2020’s other crisis: emboldened fossil fuel companies
This post was written on behalf of the Australasian Centre for Corporate Responsibility, and is part of its LobbyWatch series
Right in the middle of a pandemic that few saw coming, there is a crisis we’ve seen coming for decades, and there are people trying to make it worse rather than prevent it. Climate change, unlike coronavirus, is well known, its consequences and impacts are predictable and most significantly, it is a crisis we can avert, but as the world shudders to halt due to coronavirus, the companies that make a buck extracting, selling or burning fossil fuels haven’t stopped efforts to expand.
One of the companies seeking to worsen this avoidable problem is Woodside Energy, Australia’s biggest oil and gas company. In 2018, the fossil fuels Woodside dug from the ground will emit 33 megatonnes of CO2-e when burned. That is four times the emissions of every single domestic flight in Australia in the same year.
Prior to the pandemic, climate change was high on the world’s agenda, pushed up another notch by Australia’s disastrous and climate-intensified bushfire season. It has been vital, then, for the companies that subsist on worsening that problem to create a facade in which they’re seen to be fixing it. Now, in 2020, the world is scratching its head about how to manage the crisis and how to best spend money to kickstart economies, and fossil fuel companies again see potential for expansion.
This has created a situation in which large fossil fuel companies must simultaneously proclaim their plans for both increasing and decreasing the world’s emissions. They are selling the cause of the climate change as its cure. It is a strange place to be.
As part of an ongoing effort to draw sharp outlines around these contradictions, ACCR has filed a range of shareholder resolutions to Woodside and another major Australian oil and gas company, Santos. Recently, nearly half of all Santos shareholders opted to vote in favour of a stronger emissions reductions target, in response to an ACCR resolution — a globally unprecedented show of support for these companies taking far stronger action to prevent future crisis.
“The first resolution calls on Santos and Woodside to disclose scope 1, 2 and 3 targets, including emissions from the products sold”, said ACCR’s Brynn O’Brien, when the resolutions were filed. “It also asks both companies to disclose how their planned capital expenditure aligns with the Paris Climate Agreement, and how executives will be incentivised to achieve the emissions targets”.
The Paris Agreement — the world’s least-bad yard-stick for global efforts to put a lid on this other planetary crisis — ought to be the bare minimum aspiration at companies where decisions are made that impact the habitability of Earth. Full transparency about the emissions these companies directly create and those which they sell embedded in their primary product (destined for certain release into the sky) should be a bare minimum too.
In responding to ACCR’s resolutions, Woodside has delineated precisely how they rationalise the contradiction of what they do (selling a product that worsens climate change) and what they say (selling a product that cures climate change).
The arguments are numerous, and will be familiar to many who have been following this debate through the decades, such as ‘fossil fuels drive the economy, we’d collapse without them’, or ‘renewables aren’t reliable enough to serve an electricity grid’. Their tactics tend to centre around two core ideas: obscuring the climate impacts of their current and future operations and downplaying the fact that zero emissions alternatives could be used at a far lower cost.
Displacement misdirection
For this post, we will zoom in on one that very neatly represents how their actions, as they currently exist, are leading to the worsening of this long global crisis — namely, the idea that their fossil fuel isn’t as bad as the other fossil fuel.
Before gas is even burnt, pulling it from the ground is incredibly emissions intensive. Greenhouse gases such as methane are released during the mining process, and liquefaction is similarly emissions intensive. When it is burnt to generate electricity, it also releases emissions, but not quite as much as if you had burnt a lump of coal. The argument, then, is that even though digging it up worsens climate change, and burning it worsens climate change, together it is slightly less harmful than if you had only used coal.
A report commissioned by Woodside and cited in their response insists that selling Australia’s extracted gas leads to a net reduction in emissions in the countries that buy it, because gas displaces dirtier fuels. In a telling decision, the report’s authors claim gas is doing just this in “Europe”, but cite only the United Kingdom (pre-Brexit, so forgive them for that).
The argument here is that the orange line — closed cycle gas turbines — is the mirrored opposite of the blue line — mostly coal. Ergo, more gas equals less coal, and lower emissions.
However, when you look at all of Europe, instead of just one country (that used to be) within it, the story is quite different:
Within the European Union, it is the rising force of wind and solar that have displaced the majority of coal. Gas’ peak output occurred in 2008, but has remained unchanged since then.
Similarly, Woodside’s report references ‘Asia’, but only provides data on China. If we look at Japan (easily Australia’s biggest gas customer), fossil gas has only filled the gap left by the rapid shutdown of the country’s nuclear power stations after the 2011 Fukushima incident (with a slowly rising wind and solar portfolio leading to small reductions in both coal and gas):
Despite the influx of Australia’s fossil gas, Japan is rushing to build a fleet of new coal-fired power stations — something that ought to be unthinkable in our current situation. As Australia’s key gas customer, the country also serves as the ultimate disproof of the idea that gas is an emissions-reducing magic bullet.
Woodside’s claim that fossil gas is “competing with other storable and transportable energy sources, offering a significantly less carbon intensive alternative to coal and oil” is, being as charitable as possible, a rare phenomenon.
Conversely, it is simple to find countries that have significantly reduced coal output using renewables, energy efficiency and increased interconnection, such as Denmark, which draws on power from neighbours such as Sweden and Norway:
For countries that aren’t blessed with strong interconnection to neighbours, like the USA or the UK, gas has grown to a decent proportion. But this is more a testament to the influence of the fossil fuel industry than it is an accurate view of technological possibility. There are planned interconnection between the UK and Norway, for instance, to draw on Norway’s hydro reserves so output from plants like wind and solar can be stored. The regions in the world that missed the memo about leapfrogging fossil fuels and moving straight to total decarbonisation will hopefully not make the same mistake twice, in the coming decade.
You can’t transition from fossil fuels by adding more fossil fuels
Even countries that openly dismiss climate threats are subtly unplugging gas from their projections of the future energy transition.
In Australia, the government’s own environment department releases a yearly estimation of emissions into the coming decade. 2019’s release saw a very significant downward revision of power sourced from fossil gas, something of an admission that technologies like wind and solar have now become incredibly cheap, and the options for integrating these into grids at a large scale (such as storage, interconnection and better planning) have become incredibly feasible.
The planet’s atmosphere is a leaky bucket. Warming gases are cumulative and the time taken for humanity’s damage to disappear is many, many centuries. Every single additional tonne of greenhouse gases does damage, no matter its provenance. We must stop adding to the bucket.
Climate change is a crisis that we can see coming, and that we can avert — to waste the opportunity of a structural transition in energy and only reduce emissions rather than eliminate them completely is unconscionable.
In a year where we will experience the constant, anxiety-inducing buzz of daily crisis, it is a thousand times more important to call out those who are selling the cause of the problem as the cure, and avert something that we can still control.
In addition to the claim that gas is a feasible emissions reductions tool for electricity grids, there are many more arguments that attempt to frame the cause of climate change as the cure. They centre around the emissions from extracting gas, the viability of carbon capture and storage, lobbying against climate policies and the more insidious cultural and branding efforts of these companies and these will be considered in future posts.
For now, at least relish that there is one crisis — a century-defining one — that we can change.
