Andrew Stock: Woodside’s betting on huge fossil fuel deals is risky, reckless for the company and our planet

Woodside’s directors and management have bet the company on two massive fossil deals recently — the $16 billion go ahead for Scarborough LNG and the $20b purchase of BHP’s oil and gas interests. Doubling down on fossil fuels when the world’s global scientific consensus, the International Energy Agency and political leaders say no to more fossil fuels is reckless and risky for Woodside shareholders. Scarborough, and the adjacent Thebe and Jupiter gas fields (likely to be added later), will produce more than one billion tonnes of emissions when produced and burnt, worsening climate change. Woodside is on song with Australia’s decade-long LNG industry claims these giant fossil fuel projects reduce global emissions by displacing coal in Asian nations. To the contrary, growing emissions over the last decade provide no evidence to support that claim. Make no mistake: gas is part of the problem, not the solution. Woodside’s CEO reflected on the start of WA’s gas industry in the 1980s, with Woodside helping to establish “a whole new industry for the nation”. Why didn’t Woodside choose to spend the near $40b it is committing to these huge fossil fuel deals instead on establishing Australian leadership in new zero emissions industries for the 21st century energy industry — renewables, storage and green hydrogen? This $16b dollar fossil project will create just 600 ongoing jobs — that’s 1.3 million tonnes of extra greenhouse emissions for every job. The Climate Council’s Clean Jobs Plan identified 10,000 job opportunities in WA reducing emissions: jobs in renewable energy, land restoration, green hydrogen and public transport improvements. These solutions would power its economy for decades, dramatically cut emissions and not add to the global emission burden. West Australians already know the havoc climate change is wreaking — a drier South West, bleached coral reefs, more intense cyclones and bushfires. Every tonne of greenhouse gas emissions fossil fuel projects add to the atmosphere increases the risk to WA livelihoods. Woodside proceeding with Scarborough adds more fuel to the fire. Woodside talks about Asian customers needing gas. Yet China, Japan and South Korea have all set net zero emissions targets; and they import 87 per cent of the gas Australia ships overseas. Japan is our biggest gas customer and they are planning to halve gas use by 2030. By the early 2030s, when Woodside has sunk its $16b nd is just producing the first Scarborough LNG cargo, zero emission electricity and transport will dominate new energy investment globally. By 2040, Scarborough may reach cash break even. Then, renewable electricity will be powering transport and industrial production as well as cities and commerce. Hydrogen produced from renewable power will be growing rapidly to displace gas. It will be 2050 before the company forecasts Scarborough may have earned a modest return. By then, most Western economies have committed to net zero emissions. There are opportunities for WA in new technologies like renewable hydrogen and renewable power into Asia from the North West. Indeed, Woodside has made several recent announcements about hydrogen possibilities. But making hydrogen and ammonia from gas at Kwinana is hardly zero emission. And a land play in Tasmania for a future hydrogen prospect looks weak contrasted with Woodside’s latest multi billion fossil fuel commitments. Some might think Woodside’s hydrogen announcements amount to nothing more than speculative greenwashing. In the face of massive global changes in energy technology and the huge disruption to existing fossil fuelled energy supply brought on by cheap renewables and storage, It is already clear from Scarborough’s lifetime carbon dioxide and methane emissions the project is a disaster for the climate. With such long time frames to earn a return, and in a world of rapid energy change, it may well turn out to be a poor choice for shareholders too. Australians already feeling the impacts of climate change, with worsening droughts, bushfires, cyclones and coral bleaching, may well be thinking: “If that $40b was spent instead on zero emissions energy instead, how much brighter might the world be for our children?” Professor Andrew Stock is Climate Council councillor and a senior energy executive with more than 40 years experience