Woodside dramatically expands oil and gas exploration spend despite net zero pledge

Australia’s largest oil and gas producer, Woodside Energy, has expanded its focus on fossil fuel exploration and increased its direct greenhouse gas pollution since announcing it had an “aspiration” of reaching net zero emissions.

Woodside’s spending on looking for new oil and gas reserves was $160m in 2019 and dipped to $96m in 2021 – a year affected by the Covid-19 pandemic – before rising to $418m in 2022, according to a report by the Australian Conservation Foundation.

The jump was largely due to the company taking over BHP’s global oil and gas assets in mid 2022, and came after the company said it aspired to reach net zero emissions by 2050 or sooner.

The goal covers only its “scope 1” and “scope 2” emissions – those from its operations and in generating the electricity it uses. Woodside said in 2022 it had cut them by 11%, compared with the average between 2016 and 2020.

The conservation foundation’s report, released on Monday, said the claimed emissions cut was based on the company buying contentious carbon offsets, mostly investing in land-based conservation projects. The carbon pollution released into the atmosphere from its operations increased by 3%.

The report said the aspirational target did not cover 92% of Woodside’s contribution to the climate crisis because it ignored the “scope 3” emissions released when the company’s customers, mostly in north Asia, burned the oil and gas it extracted and produced.

The foundation’s corporate environmental performance analyst, Audrey van Herwaarden, accused Woodside of greenwashing by claiming it was reducing climate pollution while expanding its fossil fuel plans. “Net zero greenwashing poses a serious risk to humanity’s ability to tackle global warming, as it distracts from and delays concrete and credible action,” she said.

Woodside’s expansion plans include developing the Scarborough and Browse gas fields off the northern Western Australian coast and extending the life of its North West Shelf gas processing facility on the Burrup peninsula until 2070. Its “growth projects” also include oil developments in Senegal and the Gulf of Mexico.

A spokesperson for Woodside on Friday said the company’s climate-related plans, activities, progress and data were set out in a 2022 report and would be updated in its 2023 climate transition action plan scheduled to be released later this month.

The company’s chief executive, Meg O’Neill, has said it provided “reliable, affordable and lower-carbon energy”. The Australian gas industry says it is helping address the climate crisis by displacing higher-emissions coal but it has not released evidence showing the extent to which this is the case.

According to Our World in Data, the share of electricity from coal-fired power in Japan – the biggest market for Australian gas – has not decreased as gas generation has increased significantly.

The consultancy Climate Analytics found gas became the largest source of greenhouse gas emissions growth globally last decade. While gas use is expected to continue for decades, a world energy outlook published by the International Energy Agency said global investment in oil and gas would need to be cut roughly in half by 2030 to put the world on track to reach net zero emissions by mid-century.

On Woodside’s reliance on carbon offsets, van Herwaarden said nature restoration projects were important but did not stop the damage to the climate from burning oil and gas.

An export group set up by the UN to advise on how to avoid greenwashing in net zero emissions pledges concluded serious climate commitments must prioritise deep cuts in absolute emissions by 2030, with carbon offsets – which allow companies and governments to pay for cuts elsewhere instead of reducing their own pollution – to be used only for reductions “above and beyond” that.

The group said offsets could not be used to justify fossil fuel expansion if governments and companies were serious about meeting the goals of the 2015 Paris agreement.

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