Disruption and damages: climate-related risks to the Australian oil and gas sector
Stephanie M. Downes A B D , Amy Steel C , Enrico Favaro B and Michael Wood CA Deloitte Australia, Sustainability & Climate Change (Hobart Office), Hobart, Australia.
B Deloitte Australia, Sustainability & Climate Change (Sydney Office), Sydney, Australia.
C Deloitte Australia, Sustainability & Climate Change (Perth Office), Perth, Australia.
D Corresponding author. Email: sdownes@deloitte.com.au
The APPEA Journal 61(2) 395-399 https://doi.org/10.1071/AJ20145
Accepted: 3 March 2021 Published: 2 July 2021
Abstract
The oil and gas (O&G) sector has made significant commitment to reduce greenhouse gas emissions by decarbonising operations and transitioning portfolios to lower-carbon products. However, assessing the impacts of physical climate risks on assets and value chains has remained a lower priority, despite climate change consistently rated the highest risk to the global economy. Here we present selected case studies of the most relevant physical climate risks that impact key infrastructure across the O&G sector, now and in the future, with and without global abatement (that is, in high and low emissions scenarios). We focus on physical climate risks including sea level rise impacts on an offshore processing region, flooding and drought impacts in an onshore processing region, and highlight supply chain impacts on shipping and ports due to climate extremes such as cyclones. These risks all have the potential to have significant and adverse impacts on Australia’s O&G sector and have a direct impact on the ability of the sector to transition to a low-carbon future. We conclude with an overview of why and how companies should undertake climate scenario analysis for physical risks, in alignment with the Task Force on Climate-related Financial Disclosures.
Keywords: climate change, physical climate risk, Browse Basin, Surat Basin, TCFD.
Dr Stephanie Downes is a Senior Manager in Deloitte’s Sustainability & Climate Change practice in Risk Advisory. She has independently designed and led dozens of national and international climate scenario projects for over 15 years. She is an expert in climate risk, climate science trends, analysing big data and understanding physical climate risk in sectors including government, transport, infrastructure, health and energy. She has coordinated and contributed to expert reviews on, for example, peer-reviewed science, IPCC reports, government climate strategies and national research grant programs in Australia and the United States. Stephanie holds an Associate Researcher role at the University of Tasmania, has a PhD in Oceanography & Climate Science, and was previously the Principal Climate Scientist for NSW government. She is a committee member on the Australian Academy of Science National Committee for Earth System Science, the University of New South Wales Climate Change Research Centre Advisory Board, and the Deloitte global Expert Advisory Panel on Sustainability & ESG. |
Amy Steel is a Senior Manager within Deloitte’s Sustainability & Climate Change practice in Risk Advisory. With over 8 years of experience at Deloitte, Amy has provided advisory services in a broad range of sustainability areas, specialising in climate risk over the last 5 years. The types of projects have ranged from assessing the physical risks resulting from global warming under different emission scenarios, through to establishing decarbonisation targets and trajectories, and evaluating the technology types required to meet these. A large portion of this work has emanated from the Taskforce for Climate-related Financial Disclosure (TCFD) framework, with specific work on this framework spanning from education and training to both Deloitte staff and external clients – through to developing climate scenarios in collaboration with climate scientists. Amy has received formal training from CSIRO, BoM on the use of climate models and held workshops with the UK Met Office & Copernicus. |
Enrico Favaro is a Senior Analyst within Deloitte’s Sustainability & Climate Change practice in Risk Advisory. He has over 7 years of experience providing sustainability, risk and opportunity assessment and business analysis services. He has helped clients with climate risk scenario analysis, ESG rating, greenhouse-gases (GHG) accounting and climate change strategy. Enrico holds a BSc and MSc in chemical engineering and advised clients within the agriculture, waste, oil and gas, chemical, engineering, mining, property and supply chain sectors. |
Michael Wood is a Director in Deloitte’s Sustainability & Climate Change practice and specialises in low emissions, climate risk and clean technology in the energy, natural resources, infrastructure and industrial sectors. He specialises in the development execution of strategies to improve carbon, energy and climate risk performance. Michael has led hydrogen and alternative power generation assessments across the O&G sectors, and developed net-zero pathways for large emissions intensive operators. |
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