Audit finds Inpex has taken 'significant steps' to rectify emissions errors

In short:

An independent audit has found gas giant Inpex has taken "significant steps" to address historical emissions under-reporting.

It comes as the energy giant faces prosecution after it drastically under-reported toxic emissions, including benzene.

What's next?

The NT EPA has confirmed Inpex had committed to implementing the auditor's recommendations.

An independent audit has found Inpex is on track to fix major errors in reporting toxic emissions from its Ichthys LNG facility in Darwin, as the company faces prosecution and calls for better regulation.

The audit by consulting firm AECOM, ordered by the Northern Territory Environment Protection Authority (NT EPA) earlier in the year, found no evidence Inpex deliberately falsified emissions data and concluded the company had implemented "appropriate improvement actions" to better the accuracy of its reporting.

However, auditor Todd Mitchell noted that no independent site inspection was undertaken, and that his findings relied on publicly available documents and information provided by Inpex.

He also confirmed the company had not yet corrected all historical emissions errors and, despite making improvements, still does not directly measure all emission sources.

Inpex is currently facing prosecution by the NT environmental regulator over its under-reporting of emissions, including benzene — a chemical classified by the World Health Organisation as a class 1 carcinogen.

The Japanese gas giant was due to make its first court appearance on Wednesday, but the matter was vacated until November.

Audit part of environmental crack down

In July, the NT EPA recommended changes — including pollution limits — to Inpex's licence, as the regulator attempted to crack down on the company.

As part of the NT EPA's multi-pronged approach, an environmental auditor was ordered to evaluate Inpex's ability to control pollution, examine whether it had taken actions to rectify potential harm from pollution, and whether the company was accurately reporting emissions to the National Pollutant Inventory.

"The auditor concludes that Inpex has taken significant steps to rectify its emissions under-reporting," the report states, but added "there is additional work to complete".

The report said Inpex is now counting emissions from gas ships while they are moored at the facility, but noted the company is using industry averages from the Emission Estimation Technique Manual for Maritime Operations instead of direct, on-the-ground measurements.

The auditor said he considered this an "appropriate methodology" in the absence of direct sampled ship emissions "noting ship emissions would vary between vessels".

Ammonia emissions, as well as fuel and condensate emissions, were also being counted.

The report said Inpex is transitioning from its in-house spreadsheet reporting tool to an "advanced" environmental data management system, which the auditor found would significantly reduce the risk of future reporting errors if implemented properly.

Some pollutants not being reported

The auditor also questioned whether Inpex was reporting all required pollutants and emissions.

He found that while Inpex was reporting emissions on the government's list of 93 pollutants which potentially pose a risk to humans or the environment, the auditor said it was "unclear whether a full review has been done".

He highlighted mercury — a toxic chemical — as an example of a pollutant that was not being reported across all sources at the facility.

The audit identified multiple sources of "uncertainty" in the way emissions are reported, including the company's use of annual measurements which "may not fully capture variability".

Leaks and other fugitive emissions were recognised "as a key source of uncertainty", and the auditor pointed out that some emissions were still estimated using government averages rather than measured directly at the source.

However, he ultimately found the uncertainties "acceptable".

In a statement on Wednesday afternoon, the NT EPA confirmed Inpex had committed to implementing the auditor's recommendations, including undertaking an annual assurance assessment and updating all emission calculations.

NT Environment Centre climate campaigner Dan Broun said the audit makes it clear that Inpex's emissions were "yet to be rectified".

"The fact that ongoing audits are required show that Inpex hasn't got a handle on the situation at Ichthys and must not be trusted when it comes to Darwin's air quality," he said.

"Inpex has an enormous amount of work to do to bring down its emissions, monitor them correctly, and report them accurately."

Inpex senior vice president Bill Townsend said the audit highlights the actions the company took to address the unintended errors in the way some emissions were calculated and reported.

He said the safety and wellbeing of people, and the protection of the environment and community through safe operations, remain the highest priority.

"Importantly, ongoing air quality monitoring in the Darwin region has consistently shown emissions levels are well within government guidelines, meaning no increased health risk to the community, our local workforce or the environment from the Ichthys LNG facility," he said.