Mon, Jun 17 2024 17 June, 2024

Australia’s Santos met with CCS greenwashing allegations

Santos continues to pursue a carbon capture and storage strategy for its gas projects.

The Timor Sea, home to the Barossa gas field (Photo: Adobe Stock/gaborbasch).

Climate change litigation in major gas producer Australia has recently been setting new records. The country now has the highest rate per capita of climate change-related litigation in the world. Though it has only 26 million people, Australia is second only to the U.S. in its volume of climate change litigation cases.

Against this backdrop, Adelaide-based gas major Santos continues to pursue its carbon capture and storage (CCS) strategy for its gas projects, basing its low-carbon transition on the controversial technology. In February, it secured US$150 million in bank funding to build a major CCS project at its Moomba gas plant in South Australia’s outback.

This came just two months after Santos celebrated a major court victory, winning regulatory approval from Aussie oil and gas regulator National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) for a revised drilling plan for its US$4.3 billion Barossa gas project. The gas field is located in the Timor Sea, southeast of Timor-Leste, and some 300 km from Darwin.

The NOPSEMA ruling nullified a December 2022 Australian Federal Court order for Santos to stop drilling in the field when it was found that the company had failed to sufficiently consult indigenous peoples from the nearby Tiwi Islands.

Santos also plans to send gas from a new pipeline at the 3.7 mtpa Barossa field to the onshore Darwin LNG project. The fate of that pipeline remained locked in a heated legal dispute until Jan. 14th when Federal Court Judge Natalie Charlesworth dismissed the legal challenge that had been blocking the pipeline’s completion.

Santos’ recent wins also opened the way for its Bayu-Undan CCS project. The project targets the capture of up to 10 mtpa of CO2 at a hub at the Darwin LNG facility. The captured CO2 will then be transported to, and stored, in Santos’ offshore Bayu-Undan reservoir in Timor-Leste waters.

Santos also inked a MoU with Timor-Leste’s national oil company TIMOR GAP for possible collaboration on the Bayu-Undan project. The partnership hopes to advance Bayu-Undan CCS as a carbon storage hub for customers in Australia, Japan, South Korea and across Asia in an effort to decarbonise their respective energy sectors.

Examining Santos’ claims

In defence of its CCS usage, Santos states on its corporate website that storage reservoirs are “well understood, have previously held gas and condensate in place for tens of millions of years, and will provide safe and permanent CO2 storage.”

However, that statement demands further investigation. While natural gas can be held in underground reservoirs for that duration, studies show that it wouldn’t be without considerable leakage over the same time period. As such, Santos’ use of this rationale to support its CCS project would be seen by some as greenwashing.

Santos added that its CCS project “has the potential to reduce the absolute emissions and emissions intensity of Australian and Timor-Leste gas and LNG projects, as well as other hard-to-abate industries in the region.”

However, this claim is also worth questioning. A growing list of research supports the view that CCS is not the best way forward. To date globally, large-scale CCS projects are significantly underperforming. Furthermore, no project has collected the amount of emissions promised. Operating a CCS system is also incredibly energy-intensive.

Santos also cites International Energy Agency (IEA) Director Faith Birol as supporting CCS as a main pathway to reach net zero emissions. However, Santos uses information from 2019, while the release is from 2022 and is still on its website as a downloadable PDF.

Notably, since 2019, the IEA has changed its stance on CCS and was already scaling back previous support for the technology at the time of the Santos release.

Birol emphasised the IEA’s pivot away from CCS even more in a statement last November ahead of COP28 in Dubai. “The industry needs to commit to genuinely helping the world meet its energy needs and climate goals – which means letting go of the illusion that implausibly large amounts of carbon capture are the solution,” he said.

These findings support a growing number of analysts, environmental and legal groups taking issue with Santos’ environmental record.

The Institute for Energy Economics and Financial Analysis found that despite Santos’ claim to be reining in its emissions, they actually increased by 53 percent in 2021. This figure was buried in a table on page 54 of its annual climate report. Moreover, over a five-year span, Santos’ total emissions spiked by 94 percent – again, a figure not easily ascertainable from its reports.

John Pabon, a Melbourne-based sustainability expert and author of “The Great Greenwashing,” told Gas Outlook that Santos has “a fairly horrific track record at peddling greenwashing to the public.”

He added that the greenwashing lawsuit against Santos in the Australian Federal Court in 2022 was directly related to falsifying clean energy claims.

“When we look at their CCS commitments, and based on historical precedent, there is no reason to inherently trust the claims. Santos will have to reassure the public through action and transparency. However, they’ve signed agreements with international third parties that do add a level of credibility,” he said.