Carbon Capture and Storage under the Timor Sea:

Climate Change Prevention or Carbon Colonialism?

Liga ba blog ida ne'e iha Tetum

In May, Santos and Eni, two partners in the Bayu-Undan joint venture, agreed to explore opportunities to continue activities at the Bayu-Undan field after gas production ends in 2022 or 2023. They are considering using the site for carbon capture and storage (CCS). This means that carbon dioxide emissions from natural gas production could be injected into depleted gas reservoirs under the Timor Sea. The idea is a dangerous one for Timor-Leste, and is unlikely to contribute meaningfully to efforts to minimize climate change.  

Why Carbon Capture and Storage?

The world faces a major challenge in confronting human-induced climate change, including that caused by greenhouse gas emissions from oil and gas production and consumption. Communities around the world are demanding that high-emission companies reduce their impact on the environment. Of course, these companies are primarily concerned with their profits, and are desperate to avoid changing their business model or reducing fossil fuel production. Instead, they are looking for ways to prolong production, and see carbon capture and storage as a mechanism which could enable them to continue environmentally harmful production, while avoiding responsibility.

When Santos and Eni announced that they would explore opportunities to establish carbon capture and storage, they did not provide explicit information about their motivation, or specific plans. 

Santos hopes to extract gas from the Barossa field in Australia’s part of the Timor Sea, but the gas there contains high levels of carbon dioxide and would create huge amounts of emissions. Eni’s Evans Shoal field faces the same issue. Although neither field will benefit Timor-Leste, both companies see dumping their carbon dioxide in Timor-Leste’s maritime territory as a way to operate those fields while keeping their commitments to achieve “net zero” emissions in the near future.

Most nations committed in the Paris Accord to reduce greenhouse gas emissions, and the companies face pressure to minimize their impact on the environment. Net zero implies that the companies can offset their emissions by removing carbon dioxide from the atmosphere by capturing carbon or afforestation. Net zero does not oblige them to reduce emissions.

The soon-to-be-empty Bayu-Undan field could be a place to store carbon dioxide, enabling Santos and Eni to pursue environmentally-destructive activities and prolong natural gas production. Santos could also delay paying to decommission the Bayu-Undan site.

Although this might be good for the two companies, it is bad for both Timor-Leste and the planet.

How Effective is Carbon Capture and Storage?

The world’s largest carbon storage project is part of Chevron’s Gorgon LNG project, in Australia’s maritime territory. Soon after production started in 2019, Chevron encountered problems with its carbon dioxide storage technology, and has managed to store only 30% of the amount it had promised. Despite this, gas production has continued unabated.

Even if companies are able to implement effective carbon capture and storage projects, this will not ameliorate the climate crisis. The methane in natural gas is itself a highly destructive greenhouse gas. In addition, the production, transportation and consumption of natural gas releases carbon dioxide into the atmosphere. It is impossible to produce and use natural gas without damaging the environment.

In truth, the oil and gas industry promotes carbon capture and storage in order to continue production. An effective response to the climate crisis requires reducing (not offsetting) emissions, and shifting from fossil fuels like coal, oil and gas to renewable energy. Convincing nations like Timor-Leste to be part of false solutions like carbon capture and storage is a major obstacle to effective action.  

Risks and Responsibilities

Offshore carbon dioxide storage in the Timor Sea is risky, and someone must be responsible to guarantee that the carbon dioxide never escapes. Carbon dioxide leaks from an undersea storage facility could contribute to oceanic acidity, with major impacts on marine ecosystems. Will these companies still exist in a hundred or a thousand years? Who will take responsibility for the carbon dioxide then?

Although Santos has signaled that they will pay Timor-Leste if they store carbon dioxide at Bayu-Undan, they have not said how much. La’o Hamutuk’s rough estimates suggest that it will be less than $40 million per year, about 2% of Timor-Leste’s current state budget. We need to evaluate this potential revenue against the long-term risks and costs.

Climate Justice and Carbon Colonialism

Timor-Leste’s natural resources, including its biodiversity and marine ecosystems, shouldn’t be sacrificed to make profits for oil and gas companies. Using Timor-Leste’s seas as an emissions dumping ground so that polluters can continue business as usual is inconsistent with principles of climate justice. Environmentalists call it “carbon colonialism” – wealthy countries claiming to reduce environmental impacts through activities that exploit and harm nations of the Global South, echoing the abuses of the colonial period. Santos’ garbage is not Timor-Leste’s responsibility. 

Every nation has a stake in solving the climate crisis, and we need a united effort to resolve this emergency. La’o Hamutuk agrees that Timor-Leste should be part of a solution. However, carbon capture and storage will not avert the climate crisis, and could pose a risk to Timor-Leste. Climate change is creating floods and droughts, disrupting seasonal weather patterns. It also makes seas rise, contaminating ground water and destroying low-lying communities. Timor-Leste is particularly vulnerable to these impacts because our infrastructure is poor and we depend on farming, so effective solutions are all the more urgent for our people.

Timor-Leste authorities must agree before the companies can go ahead with this project. La’o Hamutuk will continue to monitor this issue, to ensure that our people and natural resources are not victimized in the interests of foreign corporations. 

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Updates: On 13 September, Santos and Timor-Leste's petroleum regulators signed an MOU to explore moving ahead with this project.

In November 2021, La'o Hamutuk gave a presentation on this topic (also PDF) to a Northern Territory Environmental Centre "Mythbusting CCS" webinar (video).

In February 2022, La'o Hamutuk made a submission on this project to the Northern Territory Environment Protection Authority.

LH husu Parlamentu atu hametin proposta Lei Enkuadramentu Orsamentál

Link to this blog in English

Ohin ONG La’o Hamutuk entrega Submisaun ba Parlamentu Nasionál kona ba proposta Lei Enkuadramentu Orsamentál no Jestaun Finanseiru Públiku, no hato’o ami nia hanoin, analiza no sujestaun balu relasiona ho konteúdu no sistema sira iha proposta refere hodi haforsa no hadi’ak liu tan transparénsia, akontabilidade, no partisipasaun povu no sosiedade civil iha prosesu governasaun.

Peskizadóra La’o Hamutuk, Eliziaria Febe Gomes, halo aprezentasaun iha audiénsia ba Komisaun C, Parlamentu Nasionál, no nia observa katak proposta Lei ida ne’e “hanesan oportunidade importante atu hadi’ak liu tan frakeza sira iha prosesu orsamentál, no ami hein katak proposta alterasaun ne’e la’ós atu introdús frakeza foun sira.”

Modelu Orsamentu ba Kada Programa Presiza Inklui Definisaun

Ezbosu Lei ida ne’e determina katak Orsamentu Jerál Estadu sei tuir sistema Modelu Orsamentu ba Kada Programa. To’o agora, Governu uza Modelu ida ne’e bazeia ba definisaun ba ‘programa’ ne'ebé jerál liu, ho rezultadu katak implementasaun sistema ida ne’e iha impaktu ladi’ak ba transparénsia.  

Proposta Lei presiza inklui definisaun ba ‘programa’ ne’ebé konsistente no espesífiku. Opsaun ida mak atu haktuir sistema Nasoins Unidas mak dezenvolve, ho naran COFOG (Classification of the Functions of Government). Se ita uza sistema ida ne’e, ita bele kompara alokasaun ba programa sira iha kada tinan, no kompara ho nasaun seluk.

Presiza Mantén Nafatin Limitasaun ba Alokasaun ba Fundu Kontinjénsia

La’o Hamutuk enkoraja distintu Deputadu/a sira atu konsidera risku katak mudansa ba regra Fundu Kontinjénsia bele hamenus Parlamentu nia abilidade hodi haktuir sira nia knaar tuir Konstituisaun RDTL, atu aprova no monitoriza despeza estadu nian.

Lei Orsamentu no Jestaun Finanseiru Nu.13/2009 determina katak alokasaun ba Fundu ida ne’e la bele liu husi 5% husi valor OJE tomak. Artigu 32 iha proposta Lei Enkuadramentu Orsamentál kansela limitasaun ida ne’e, no troka ho kondisaun katak Fundu Kontinjénsia la bele ki’ik liu duké 2% husi valor OJE tomak. Realidade, gastu sira iha Fundu Kontijénsia nunka too 5%; foin lalais mak aumenta alokasaun ba 3.2% iha OJE 2021 retifikativu. Tinan hira sira liu ba Governu gasta ba Kontijénsia menus husi 2% husi orsamentu ne’ebé ezekuta ona. La’o Hamutuk sujere atu mantén nafatin limitasaun ba alokasaun ba Fundu Kontinjénsia.

Hametin Fornesimentu Dokumentu Sira ba Públiku no Asegura katak Informasaun Loloos

La’o Hamutuk observa katak iha nesesidade atu hametin artigu balu, atu asegura katak Governu ba futuru la bele deside ho arbiru ba dokumentu hirak ne’ebé mak bele fahe ba públiku no informasaun ne’ebé sira bele mantén hanesan segredu. Lei ida ne’e presiza define ho klaru dokumentu sira ne’ebé Governu iha obrigasaun atu fahe, no asegura katak konteúdu asesível no lejivel ba públiku liu husi konsidera lian iha hakerek sira no mós formatu. 

Submisaun husi La’o Hamutuk nota iha oportunidade iha artigu sanulu atu hametin transparénsia no kualidade informasaun.

Lei das Grandes Opções do Plano la Bele Hamenus PN nia Knaar

Proposta Lei ida ne’e, iha Artigu 47, introdús etapa foun iha prosesu orsamentál: Lei Grandes Opções do Plano. Lei das Grandes Opções do Plano iha objetivu atu estabelese dalan ba OJE tuir mai. Maibé, Artigu 47.9 estabelese oráriu ba prosesu aprovasaun Lei Grandes Opções do Plano ne'ebé kloot. Tuir Artigu ida ne’e, Parlamentu presiza aprova Lei Grandes Opções do Plano iha loron sanulu nia laran, depois de Governu submete ezbosu ba Parlamentu. 

La’o Hamutuk observa katak Lei foun ida ne’e la bele fó limitasaun ba Parlamentu, no presiza iha obrigasaun atu hala’o konsultasaun públiku.

Proposta Lei Enkuadramentu Orsamentu Jerál Estadu Loke Oportunidade atu Haktuir Prátika Di’ak ba Transparénsia no Akontabilidade

La’o Hamutuk hatudu katak iha oportunidade balun atu implementa prátika di’ak ne’ebé haktuir estandar internasionál, inklui implementa no publika Mid-Year review, publika Relatóriu Anuál, no obriga Governu fornese dadus iha formatu Excel (la’ós PDF de’it), hodi fasilita analiza. Submisaun sujere mós atu reforsa iha Lei ida ne’e ho sistema konsultasaun no partisipasaun públiku.

LH asks Parliament to strengthen proposed Budget Framework Law

Liga ba blog ida ne'e iha Tetum

Today, La’o Hamutuk delivered a submission (Tetum) to the National Parliament about the proposed Law on Budgetary Framework and Public Financial Management, sharing our thoughts, analysis and suggestions related to its content and systems to strengthen and improve transparency, accountability, and participation by the public and civil society. 

La’o Hamutuk researcher Eliziaria Febe Gomes told a hearing of Parliament Committee C that this proposed law “is an important opportunity to improve the shortcomings in the budget process, and we hope that this proposed revision will not introduce new weaknesses.” 

The Program-Based Budgeting model should include definitions.

This draft law specifies that the General State Budget will follow a model of Program-Based Budgeting. At this point, Government is using a definition of ‘program’ which is too general, with the result that implementing this system reduces transparency.

The draft law should define ‘program’ consistently and specifically. One option would be to use the system developed by the United Nations called COFOG (Classification of the Functions of Government). This system would enable comparison of allocations to programs in different years, and with other nations.

Keep the limit on the amount allocated to the Contingency Fund.

La’o Hamutuk encourages the distinguished Deputies to consider the risk that changing the rules for the Contingency Fund could reduce Parliament’s ability to carry out its Constitutional responsibilities to approve and monitor state expenditures.

Law no. 13/2009 on Budget and Financial Management currently limits the allocation to the Contingency Fund to no more than 5% of the entire state budget. Article 32 in the proposed Budget Framework Law repeals this limitation, while adding a condition that the Contingency Fund cannot be smaller than 2% of the budget. Spending from the Contingency Fund has never been close to 5%; the just-rectified 2021 State Budget raised the allocation to 3.2%. Between 2015 and 2020, contingency spending averaged less than 1% of the executed budget.

There is no need to increase the allocation to the Contingency Fund, and the 5% limit should stay in place. The proposed change creates a risk that future governments could misuse this Fund without a limit, and also reduces accountability.

Improve public availability of documents and ensure that the information is correct.

Some articles need to be strengthened to ensure that future Governments cannot arbitrarily decide what information to make public, and what to keep secret. This law should clearly define which documents the Government is required to distribute, ensuring that their content is accessible and readable by the public, considering the language and the format.

In its submission to Parliament, La’o Hamutuk identified ten articles which offer the chance to improve transparency and the quality of information.

The Major Planning Options Law should not interfere with Parliament’s role.

Article 47 in this proposed law introduces a new step in the budget process: a Major Planning Options Law (Lei das Grandes Opções do Plano), with the goal of setting the direction for the budget for the following year. However, Paragraph 47.9 sets a very short timetable for Parliament to approve the MPO law – within ten days of when Government submits it.

The new Budget Framework Law should not limit Parliament’s deliberations, and should allow enough time for public consultation.

The proposed Budget Framework Law is an opportunity to implement good practices for transparency and accountability.

La’o Hamutuk identified several opportunities to implement good practice according to international standards, including publishing a Mid-Year Review, publishing an Annual Report, and requiring Government to provide data in Excel format (not only PDF) to facilitate analysis. The submission also suggests ways to strengthen systems for consultation and public participation.