yesterday permitted the agency to provide details. Woodside immediately notified NOPSEMA and both parties investigated the leak, a Woodside spokeswoman said. No more leaks were detected and there was no lasting damage to the environment. She said Woodside was a responsible operator committed to high standards and transparent reporting. ### Quadrant looks short of gas before sell off URL: https://www.boilingcold.com.au/quadrant-looks-short-of-gas-before-sell-off/ Last updated: 2022-04-23T04:46:46.000Z *This story was originally published in The West Australian on 17 May 2017 with the headline "$4b Quadrant float to hit gas supply poser." © Peter Milne.* Macquarie and Brookfield will have to sell exploration potential in their planned $4 billion float of Quadrant Energy amid concern its domestic gas plants could run dry in as little as six years. With Quadrant’s existing fields having peaked, it faces tough competition from rival new supplies and questions over whether customers can afford to pay a gas price high enough to support any developments. Macquarie and Brookfield bought the WA domestic gas and oil interests of US firm Apache in April 2015 for $2.7 billion when the oil price was $US56 a barrel. The Brent oil price was yesterday about $US52. The Gas Statement of Opportunities for WA issued by the Australian Energy Market Operator in December predicted only the Gorgon, Wheatstone, North West Shelf and the small onshore Xyris plants had sufficient gas from existing fields to continue production past 2023. Quadrant’s production comes from its Varanus Island and Devil Creek plants and a minority stake in the BHP-operated Macedon plant. Paul Taliangis, chief executive of Adelaide-based energy consultant Core Energy, said production from the fields supplying Quadrant’s customers had peaked, but the area was prospective for discoveries. The challenge for Quadrant would be to develop the fields at a low enough cost to be economic, he said. Fields in shallow water, near existing infrastructure and with a high level of liquids would be the most viable. For a new gas field to break even, it needed a price of $5.50 to $6 a gigajoule and an oil price of more than $50 a barrel, he said. Last year Quadrant supplied 22 per cent of the WA gas market, with three-quarters of that production coming from the two Quadrant-operated plants where Santos takes the remaining 45 per cent of production, according to data from the AEMO WA gas bulletin board. Santos noted in its annual report last year new projects such as the Spar-2 tieback and additional compression on Varanus Island would unlock undeveloped reserves. There was a discovered resource base that may supply Varanus Island and Devil Creek in the longer term. Wood Mackenzie analyst Saul Kavonic said Quadrant was positioned to capitalise on increased gas prices from its infrastructure, as well as any gas production developed beyond their commitments to service their existing large Alcoa contract. Mr Taliangis said another unknown for domestic gas producers was how fast the Gorgon and Wheatstone projects would bring extra gas to WA’s market. A Quadrant Energy company spokesman said as a private company it does not publish details of field development plans or reserve outlooks. ### WA gas enough for export and local use: Coleman URL: https://www.boilingcold.com.au/wa-gas-enough-for-export-and-local-use-coleman/ Last updated: 2022-04-23T04:41:53.000Z *This story was originally published in The West Australian on 6 May 2017 with the headline "Gas works better in the west: Woodside." © Peter Milne.* WA has enough gas to keep the North West Shelf full, ship LNG to the Eastern States and still have a reliable domestic supply, Woodside Petroleum chief executive Peter Coleman believes. Mr Coleman said the North West Shelf — the State’s most important gas processing facility — would have enough spare capacity mid next decade to warrant a major new gas supply project. The NWS will next month finalise a proposal to liquefy gas from other projects. The Scarborough and Browse gas fields, in which Woodside has an interest, and one or two other ventures, would receive the offer, he said. Woodside believed the NWS could offer one of the most competitive processing fees in the world, less than those being charged in the US Gulf of Mexico, Mr Coleman said. He said a pipeline from Browse to the NWS was less risky and cheaper than the floating LNG concept discarded early last year. Speaking after Woodside’s annual meeting, Mr Coleman said for Browse gas to go to the NWS, all six NWS partners would need to agree to the deal. Woodside was working with a group that was well aligned and would then bring the others along “who may be neutral on the outcome”, he said. Woodside, Shell, BP and Japan Australia LNG have interests in NWS and Browse. The two NWS partners without an interest in Browse have their own gas that could backfill the NWS. BHP Billiton owns 25 per cent of Scarborough and Chevron has undeveloped resources in the Carnarvon basin. Chevron Asia Pacific president Steve Green, responding to a Wall Street analyst’s question about the NWS last week, said the US giant was looking for opportunities to accelerate the development of its Carnarvon basin resources and would consider facilities apart from its Gorgon and Wheatstone plants. Mr Coleman, in contrast to the position of most of Australia’s gas producers, supported WA’s gas reservation policy. Mr Coleman said Woodside had spoken to proponents of LNG import terminals about buying Woodside gas to relieve the east coast’s supply problem. ### No support for tax minimisation fom Woodside URL: https://www.boilingcold.com.au/no-support-for-tax-minimisation-fom-woodside/ Last updated: 2022-04-23T04:32:04.000Z *This story was originally published in The West Australian on 29 April 2017 with the headline "No tax avoidance at Woodside, tax inquiry told." © Peter Milne.* Woodside Petroleum does not support the use of artificial structures aimed at the avoidance or minimisation of tax, the company’s chief financial officer Anthea McKinnell told a Senate inquiry into the petroleum resources rent tax yesterday. Ms McKinnell said Woodside funded its operations within Australia so had no opportunity to engage in cross-border financing with related parties. The transfer prices resource companies use for Australian exports sold through Singapore marketing hubs have been a focus for the Australian Taxation Office in recent years. Ms McKinnell said Woodside did not apply transfer pricing to Australian production sold through their Singapore marketing office. Fees paid to the office last year were only $1 million. Chevron taxation manager Michael Fenner told the inquiry Chevron Australia owed related entities $34.5 billion in loan principal and a further $9 billion in interest. Chevron Australia managing director Nigel Hearne said a Wood Mackenzie analysis of LNG project economics released by oil and gas industry lobby group APPEA was in the same range as Chevron’s analysis. Wood Mackenzie predicted the Gorgon and Wheatstone projects would achieve 7.7 per cent and 7.8 per cent rates of return respectively at an oil price of $60 a barrel. That was down from 12.6 per cent and 12 per cent expected when the projects were approved. ### LNG giants start move from South Korea to Australia URL: https://www.boilingcold.com.au/lng-giants-start-mot-from-south-korea-to-australia/ Last updated: 2022-04-23T00:37:26.000Z *This story was originally published in The West Australian on 27 April 2017 with the headline "Big cats of LNG world leave South Korea for WA." © Peter Milne.* A once-in-a-lifetime migration of LNG production vessels from Korea has begun, with waters off WA the destination. The Ichthys Explorer, the offshore central processing facility for the Inpex-led LNG project, has sailed from Samsung Heavy Industry’s Geoje shipyard. The world’s biggest ever vessel, Shell’s 488m Prelude floating LNG facility, is waiting its turn at the same shipyard. The second Inpex vessel, the 336m Ichthys Venturer, is nearing completion less than 20km away in a Daewoo shipyard. An Inpex spokesman confirmed the central processing facility had set sail and marine traffic monitoring website Vessel Finder showed the Ichthys Explorer, the world’s biggest semi-submersible platform, being towed south by four tugs and due to arrive at the Ichthys field, about 200km off the Kimberley coast, on May 30. The Ichthys Explorer will separate the gas, that is piped 890km to Darwin, from the liquids, that are sent to the Ichthys Venturer and then loaded onto tankers. A project schedule lodged by Inpex with the offshore safety regulator in December indicates that six months after the first vessel arrives on site gas could reach Darwin. This would be late November. Inpex is targeting a start of production by September. It is not known when the Ichthys Venturer will leave Korea. Shell had planned for Prelude to sail in July but this may be delayed to September, according to industry sources. WestBusiness understands September is the latest sail date that would allow Prelude to be secured in position before the Australian cyclone season. A Shell spokeswoman said Prelude was nearing the end of construction and commissioning and was on track to provide significant cash flows next year, but would not comment further on its schedule. Offshore Weather Services operations manager Peter Wellby said avoiding cyclones was a key consideration when towing large vessels. He said the most likely route from the shipyards at the southern tip of Korea was directly south, past the east coast of the Philippines, through the islands between Sulawesi and Irian Jaya and the Lombok Strait east of Bali. ### Wheatstone startup threatened by offshore problems URL: https://www.boilingcold.com.au/wheatstone-start-up-threatened-by-offshore-problems/ Last updated: 2022-04-23T00:28:45.000Z *This story was originally published in The West Australian on 20 April 2017 with the headline "Chevron challenged to meet first LNG target." © Peter Milne.* Wheatstone LNG project operator Chevron faces a challenge to meet its mid-year target of first LNG as it readies to receive a 600-bed accommodation vessel to allow workers to continue fixing piping systems on the offshore platform. Another accommodation vessel, the 500-bed Floatel Triumph, has been connected to the Wheatstone platform since October, housing the hook-up and commissioning crews. When that vessel was delivered to its owners in September, it was announced that it would work on the Ichthys LNG project after Wheatstone. With Inpex readying to sail its floating central processing facility the Ichthys Explorer from South Korea soon, it is likely the Floatel Triumph now has to sail north to house workers for the Ichthys LNG project. WestBusiness understands Chevron has initially contracted replacement vessel the Edda Fides for four months. The Edda Fides set sail from Singapore on April 10. Allowing for travel time from Singapore, four months on the site would see platform hook-up and commissioning activities continuing until late August. After the platform is able to export gas, Chevron must also commission the 225km pipeline to shore and the two-train LNG plant near Onslow before the US$34 billion project produces LNG. Chevron chief executive John Watson said in January that work on the offshore platform was the critical path activity for the project. Early last month, despite the Edda Fides already sailing towards Australia, Chevron upstream executive vice-president Jay Johnson said: “Our outlook for start-up remains around the middle of this year”. A Chevron company spokeswoman said the outlook for first LNG remained mid-2017. Wheatstone shareholder Woodside is expecting two to three million barrels of oil equivalent from the project in 2017, according to its 2016 results briefing in February. Wheatstone’s 4.45 million tonnes a year train 1 needs to achieve the equivalent of over four months of full production this year for Woodside’s 13 per cent share of production to meet the lower end of its expected production. Woodside’s efforts to meet its production target will not be helped by the unplanned shutdown of the North West Shelf project’s Karratha gas plant on Saturday. Production of gas for the domestic market resumed on Tuesday. A North West Shelf spokeswoman said staff were working to safely restart LNG production as soon as possible. In better news for Chevron, its spokeswoman said activities to restart train 2 were underway. Train 2 production was reported to be shut down on March 27. ### Gorgon's catastrophic start-up URL: https://www.boilingcold.com.au/gorgons-catastrophic-startup/ Last updated: 2021-02-13T03:52:58.000Z **This story was originally published in The West Australian on 8 April 2017 with the headline "The day disaster struck Gorgon." © Peter Milne.* Twenty-six million dollars is real purchasing power. But what does spending $26 million every day for 7½ years get you? For Chevron and its partners Shell and ExxonMobil, it bought the Gorgon project on Barrow Island. Three vast processing units, known as trains, that can process and freeze 15.6 million tonnes a year of LNG — the energy which keeps the lights on from Tokyo to Shanghai. For the Gorgon project team in January last year, that $26 million a day bought pressure. A lot of pressure. As if they weren’t under enough already. The project they were in charge of was one of the biggest industrial initiatives anywhere in the world. The challenge had been to tap the gas strapped in porous rocks 4000m below the seabed off WA’s rugged North West coast and transport it to a sprawling processing complex on tiny Barrow Island — an area so environmentally sensitive the company was allowed to disturb just one per cent of the land. On Barrow, the gas would be cooled to liquid form and pumped onto gigantic freighters bound for Asia . To do this, Chevron installed 230,000 tonnes, equal to three aircraft carriers, of structure on the seabed. It designed sections of subsea pipe strong enough to be unsupported for lengths of up to 270m — 95m longer than the oval at the new Perth Stadium. On Barrow, the giant processing plant required more steel than four Sydney Harbour Bridges. The three LNG trains comprised 51 modules, one weighing 6600 tonnes, which had floated across rolling seas to Australia from engineering yards in Asia. The 2.1km jetty jutting out from the island rested on 56 concrete caissons built in Henderson and weighing an average of 2500 tonnes each. The LNG carriers docking at that jetty each held enough energy to power about 80,000 Japanese homes for an entire year. The enormity of the engineering challenge was surpassed only by the financial test. When construction started in September 2009, LNG was to be produced in 2014\. By January last year it was more than a year late. An already eye-wateringly expensive project was becoming dearer by the day as 8000 workers — equal to the combined populations of Kalbarri, Carnarvon and Exmouth and so numerous Chevron brought in a 1200-bed floating hotel, the Europa, to house the overflow — put their shoulders to the wheel. In doing so they chewed through an astonishing $40 billion worth of Australian goods and services. The initial $US37 billion cost soon blew out by more than 45 per cent to $US54 billion ($71 billion). The extra cash that the Gorgon partners had to cough up was enough to run the WA Government for nine months. To add insult to injury, revenue projections were plummeting. When the project was approved in 2009, oil cost $US70 a barrel and demand for LNG was strong. Early last year, a barrel of oil could be bought for $US30 and the industry was talking about an LNG glut which would last for years. Investors were fretting and Chevron desperately needed some good news. Against that backdrop, Chevron chief executive John Watson told investors in October 2015 that “Gorgon will see first cargo in the first quarter”. Chief executives do not make commitments to Wall Street lightly. The thousands of workers at Gorgon had just been given a deadline to get the first load of LNG onto a ship by March 31 last year. For a project team that measured progress in years and months, the most complex start-up phase would be counted in weeks and days. ## Getting closer By January 1 last year, the Chevron LNG carrier Asia Excellence was at Barrow Island, laden with LNG to cool the plant to ready it for producing its own LNG. The project team must have felt relieved when a few weeks later, on March 7, train 1 produced its first batch of LNG. There was still three weeks to produce sufficient LNG to load the Asia Excellence and ship the first cargo — meeting the chief executive’s ambitious deadline. To produce that first LNG, untreated feed gas travelled from the Jansz-Io gas field wellheads, 1350m below sea level off the edge of the continental shelf, to Barrow Island, 130km away. At the plant, a 210m long slug catcher removed condensate — a type of hydrocarbon coveted by industry. Then, successively, carbon dioxide, water and finally mercury were extracted from the feed gas to ready it for cooling and the creation of the final product: almost 600 tonnes an hour of LNG at minus 162C. The propane refrigeration system provided the first cooling. A compressor circulated 2300 tonnes an hour of propane — the fuel in barbecue LPG bottles — through a propane cooler. The feed gas ran through that cooler on a separate circuit. The propane pressure reduced in four stages — each time some of it boiled quickly, which was known as a flash. The flash cooled the feed gas like evaporating sweat cools the body. Because each flash was at a lower pressure, the propane had a lower boiling point, chilling the feed gas in stages to minus 40C. The propane gas from each flash flowed back to the compressor through a knockout drum to repeat the cycle. The knockout drum removed any remnant propane liquid that could damage the compressor. Eighteen days after first LNG production — and with the eyes of the world on the project — the fourth knockout drum failed. It was a major catastrophe. The compressor was damaged and production at Gorgon ground to an expensive halt for more than three months. ## Day of disaster What happened that day is sourced from documents at the Department of Mines and Petroleum, the safety regulator for the LNG plant, obtained through freedom of information. Compared with much of the Gorgon plant a knockout drum is a straightforward piece of equipment. Liquid propane settles to the bottom to drain away and the gas flows out the top to the compressor. For a knockout drum to work the liquid level cannot rise too high. On the second day of LNG production, March 8, there was a high level of liquid in the fourth knockout drum and vibration in the propane compressor. It was a sign of the trouble to come. On March 20, train 1 was shut down because of problems with a gas turbine generator. The next day, Chevron’s LNG carrier Asia Excellence sailed from Barrow Island escorted by tugs spraying their fire hoses. Amid the media attention there was no mention that LNG production had stopped. According to an industry source, very little of the LNG the Asia Excellence carried that day had been produced by the Gorgon plant. The plant was restarted on March 25\. Things again went wrong, this time at the propane refrigeration circuit. The propane compressor vibrated so much it tripped — an automatic shutdown to protect the equipment. Again, liquid levels in the fourth knockout drum were high, and liquid propane surged into the compressor. The knockout drum was significantly damaged. DMP described it as a “catastrophic breakdown of the propane refrigeration circuit.” Chevron made no statement and the incident was first revealed by *WestBusiness* on April 1. ## The fallout The Gorgon operator’s description was more subdued than the regulator. Chevron said in a statement on April 7: “Based on initial findings, the repair work is of a routine nature and all the necessary equipment and material is available on site.” As part of the apparently routine work, the propane compressor was flown out of Perth for repairs aboard the world’s biggest plane, the Antonov AN-225, on May 17\. The necessary material was on site because Chevron was scavenging parts from trains 2 and 3 to repair train 1. In early July, more than three months after the incident, Gorgon’s second cargo of LNG left on the Marib Spirit. In that time Chevron had not reported the incident to the DMP. The regulator and operator of the LNG plant met on August 8 to discuss the propane refrigerant circuit incident. As recorded by DMP in a file note, Chevron laid out “what didn’t work” leading up to the incident. It was a lengthy list. Perhaps the most serious was the failure of the stop-work authority that gives any worker the responsibility and authority to stop a task they believe is unsafe. Another problem was the hazard and operability review, or HAZOP, where engineers and operating personnel brainstorm to identify possible hazards that are then addressed with changes to design or procedures. DMP in the file note of its meeting with Chevron stated: “Start-ups and shutdowns poses significant risk to a process plant and ... HAZOP of this stage is very important”. The HAZOP for the propane refrigeration circuit did not cover the start-up of the equipment. Had it done so it may have identified a further issue. The procedures for operating the propane cooler required the operator to know the pressure at the inlet of the propane compressor, but no such indication existed. Other issues Chevron identified included workers starting up the plant having an “unclear line of management oversight” and “inadequate technical resources to back up operations”. When contacted by *WestBusiness* for comment on the incident, DMP director of dangerous goods and petroleum safety Ross Stidolph said the department was satisfied that Chevron had identified the root causes, completed remedial actions and implemented additional controls to minimise future risk. A Chevron spokeswoman said Chevron had notified the regulator as required, measures were taken to ensure the safety of personnel and the company had applied lessons learnt to the start-ups of trains 2 and 3. Gorgon started producing LNG from its third and final train two weeks ago. --- *Main image: Three Gorgon LNG trains on Barrow Island. Source: Chevron Australia Pty Ltd.* ### Key contractor abandons Inpex's Ichthys LNG plant build URL: https://www.boilingcold.com.au/key-contractors-abandons-inpexs-ichthys-lng-plant-build/ Last updated: 2022-04-23T00:23:46.000Z *This story was originally published in The West Australian on 16 March 2017 with the headline "Ichthys contractor walks away." © Peter Milne.* A second key contractor has walked away from the Inpex-led $US37 billion Ichthys LNG project, taking 800 workers over a payment dispute and adding to the woes of a venture targeting first gas by September. Laing O’Rourke yesterday demobilised the workers who had built 91 per cent of four LNG tanks at the Darwin site. The British-owned engineering firm said contract partner Kawasaki Heavy Industries had not made payments for several months. Project director John Bramley, of head contractor JKC Australia LNG, said it was working with the two companies to restart work on the tanks. The withdrawal follows similar action on the Ichthys power plant seven weeks ago when a joint venture including UGL withdrew 300 workers from the site, leaving that facility 89 per cent complete. Mr Bramley said work had resumed on the power plant, with JKC acting as the main contractor. JKC is also close to awarding a contract for additional painting and insulation of the plant’s pipework. WestBusiness understands faulty insulation on its overseas-built modules resulted in waterlogged insulation and peeling paint. The remedial work may cost up to $2 billion and take 18 months. The floating central processing facility under construction in South Korea, the Ichthys Explorer, is understood to have had problems with over 1000 pipe connectors during pressure testing. An Inpex spokeswoman said a minor issue with some pipe connectors had been identified during commissioning. The completed Ichthys Explorer and floating storage vessel, the Ichthys Venturer, would set sail when commissioning was complete and the weather suitable, she said. An Inpex schedule, lodged with Australia’s offshore oil and gas regulator, indicated gas would arrive in Darwin six months after the first vessel arrived on site. Despite the need to also commission the onshore plant once gas arrived, the spokeswoman said production was scheduled to start by the end of September. ### Aboriginal heritage red tape excessive: Greens URL: https://www.boilingcold.com.au/heritage-rules-too-much-say-greens/ Last updated: 2024-11-29T02:23:17.000Z *This story was originally published in The West Australian on 2 March, 2017 with the headline "Heritage rules too much, say Greens." © Peter Milne.* Aboriginal heritage management and the effect it has on resources projects is in for a big shake-up after the State election, regardless of the winning party. Greens spokesman for Aboriginal issues and mining Robin Chapple condemned the existing arrangements yesterday, telling a mining conference that requirements for heritage surveys were excessive. Mr Chapple described the Department of Aboriginal Affairs as the worst department in the State. “You don’t need to do half the things the DAA are telling you to do,” he said at the AMEC Mining and the Environment Conference. “The key issue is to get a functioning organisation that actually assists people in the process.” Aboriginal Affairs Minister Peter Collier defended his department. “The Department of Aboriginal Affairs has gone through major changes, including a 30 per cent reduction in staff and a review of the Heritage Directorate,” Mr Collier said. The DAA administers heritage approvals under the 45-year-old Aboriginal Heritage Act, which all major parties want to overhaul. The Government introduced amendments in late 2014 but the legislation had stalled in Parliament. “It is still firmly my intention to pursue those should we win,” Mr Collier said. Shadow Aboriginal affairs minister Ben Wyatt said the Act failed in Parliament as the Government erred in not involving Aboriginal people in the new regime. Mr Wyatt said there had to be a system that respected that Aboriginal people owned the heritage and wanted a role in its protection. They firmly understood heritage protection had to exist with industry and job creation, he said. He would like to see heritage arrangements devolved to Aboriginal groups as close to country as possible. ### PRRT: Australia's gas tax that does not work URL: https://www.boilingcold.com.au/prrt-australias-gas-tax-that-does-not-work/ Last updated: 2022-01-28T10:10:55.000Z *This story was originally published in The West Australian on 27 February 2017 with the headline "LNG tax changes in the wind." © Peter Milne.* Australia is coming to the end of a $200 billion LNG investment boom, but analysis from the oil and gas industry’s lobby group indicates that the largest project, Chevron’s $70 billion Gorgon, will not pay anything for the gas it extracts if current oil prices persist. In November, Treasurer Scott Morrison launched an inquiry to “better protect Australia’s revenue base and ensure that companies are paying the right amount of tax on their activities in Australia”. The inquiry must navigate the complex petroleum resource rent tax before it reports in April. Canberra levies PRRT on the profits from all oil and gas production in Australia. Production is soaring due to more than $200 billion spent on 14 LNG trains starting up between 2014 and 2018\. However, there are concerns this will not result in significant PRRT revenue. For an oil price of $US60 a barrel (yesterday’s Brent crude price was $US56.60), the analysis shows no PRRT payments. The work by industry consultant Wood Mackenzie formed part of the submission by oil and gas industry group APPEA to the PRRT inquiry. If the oil price rises to $US80 a barrel no PRRT revenue is predicted from Gorgon until 2028, after which it pays about $1.7 billion a year. Production-based royalties are paid by the three LNG plants in Queensland and the North West Shelf project. PRRT is then paid if there is a taxable profit after the royalties. However, LNG projects fed by offshore gas, apart from the NWS, only pay for their gas if they make a profit. These projects — Pluto, Gorgon, Wheatstone, Ichthys and Prelude — are most exposed to PRRT changes. PRRT is levied at 40 per cent of a project’s PRRT taxable profit, but deductions for capital spend are very different to company tax where the depreciation rate limits the annual deduction. For PRRT, the deductions for capital expenditures actually increase in value each year. The deductions used in a year are not capped so no PRRT is paid until all the capital deductions are exhausted, but then payments jump quickly. The Wood Mackenzie analysis of Gorgon with a $US60 oil price did not separate the government revenue into company tax and PRRT, but the absence of a pronounced kick in total government take makes clear no PRRT is paid. Uplift of deductions was intended to compensate the producer for the risk that a project may never get to use its losses and for not getting a refund if they made a loss, according to the PRRT inquiry’s issues note. The Henry tax inquiry in 2009 said the uplift rates overcompensated investors and a 2013 ACIL-Tasman report for the Federal Resources Department described the selection of some of the uplift rates as arbitrary. With 10 categories of deductions, the system is not simple, and the tax effect of various expenditures varies widely. Exploration costs in the five years before project construction starts are uplifted by the long-term bond rate plus 15 per cent, an increase of 17.6 per cent in 2016\. Until 2014, the Australian Taxation Office treated front-end engineering and design as an exploration activity, contrary to common industry understanding of exploration. The result is that $1 spent on Gorgon FEED in 2005 is worth $7.12 in deductions today and will keep rising in value. Earlier exploration is uplifted by a factor known as the GDP deflator that last year resulted in negligible adjustment. Exploration costs from 2005 have more than six times the ability to reduce tax payable as costs from the year before. A dollar spent in the first year of Gorgon’s construction, 2009, is now worth $1.82 in deductions. Of course, LNG projects do not spend single dollars; they spend tens of billions. Cost blowouts have increased the pool of deductions, and schedule delays give the deductions more time to escalate. The PRRT inquiry is investigating more than uplift rates. Revenue raised can be hugely affected by the transferability of deductions between projects, the order of deduction and how the gas price is determined. Also, the tax treatment of decommissioning costs can result in the Federal Government effectively paying 58 per cent of costs that may be in the billions when large projects close down. The toughest question for the Government is will it apply any recommended changes to existing projects? APPEA chief executive Dr Malcolm Roberts said this month that retrospective changes would kill confidence and therefore investment, jobs and exports. But with any expansions until mid-2020s likely to be a fraction of the size of the current construction boom, there will be negligible new revenue if Canberra does not. --- *Main image: First LNG cargo leaves Gorgon . Source: Chevron Australia Pty Ltd* --- ### Little hope for local jobs from new Pluto LNG train URL: https://www.boilingcold.com.au/little-hope-for-local-jobs-from-new-pluto-lng-train/ Last updated: 2022-01-08T14:00:58.000Z *This story was originally published in The West Australian on February 25, 2017 with the headline "Locals lose out on Pluto work." © Peter Milne.* Woodside intends to use “mega-modules” in possible expansions to the Pluto LNG plant which may provide less work to local contractors than the plants currently under construction. Chief executive Peter Coleman this week said the WA oil and gas producer was considering adding a smaller one million tonnes per annum train to Pluto’s first train’s 4.9 mtpa output. Chief operations officer Mike Utsler yesterday said the new smaller train would be built off site and transported to Karratha as a single module. Mr Utsler said the smaller trains were faster to build, simpler and lower cost. If one train was out of service there was less effect on total production, and the investment in a smaller train was easier to underwrite with LNG sales. Mr Utsler did not rule out future expansions with bigger trains. The first Pluto LNG train consisted of 88 modules, but if repeated today would require only two to three, he said. Mr Utsler said the bigger trains would have less local content in the future. > “Can we compete at this point with the larger shipyards in Korea and China? No,” he told the Australasian Oil and Gas Conference. He said Australian industry could be competitive for module components, and perhaps for the smaller trains. “There is no reason we shouldn't be able to deliver the single footprint small module, one million tonne per annum truck type trains, right in our own backyard,” he said. “We have the fabrication capability and capacity to do that.” Woodside’s work on the Pluto expansion is in the appraisal stage and the possibility for local content had not yet been considered. A senior figure in the local engineering sector was pessimistic about the prospects for local content. > “They'll be designed in Paris, London, Houston, KL or India; fabricated in China, India, Malaysia, Korea or Indonesia using Japanese, Korean or Chinese steel,” he said. --- *Main image: Woodside employees at the Pluto LNG plant near Karratha. Source: Woodside Energy Limited* --- ### Woodside christens first LNG-powered ship URL: https://www.boilingcold.com.au/woodside-christens-first-lng-powered-ship/ Last updated: 2022-01-08T08:43:26.000Z *This story was originally published in The West Australian on 21 February 2017 with the headline "Woodside makes big waves with clean ship." © Peter Milne.* Woodside Energy’s ambition to be at the forefront of ships moving to cleaner fuel took an early step last night with the christening in Fremantle of its first LNG-powered vessel. The Siem Thiima is a 90m-long platform support vessel built in Poland. It has been working out of Karratha since last month supplying Woodside’s offshore platforms and floating production vessels. Woodside chief operations officer Mike Utsler said there were more than 200 LNG-powered vessels in operation globally with about another 200 under construction. However, the Siem Thiima and the Searoad Mersey II, a roll-on roll-off ferry that arrived in Devonport in December to serve the Bass Strait market, are the only two in Australia. Mr Utsler said Woodside was looking to move the 50-strong fleet of vessels supporting its operations to LNG fuel over the next five years. The oil and gas producer is building an LNG truck-loading facility at its Pluto plant in Karratha to first fuel its fleet and then compete with diesel in the Pilbara for locomotives and power generation. The plant is due to be operating by the end of the year. Until then the Siem Thiima will be fuelled by Wesfarmers’ Evol LNG. Evol LNG business manager Nick Rea said new international rules requiring less sulphur emissions from ships by 2020 were driving the interest in LNG as a marine fuel. > “LNG is a cleaner fuel than marine diesel, emitting 25 per cent less carbon dioxide, less nitrogen oxides and almost zero sulphur oxides and particulates,” he said. Mr Utsler said there were three ways for ships to meet the requirements; expensive ultra-low sulphur diesel fuels, fitting “scrubber” systems to existing ships, or LNG. The Pilbara consumed three billion litres of diesel a year and ships visiting there consumed five billion litres of marine fuel a year. The ship was christened by Jill Churnside, a noted artist and Ngarluma elder. Thiima is the Ngarluma word for ocean-going vessel. --- *Main image: EVOL trucks fuels Siem Thiima with LNG at Fremantle. Source: Wesfarmers.* --- ### Coleman wants to drive Woodside like an F1 car URL: https://www.boilingcold.com.au/coleman-wants-to-drive-woodside-like-an-f1-car/ Last updated: 2022-04-22T08:49:11.000Z *This story was originally published in The West Australian on 20 February 2017 with the headline "Woodside’s winning formula." © Peter Milne.* Red Bull F1 driver Daniel Ricciardo plans his corners three turns out according to Woodside Petroleum chief executive Peter Coleman, who wants to run his LNG plants the same way. “His team is continually monitoring the performance of his motor vehicle to get the optimum performance. We said, ‘let’s try to do that to Pluto’,” Mr Coleman said. Mr Coleman told West-Business that Woodside needed to predict problems rather than react to them. With this new approach, the Pluto LNG plant in Karratha now achieves 99.8 per cent reliability. Traditionally oil and gas companies operated their plants on alarms, he said. A high temperature or a low-pressure alarm would sound in the control room, and operators would deal with it. There was little other information about the plant’s operations. Now the Pluto plant generates 160,000 pieces of data a second. “Data analytics allowed us to analyse the plant as a whole body as distinct from separate parts,” Mr Coleman said. To convince their staff that a new approach could work, Woodside set up a three-day blind test between their engineers and data analysis consultants from Accenture in Singapore to solve a past problem in one of their plants. “The Accenture team won, and so we then got the believers,” he said. To apply the new predictive approach Woodside first had to improve its collection of data. Woodside was gathering data the same way it did 50 years ago, Mr Coleman said. An operator would walk around the plant writing down numbers from gauges. Wiring all the sensors back to a central point was expensive. However, help from the CSIRO team that helped invent wi-fi allowed the sensors to be connected wirelessly. Engineers in Perth now come into work and see a dashboard on their screen with red and green lights driven by predictions from the data analytics. “We can see things starting to move, and we say OK if this keeps going for two or three days this will end up in a problem — we start to correct now,” Mr Coleman said. The engineers in Perth advise the plant operators in Karratha. Technically the Pluto plant could be controlled from Perth, but Woodside has chosen not to. “At the moment we don’t have the cyber security systems in place we’re comfortable with,” Mr Coleman said. The data analytics on Pluto is part of a new approach to technology Woodside started several years ago to move beyond traditional engineering “hard pipe” innovation. Mr Coleman said Woodside switched from seeing the value of the organisation in the assets to seeing value in its people and culture. The oil and gas industry was full of opinion, but Woodside’s boss wanted decisions based on facts. Accessing those facts from the mass of company data was a problem, so Woodside employed Watson, an IBM artificial intelligence system, 2½ years ago. “It’s a search engine with intelligence,” he said. Watson was first used to access data gathered during the development of projects. It is designed to maintain the corporate memory otherwise lost with retirements or simply because it could not be found. Computing, which used to be in the finance organisation and treated as a cost, now reports to the technology organisation as a business enabler, Mr Coleman said. “We’re not going to be an R&D organisation because we’re not big enough to do fundamental research,” he said. “However, what we will be is early adopters of it and what we’ll have is an open platform.” LNG-powered marine support vessels and a robot partnership with NASA are two technologies Woodside are embracing now. An open platform means Woodside will develop the technology by collaborating with others and not keep it in-house. “Our view is a lot of that technology is better in the hands of service providers who can make that offering across a broad range of clients, so the unit costs come down, and then you get continuous improvement,” Mr Coleman said. Woodside is still pursuing “hard pipe” innovation. Pluto’s unmanned platform is operated from the plant 150 km away. For future developments, Woodside wants to push remote operation further out and have its equipment on the seabed undisturbed by weather. “If we can extend that reach out to 300km . . . we’ve actually covered 80 per cent of the continental shelves in the world,” Mr Coleman said. Recent advances in multiphase submersible pumps would help get the product to shore for processing, and controlling the subsea valves with direct current could work over longer distances than the current hydraulic cables, he said. He said only a few F1 cars would ever win and that was because of their technical edge from continuous improvement. In oil and gas, Woodside wants to be one of the few. ### Woodside looks to supply LNG to ships, mines and remote islands URL: https://www.boilingcold.com.au/woodside-looks-to-supply-lng-to-ships-mines-and-remote-islands/ Last updated: 2022-01-08T08:48:30.000Z *This story was originally published in The West Australian on 2 February 2017 with the headline "Pluto LNG to be trucked to Pilbara mines." © Peter Milne.* Woodside Petroleum is poised to truck LNG to customers in the Pilbara in a bid to break the region’s 3 billion litre-a-year addiction to diesel. Woodside chief executive Peter Coleman told WestBusiness yesterday that design work had started for a facility to load trucks with LNG at the company’s Pluto plant, near Karratha. It is part of a staged development of new markets designed to give Woodside greater control over the market for its fuels. Mr Coleman said LNG was traditionally delivered in a big ship, into big tanks and then into big pipelines. Woodside looked at alternative markets and found latent demand for LNG partly driven by the desire to reduce pollution and greenhouse gas emissions. “The product was highly sought after but not accessible,” he said. For new markets the industry needed to “break bulk” and deliver LNG in the quantities customers wanted. “It is no use ... telling them what they should do. What you’ve got to do is actually demonstrate it,” he said. The first tangible demonstration of the market shift arrives in Australia soon — an LNG-powered marine support vessel to join Woodside’s fleet. Mr Coleman said Woodside planned to change its entire fleet of 16 marine support vessels to LNG over the next five years. The vessel will get its LNG from other suppliers for a few months until Woodside’s LNG truck-loading facility at Pluto is ready. The facility will allow trucks not only to deliver LNG to the vessel’s jetty but also to the iron ore industry’s diesel-powered trucks, locomotives and electricity stations. Mr Coleman also sees remote communities and hospitals as potential customers. “I can put it on the back of a flatbed truck with an ISO container and go on and just replace it like you do with your gas bottle,” he said. Mr Coleman sees fuelling the iron ore carriers as “the big prize”, hence the joint industry project with BHP, Rio Tinto and others announced this week. LNG-filled barges moored off Dampier and Port Hedland would allow the iron carriers to load their fuel. A small coastal tanker could supply the Port Hedland barge, he said. Mr Coleman said small coastal tankers could service Indonesia’s diesel-dependent islands. --- *Main image: Pluto LNG Plant. Source: Woodside Energy Limited* --- ### Chevron happy with ramp up of Gorgon LNG URL: https://www.boilingcold.com.au/chevron-happy-with-ramp-up-of-gorgon-lng/ Last updated: 2022-04-22T08:44:12.000Z *This story was originally published in The West Australian on 30 January, 2017 with the headline "Chevron cheered by Gorgon." © Peter Milne.* The first two processing facilities at the Gorgon LNG project are operating near capacity and commissioning of the final train is under way, with production expected early in the second quarter, according to Chevron chief executive John Watson. Mr Watson told analysts at the weekend that after a difficult 2016 Chevron saw a great year for production from their “terrific” Gorgon and Wheatstone projects, as the company spends $US2 billion ($2.6 billion) more on construction. “The only remaining thing to do is to bring on the Gorgon offshore field, we’ve been running on the Jansz field,” Mr Watson said of the two giant gas sources underpinning the $US54 billion project. Gorgon shipped its first LNG cargo in March but the first train had many shut downs throughout the year. Mr Watson said that lessons learnt from train one allowed train two to achieve more than 90 per cent capacity within a week of its October start up. The turnaround in the performance of the project has been dramatic. Already this year 10 LNG cargoes have been shipped, compared with 29 in the eight months last year since train one started production. Mr Watson said Chevron expected a full year of production out of the first two trains. He said Wheatstone’s onshore plant was making good progress with all modules for the two trains in position. “Ongoing hook up and commissioning of the offshore platform is the critical path activity,” he said, referring to additional work on the offshore platform’s piping systems first reported by WestBusiness this month. “We’ve supplemented our workforce on the platform, but it hasn’t changed our expectation of a mid-year start date,” he said. Wheatstone train two is expected to start six to eight months later. Referring to Chevron’s one-sixth stake in the North West Project, as well as Gorgon and Wheatstone, Mr Watson said: “Australia is a terrific asset” with substantial gas resources. However, building additional trains at Gorgon and Wheatstone was not on the horizon. “We want to really get the most we can out of the gear and hardware that we have,” Mr Watson said. The Chevron boss said he was very pleased with the agenda of the Trump administration. “We have seen an avalanche of regulation over the last decade and putting a more balanced cost-benefit framework in place to assess the value of those regulations . . . is quite positive for our business,” he said. ### Inpex loses crucial Ichthys contractor URL: https://www.boilingcold.com.au/inpex-loses-crucial-ichthys-contractor/ Last updated: 2022-04-22T08:39:43.000Z *This story was originally published in The West Australian on 27 January, 2017 with the headline "Ichthys on tight time line for first gas." © Peter Milne.* The termination of a key contract at the Ichthys LNG project — which draws its gas from WA’s North West — has added to problems which are threatening to derail plans for first production in September. The contractor building the power station in Darwin, a joint venture between CIMIC-owned UGL and American company CH2M Hill, pulled its workers off the site on Wednesday. The decision could trigger a disproportionate delay, West-Business understands, because the last 10 per cent of the power station work is particularly complex and needs to be operating to allow commissioning of the overall onshore plant. JKC Australia LNG, a joint venture between Japanese companies JGC and Chiyoda and US giant KBR, is building the onshore LNG plant in Darwin for project operator Inpex. JKC project director John Bramley told WestBusiness the company was disappointed the CH2M Hill-UGL joint venture provided a “notice of termination”. “As a result, construction work on the combined cycle power plant has temporarily ceased, however, other activity continues,” he said. Mr Bramley said the power station was 89 per cent complete. Faulty pipework insulation on the overseas-built plant modules is understood to have resulted in waterlogged insulation and peeling paint, adding to the workload of the 8000 workers in Darwin. JKC confirmed the extra work had started, saying the balance of the work would likely take place after the current wet season. “This work will be undertaken in parallel with construction and commissioning activities and is not expected to impact on overall project delivery,” Mr Bramley said. Problems at the onshore plant are heaping pressure on Inpex as it grapples with a massive offshore installation program. The major offshore components of the Ichthys project are a central processing facility that houses 200 workers, a floating production storage and offloading facility to store the condensate production, and an almost 900km pipeline to transport gas to the LNG plant near Darwin. The pipeline has been installed on the seabed but the CPF and the FPSO are still in shipyards in Korea. It is understood the CPF will leave Korea in March and arrive at the Ichthys field in April. The FPSO departure time is yet to be determined. A project schedule contained in the Ichthys project offshore facility environment plan of December 22, lodged with Australia’s offshore oil and gas regulator, shows an indicative timing from the arrival of the first vessel on site, either the CFP or the FPSO, to the first gas arriving at Darwin of six months. The Inpex plan states that the arrival of the first ship is scheduled for late in this quarter, which would see the first gas reaching Darwin late in the third quarter. The plan states that timing is subject to weather delays and assumes the other ship arrives a week later. To hit its production start target, Inpex is relying on both ships arriving on site by mid-March, no weather delays and the plant producing LNG a few weeks after receiving the first gas from offshore. A spokesman for Inpex said the project was 90 per cent complete in September and the target to start production remained the third quarter of this year. ### Woodside in no hurry to supply Pluto gas to WA URL: https://www.boilingcold.com.au/woodside-in-no-hurry-to-supply-pluto-gas-to-wa/ Last updated: 2023-12-04T11:45:25.000Z *This story was originally published in The West Australian on 23 January 2017 with the headline "WA unlikely to get Woodside’s Pluto gas." © Peter Milne.* Woodside is confident it will not have to pipe gas to WA from its giant Pluto project despite the company’s five-year reprieve from the State’s domestic gas policy ending in May. However, the absence of Pluto gas from the market may figure in a looming pre-election debate on domestic gas policy. The reservation policy requires LNG producers to quarantine gas for domestic use equal to 15 per cent of the LNG they export. The policy, which was conceived by the Carpenter Labor government, is intended to stop energy companies exclusively targeting the lucrative export market and isolates the local price of gas from international fluctuations. LNG producers are required to sell the reserved gas only when it is commercially viable, which critics of the policy say is a fatal flaw. Pluto’s domestic gas obligations start in May, five years after first LNG production, but it appears that gas from the field off the North West coast will not be powering WA industry or households anytime soon. > “Based on our recent experience in the market, however, there is currently no shortfall in supply and the market is well supplied on commercial terms,” Woodside told WestBusiness. A spokesman for State Development Minister Bill Marmion said the State talked regularly to Woodside about Pluto’s domestic gas commitments. The Government was not considering any changes to the policy. WA Nationals leader Brendon Grylls said he was not confident the policy was right and he was concerned the targeted reservation of gas would not be achieved. > “The supply of domestic gas to WA businesses at an affordable price is a key economic enabler for the post-mining boom economy,” he said. “We should look beyond putting all of our resources on boats and utilise them effectively and locally to add value and jobs.” A spokesman for Woodside said it believed the WA pipeline gas market was well supplied but was considering selling LNG in the Pilbara to displace diesel as a transport fuel. The Pilbara was the perfect place to lead the change to LNG as a transport fuel, with LNG plants close to fuel-intensive mining and shipping operations, Woodside chief executive Peter Coleman said last year. One potential customer, Fortescue Metals Group boss Nev Power, urged Australia to develop its natural gas immediately to increase the competitiveness of industries. --- *Main image: Pluto LNG plant. Source: Woodside Energy Limited* --- ### Coleman looks to Wheatstone for Woodside's upside URL: https://www.boilingcold.com.au/coleman-looks-to-wheatstone-for-woodsides-upside/ Last updated: 2022-04-22T08:33:13.000Z *This story was originally published in The West Australian on 20 January, 2017 with the headline "Woodside pins hopes on Wheatstone future." © Peter Milne.* Woodside chief executive Peter Coleman is putting his hopes on the ramp-up of Wheatstone going well as the Perth-based group braces for a big reduction in its domestic gas sales this year. Woodside needs Wheatstone pumping over the next two years because Woodside’s share of North West Shelf’s WA gas sales will fall from 50 per cent to 16.67 per cent in May because of long-term joint venture agreements. Woodside’s group production next year will feel the full 12 months of the North West Shelf change but Wheatstone partners are hoping they will have overcome delays by next year and have the project approaching fully operational. “You should be looking at Wheatstone,” Mr Coleman said. “That’s the thing that is going to define the upside for us.” There are questions about Wheatstone project operator Chevron delivering on budget and on schedule as it deals with significant unplanned work on its offshore platform. Mr Coleman discussed the importance of Wheatstone yesterday and the company’s longer-term challenges after unveiling bumper production for calendar 2016 yesterday. Its LNG production of 63.7 million barrels of oil equivalent in 2016 was 3 per cent higher than 2015, but predicted a 5-11 per cent production fall for this year. LNG amounted to 67 per cent of the production, oil and condensate 17 per cent and domestic gas from the North West Shelf 14 per cent. The energy giant lifted its total full-year production by 3 per cent to 94.9 million barrels of oil equivalent, hitting its guidance of between 92 million barrels and 95 million barrels The annual production was the second highest the company had ever achieved. Mr Coleman said production performance had been outstanding, with LNG production reliability greater than 99 per cent for the past two quarters. Mr Coleman said the prize for Woodside this year would be if Wheatstone could start up like the Woodside-operated Pluto project did in 2012 and achieve similar reliability. “Start up and commissioning is something that Woodside has particular skills in with the North West Shelf and Pluto so we offered our people into the integrated team,” he said. He said the group would have a nice pipeline of growth with Wheatstone train one this year, Wheatstone train two and domestic gas in 2018 and oil from Greater Enfield in 2019. “Post 2019, we’re working hard this year to appraise discoveries in Senegal and in Myanmar,” he said. Mr Coleman said by 2021 or 2022 there would be spare capacity in the North West Shelf’s five LNG trains as production from existing and planned fields declines. Mr Coleman sees small-scale projects filling the gap. “The big guys will come in later in the decade,” he said, adding both the Browse and Scarborough fields would be vying to get into the North West Shelf. Mr Coleman said the acquisitions were designed to give Woodside greater influence over developments. Woodside now operates one major North West Shelf contender, Browse, and has a substantial interest and influence on the other, Scarborough. It bought a 25 per cent stake in Scarborough from BHP Billiton in September. With the BHP purchase, Woodside also acquired a 50 per cent interest in the Jupiter and Thebe fields. Woodside shares yesterday finished 30¢ down at $32.08. ### Wheatstone platform problems threaten schedule URL: https://www.boilingcold.com.au/wheatstone-platform-problems-threaten-schedule/ Last updated: 2022-04-22T08:33:51.000Z *This story was originally published in The West Australian on 19 January, 2017\. with the headline "Wheatstone headache grows." © Peter Milne.* There are fresh questions about Chevron’s likelihood of delivering the Wheatstone LNG project on budget and schedule after it emerged there is significant unplanned work underway on the project’s offshore platform. It is understood the South Korean-built platform topsides — the accommodation and processing equipment which sit on top of the steel platform base — have required more work than expected, including the replacement of valves and pipes. One source said the original estimate for the platform hook up and commissioning was 500,000 hours but Chevron now expects more than 2 million hours will need to be performed offshore to complete the work. Less than three months ago Chevron increased Wheatstone’s cost estimate by $US5 billion ($6.6 billion) to $US34 billion and predicted first LNG in mid-2017. In April 2015 the topsides were floated over and installed on the steel base structure, which stands in 70m of water about 200km from the Wheatstone gas plant at Onslow. Wheatstone’s Environmental Plan for Hook Up and Commissioning of November 2014, submitted to the National Offshore Petroleum Safety and Environmental Management Authority, states that an accommodation support vessel to house workers would be required for six months until the on-platform accommodation was ready. The Floatel Endurance, that accommodates 440 people, arrived in April 2015 and stayed for about nine months. Another accommodation vessel, the Floatel Triumph with accommodation for 500 workers, arrived at the platform in October. Once the platform is fully commissioned, the 225km pipeline to the LNG plant must be started and only then can sufficient gas be delivered to shore to allow the liquefaction plant itself to be commissioned. The disruption to this sequence is what some observers say will jeopardise the target date for first LNG. A Chevron spokesperson said the company was making “progress against key milestones on the Wheatstone Project and our outlook for first LNG remains mid-2017 for train one”. ### Chevron's Wheatstone has $US5B budget blowout URL: https://www.boilingcold.com.au/chevrons-wheatstone-has-us5b-budget-blowout/ Last updated: 2022-04-22T08:06:11.000Z *This story was originally published in The West Australian on 31 October 2016 with the headline "Wheatstone LNG blows out by $6.5b." © Peter Milne.* Chevron and its Wheatstone partners, including Woodside, will need to cough up more cash for the delayed LNG project after the US multinational announced a $US5 billion ($6.57 billion) cost blowout. Just one week after Woodside told shareholders that it was expecting no changes to its costs at Wheatstone, Chevron chief financial officer Pat Yarrington told analysts at the weekend that the bill for the project was now forecast to come in at $US34 billion ($44.9 billion) — 17 per cent more than its original estimate. In January, Chevron chief executive John Watson blamed a Malaysian module yard for pushing first LNG production back six months. Late modules were now a primary driver for the cost increase, Ms Yarrington said. A secondary reason, also experienced on the Gorgon project, was an underestimation of the quantity of materials required, she added. “At the same time we took a final investment decision on Wheatstone, we had engineering at about 15 per cent complete so the rest was based on rules of thumb and factors,” Ms Yarrington said. Design for the Wheatstone LNG plant was mainly performed in Houston. Gorgon’s design was based in London. “All modules for train one and train two are now on site, and the installation of piping, electrical and instrumentation continue as planned,” Ms Yarrington said. However, there is better news for Chevron’s Gorgon project as the second of three trains starts producing LNG on Barrow Island. Ms Yarrington said Gorgon’s train one was producing at a stable rate of about 5 million tonnes a year to combine with train two. “We have shipped 17 cargoes to date, and with both trains now running we expect to ship an average of two to three cargoes per week,” she said. “Construction on train three is progressing very well, and we expect first LNG in the second quarter of 2017.” Ms Yarrington expects significant cashflow growth for Chevron from the two Australian LNG projects. “We have approximately 85 per cent of the production from these five trains sold under long-term contracts,” she said. The 7000 workers on the Wheatstone site near Onslow are targeting first LNG by the middle of next year. Confirmation of long-held suspicions by observers of a cost blowout at Wheatstone will likely push the spotlight on Gorgon. The Barrow Island project was approved eight years ago at a cost of $US37 billion to produce LNG in 2014\. The current cost estimate, $US54 billion, has not been updated for three years. Chevron declined to comment on Gorgon’s budget.