Albanese just extended a major fossil fuel project for 45 years. Here’s what it means

One of Australia’s biggest fossil fuel developments is set to continue operating for another 45 years after the Albanese government gave preliminary approval for a controversial extension plan for the giant North West Shelf project even as concerns about climate change intensify.

The Woodside Energy-led North West Shelf joint venture in Western Australia – a network of offshore gas-drilling facilities and the Karratha gas-processing plant on the Burrup Peninsula – has been producing liquefied natural gas (LNG) since the 1980s, but its approvals were due to expire in 2030.

The announcement came the same day it was revealed the United Nations intends to deny an Australian bid for ancient rock art in the Pilbara to be given World Heritage status, because of the impacts of Woodside’s “degrading acidic emissions” on the petroglyphs.

The news

In his first major decision in the portfolio, Australia’s new Environment Minister Murray Watt rejected pressure from environmental groups and gave Woodside preliminary approval to keep running the assets out to 2070.

“Following the consideration of rigorous scientific and other advice including submissions from a wide cross-section of the community, I have today made a proposed decision to approve this development, subject to strict conditions, particularly relating to the impact of air emissions levels from the operation of an expanded on-shore Karratha gas plant.”

Woodside now has 10 days to respond, before a final decision is made.

The Woodside-operated Karratha gas plant on Burrup Peninsula near Dampier in Western Australia.Credit: Krystle Wright

The preliminary approval comes after years of uncertainty over the North West Shelf’s future, and marks one of the biggest political moves so far by the re-elected Albanese government, which was decisively returned to power on May 3 with promises to accelerate the build-out of renewable energy and slash planet-heating emissions.

However, Watt’s decision is a sign of the government’s recognition of the gas industry’s ongoing importance to the economy, both as a multibillion-dollar exporter of LNG to Asia, and as a supplier of traditional energy to the millions of Australian homes and businesses that still rely on fossil fuels.

It also gives the strongest indication yet of Labor’s support for gas as a necessary fuel in Australia’s transition to greener power.

How we got here

ASX-listed Woodside, the largest Australian oil and gas company, applied for the decades-long extension at a state level six years ago, before securing WA state government approval in December. It had been waiting on the federal government’s sign-off.

Earlier this year, former federal environment minister Tanya Plibersek for a second time pushed back the deadline for the government to finalise its assessment until after this month’s election.

Woodside’s North West Shelf gas project in WA.

Why it matters

The long-awaited announcement has been welcomed by the oil and gas industry, which describes the North West Shelf as a critical economic driver in the region, employing more than 330 people locally and delivering $40 billion in state and federal royalties over its life. The gas it delivers, meanwhile, provides energy security for homes and businesses in WA and overseas.

Approving the Karratha gas plant’s extension now clears the way for Woodside to progress a $30 billion proposal to develop new offshore gas fields in the Browse Basin, considered the country’s largest untapped conventional gas resource.

What environmentalists are saying

The government’s decision is staunchly opposed by conservationists, climate scientists and community groups.

The Climate Council said the decision locked in more than 4 billion tonnes of climate pollution - equivalent to a decade of Australia’s annual emissions.

The Australian Conservation Foundation slammed the decision, declaring it would drive global warming and contribute to severe environmental damage.

“That the gas is destined for export makes no difference to its climate impact. It will be felt by Australians through more intense and frequent extreme weather events like bushfires, heatwaves, floods and coral deaths,” said the foundation’s chief executive Kelly O’Shanassy.

Credit: Matt Golding

Greens environment spokesperson Senator Sarah Hanson-Young accused the government of “doing the bidding of the fossil fuel industry” and urged Watt to work with the Greens to bolster federal powers to halt fossil fuel projects with creation of new “climate trigger” laws.

Climate scientist Bill Hare described the decision as “extreme” and said it underscored a disconnect between the federal government’s efforts to curtail domestic emissions and its support for ongoing fossil fuel exports.

“I think it [sends] a destructive message, actually, because the world is trying to stop the warming, and then we go and make a huge decision as a country to continue adding to this problem for 50 years,” he said.

There are also fears that releasing additional industrial emissions presents unacceptable risks to 50,000-year-old Aboriginal rock art in the region, which has been nominated for world heritage listing, at Murujuga.

Last Thursday, Murujuga traditional custodian Raelene Cooper launched legal action in the Federal Court seeking to compel Watt to decide her application for a cultural heritage assessment for Murujuga under Section 10 of the Aboriginal and Torres Strait Islander Heritage Protection Act, which has been with the federal government for more than three years.

Murujuga custodian Raelene Cooper standing on Murujuga, with Woodside’s Karratha plant in the background.Credit: Photo: Bianca Hall

“I am sickened that the minister would make such a decision without even paying us the respect of coming here to meet with the custodians of this place, and without even seeing the incredible Murujuga rock art with his own eyes,” Cooper said.

Woodside said it was reviewing the government’s conditions for the proposed approval, which included matters of Indigenous cultural heritage management.

“We remain committed to protecting the Murujuga cultural landscape and support its World Heritage nomination,” Woodside said. “We believe long-term co-existence between cultural heritage and industry is possible when guided by credible science, traditional custodian leadership, and genuine collaboration.”

The future of gas in Australia

Although emissions released from drilling and burning gas are major drivers of dangerous climate change, the Albanese government sees an ongoing need to secure greater gas supplies.

The government’s “future gas strategy”, finalised last year, details its support for an expansion of the gas industry in Australia, which it says will be needed to back up weather-dependent renewable energy and drive the transition to net zero emissions because gas releases fewer emissions than coal when it is burned to generate electricity.

Gas also remains widely used in household heating, stove tops and hot water units, and as a feedstock for a range of heavy manufacturing industries.

LNG – gas that has been super-chilled down to a liquid so it can be loaded on to ships and sent overseas – is one of Australia’s most lucrative exports, expected to rake in at least $64 billion this financial year.

However, its longer-term demand could vary significantly, depending on how aggressively the world decides to ratchet up goals to slash greenhouse gas emissions.

Woodside says it believed LNG would be increasingly needed to “decarbonise” Asia, as the region’s governments and utilities stepped up efforts to cut emissions by replacing coal-fired generators with gas-powered plants, which are less emitting.

Other forecasts suggest the role of gas could far more be limited, especially if Asian nations follow through on plans to reduce the use of all fossil fuels in their electrical grids, and if the world doubles down on efforts to electrify the economy as much as possible.

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