By Nick Toscano
Australian energy giant Woodside has paused two major clean energy projects it had been pursuing in the United States, in the latest sign of fossil fuel companies taking a step back from economically challenging green investments.
The move by Perth-based Woodside, the nation’s largest oil and gas producer, comes as US President Donald Trump returned to the White House this week and signed a slew of orders aimed at making it easier and cheaper to drill for fossil fuels while removing support for renewables and other lower-carbon technologies.
Woodside chief executive Meg O’Neill.
The new administration also kick-started the process of withdrawing the US from the Paris Agreement, under which nations pledge collective action to limit rising temperatures to as close as possible to 1.5 degrees, compared with pre-industrial levels, which scientists say is key to averting catastrophic global warming.
Woodside said on Wednesday it had made the “strategic decision” to delay taking a final investment decision on its H2OK project – a liquid hydrogen project in the US state of Oklahoma.
Woodside chief executive Meg O’Neill said the decision was made to enable the company to prioritise work on its lower-carbon ammonia project in Texas, and was “not particularly” related to Trump’s return to the presidency.
But she said Woodside would need to assess the impact of Trump’s pledge to suspend the disbursement of funds under the $567 billion Inflation Reduction Act, which had been offering generous tax credits for hydrogen developers.
“We need to review it,” O’Neill said.
Also on Wednesday, Woodside announced it had ended its partnership with Heliogen, a company backed by billionaire Bill Gates, which had been planning a demonstration facility for concentrated solar thermal energy technology in California. It had intended to use an array of mirrors to reflect sunlight to a single target on the top of a solar tower, enabling low-cost storage in the form of high-temperature thermal energy.
However, both parties had since decided not to proceed to construction, Woodside said.
“As can be the case with these technology investments, we’ve determined the technology is not going to be as cost-competitive as we had anticipated,” O’Neill said. “That’s why we’ve parked that opportunity.”
Woodside’s retreat from the two US projects continues a global trend of giant oil and gas companies slowing the speed and scale of their forays into renewable energy and alternative fuels.
In Australia and around the world, large resources companies have faced pressure from institutional investors paying closer attention to environmental, social and governance factors (known collectively as ESG issues), which have been pushing big emitters to reduce their carbon footprints and do more to diversify into industries that don’t release harmful greenhouse gases into the atmosphere.
But the oil and gas industry’s climate commitments have been slowing – and sometimes stalling – since 2022, when Russia’s invasion of Ukraine choked energy supplies, unleashed a global scramble for spare fossil fuels and boosted commodity prices to near-record highs.
While the pullback began well before the US elections, “Trump 2.0 will only accelerate the pivot”, MST Marquee energy analyst Saul Kavonic said.
“Peak ESG has passed, and every oil and gas company is walking back from their uneconomic green opportunity pipeline,” he said.
The pendulum had “swung too far in the first place”, Kavonic said, to the point that some companies had been pursuing “uneconomic and at times impossible” targets.
“There is little appetite for loss-leading, strategic or marginal green investments any more,” he said.
The news comes as ASX-listed Woodside, whose operations span Western Australia, eastern Australia, Africa and the Americas, posted its strongest-ever yearly oil and gas production figures during the 12 months to December 31. The result was boosted by the ramp-up of its Sangomar oil field in Senegal, the company said
Woodside has embarked on plans to expand in the US after buying an under-construction liquefied natural gas (LNG) export terminal in Louisiana last year. O’Neill said the company welcomed the Trump administration’s “recognition that energy is at the heart of a vibrant economy”.
Hours after his inauguration, Trump initiated plans to enable the fast-tracking of permits for fossil fuel projects, expanding oil and gas drilling, particularly in Alaska, and lifting the former administration’s restrictions on LNG exports.
However, investment bank UBS said Trump’s lifting of the ban would add risk for Woodside’s Louisiana LNG project.
“A range of partially permitted projects planned to be constructed ahead of Woodside’s Louisiana LNG now face a much clearer path to development,” UBS analyst Tom Allen said.
UBS expects the LNG market to be undersupplied this year, before balancing out in 2026 and flipping into oversupply by 2027 when a wave of new projects comes onstream in the US and Qatar.
Artem Abramov, the head of new energies research at global consultancy Rystad, said Trump’s policy direction of accelerating domestic oil and gas supply would have major implications for renewable energy and clean technology sectors.
He said the impact of the US withdrawal from the Paris Agreement was expected to be more significant than during his previous term as president, and might be felt across the globe.
“It could further strengthen support for anti-climate policies in Europe and other regions,” he said.
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