FUNDING CLIMATE FAILURE

How Australia’s big banks are undermining the Paris Agreement

In December 2015 nearly 200 nations signed the Paris Agreement, aiming to limit global warming to 1.5°C compared with pre-industrial levels.

Since then, the world has recorded its five hottest years. Half the Great Barrier Reef corals died in back-to-back mass bleaching events. Australia burned, experiencing some of its worst bushfires on record. A significant portion of the world’s population risks running out of water. And the concentration of CO2 in our atmosphere has risen.

Australia’s ‘big four’ banks – ANZ, CommBank, NAB and Westpac – have all publicly championed the Paris Agreement, promising to support the transition to a low carbon economy.

Yet years later, our 1.5ºC Scorecard reveals the big banks have made a mockery of those commitments, together having loaned $35.5 billion to the dirty coal, oil and gas industry. Our research reveals:

  • they’re still backing companies whose business strategies result in the failure of the Paris Agreement, including the likes of Whitehaven Coal and New Hope Corp,
  • they’ve loaned $7 billion to projects that expand the scale of the fossil fuel industry, enabling an additional 9 billion tonnes of CO2 to be released into our atmosphere, and
  • in some cases the above lending practices appear to have breached their own policies.

Worse still, companies are pursuing at least another 118 new or expansionary fossil fuel projects in Australia that would cost more than $149 billion, including projects like Woodside’s Burrup Hub, Origin’s Beetaloo fracked gas project or Santos’s Narrabri Gas Project. These are the projects that will make or break our climate targets. We must ensure the banks do not fund these dirty fossil fuel expansions.

Scroll down to learn more and take action, telling the banks to stop ruining our climate.

Since 2016 the big banks have loaned $35.5 billion to dirty fossil fuels

TAKE ACTION!


Tell your bank that 1.5 degrees means no more fossil fuels!

If you’re not a customer or shareholder of one of the big four, click the “All Banks” tab below to send all four banks a message.

ANZ

Tell ANZ 1.5 degrees means no new fossil fuels!


CommBank

Tell Commonwealth Bank 1.5 degrees means no new fossil fuels!


NAB

Tell NAB 1.5 degrees means no new fossil fuels!


Westpac

Tell Westpac 1.5 degrees means no new fossil fuels!


Tell the banks 1.5 degrees means no new fossil fuels!


Banks should fund green stimulus, leave fossil fuels behind

Just as the banks reached what seemed to be peak hypocrisy, in May 2020 they called for “stimulus measures that are consistent with the Paris Agreement” in response to COVID-19, arguing that “simply throwing money at old forms of infrastructure was no longer appropriate”. While it’s genuinely helpful (and even necessary) that the banks and broader financial industry are throwing their weight behind such messages, these calls are clearly undermined by their continued funding of projects and companies relying on the failure of the Paris Agreement.

Instead of the banks doing the opposite of what they’re calling for, they should rapidly align their finance activities with the Paris Agreement and leave behind companies and projects that are unwilling or unable to shift their business models away from their current reliance on fossil fuels in line with Paris.

1.5°C Scorecard: Bank actions since
January 2016

ANZ
CommBank
NAB
Westpac

Total lending to fossil fuels

$10,843 million

$12,059 million

$7,274 million

$5,396 million

Total lending to expansionary projects

$2,222 million

$2,827 million

$1,214 million

$843 million

Fossil fuels vs renewables lending ratio

$5.49 : $1

$3.73 : $1

$1.35 : $1

$2.71 : $1

Total emissions enabled
(tonnes CO2)

4.1 billion

5.4 billion

2.5 billion

1.9 billion

1.5°C Scorecard: Bank policies

ANZ
CommBank
NAB
Westpac

Plans to exit thermal coal by 2030, consistent with Paris Agreement?

No

Yes

No

Yes

Plans to phase out all fossil fuel exposure in line with the Paris Agreement?

No

No

No

No

Explicitly rules out funding new or expansionary fossil fuels?

No

No

No

No

Explicitly rules out funding companies whose business plans are consistent with the failure of the Paris Agreement?

No

No

No

No

1.5°C Scorecard: Bank actions since January 2016

Total lending to fossil fuels

ANZ

$10,843 million

CommBank

$12,059 million

NAB

$7,274 million

Westpac

$5,396 million

Total lending to expansionary projects

ANZ

$2,222 million

CommBank

$2,827 million

NAB

$1,214 million

Westpac

$843 million

Lending to companies relying on the failure of the Paris Agreement

ANZ

$1,901 million

CommBank

$1,824 million

NAB

$1,090 million

Westpac

$1,154 million

Fossil fuels vs renewables lending ratio

ANZ

$5.49 : $1

CommBank

$3.73 : $1

NAB

$1.35 : $1

Westpac

$2.71 : $1

Total emissions enabled (tonnes CO2)

ANZ

4.1 billion

CommBank

5.4 billion

NAB

2.5 billion

Westpac

1.9 billion

1.5°C Scorecard: Bank policies

Plans to exit thermal coal by 2030, consistent with Paris Agreement?

ANZ

No

CommBank

Yes

NAB

No

Westpac

Yes

Plans to phase out all fossil fuel exposure in line with the Paris Agreement?

ANZ

No

CommBank

No

NAB

No

Westpac

No

Explicitly rules out funding new or expansionary fossil fuels?

ANZ

No

CommBank

No

NAB

No

Westpac

No

Explicitly rules out funding companies whose business plans are consistent with the failure of the Paris Agreement?

ANZ

No

CommBank

No

NAB

No

Westpac

No

Total lending to fossil fuels since Jan 2016

1.5°C requires the rapid decline of fossil fuels

The 1.5°C warming limit has stark implications for the world’s energy system. The vast majority of the world’s developed fossil fuel reserves must stay underground to give us a fighting chance of meeting the Paris Agreement. So if we can’t even burn all the carbon currently claimed by fossil fuel companies, new projects will certainly bust our climate goals.

The latest science paints a very clear picture: 1.5°C means the world cannot accommodate any new or expanded fossil fuel projects, including supply (coal mines and oil & gas reserves) and power plants. Our banks must stop financing these activities if their own commitments to support the Paris Agreement are to be taken seriously.

Far from expanding, the fossil fuel industry must decline. The Intergovernmental Panel on Climate Change (IPCC) models the role of gas declining by 25% by 2030 and 74% by 2050, while oil would decline by 37% by 2030 and 87% by 2050, under a 1.5°C scenario (relative to a 2010 baseline). Meanwhile, energy from could would decline 78% by 2030 and 97% by 2050.

Click here to learn more about the science of keeping global warming to 1.5°C.

“We have no room to build anything that emits CO2 emissions.”

– Fatih Birol, Executive Director, International Energy Agency (IEA)

“With average lifetimes of 20 years or longer for pipelines, terminals, wells, and platforms, the time to begin planning for a wind-down of gas production is, as with other fossil fuels, already upon us.”

– SEI, IISD, ODI, Climate Analytics, CICERO, and UNEP

Big banks make a mockery of climate commitments by funding new fossil fuels

The big banks’ continued financing of new fossil fuel projects flouts their climate commitments. Below are some examples of their lending since 2016, just after the Paris Agreement was signed, all of them blatantly inconsistent with 1.5°C.

Banks back into funding coal

From late 2015 to 2017, it appeared the banks’ direct funding for new coal projects had dried up, with Market Forces unable to identify a single new coal project at the time. However it’s now clear the banks have ended that streak by lending to at least 3 projects that expand the scale of the coal industry.

New Acland Stage 3 coal mine

In December 2018, ANZ and NAB were among lenders that provided $600 million to New Hope for purposes including the proposed New Acland Stage 3 coal mine in south-east Queensland. The deal was shrouded in secrecy, as New Hope’s CEO declined to publicly identify the lenders.

This project involves three new mine pits (named Manning Vale West, Manning Vale East and Willeroo) which New Hope expects would produce 80.4 million ‘product tonnes’ of coal. The project would extend the life of the established New Acland coal mine beyond 2030, when OECD countries like Australia need to exit thermal coal if we’re to align with the Paris Agreement’s climate goals.

New Acland Stage 3 is the subject of a high court challenge from the Oakey Coal Action Alliance (OCAA) representing 60 landholders, while the existing mining operation is under investigation by state and federal regulators amid allegations it unlawfully mined $500 million of coal in an area which had never been applied for.

It’s unclear how NAB squares its funding for New Acland Stage 3 with its commitment to no longer finance new thermal coal mines or extensions.

New Acland coal mine stage 3 protest, Queensland Parliament. Credit - Lock the Gate Alliance

New Acland Stage 3 protest Queensland Parliament. Credit: Lock the Gate Alliance (CC BY 2.0)

Carborough Downs coal mine expansion

In total, ANZ has loaned $100 million to Fitzroy Australia Resources across two separate deals in Feb 2018 and Jul 2019, for its Carborough Downs coal mine in central Queensland. In June 2018, Fitzroy’s CEO Grant Polwarth told industry media “we have now mined in excess of 2 million tonnes of resource that was never previously contemplated while opening up the northern reserves and creating a 10 plus year future”.

New Acland coal mine, Queensland. Credit: Lock the Gate alliance

New Acland coal mine, south-east Queensland. Credit: Lock the Gate Alliance (CC BY 2.0)

Curragh coal mine expansion

In September 2019, ANZ, NAB and Westpac helped loan US$550 million to Coronado Global Resources, US$200 million of which was to fund expansion of the Curragh coal mine in central Queensland. According to Coronado, “the expansion is set to deliver an additional 6.0 Mt [million tonnes] from FY20 to FY23”. However, given Coronado expects operations at Curragh to continue well beyond 2023, it’s likely the expanded capacity would result in much more than 6.0 Mt of additional coal mined.

The expansion follows Coronado’s acquisition of the Stanwell Reserve Area (SRA) in August 2018, which it states ‘unlocked access’ to 318 Mt of resources including 82 Mt of reserves and “extend[s] mine life beyond 35 years”. This was part of a deal with the owners of Queensland’s Stanwell coal-fired power station, whereby Coronado agreed to supply Stanwell with coal from 2027 until 2038, while “Stanwell will receive $210 million (plus interest) in exchange for its rights to coal resources at the Curragh Mine”, according to the Queensland Audit Office.

Supplying Stanwell with thermal coal past 2030 runs contrary to the need for OECD countries like Australia to exit thermal coal by this date if we’re to meet the climate goals of the Paris Agreement. Both NAB and Westpac would have been aware of the Stanwell arrangements when they helped loan $350 million to Coronado in October 2018, supporting its listing on the Australian Securities Exchange. It’s unclear how NAB squares its funding for Coronado with its commitment to no longer finance new thermal coal mines or extensions.

Banks funding huge expansions of oil & gas

RAPID oil refining complex

The Refinery And Petrochemical Integrated Development (RAPID) project in Malaysia, funded by ANZ, is a planned oil refining complex capable of producing more than 200,000 barrels per day of liquid fossil fuel products including petrol, diesel, jet fuel and fuel oil. Combusting this volume of fossil fuel would result in the addition of 85,000 tonnes of CO2 to the atmosphere each day, almost 6% of Australia’s daily average greenhouse gas emissions.

RAPID is part of a broader project; the US$27 billion Pengerang Integrated Complex, where developers are also planning a 2,000 MW gas-fired power plant and 10 million tonne per annum LNG regasification terminal in order to facilitate the combustion of even more fossil fuels.

Ichthys LNG, Australia

Spanning the Northern Territory and Western Australia, the $53 billion Ichthys LNG project (originally estimated to cost $45 billion) is expected to facilitate 1.13 billion tonnes of CO2 emissions, more than double Australia’s entire emissions abatement target for 2021-2030. Of the total emissions enabled, 280 mt is expected to come from the project site.

All of the big four banks have loaned to Ichthys. Since 2016, ANZ and Westpac financed the project during construction while as recently as June 2020 CommBank and NAB joined as lenders. How the banks can square their Paris commitments with their support for one of the world’s largest and most expensive LNG mega-projects is baffling.

US LNG projects

CommBank and NAB have funded LNG projects in Texas to the tune of $852 million, comprising the Sabine Pass, Corpus Christi and Freeport projects. Combined, these projects would have the capacity to liquefy 63.5 million tonnes of LNG each year, rivalling Australia’s 87.6 million tonne capacity (Australia was the world’s largest exporter of LNG in the calendar year 2019).

These facilities, all located near the coast, face significant risks from sea-level rise and flooding as climate change worsens. Since at least 2018, the US oil & gas industry has lobbied government to defend its assets in Texas from climate risks by seeking US$12 billion for a ‘coastal spine’ of concrete seawalls, earthen barriers, floating gates and steel levees on the Texas Gulf Coast. In February 2020, engineers were appointed to design the US$1.9 billion ‘Orange’ project intended to protect infrastructure at Sabine Pass and Freeport.

Pluto 2 (part of the ‘Burrup Hub’)

In 2019 ANZ and Westpac each made loans supporting Pluto LNG train 2 (Pluto 2), a project being pursued by Australia’s largest oil & gas company Woodside Energy. In the same year, CommBank funded an accommodation facility supporting Woodside’s LNG projects including Pluto. This gas processing facility would liquefy up to 5 million tonnes of gas each year for export overseas, further perpetuating Australia’s position as one of the world’s largest LNG exporters.

Pluto 2 is part of Woodside’s Burrup Hub ‘vision’ which, according to the Conservation Council of Western Australia (CCWA), “would be the most polluting project ever to be developed in Australia, delivering some of the world’s dirtiest LNG for up to 50 years. With estimated total emissions of over 6 billion tonnes (gigatons) of carbon pollution across its lifetime, the proposal has profound implications for the global climate across generations.”

Permian Highway Pipeline

Funded by CommBank, the 692km Permian Highway Pipeline in Texas would transport up to 2.1 billion cubic feet per day of climate-wrecking gas. Based on conservative estimates, the pipeline would enable the release of more than 1 billion tonnes of CO2 over its lifetime, almost double Australia’s greenhouse gas emissions in calendar year 2019.

The project was the subject of a federal district court injunction, with the court finding evidence related to gaps in compliance with federal law (the Endangered Species Act) to be ‘compelling’. CommBank’s funding of the pipeline appears to have breached its commitment to only finance new gas projects if they’re demonstrated to be compatible with the goals of the Paris Agreement.

Gas power stations

Since 2016, ANZ, NAB and CommBank have supported the construction of 13 gas-fired power plants with a combined 12.6 GW of capacity across the United States (10 GW), Indonesia (2 GW) and Hong Kong (550 MW). NAB provided $439m for 6 US-based gas power plants, while CommBank loaned $281m for 5 plants in the US. Meanwhile ANZ loaned $275m for 4 plants in Indonesia and Hong Kong.

This funding comes despite researchers at Oxford University finding that we needed to stop building new fossil fuel power stations back in 2017 if we’re to avoid even 2°C of global warming, let alone 1.5°C. Building power stations past 2017, such as those funded by ANZ, NAB and CommBank, means even more dirty fossil fuel projects must be shut down ‘prematurely’ in order to avoid the worst impacts of climate change.

Climate impact of new fossil fuel projects

From 1 Jan 2016 to 31 Dec 2019, the big four banks loaned $7.1 billion to expansionary fossil fuel projects via 54 separate finance deals. For 42 of these deals involving big four banks lending $5.9 billion, Market Forces identified the specific fossil fuel projects funded and the resulting CO2 emissions enabled by those projects.

wdt_ID Project name Location Big four banks involved Lifetime CO2 emissions enabled
1 Sabine Pass LNG Terminal USA CBA, NAB (Train 6) 1,635
2 Ichthys LNG Australia ANZ, WBC 1,131
3 Permian Highway Pipeline USA CBA 1,018
4 Johan Sverdrup offshore oil field Norway ANZ, CBA 966
5 Corpus Christi LNG USA CBA, NAB 775
6 Midship Pipeline USA CBA, NAB 698
7 Refinery and Petrochemical Integrated Development (RAPID) Complex Malaysia ANZ 583
8 Elk-Antelope gas fields PNG ANZ, WBC 342
9 Pluto LNG train 2 Australia ANZ, WBC 311
10 Block A Aceh gas field Indonesia ANZ 295
Location Big four banks involved

Click here to view the calculations and assumptions associated with this data

The big four banks have provided finance for 33 new or expanded fossil fuel projects since committing to support the Paris Agreement. Over their lifetimes, these projects are expected to enable the release of an additional 9 billion tonnes of CO2. This is enough to cancel out Australia’s planned emissions reduction (2021-2030) 21 times over, if we assume the Australian government does not use dodgy Kyoto carryover credits to achieve this target (or approximately 520 times over if the accounting trickery is factored in).

The graph below shows the total estimated lifetime emissions enabled by expansionary fossil fuel projects that the big banks financed from 1 Jan 2016 until the end of 2019.

CommBank and ANZ are clearly the worst, each lending to projects that would enable emissions equivalent to nearly 8 years of Australia’s total greenhouse gas emissions in 2019. However both ANZ and CommBank reduced lending to expansionary projects from 2018 to 2019, while both NAB and Westpac increased such lending.

Total lifetime emissions of new or expanded projects financed by each bank since 1 Jan 2016
Total lifetime emissions of new or expanded projects financed by each bank since 1 Jan 2016
Total lifetime emissions of new or expanded projects financed by each bank since 1 Jan 2016
Since 2016 the big banks have financed projects that will cancel out Australia's emissions target 21 times over!
Lending to new or expanded fossil fuel projects since Jan 2016

Funding failure of the Paris Agreement

From 1 Jan 2016 – 31 Dec 2019, Australia’s major banks loaned nearly $6 billion to 14 of the 22 Australian companies undermining climate action by:

  • Expanding the scale of the fossil fuel sector; and/or
  • Relying on scenarios consistent with the failure of the Paris Agreement to justify their future business prospects.

Each of these companies has had years of public pressure, and warnings from shareholders, investors and regulators about the need to manage climate risks, and stay in line with the Paris climate goals. In the face of the climate crisis, Australia’s major banks can no longer justify financing any of these companies to pursue their climate-wrecking plans.

Explore each bank’s connection to these companies below:

Burrup Hub project infographic

ANZ, CommBank and NAB all loaned to Australia’s largest oil & gas company Woodside Energy, which is pursuing the Burrup Hub gas project. Image source: Clean Slate & CCWA

Lending to companies out of line with the Paris Agreement since Jan 2016

Banks connections to companies out of line with the Paris Agreement since Jan 2016

wdt_ID Out of line companies Banks
1 AGL Energy ANZ, CommBank, NAB, Westpac
2 APA Group ANZ, CommBank, NAB, Westpac
3 Aurizon ANZ, CommBank, NAB, Westpac
4 Beach Energy ANZ, CommBank, NAB, Westpac
5 Cooper Energy ANZ, NAB
6 Mineral Resources CommBank, NAB, Westpac
7 New Hope Group ANZ, NAB
8 Oil Search ANZ, CommBank, NAB, Westpac
9 Origin Energy ANZ, CommBank, NAB, Westpac
10 Santos ANZ, CommBank, Westpac

Click here to learn more about the 22 Australian companies undermining climate action.

Fossil fuel lending too high, renewables lending too low

The big four banks often point to renewable energy lending as a defence when challenged over their colossal financing of fossil fuels. But lending to renewables does not excuse or cancel out funding for dirty alternatives. Every dollar to fossil fuels locks in more harmful emissions, for which there is no room for in a Paris-aligned economy.

Despite their Paris Agreement commitments, the big four have loaned nearly THREE times as much to fossil fuels as renewable energy since 2016. Renewables counted for just $12.6 billion of their total lending compared with $35.5 billion for fossil fuels.

ANZ continues to have by far the worst lending ratio of the big four, providing $5.49 to fossil fuels for every dollar loaned to renewable energy. CommBank’s lending ratio of $3.73 : $1.00, while much lower, is still completely inconsistent with its promise of “playing our part in limiting climate change in line with the goals of the Paris Agreement”. Westpac has loaned $2.70 to fossil fuels for every dollar loaned to renewables since 2016. And while NAB’s fossil fuels to renewables ratio was the best of the big four banks, it still favoured dirty power sources. What’s worse, its ratio has tipped further towards fossil fuels since we last conducted this comparison 12 months ago.

Fossil fuels vs renewables lending 1 Jan 2016 - 31 Dec 2019
Fossil fuel : Renewables lending ratio (1 Jan 2016 – 31 Dec 2019)

Policy laggards

Australia’s big four banks fall well behind their international peers when it comes to climate policies.

In the 2020 Banking on Climate Change Fossil Fuel Finance Report Card, the highest ranking Australian bank is NAB, scoring a measly 21 out of 200 possible points. The study assesses bank policies and practices related to certain key fossil fuel subsectors.

While it’s worth acknowledging that the big banks’ policies have improved in recent years, it’s hard to applaud a scorecard dominated by such low scores.

Learn more about each bank’s policies below:

ANZ

In October 2015, ANZ excluded funding certain forms of new coal power plants by setting an emissions intensity threshold, ruling out plants emitting more than 0.8 t CO2/MWh. This policy is so weak that it allows the bank to fund all but the least efficient modern coal plants. But it is at least effective, having forced the bank to withdraw from a financing deal for a Vietnamese coal power plant in February 2016.

Not much has changed in terms of ANZ’s climate policy since then. In December 2018 the bank introduced another woefully weak policy by “excluding new-to-bank lending to customers whose thermal coal assets exceed 50% of revenue, installed capacity or generation (mining, transport, ports and power generation)”. Given ANZ already had (and still has) a vast network of coal clients prior to the introduction of the policy, it’s highly doubtful ANZ is turning away any ‘new’ coal customers as a result.

On the other hand, ANZ’s major competitors have changed, leaving ANZ as the only big four bank without a policy to phase out thermal coal. This is despite leaked documents revealing ANZ had a secret strategy to slash its thermal coal mining loans by 75% (representing more than $700 million) by 2024. Unfortunately, ANZ has so far been unwilling to commit to the strategy publicly, telling shareholders “we don’t believe in having dates” despite major investors and the scientific community calling for an exit from thermal coal in OECD countries by 2030.

ANZ’s climate change commitments still allow the bank to:

  • Continue lending to new coal-fired power stations that have the worst emissions intensity of new coal power technology,
  • Lend to new and existing coal mines anywhere around the world,
  • Remain invested in any current coal fired power station provided there is a plan (the nature of which is not defined) in place for how emissions would fall beyond the lifetime of the power plant, and
  • Lend to new and expansionary oil and gas projects.
CommBank

In recent years, CommBank almost went from ‘zero to hero’ on climate policy. Prior to August 2019, the bank had no fossil fuel lending restrictions nor commitments to reduce exposure over time. Then, on 7 August 2019, CommBank leapt ahead of its major competitors, committing to:

  • continue to reduce its exposure to thermal coal mining and power generation, with a view to exiting the sector by 2030, subject to Australia having a secure energy platform,
  • only provide banking and financing activity to new oil, gas and metallurgical coal projects if supported by an assessment of the environmental, social and economic impacts of such activity and it is in line with the goals of the Paris Agreement.
  • not provide project finance for the mining, exploration, or development of oil sands, or for oil and gas exploration and development in the Arctic

While this represents significant progress, it’s not quite the victory it appears to be. Unfortunately, it appears CommBank has already breached its oil and gas policy by funding projects that are inconsistent with the goals of the Paris Agreement with no evidence of having conducted an assessment demonstrating otherwise. CommBank needs to take these allegations seriously if it wants the credibility attached to the policies it announced, including taking any necessary disciplinary and corrective action to ensure the effects of the breach are undone and that it doesn’t occur again.

NAB

In November 2019 NAB committed to be out of thermal coal by 2035, five years later than what Commonwealth Bank committed to earlier that year, and also five years later than OECD countries have been told we need to phase out coal-fired power completely. In some ways, this is worse than having no policy at all, as it deliberately selects a date the bank knows is consistent with the failure of the Paris Agreement.

NAB also has standing policies to no longer finance new thermal coal mining projects or new-to-bank thermal coal mining customers, and new or material expansions of coal-fired power generation facilities, unless there is technology in place to materially reduce emissions.

It is also committed to not financing oil/tar sands extraction projects, or oil and gas projects within or impacting the Arctic National Wildlife Refuge area and any similar Antarctic Refuge. This is materially meaningless given there is no record of NAB having made such loans in the first place.

While each of these sound good on the surface, most are either being breached, or have no material impact on the bank’s lending activity in the first place. For instance, it’s completely unclear how NAB squares its policies with its recent funding of New Hope Corp (for its New Acland Stage 3 coal mine) and Coronado Global Resources (owner of the Curragh coal mine, which has planned or undergone extensions and expansions).

Westpac

Westpac’s climate change policy update, released in May 2020, committed the bank to following CommBank in setting a 2030 exit date for thermal coal exposure. While this policy built upon Westpac’s previous climate commitments, including its refusal to lend to certain types of new thermal coal mines, Westpac has left the door open to funding companies expanding the scale of coal, oil and gas industries (an activity entirely inconsistent with the climate goals of the Paris Agreement). Just one example of this is Westpac’s February 2020 participation in a $1 billion loan for Whitehaven Coal, which describes itself as ‘Australia’s largest independent coal producer’ and has plans to significantly expand coal mining operations.

In relation to power generation, the bank committed to continue reducing the emissions intensity of its power generation portfolio, targeting 0.23 tonnes of CO2 per Megawatt-hour (tCO2e/MWh) by 2025 and 0.18 tCO2e/MWh by 2030. This effectively squeezes out new coal-burning power stations and makes it almost impossible to finance new gas-fired power plants.

These commitments build upon Westpac’s existing policies to refuse loans for thermal coal mines in new thermal coal basins or with a calorific content of less than 6,300 kcal/kg, and to only finance new power stations if they decrease the emissions intensity of the grid in which they operate.

These are steps in the right direction, but leave far too much room for Westpac to fund companies and projects that depend upon the failure of the Paris Agreement.

Banks breaching their own policies?

Commbank

On 7 August 2019, CommBank announced that it would be “only providing Banking and Financing activity to New oil, gas or metallurgical coal projects if supported by an assessment of the environmental, social and economic impacts of such activity, and if in line with the goals of the Paris Agreement”.

Since then, CommBank has funded several gas projects that appear inconsistent with this statement, including:

Permian Highway Pipeline

In Sep 2019, CommBank loaned US$52.25 million for development and construction of a 692 km gas pipeline that would transport gas from the Permian basin in southwestern United States to the Texas Gulf Coast. Based on conservative assumptions, Market Forces estimates that combustion of the gas transported over the pipeline’s lifetime would enable the release of approximately 1 billion tonnes of CO2.

7 new LNG vessels

In Dec 2019, CommBank was reported as having acted as ‘lead arranger’ in a US$1.05 billion debt financing of GasLog Ltd for the building of seven new LNG vessels.

Tipton West expansion (Surat Gas Project)*

In Apr 2020, CommBank was reported as having taken part in a $693 million financing of an unlisted energy infrastructure company named ‘Energy Infrastructure Investments’, part of which “finances the Tipton West expansion project” according to subscription-based financial data provider Refinitiv.

It appears this expansion is part of the much larger proposed new Surat Gas Project being pursued by Arrow Energy (a 50:50 joint venture between PetroChina and Shell). According to Arrow Energy, Phase 1 of the Surat Gas Project “focuss[es] on an expansion between Arrow’s current operational areas at Daandine and Tipton”. The Tipton West expansion was funded on 17 Apr 2020, the same day the Surat Gas Project was sanctioned.

*Although CommBank took part in the overall A$693 million financing for Energy Infrastructure Investments, it did not contribute to all components (called ‘tranches’) of the financing, which included loans of $50 million, $230 million and $413 million provided by a variety of banks. CommBank contributed to the $230 million and $413 million tranches but not the $50 million tranche. It is unclear to Market Forces which of these tranches funded Tipton West, and therefore whether CommBank contributed to the specific tranche that funded Tipton West.

NAB

On 14 December 2017, NAB ruled out lending to all new thermal coal mines or extensions, stating “NAB will no longer finance new thermal coal mining projects”.

Since then, NAB has loaned to several companies and projects that are inconsistent with this statement, including:

New Hope Corp (New Acland Stage 3 thermal coal mine)

According to an article published via Bloomberg Professional on 15 Jan 2019, “ANZ, CAT Finance, NAB, Macquarie, Mizuho are providing New Hope with a facility to fund its acquisition of a stake in Bengalla Joint Venture”.

The loan referred to was $600 million for the acquisition of the Bengalla coal mine but which New Hope also stated “will be sufficient for the Company to also fund its medium term growth projects including New Acland Stage 3”.

It is unclear how NAB can justify funding a proposed thermal coal mining project given its commitment to not fund such projects.

Coronado Global Resources (Curragh coal mine extension and expansion)

In October 2018, NAB co-financed a $720 million underwriting debt facility backing the initial public offering (IPO) of Coronado Global Resources on the Australian Securities Exchange (ASX).

Coronado had acquired the Stanwell Reserve Area (a coal mining area) in August 2018, which it states ‘unlocked access’ to 318 Mt of coal resources including 82 Mt of reserves at the Curragh coal mine and “extend[s] mine life beyond 35 years”. This was part of a deal with the owners of Queensland’s Stanwell coal-fired power station, whereby Coronado agreed to supply Stanwell with coal from 2027 until 2038, while “Stanwell will receive $210 million (plus interest) in exchange for its rights to coal resources at the Curragh Mine”, according to the Queensland Audit Office.

Crucially, as part of an investor presentation published on the ASX in October 2018, Coronado stated the Stanwell agreement was “expected to materially extend mine life until around 2038”, well beyond the investor-backed 2030 deadline for OECD countries to phase out coal power. Surely NAB’s coal policy should have prevented it supporting the IPO of a company which planned to materially extend thermal coal mining?

Far from pulling out of the deal, NAB recommitted to and bolstered funding for Coronado. In September 2019, NAB loaned to Coronado Global Resources to refinance the October 2018 loan and provide it with additional funds to expand its Curragh coal mine. According to Coronado’s 2019 Half Year Results Presentation, “the expansion is set to deliver an additional 6.0 Mt from FY20 to FY23”. NAB clearly needs to explain how its funding for Coronado complies (or doesn’t) with its coal policy.

Methodology


Scope

  • Lenders: ANZ, CommBank, NAB and Westpac
  • Assets: Fossil fuel companies and projects globally
  • Timeframe: 1 Jan 2016 – 31 Dec 2019
  • Finance type: Project and corporate loans
  • Transaction type: Primary, refinancing, acquisition

Market Forces obtained primary data from finance industry databases provided by IJGlobal and Refinitiv. Further primary data was sourced from company filings, reports and market disclosures. Figures were cross-referenced for consistency and verified against secondary material. This report presents a synthesis of this material.

The loans we have captured include refinancings, as (1) we consider each refinancing a conscious decision by a lender to continue supporting a company or project, and (2) the lending group can and often does change upon refinancing and we wanted to capture this.

Where corporate lending occurred, we sought direction on the purposes of the loan and if this was not available, discounted the value of that loan to reflect the proportion of the company’s business that is involved in the fossil fuel supply chain.

Dollar values represent the sum of committed loan amounts and are presented in Australian dollars unless otherwise specified. No adjustments have been made to reflect the net present value of facilities arranged before 1 Jan 2020.

We have tried to capture as much information as possible in this study but a lack of transparency about fossil fuel lending means it will only ever be a partial picture.

Calculations and assumptions - climate impact of new fossil fuel projects

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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:

Coal mines

Energy and emission factors are derived from the Australian Department of Industry NGER Technical Guidelines 2017-18 unless stated otherwise. Although mines often produce a mix of thermal and metallurgical coal, our calculations are based on the main product (thermal or coking coal) for each project unless specified otherwise. This approach was taken to ensure calculations are as straightforward as possible and resulted in no material difference in the magnitude of the emissions estimates.

New Acland Stage 3 project

The New Acland Stage 3 2014 environmental impact assessment (EIS) states “The revised Project involves the extension of the Mine’s operating life to approximately 2029 with the inclusion and progressive development of two new resource areas within MLA 50232. These resource areas are identified as the Manning Vale and Willeroo resource areas. The revised Project will include mining in three new mine pits, namely Manning Vale West, Manning Vale East and Willeroo mine pits.” (p.3-1) The same document states there are a combined 80.4 million ‘product tonnes’ of coal at the Manning Vale West, Manning Vale East and Willeroo mine pits (table 3-4). So 80.4 million tonnes of coal x 1,000,000 (million tonnes of coal to tonnes of coal) x 24 GJ/t (average energy factor for sub-bituminous and bituminous coal) x 90.23 kg CO2-e/t (average emissions factor for sub-bituminous and bituminous coal) x 0.001 (kg of CO2 to tonnes of CO2) = 174 million tonnes of CO2.

Curragh coal mine expansion

In September 2019, Coronado Global Resources secured finance to expand its Curragh coal mine in central Queensland. According to Coronado’s 2019 Half Year Results Presentation, “the expansion is set to deliver an additional 6.0 Mt from FY20 to FY23”. This is to be achieved by incrementally increasing annual production by 2.1 Mt (from 12.9 Mt to 15 Mt) between FY19 to FY23. According to the same presentation, the Curragh mine had 311 Mt of reserves as of 31 December 2018. Assuming that the 2.1 Mt of additional coal is mined beyond FY23, until Curragh’s 311 Mt of reserves are depleted, this would result in approximately 39.6 Mt of additional coal mined by 2039.

This expansion comes after Coronado acquired the Stanwell Reserve Area (SRA) in August 2018, which it states ‘unlocked access’ to 318 Mt of resources including 82 Mt of reserves and “extend[s] mine life beyond 35 years”. This was part of a deal with the owners of Queensland’s Stanwell coal-fired power station, whereby Coronado agreed to supply Stanwell with coal from 2027 until 2038, while “Stanwell will receive $210 million (plus interest) in exchange for its rights to coal resources at the Curragh Mine”, according to the Queensland Audit Office.

Discounting the Stanwell arrangements and assuming that an additional 2.1 mtpa is mined until the mine’s reserves are exhausted, we estimate the expansion would result in an additional 39.6 Mt of coal mined. Estimated emissions calculation: 39.6 million tonnes of coal x 1,000,000 (million tonnes of coal to tonnes of coal) x 30 GJ/t (coking coal) x 92.02 kg CO2-e/GJ (emissions factor for coking coal) x 0.001 (kg of CO2 to tonnes of CO2) = 109 million tonnes of CO2.

Carborough Downs coal mine expansion

Fitzroy Resources secured finance in 2018 and 2019 for its Carborough Downs coal mine in Queensland, which it claims to have expanded since it acquired the mine in 2017. There is limited public information relating to the reserves and expansion of the mine, however we know Carborough Downs had 33 Mt of coal reserves according to a project brief published by Fitzroy Resources prior to Q1 2018. According to Mining Monthly, Carborough Downs saw a “100% increase in JORC reserves in the first year under Fitzroy ownership” based on. Therefore, it was assumed that Fitzroy doubled reserves from 16.5 Mt to 33 Mt since acquiring the mine. This appears consistent with a statement made by Fitzroy’s CEO Grant Polwarth. According to the same Mining Monthly article from June 2018, Polwarth said “we have now mined in excess of 2 million tonnes of resource that was never previously contemplated while opening up the northern reserves and creating a 10 plus year future”. Given that Fitzroy acquired the mine in June 2017, it appears the company took approximately 1 year to mine the 2 million tonnes of coal that was “never previously contemplated”. Assuming this is the case, if Fitzroy were to mine 2 Mt over 10 years, it would extract 20 Mt of coal that was “never previously contemplated”. Estimated emissions calculation: 16.5 million tonnes of coal x 1,000,000 (million tonnes of coal to tonnes of coal) x 30 GJ/t (coking coal) x 92.02 kg CO2-e/GJ (emissions factor for coking coal) x 0.001 (kg of CO2 to tonnes of CO2) = 45.5 million tonnes of CO2.

 

Downstream oil & gas infrastructure

Refinery and Petrochemical Integrated Development (RAPID) project

According to project documents RAPID would have capacity to produce the following volume of refined oil products (figures in thousands of barrels per day, or ‘kbd’): 65.7 kbd of motor gasoline + 92.7 kbd of diesel + 20.4 kbd of jet fuel + 27.3 kbd of fuel oil. In the absence of more detailed information, it was assumed that the project would operate at 75% capacity for 25 years (according to The Institute of Chartered Accountants of India, the useful life of refinery processing units is 25 years, which appears consistent with figures from the Australian Tax Office relating to the useful life of petroleum refining assets). These volumes were then multiplied by the US EPA emissions factors for each fuel type (kg CO2 / barrel): 368.75 for motor gasoline, 428.81 for diesel, 409.49 for jet fuel, 473.33 for fuel oil.

The full calculation is as follows: 

  • Motor gasoline: 65.7 kbd of motor gasoline x 368.75 kg CO2 / barrel of motor gasoline x 365 days per year x 25 years x 75% capacity factor = 165,803,856 kg CO2
  • Diesel: 92.7 kbd of diesel x 428.81 kg CO2 / barrel of diesel x 365 days per year x 25 years x 75% capacity factor = 272,044,667 kg CO2
  • Jet fuel: 20.4 kbd of jet fuel x 409.49 kg CO2 / barrel of jet fuel x 365 days per year x 25 years x 75% capacity factor = 57,170,175 kg CO2
  • Fuel oil: 27.3 kbd of fuel oil x 473.33 kg CO2 / barrel of fuel oil x 365 days per year x 25 years x 75% capacity factor = 88,434,414 kg CO2

Total emissions enabled: 583 million tonnes of CO2.

 

Oil & gas pipelines

Unless stated otherwise, it was assumed that the:
– lifespan for US-based pipelines is 50 years based (according to a U.S. Department of Energy laboratory; “a natural gas pipeline generally has a design life of more than 50 years, although the actual life may be considerably longer”).
– lifespan for Australia-based pipelines is 40 years (according to an article published in the Journal of the Australian Petroleum Production & Exploration Association (APPEA), “so many pipeline assets around Australia are approaching operating lives of 40-50 years”).
– capacity factor for pipelines is 50% (according to Matteo Villa, Research Fellow at the International Society for Performance Improvement, “as a rule of thumb it is generally assumed that, in order to guarantee sufficient return on investment to project participants, a pipeline requires a utilization rate of around 50%”).

Permian Highway Pipeline

Kinder Morgan reports the pipeline is designed to transport up to 2.1 billion cubic feet per day (bcfpd) of gas. Therefore, the emissions enabled by this project are estimated to be: 2.1 billion cubic feet per day x 365 days in a year x 50 years x 50% (assumed capacity factor) x 1,000,000 (conversion from bcfpd to thousand cubic feet per day) x 53.120 kg CO2-e per thousand cubic feet natural gas (US EIA emissions factor) * 0.001 (kg of CO2 to tonnes of CO2) = 1.01 billion tonnes of CO2.

Midship Pipeline

The Midship Pipeline in Oklahoma has capacity to transport 1,440,000 Dekatherms of gas per day. Therefore, the emissions enabled by this project are estimated to be: 1,440,000 Dekatherms per day x 1.0 (Dekatherms to million british thermal units per day) x 1.0 (million british thermal units to thousand cubic feet per day) x 365 days per year x 50 years x 50% (assumed capacity factor) x 53.120 kg CO2-e per thousand cubic feet natural gas (US EIA emissions factor) * 0.001 (kg of CO2 to tonnes of CO2) = 698 million tonnes of CO2.

Tanami Gas Pipeline

Tanami Gas Pipeline’s owners, Australian Gas Infrastructure Group, reports the pipeline will have capacity to transport 13 TJ of natural gas per day. Therefore, the emissions enabled by this project are estimated to be: 13 TJ per day x 365 days in a year x 40 years x 50% (assumed capacity factor) x 51.8 kg CO2-e per GJ of natural gas combusted (NGER Technical Guidelines 2017-18) x 0.001 (kg of CO2 to tonnes of CO2) = 4.9 million tonnes of CO2.

 

LNG terminals

Assumed a 75% average capacity factor across a 30-year economic lifetime for LNG trains and terminals, unless stated otherwise.

Corpus Christi LNG

According to Cheniere Energy, the owner of Corpus Christi LNG, “the liquefaction project is being designed for three trains with expected aggregate nominal production capacity of up to 13.5 million tonnes per annum (mtpa) of LNG.” Therefore, the emissions enabled by this project are estimated to be: 13.5 million tonnes per annum of LNG x 30 years x 75% (assumed capacity factor) x 48.028 unit conversion (million tonnes of LNG to billion cubic feet of gas) x 1,000,000 (billion cubic feet of gas to thousand cubic feet of gas) x 53.12 kg CO2-e per thousand cubic feet natural gas (US EIA emissions factor) x 0.001 (kg CO2 to tonnes of CO2) = 775 million tonnes of CO2.

Freeport LNG Train 2

Freeport LNG Train 2 would have capacity to liquefy up to 4.4 million tonnes of gas each year. Therefore, the emissions enabled by this project are estimated to be: 4.4 million tonnes per annum of LNG x 30 years x 75% (assumed capacity factor) x 48.028 unit conversion (million tonnes of LNG to billion cubic feet of gas) x 53.12 kg CO2-e per thousand cubic feet natural gas (US EIA emissions factor) x 0.001 (kg CO2 to tonnes of CO2) = 252.6 million tonnes of CO2.

Pluto LNG Train 2

Woodside reports Pluto LNG Train 2 would liquefy up to 5 million tonnes per annum of gas. Therefore, the emissions enabled by this project are estimated to be: 5 million tonnes per annum of LNG x 30 years x 75% (assumed capacity factor) x 1.36 million tonnes of LNG to billion cubic metres of gas (BP conversion factor) x 10^9 (billion cubic metres of gas to cubic metres of gas) x 2.03574 kg CO2-e per cubic metre of gas (NGER Technical Guidelines 2017-18) x 0.001 (kg CO2 to tonnes of CO2) = 311.5 million tonnes of CO2.

Note: According to Woodside, Pluto LNG Train 2 “would provide a clear pathway to the low-cost development of the Scarborough resources”. In other words, Woodside plans to use Pluto LNG Train 2 to process gas from its proposed Scarborough gas fields. According to Woodside’s own figures, combined Scope 1 and 3 lifetime emissions from the Scarborough gas fields would be 878 Mt of CO2-e, far greater than our estimate for Pluto Train 2. Further, both Scarborough and Pluto LNG Train 2 are part of Woodside’s Burrup Hub ‘vision’. According to Woodside’s own figures, Scope 1, 2 and 3 lifetime emissions from Burrup Hub projects could be up to 6.88 Gt CO2-e, nearly 13 times Australia’s total greenhouse gas emissions for calendar year 2019. This includes up to 1,615 Mt CO2 from the ‘Browse to North West Shelf’ project, 4,394 Mt CO2 from the ‘North West Shelf project extension’ and 878 Mt CO2 from the Scarborough gas fields.

Sabine Pass LNG terminal

Once all six components (‘trains’) of the project are fully constructed, Sabine Pass LNG would have capacity to liquefy 27 million tonnes per annum (mtpa) of gas. It was assumed that the facility would actually 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.

Ichthys LNG Project

The Terminal is planned to reach a nameplate capacity of 8.9 mtpa LNG and 1.6 mtpa LPG and it was assumed that this facility would liquefy approximately 75% of this capacity, on average, over its 40-year lifetime. This amounts to 267 million tonnes (mt) of LNG and 48 mt of LPG over the lifetime of the project. Based on information sourced from Karoon Energy, one tonne of LNG equals 8.9055 barrels of oil equivalent (boe) and one tonne of LPG equals 8.1876 boe, resulting in 2,377.8 million boe (mmboe) LNG and 393 mmboe LPG over the lifetime of the project. The same source supplies a conversion factor of 1 PJ = 171,937 boe. Therefore, 2,377.8 mmboe LNG is equivalent to 13,829 PJ of LNG, whilst 393 mmboe LPG is equivalent to 2,286 PJ of LPG, over the lifetime of the project. The Australian Government Department of Environment and Energy supplies an emissions factor of 51.53 kg CO2-e/GJ of LNG and 60.60 kg CO2-e/GJ of LPG, resulting in the project processing enough gas to emit 851.14 mt CO2-e over its lifetime.

In addition to the emissions estimate above and according to Ichthys, the project will generate emissions due to “reservoir CO2 and combustion CO2 emitted from the offshore and onshore processing facilities”. In this regard, Ichthys states that “the Ichthys Project is expected to emit approximately 280 Mt of CO2 over its 40-year lifetime.” Total: 1.13 billion tonnes of CO2.

 

Oil and gas drilling

Johan Sverdrup oil field

Gross 2P reserves at Johan Sverdrup were 2,279 MMBoe (515 MMBoe net 2P reserves ÷ 22.6% Lundin Petroleum working interest). 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 were 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.

Medco North Sumatra Block A PSC

According to Medco Energi: “[Block A Aceh] Phase I will monetize 237 TBTU of gas and 5.17 MMBO of condensate for the domestic market” and also “Phase II and III development of gas discoveries with resources of > 5TCF, enough to generate 1.5GW to support Sumatra electricity demand growth”

Using the IEA Unit Converter, the 237 trillion British thermal units (TBTU) of gas from Phase 1 was converted to 250,048,237 gigajoules (GJ). Using the Karoon Energy unit converter, 5.17 million barrels of oil (MMBO) condensate was converted to 29.469 billion cubic feet (BCF) gas-equivalent (1 boe = 5,700 Cubic Feet Gas), which was then converted to 32.12 PJ (1 BCF natural gas = 1.09 PJ) or 32,120,000 GJ. Using the same converter, the 5 TCF (5000 BCF) gas from phases 2 and 3 was converted to 5,450 PJ or 5,450,000,000 GJ. Therefore, total estimated gas development represents 5,732,168,237 GJ gas.

One GJ of natural gas releases 51.53 kg CO2-e when combusted. Therefore, Block A Aceh was estimated to facilitate emissions of approximately 5,732,168,237 x 51.53 kg of CO2. Total: 295 million tonnes of CO2.

Senoro gas field phase 2

Medco reported 329.7 billion cubic feet (bcf) of 2P gas reserves in 2018. Given Medco owns 30% of Senoro and reports reserves in net terms, the overall reserves at Senoro are 329.7 / 30% = 1099 bcf gas (this is consistent with Medco’s previous reporting that ‘gross proved reserves’ at Senoro are 1.4 trillion cubic feet of gas). Senoro Phase 2 is expected to increase production from 310 to 410 million standard cubic feet per day (mmscfd) of gas. Therefore it was assumed the proportion of reserves attributable to Phase 2 was at least (140/450 =) 31%. Medco reports 55 mmscfd of 310 mmscfd (18%) of gas production is bought by fertilizer manufacturers. Therefore it was assumed only 82% of gas is intended for combustion. Therefore, the emissions enabled by this project are estimated to be: 1099 bcf gas x 31% (assumed proportion of gas attributable to Phase 2) x 82% (assumed proportion of gas for combustion) x 1000,000 (billion to thousand cubic feet of gas) x 53.12 kg CO2-e per thousand cubic feet natural gas (US EIA emissions factor) x 0.001 (kg CO2 to tonnes of CO2) = 15 million tonnes of CO2.

Cambo oil and gas fields

Siccar Point Energy stated the Cambo oil and gas field “contains over 800 million barrels of oil … Phase 1 will target c.170mmBOE [million barrels of oil-equivalent] of reserves.” The 170 mmboe reserve estimate was split 50:50 between oil and gas outputs as no public information was found on the estimated reserves by product. Therefore, the emissions from the gas portion of the field are estimated to be:

Gas portion: 170 (mmBOE reserves) x 50% (gas portion) x 0.17 mmBOE to billion cubic metres of gas (BP conversion factor) x 2.031 kg CO2-e per cubic metre of natural gas (UK Government greenhouse gas conversion factors) x 0.001 (kg CO2 to tonnes of CO2)

Oil portion: 170 (mmBOE reserves) x 50% (oil porton) x 1,000,000 (mmBOE to BOE) x 0.43 metric tonnes CO2 per BOE (US EPA)

Gas portion + oil porton = 65.9 million tonnes of CO2.

Tolmount gas field

According to Premier Oil, the Tolmount gas field would produce around 500 billion cubic feet (bcf) of gas. Therefore, the emissions from the gas portion of the field are estimated to be: 500 bcf gas x 10^9 (billion cubic feet of gas to cubic feet of gas) x 0.028 cubic feet of gas to cubic metres of gas (BP conversion factor) x 2.031 kg CO2-e per cubic metre of natural gas (UK Government greenhouse gas conversion factors) x 0.001 (kg of CO2 to tonnes of CO2) = 28.4 million tonnes of CO2.

Project Atlas and Roma North gas fields

In October 2018, Senex Energy announced it received $150 million from ANZ to “fund expansionary capital expenditure across its Surat Basin and Cooper Basin oil and gas acreage.” On the day this deal was closed, Senex announced it had made a ‘final investment decision’ to develop the Project Atlas and Roma North gas fields in the Surat Basin. 3 months before the deal closed, Senex Energy identified 300 PJ in undeveloped 2P reserves at its Project Atlas and Roma North gas fields. Senex reports that its 2P reserves consist of 7% oil and 93% gas across all projects. As oil represents a minor portion of total production and for simplicity, all reserves were treated as natural gas, which made no material difference to the emissions estimates. Therefore, the emissions from the gas portion of the field are estimated to be: 300 PJ gas x 1,000,000 PJ gas to GJ gas x 51.8 kg CO2-e/GJ of gas (NGER Technical Guidelines 2017-18) x 0.001 (kg of CO2 to tonnes of CO2) = 15.5 million tonnes of CO2.

Sole Gas Field

The Sole Gas Field is assessed to contain proved and probable reserves of 249 PJ of sales gas. One gigajoule (GJ) of natural gas releases 51.53 kg CO2-e when combusted. Therefore, the Sole Gas Field facilitates emissions of approximately 249 x 10^6 x 51.53 kg of CO2. Total: 12.8 million tonnes of CO2.

 

Gas-fired power plants

The average capacity factor for US-based combined cycle gas turbines (CCGT) is approximately 50% (2010-2019) according to the US Energy Information Administration. Given that the majority of new or expanded gas-fired power stations funded by the big four banks were based in the US, we assumed a 50% average capacity factor across a 30-year economic lifetime for all CCGT power stations. Assumed emissions intensity of 0.36 t CO2/MWh – the lowest emissions intensity for this type of gas technology.

Lackawanna emissions = 1480 (MW capacity) x 8760 (hours in the year) x 30 (years) x 0.5 (capacity factor) x 0.36 (t CO2/MWh emissions intensity) = 70,009,920 t CO2. Total: 70 million tonnes of CO2.

AES Corporation portfolio emissions = 1300 (MW capacity) x 8760 (hours in the year) x 30 (years) x 0.5 (capacity factor) x 0.36 (t CO2/MWh emissions intensity) = 61,495,200 t CO2. Total: 61.5 million tonnes of CO2.

Jackson Generation CCGT Plant emissions = 1200 (MW capacity) x 8760 (hours in the year) x 30 (years) x 0.5 (capacity factor) x 0.36 (t CO2/MWh emissions intensity) = 56,764,800 tCO2. Total: 56.8 million tonnes of CO2.

South Field Energy Gas-Fired Power Plant emissions = 1182 (MW capacity) x 8760 (hours in the year) x 30 (years) x 0.5 (capacity factor) x 0.36 (t CO2/MWh emissions intensity) = 55,913,328 tCO2. Total: 55.9 million tonnes of CO2.

Cricket Valley emissions = 1100 (MW capacity) x 8760 (hours in the year) x 30 (years) x 0.5 (capacity factor) x 0.36 (t CO2/MWh emissions intensity) = 52,034,400 t CO2. Total: 52.0 million tonnes of CO2.

CPV Fairview emissions = 1050 (MW capacity) x 8760 (hours in the year) x 30 (years) x 0.5 (capacity factor) x 0.36 (t CO2/MWh emissions intensity) = 49,669,200 t CO2Total: 49.7 million tonnes of CO2.

Hickory Run emissions = 1000 (MW capacity) x 8760 (hours in the year) x 30 (years) x 0.5 (capacity factor) x 0.36 (t CO2/MWh emissions intensity) = 47,304,000 t CO2. Total: 47.3 million tonnes of CO2.

Westmoreland emissions = 925 (MW capacity) x 8760 (hours in the year) x 30 (years) x 0.5 (capacity factor) x 0.36 (t CO2/MWh emissions intensity) = 43,756,200 kg CO2. Total: 43.7 million tonnes of CO2.

Jawa 2 emissions = 880 (MW capacity) x 8760 (hours in the year) x 30 (years) x 0.5 (capacity factor) x 0.36 (t CO2/MWh emissions intensity) = 41,627,520 t CO2Total: 41.6 million tonnes of CO2.

Towantic emissions = 785 (MW capacity) x 8760 (hours in the year) x 30 (years) x 0.5 (capacity factor) x 0.36 (t CO2/MWh emissions intensity) = 37,133,640 kg CO2. Total: 37.1 million tonnes of CO2.

Tambak Lorok Combined Cycle Power Plant Block 3 emissions = 780 (MW capacity) x 8760 (hours in the year) x 30 (years) x 0.5 (capacity factor) x 0.36 (t CO2/MWh emissions intensity) = 36,897,120 t CO2Total: 36.9 million tonnes of CO2.

Black Point emissions = 550 (MW capacity) x 8760 (hours in the year) x 30 (years) x 0.5 (capacity factor) x 0.36 (t CO2/MWh emissions intensity) = 26,017,200 t CO2Total: 26.0 million tonnes of CO2.

Muara Karang emissions = 500 (MW capacity) x 8760 (hours in the year) x 30 (years) x 0.5 (capacity factor) x 0.36 (t CO2/MWh emissions intensity) = 23,652,000 t CO2Total: 23.7 million tonnes of CO2.