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 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

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.

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

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.

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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.

Post-2030 targets to be decided later. Source: Pluto Greenhouse Gas Abatement Plan

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

Woodside has promised the WA Government no more than its overall corporate targets 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 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.

Fudge 3 - take it slowly

Woodside's homepage urges visitors to act now on cleaner energy for the sake of the future.

Source: Woodside homepage 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.

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 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 Amber-Jade Sanderson following advice from the EPA.

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.


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Main image: Existing one train Pluto LNG plant. Source: Woodside Energy Limited website.