Exxon's Business Ambition Collided with Climate Change Under a Distant Sea (Part 4)

by Neela Banerjee & Lisa Song (Inside Climate News) Throughout the 1980s, the company struggled to solve the carbon problem of one of the biggest gas fields in the world out of concern for climate impacts.

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."

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 CO₂greenhouse 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.

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.

Exxon only began to disclose climate risks to its shareholders years after it first weighed Natuna's risks, federal filings show.

In the end, the hydrogen sulfide released with the CO₂stymied the sparging idea, Woodward said. Exxon worried that a toxic plume might kill fish and result in bad press.

By February 1984, Exxon Research began modelling once more the feasibility of sparging.

The scientists found that the ocean would release the CO₂ into the atmosphere, probably in 10 years or sooner. Further, increased CO₂ would raise the acidity of the ocean water, damaging the local environment. "Our conclusion is that atmospheric discharge is preferable to seawater sparging," Flannery and others concluded.

The project remains dormant, but Exxon never gave up. After an on-and-off relationship with Indonesia, the company still holds the license, which is up for renewal next summer. READ MORE

Click here for Part 1, an overview of Exxon’s history with climate change; Part II, an accounting of Exxon’s early climate research; Part III, a review of Exxon’s climate modeling efforts; Part IV, a dive into Exxon’s Natuna gas field project; Part V, a look at Exxon’s push for synfuels; Part VI, Exxon sowing doubt in a public campaign of climate denial