The Australasian Centre for Corporate Responsibility (ACCR) calls on investors in Santos to intervene on its Narrabri gas project.
The proposed Narrabri fracking project will imperil Australia’s commitments to the Paris Agreement and its high cost of production will likely see it stranded before the reserves are exhausted.
According to Pegasus Economics, this project is relatively costly, with an estimated production cost of $7.40/GJ, ranking it 41 out of 51 actual and undeveloped gas projects assessed by the Australian Energy Market Operator (AEMO).
Commenting on the project, Director of Climate and Environment, Dan Gocher said:
“In 2018-19, Santos’ operational emissions (scope 1+2) were the equivalent of 1.2% of Australia’s total emissions. This project will increase that figure to 1.4% of Australia’s total emissions, which does not take into account Scope 3 emissions, that are 4-5 times larger. This project will significantly increase both Santos’ emissions and Australia’s annual emissions.
“Santos has failed to demonstrate that it is willing or able to effectively manage fugitive methane emissions, which are more potent than carbon dioxide. Over a 20 year period, the global warming potential of methane is 85 times greater than carbon dioxide.
“Climate-aware investors now have a role to play in ensuring shareholders’ money is not spent on activities that go against the interests of local communities and a safe climate.
“In 2019, Carbon Tracker found 40-50% of Santos’ capital expenditure to 2030 was outside a carbon budget consistent with a pathway well below 2 degrees - including the Narrabri gas project. This suggests that high cost reserves like Narrabri are likely to be stranded before they’re exhausted.
“In July, Santos wrote down another $1.1 billion in value from its Australian oil and gas assets. This project is throwing good money after bad. Santos must see the writing on the wall and abandon the Narrabri project before burning any more shareholder capital.
“Given the strong signal investors gave Santos in April this year, when 43% of its shareholders supported calls for Paris-aligned emissions targets, the onus now falls on to climate-aware investors to amplify the pressure on Santos to halt these plans.”