Volatility in Europe's oil and gas market ‘is thwarting global climate targets’

Woodside CEO calls Nord Stream incident a setback for cutting methane emissions

Meg O'Neill, chief executive and managing director of Woodside Energy, said disruption to oil and gas supplies in Europe has caused concern in Asia. Bloomberg

Disruption to Europe's oil and gas supplies due to the war in Ukraine and the sabotage of the Nord Stream pipelines has resulted in knock-on negative effects for the global effort to lower methane emissions, climate delegates were told on Wednesday.

Russia has denied it was behind recent leaks in the pipelines under the Baltic Sea which saw colossal amounts of methane emitted into the atmosphere. President Vladimir Putin accused the US of "sabotaging" the vital infrastructure.

Methane can represent more than 80 times the warming power of CO2 over the first 20 years after it reaches the environment. The drive to reduce methane emissions was discussed by delegates at the Energy Intelligence Forum in London on Wednesday, where speakers pointed out it was the best opportunity the industry has to slow the rate of global warming.

Meg O’Neill, chief executive and managing director of energy giant Woodside Energy, said the geopolitical challenges gripping Europe have had a ripple effect across other markets and caused coal use to increase elsewhere.

“It’s been really interesting watching what’s been happening in the world, particularly over the last six months,” she said.

“One of the things that we've seen as energy flows to Europe have been disrupted [is that] most of our businesses in Australia and Asia … are very, very concerned about energy security. They are taking steps to try to strengthen their inner energy, their diversity of supply source and where they can, their ability to self-generate.

“From a climate perspective, this has had the outcome of many nations using more coal, so it's not a good outcome. What's happening today with respect to the supply side upsets is driving bad outcomes from a climate perspective.”

Woodside Energy, one of Australia’s largest oil and gas companies, is striving to honour a pledge to achieve zero methane emissions by 2030.

It is one of a string of companies who have latched on to the international movement spearheaded by fossil fuel industry figures.

Ms O’Neill stressed the importance of collaboration between firms and customers “to help them understand the pathway to execute an energy transition and how to do that in an orderly way”.

One of the challenges en route to net zero is that policymakers will always be concerned about the short-term energy needs of their people and thus be drawn towards instant solutions which are not always eco-friendly.

“At the end of the day, all politics are local and politicians are concerned about how do I keep the lights on for my community, how do I keep energy bills down for the citizens that live here,” Ms O’Neill said.

“Unfortunately, that's leading to some outcomes that are not positive from a climate perspective. So we have a role to play to continue to provide the energy that the world is using today in a way that is reliable and affordable, and to work with our customer nations in terms of carbon emissions.”