WA EPA drops offsets but adopts net-zero emissions plan

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in March - that all new projects with emissions greater than 100,000 tones a year offset all their emissions - that was withdrawn a week later after intense pressure from industry and the state Labor government.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 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 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 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 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 on Unsplash