German LNG Terminal Operator Sues EU Over Competitor's Subsidy

FSRU dockedi n Stade where construction has begun on the first onshore LNG import terminal (Deutsche Energy Terminal)

Published Aug 16, 2024 1:48 PM by The Maritime Executive

 

 

Two years after Germany rushed to launch its first onshore LNG import terminals, the operators are struggling to gain the upper hand in the market as they move from temporary operations toward the future energy markets. The operator of the first terminal opened at Stade confirmed on Thursday that it has filed suit against the European Commission in a move to block government subsidies to one of its competitors.

After the Russian invasion of Ukraine, Germany launched an ambitious plan to gain energy independence ending its massive gas imports from Russia. The government led the efforts and formed partnerships with private companies to develop floating storage and regasification facilities. They entered into multiyear charters with the owners of FSRUs that could be docked in major German ports and linked to the existing gas infrastructure. The government reportedly committed up to €740 million for the development of the LNG import infrastructure and operations.

The first of the terminals was established in Wilhelmshaven with the FSRU Hoegh Esperanza and the FSRU Hoegh Gannet which was placed in Brunsbüttel. The partnership Deutsche Energy Terminal was established with the goal of building a permanent facility in Brunsbüttel with financial support through the German industrial bank KfW. The German federal government has a 50 percent stake in the company along with Dutch pipeline operator Gasunie (40 percent) and German energy group RWE (10 percent).

Another one of the onshore import terminals was started nearby in Stade, Germany as part of the Hanseatic Energy Hub. Participants include Buss Gruppe, a Hamburg port logistics company, Swiss investment firm Partners Group, Spain’s Enagas, and US chemical company Dow. The FSRU Energos Force was stationed in Stade.

Separately, Deutsche Regas also established LNG terminal operations in Lubmin and Mukran in eastern Germany. These projects were privately financed by Deutsche Regas. Deutsche Energy Terminal is also scheduled to position another FSRU, Excelsior from Excelerate Energy at a floating terminal on the Jade at Wilhelmshaven later this year.

The long-term plans called for the construction of permanent facilities both in Brunsbüttel and Stade. Work began in June 2024 in Stade to build what is being billed as Germany's first land-based terminal for liquefied gases. The design includes Europe's two largest LNG tanks, each with a capacity of 240,000 cubic meters, which critically are also being built ready for ammonia. The facility is scheduled to be online in 2027.

RWE developed the infrastructure at Brunsbüttel and as planned transitioned it as of the beginning of 2024 to Deutsche Energy Terminals. The plan calls for the construction of a permanent facility at the site which like its nearby rival in Stade is designed to handle a form of hydrogen derivates.

The German government filed with the European Commission and won approval in 2023 to provide a state subsidy for the development of the Brunsbüttel terminal. The European Commission approved an initial amount of €40 million and under certain circumstances, it could increase to a total of €125 million.

HEH is now seeking to block the subsidy arguing that the work at Brunsbüttel could and should proceed without government support. They contend the subsidy encourages the operators to be less economically efficient. They also said a normal business would have raised prices to customers to pay for its expansion.

 

Ferries to Demonstrate First Green Corridor Operating for a Week on Biogas

Already eco-friendly, the deluxe ferry Viking Glory and her running mate Viking Grace will demonstrate the Baltic green corridor sailing for one week using only biogas (Viking Line)

Published Aug 15, 2024 7:04 PM by The Maritime Executive

 

 

Viking Line, the Baltic ferry operator based in Finland, plans to demonstrate the future Baltic Green Corridor with special operations between Turku, Finland and Stockholm, Sweden later this month. For one week, two of the company’s ferries will operate using only liquified biogas resulting in a 90 percent reduction in harmful greenhouse gas emissions.

“This is a historic moment for us, the Baltic Sea, and maritime transport,” said Viking Line’s Sustainability Manager, Dani Lindberg. “Scheduled service has never before been powered solely by biofuel. We have invested 450 million euros in our climate-smart vessels Viking Grace and Viking Glory, and one of their most important features is that they can run on LNG, biofuel, and future synthetic fuels produced from renewable energy.”

The company is involved in the efforts to develop a green sea corridor in the Baltic targeting the routes between Turku and Stockholm as well as between Helsinki, Finland and Tallinn, Estonia. While these efforts are ongoing and the supply of biogas is yet to be expanded, Viking Line plans to kick off a special celebration for Baltic Sea Day by demonstrating the world’s first green corridor.

From August 29 to September 4, Viking Glory (built in 2022 and 65,000 gross tons) and Viking Grace (built in 2013 and 57,500 gross tons) will only be operating on LBG. The vessels are equipped to run on sustainable fuel and have run on it for limited periods instead of their normal LNG fuel. Viking explains that while biogas is already a part of its fuel mix today, availability and the price put a damper on it currently. According to the company, when it is available it currently costs twice as much as LNG.

The biogas for the special week will be supplied by Gasum. It will be made in Europe entirely of food and agricultural waste and fully certified. The vessels make an approximate 11-hour trip between the two destinations as well as offering passengers the option of a 24-hour cruise. Viking estimates a week of biogas operations will generate about 2,600 fewer tonnes of greenhouse gas emissions. They equate that to the annual average carbon dioxide footprint of 270 Finns.

Viking drew attention a year ago when it began offering passengers and cargo shippers the option of paying a surcharge for their travel to be with biofuel. The base fee for a passenger adds SEK 26 (approximately $2.50) to the fare. Viking reports when it began highlighting the option on its booking system the number of trips using biofuel increased 500 percent.

Viking Line, the Ports of Stockholm, and the Port of Turku signed a Memorandum of Understanding in 2024 formalizing the efforts to launch the green corridor. Efforts will phase in with the goal for the corridor to be 100 percent carbon-neutral by 2035.

Ørsted Pulls Plug on Shipping E-Methanol Fuel Project Citing Slower Demand

The pioneering FlagshipONE project to produce e-methanol was shelved because Orsted said it could not get a satisfactory price for the fuel (Orsted)

Published Aug 15, 2024 2:44 PM by The Maritime Executive

 

Renewable energy giant Ørsted further highlighted the problems in the nascent sustainable fuel market for the shipping industry highlighting that it was unable to secure a contract at a reasonable for the offtake from its pioneering plant. The company surprised investors by reporting today that it has decided to defer the program known as FlagshipONE, which was under construction and due to begin production in 2025.

FlagshipONE was hailed as a game-changer in 2022 when Ørsted acquired the project while it was in the design phase from Swedish e-fuels company Liquid Wind. Expected to produce around 50,000 tonnes annually of e-methanol the project was using wind power in northern Sweden along with biogenic carbon from the nearby forestry industry. It was to use renewable energy and captured biogenic carbon dioxide in production while sharing steam, process water, and cooling water with a nearby plant and returning excess heat from production into the regional heating system.

“The liquid e-fuel market in Europe is developing slower than expected, and we have taken the strategic decision to de-prioritize our efforts within the market and cease the development of FlagshipONE,” Mads Nipper, Group President and CEO of Ørsted announced during the company’s half-yearly results announcement. 

FlagshipONE's construction began in May 2023 with reports saying the company was expected to invest $175 million in the development of the pilot project. They said at the time it would signal a new era in green shipping.

Nipper said the company however was unable to secure long-term contracts for the e-methanol at a “viable price.” Based on this, Ørsted reports it has shut down the project and is taking an impairment charge of over $220 million this quarter related to ceasing execution of FlagshipONE.

“We will continue our focus and development efforts within renewable hydrogen, which is essential for decarbonizing key industries in Europe and closer to our core business,” Nipper told investors.

There continue to be discussions across the shipping industry and regulators about the challenges of developing a supply of sustainable fuels for the industry. One of the big concerns is the anticipated high prices far above traditional fuels with repeated calls for establishing surcharges and funds to help bridge the gap and build demand for the new fuels. Maersk, a strong proponent of methanol, recently admitted continuing challenges and confirmed it was looking at other biofuels and LNG as it moves forward this year with a fleet renewal effort for as many as 50 to 60 ships.

Ørsted’s decision to cease the methanol project comes as the company continues to execute a revised strategy after recording significant charges in 2023 including the ending of two planned large offshore windfarm projects in the U.S. It took further charges this quarter revising the value of the leases but reversed a charge for the Sunrise Wind project in the U.S. which it has decided to move forward after it was successful in its rebid with New York State.

In a further development which Nipped called “frustrating and unsatisfactory,” the company cited further problems in the “early stage” U.S. offshore wind energy market. While saying Ørsted’s portfolio overall is performing well, he said they are now experiencing delays related to Revolution Wind, a 704 MW project that has started construction offshore between Connecticut and Rhode Island.

“Despite encouraging progress on our U.S. offshore wind project Revolution Wind, the construction of the onshore substation for the project has been delayed,” Nipper announced today. “This means that we have pushed the commercial operation date from 2025 into 2026, which led to an impairment.”

The company recorded a nearly $309 million impairment charge due to the delays at Revolution Wind as part of an overall impairment charge of $470 million this quarter for all parts of its business. Reuters quotes Nipper as saying that it is no longer a supply chain problem in the U.SD. wind sector but a specific challenge with substation. He said offshore work at Revolution Wind was “going according to plan.”

Overall, he told investors that Ørsted’s operations are performing well and particularly the earnings from its offshore wind farms. He highlighted that it was maintaining EBITDA guidance for the full year, and increasing earnings expectations for Ørsted’s offshore wind business.

 

$84 Billion in Clean Energy Projects Are Running Behind Schedule

By Tsvetana Paraskova - Aug 13, 2024

• Nearly 40% of the announced clean energy projects under Biden's IRA, worth $84 billion, are facing delays or indefinite pauses.
• 
  
• Factors contributing to these delays include falling solar panel prices, rising costs, high interest rates, and uncertainty surrounding the upcoming presidential election.
• 
  
• Companies are concerned that a potential Trump presidency could reverse Biden's clean energy policies and incentives, further jeopardizing these projects.
• 
  

Companies have announced hundreds of billions of dollars worth of clean energy and manufacturing projects in the United States over the past two years since the Biden Administration passed the Inflation Reduction Act (IRA) in August 2022.   

The IRA has nearly $370 billion in climate and clean energy provisions, including investment and production credits for solar, wind, storage, critical minerals, funding for energy research, and credits for clean energy technology manufacturing such as wind turbines and solar panels.

In the first year since the IRA and the CHIPS Act were passed, companies announced over $220 billion worth of projects. 

But over the past few months, announcements have been rarer due to slumping solar panel prices from China’s overproduction and overcapacity, slowing EV sales growth globally, high interest rates, and last but not least, enormous domestic policy uncertainty given the U.S. presidential election in November. Company executives are reluctant to make final investment decisions because they are concerned that a Trump presidency could try to gut Biden’s clean energy initiatives and incentives. 

Other firms are waiting for clearer guidance from the Department of the Treasury on the specific terms under which clean energy projects and production of clean fuels would benefit from the IRA tax credits. 

Funding has also been a deterrent for some projects because IRA subsidies and tax credits are granted in most cases to projects that have already reached some production milestones. 

Setback for $84 Billion Projects 

Of the announced projects worth at least $100 million each, nearly 40% are facing delays or indefinite pauses, according to investigation and research carried out by the Financial Times. 

These $84 billion worth of projects face delays of between two months and several years or have been indefinitely paused, research by FT, which has also conducted over 100 interviews with company executives, showed. 

Planned solar panel factories, battery storage projects, and a lithium refinery facility are among those faced with delays, according to the FT investigation.  

Solar panel prices have tumbled globally amid overproduction in China, which could persist for another year or two until the authorities manage to rein in the quantity-over-quality output. 

Then, there are higher-than-planned costs for manufacturing facilities in the U.S., including labor and materials. These higher costs add to increased interest rates, making projects more expensive than initially budgeted. 

And finally, political uncertainty with the upcoming presidential election is now topping the list of potential risks for many companies.

Solar manufacturer VSK Energy, which planned to build a factory in Colorado, has ditched that plan and is now looking for a location in a mostly Republican state in the Midwest, to be spared from Trump’s possible axe, a company executive told FT. 

“Just in case, you probably want to be in a red state so that someone from the same party is going to fight for you and your rights,” the manager told FT.

Trump Threat To Clean Projects

Some companies are waiting to see who will ascend to the Oval Office early next year before making final decisions. 

If Donald Trump wins in November, he is set to overturn or at least try to dismantle many of President Biden’s energy and climate policies, including methane rules, the pause on new LNG export permits, EV mandates, federal oil and gas leasing, and even parts of the Inflation Reduction Act. 

The IRA is under scrutiny for possible scrapping of tax breaks, according to Trump advisers and people with whom Trump is directly discussing energy policy issues.  

However, dismantling the IRA would first need a Republican-controlled Congress with both House and Senate. And even then, it could be difficult to scale back or scrap some incentives, as they mostly benefit projects and jobs in Republican states, analysts say. 

At a rally last month, Trump attacked the green policies of the Democrats and the “ridiculous and actually incredible waste of taxpayer dollars” on “things having to do with the green new scam.” 

Trump vowed to redirect the money to infrastructure projects and not allow it to be spent on “meaningless green new scam ideas.” 

A Trump presidency could jeopardize $1 trillion in clean energy investments, Wood Mackenzie said in May. 

Although Trump—if elected—is not expected to fully repeal the IRA of 2022, he is likely to scrap major clean energy policies, including a pledge to decarbonize the power grid by 2035. He is also set to soften emission reduction goals and regulations, according to WoodMac.

The energy consultancy expects the U.S. to see $7.7 trillion in investment for the U.S. energy sector from now until 2050. But less policy support for clean energy and infrastructure improvements would reduce this base-case investment projection by about $1 trillion, Wood Mackenzie’s analysts say.

“This election cycle will really influence the pace of energy investment, both in the next five years and through 2050,” said David Brown, director of Wood Mackenzie’s Energy Transition Research.   

By Tsvetana Paraskova for Oilprice.com

 

Ukrainian Cruise Passenger Nabbed for Tax Evasion on Arrival in Germany

Pixabay

Published Aug 13, 2024 10:36 PM by The Maritime Executive

 

Last weekend, a Ukrainian man was arrested aboard the cruise ship MSC Euribia in Kiel for an outstanding warrant for tax evasion. If he had stayed outside of Germany, he would have gone free, according to the local authorities - but as it stands, he will have to serve more than three years in prison. 

MSC Euribia operates a week-long round trip route between Kiel, Copenhagen and Norway. When the ship returned to port in Kiel, the authorities checked the passenger manifest and found a wanted name: a 53-year-old Ukrainian man with an active warrant. The man had previously been deported, and he faced a remaining prison sentence of more than 1,100 days if he ever returned - a sentence he will now have to serve.

"Why he traveled back to Germany despite the circumstances will probably remain his secret, especially since the arrest warrant would no longer have been valid in a year," a spokesperson for the Kiel police force told Hamburger Abendblatt.

It was not the first time that a wanted man got picked up because of the Euribia's passenger manifest. In July, the Kiel police found and arrested a 36-year-old German national who had been released from prison and had failed to return to serve out a sentence for drunk driving. The man gave himself up when confronted and returned for the remaining 15 days of his sentence, according to Abdenblatt. 

MSC Euribia is a brand new, family-oriented cruise ship with space for up to 4,800 passengers. It runs on LNG, and currently serves the German and Scandinavian markets. As of Tuesday Euribia was operating off Norway, with four planned port calls before returning to Kiel. 
 

 OPINION

OPINION,

From Papua to Gaza, military occupation leads to climate catastrophe

Environmental destruction is not an unintended side effect, but a primary objective in wars of occupation.

By David Whyte and Samira Homerang Saunders

Published On 13 Aug 202413 Aug 2024

Smoke rises following Israeli strikes, in Khan Younis in the southern Gaza Strip August 8, 2024. [Hatem Khaled /Reuters]

Many in the international community are finally coming to accept that the earth’s ecosystem can no longer bear the weight of military occupation. Most have reached this inevitable conclusion, clearly articulated in the environmental movement’s latest slogan “No Climate Justice on Occupied Land”, in light of the horrors we have witnessed in Gaza since October 7.

While the correlation between military occupation and climate sustainability may be a recent discovery for those living their lives in relative peace and security, people living under occupation, and thus constant threat of military violence, have always known any guided missile strike or aerial bombardment campaign by an occupying military is not only an attack on those being targeted but also their land’s ability to sustain life.

A recent hearing on “State and Environmental Violence in West Papua” under the jurisdiction of the Rome-based Permanent Peoples’ Tribunal (PPT), for example, heard that Indonesia’s military occupation, spanning more than seven decades, has facilitated a “slow genocide” of the Papuan people through not only political repression and violence, but also the gradual decimation of the forest area – one of the largest and most biodiverse on the planet – that sustains them.

West Papua hosts one of the largest copper and gold mines in the world, is the site of a major BP liquefied natural gas (LNG) facility, and is the fastest-expanding area of palm oil and biofuel plantation in Indonesia. All of these industries leave ecological dead zones in their wake, and every single one of them is secured by military occupation.

At the PPT hearing, prominent Papuan lawyer Yan Christian Warinussy spoke of the connection between human suffering in West Papua and the exploitation of the region’s natural resources. Just one week later, he was shot and injured by an unknown assailant. The PPT Secretariat noted that the attack came after the lawyer depicted “the past and current violence committed against the defenceless civil population and the environment in the region”. What happened to Warinussy reinforced yet again the indivisibility of military occupation and environmental violence.

In total, militaries around the world account for almost 5.5 percent of global greenhouse gas emissions annually – more than the aviation and shipping industries combined. Our colleagues at Queen Mary University of London recently concluded that emissions from the first 120 days of this latest round of slaughter in Gaza alone were greater than the annual emissions of 26 individual countries; emissions from rebuilding Gaza will be higher than the annual emissions of over 135 countries, equating them to those of Sweden and Portugal.

But even these shocking statistics fail to shed sufficient light on the deep connection between military violence and environmental violence. War and occupation’s impact on the climate is not merely a side effect or unfortunate consequence. We must not reduce our analysis of what is going on in Gaza, for example, to a dualism of consequences: the killing of people on one side and the effect on “the environment” on the other. In reality, the impact on the people is inseparable from the impact on nature. The genocide in Gaza is also an ecocide – as is almost always the case with military campaigns.

In the Vietnam War, the use of toxic chemicals, including Agent Orange, was part of a deliberate strategy to eliminate any capacity for agricultural production, and thus force the people off their land and into “strategic hamlets”. Forests, used by the Vietcong as cover, were also cut by the US military to reduce the population’s capacity for resistance. The anti-war activist and international lawyer Richard Falk coined the phrase “ecocide” to describe this.

In different ways, this is what all military operations do: they tactically reduce or completely eliminate the capacity of the “enemy” population to live sustainably and to retain autonomy over its own water and food supplies.

Since 2014, the bulldozing of Palestinian homes and other essential infrastructure by the Israeli occupation forces has been complemented by chemical warfare, with herbicides aerially sprayed by the Israeli military destroying entire swaths of arable land in Gaza. In other words, Gaza has been subjected to an “ecocide” strategy almost identical to the one used in Vietnam since long before October 7.

The occupying military force has been working to reduce, and eventually completely eliminate, the Palestinian population’s capacity to live sustainably in Gaza for many years. Since October 7, it has been waging a war to make Gaza completely unliveable

As researchers at Forensic Architecture have concluded, at least 50 percent of farmland and orchards in Gaza are now completely wiped out. Many ancient olive groves have also been destroyed. Fields of crops have been uprooted using tanks, tractors and other vehicles. Widespread aerial bombardment reduced the Gaza Strip’s greenhouse production facilities to rubble. All this was done not by mistake, but in a deliberate effort to leave the land unable to sustain life.

The wholesale destruction of the water supply and sanitation facilities and the ongoing threat of starvation across the Gaza Strip are also not unwanted consequences, but deliberate tactics of war. The Israeli military has weaponised food and water access in its unrelenting assault on the population of Gaza. Of course, none of this is new to Palestinians there, or indeed in the West Bank. Israel has been using these same tactics to sustain its occupation, pressure Palestinians into leaving their lands, and expand its illegal settlement enterprise for many years. Since October 7, it has merely intensified its efforts. It is now working with unprecedented urgency to eradicate the little capacity the occupied Palestinian territory has left in it to sustain Palestinian life.

Just as is the case with the occupation of Papua, environmental destruction is not an unintended side effect but a primary objective of the Israeli occupation of Palestine. The immediate damage military occupation inflicts on the affected population is never separate from the long-term damage it inflicts on the planet. For this reason, it would be a mistake to try and separate the genocide from the ecocide in Gaza, or anywhere else for that matter. Anyone interested in putting an end to human suffering now, and preventing climate catastrophe in the future, should oppose all wars of occupation, and all forms of militarism that help fuel them.

The views expressed in this article are the authors’ own and do not necessarily reflect Al Jazeera’s editorial stance.

---

• 
  David Whyte

  Professor of Climate Justice at Queen Mary University of London

  David Whyte is Professor of Climate Justice at Queen Mary University of London and Director of the Centre for Climate Crime and Climate Justice. The Centre hosted a Permanent Peoples’ Tribunal on State and Environmental Violence in West Papua June 27th-29th.”
• 
  Samira Homerang Saunders

  Research officer at the Centre for Climate Crime and Climate Justice, Queen Mary University of London

  Samira Homerang Saunders is research officer at the Centre for Climate Crime and Climate Justice, Queen Mary University of London. The Centre hosted a Permanent Peoples’ Tribunal on State and Environmental Violence in West Papua June 27th-29th.

 

Maersk Names Third Large Methanol Dual-Fuel Boxship in Denmark

Nmaing ceremony for the third large methanol dual-fuel containership today in Denmark (Maersk)

Published Aug 9, 2024 8:12 PM by The Maritime Executive

 

 

Maersk celebrated the naming of the third vessel in its fleet of 18 large dual-fuel methanol containerships as the company continues the rollout of the revolutionary ships while also looking to the future. The naming of the fourth ship comes in just a matter of weeks while the company this week laid out plans for its fleet modernization focusing on the transition to new, greener ships.

“We are excited to introduce Antonia Maersk, the third large dual-fuel vessel in our fleet capable of sailing on green methanol,” the company wrote online. “The name was unveiled today at a ceremony held in Aarhus, Denmark. Antonia Maersk was christened by its godmother Kirsten Andersen, spouse of Vestas CEO Henrik Andersen.” Vestas is the Danish wind turbine company.

Consistent with the tradition of naming Maersk vessels after members of the founding family, Antonia Maersk is named after Antonia Uggla, granddaughter of Ane Maersk Mc-Kinney Uggla, the chair of A.P. Møller Foundation and its investment company A.P. Moller Holding, the majority owner of A.P. Moller - Maersk.

The Antonia Maesk is one of 18 large methanol-enabled newbuilds scheduled for delivery between 2024 and 2025. The first ship of the revolutionary class, Ane Maersk, was christened in January 2024 in South Korea and the second vessel Astrid Maersk was named in April in Yokohama, Japan. Keeping with the effort to show off the vessels and highlight the leadership in new technology, the fourth vessel will be named in a ceremony in late August at the Port of Los Angeles with co-sponsor Nike.

The ships incorporate new designs including moving the deckhouse and accommodations to the bow and offsetting the funnel to one side on the stern. The ships, which are 174,000 dwt, have 10 holds and a total loading capacity of just over 16,500 TEU. Both the main engines from MAN and the auxiliary engines are dual-fuel capable of running fully on methanol. Maersk reports when operating with methanol, the ship saves up to approximately 280 tonnes of CO2 per day compared to a traditional sip running on diesel fuel.

 

Ane Maersk which entered service in January highlights the different configuration of the vessel (Maersk)

 

CEO Vincent Clerc used today’s ceremony to reiterate the company’s commitment to accelerating a reduction in carbon emissions while also repeating calls for broad cooperation. He highlighted the higher cost of green fuels, at a time when the company is experiencing overall higher operating costs due to the diversions away from the Red Sea, and the challenges of obtaining enough green methanol. He admitted they are still having to operate the new ships part time on traditional fuels including to navigate into ports.

"We cannot make this journey alone,” Clerc told today’s audience. “A price mechanism is needed that can close the gap between the prices of transport with green fuels and fossil fuels.” He repeated today a new position for Maersk admitting due to the challenges they believe several different fuels will be used by the industry.

Earlier in the week Maersk said it was nearing orders for 50 to 60 new vessels, all to be used as fleet replacements. They are targeting 800,000 TEU of capacity by 2030, expecting a pace of 180,000 TEU per year. 

To ensure the long-term competitiveness of the fleet and its ability to deliver on the decarbonization goals, Maersk announced it revised its strategy electing a mix of methanol and liquified gas dual-fuel propulsion systems. The company said it has commenced the work of securing offtake agreements for liquified bio-methane (bio-LNG) to ensure that the new dual-fuel gas vessels provide greenhouse gas emissions reductions in this decade.

Near-term, however, Maersk will continue to highlight its methanol vessels. Five of the methanol vessels are now in service, including one smaller feeder ship, with a total of 18 of the large vessels ordered. In addition, last year Maersk ordered six mid-size (9,000 TEU) dual-fuel vessels to be built in China. The first conversion of a large, in-service containership to methanol also got underway in July in China.

 

Will Australia Reject a Proposal to Drill Under a Coral Reef? 

DAMN WELL BETTER!

The sailboat is located on the approximate position of a proposed well site, with North Scott Reef in the background (Greenpeace)

Published Aug 11, 2024 

by The Conversation

 

 

[By Samantha Hepburn] 

For decades, Australia’s largest independent oil and gas company, Woodside, has eyed off a prize: the largest known unconventional gas fields in the nation.

But there’s a problem. The enormous Brecknock, Calliance, and Torosa gas fields are hundreds of kilometers off the coast of Western Australia – buried underneath pristine coral reefs. To access it, the company would have to drill more than 50 wells around the Scott Reef system and pipe the gas 900 km along the ocean floor to a processing plant.

Now Woodside has an even larger problem. The state’s Environmental Protection Authority is signaling it will reject this A$30 billion project, known as Browse, which is part of Woodside’s much larger Burrup Hub project.

It would be unusual to see the state authority reject a project of this size – they’re more commonly approved with conditions. But the authority is clearly concerned about the potential damage the giant gas project could do. The project has been mired in controversy, attracting 800 public appeals and more than 400,000 signatures on a petition against it. Conservationists are elated at news of the rejection.

Has this project by Australia’s homegrown answer to Big Oil been shut down? Not quite. The authority has only made a preliminary decision. Woodside has vowed to keep pushing for a green light – and it has the support of federal Resources Minister, Madeleine King.

But because these reefs are on an important migration route for endangered pygmy blue whales, federal Environment Minister Tanya Plibersek may have to weigh in.

What happens next will tell us a great deal about who holds sway within the Albanese government.

How big is this project?

If approved, the Browse project would feed gas into Woodside’s proposed Burrup Hub, the company’s gas megaproject which would become one of the largest liquefied natural gas (LNG) processing hubs in Australia. Conservationists have described Burrup as a “climate bomb”, which would produce twice the emissions of any other fossil fuel project seeking approval.

The Browse gas has high levels of carbon dioxide (12% CO?), and gas extraction commonly leads to escaped methane, a particularly potent greenhouse gas. Last year, Shell left the joint venture citing concerns about profitability and carbon.

But greenhouse gas emissions aren’t usually covered under an environmental authority’s remit. The Western Australian authority reportedly rejected the Browse project on conservation grounds. A freedom of information request by the Nine newspapers produced a letter the authority sent in February to Woodside, indicating the project was “unacceptable” due to the likely impacts on Scott Reef.

The concerns are well-founded. The project would threaten the habitat or migratory routes of endangered species such as pygmy blue whales, manta rays, whale sharks and nesting green turtles. Gas flaring would disorient migratory birds and young turtle hatchlings.

Noise pollution from drilling, piling and other infrastructure would cause stress and impact habitat. Chemical pollutants including drilling fluid and treated sewage would be released into the water.

High speed transfer boats could threaten whale migration paths. Then there’s the chance of an oil blowout. If this happened, it would be devastating for marine life.

There’s a chance gas extraction could cause Sandy Islet, the only part of Scott Reef above the high tide mark, to be submerged, risking the destruction of a popular nesting habitat for green turtles.

In the public interest?

Woodside argues exploiting these enormous gas fields is necessary to avoid a forecast gas shortage in WA – and to firm up energy security in Asia.

But the state doesn’t have a gas shortage. Even if it did, WA has a domestic reservation policy requiring LNG producers to reserve 15% for the domestic market. Given a recent WA parliamentary inquiry found major gas companies are only reserving 8% of the state’s gas at present, it would be far simpler to enforce the current reservation policy rather than crack open new gas under a coral reef.

What’s coming next?

A final decision by the state Environmental Protection Authority is yet to be handed down. But even if the decision is a clear no, it’s hard to see the company giving up.

In that case, Plibersek would likely have to weigh in. She is tasked with making determinations of national environmental significance under Australia’s main environment laws.

These laws don’t account for damage done by emissions, meaning Plibersek could not reject Woodside’s proposal on climate grounds. But the act does cover protection of endangered species, migratory species and the marine environment.

The endangered pygmy blue whale is found in Western Australian waters –including Scott Reef. Under Australia’s environment laws, endangered means the species has had a severe drop in population and has fallen by at least 50% over ten years or three generations.

Plibersek could stop the Browse project due to its impact on the pygmy blue whale, as this species has an existing species recovery plan.

When a recovery plan is in place, our laws state the federal minister cannot approve a project inconsistent with or in contravention of the plan. But the whale’s recovery plan expires next year.

Samantha Hepburn is a Professor at Deakin Law School, Deakin University. This article appears courtesy of The Conversation and may be found in its full form here. 

The opinions expressed herein are the author's and not necessarily those of The Maritime Executive.