The energy giant Chevron has conceded its self-described world’s biggest carbon capture and storage (CCS) project has failed to meet a five-year target for burying carbon dioxide under an island off Western Australia.
Climate campaigners believe the company should be heavily fined after it acknowledged on Monday that it had not met a requirement to capture and inject underground at least 80% of emissions from a gas reservoir over the first five years of the Gorgon liquefied natural gas (LNG) development
The Western Australian environment minister, Amber-Jade Sanderson, said through a spokesperson that she had called Chevron in for a meeting “to seek an explanation of how the company intends to address the issue”.
An analysis last year suggested Chevron could face a bill of more than A$100m if required to offset all emissions that breached its approval requirements.
Chevron Australia, which operates the Gorgon facility on behalf of partners including Shell and ExxonMobil, issued a statement saying it was “poised to reach a significant milestone” of injecting 5m tonnes of greenhouse gas more than 2km beneath Barrow Island since sequestration belatedly began in August 2019.
The company’s Australian boss Mark Hatfield said this showed the company was “deploying technology, innovation and skills to deliver cleaner energy and reduce our carbon footprint”.
“The road hasn’t always been smooth, but the challenges we’ve faced and overcome make it easier for those who aspire to reduce their emissions through CCS,” he said.
Hatfield said the company would work with the WA regulator on how to “make up the shortfall”, which he did not quantify. Chevron Australia would release a report on the issue later this year, he said.
Ian Porter, a former oil and gas industry executive who is chair of the advocacy group Sustainable Energy Now WA, said the report was likely to find the project had captured only 30% of what it was supposed to.
He said the report would be a “major test case for CCS technology”, which the Morrison government is backing as one of five priorities under what it calls a “technology, not taxes” approach to emissions reduction.
“It’s a shocking failure of one of the world’s largest engineering projects,” Porter said.
“Chevron needs to face significant fines and be forced to offset the more than six million tonnes of unauthorised legacy carbon dioxide releases.
“I sincerely hope CCS does work one day. Ultimately, we need it. But until that time, it is reckless and disingenuous for the industry to keep pretending that it can expand operations and reach net zero.”
Angus Taylor, the federal energy and emissions reduction minister, last year referred to Gorgon as an example of CCS “already working”, describing it as “the biggest project in the world”.
The $3bn development, which received $60m in federal funding, has had a troubled history. It was initially delayed for more than three years due to technical setbacks and the CCS system stopped working properly earlier this year following a problem with a pressure management system.
Under its terms of approval, the development was expected to capture and bury about 4m tonnes a year to meet a target of sequestering 80% of reservoir gas across a rolling five year period.
The company was not required to capture emissions released during LNG processing. It means a fully successful CCS facility would reduce total emissions from Gorgon by only about 40%.
Despite Chevron missing its target, the oil and gas industry lobby group said the company’s announcement showed the industry was “continuing to walk the walk when it comes to reducing emissions”.
Andrew McConville, the chief executive of the Australian Petroleum Production and Exploration Association, said: “Chevron’s announcement is on top of all the work our industry is already doing to combat climate change.”
New LNG developments have led to a significant increase in national industrial emissions over the past decade. They have limited the benefits of reduced carbon pollution from Australia’s electricity generation thanks to more solar and wind energy.
Official data shows the Gorgon facility has twice breached its initial emissions limit under the safeguard mechanism, a federal government policy that was promised to cap industrial carbon pollution but has allowed continued increases.
When the scheme started in 2016-17, Gorgon’s annual emissions limit – known as a baseline – was 8.34m tonnes of CO2.
It released 9.02m tonnes in 2017-18 and 8.97m tonnes in 2018-19, the most recent year for which data is available. Rather than be penalised for the breaches, it was allowed to set a new baseline calculated across a three-year period.
Separate official data from the Clean Energy Regulator shows Chevron was responsible for more than 10.2m tonnes of CO2 in 2019-20, making it Australia’s eighth-biggest emitter.