A Sorry Business

Equinor’s Mariner A oil rig in the North Sea.

Another promising Australian energy project has been abandoned for the usual reason: doing business here is too difficult and expensive. By Fred Pawle.

“We’ve done it!” exclaimed Damien Cole, the leader of the protest movement against Norwegian company Equinor exploring for oil in the Great Australian Bight, on Instagram this week. “Equinor has been sent packing back to Norway.”

He’s correct. Not only has Equinor suddenly decided not to explore for oil in an offshore field where up to 6 billion barrels potentially lay, but Cole’s loose coalition of noisy, passionate and tireless coastal protesters are the main reason for the decision.

Not that anybody in the industry will admit this, of course. In the increasingly rare occasions when a mining or energy company places itself in the crosshairs of Australian protesters, the most common strategy is to politely deflect their paganistic arguments about pristine wildernesses and corporate greed, and hope a rational case for environmental stewardship and prosperity will prevail. To openly criticise environmentalists is to invite the wrath of media organisations such as the ABC and Nine’s newspapers, who act as their PR wing.

In Equinor’s case, this strategy worked, at least initially. In December, its environmental plan was approved by the National Offshore Petroleum Safety and Environmental Management Authority. NOPSEMA made this decision despite a misleading and relentless campaign that rivalled the Adani protest for viciousness.

Surf journalist Nick Carroll falsely claimed that “a worst-case spill would put oil on every surfable coast of Australia south of 30 degrees S.” Greenpeace published a map falsely illustrating a spill from Equinor’s rig could be ten times the size of Deepwater Horizon, the worst accidental oil spill in history. A group of surf celebrities, led by former world champions Mick Fanning, Joel Parkinson, Mark Richards and Layne Beachley, published an open letter saying “an oil spill in the bight would be catastrophic and the southern coastline of Australia would never be the same.”

NOPSEMA is required to consider an environmental plan on its merits, not the emotional appeals of the self-appointed experts who inundated it with objections. Nevertheless, it is amusing to ponder whether somebody in NOPSEMA smiled at the hypocrisy of the protesters, especially those former world surfing champions, as the “Approved” stamp slammed down on Equinor’s submission. Without the oil industry, not only would Fanning and friends not have been able to travel the world to enter contests, they wouldn’t even have had surfboards or wetsuits, which are made from oil byproducts.

One of the most startling moments of the protest occurred during the Rip Curl Pro at Bells Beach, Victoria, in April last year. On a flat day during the contest, an entourage of pro surfers, commentators and their broadcast crew joined a large nearby protest against Equinor. Their enthusiastic chanting and ritualistic splashing of water was later edited into the World Surf League’s broadcast of the contest, interspersed with ads for Jeep, the “official vehicle of the World Surf League” and manufacturer of some of the most gas-guzzling cars on the market.

But although Equinor was able to persuade NOPSEMA that it had a solid environmental plan in the unlikely event of a spill, it still decided not to proceed with the project. Equinor attributed its sudden withdrawal to the project being “not commercially competitive.”

Unions may have contributed to this. Workers on the heavily unionised rigs take home about $180,000 a year. This month The Australian reported that the Australian Workers Union was backing a campaign by cooks on the platforms, who take home a comparatively paltry $85,000 to $95,000, for a $25,000 pay rise.

In a separate dispute last September, offshore rig workers employed by Monadelphous walked off the job in the first industrial action in the sector in decades. The revival of union militancy is spreading to the rigs, making life difficult for the rig’s operators.

Against all this, Equinor was understandably keen to find a partner to share the risk. At the Australian Petroleum Production and Exploration Association trade conference last May, it actively sought a partner to buy into the bight project, but got no takers. Whether the costs were prohibitive or not, most would have looked at the protest movement then in full swing and thought, why bother?

On November 22 last year, Sean Doherty, another leader of the protest movement, published a map of the 57 separate protests planned at beaches around Australia the next day, beneath which was the caption, “That’s a lot of people that would prefer you pissed off, Equinor.” Other posts on Instagram used more offensive expletives.

In November, Cole posted a photo of himself flipping the bird at a sign saying, “No way Equinor”. He said this wasn’t setting a poor example to young people about how to conduct a civilised debate. Rather, “younger generations aren’t offended by my gestures, they are infuriated that their future is being destroyed before their very eyes by a gutless, self-indulgent government and a few soulless, greedy fossil fuel executives who only care about their end-of-year profits.”

There were times when the protestations bordered on racist, but in the game of grievance poker, Gaia holds the aces.

Equinor drills about 40 exploratory wells a year around the world. The proposed well in the bight was just one of them. The company will now instead pursue opportunities in Brazil, Argentina, Mexico and at home in Norway. 

It is interesting that the three foreign countries it now prefers to work with all have less bothersome environmental movements and are more inclined to appreciate the benefits of prosperity.

But the protesters’ victory is small beer in the grander scheme of things in Australia. While the protesters were preoccupied with Equinor throughout last year, ExxonMobil managed to submit an application for a deeper offshore well, have it approved and has already started drilling. That well is about 600km closer to Damien Cole’s home surf break at Bells than Equinor’s proposed well would have been.

Smart surfers will be secretly relieved that ExxonMobil dodged the protest gauntlet and has quietly got to work. It means surfboard makers will still have raw materials to work with, and airlines will still be able to fly keen surfers for their annual trip to Indonesia, where the waves are even better than at Bells.