Chevron May Have to Pay $100m for Failing to Catch CO2 Emissions

The oil and gas giant Chevron from Australia will have to account for almost all of the greenhouse gas emissions by the mammoth Gorgon gas project after the WA government brought a ruling that could hit the company with a $100 bill for the carbon offsets.

The WA state government agreed to a recommendation by the state’s EPA that Chevron is responsible for catching or offsetting 80 percent of the CO2 emissions extracted from the Gorgon reservoir dating back to 2016.

The Role of the Chevron Company in Australia

The gas pulled out from the Gorgon reservoir is mostly natural gas, but also a major component of CO2.

Chevron divides these 2 greenhouse gases, but as condition of its environmental approval, the company is required to catch and store the carbon dioxide they separate, rather than allow it to go off in the atmosphere.

The carbon capture facility should’ve started its operation back in 2016; however, there was a few-year-delay because of commissioning issues. Eventually, they began the injection of CO underground in 2019.

The delay led to millions of tons of CO emissions released from the project instead of being caught and properly stored.

Chevron and their partners Shell and ExxonMobil didn’t bury the emissions from this site for years after they commenced operating in 2016.

This resulted in more than 50 percent increase in the annual emissions of Australia in 2017-18, according to the climate and energy director of the Australia Institute, Richie Merzian.

Chevron’s Debt Isn’t Paid Off yet

The company is still in debt for the last three years of carbon pollution. This debt is bigger than the annual fossil fuel emissions of 12 Pacific Island countries.

With the CCS project expected to collect as much as 4 million tons of emissions yearly, Chervorn may only have the power to capture only half of the emissions that have to be stored through its 5 years of operation.

If the facility can’t operate fully, millions additional tons of CO2 emissions may end up being released in the atmosphere.

This can increase their carbon bill, with the cost exceeding $100 million.

The Company Asked for a Waiver, but the Government Is Firm

The company asked for a waiver from the WA government that the emissions offset requirement starts from 2018 when the 2nd stage of an expansion of the Gorgon project was finished.

However, in adopting the recommendation, Stephen Dawson, the environment minister, ruled it has to account for emissions going back to 2016, when the 1st stage of the project was done and when CO2 began being removed from the project for the first time.

The Western Australian government wants Chevron to account for these surplus emissions. Minister Dawson ruled last week that there won’t waive the requirement.  

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