- The terrifying video of the Sinbad platform swinging out of control is a great reminder that we need to be careful about the upcoming boom in decommissioning work.
READ: Out of control lift of Santos platform off WA could have killed
And here is another, closer, view of the Sinbad incident that popped into my inbox:
NOPSEMA last week told operators that they cannot “allow their disused property and equipment to degrade to a point where it becomes too dangerous to remove or otherwise safely decommission." Note, I'm not saying this was an issue at Sinbad.
The dangers of decommissioning don’t need to be magnified by a cost-first approach that leaves the structures with uncertain integrity. The regulator will need to be aggressively proactive to keep decommissioning safe.
- Woodside lost about 100 people last Tuesday, as far as I could tell from various sources late last week. They all agreed on one thing: there are many more cuts to come in coming months.
READ: Another job cull at Woodside
National Energy Resources Australia is looking to organise a workshop to "discuss the imperative for increased student enrolment in petroleum engineering-based studies." However, long-term business outlook, climate concerns and increasingly social acceptability will make it a hard sell to your average seventeen-year-old.
Ahead of last weeks' WA Skills Summit, APPEA WA director Claire Wilkinson said, "when COVID-19 hit, APPEA member companies responded by prioritising local workers." Which is pretty much admitting they weren't until they were forced to by border closures.
At the Skills Summit, the Chamber of Commerce and Industry WA and the Chamber of Minerals and Energy both wanted childcare incentives to allow parents to return to work. You know, the two outfits that fight to reduce taxes every day but now want the Government to cough up when they are in strife.
According to an analysis in Recharge, developers of huge green hydrogen projects - including WA's Asian Renewable Energy Hub in the Pilbara and the Western Green Energy Hub near Eucla - are being unrealistic about production costs.
Fortescue now has 350 people working on green energy and plans to spend up to $800 million in the next 12 months. Fortescue chief executive Elizabeth Gaines "was repeatedly challenged to provide more detail on how the company's spending was adding value for shareholders" during a call with analysts last week.
Does anyone in Perth's resources sector not know someone who has recently joined Fortescue Future Industry, generally with a very attractive package?
On a less ambitious scale, BHP signed TransAlta to build a 27MW solar farm at its Mount Keith nickel mine. Also, an 11MW solar farm with a 10MW battery will be installed at BHP's Leinster mine.
On Friday, Technip v Commonwealth Director of Public Prosecutions was listed in the WA Supreme Court, five years after NOPSEMA gave a brief to the DPP concerning a possible breach of the law during saturation diving at Chevron's Wheatstone platform. There have been numerous hearings and decisions in those intervening years.
Santos has had early success with the first of three wells it is drilling to extend production from Bayu Undan, and hence gas supply to Darwin LNG.
The Adelaide-based company's Spartan now has a production license and will provide much-needed gas to Varanus Island.
There is a great story in EnergyVoice by Perth geo Simon Molyneux about the Great Australian Bight exploration boom that fizzled out.
On Friday night, Chevron told Wall Street analysts all the Gorgon LNG trains were back up after about 14 months of having one down at a time to fix cracked propane kettles.
Pakistan had to buy LNG at the incredible price of $US15 an MMBtu to stop the lights from going out. LNG price volatility is making it look like an economically risky choice for third world countries.
The Conservation Council of WA is considering a "duty of care" case to challenge environmental approvals to gas projects like Waitsia and Pluto, according to Footprint.
In May, the Federal Court found Federal environment minister Sussan Ley has a duty of care to protect young people from climate change. The CCWA seems to want give WA environment minister Amber-Jade Sanderson the same treatment.
Hastings Technology Metals plans to process rare earth concentrates from its Yangibana mine at the Ashburton North Strategic Industrial Area near Onslow. Interestingly, the ANSIA, which now houses BHP's Macedon gas plant and Chevron's Wheatstone LNG plant, was initially designated a hydrocarbon-only precinct. Times are changing.
Griffin Coal, one of Collie's two miners, has declared force majeure and halted coal deliveries to privately-owned Bluewaters blaming the wet winter. Energy Minister Bill Johnston was "deeply concerned", but for now, Bluewaters is being supplied by Premier Coal that usually supports Synergy's two coal-fired stations.
Johnston said he was confident the State had enough generation capacity if Bluewaters was disrupted.
The bigger question is whether financially struggling Griffin will survive the revenue loss.
Collie is not short of problems, including the coal-fired stations cycling up and down each day to balance the output from solar panels instead of operating steadily as they designed to.
As former State energy minister Mike Nahan told the Energy in WA Conference dinner last week: "You're going to wear them out; you're going to destroy them."
A strong theme at the conference was the increasing challenge of minimum operation load: when rooftop solar output forces so many gas and coal plants to shut down, the system becomes unstable.
The risk is highest on sunny days in spring and autumn when homes need either cooling or heating. So buying a few candles and phone charging packs might be worthwhile – just in case.
On a brighter note for Collie, International Graphite will set up a graphite plant in Collie with the help of $2 million from the State Government.
Gas hot air
Woodside general manager climate engagement Peter Metcalfe told the conference emissions from Woodside's equity share of projects has peaked. My take is that this must assume CO2-rich Browse never gets developed.
However, the prediction had an interesting rider: "barring any major acquisitions and fundamental changes to our business." Of course, that covers any deal with BHP.
The Woodside presentation had plenty of references about meeting the needs of customers.
"It is the customers who make the choices that determine the pace of the energy transition," Metcalfe said.
That logic is nonsense; companies like Woodside can choose where to invest and what to produce. Customer choice is strongly influenced by availability. Blaming the customer is straight out of the tobacco and gambling PR playbooks.
Also, at the Energy in WA Conference, Professor Paul Stevens from Chatham House said the energy transition was being grossly underestimated by what he called "the energy establishment," which includes big oil and gas companies, for two reasons.
"First of all, there's a degree of intellectual inertia within the institution, if you've been singing the same song, for the last 20 years, it's difficult to change the tune," Stevens said.
"But there's also a lot of vested interests as well.
"It's difficult for the oil companies to write to their shareholders and say, it's been nice to know you, but the good days are finished."
In fairness to Woodside, I'm sure they understand the pace of change, but are doing their best to slow it down in WA to wring the last dollar out of their existing business model.
"Robust demand growth notwithstanding, the addition of significant new Qatari and Russian capacity means that LNG developers are now racing to get their projects through an increasingly narrow proverbial door within this decade," WoodMackenzie vice president Valery Chow said.
Which is why long-term thinker BHP wants to shed its oil and gas assets to kind-of-desperate no-Plan-B Woodside.
UK politician Ed Miliband wrote this week that "our biggest enemy is no longer climate denial but climate delay," in the context of his country. However, Miliband's comments apply perfectly to WA. A climate policy with an "aspiration" of net-zero emissions by 2050 but no interim targets is just an irresponsible joke.
The paranoid might thing not getting in the way of Woodside's Scarborough project was a main aim of the policy wording.
Ahead in the merger game, this morning Santos and Oil Search announced they had agreed that Oil Search shareholders would own 38.5 per cent of the new bigger Santos.
So, to my fellow Western Australians, Australia's biggest oil and gas company is now headquartered in Adelaide.
Mark Beeson, a politics professor at the University of WA, has had a go at his masters grovelling for money from the resources sector at the expense, perhaps, of academic freedom.
"Perhaps UWA's senior leadership should recall that the university's admirable motto is 'seek wisdom', not seek funding," Beeson said.
Of course, fossil fuel funding to befriend the potentially outspoken is a global phenomenon. London's wonderful Science Museum agreed to a gagging clause with Shell to not say anything that could damage the company's reputation in return for funding. And where did the money go? An exhibit called "Our Future Planet."
"We fully respect the museum's independence," A Shell spokesperson said. "That's why its exhibition on carbon capture matters and why we supported it."
I doubt the true performance of Gorgon CO2 injection, 25 per cent owned by Shell, got a mention.
Enjoy your week.