Woodside's "independent" Browse report overstates benefits and ignores potentially hundreds of billions in climate costs
Our latest analysis reveals that a Deloitte report commissioned by Woodside exaggerates the economic benefits of the Browse to North West Shelf gas project and excludes colossal climate costs.
With a government decision on environmental approvals for Woodside's Browse gas project imminent, the fossil fuel giant has been publicly promoting the findings of an economic analysis it paid ‘big four’ consultancy Deloitte to produce.
“Commissioning a 'big four' consultancy to produce rosy economic modelling is a well-worn strategy fossil fuel companies deploy to influence decision-makers and the public alike. The concerning thing is that it often works – because the headlines get written before anyone looks at the fine print”
— Claire Snyder, Executive Director of Climate Integrity.
Our analysis of the Deloitte report identifies significant flaws in both the economic modelling and the media statement Woodside has been spruiking alongside it. Importantly, it highlights how the report explicitly treats the enormous climate, biodiversity and environmental harms of Browse as "outside the scope of analysis", despite these costs outweighing any economic benefits from the project.
“This is a carefully timed PR tactic from Woodside as it awaits government approval on Browse, which if it is approved, will be one of the most polluting gas projects in the world. By excluding the costs of Browse’s climate harms from its economic assessment, this report only tells half the story. If Deloitte had put an economic price on the damage that Browse’s emissions would cause, these costs could be almost three-times greater than the economic benefits the report is claiming. It’s like a used car salesman touting a car’s low price, leather seats and sound system, but neglecting to mention the car needs a new gearbox.”
— Michael Mazengarb, Head of Corporate Accountability
The key findings from our analysis include:
Deloitte’s flawed gas price assumption inflates the claimed economic benefitsof Woodside’s Browse project. Deloitte assumed gas prices will remain stable for the next four decades, despite IPCC and IEA warnings that demand for gas must decline by more than 75% by 2050 to limit global warming to 1.5 degrees, and that Asian-region gas prices would more than halve by 2035.
The project’s global climate costs could be almost three times greater than the economic benefits. Deloitte excluded climate, biodiversity and environmental harms from its assessment and considered them “out of scope”, despite the project’s social cost of carbon potentially exceeding $420 billion,dwarfing the claimed benefits in the report.
Deloitte’s report headlines undiscounted figures, leaving present value figures buried in the fine print - despite standard economic appraisal guidance recommending discounting future dollars to today’s value. This approach, which was adopted in Woodside’s media release, has the effect of inflating the economic benefits for any reader not examining the fine print.
Deloitte’s report says the ‘quiet part out loud’: building the Browse gas project will delay Australia’s transition to renewables. While Woodside claims Browse will "back up renewables" and enable "a more orderly and lower-cost scale-up of renewable energy", the report actually says the development of the Browse gas project will delay the transition to renewable energy.
Woodside cherry-picks job figures to exaggerate the projects’ impacts on employment, whilst ignoring job destruction in farming and manufacturing. Woodside's media release claims Browse will create "up to 4,760 full-time equivalent jobs across Australia at peak operations." Climate Integrity's analysis shows this figure refers only to a single peak year and the average over the project’s 47-year life is just 1,388 net jobs, less than a third of the headline figure. Deloitte's modelling also shows Browse will cannibalise an average of 1,760 jobs in manufacturing and 458 in agriculture, as workers leave these industries to work on the gas project – figures Woodside chose not to include in its media statement.
"When you look at the full picture and the fine print, the employment case for this project largely falls apart. This is an inconvenient message for Woodside - fossil fuel projects cannibalising workers from farming and manufacturing. Much of the “job creation” being achieved by the Browse projects involves workers abandoning jobs in these critical industries. It's no wonder these figures didn’t feature in the company’s media statement or in Deloitte’s headline findings.”
— Michael Mazengarb, Head of Corporate Accountability
By putting their name to a report that exaggerates the economic benefits and ignores the climate harms of Browse, Deloitte has delivered Woodside a lobbying tool, and its report is the latest example of a concerning pattern where major consultancies are paid by the fossil fuel industry to present flimsy justifications for new projects.
"Accepting paid commissions to produce economic modelling that supports the expansion of coal and gas, while ignoring the climate costs of doing so, is incompatible with a genuine commitment to limiting warming to 1.5 degrees. Consultancies need to decide whether their Paris commitments are real, or just marketing."
— Claire Snyder, Executive Director
We have previously raised concerns about similar work by EY, ACIL Allen, KPMG, and McKinsey. We call on consultancies and advisory firms to ensure their work is consistent with their stated Paris Agreement commitments. We also call on the government to consider the economic and climate harms of Woodside’s Browse project in its approvals decision.
