Published on May 2nd, 2012 | by Zachary Shahan0
James Price Point: A Hostile Environment
by Patrick O’Keeffe
The Kimberley Coast, located on the north-western edge of Australia, is under significant threat from a boom in liquefied natural gas (LNG) production, as companies swoop on large gas fields off the West Australian coast. The most controversial of these projects, is the Browse Basin development, which involves the development of a LNG processing hub at the pristine location of James Price Point. This move has been fiercely criticized by environmentalists, who argue that the development will greatly undermine the ecological integrity of the area, which is considered as one of the last great wilderness areas on Earth. On the other hand, proponents of the development, including the Western Australian State Government and the Australian Federal Government, claim that Browse will deliver jobs, economic stimulus for Indigenous communities and a needed boost to the Australian economy, which is attempting to withstand pressures from a turbulent world economic climate.
Australian LNG Industry
Supported by two primary players, Australian Federal Resources Minister Martin Ferguson and Western Australian Premier Colin Barnett, the Australian LNG industry is set for a period of rapid expansion.
The International Energy Agency has predicted that Australia will be the leading producer of LNG across the world, by 2020. This expansion is being driven by Australia’s plentiful supply of LNG, for which there is a healthy demand that is rapidly growing from countries such as South Korea, Japan and China. A spokesperson from the Office of Premier Barnett stated that for Asian countries, Western Australia provides a “reliable and secure energy source, to support economic growth and improved living standards,” as well as “an environmentally more acceptable alternative to coal.”
The Browse Basin LNG Project
The Browse Basin project is a $US30 billion enterprise, managed by a joint venture between Woodside, BHP Billiton, BP, Chevron and Shell.
As stated on the website of Woodside, the Australian company operating the project, “The Browse LNG development concept is to commercialize the Browse Joint Venture’s three gas and condensate fields, Brecknock, Calliance and Torosa, 400km off the Kimberley Coast.” The project description continues, describing that “Gas and liquids from these fields will be brought to an onshore LNG plant at the Western Australian Government’s Browse LNG precinct, 60 km north of Broome.”
According to Woodside, the location choice was “unanimously” decided upon “the Western Australian Government’s Browse LNG precinct as the preferred location of the onshore processing facilities, complying with the retention lease conditions accepted in December 2009.” The location of this project is James Price Point on the Kimberley Coast, which, as this report will highlight, has been a major cause of controversy which threatens to derail the project.
A spokesperson from the Office of Premier Barnett has described the benefits of the increased LNG production in Western Australia as including the creation of “thousands of construction jobs and hundreds of long term jobs, many of these located in regional towns”. Furthermore, the spokesperson spoke of the benefits that LNG would bring to Indigenous people, including “new employment and business development.”
Native Title Agreement
For the project to be located at James Price Point, The Western Australian Government compulsorily acquired the land for the project site. For this to occur, a native title agreement had to be reached between the traditional owners of the land. This agreement was reached on June 30 2011, between the Goolarabooloo Jabirr Jabirr native title claim group, Woodside and the Western Australian State Government. However not all are happy with the outcome of this meeting, nor is their contentment with the manner in which the outcome was reached.
Federal Senator representing the Australian Greens, Rachel Siewart, contends that Indigenous traditional owners of the land were pressured into the initial agreement with the Western Australian Government. Senator Siewart believes that state and federal governments “very definitely put pressure on local traditional owners to accept James Price Point as the site for this gas hub.”
There is passionate opposition to this project, with many arguing that the location of the LNG hub at James Price Point will cause a great decline in the ecology of the area. Speaking at a community meeting in Redfern, an inner city suburb of Sydney, Neil Mackenzie, spoke of the Kimberley, stating that “It is almost the last outback wilderness area in the world. What we have there is very precious.” Referring to the economic value of the pristine environment, Mackenzie stated that “there are a lot of communities out there that depend upon ecotourism and keeping the country the way that it is.” The claims that the project would undermine the environmental integrity of the area are rejected by the Office of Premier Barnett, with a spokesperson stating that “Western Australia’s and Australia’s environmental approvals processes and impact management requirements are transparent, rigorous and comprehensive.”
However, not all are satisfied that the project will commence without having a harmful effect on the local environment. Mark Jones, from the environmental group ‘Save The Kimberley’ states that the primary concerns surrounding the expansion of LNG include the “immediate effects, such as 50 square kilometers of marine dead zones, huge dredging tracts, loss of endangered species, destruction of dinosaur track ways and migration routes for marine species such as dolphins, whales and dugongs”. Premier Barnett has dismissed such concerns, however recent study led by Rosalind Rolland of the New England Aquarium, has found that shipping noise can have a significant effect on the viability of coastal dwelling whales.
There has been significant conflict between those opposing the development and local police. Protestors opposing the development have been camped at blockades since mid 2011, with tents, showers, toilets, kitchen and vegetable garden created to support the action. The blockading actions have endured, despite police action which removed protestors from blockading the road to James Price Point in July 2011, which led to 25 arrests. An ABC report described the atmosphere created by the incident was “more like a war zone than a sunny Kimberley day”.
Private Security Firm
The tensions have undoubtedly been exacerbated by project operators Woodside. As mentioned by Jones, “Woodside contracted a company called Hostile Environs Services. These people are ex-army who basically get around and film everything and all that information feeds into their intelligence”. The operations of Hostile Environs Services have had a significant effect on the population of Broome, with many of those acting in opposition to the development claiming that the security company has been acting in an intimidatory manner. As Jones states, the mood of the town has darkened considerably.
The move of the Western Australian Government to compulsorily acquire the James Price Point location was challenged in the Western Australian Supreme Court by traditional land owners, the Jabbir Jabbir people, who achieved a ruling in their favor on December 6 2011.This decision has major ramifications for the project. Speaking after the announcement of the decision, lawyer Michael Orlov told the Sydney Morning Herald that “The immediate practical effect of this judgment is the Browse project agreement, which depended on the validity (of the land acquisition) notices, is invalid and has no effect.”
Retired Federal Court judge Murray Wilcox states that the ruling further jeopardizes the $1.5 billion native title agreement, which had been forged between the federal government and traditional landowners and had allowed for the compulsory acquisition by the Western Australian government. According to Wilcox, the process will have to be restarted due to the decision of the Supreme Court, with a new agreement to be forged.
Woodside Delaying Investment
Following the court decision, Woodside applied for a delay to their final investment decision, which was initially due by mid 2012. In an announcement to the Australia Stock Exchange on Monday, January 19th, Woodside confirmed that in December “The Joint Authority and the WA Minister for Mines and Petroleum were approached seeking amendments for Browse Basin retention leases, including a request to vary the condition relating to readiness for a final investment decision to first-half 2013”. In response to the decision, Glen Klatovsky of Australian environment group The Wilderness Society, stated that “The project faces stiff opposition from the Broome community, the indigenous community and environmentalists, which no doubt has been a factor in the delays that led to today’s announcement”.
Woodside Selling Stake
Writing for Energy News Premium, Gomati Jagadeesan reported on “increasing industry speculation,” questioning whether or not Woodside would be able to hold its permit with the expiration of its retention lease in 2014. This speculation arises from the so called “use it or lose it” policy, which has been development by the federal government, aimed at preventing resource warehousing of corporations. This policy allows the federal government to not renew licenses, if the license holder does not meet conditions imposed by the exploration license.
The concern that Woodside could potentially lose their license for the project comes after whispers that the company was looking to offload a significant portion of their 50 per cent stake in the project. The ABC reported upon speculation that Woodside was planning this move, which could threaten the viability of the project. In response to this speculation, Woodside issued an announcement to the Australian Stock Exchange, which indicated that the company had “not made any decision to reduce its equity in the proposed development at this time”. The announcement continues, with the company stating that the company is assessing “the potential sale of a minority portion of the company’s equity in the development.”
Adding to the pressures experienced by Woodside, are mounting project costs, which the Business Spectator reported have risen from $US30 billion to $US40 billion.
Through their development of the Browse Basin project, Woodside have enjoyed unequivocal support from the Western Australian and Australian governments. However, the company, displaying considerable arrogance, failed to account for any public backlash to their plans. Rather than engaging with people who were uncertain about, or opposed to, the development, the company hired a firm to gather intelligence on the community. As a result of such poor public consultation, Woodside lost public trust and lost credibility, which has now placed the future of the Browse Basin project in doubt.
Image Credit: James Price Point by Paula Constant