By JR on Monday, May 02, 2016
Greenies trying to stop oil exploration in the Great Australian Bight
It's Greenies doing what Greenies do and compromise is unknown to them. But if drilling is to be banned there, drilling is impermissible anywhere. For most of the length of the bight (over 1,000 kilometers), the land adjoining the Bight is basically desert. There's nothing there. So virtually no people to endanger in any way. The land concerned is not called the Nullarbor plain for nothing. Most people seem to think it is an Aboriginal name but it is in fact Latin -- meaning "No trees". That's how barren it is.
And the minimal runoff from the land means that there is not much to encourage life in the seas there either. There will of course be some marine life feeding off marine algae and the like but there is no reason to think any of it is unique, let alone importantly unique. All deserts have creatures in them at low densities so the Greenies can claim that creatures on land and sea there are "endangered" but that is just a reflex. Nobody that I know has shown that there are in fact unique creatures there, let along importantly unique ones.
So if exploration even in a desert area is impermissible, where is it permisible? To Greenies NO oil exploration or new production is permissible but less obsessed people do not have to agree
When executives of the global oil giant BP fronted the company’s general meeting in London this month they knew they faced plenty of upset shareholders.
The mop-up from the catastrophic Deepwater Horizon oil spill in the Gulf of Mexico had just eaten up another $US20 billion ($25bn) of shareholder funds in a major legal settlement, and collapsing world oil prices had smashed the company’s full year profit, causing an investor revolt over an executive bonus scheme that seemed completely at odds with the financial performance.
But when the most senior BP executives faced investors, the level of hostility towards an oil exploration project 16,000km away took them by surprise.
“Gosh, this investment in Australia is not very popular today,” BP chief executive Bob Dudley said. But he couldn’t see why all the fuss. “The country had an area and invited people to participate in a bid,’’ Dudley said. “We do this around the world in exploration; it is not a particularly unusual or harsh area.”
BP’s plans, along with rival oil giants, to drill for oil in the Great Australian Bight is highly contentious, but the potential rewards — up to 1.9 billion barrels of oil worth up to $110bn (at today’s depressed prices) are great. But so are the risks. It could be the next Bass Strait, enthusiastic backers claim. Or it could be the next Deepwater Horizon disaster, passionate opponents warn.
At the general meeting, BP chairman Carl-Henric Svanberg emphasised that the company was not trying to pressure governments. “To run Bight or not run Bight is not a decision for BP,” he said. “It is a decision for Australia.”
Now, as BP plans a $1bn exploration program and a $US750 million drilling rig nears completion in a South Korean shipbuilding yard, the federal Senate is taking a very keen interest.
Today, a Senate inquiry holds its first public hearings, hoping to determine how the contentious drilling permits were issued and administered and whether the great risks in drilling in such a hazardous environment as the Great Australian Bight were properly assessed.
The Bight drilling program is at a very early stage but is vigorously touted as being the next Bass Strait: an area containing billions of dollars worth of oil reserves that could transform Australia from a net importer of crude oil into an exporter.
For risk-hungry explorers it represents one of the world’s great unexplored deepwater oil regions, similar in potential to that of the Niger and Mississippi deltas. Major oil companies, led by BP, Statoil, Chevron and Santos, are lining up for a piece of the action.
But the calamitous events six years ago in the Gulf of Mexico, when an explosion on BP’s Deepwater Horizon well killed 11 workers, spewed 4.9 million barrels of oil into the ocean, killing countless wildlife, ruining fisheries and decimating local communities, mean that the Great Australian Bight drilling plans have put environmental groups on high alert.
Leading environmental groups have spent many months war gaming a major confrontation with BP over its Great Australian Bight plans. The campaign dovetails into a broader agenda to limit fossil fuel developments, most particularly in new frontier and potentially difficult areas like Alaska and deepwater targets such as the Great Australian Bight.
BP says in its submission to the federal Senate inquiry, it wants the matter concluded quickly “given the Senate has taken the unusual step of specifically naming our company and its proposed investments in Australia”.
Global oil and gas production will keep rising over the next two decades, it says, to help meet world demand for primary energy. It points out that Australia has produced oil since the 1960s with a history of drilling in Commonwealth Marine Areas, including the Great Australian Bight. And Australia is a net oil importer, as consumption keeps rising despite domestic oil production steadily falling. The whole nation would benefit from the discovery of a new oil or gas region, and not just through tax and other macroeconomic benefits, BP says.
“Wood Mackenzie, an independent oil and gas analytical firm, estimates the potential resource in the Great Australian Bight to be 1900mmboe (million barrels of oil equivalent) of oil — more than 20 times the entire Australian production in 2014,” BP’s Senate submission says. “A new oilfield development could make a material difference to the balance of payments — and to tax revenues.”
Ironically, BP was granted special tax arrangements over its Great Australian Bight exploration program and can deduct 150 per cent of costs from its royalty obligations. But in response to publicity about the tax arrangements, the company said it “considers transparency an important requirement to increasing trust in tax systems around the world”. The company told an earlier Senate hearing into tax avoidance that BP Australia’s effective tax rate had averaged 28.4 per cent over the past five years with income tax payments alone exceeding $2.2bn.
Given the company’s recent history in the Gulf of Mexico, however, it is not tax matters that concentrate the minds of environmental groups.
The Great Australian Bight is an “extraordinary ocean and coastal environment of global conservation significance”, the Wilderness Society says in its Senate inquiry submission. “It is remote, wild and pristine, with more local marine life diversity than the Great Barrier Reef.
“While scientists are still trying to understand the diverse ecological values of the Bight, we know already that it is a major haven for whales, including the threatened southern right whale, and home to other significant marine wildlife such as the Australian sea lion, giant cuttlefish, dolphins, great white sharks and a vast array of seabirds. All of this life and immense natural beauty supports thriving fishing and tourism industries and a uniquely Australian way of life for the many coastal communities of the Bight.”
Both sides are haunted by the Deepwater Horizon disaster. According to BP, if the Bight was hit by a worst-case scenario — a loss of control of the well resulting in uncontrolled flow of petroleum into the ocean, “oil would take several weeks to reach shore and the direction in which it could drift varies due to seasonal differences in current and wind direction”.
But the Wilderness Society says an oil spill from a deep-sea well blowout could close fisheries in the Bight, Bass Strait and even the Tasman Sea while even a low-flow oil spill could affect all of southern Australia’s coast, from Western Australia right across to Victoria through Bass Strait and around Tasmania.
BP aims to begin exploratory drilling in October and has a $US750m harsh environment, semi-submersible oil drilling rig nearly completed in South Korea and ready to ship to the Bight.
The Senate has a fortnight to investigate but given the looming federal election, it is feasible the Senate may not finish the task. The inquiry terms of reference call for an assessment of the potential environmental, social and economic impacts of BP’s plans, including the risks of something going wrong.
Submissions to the inquiry include local councils and fishing groups. The city of Victor Harbor thinks the risk of an oil spill within the Bight may be low but the consequences potentially catastrophic. It points out that the Bight is a pristine environment and a critical sanctuary for many threatened species that support two significant industries: fishing and tourism.
The South Australian Oyster Growers Association says it does not want to block potentially beneficial oil projects for the Eyre Peninsula and South Australia. But drilling for oil does pose a “significant risk to the currently pristine unpolluted environment and the image of this”.
“These are the features that our reputation and credentials in the marketplace are based upon, and have taken decades to establish and promote,” the association says.
Then there’s damning evidence by the world’s foremost engineering disaster expert, Bob Bea. Bea, nicknamed the “Master of Disaster”, criticises BP, saying there is not “sufficient information to determine if BP has properly assessed the risks”.
“The information that has been presented indicates that BP has apparently integrated the key aspects of what has been learned about drilling in high-risk environments,” Bea says. “However, the information is not available to determine if BP has properly assessed and managed the risks associated with an uncontrolled loss of well control.”
Bea, professor emeritus at the Centre for Catastrophic Risk Management, University of California-Berkeley, has worked for more than 55 years on offshore oil and gas industry operations in 72 countries.
The American Society of Mechanical Engineers journal says: “If Robert Bea turns up on your project, it’s not a good sign. Either you’re in the middle of a major disaster or someone is worried enough to send out the nation’s foremost forensic engineer to take a look.”
The Wilderness Society says BP has admitted containment booms and skimmers will not work in the Bight and that the area is “right on the edge of” the reach of helicopters. But of major concern is the level of secrecy imposed by the government-sanctioned approving authority, which has all of the environmental powers of the federal government over the offshore exploration area including endangered and listed marine species.
The National Offshore Petroleum Safety and Environmental Management Authority is an independent statutory authority that is the national regulator for health and safety, well integrity and environmental management for offshore oil and gas activities in Australian waters.
Green groups demand that BP release its environmental plan and that the federal government assemble an independent expert panel to look at oil drilling in the Bight. They claim NOPSEMA does not have necessary environmental expertise. “While we know the Bight is a pristine marine environment with at least 36 species of whales and dolphins, there is still much we don’t know as the GAB Research Project, which BP has partly funded, won’t report until mid-2017,” a Wilderness Society spokesman says.
The Wilderness Society is demanding a transparent process. “Instead, we have an Environment Minister who has handed off his responsibility to protect the environment to a poorly known regulator; one running a highly flawed and opaque process that fails to ensure the protection of our environment or properly assess the cumulative impacts of all potential oil development in the Great Australian Bight.”
BP is no doubt banking on the Senate inquiry falling victim to the electoral cycle. It wants to start drilling in October and the federal government has delegated the decision to its regulator.
In its own Senate submission, NOPSEMA says a final decision on the BP plans for the Bight is yet to be made. It notes that two statutory independent reviews found NOPSEMA to be a “robust, rigorous and competent regulator”.