Exports of Australian gas carry “substantial risks” of slowing the move to cleaner energy in Asian countries, according to a confidential report for the Western Australian government that undermines the government’s own narrative that the industry helps cut global emissions.
The warning in the 2024 report by consultants Deloitte challenges the claim made by the Western Australian premier, Roger Cook, in 2023 that his state’s increased greenhouse pollution, largely driven by the vast amount of gas burnt to liquefy gas for export, is justified because it is good for the climate and displaces coal power in Asia.
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WA is the only state without a 2030 emissions-reduction target and is also the only state producing more carbon pollution now than in 2005, the benchmark year for the Paris agreement.
Greens WA upper house member Sophie McNeill, who has pushed for the report’s release, said it exposed the WA Labor government’s spin.
“Despite paying Deloitte more than $400,000, the Cook government did not get the narrative they wanted because it is simply not true,” she said.
“No wonder they’ve been hiding it from the public for almost a year.”
Gas has “significant potential” as an intermediate energy source as economies move from using coal and oil to renewable energy, according to the December 2024 report marked “Cabinet in Confidence” obtained by the Guardian and the ABC.
However, gas exports to Asia could also slow investments in renewable energy.
“These risks must be carefully managed to ensure natural gas serves as a true bridge fuel rather than a long-term dependency that hinders progress toward decarbonisation goals,” Deloitte concluded.
Deloitte sees a diminishing role for gas in Australia’s traditional markets of Japan, South Korea and Taiwan. There, consumption must start declining in the 2030s and be just 20% of current levels by 2050 for global warming to be limited to 1.5C.
However, the global consultancy concluded that a growing use of gas for the next 15 years in China, India and Indonesia, followed by a substantial fall in the 2040s, is consistent with climate goals.
Thomas Houlie, an analyst with research organisation Climate Analytics, who has reviewed the report, doubts that increased gas use – which requires billions of dollars for gas import terminals, pipelines and gas-fired power stations – would decline so quickly.
“There is no way to politically guarantee that a fossil fuel like LNG will only be used in the short term, particularly given the lead time it takes to get it up and running,” he said.
“Ultimately, it benefits an industry that can develop these projects and then apply political pressure to cement them in.”
The Japanese government is financing gas production, transportation, and use projects across Asia in a “market-making role” to “enhance Japan’s trade influence and generate commercial opportunities for Japanese firms,” according to Deloitte.
Controversially, Japanese companies resell about a third of the gas they buy from Australia, reaping more than $1bn in profit in 2024.
Deloitte listed Woodside, Chevron, oil and gas lobby group Australian Energy Producers, four Japanese companies with investments in Australian gas projects, and Taiwan’s Ministry of Economic Affairs as key contributors to the study.
According to separate freedom of information documents obtained by WA climate researcher Piers Verstegen, Cook was briefed on the report to prepare for a meeting to “discuss energy diplomacy issues raised by the study”.
He appears to have used the report in March when he told the Guardian that WA “turning off gas” would lead to Asian buyers turning to coal or gas from Russia and the United States.
Deloitte reached that conclusion by assuming that all WA gas exports would cease in 2031, a scenario that Houlie said was irrelevant, arbitrary and extremely unlikely.
The global consultancy also calculated the emissions savings if all gas exported from WA were used to displace coal.
Houlie said it was a false equivalence. “Gas being slightly less climate-harming than the worst fuel doesn’t make it a ‘transition fuel’, especially when we have cost-effective alternatives like solar and wind,” he said.
In a statement, Cook said the draft report by Deloitte was being considered by cabinet. He said it outlined how WA gas was “playing an important role in Asia’s transition to net zero”.
The premier said on a recent trip to Japan he promoted WA’s role in that country’s energy transition through the supply of LNG, ammonia made with gas and carbon capture and storage, and green fuels “when they become commercially available”.
“With limited space to deliver onshore and offshore renewables, coupled with massive energy demand, Japan relies on its trusted trading partners to provide secure, affordable and lower carbon energy,” Cook said.
