Australia extends the North West Shelf gas project's lifespan past 2050 due to economic reasons.
The Australian government's decision to extend the operating life of the North West Shelf (NWS) LNG project until 2070 has sparked significant concerns and implications, particularly regarding Woodside Energy's fossil fuel expansion and climate governance.
The NWS, Australia's largest natural gas development, was previously scheduled to shut down by 2030. However, its extension to 2070 means emissions from this major industrial source will continue to contribute substantially to Australia's carbon footprint. In 2020-2021, the NWS was the single largest industrial emitter in Australia. Extending its life risks unleashing billions of tonnes of additional greenhouse gas emissions, which undermines Australia's climate goals and commitments under the Paris Agreement.
Woodside, as operator and major stakeholder in the NWS project, is also pursuing upstream fossil fuel expansion projects like the Browse Basin development. The company faces challenges in justifying the carbon footprint of these expansions, especially with emerging technologies like carbon sequestration still unproven at scale. Woodside is likely to seek taxpayer subsidies and governmental support, potentially leading to a "bidding war" between Western Australia and Northern Territory governments to attract investment by offering regulatory fast-tracking and financial incentives.
The extension has drawn criticism from climate advocacy groups and some political figures who see the move as contradictory to Australia's responsibilities to reduce carbon emissions. The decision reflects decades of lobbying by fossil fuel interests and suggests the federal government's willingness to prioritize economic considerations and industry lobbying over robust climate action. Transparency over the conditions imposed for the extension is lacking, raising questions about environmental safeguards and Indigenous cultural heritage protection, given the plant’s location on the Murujuga Cultural Landscape (Burrup Peninsula).
Critics argue the economic benefits from extending the NWS project will be minimal compared to the environmental cost. The risk is locking in fossil fuel infrastructure that will delay transition to renewable energy and hinder Australia’s broader climate transition. This also affects Australia's global reputation on climate leadership, especially as international pressure increases to phase out fossil fuels rather than extend their lifespan.
Investor discontent with Woodside Energy's climate risk governance was evident at the company's recent annual general meeting. As a result, investors may amplify their message from the 2025 AGM, as it is now up to them to constrain Woodside Energy's fossil fuel expansion.
The decision to extend the approval was made by Murray Watt, Australia's minister for the environment and water, on 28 May. The move could enable a significant expansion of Woodside's LNG portfolio, as the Karratha gas plant may need to move forward with its Browse LNG project to stay operational for another 40 years. If executed, the Browse LNG project is estimated to produce 11.4 million tonnes of LNG and LPG per year, which would expand Woodside's current production by an amount the size of Santos' entire portfolio.
Woodside Energy aims to operate over 5% of the world's LNG supply in the 2030s, which could result in its LNG holdings exceeding the scale of BP's current portfolio. The company has recently made a final investment decision on the Louisiana LNG project and has net zero targets, including a net zero by 2050 objective and a 30% emissions reduction target by 2030. However, the rapid expansion of its LNG portfolio could lead to a significant increase in its use of offsets to meet its emissions reduction targets.
The Albanese government has announced an extension of the approval for the project's operating life for a further 40 years, well beyond 2050. The proposed decision is subject to strict conditions, particularly relating to the impact of air emissions levels from the operation of an expanded onshore Karratha gas plant.
In summary, the extension of the North West Shelf LNG project beyond 2050 raises substantial concerns about increased carbon emissions, the enabling of Woodside's fossil fuel expansion, the undermining of climate governance efforts, and the challenge of balancing economic interests with urgent environmental imperatives. This decision encapsulates tension between Australia's fossil fuel dependency and its climate commitments, potentially setting back the nation's climate progress for decades.
- The Australian government's decision to extend the North West Shelf (NWS) LNG project until 2070 might prompt individuals in the realm of personal-finance to reconsider their investments, as the project's extended life could lead to billions of tonnes of additional greenhouse gas emissions, which may negatively impact Australia's climate goals and its global reputation on climate leadership.
- The energy sector, specifically Woodside Energy, is poised for significant growth with the extension of the NWS project, as the company is likely to seek taxpayer subsidies and governmental support to justify their upstream fossil fuel expansion projects like the Browse Basin development. This increased financial investment could create opportunities for those interested in the business and finance sector.
- As the Albanese government has announced an extension of the approval for the project's operating life for a further 40 years, environmental groups and advocates for personal-finance might scrutinize businesses' climate risk governance more closely. This focus on climate change could lead to increased pressure on companies within the energy and finance industries to adopt more sustainable practices and meet their emissions reduction targets, thus presenting opportunities for growth within the renewable energy sector.
