Australia’s offshore oil and gas regulator is stepping on the gas ahead of the election, with two project approvals in as many weeks. Zacharias Szumer reports.
The Albanese government’s fossil fuel approval tally has risen to 18 after Australia’s offshore oil and gas regulator approved Santos’ controversial Barossa project.
The project, about 285km north-northwest off the coast of Darwin, is expected to come online in a matter of months, after the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) approved the gas project on Tuesday.
In February, Santos told investors that the project, which had been delayed by legal opposition from environmental groups, was on track to start production in the third quarter of 2025.The approval was met by condemnation by environmental groups such as the Australian Conservation Foundation (ACF), the Climate Council and the Environment Centre NT.
ACF’s Gavan McFadzean said Barossa is “Australia’s dirtiest gas project and it should never have been given the green light.”
Climate Council analyst Ben McLeod told the ABC that approval was “completely at odds” with Australia’s efforts to reduce emissions. Barossa project documents show that the $5.6B project would product around 380 million tonnes of C02 during its 25-year life span.
Labor distancing itself
A Labor campaign spokesperson said the Albanese government had no hand in the approval of Barossa.
“Technical regulatory decisions for offshore resources projects in Commonwealth waters are a matter for the independent expert regulator NOPSEMA,” the spokesperson told the ABC, adding that the project would still be subject to “the Albanese Government’s strengthened safeguard mechanism”.
However, close watchers of Australian fossil fuel developments, such as the Australia Institute’s Roderick Campbell, argue that Barossa is
the project that Labor bent over backwards to support.
Roderick pointed to legislation passed by Labor in November 2023 that the institute has argued was essential to the Barossa project going ahead. Because of the unusually high carbon dioxide content of Barossa, Santos would be unable to comply with safeguard mechanism obligations unless it offsets or captures CO2, the institute has argued.
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In late 2023, the institute’s Stephen Long wrote:
“There’s no way, amid concerns about catastrophic global warming, that Santos could gain investor and financier support for the project absent a claim that it will stop the emissions from reaching the atmosphere”.
Labor’s ‘Environment Protection (Sea Dumping) Amendment (Using New Technologies to Fight Climate Change)‘ essentially created a “regulatory system for carbon dioxide exports, allowing CO2 to be transported into international waters and pumped under the seabed in what are known as carbon capture and storage (CCS) projects.”
Without that law, Santos’s $5.8B Barossa gas project could not go ahead.
Will Barossa use CCS?
It’s still unclear whether the company will seek to rely on CCS to reduce emissions at Barossa. “Carbon capture and storage has been rejected by Santos because it is not an available option for emissions reduction,” the company said in the final approval documents.
This is perhaps a slightly misleading phrasing. The company hasn’t outright rejected CCS as an option.
It’s simply saying that because planned CCS projects like Bayu Undan haven’t yet been approved or finalised, it can’t yet say whether it will seek to reduce emissions from Barossa by pumping carbon into such depleted underwater reservoirs.
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Environmental groups have suggested that Santos’ exclusion of CCS as a source of emissions reduction contradicts previous statements made by Santos.
Responding to these claims in the Barossa environmental plan, Santos said it had “made clear that Barossa would be a potential customer of the proposed Bayu-Undan CCS project if the project were to proceed.”
Kevin Morrison and John Robert from the Institute of Energy Economics and Financial Analysis (IEEFA) wrote in late 2024 that Santos’ ability to make Barossa a net-zero gas production facility was “contingent on burying some of the CO2 it produces at Bayu-Undan”.
However, with Bayu Undan’s future still unclear, Santos will now need to rely on carbon offsets to meet its obligations under the safeguard mechanism.
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Santos said in the Barossa approval documents that it had already “entered into forward contracts for the purchase of 2.5 million Australian Carbon Credit Units (ACCUs) at fixed prices to be delivered and paid between December 2023 and January 2027”.
Australia’s carbon offset system has been criticised by some experts as being riddled with fraud and miscounting, claims the Albanese government has rejected.
Taking care of approvals
Last week, MWM reported that the Albanese government had approved or extended at least 17 fossil fuel projects and two carbon capture projects since taking office.
MWM’s tally only includes extractive projects, not supporting infrastructure such as gas pipelines or railways for coal mines.
It also only counts federal approvals, not those from state and territory governments.
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Zacharias Szumer is a freelance writer from Melbourne. In addition to Michael West Media, he has written for The Monthly, Overland, Jacobin, The Quietus, The South China Morning Post and other outlets.
He was also responsible for our War Power Reforms series.