Shareholders pressure Woodside over carbon emissions and Scarborough gas project
Directors of fossil fuel producer Woodside Petroleum have been peppered with questions about the company’s commitment to reducing carbon emissions and its controversial Scarborough gas project during a meeting of shareholders in Perth.
The company is due to make a final decision on whether to commit to Scarborough in the second half of the year but is also in the process of looking for a new chief executive to replace Peter Coleman – raising concerns among shareholders about the process for approving the project.
Coleman is retiring in June after 10 years as CEO. In February, the company was forced to backpedal after he told website Energy News Bulletin that coup leaders in Myanmar, where Woodside was exploring for gas, felt “they weren’t being heard” and “were pushed up against a difficult decision point” before seizing power in a bloody coup that has so far cost more than 700 lives.
Chair Richard Goyder told Thursday’s meeting one of Woodside’s large shareholders told him it was not happy with the company’s greenhouse gas targets, which exclude the “scope 3” emissions produced by its customers, and would as a result vote against the reelection of a director.
The company says it is aiming for net zero emissions by 2050 and will have more to say about scope 3 emissions next year.
“It’s up to shareholders if they want to divest at any time,” Goyder said.
He said the company was committed to the Paris agreement, which aims to limit global heating to less than 1.5C and rejected a suggestion from Julien Vincent, the lead campaigner for shareholder activist group Market Forces, that Woodside’s internal projections were based on heating of 3c.
“It’s kind of like saying you’re a Dockers fan and then getting a membership out for the Eagles,” Vincent told the meeting.
Goyder said the Paris agreement contained a number of different scenarios. “The majority of scenarios see an increase in gas,” he said.
In a report released this month, environmental group the Institute for Energy Economics and Financial Analysis said the Scarborough project, which is 73.5% owned by Woodside and 26.5% by BHP, was high cost compared to competition in Qatar, and vulnerable to potential carbon tariffs under consideration by Europe and the US.
Goyder said a new CEO would be appointed before the final decision on whether to invest in the project was made.
“That will give an incoming CEO time to look at the proposal, because they are going to be living with it for a long time, but it will not slow down the process,” he said.
He played down differences between forecasts made by the company’s chief economist and what a shareholder said were more optimistic projections made by Coleman.
“Both the chief economist and Peter will be wrong,” he said.
“The Woodside board takes into account a range of forecasts.
“Scarborough is a robust project, under most circumstances.”
Coleman tried to distinguish Scarborough from the James Price Point project, which was also controversial because of its potential effect on the environment. Woodside abandoned the project in 2013, saying it was not economically viable.
“Scarborough is completely different,” Coleman said.