Speech to the AFR Energy and Climate Summit
Thank you Mark for that introduction.
I would like to begin by acknowledging the Traditional Custodians of the land on which this event is taking place, the Gadigal people of the Eora Nation, and pay my respects to their Elders past and present.
I extend that respect to the First Nations people in the audience.
You all know we have an important moment in Australian history coming up this weekend.
As the Resources Minister, I am pleased to work with an industry that, despite its past, knows the value of consulting with and listening to Aboriginal people. The resources industry has a very mixed history with the Traditional Owners of this land, but now is this country’s greatest example of how listening to Traditional Owners gets better results for everyone. Increasing Indigenous participation in our community, the granting of land rights and the important acknowledgement of traditional land ownership has not impeded the stellar growth of Australia’s resources industry.
Nor has it affected in any way the prosperity of our nation. And neither will the Voice.
It will only make us better.
In my home State of Western Australia, the resources industry works closely with Aboriginal people, and has done so for many years. Mining projects don’t go ahead without the approval of Traditional Owners. And there are plenty of mining projects. Under Liberal Premier Colin Barnett, Western Australia took the important step of reaching a settlement with the Whadjuk Noongar people of South West Western Australia. It was a settlement that recognised their loss, and it has passed into all of our lives quietly and without controversy or conflagration. It was simply the right thing to do, and Western Australia and the WA resources industry that underpins the economic success of the whole nation is the better for it.
The Wadjuk Noongar Settlement only made us better. Just like the Voice: it will only make us better.
So this weekend I would ask to you to vote Yes for recognition and listening.
I would like to acknowledge the Editor in Chief of The Financial Review Michael Stutchbury. And of course, I recognise my colleague, the Minister for Climate Change and Energy Chris Bowen who will speak later this morning.
It is a great privilege to be Australia’s resources minister.
Without our nation’s resources and geology we would not be as prosperous as we are today.
Mining underpins our standard of living, and the success of our economy in good times and bad. Mining and the resources sector are the ballast in our international trading relationships and secures our economic and political standing in the region.
We are a trading nation. Trade in goods and services that we cannot consume ourselves ensures our national prosperity.
Australia’s resource and energy export earnings reaped a record $460 billion in the last financial year.
Though the value of Australia’s resources and energy exports are forecast to ease to more normal levels because of slowing world growth, the resources industry will continue to support the nation’s finances. When the Federal Treasury says ‘commodities prices benefit the budget bottom line’, they mean: ‘the sustained price and delivery of iron ore, coal, LNG and gold to our trading partners’ benefits the budget bottom line’. These are the commodities we produce and produce well.
Australian governments collected $47 billion in taxes and royalties from our natural resources in the 2020-21 financial year. Royalties from resources are used to build essential assets like roads and hospitals, schools, and other critical infrastructure upon which we all depend.
The resources sector directly employs over 280,000 people. And First Nations people make up a greater share of the workforce than in any other sector.
And into the future Australia’s resources sector will be at the centre of the nation’s green energy transition. But more than that, we will be an integral part of the global energy transformation.
Resources and the path to net zero
The path to reaching net zero runs through the Australian resources sector.
I think that it is not well understood that decarbonising the global economy will require more mining, not less.
The mining and chemical processing of critical minerals and rare earth elements will be the backbone of the clean energy transformation the world must undertake over the coming decades to address dangerous climate change.
Australia has vast reserves of critical minerals, but they need to be mined. They won’t help us by staying in the ground.
Demand for these technologies will increase dramatically in the years ahead.
This means more demand for lithium, cobalt, graphite, and rare earth elements.
Australia produces 79% of the world’s hard rock lithium, with exports forecast to reach $16 billion this year. But last year, 96% of that unprocessed product was exported. This government wants to ensure that we undertake more of the processing closer where the ore is: in Australia.
We are the world’s third largest cobalt exporter and the fourth‑largest exporter of rare earths. Again, we can do, and should do, more processing of this natural endowment, here.
I have just returned from meetings in Europe and the UK, and I can assure you the entire world is seeking access to our critical minerals and rare earths. Equally, they are starting to explore more, closer to home, and seeking alternatives from all over the world.
This is a race. A race to secure the stable supply of the critical minerals and rare earth elements that will enable a clean energy future for the world.
Another sometimes overlooked fact, is that critical minerals need to be combined with traditional commodities like copper, nickel and aluminium to produce the products the world needs.
Australia is the fourth largest exporter of mined copper and nickel and a significant producer of aluminium.
Iron ore and bauxite are vital inputs to the steel and aluminium we need to build the electric vehicles, factories and infrastructure of a decarbonised global economy.
Steel is also critical to delivering crucial sources of renewable energy – solar, tidal, geothermal and wind, and enabling infrastructure, like transmission networks.
To make steel you need iron ore. Australia has the vast iron ore deposits of the Pilbara.
And making steel at scale still requires metallurgical coal, which our nation has in abundance along northern NSW and Queensland
About half of our coal exports are of this type.
Our resources build cities. They build aeroplanes, ships and motor vehicles.
And they will contribute to realising our own green energy aspirations and those of our trading partners.
The economic and security importance of gas
Australia is one of the world’s largest LNG exporters, accounting for about 21% of last year’s global market and providing a considerable boost to our domestic economy.
About 70% of Australia’s gas production is exported, primarily on long-term contracts to Japan, China, the Republic of Korea, and Taiwan, and Singapore.
Australia is by far the largest LNG supplier to Japan, providing nearly half of Japanese LNG imports in 2022, worth an estimated $34 billion. Importantly, Australian LNG powers the great cities of Japan and provides for the people of our good neighbour. Japan is a nation that is driving to a decarbonised economy, and it will need our LNG as part of that journey.
These LNG trade and investment partnerships are more than simply commercial arrangements.
Energy security is crucial to the stability of our region.
Australian resources and energy have been one of the key ingredients in the stability and prosperity we have enjoyed in our region in recent decades.
Recent global events have increased the importance of Australia as a trusted energy export partner.
Nations like Japan and South Korea rely on Australian gas for energy security today. They’ve also planned to use Australian gas to support their energy shift from coal.
Japanese and South Korean demand, and their significant capital investment, has underpinned the development of Australia’s LNG industry and most Australian gas production for the benefit of Australian industry and consumers.
Australia will continue to welcome foreign investment in our resources and energy sectors.
We must get the balance between gas demand and supply right to protect ordinary Australians, to support Australian businesses and to support our energy grid in the transition to renewables.
The IEA has acknowledged that in all of its transition scenarios, continued investment in gas will be needed to meet demand.
This is why the Australian Government is developing the Future Gas Strategy, to understand the future demand for energy, particularly gas, and balance the needs of consumers, industry and future generations through the transition underway within our region.
The Future Gas Strategy will inform how Australia’s energy system can become cleaner, cheaper and more reliable while maintaining our international reputation as a trusted energy supplier to the region.
Despite some reports, the discussion paper is wholly cognisant of the need for Australia to consider the its trading relationships as we develop a Future Gas Strategy.
Equally, gas and the gas sector are a significant source of Australian greenhouse gas emissions.
I invite everyone with a personal and professional interest to contribute to the Future Gas Strategy, and to help us shape the future. I put it to you that is every single person here today.
Through the Future Gas Strategy, we will create a framework that balances energy security with affordability and investment certainty.
Commitment to net zero
The Australian Government has pledged to achieve net-zero emissions by 2050 and a 43 per cent reduction in emissions on 2005 levels by 2030.
We will work towards our targets in a sensible and systematic way.
The government’s Safeguard Mechanism will drive down emissions from Australia’s largest emitters, including gas producers, while maintaining the international competitiveness of our industries.
Companies in the oil and gas sector are already showing leadership in the deployment of low emissions technologies and our Safeguard Mechanism will further encourage this.
Carbon capture and storage
On carbon, capture and storage, let us be clear it will play an important role in managing carbon and reducing emissions, particularly in hard-to-abate sectors. The US, Canada, and others have leant in hard to ensure CCS continues as a carbon management proposition because – as the International Energy Agency has confirmed – we need CCS if we are to reach net zero.
Australian resource projects – backed by the CSIRO and our universities – are world leaders in developing commercial‑scale carbon capture technologies.
Australia hosts the world’s largest commercial CCS project, Chevron’s Gorgon LNG Project at Barrow Island in Western Australia. Eight million tonnes of stored CO2 is not to be sneezed at.
There are currently 18 CCS projects at various stages of progress in Australia, aiming to collectively sequester 20 million tonnes of CO2 a year by 2035.
I recently announced the opening of bidding for the 2023 Offshore Greenhouse Gas Storage Acreage Release.
The release of new acreage builds on the government’s investment to improve regulations to support offshore CCS projects as part of a $12 million package in the last Budget.
Our nation will continue to be both a reliable energy trade and investment partner, as well as being a positive contributor to global energy security and decarbonisation.
Australia’s critical minerals will play a pivotal role in the transition to net zero.
But so will traditional commodities like iron ore, copper, nickel and bauxite.
And gas will be part of the world’s energy mix for the foreseeable future.
While the global transition to net zero is a great challenge, it is also an enormous opportunity for Australia – for our resources sector and the workforce it supports.