Sea dumping legislation paves way for opening of new gas fields in Timor Sea

The federal government’s Environment Protection (Sea Dumping) Amendment (Using New Technologies to Fight Climate Change) Bill has passed the Senate with the support of the Coalition.

With a title like that, you’d be forgiven for thinking it wouldn’t have much to do with fossil fuels.

But speaking in the Senate, the Greens’ Peter Whish-Wilson called the legislation “a naked and shameless attempt to facilitate the dirtiest fossil fuel project in our nation’s history”.

While the bill brings Australia into line with international protocols regarding disposing of waste in the seas, it also paves the way for gas company Santos to develop a massive carbon capture and storage (CCS) project in the Timor Sea. 

Santos’s proposed Bayu-Undan CCS project is crucial to its plans to open a new $5.6 billion gas field, known as Barossa.

Solutions for Santos

The passing of the Sea Dumping Bill brings Santos a step closer to solving two big problems it faces in the Timor Sea.

The first involves the estimated $1.6 billion cost to decommission its Bayu-Undan gas field, which is expected to produce its last cargo of LNG before the end of the year.

The second problem is the huge amount of carbon dioxide that Santos’ proposed Barossa gas field, nearly 300 kilometres north of Darwin, is expected to produce.

Barossa’s gas contains some of the most carbon-intensive gas ever proposed to be extracted in Australia, and under the new Safeguard Mechanism reforms, Santos will need to offset some of its emissions.

Santos’s answer to both problems is to develop a CCS project at Bayu-Undan, in order to sequester CO2 from Barossa and push the Bayu-Undan’s clean-up costs to sometime in the 2050s.

Because the Bayu-Undan field sits in Timorese waters, 500 kilometres north-west of Darwin, the CCS project could not go ahead without a mechanism to allow for carbon dioxide to be pumped across Australia’s international boundaries.

The Sea Dumping legislation creates a permit for the import and export of greenhouse gases — a permit Santos could be among the first to pursue.

The Senate heard just four companies had expressed interest in moving carbon dioxide across Australia’s borders.

Carbon capture needs

Questions put to Environment Minster Tanya Plibersek, who introduced the Sea Dumping legislation, were referred to the Trade Minister Don Farrell. 

“This legislation is a critical step in our transition to net-zero,” a spokesperson for Senator Farrell said. 

“Unlike the Greens political party, we know that being able to achieve net-zero will take a number of steps including new and emerging technologies.”

A Santos spokesperson said CCS was broadly accepted as a proven technology that was critical to achieving climate goals.

“A large scale-up of CCS is required and we are leading the charge with the technology, infrastructure and knowledge to deliver low-cost CCS and low carbon energy competitively on a global scale,” the spokesperson said.

While groups such as the Intergovernmental Panel on Climate Change and the International Energy Agency have stated the importance of developing carbon-reducing technologies like CCS, environmental groups argue it shouldn’t be used as a licence to open new fossil fuels projects.

A United Nations Environment Programme report released last week said CCS “could play a role in addressing residual emissions for hard-to-transition sectors”.

“However, [it is] not a free pass to carry on with business as usual,” the UN report said.

“The track record for CCS deployment has been poor to date, with around 80 per cent of pilot projects ending in failure over the past 30 years.

“Counting on these largely unproven and relatively costly technologies being rolled out at scale is thus a potentially risky and dangerous strategy.”

The world’s largest CCS project, at Chevron’s Gorgon field in Western Australia, has been operating for seven years but has only stored about one third of its target after a myriad of problems, according to a company report published last week. 

The development of a CCS project at Bayu-Undan could also help facilitate another new gas field in the Timor Sea which has an even higher CO2 makeup than Barossa. 

Italian company Eni is looking to develop the Evans Shoals gas field, which similarly to Barossa, will need to reduce its emissions via CCS if it is to go ahead. 

No sure reduction

The high concentration of CO2 in Barossa’s gas of about 18 per cent also challenges a CCS project’s abilityto reduce the development’s emissions.

Santos will need to pipe Barossa’s CO2 a long way — about 280 kilometres from Barossa to Darwin, then about 500 kilometres from Darwin to Bayu-Undan.

Piping gas such a distance requires compression and a lot of energy, which will likely involve using Barossa’s carbon-heavy gas, according to analysis by John Robert for the Institute for Energy Economics and Financial Analysis.

“The emissions are so high, any effort for CO2 storage [CCS] is negated … all up, the amount [of CO2] Santos would be sequestering would be more or less cancelled by the increased combustion emissions,” Mr Robert said.

Santos has declined to answer questions about how its Bayu-Undan CCS project will work.

Santos chief executive Kevin Gallagher has said that with the help of a Bayu-Undan CCS project, LNG from Barossa could be “carbon neutral”.

But that claim does not consider the 11 million tonnes of carbon dioxide-equivalent it estimates will be released every year when Barossa’s LNG is burnt by overseas customers for the roughly 25-year life of the gas field.

So, even if a Bayu-Undan CCS project was successful, it could only ever store less than 30 per cent of Barossa’s lifecycle emissions.

Santos’ construction on an underwater pipeline for Barossa is currently in limbo, as Tiwi Islands traditional owners challenge its approval in Federal Court.