Australian banks help release another 3 billion tonnes of carbon emissions

9 September 2016

Since late 2015, when Australia’s major banks committed to support the goal of holding global warming to below two degrees, they have contributed to deals for new fossil fuel projects capable of adding 3 billion tonnes of CO2 to the atmosphere.

A new report from the Stockholm Environment Institute has concluded that the world’s carbon budget for holding global warming to less than 1.5ºC  degrees is on track to run out in six years. Even giving ourselves a 66% chance of staying below 2ºC, the goal supported by all four major banks, would mean working with a carbon budget that is currently on track to run out in less than 20 years. Given that new coal, oil and gas projects are going ahead today and have an expected lifetime in the decades, one clear result of these findings is that there is no room for new projects that expand the scale of the fossil fuel industry.

Yet that’s exactly what the big banks have been funding. The table below shows the new fossil fuel projects that major Australian banks have provided credit to since they committed late last year to support the 2ºC global warming limit.

Project name and locationAustralian Banks invovledLifetime CO2 emissions
TOTAL EMISSIONS3121 Mt
Sabine Pass LNG Terminal, Louisiana, USACommonwealth Bank1,634 Mt
Johan Sverdrup offshore oil field, NorwayCommonwealth Bank, ANZ966 Mt
Elk-Antelope gas field, Papua New GuineaANZ, Westpac341 Mt
Heidelberg deep water oil field, Gulf of MexicoCommonwealth Bank86 Mt
Westmoreland 925 MW CCGT plant, Pennsylvania, USACommonwealth Bank51 Mt
Towantic Energy 785 MW CCGT plant, Connecticut, USANAB43 Mt

While some of these projects are examples of adding to the global capital stock of carbon reserves and others would facilitate the burning of carbon reserves, all of them act to expand an industry that urgently needs to contract in order to fit within a carbon budget we are currently on track to exhaust within six years.

Given the findings of the Stockholm Institute Report, it is hard to escape the reality that even the smaller projects on this list are not consistent with action to limit global warming to below two degrees. But there is a clear difference in the scale of projects listed and their contribution to increasing carbon emissions.

This quote from Lundin Petroleum, financed by ANZ and Commonwealth Bank for development of Lundin’s 22.6% interest in the Johan Sverdrup oil field, demonstrates the magnitude of the project and how out of step it is with the notion of conforming to an extremely tight carbon budget:

The Johan Sverdrup discovery is one of the largest oil discoveries ever made on the Norwegian continental shelf and will prolong the life of the Norwegian oil industry for several decades.

The largest project of all, the Sabine Pass LNG terminal in Louisiana is huge, with its full planned capacity of 27 million tonnes per year larger than the three LNG terminals built on Curtis Island in Queensland combined.

 


Calculations and assumptions

In calculating the emissions accounted for in this study, Market Forces has made a number of conservative assumptions. Details on how the emissions were calculated are as follows:

Sabine Pass LNG terminal

Noting that 88% (amounting to 19.5 mtpa) of the project’s first five trains is already contracted, and the Terminal is planned to reach a nameplate capacity of 27 mtpa, it was assumed that this facility would liquefy 20 mtpa (approx 75% capacity) of gas, on average, over 30 years. This amounts to 600 million tonnes of LNG over the lifetime of the project. Based on information sourced from Prometheus Energy, one tonne of LNG equals 621 LNG gallons, resulting in 372.6 billion LNG gallons processed over the lifetime of the project. The same source supplies a conversion factor of 1 LNG gallon = 82.6 cubic feet of gas. Therefore, 372.6 billion LNG gallons is equivalent to 30.77676 tcf of gas processed over the lifetime of the project. The US EIA supplies an emissions factor of 53.12 kg CO2/thousand cubic feet natural gas, resulting in the project processing enough gas to emit 1,634,861,491,200 kg CO2. Total: 1.63 billion metric tonnes of CO2 over its lifetime.

Note that these calculations do not account for emissions generated on site during the liquefaction process or upstream in the process of gas extraction or transport.

Johan Sverdrup oil field and Heidelberg Deepwater oil field

Net 2P reserves at Johan Sverdrup are 2,279 MMBoe. The field is 95% oil and 5% gas and natural gas liquids. This equates to 2,165 MMBo and 114 MMBoe gas. One barrel of oil releases 0.43 metric tons of CO2 when combusted. Therefore, emissions from the oil portion of the field are 2,165 MMBo x 0.43 = 931 million tonnes of CO2. 114 MMBoe is equivalent to 6.612×10^14 Btu or 6.612×10^9 therms. Natural gas releases 0.005302 tonnes CO2/therm when combusted. Therefore, emissions from the gas portion of the field are 6.612×10^9 x 0.005302 = 35 million tonnes of CO2. Total: 966 million tonnes of CO2

Elk-Antelope gas field

Average certified 2C resource at Elk-Antelope is 6.43 tcf of raw gas. One thousand cubic feet of natural gas releases 53.12 kg of CO2 when combusted. Therefore, Elk-Antelope facilitates emissions of approximately 6.43 x 53.12 x 10^9 kg of CO2. Total: 341.5 million tonnes of CO2

Westmoreland and Towantic CCGT plants

Assumed a 50% average capacity factor across a 30-year economic lifetime for both facilities. Used 920 lbs CO2 / MWh, indicated on the Westmoreland CCGT project website, across both facilities.  Converted 1 kg to 2.20462 lbs.

Westmoreland emissions = 925 (MW capacity) x 8760 (hours in the year) x 30 (years) x 0.5 (capacity factor) = 121,545,000 MWh = 111.821 billion pounds CO2 = 50,721,394,163 kg CO2.  Total: 50.7 million tonnes of CO2

Towantic emissions = 785 (MW capacity) x 8760 (hours in the year) x 30 (years) x 0.5 (capacity factor) = 103,149,000 MWh = 94.897 billion pounds CO2 = 43,044,642,614 kg CO2.  Total: 43.0 million tonnes of CO2