When Exxon’s Business Ambition Collided with Climate Change Under a Distant Sea

Neela Banerjee & Lisa Song write at InsideClimate News:

In 1980, as Exxon Corp. set out to develop one of the world’s largest deposits of natural gas, it found itself facing an unfamiliar risk: the project would emit immense amounts of carbon dioxide, adding to the looming threat of climate change.

The problem cropped up shortly after Exxon signed a contract with the Indonesian state oil company to exploit the Natuna gas field in the South China Sea—big enough to supply the blossoming markets of Japan, Taiwan and Korea with liquefied natural gas into the 21st century.

Assessing the environmental impacts, Exxon Research and Engineering quickly identified Natuna’s greenhouse gas problem. The reservoir was contaminated with much more carbon dioxide than normal. It would have to be disposed of somehow—and simply venting it into the air could have serious consequences, Exxon’s experts warned.

Exxon’s dawning realization that carbon dioxide and the greenhouse effect posed a danger to the world collided with the company’s fossil fuel ambitions.

“They were being farsighted,” recalled John L. Woodward, who wrote an internal report in 1981 on Natuna’s climate implications.

“They weren’t sure when CO₂ controls would be required and how it would affect the economics of the project.”

Since 1978, long before the general public grew aware of the climate crisis, Exxon had worked at the cutting edge of emerging climate science. At first, Exxon’s internal studies had described climate change as an important but somewhat distant problem. Now, sooner than expected, climate considerations were affecting strategic business decisions. Natuna was one example; another was Exxon’s proposed leap into synthetic fuels.

Releasing Natuna’s carbon pollution would make it “the world’s largest point source emitter of CO₂ and raises concern for the possible incremental impact of Natuna on the CO₂ greenhouse problem,” declared an October 1984 report from Exxon’s top climate modeler, Brian Flannery, and his boss Andrew Callegari.

Documents and other evidence uncovered by InsideClimate News also show that Exxon calculated that Natuna’s emissions would have twice the climate impact of coal. The company spent years researching possible remedies, but found them all too costly or ineffective, ICN’s eight-month investigation found.

Exxon managers saw the problem as both technically vexing and environmentally fraught. Not only was there carbon dioxide to be dealt with, it was mixed with toxic, flammable hydrogen sulfide, a contributor to acid rain.

“I think we generally agree that we are seeking a method of disposing of the off gases in a manner which will minimize the risk of environmental damage,” wrote Exxon’s manager of environmental affairs Alvin M. Natkin in an October 1983 letter to Natuna project executive Richard L. Preston.  “We must also have the data which will be convincing not only to ourselves but also to the international environmental community that the method selected is environmentally sound.”

The company consulted with leading scientists, including NASA’s pioneering expert James E. Hansen, to understand the effect on atmospheric CO₂ concentrations if the gas from Natuna were released. It sent staff to facilities at Dalhousie University in Halifax, Canada to simulate the diffusion of the gas into ocean water. Over the years, Exxon scientists developed mathematical models to assess the options.

Because the project was so complex and expensive, the Natuna staff presented regular updates, including details of the CO₂ issue, to Exxon’s board of directors, whose members were drawn almost entirely from the company’s upper management.

Some Exxon directors accepted the emerging climate consensus. Others were less sure of the science, but agreed that as popular attention to global warming mounted, releasing Natuna’s greenhouse gases into the air could turn into a public relations debacle, former employees said.

Either way, directors repeatedly told project staff Natuna could not proceed unless the CO₂ was handled in a cost-effective way that did not harm the atmosphere.

Read more here.

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