Getting the Balance Right

Contemporary Christians are called to be stewards of God’s creation.  We have a duty of care not just for God’s children but also for the Earth, including other species.  In my view it is entirely appropriate that we take up the challenge of rectifying the impact that we as the human race are having on the environment.  We see this expressed in a wide variety of ways from “Church greening” through to Ethical investment principles.  However, in the area of ethical investments the issues can be highly complex and it isn’t always straight forward how best to exercise our Christian calling.  By way of example I think the recent decision of the NSW/ACT synod to divest of investments in corporations engaged in the extraction of fossil fuels (April 2013) should be carefully scrutinised to ensure it does not conflict with our Christian calling to strive for justice for the poor.

This is an issue that I have reflected on over many years.  I grew up in a Christian family and made a personal commitment to Christ when I was about sixteen.  Later I studied geology at university and have since had a 20+ year career in the oil and gas industry both in Australia and internationally.  For most of my life I’ve continued to be an active member of the Uniting Church.  As I’ve tried to live a faithful, Christ centred life I’ve had to consider the role of my profession and the fossil fuel industry

Access to clean, cheap and reliable energy is essential for assisting people escape from grinding poverty.  Energy is needed for heating, cooking, lighting, transport, communications both directly and indirectly through the supply chain for low cost food, clothing, housing and services.  Even in affluent Australia the cost of energy plays a key role in the quality of life of those on the margins of our society.

Energy plays an even more dramatic role in third world countries.  I’ve observed villages in Myanmar within 100km of the capital city that are not connected to the electricity grid – imagine the impact that has in a tropical environment.  I’ve witnessed a society emerging from war and oppression in Kurdistan where they are delighted that access to electricity has increased from 2 hours per day a decade ago to 24 hours per day in 2012 (although brown outs were still common).. I’ve been to the Philippines that struggles to provide the same services to its people as its Asian neighbours in part because of its lack of natural energy resources.

Today fossil fuels provide the cheapest and most reliable sources of energy both in Australia and in many parts of the world.  Justice for the poor means access to energy, so the best way to improve the lot of the poor is to keep fossil fuels in the energy mix.  Renewable energy sources are no doubt making great improvements but they are not the best solution for most of the world’s energy needs today.  Unfortunately, the intermittent nature of wind and solar power makes these forms of power expensive and unreliable. To be truly viable, wind and solar require back-up from natural gas. Fossil fuels do have a higher carbon footprint than renewables, however not all fossil fuels are the same – gas has a dramatically lower carbon footprint than coal, which when combined with its abundance and reliability makes it a natural choice for a transition fuel to a low carbon economy.  Ultimately I expect renewables will be the dominant source of energy for humanity but we simply are not at the point today where we can abandon fossil fuels, particularly the cleanest of them, which is natural gas.

So where does that leave the Christian trying to live out their discipleship in all facets of their life? The NSW/ACT Synod Ethical Investment Principles call for divestment from companies whose activities “involve substantial change to the environment, which is not or proposed to be made good at the conclusion of the activity”.  In my opinion this seems sound, but it is taken too far when the same Synod recently interpreted that principle to mean that it “should divest from corporations engaged in the extraction of fossil fuels”.

Does that include banning investment in companies such as Oil Search? A company whose projects include oil and gas development in PNG – a nation in desperate need of foreign investment and export revenue.  Oil Search is also exploring for oil and gas in Kurdistan, where its success will help rebuild the infrastructure in this war torn region.  Does the Synod’s decision ban investment in Woodside Petroleum? Which not only produces oil and gas offshore Western Australia for domestic and export markets but as part of it’s portfolio is exploring for oil and gas offshore Myanmar.  Success in Myanmar would mean investment, jobs and revenue desperately needed in this emerging democracy.  These companies are motivated by profit and they may not be perfect, but in my opinion they are generally well regulated and managed.  The Synod’s determination on banning companies involved in fossil fuels discourages investment in corporations such as these and thus it discourages investment in their projects and so can inadvertently continue injustice to the poor in those countries.

Closer to home the extraction of natural gas from coal seams and the hydraulic fraccing technique have been very divisive topics in eastern Australia in the past few years.  Natural gas has been produced from coal seams in Australia for around 20 years and currently contributes 30% of all natural gas produced in eastern Australia– predominantly from coal seams in Queensland.  Over the past few years this industry has boomed, with 3 export projects being developed at Gladstone generating 10,000’s jobs and bringing opportunity and real careers to regional communities.  While people naturally worry about this emerging industry’s ability to coexist with other land users and its impact on water resources, the Queensland story has shown that the industry does care about its social license to operate and can address these concerns responsibly.

So should the Church ban corporations producing gas from onshore Australia such as Santos and Origin?  So long as these companies are well regulated and ethically run I believe they can benefit their local communities, Australia as a whole, and Asian export markets seeking to develop their economies and to provide a reliable and cleaner alternative to coal-fired power. .  Local communities can benefit from the jobs and increased economic activity.  Australia as a whole benefits from the tax revenue from these projects – in 2011 the Australian oil and gas industry paid $7.9 billion in corporate taxes and resource royalties.  That is a lot of class rooms or hospital beds improving the lot of the poor in our own country.

Does a ban on fossil fuels include a ban on oil exploration and production? Oil is the world’s most important fuel and underpins our standard of living. It provides modern convenience and freedom of movement and is crucial to transport systems. If we stop investing in companies producing oil then the price of oil goes up and those least able to afford fuel are the most impacted.  Can we deny its benefits to poorer countries?  Can we honestly say that viable replacements for oil have been found?  Numerous studies have found that cultivation of biofuels has had many negative effects – from deforestation and habitat loss, to increased lifecycle emissions once the fuels needed to grow and process the biofuels are taken into account, to rising food prices, particularly in third world nations.

How can we go about reducing emissions and increasing global prosperity?  As I noted earlier, the intermittent nature of solar and wind power means these forms of energy are expensive and require gas-fired back-up. Expanding renewable energy will actually require expanding the production and use of natural gas. This is nothing to fear. Between 2007 and 2012, the US cut its energy-related carbon emissions by 12%. This was mainly due to switching from coal to natural gas for power generation. This move to gas has also revived US economic growth and revitalised many struggling regions.  Natural gas can have a similar effect in Australia and in our Asian export markets and thus has a critical transition role as we move to a low carbon economy.

Every human endeavour involves risk and can attract participants with a range of moral perspectives.  The oil and gas industry is no different, but I believe that most corporations recognise that they need to perform well in the areas of safety and environmental impact to maintain their social licence to operate.  I also think society can take some comfort from that fact that the industry is well regulated (in Australia and many other countries ), ensuring that risks are managed to the best level possible.  Incidents can occur, but the safety and environmental record of the oil and gas industry is better than many other industries.

Leading a Christ centred, faithful life in a modern world is not easy.  In striving to be faithful steward’s of God’s creation I am concerned that the NSW/ACT Synod has not adequately considered its obligation to also seek justice for the poor.  Justice for the poor, amongst other things, means access to cheap, reliable, clean energy. It also means access to the economic opportunity that energy projects can bring.  Therefore I believe that investment in fossil fuel corporations, particularly oil and gas corporations, can be ethically sound and consistent with our Christian calling.

Peter Stickland, Ballarat Victoria