Australia is one of the world’s leading producers of oil and gas. As a nation we are fortunate to have abundant natural gas reserves and responsible development of these resources provides jobs and economic growth for Australia.
In fact, oil and natural gas together account for nearly two-thirds (65%) of our national energy use.
Liquefied natural gas is also Australia’s second largest export - larger than coal and second only to iron ore – contributing around 11% of Australia’s total exports.
Around our country, hundreds of thousands of Australian jobs rely on gas including those employed directly in the industry and many thousands more in industries where gas is used – such as electricity generation, manufacturing, transport, construction.
Many of these jobs are in Australia’s regional and rural areas, where they help to build stronger communities and support local businesses.
Over the past decade the industry has contributed more than $66 billion in taxes, royalties helping to build hospitals, schools and roads for communities across Australia.
Importantly, Australia’s natural gas is playing a vital role in helping reduce greenhouse gas emissions – here in Australia and across the world. Natural gas releases only half the carbon emissions as compared to coal when used in electricity.
The cleaner energy characteristics of natural gas are underpinning a strong demand outlook for this reliable strategic asset. In fact, a 2020 IEA report highlights a 52% increase in demand for gas in Asian regions to 2040.
APPEA appeared at this morning’s Trade and Investment Growth Committee hearing to discuss the contribution of Australia’s oil and gas industry to Australia’s economic well-being and cleaner energy future.
APPEA Chief Executive Andrew McConville – joined by APPEA Director – Public Affairs Sarah Browne, and APPEA Director – Government Relations Ashley Wells – highlighted a concerning information gap between the industry and financiers.
This information gap, Mr McConville explained at the hearing, was particularly pertinent when discussing the role natural gas can play in reducing emissions and supporting renewable eenergy growth with analysts, advisors, banks, and super funds.
“Part of the challenge is that it’s very easy to characterise the debate as we move to renewable energy [in a way that] it has to be ‘black and white’ or ‘either or’ […] the reality is far more complex than that in the role that gas can play in supporting renewables,” Mr McConville said.
Mr McConville also said there was a lack of knowledge regarding the industry’s important contribution to other industries outside of the energy sector.
“It’s not well understood that only 30% of natural gas is used in electricity generation – the other 70% is used in other industries such as mining and manufacturing, producing a lot of the things we take for granted [and] it’s very easy to characterise gas as only being for electricity generation,” he said.
The role of important technologies such as Carbon Capture and Storage (CCS) Systems and hydrogen were also cited in response to the findings of a recent IEA report questioning the gas industry’s place in a net zero future. Mr McConville stated that the IEA Report represented a single pathway to a net zero outcome that doesn’t take account of these technologies, in addition to emission reductions in other sectors such as agriculture.
Mr McConville emphasised the report’s mentioning of the future hydrogen opportunity within Australia, stating that while the uses of the industry’s product might change in future, overall demand would be maintained.
“We as an industry look at that as an opportunity because natural gas is the most logical and affordable pathway to hydrogen – blue hydrogen first, and then from there flowing through to green hydrogen as well – and CCS, which is in effect decarbonising any form of energy,” Mr McConville said.
The oil and gas industry is an important contributor to reducing emissions – the Australian Government estimates that Australian LNG exports have the potential to lower emissions in importing regions by around 170 million tonnes of CO2 each year by providing an alternative to higher emissions fuels.
This is a tremendous opportunity for Australia to utilise our natural gas resources in a way that is consistent with net‐zero emissions.
The oil and gas industry’s existing environmental stewardship and evidential role in the future of reducing emissions must continue to be publicised to combat misinformation affecting the reputational health of the industry, which is a crucial important economic enabler of the Australian economy.