A new Australia Institute report details how fossil fuel producer Santos intends to use the Federal Government’s Emissions Reduction Fund (ERF) to increase oil and gas production.

Key findings:

• Santos company documents show that its Moomba carbon capture and storage (CCS) project will be used for ‘Enhanced Oil Recovery (EOR)’, where captured CO2 is used to force more oil out of declining reservoirs.
• The conditions for ERF funding clearly state that a project cannot be funded if it “includes the injection of greenhouse gases into a storage site which has the effect of enhanced oil, gas or hydrocarbon recovery.”
• Despite this clear prohibition, the Santos project was registered as an ERF carbon credit project on the second day of COP26. A branded Santos model of its CCS/EOR project was controversially installed in the official Australian Pavilion

“Santos and the Federal Government cannot have it both ways,” said Mark Ogge, Principal Advisor at the Australia Institute.

“Santos’ Moomba CCS project has been approved by the South Australian Government with the understanding that it will enhance oil recovery, while ERF funding requires that it will not include such activities.

“Neither Santos nor the Federal Government have provided evidence that the Moomba CCS project has changed from its original design to meet the ERF requirements.

“The ERF excludes EOR projects because these projects increase fossil fuel production, and therefore increase overall emissions. To be credited under an ERF method, a project must represent a real reduction in emissions. Santos’ proposal does not meet this requirement.

“EOR is not a new technology to reduce emissions. It is a fifty-year-old practice of injecting CO2 into depleted oil and gas fields, to increase oil production. EOR can increase the amount of oil recovered from fields by up to 40 per cent and extend the oil field’s life by decades.

“Santos has been carrying out EOR in its Cooper Basin gas fields since the mid-1980’s including CO2 injection since 2008. Santos’ 2019 climate policy expressly describes Moomba CCS as an EOR project.

“For Santos to rebrand this as emissions reduction is a scam. Having this scam shown off on the COP26 world stage shows that the Government has either been scammed, or they are part of it.”