Posts Tagged ‘fossil fuels’

Grant King and the Climate Change Authority

April 10, 2021

After looking at the Misfortunes of Malcolm, we can now look at another board, this one appointed by the Federal Government, that seems to be getting by with only half hearted protest….

The Climate Change Authority has a long and chequered history.

In 2014, it recommended the government set a 2030 climate target equivalent to a 45-60% cut in emissions below 2005 levels. The Coalition ignored the advice, setting a 26-28% reduction target.

Cox. A ‘win’ for fossil fuels: green groups critical as former Origin Energy boss named chief of climate body. The Guardian 9 April 2021

The Coalition tried to abolish the Authority and failed, so cut funding and staff.

CEO of the Climate Change Authority, Brad Archer, told a senate estimates hearing in February that the Morrison government has not asked the body to undertake any new work and has not been asked to complete any modelling or research into what may be required to transition Australia to a zero net emissions economy.

Mazengarb. Taylor slammed for “stacking gas lobbyists” on Climate Change Authority. RenewEconomy 9 April 2021

However the Federal government recently appointed, as its head, Grant King, well known for being the former CEO of Origin Energy, and a persistent advocate for the methane industry.

Dan Goucher of the Australasian Centre for Corporate Responsibility said:

Under his leadership, Origin forcefully opposed credible climate policy. During his tenure on their boards, the Business Council of Australia and the Australian Petroleum Production and Exploration Association (APPEA) campaigned to repeal the carbon tax, the only effective policy Australia has ever had to reduce emissions

O’Malley ‘Uniquely unsuited’: Government accused of stacking climate body with fossil interests. Sydney Morning Herald, 9 April 2021

The Australia Institute remarks

King was responsible for initiating Asia Pacific LNG,  the largest Queensland coal seam gas LNG project which has resulted in well over 200 million tonnes of greenhouse gas emissions already, which will rise to well over one billion tonnes over the life of the project

O’Malley ‘Uniquely unsuited’: Government accused of stacking climate body with fossil interests. Sydney Morning Herald, 9 April 2021

King was also on the board of the Australian Petroleum Production & Exploration Association (APPEA), which has campaigned strongly against climate action, and described itself as “the effective voice of Australia’s upstream oil and gas industry on the issues that matter“. It needs to be said that this body is more radical than the Government as they claim:

Policies should achieve emissions reductions consistent to achieve net zero emissions across the Australian economy by 2050 as part of a contribution to a goal of global net zero emissions by 2050. The Australian Government has the responsibility to set interim targets and for the policy framework that meets them.

APPEA Australia’s cleaner energy future, p2.

In counterposition, the Prime Minister, Scott Morrison, told the National Press Club:

Our goal is to reach net zero emissions as soon as possible, and preferably by 2050.

Morrison. Address to the National Press Club, Barton ACT, 1 Feb 2021

Which might be said to mean, as soon as possible as late as possible ?? No interim targets have been mentioned.

Perhaps unsurprisingly the APPEA recommend more gas, and the money consuming fantasy of Carbon Capture and Storage (CCS).

The Minister for Emissions Reduction, Angus Taylor, described Mr King as:

a thought leader who has already made a significant contribution to the development of Australia’s emissions reduction policy framework

Taylor. Appointments to the Climate Change Authority, Press Release 9 April 2021

Which means, I suppose, that Mr King can be reliably expected to go along with Mr Taylor’s views.

The new board will also include Susie Smith, who was a long serving executive for the gas company Santos (who have large projected and new projects in Australia, one of which has been described as so rich in CO2 that it “looks more like a CO2 emissions factory with an LNG by-product.”) She is also head the Australian Industry Greenhouse Network, which has been heavily pro-fossil fuels, and some members once apparently called themselves the “Greenhouse Mafia“.

King and Smith have previously worked together on the ‘King Review’ which recommended CCS, and that ARENA and the CEFC not to be constrained to supporting only clean energy projects. The Review’s consultations have been described as being “heavily stacked towards representatives of big industrial emitters and the fossil fuel industry.”

Independent MP, Zali Steggall, said:

These new appointments are completely at odds with the Authority’s purpose to give independent advice on climate, science and policy to the Government.

The Morrison Government continues to only listen to vested interests in fossil fuels. We need a truly independent expert Climate Change Commission, as the UK has had since 2008, to advise the Government if we want a chance at achieving net zero by 2050. The Climate Change Authority, as it is currently is now constituted, is not it.

Steggall. MEDIA RELEASE: New appointments by the Morrison Government to the Climate Change Authority miss the mark

It is too early to tell what the media and political reaction will be, and I’ll keep adding as information accumulates, but my bet is that the media will largely leave it alone, or make it a one day wonder. The current most popular headline suggests the pick “ruffles feathers” – which suggests those who are complaining fuss about nothing. I also suspect in the current political climate that the government will see protests by climate concerned people as showing the Government is completely right about the appointments, as opponents have to be completely wrong. They are unlikely to be criticised by the Murdoch Empire, which may be almost all the media Coalition parliamentarians take seriously, so they will be happy. King and Smith do not have the political enemies that Turnbull made, so they will brazen it out, and the government will ignore protests.

This kind of standard neoliberal approach could lead to corruption, which is not corruption for neoliberals, such as taxpayer support for polluting gas, gas pipelines, gas exports, or legal threats against NSW if it decides it does not want the gas it agreed to. They will also encourage wasting more taxpayer funds on CCS, which almost certainly will not achieve its promises. But this will happen anyway, because its not corruption, or vested interest, its just what is called plain business good sense – it supports established business.

However, the news may not all be bad. King is associated with several organisations that want firm targets for 2050, and targets on the way, which is better than what the government wants, which seems to be aspiration alone.

The new members may also encourage a carbon price, which at least is a direct encouragement for people to reduce emissions (yes it has problems but I’ll take what I can get).

We shall see.

Quick submission to the inquiry into the Gas fired Recovery Plan

February 17, 2021

First of all: if Gas is a viable industry that serves Australian people and makes a profit, why does it need government assistance? It is an established industry, not path-breaking, nor needing initial support to take off. It is pretty clearly not the future, as it is likely to be superseded if we really do gain emissions targets. Given this, it looks like a taxpayer subsidy, or kickback to people on the National COVID‑19 Commission Advisory Board, who could have the appearance of primarily aiming their recommendations at private benefit.

Second: again as I understand it, the pipelines that are being suggested are massively expensive. If the companies are viable why are they not paying the money? If the companies are not viable, why are we paying for it?

Third: why is money not being spent on electricity infrastructure, where the problems of lack of infrastructure is clear, and the problems of generating commercial builds are also quite clear? Improving electricity infrastructure would benefit a range of industries and, if well designed, provide the energy to help set up industries in Australian Country Towns. This could generate a national resurgence of jobs. Electricity infrastructure benefits everyone, not just a particular set of companies, and helps us to a better future.

Fourth: recent research has shown, that gas drilling sites and gas pipes leak, particularly old pipes in the city. The pipes are hard to monitor and hard to repair (again especially in cities). This leakage does not make gas a low emissions fuel. The methane leakage generates more climate change than carbon dioxide leakage in the short term. Gas companies have little incentive to repair leaking pipes if the leakage is not so bad that it impacts profit, or is likely to cause a major explosion.

Fifth: given the known problems with greenhouse gas emissions, why are taxpayers funding a source of energy that will help endanger the country? Gas emissions will help increase droughts, poison water and destroy the farming sector.

Sixth: in many places there are issues with gas contaminating bore water – particularly on the Eastern side of Australia. Much of Australia depends on bore water. While it may be possible that gas companies can absolutely guarantee that no bore water will be affected for 20-30 years (the difficulties of tracing pollution makes it impossible to be sure), they cannot guarantee safety over hundreds of years. Concrete rots, steel and welding decays, natural phenomena add stress over time. If we want to preserve our farming industry we have to think in terms of thousands of years, especially given the likelihood of increasing severity of droughts.

Seventh: if the EU, China, or the US installs Carbon tariffs which seems likely, as there is no reason they should protect foreigners who, from their point of view, freeload on carbon emissions, then taxpayers are helping to undermine Australia’s export industries.

The whole project of a gas lead recovery, seems to be a way to trap Australia into greenhouse gas emitting fuels, and to endanger our future prosperity. It should be abandoned.

Problems for oil finance

January 19, 2020

If correct, this is an extraordinary piece of financial news, that deserves maximum publicity.

The Institute for Energy Economics and Financial Analysis reports that:

“ExxonMobil, BP, Chevron, Total, and Royal Dutch Shell (Shell), the five largest publicly traded oil and gas firms, collectively rewarded stockholders with $536 billion in dividends and share buybacks since 2010, while generating $329 billion in free cash flow over the same period.”

This means that

“Since 2010, the world’s largest oil and gas companies have failed to generate enough cash from their primary business – selling oil, gas, refined products and petrochemicals – to cover the payments they have made to their shareholders.”

Pouring money into shareholders is not an obvious investment in future business other than in perhaps suggesting you are a good investment, and trying to increase the share prices, which are often tied to bonuses.

“Asset sales have been a crucial source of funding of dividends and share buybacks for the supermajors.”

This is not using asset sales to make new investments, or carry out new explorations or research into technology or new business ventures – this is odd.

We should also note that oil companies do not pay the tax they should, which also makes them precarious if governments were to insist that they should.

Again from the IEEFA

Australian company Telstra paid twenty times as much tax as all of the oil and gas companies in Australia despite having similar revenues according to the latest data provided by the Australian Taxation Office (ATO).

Companies working in Australia’s oil and gas industry paid just $81 million in tax in 2016-17, while Telstra with a comparative revenue of $26,948 million paid $1,644 million in tax.

“Catherine Tanner, the Chief Executive Officer of BG Group promised around $1 billion a year in taxes and $300 million a year in royalties for its petroleum project in Queensland,” says Robertson.

“The reality is BG Group paid no tax in 2016-17 nor did its parent Shell Australia

IEEFA notes $195 billion of Australia’s natural wealth is being exported with $0.00 royalties or royalty-type petroleum resource rent taxes (PRRT) being collected.

One way of interpreting both pieces of news together, is that oil company executives think they are heading for trouble, and they want to shovel as much money to their established shareholders (including high level executives) as they can, possibly out of defrauding tax-payers, before they collapse.