Chevron buys credits to offset Gorgon carbon shortfall
By Sourced Externally
November 11, 2021
Energy giant Chevron will spend $40m on low carbon projects in Western Australia to meet a shortfall after failing to hit a five- year target burying enough carbon for its $US54bn ($74bn) Gorgon LNG project.
The $2.5bn Gorgon carbon capture and storage project under WA’s Barrow Island is the largest facility in the world but was hit by technical setbacks and delays, underlining the huge task ahead for oil and gas producers pinning their hopes the nascent technology can help solve pollution concerns.
Chevron and its partners were required to capture and store at least 80 per cent of Gorgon’s carbon emissions every five years under a target set by the state’s environment watchdog. The system works by reinjecting carbon dioxide into rocks more than 2km beneath Barrow Island after being stripped out from the industrial gas gathering process.
The US oil and gas producer said on Thursday the package would see Chevron fulfil its regulatory obligations through the acquisition and surrender of 5.23 million greenhouse gas offsets, roughly the same amount as it has injected underground since start up in August 2019.
“We take our regulatory obligations seriously. The package we have announced will see us make good on our commitment to offset the injection shortfall, and ensure we meet the expectations of the regulator, the community and those we place on ourselves as a leading energy producer in Australia,” Chevron Australia managing director Mark Hatfield said.
The first five-year period ended on July 18 after WA’s Environmental Protection Authority decided Gorgon had officially been in production since July 2016 – when it received its first operations licence – despite Chevron arguing it only reached routine production two years later.
The Conservation Council of WA called for the state to place a halt on gas production at Gorgon until the faulty carbon injection plant is fixed, saying only 10 per cent of total pollution from the project has been successfully captured by the CCS facility since it began operations.
The company expects to inject around 100 million tonnes of carbon dioxide back underground over the life of the project with the system to eventually capture 4 million tonnes of greenhouse gases annually.
Chevron was responsible for over 10 million tonnes of carbon dioxide emissions in 2019-20, making it the eighth-biggest emitter in the country, according to the Clean Energy Regulator.
Gorgon is 47 per cent owned by Chevron, the operator, while ExxonMobil and Shell each have a 25 per cent stake.