Woodside’s liability

Woodside’s plant, photographed by a concerned Dampier resident from 12 km away, 2 January 2008.

Thoughts on liability

To the shareholders of Woodside Petroleum

As a Woodside shareholder you no doubt support any measure or strategy that promises to increase Woodside’s business and share price. If you oppose any policy that would damage the company commercially or financially, the following should concern you.

At the present time, Woodside is embarking on its greatest commercial enterprise so far, the $A6.5 billion Pluto plant, to be 100 % owned by the shareholders. Woodside is under great pressure from the WA State Government to place this huge development project at Holden Point, Dampier. Why there? Because the government has in 2002 committed $135 million for infrastructure, which after the departure of Methanex and the $70 million enticement grant the federal government had offered that company had to be increased to $185 million, but will eventually be well over $200 million. Then about one dozen companies that had been interested in Dampier (including BHP Billiton, Syntroleum, DME Japan and Methanex) determined that they were unhappy with the sites offered, the significant environmental issues and the dithering of the government and left Dampier. Only one proponent stayed, Burrup Fertilisers, which after a few months of operation has already seen numerous EPA interventions. Therefore the government is now desperate to secure a user for the infrastructure it has established, and Woodside is its last option.

Also at the present time, the Federal Minister for the Environment and Heritage, Hon Ian Campbell, is agonising over whether or not to list the Dampier Rock Art Precinct on the National Heritage. He has been urged by his own advisory body, the Australian Heritage Council, to list Dampier, and it is anticipated that he will do so after the area earmarked for Pluto is excised from the area to be protected, and after Woodside has received all required approvals to proceed with construction.

Woodside opposes the listing because “the listing will create uncertainty for industry in the area, which could be held liable for damage to the rock art through pollution” (Woodside statement to Anna Salleh, ABC Science, on 5 October 2006). Woodside therefore recognises that the massive acidic pollution from its existing Northwest Shelf plant, the largest anywhere in Australia (12,000 tonnes of nitric oxide per year) is damaging the rock art, or likely to do so, and that it may be rendered liable in future. This could involve fines, compensation, and most importantly, severe interruptions to the industrial processes of creating LNG. Permissible emission levels could be greatly lowered, or tied to wind direction, which would render not only the new Pluto plant uneconomical, but which might also affect the existing plant. After all, the Pluto project will virtually double emissions once it is operational.

It follows that Woodside finds itself in a commercially very precarious situation: if it locates its Pluto plant at Dampier, as the government is trying to ensure, it may end up with two plants operating at much less than production capacity — most especially after the monument has become listed on Unesco’s World Heritage Register. That would be massively uneconomical and return to shareholders losses rather than profits. To anyone with business acumen it is commercially unsound to build a multi-billion dollar plant where it is likely to be subjected to unpredictable impediments or costs. It would make good sense to build the Pluto plant at a different site, and Woodside has several excellent alternative sites for this plant. The favoured one is near BHP Billiton’s LNG site at nearby Onslow, another possibility is the huge Maitland Heavy Industrial Estate, only 20 km from Dampier, and there are many others.

Of all the potential sites for Pluto, the Dampier option is in fact the worst from a purely practical perspective. The site consists of extremely rugged terrain, of huge piles of loose boulders and gorges, and construction costs there are estimated to be 20 % higher than at the alternative sites. Dampier is less accessible from the main road than Onslow or Maitland, which are both perfectly flat terrain and free of any rock (and rock art). Moreover, the amount of explosive power stored at the existing Woodside plant is already the equivalent of 1,500,000 tonnes of TNT, to which the Pluto plant would add another 1,800,000 tonnes, several hundred times the power of the Hiroshima bomb. It is not only uneconomical, it is stupid to place two highly explosive and flammable installations in immediate proximity, especially as there are other volatile installations in the area.

Another issue to consider is the already congested state of Dampier shipping, with five current ports all using the same single dredged shipping channel. If one of the 250,000-tonnes iron ore carriers had a mishap and blocked this channel, half the economy of the Pilbara would be closed down for a year or more — including both Woodside plants. Anyone with business acumen knows that one never places all of one’s eggs into one basket, but that is precisely what Woodside proposes to do with its Pluto plant. Incidentally, there is only one causeway to Dampier, only one road, one railway track, all of which can easily be blocked by demonstrators. Your investment would sit at Dampier and produce nothing at all, because of the lack of strategic foresight by Woodside’s directors.

But this is not all. Dampier houses the world’s largest concentration of rock art, its largest art gallery, and Australia’s largest corpus of stone arrangements (megalithic monuments). It is the continent’s greatest and most sacred cultural heritage site, and it occurs in a part of the country that has a population density similar to that of the Sahara; the region is almost unoccupied. To condemn this stunning archipelago to become Australia’s largest industrial centre is perverse. There is no ore, gas or oil at Dampier, there is absolutely nothing of economic value, and there are dozens of alternative sites for harbours up and down the largely unoccupied coast. To destroy the world heritage monument of Dampier needlessly is a crime against humanity, according to the Unesco convention concerning the intentional destruction of major heritage properties. Do you, as a shareholder, wish to be party to such senseless vandalism?

The Dampier monument is part of the common cultural heritage of all of humanity, and Woodside has no right to deprive humanity of its patrimony. Already, 24.4 % of the rock art on the Burrup has been destroyed, including a large slice bulldozed by Woodside, your company. We request that you, as a shareholder of Woodside, express your own thoughts on the matter by writing to your directors.

Thank you for considering this, and thank you for signing our Petition to save the Dampier rock art.

Robert G. Bednarik
Convener, International Federation of Rock Art Organisations (IFRAO)

12 October 2006