APPEA’s Andrew McConville claims more gas will reduce emissions
On Monday night, CEO of the Australian Petroleum Production and Exploration Association (APPEA), Andrew McConville, appeared on ABC TV’s The Business with Elysse Morgan.
APPEA’s members include local companies BHP, Beach Energy, Origin Energy, Santos and Woodside Petroleum, as well as oil majors BP, Chevron, ConocoPhillips, Equinor, ExxonMobil, Shell and Total.
Elysse Morgan started off by asking McConville about APPEA’s significant appearance in UK research group Influence Map’s recent report on the world’s worst fossil fuel lobby groups.
[0:00] Elysse Morgan: APPEA, which represents the oil and gas industry was ranked 18th worst lobby group in that report, CEO Andrew McConville joined me from Brisbane. Andrew McConville, APPEA is 18th on this list of the world’s most influential and negative on climate progress. Does this mean that you’re doing your job for your members?
[0:23] Andrew McConville: Look, Elysse, we are absolutely committed to making sure that we have a consistent approach to climate change and emissions reduction, and we’ve been on the record now for more than 15 years, with a very consistent approach and a very clear policy, that says we absolutely support a national approach to climate change which delivers emissions reduction consistent with our Paris commitments in a way that is least cost, encourages investment and is consistent with an international price on carbon.
McConville is referring to APPEA’s Climate Change Policy Principles, published in October 2015. The principles do not explicitly support carbon pricing, nor do they specify the emissions reductions targets that APPEA would support. The principles do however, stress the role for gas, which is not particularly surprising. It’s worth noting that APPEA campaigned against Australia’s price on carbon until it was repealed in 2014, which it then duly celebrated.
[0:58] EM: To that in just a moment, but first to put the allegation to you. Earlier in the program, business leader Mark Johnson said of business lobby groups like APPEA, that it’s a relatively small rump of non-believers, conspiracy theorists and others that have exerted influence to stop more proactive policies. Is that APPEA?
[1:20] AM: I think it’s completely fallacious to suggest that our industry, our association, and indeed Australia is not doing its bit in terms of addressing the challenge of emissions reduction and moving to a lower carbon economy. So look, I reject it outright, Elysse, it’s not the reality.
McConville avoids Elysse Morgan’s question, ‘has APPEA exerted influence to stop more proactive policies?’, and answers his own question: ‘is the industry doing its bit to reduce emissions?’. In recent years, APPEA has supported the use of Kyoto carryover credits to reduce Australia’s 2030 target; it has opposed state-based renewable energy targets; and, it has sought exemptions for the gas industry from the impact of climate policies.
The argument that some business lobby groups are being steered by a minority of their members to obstruct more proactive policies on climate could be made for groups with diverse memberships, such as the Business Council of Australia. In APPEA’s case, it’s probably a bit more straightforward. APPEA represents oil and gas companies, and most — if not all — of its members have interests in expanding production over the medium term.
McConville’s claim that Australia is “doing its bit” on emissions reduction is simply wrong, given the increase in Australia’s emissions since the repeal of the price on carbon in 2014, driven primarily by the growth in emissions from LNG production.
[1:38] EM: As you said, APPEA supports a national climate change policy, and you said that you’ve been proactive. What does that actually mean, what do you support apart from a carbon price, and many of your members have been clear on that as well. But what else, because the government has shown no intentions of giving us a carbon price.
[1:58] AM: Well look, we’ve been very clear, right from 2004 in terms of our policy, as you say, it’s been revised several times since then. It will be reviewed again by our members next year, so we’ve been clear and we’ve been transparent. And we’ve worked very hard with government to look at ways in which we can continue the development of the natural gas industry here in Australia. Because natural gas has been shown to deliver energy with a lower emissions profile than the majority of energy coming into the national energy grid.
McConville provides no further information here about APPEA’s claimed “proactiveness” on climate change policy. The only proactiveness we have seen from APPEA is lobbying government to lift moratoria on onshore gas development, open up new offshore oil and gas fields for exploration, and attempts to reduce transparency of the emissions from the LNG industry.
[2:30] EM: Do you agree that emissions in Australia are rising?
[2:33] AM: I think what we are seeing, Elysse, is that as the production of natural gas has been increasing, it is a consequence that we do see emissions reductions that do start to trend up, and the government’s been very clear on that, and that is the case.
“…we do see emissions reduction that do start to trend up”
As reported by the SMH earlier this week, recent data shows that “Australia’s carbon emissions appear to have edged higher in the final quarter of the 2018–19 financial year”. In response to previous reports about Australia’s rising carbon emissions, including in official government data, the Australian government has acknowledged that although emissions from electricity generation are decreasing, these are being offset by the growth in emissions from LNG production.
[2:48] EM: Would you like the government to update its emissions reduction requirements as required by the Paris Agreement’s five yearly review process? The Scott Morrison government has said that it won’t do this.
[3:00] AM: Well you know, ultimately, you know policy matters are an issue for government. What we want to focus on is…
[3:07] EM: But you’re a lobby group that does say that it likes to help inform policy for governments.
[3:12] AM: Absolutely. And we’ve been very clear in informing government of our policy position in relation to climate change. We can’t be any clearer than putting it out there for everyone to see, Elysse.
APPEA’s specific MO is to shore up support for the oil and gas industry on behalf of its members, who are responsible for almost all petroleum production in Australia. APPEA regularly puts policy proposals to state and federal governments, including submissions to inquiries and policy briefing papers. While APPEA has committed to supporting “a national climate change policy response consistent with [its own] policy principles”, we can assume that the ratcheting up of Australia’s emissions reduction targets, as expected under the Paris Agreement, is not the sort of policy response APPEA lobbies government for. Again, this undercuts its claim to support Paris-aligned policy.
[3:19] EM: Have you spoken to the government specifically about how to lower emissions from where we are?
[3:24] AM: Our message to government continues to be, as it has been for almost 15 years now, Elysse, is that we see that natural gas has a really important role in terms of enabling renewables and that transition to a lower carbon economy.
As per APPEA’s Climate Change Policy Principles, APPEA is hoping for a “reduction in the emissions intensity of the Australian economy” particularly in “electricity generation and resource processing”, while natural gas use in the Australian economy expands. In short, the key feature of APPEA’s climate policy is increased gas production, while it hopes that every other sector decarbonises.
[3:36] EM: Have you spoken to this government about including a carbon price, or bringing in a carbon price?
[3:43] AM: Look, at this stage, again we’ve been very, very clear right for more than 15 years in terms of what our policy position is. Now, what we’ve said is a position consistent with an international price on carbon. Now that may not necessarily mean a price on carbon, there may be other ways in which those price signals can be sent through to support and encourage investment and innovation.
APPEA claims to support policies “consistent with an international price on carbon”, but it did not support the price on carbon in Australia in 2012–14. In fact, as we mentioned earlier in this post, APPEA campaigned for its repeal. APPEA has had one consistent policy position, however, that gas is the solution to reducing emissions. APPEA has been so consistent in this position, every CEO has said the same thing since at least 2006.
In 2006, then APPEA CEO Belinda Robinson claimed gas was “the obvious choice in moving to a substantially less greenhouse-intensive future”.
In 2013, then APPEA CEO David Byers claimed “LNG is key to cutting emissions”.
In 2016, then APPEA CEO Malcolm Roberts claimed that “more gas = less emissions”.
[4:04] EM: What specific things have you put to this government, that you’d like to see, in order for Australia to reduce its emissions?
[4:11] AM: I think certainly understanding the really key role that natural gas can play in enabling renewables. I think that’s the first point. I think the second point is, you know, creating a business environment which supports access to these substantial natural resources which Australia has, which will enable the production of natural gas here, and the export of LNG overseas. So I think that’s the second.
APPEA has been very successful at convincing governments of the need to develop and grow the gas industry. Earlier this week, Minister for Resources Matt Canavan delivered a speech where he espoused the benefits of natural gas. Canavan does not, however, support carbon pricing, and at the APPEA conference in May, rebuked the gas industry for its tacit support for a price on carbon.
[4:35] EM: And just finally. The investor reports analysis notes that industry groups like APPEA have relatively non-committal statements on climate change, in an attempt to distract the media and politicians, and to hold meaningful climate regulations at bay.
[4:50] AM: Oh look, Elysse, I reject that outright. I mean, we’ve been absolutely clear for more than 15 years on what our position in relation to emissions reduction and climate change has been. You know, to suggest anything otherwise, Elysse, is quite frankly pretty disingenuous and it really doesn’t help to move the debate forward. We want to be constructive. We want to be part of the solution. And we’re certainly committed to engaging any and all stakeholders who want to be part of that solution.
It’s worth repeating that APPEA’s Climate Change Policy Principles do not specify the emissions reduction targets it supports, nor does it mention the need to decarbonise over any timeframe. It does not mention the need to transition away from oil and gas at all. If McConville was serious about being “constructive”, APPEA would withdraw its support for the use of Kyoto carryover credits, publicly support Paris-aligned emissions reductions targets, and start lobbying governments to achieve those targets. Unfortunately for APPEA, that is likely to mean a limit to the expansionism of the oil and gas industry.
[5:14] EM: Andrew McConville, thank you so much for your time.
[5:17] AM: Thank you very much Elysse, great pleasure to talk to you.
Credit to Elysse Morgan for the strong line of questioning.
