The tide is turning on offshore oil and gas

You may have heard about the Safeguard Mechanism and the changes made to this Abbott era policy. Here is a quick overview of what it is, why it’s important for our oceans and some home truths about the polluting offshore oil and gas industry.

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What is the Safeguard Mechanism?

The Safeguard Mechanism was first introduced in 2016 as part of the Coalition government’s climate policy. It complements the emissions reduction elements of the Emissions Reduction Fund and is intended to send a signal to businesses to avoid increases in emissions beyond business-as-usual levels. The Australian Government’s Safeguard Mechanism (SGM) Amendment Bill 2023 was passed by Parliament in March 2023, with the new arrangements taking effect from 1 July 2023. 


What does the Safeguard Mechanism mean for new offshore oil and gas, and our oceans?

The Safeguard Mechanism amendments negotiated between Labor and the Greens in March 2023 are an improvement on the original proposal, but still fall short of what the world’s climate scientists say is required to avoid dangerous climate change. The science is clear – we need to stop new fossil fuels, rapidly phase out existing fossil fuels while dramatically cutting our emissions and restoring our environment,

Unfortunately, the amendments still allow new fossil fuel projects to commence. One important addition is that a new hard cap, or ceiling, on actual or absolute emissions has been agreed to, and a limit on dodgy offset schemes Which won’t be able to exceed current carbon pollution levels and will decrease over time. This will result in some of the proposed fossil fuel projects not going ahead, including offshore oil and gas proposals.

This is a first step in stopping new fossil oil and gas, reducing our greenhouse pollution and protecting our oceans.

- The amended package will still allow new coal, oil and gas projects to proceed – albeit fewer of them. 
- It includes a climate pollution trigger to to asses and stop new fossil fuel projects
- Safeguard Mechanism includes a legislated hard cap on emissions that reduces over time and requires real (not net) emissions cuts.
- If new fossil fuel projects breach the cap, the Minister will have the power to act including stopping the project or putting restrictions on it. 
- The Minister's action (or lack of action) on enforcing the mechanism and caps will be subject to legal enforcement.
- New gas projects will need to be 100% carbon offset from day one.
- Improved integrity measures around carbon offsets, in line with expert concerns about dodgy carbon offset schemes.
- It includes a climate pollution trigger to to asses new fossil fuel projects
- Limiting public subsidies to new fossil fuel projects from the Powering the Regions Fund, and changing the grant funding powers in the Act to prevent funding for coal
and gas extraction.
- Methane emitted from fossil fuels including offshore oil and gas is still not counted in Australia’s climate pollution reporting. That said, it will be increasingly considered, based on averages of methane in emissions known as CO2 equivalent while new mechanisms to measure methane are being developed.

What does this mean for new offshore oil and gas projects?

This deal does not stop oil and gas development in our fragile marine environments, however it is a useful lever to slow down the rapid expansion plans of the fossil fuel sector in our oceans. New gas projects designed for export, which is about 75% of them, will have to offset all carbon dioxide emissions. Putting a bigger cost on fossil fuel companies considering these developments, and if they are viable. And we know the fossil fuel lobby does not like having to deal with their emissions

The Safeguard Mechanism could have big impacts on Santos’ Barossa field off the Northern Territory which is an extremely gassy field, high in CO2 and methane. It is likely to have less impacts on oil and gas fields with lower CO2 levels, such as those in the South East oceans of Australia and Woodsides Scarborough gas fields in Western Australia, but have higher methane emission, which are not measured, released during drilling,  and mining and when gas is sold and burned.


Next steps

The world’s scientists have made it clear that the climate crisis requires an urgent end to fossil fuel expansion and subsidies, and the protection and restoration of our environment.

The Safeguard Mechanism is a starting point to reduce emissions and stop new oil and gas projects in our oceans, through a hard cap on actual emissions from polluters

This is not the ban on new gas and coal that science requires, however, we welcome the fact that for the first time there will be a way to limit fossil fuel expansion in Australia. 

The Australian Marine Conservation Society is committed to protecting our marine environments from harmful offshore oil and gas exploration and mining. The tide is turning on fossil fuels. Together we turn the tide on new offshore oil and gas to protect our oceans, marine wildlife and coastal communities.

Blog by Louise Morris, AMCS Oil & Gas Campaign Manager


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