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Scientists warn backing fossil fuel projects like Woodside's Scarborough will make meeting climate targets more difficult

The current energy crisis has laid bare the world's dependence on fossil fuels.  (ABC News: Michael Barnett)

As the Australian government grapples with a short-term fix to the energy crisis, climate scientists are warning against long-term fossil fuel projects that will exacerbate the climate crisis.

The Albanese government has thrown its support behind Woodside Energy's $16 billion Scarborough gas project, which cleared major state and Commonwealth regulatory hurdles before the federal election.

Most of the liquefied natural gas (LNG), expected to be ready for export by 2026, will go to Woodside customers in China, Japan and South Korea. 

But amid the energy crisis facing parts of Australia, the company has also flagged the potential to ship LNG to the eastern states in the future.

"It's a few years away from being helpful in the current crisis," Woodside CEO Meg O'Neill told 7.30.

"But certainly, if we can get the right sort of LNG importing facilities up and running, we would absolutely be interested in taking Scarborough LNG across to the east coast."

Ms O'Neill has also flagged kick-starting undeveloped gas fields.

Woodside's Scarborough gas project includes expanding the current Pluto facility on the Burrup Peninsula. (Supplied: Woodside)

"One of the things that worries me is that in the world's rush to address the climate crisis, which is a serious crisis, and does need to be addressed, is that we risk creating an energy crisis.

"We need to make sure that as we think about transitioning from the energy system we have today to the one that we want, that we do it in an orderly manner.

"And that's going to involve continuing to use the fuels that we use today, because we can't just walk away from them."

But Bill Hare, the founder and CEO of the global research group Climate Analytics, said the development of any new fossil fuel projects including Scarborough was inconsistent with the Paris Agreement to limit global temperature rises to 1.5 degrees Celsius.

"What I'm seeing now is the gas industry is basically using the Russian-induced energy crisis as a justification for essentially busting the Paris Agreement," he said.

"And it's one of mounting concern for all of those in the energy and climate business looking at how to meet the Paris Agreement."

Net zero ambitions

A year ago, the International Energy Agency (IEA) warned immediate action was needed to meet climate goals by 2050, including ending investments in new coal mines, oil and gas wells.

Woodside Energy forecasts its Scarborough development will release 878 million tonnes of carbon dioxide equivalent over its lifetime.

But Climate Analytics estimates the entire project would emit almost 1.4 billion tonnes of greenhouse gases over its lifetime – three times Australia's current annual emissions.

Mr Hare said the project presented a challenge for the new Labor government, which had committed to reducing Australia's emissions by 43 per cent by 2030.

"The Labor government is going to struggle to meet the 43 per cent target as long as these kinds of projects are going ahead," Mr Hare said.

But Resources Minister Madeleine King said Woodside's Scarborough project fit with Labor's climate targets.

Madeleine King says Woodside's Scarborough project fits with Labor's ambitions for net zero by 2050. (ABC News: Andrew O'Connor)

"[Woodside] have an ambition themselves for net zero emissions by 2050, just like the government does," she told 7.30.

"Woodside are prepared and have guaranteed to the WA state government to implement the appropriate offsets for the development of the Scarborough gas field.

"Because it is a low carbon field, it is the kind of field we should be encouraging development of, so long as those offsets are there."

Part of Labor's plan to reduce emissions involves strengthening the safeguard mechanism, by forcing Australia's biggest polluters to keep their emissions below historic levels, known as the baseline.

Energy analyst Tony Wood said he believed Woodside's Scarborough development could be accommodated within this policy because its emissions will be included in the cap and will need to be accommodated.

Tony Wood says projects like Scarborough can go ahead and be accommodated within Labor's policy to reduce emissions.  (ABC News: Steve Keen)

"So given that the cap is fixed, and will be declining, that means by adding a project which is going to add to emissions, something else has got to give," he said.

"And it also means other companies who are contemplating new gas developments will have a very clear and I believe credible framework to make these investment decisions.

"It won't require the government to ban these projects or otherwise.

"Because two things will happen: International demand for LNG will fall away as other countries move towards net zero emissions, and that very policy that Labor is putting in will constrain emissions in Australia."

Beyond the Scarborough project

Woodside's climate plan aims to reduce emissions by 30 per cent by 2030 by using measures such as better technology, tree planting and investing in carbon offsets.

The company has no target for Scope 3 emissions – those created through the burning of fossil fuels by its customers.

Instead, it will spend $5 billion on low-carbon projects and investigating carbon capture and storage.

Meg O'Neill says the situation with Russia strengthens the case for undeveloped gas fields to be brought online. (ABC News: Robert Koenigluck)

"We're investing time and effort in things like hydrogen and ammonia, because those really will help our customers with their emissions challenge," Ms O'Neill said.

Emboldened by high prices, Woodside Energy is looking beyond Scarborough.

At last month's annual general meeting, Ms O'Neill said the energy crisis had strengthened the case for developing the Browse gas field – which is even bigger than Scarborough.

"We are in this position of financial strength at a time of significant volatility in global commodity markets including oil and gas, exacerbated by Russia's invasion of Ukraine," Ms O'Neill said in her AGM statement

"The likelihood that major energy customers will continue moving away from Russian energy sources also strengthens the case for other undeveloped gas fields, such as Browse, to be brought on-line."

Fossil fuel projects 'can't fix today's energy problems'

Alex Hillman, who worked as an engineer and lobbyist at Woodside for more than eight years and now works for the Australasian Centre for Corporate Responsibility (ACCR), said big new fossil fuel projects would not fix today's energy problems but would exacerbate the climate crisis.

"Energy exporters, like Woodside, are talking a lot about increasing their supply as customers look for alternatives to Russian energy," he said.

Alex Hillman is a former engineer at Woodside. (ABC News: Rhiannon Shine)

"Meanwhile, gas importers have realised that domestic renewable energy is cheaper, cleaner, faster to build and provides higher levels of energy security than LNG imports.

"Taking Browse for example, it's infeasible that Browse could produce LNG, or generate revenue, until the 2030s.

"By this time, countries will have had plenty of time to reduce their gas dependency, creating huge risk for this investment."

Resources Minister Madeleine King said the government would support developments that met environmental standards and approvals and aligned with the move towards net zero emissions.

"If that includes Browse, and Browse stacks up environmentally and economically, then I can see no reason why not to support it," she said.

Market for gas 'is going to collapse'

Prime Minister Anthony Albanese told ABC Radio Perth last week gas would continue to play a role domestically as the country transitioned to net zero.

"The idea that you have a simple stop position [on fossil fuel projects] is one that does not reflect the needs of either our domestic economy or the global economy," he told ABC Radio Perth.

Woodside sees its LNG as a solution to both energy security and the climate crisis.

"If we look at nations like China, Japan, Korea, where much of our product is sold today, all of those nations still have heavy dependence on coal," Ms O'Neill said.

"So gas is going to be part of their energy transition and meets both of those needs of being a secure source of energy, that is lower carbon than many alternatives."

But Professor of Sustainability at Curtin University Peter Newman said coal could be replaced by renewables.

Professor Peter Newman says the natural gas market will disappear in the long-term. (ABC News: Rhiannon Shine)

"The market for natural gas is up at the moment, very short-term. But in the mid to long-term, that market is going to collapse. It is going to disappear.

"You will have stranded assets.

"It is not acceptable to claim that somehow that market will go on and on over decades. It is not going to."

Curtin University energy economist Roberto Aguilera said the high price of fossil fuels should provide stimulation to renewable energy development.

While renewables are a fast-growing sector, they're not yet ready to take the market share of gas and coal. (ABC North Queensland: Tom Major)

"But we have to remember that around the world, fossil fuels still accounted for around 80 per cent of energy consumption," he said. 

"So despite the very fast growth of renewables, this is coming from a fairly low base.

"They're not ready today to take the market share of gas and coal. That's a longer-term prospect that could take years, or in a worst-case scenario, several decades before they account for a majority of the total energy mix.

"The gas and LNG industry has invested hundreds of billions of dollars in this country over the past decade and it is difficult to see them walking away from these projects.

"The more likely outcome is for them to continue to invest in clean technologies, like carbon capture and storage, or hydrogen, or nature-based offsets like reforestation."

Watch this story on 7.30 tonight on ABC TV and ABC iview.

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