BP Tangguh's climate change commitment under scrutiny

Down to Earth No.80-81, June 2009

Operations at BP's controversial Tangguh gas project in West Papua are now underway. Serious questions over security, sovereignty, human rights, land rights, the impacts on indigenous communities and on the local environment will continue to be raised as the venture becomes fully operational and starts exporting gas to China, Korea and North America¹ In this article we focus on a different issue: that of Tangguh and climate change.

Greenhouse gas emissions from the Tangguh LNG project will contribute to climate change and may even play a small indirect part in decreasing the size of the Jayawijaya mountain glacier in Papua's central highlands according to detailed environmental and social impact studies carried out before the project was approved.²

The Tangguh gas fields in the Berau/Bintuni Bay area of West Papua province contain certified reserves of 14.4 trillion cubic feet of natural gas. The primary component, methane, will be liquefied for export as a fuel source. However, the main secondary component, carbon dioxide, accounting for 10 to 12 percent of the reserves, will be removed ('scrubbed') during the onshore processing phase and released ('vented') into the atmosphere.³

According to the environmental and social study documents (collectively known as the AMDAL), CO₂ emissions will amount to 3 million tonnes a year. An additional 1.67 tonnes of emissions will be produced by the combustion of fuels required to run the LNG plant operations.⁴

The project is expected to produce at least 7.6 million metric tonnes of LNG a year.⁵ Substantial quantities of additional CO₂ emissions will be produced when the LNG is used to generate energy in the countries to which it is sold.

Reinjection undertaking

When the project was approved by the Indonesian government in 2002, the lead operator, UK-based multinational oil and gas company, BP, undertook to investigate how to minimise the level of CO₂ emissions and in particular to consider the possibility of reinjecting the CO₂ into a suitable underground reservoir.

The investigation was to include a comprehensive study programme to locate a suitable reinjection site, and to fully estimate the cost of a viable reinjection scheme. BP and the Indonesian state-owned oil company, Pertamina, were to network with technology providers to find innovative ways to reduce costs of CO₂ capture and injection.⁶

Seven years on, as the project has become operational, there has been little progress towards identifying a feasible reinjection option. The harmful emissions will be vented into the atmosphere for at least the first four years of operations.

CCS technology

Technological measures to reduce greenhouse gas emissions from the burning of fossil fuels, such as reinjection, commonly known as carbon, capture and storage (CCS), are controversial and largely unproven. They have received particular publicity recently in the UK in relation to the building of coal-fired power stations.

Criticisms from environmentalists are based on the argument that real solutions to climate change must lie in renewable energy and energy efficiency. They also include the claims that:

• CCS cannot deliver in time to avoid dangerous climate change;
• CCS requires a huge amount of energy, using 10 and 40 per cent of the energy produced by a power station;
• Storing carbon underground is risky; safe and permanent storage of CO₂ cannot be guaranteed;
• CCS is expensive;
• CCS poses a threat to health, ecosystems and the climate and it is unclear how severe these risks will be.⁷

Furthermore, it is argued, 'technofixes' relax the pressure to reduce fossil fuel use. Governments find it easier to rely on coal, oil and gas instead of taking on powerful economic interests or attempting to change people's lifestyles by challenging the addiction to fossil fuels.⁸

Notwithstanding these sound arguments against CCS, there are compelling reasons why BP should be made to reduce the impact of its project and fulfil its commitment to minimise greenhouse gas emissions. As the project is now underway, damage limitation through reinjection is better than taking the 'do nothing' approach.

Positive precedent

A precedent for reinjection from a natural gas project exists with the Sleipner gas field in the North Sea. The Norwegian oil company, Statoil, has been injecting a million tonnes of CO₂ into deep saline acquifiers for the past decade. The geological conditions may be different from Tangguh, but the fact that so far there have been no reported problems with Sleipner indicates that the technology could be effective.⁹

Exxon and Pertamina are also reported to be considering a massive reinjection project from the Natuna gas field in the South China Sea.¹⁰

In response to questions about CO₂ emissions, BP points out that there is currently no agreement with the Indonesian Government to proceed with a technical appraisal of reinjection and that it is necessary for the government to develop regulations to allow for reinjection as an option.

While that may be strictly true, the impression created is that BP is conveniently avoiding its commitment to reduce emissions by putting the onus on the government to take action and meet the costs. Its failure to take the lead makes the company's claim that Tangguh aspires to be a 'world class model for development' ring decidedly hollow.

Notes

¹ These concerns have been tracked by DTE and raised with BP - see for example DTE 76-77, also DTE 73 and DTE 69.
² Environmental and Social Impact Analysis (ANDAL), October 2002, p. 3-30. The ANDAL is one of three environmental and social study documents, collectively known as the AMDAL, required for the project. The other two documents are the RKL (Environmental and Social Impact Management Plan) and the RPL (Environmental and Social Impact Monitoring Plan). A summary of the AMDAL documents is available at www.adb.org/Documents/Environment/Ino/ino-tangguh-lng-project.pdf
³ ANDAL pp 3-30, 3-31, 3-40, 3-60 and 3-104.
⁴ AMDAL summary, op. cit. note 2, p. 33, para 137.
⁵ www.bp.com/tangguh, accessed 26 May 2009.
⁶ ANDAL, p. 3-31.
⁷ See 'False Hope: Why carbon capture and storage won't save the climate', Greenpeace, May 2008 at www.Greenpeace.org.
⁸ See 'Carbon reinjection: an addict's response to climate change', Greg Mutti and Ben Diss, October 2001 published in The Ecologist magazine and reprinted in The Observer newspaper, available at www.platformlondon.org.
⁹ See 'How Britain can take a lead in the carbon battle', The Observer, 15 February 2009 and DTI Oil and Gas - Maximising Recovery Programme, IOR Views, at ior.senergyltd.com/issue12/rnd/sme/senergy/
¹⁰ See 'Carbon reinjection: an addict's response to climate change', op. cit., note 7 and 'Now is the time to tap into Natuna's gas reserves', The Jakarta Post, 24 April 2009.