Following my recent article, ‘Woodside, We Don’t Want You as Our Neighbour’ (available in Farm Weekly, June 27, 2024 or on my LinkedIn), I received a call from Woodside’s carbon team, eager to meet and sell me the company line about what great corporate citizens they are.

For those who haven’t read the article, it essentially accuses Woodside of solving part of their carbon problem at the expense of Wheatbelt farming families and their communities, by sterilising productive farmland for the next 100 years through returning it to native vegetation.

We all know Woodside, Australia’s biggest gas producer, but many might not realise it is also one of the country’s biggest CO2 emitters. With the Federal government’s 2030 and 2050 targets looming like a freight train they have been very busy working on their emissions reduction plans.

Unfortunately, during the frenzy of the climate change debate, the Australian energy sector has been all too willing to overpromise on what is achievable in reducing their CO2 footprint, as a result they are now desperately searching for solutions. This, unfortunately, is where Western Australian farmland comes into play.

Unfortunately for Western Australia’s farmers, Woodside’s carbon team has come up with the brilliant idea to plant trees and claim the credits as an offset for their emissions. Without consultng the farming community, they have been quietly buying up farms across the Wheatbelt and now own about 30,000 hectares, which in today’s market is worth at least $200 million. Adding to that, they have spent untold millions on internal work that has no doubt convinced their senior executive that their carbon farming plan is a win-win for all concerned.

That win-win plan is to plant trees – lots of trees – on productive farmland and then lock that land up for the next 100 years so it no longer produces food or fibre. It’s a solution that no doubt resonates well with the narrative the board, a Labor government, and the Greens, want to hear as in it there are no losers. What could go wrong?

Certainly nothing, according to Woodside’s carbon team who sat across from me in our office.

What surprised me was how simplistic their views were on the impact of their carbon farming activities on the Wheatbelt and how little work they had done consulting with the farming community.

When I started pulling apart their arguments, they became very defensive, resorting to the same meaningless lines of “we just want to listen and work with farming communities”. It’s the sort of rubbish we got from the Federal Minister for Agriculture over the move to shut the live sheep trade.

Note to Woodside media team, do a search on the number of articles generated around Australia over the Federal government’s move to shut down live exports and write a report to the executive of the risk that Woodside faces in shutting down family farms.

Woodside is following in the steps of the Federal government, and it will not end well.

The farming community needs its concerns to be heard by those in the Woodside top floors who thought it was a good idea to skip the “listening and working” phase and go straight to the “doing” phase of embarking on the grand venture of buying farms and taking them out of production for the next 100 years.

For their benefit I will summarise the various arguments put to me that farmers have nothing to fear from Woodside coming to town with their big cheque book, along with my counter arguments.

Apologies to the Woodside people who fronted up, as my recollection isn’t perfect and despite repeated attempts, no one got back to me with corrections to early drafts, but as they said repeatedly, they wanted to start the conversation, so I’m taking it to the next level. I look forward to Woodside’s considered response, which will no doubt interest all my readers as this is as serious a threat as the banning of live exports to the future of family farms.

Woodside is only buying farms with large amounts of unproductive land.

Define “unproductive.” It can’t be that unproductive if Woodside has paid $1000, $2000, $3000, or $4000 per acre. The market has placed a value on that land based on its productive potential and even the most unproductive hectares can generate a return.

Woodside is saving the environment.

If Woodside was serious about the environment, it would stop drilling wells. Where is the risk-reward matrix if the mission is saving farmland? Why not start by stopping rainforest clearing in Asia for palm oil? If land care in Western Australia is the focus, start with salt-impacted land.

Let’s face it – the focus is not on the environment; it’s on solving Woodside’s carbon problem.

Woodside is only interested in the unproductive land.

Show me a good farmer and agronomist, and they’ll show Woodside how to turn even the most unproductive deep sands into productive country with soil amelioration. If Woodside truly believed the land was of no value, then the market would value it as being worth next to nothing. To prove their claim, they should test the market and see what the market values the blocks they plan to plant trees on. I suggest they will be shocked by what the neighbours would be prepared to pay for it.

Woodside is helping neighbouring farms to buy/lease smaller parcels of land, thereby helping them expand.

No, Woodside has outbid neighbouring family farms, taken cleared land, and locked it up in a 100-year covenant (which is as good as forever), forcing up the price of a very limited commodity: land.

Leasing or selling what is left over to one neighbour comes at the expense of all the other neighbours who now compete over less land in the district. One winner at the expense of many losers.

Woodside is supporting local communities.

The number one thing local communities want is people and businesses, not a cheque from Woodside’s community fund. Take a look at what the managed investment trees did to local communities in the South West – no amount of cheques can replace people.

Woodside just wants to work with local communities.

Here we go. What does “working with local communities” actually mean? (It’s spin.) Unless Woodside mean they are working to help speed up their demise. Again, Woodside is working to solve its carbon problem at the expense of Wheatbelt communities.

Woodside is employing and buying locally.

Buying what? A tree planter? Employing whom? Someone to watch the trees grow for the next 100 years and spray the odd firebreak? How could planting trees that will never be harvested replace the shearers, mechanics, truck drivers, stockmen, agronomists, etc., that make up a grain and livestock economy? Don’t make that claim if you’re not adding to, rather than subtracting from, the local community.

Woodside is not impacting the price of local farmland.

Seriously? Run that one past the Woodside economist and tell him to put his name to the claim that outbidding the neighbours doesn’t impact the local market for farmland? Or try running that argument with those neighbours who missed out on buying those farms. Successful bidders in a rising market set higher prices impacting the price of local farmland.

Woodside is not impacting the broader market for land across the whole Wheatbelt.

Seriously? Look up the economic theory of market power – every individual buyer or seller, no matter how big or small, impacts the broader market, despite what the local land reps might tell Woodside’s carbon team. Woodside is not operating in an economic vacuum, despite what the self-serving land agents say.

Woodside is not interested in impacting food production.

But it has – 10,000 hectares or so have, or are planned, to be replanted by Woodside to trees, taking sheep and grain out of the equation. Even at 3 DSE/hectare or 1 tonne/hectare, that equates to 30,000 sheep or 10,000 tonnes of grain – enough to feed 100,000 people. How many more mouths will Woodside impact over the next 100 years as it expands its footprint of sterilised, food-producing farmland?

Woodside is not targeting the whole Wheatbelt.

Good to hear – so what are the target numbers? As the price of carbon rises and the pressure mounts to achieve your 2030 and 2050 targets, is it 100,000 hectares, 500,000 hectares, or 1,000,000 hectares?

There must be a target set of hectares; if not, someone needs to be sacked, as already the company has spent tens of millions of dollars.

Woodside says, don’t we think it’s worth planting even one tree?

Absolutely. See the answer above on productive land and salt land. Knock yourself out buying salt land to plant trees – you have WAFarmers’ full support.

But put the productive land back on the market (what a farmer sees as productive not Woodside’s consultants). Plant trees in creek lines or shelter belts where farmers invite you to plant, not on cleared, working paddocks.

Woodside says we need to work together to address Government policy issues.

Happy to have Australian Petroleum Production & Exploration Association, Chamber of Minerals and Energy, and National Farmers’ Federation work together to stop this carbon madness that is encouraging mining and petroleum companies to buy out family farms, as it pits one primary producer against another. We need both energy and food – not energy at the expense of food. In the meantime, can Woodside stop buying family farms and sell what it’s got?

Woodside says they are not the only ones buying farmland.

Yes, but to my knowledge, they are the only large corporate energy company running around the Wheatbelt outbidding family farms for neighbouring properties.

It’s a signal to Shell, Chevron, ExxonMobil, Santos, and the miners – BHP, Rio, Fortescue, etc. – that the solution to their carbon problem lies in planting trees in the Wheatbelt. With their Chief Executive Officer (CEO) also chairing Australia’s peak energy association, Woodside has a leadership responsibility not to start a war between farmers and the resources sector.

Woodside says I have got the numbers wrong and the carbon they can bury in trees will make a difference.

I’m always happy to be corrected. But I’m still waiting for their response. And yes, no doubt planting trees will make a diff erence to CO2 – but at what cost and which communities pay the price?

The Cost Benefit Equation.

So that’s a summary of the discussion. For readers’ benefit, let’s break down my interpretation of Woodside’s cost-benefit equation to see just how misguided their carbon farming venture is.

In our meeting I asked the learned people from Woodside how much CO2 the company generates in Australia, but they looked at me blankly, which is concerning, given their current job titles (cancel that Christmas bonus). For their benefit, Woodside’s Scope 1 and 2 emissions were 6.32 million tonnes of CO2 in 2023. Woodside has promised to reduce this by 15 per cent by 2025 and 25 per cent by 2030, which equates to 1.58 million tonnes per year.

So, what does it take to sequester or eliminate a portion of 1.58 million tonnes (and rising) every year through carbon farming?

According to the Department of Primary Industry and Regional Development (DPIRD) Bulletin 4856, “Carbon Farming in Relation to Western Australian Agriculture,” p.38, the modelling of replanting mixed species on 300mm rainfall trial data shows it’s possible to sequester between 56-209 tonnes CO2/hectare and in a 450mm rainfall, between 85-425 tonnes/hectare over 30 years. You do the maths on what that is annually per hectare and work out how much farmland would be required to soak up 1.58 million tonnes a year. It’s a lot.

In my article, I quoted 5 tonnes/hectare of CO2 per year on 350mm rainfall through replanting native vegetation, which is in the middle of several studies.

It equates to 150 tonnes/hectare over 30 years, which is when the trees mature and reach a net zero position until they are consumed by termites and wildfires.

Now, considering Woodside is picking the non-productive soils (their words) and their farms are in predominantly 350mm country, I’m probably being generous compared to the DPIRD numbers, so let’s stick to my 5 tonnes/hectare number.

So, assuming they have replanted 10,000 hectares in total, and each year these trees are sequestering 50,000 tonnes of CO2, this equates to 0.0316 per cent of Woodside’s annual 1.58 million tonne 2030 target – a drop in the ocean compared to their current total emissions, let alone their expansion plans.

Let’s not talk about what happens after 30 years when the trees stop growing. And let’s not talk about the virtue-signalling lunacy of locking it up for 100 years – or the fact they are selling out one sustainable primary producer growing food so another can keep an unsustainable business in the energy sector going a few more decades. For their American CEO’s benefit, that’s not the Australian way.

Back to the numbers – let’s be generous and say Woodside only need to use Wheatbelt farmland to abate just 1 per cent of their 25 per cent reduction of current emissions by 2030. The other 99 per cent will come from executives driving electric cars, buying Australian carbon credit units (ACCU) on the open market, and drilling holes to pump CO2 underground.

To hit the 1 per cent, all Woodside need to do is buy another 32 x 10,000 hectares = 320,000 hectares of unproductive farmland by 2030 to turn into completely unproductive trees.

Oh, I forgot to add that for every 1 hectare they replant, they must buy, by what they told me, 3 hectares to find the unproductive 33 per cent (more likely its 10:1 or 20:1 or 30:1, but let’s give them again the benefi tof the doubt).

So, we need to multiply those 320,000 hectares by 3, we get around 1 million hectares out of the State’s 18 million hectares of farmland to be bought by Woodside over the next 5 years.

Not a problem, says the chief financial officer – we have budgeted US$5 billion for carbon reduction programs. One million hectares at, say, $8000 per hectare, as they will be by far the most desperate buyer in the market, so the price will escalate, and the total bill exactly matches the US$5 billion they have put aside for carbon abatement.

Madness. Now Woodside will no doubt howl in anguish and say that’s not their plan, which it can’t be as they need to abate the other 99 per cent with the $US5 billion, but there must be a formula for how many hectares they are planning to plant to trees otherwise see above about sacking someone.

For me to be penning this, it must be clear to Woodside’s community relations team something has gone horribly wrong, (more sackings!) as there’s no “listening and working” with the farming community to tell them what the plan is. When commentators like me start jumping up and down, pointing, and saying they are coming to take the farm – or at least outbid you on the neighbouring farm, it’s time for the board to ask questions of the Management.

But back to my back-of-the-envelope calculations – Woodside tells me they have no choice, as the Government is making it difficult to bury carbon under the sea, which is the holy grail solution to their emissions problem. But the sheer scale of their problem and the finite solution of growing trees that will never be harvested means even bothering to plant trees does not pass the pub test.

Let’s take their logic to the next level: if they can’t get approvals to pump CO2 underground and ACCUs get hard to find, what is their fallback position? Is it that they might have to plant not 1 per cent of the Wheatbelt to trees but say 10 per cent?
Let’s look at those numbers. If 10 per cent of their 1.58 million tonnes (a figure that will be closer to 2 million by 2035 but sticking with the lower figure) is 3.2 million hectares, this equates to 1 in 5 of the entire Wheatbelt, including vast amounts of highly productive land.

Now, the 10 per cent figure is not going to happen, as the price of land would be exorbitant and it’s just not coming on the market, but 1 or 2 per cent (1-2 million hectares) is – which must be why Woodside has agents looking at every farm property that hits the market and is actively bidding on a growing portion of them.

Now, Woodside can say what it likes – that this is not the plan – but they now have a portfolio of land worth close to a quarter of a billion dollars and have US$5 billion in the war chest, so what are we to conclude? It’s just a trial? I doubt they have thought this through, and I bet they have not considered the public relations disaster that lies ahead if they start buying 10,000 hectares in every Wheatbelt shire every year.

So, what happens now? First, Woodside is invited to listen to the industry and work with the farming community (see, I’ve got the hang of it) and produce a map of its farms and explain exactly how much of the Wheatbelt they want to sterilise for the next 100 years in each shire. For good measure they can produce a report on how many long-term jobs their economists think they will magically create with all the people they will employ to watch these trees grow, and what impact they will have on the local football team.

As mentioned above I’ve invited Woodside to respond, but knowing how big corporates operate, I expect their carbon team have been told to leave it to the media team, who will consult the legal team, who will escalate it up to the senior executive team, who will not be that interested, or more likely, be so paralysed by corporate indecision, hence they will feed back down to the community relations team to trot out some lines about “listening and working with the farming community”.

All I say to the senior executives, starting with their CEO, if one of the panicked carbon team has the courage to show up here, spare us the spin. You are not dealing with the average punter on the street – you are messing with multimillion-dollar family businesses that have multi million-dollar debts and who need to continue to expand to remain viable.

Having Woodside running around with a billion-dollar cheque book outbidding them and forcing up land prices is a disaster for family farms and the towns they support, not to mention a public relations disaster when the city realises that the big end of town is shuttng down the bush so they can keep pumping out CO2.

Woodside, how about we skip the “listening and working with farming communities” and move straight to the action of not buying any more farmland and selling what you have.