Speech to AOG Energy Conference, Perth
Thank you for such a warm welcome.
I want to begin by acknowledging the traditional owners of the land we are meeting on here today, the Whadjuk Nyoongar people, and pay my respects to their elders, past, present, and emerging. I extend that respect to all First Nations peoples present today.
Australia is rich in resources, but it is also rich in First Nations history and culture.
It is essential that the resources sector works closely with First Nations peoples. Ongoing and genuine partnerships with First Nations Australians is essential to the sustainability of a strong and responsible resources sector.
As you know, the Australian Government has made a commitment to implement the Uluru Statement from the Heart in full.
A referendum will be held later this year seeking to ensure Aboriginal and Torres Strait Islanders are recognised in the Constitution of this nation through having a Voice to Parliament.
I know a number of resources companies have indicated their support for the Voice, and I thank them doing so.
As I have mentioned previously, while the resources industry is now a leader in working with First Nations people, this has not always been the case.
Industry support for this positive change to the Constitution would be a welcome step. After all, this is a once in a generation opportunity to recognise First Nations people in the Constitution.
Before I talk about our resources sector more broadly, I would like to thank and acknowledge the Western Australian Government and the AOG Energy Conference organising committee for the invitation to speak.
In particular, I would like to acknowledge:
- My good friend the Hon Roger Cook MLA, Deputy Premier, and Minister for State Development, Jobs and Trade; Hydrogen Industry; Tourism; Science.
- And I would like to welcome Timorese visitors attending the conference as part of the Timor-Leste Australia LNG Partnership. Greater Sunrise is an unmissable, nation-building project and we need to make every effort to ensure it proceeds for the benefit of all.
Resources have come to the economic rescue of the nation repeatedly, most recently during the pandemic.
The resources sector has lifted the standard of living for all Australians by driving economic growth, creating regional jobs, and fostering innovation.
Here, in my home state of Western Australia, that prosperity has been driven in part by our abundant onshore and offshore natural gas reserves. As we transition our energy make up, our abundance of wind and solar sources will become more important as well.
Here in the west we have a can-do attitude and storied understanding of the role in the energy sector in our economy.
I am proud of WA’s strong track record of responsibly progressing resources and energy projects from exploration through to production.
As Resources Minister, I have made the point time and again that if resources projects stack up environmentally, socially and economically, and meet all regularity requirements, they should proceed.
These projects create good jobs, support families and communities, and continue to support the Australian economy as our largest export industry.
Resources and net zero
As you know, the Albanese Government is committed to achieving net zero emissions by 2050, and this commitment is now legislated.
Australia’s resources are vital to the clean energy transition. Without Australia’s resources sector there will be no net zero.
Building the needed technological innovations to achieve net zero, such as batteries, wind turbines and electric motors, will require Australian minerals, Australian production and Australian innovation.
Our copper, iron ore, aluminium, tin, zinc, nickel, cobalt, lithium, gold, silver and rare-earth elements will underpin Australia’s clean energy future.
And metallurgical coal will still be required for the production of steel into the future until all the hard work and scientific endeavour can make green steel production a reality.
Resources companies are showing leadership in the development and deployment of low emissions technologies, and we should acknowledge many in the sector long ago committed themselves to a pathway to net zero.
Traditional energy sources will have a role to play in Australia’s energy transition. Natural gas, for instance, is needed to ensure the reliability of an electricity grid increasingly powered by variable renewables.
The Prime Minister himself recently underlined the importance of gas as a flexible fuel. Gas is important for energy intensive projects such as the concentration and processing of critical minerals. It is also very important for the energy needs of Western Australian households and businesses.
Natural gas is also a critical feedstock for fertiliser and feed manufacturing that underwrites global food security.
Some have called for an immediate ban on future gas or the cancelling of long-term contracts with international partners who have invested in Australia for decades and across many sectors of our economy.
As my colleague, Energy Minister Chris Bowen, recently said these options are irresponsible and will not be countenanced by the Government. The sovereign risk created by any such acts would be untenable and economy wrecking.
And after all, we must recognise that our current energy trading partners are the same countries and companies we will need to help drive the energy transformation here and abroad.
A trusted energy supplier
One of our key objectives is for Australia to remain a stable and reliable energy supplier to both our domestic industries and regional partners.
Australia is one of the world’s largest LNG exporters, accounting for about 20 per cent of global LNG exports.
Australia is well positioned to meet future gas demand in Asia while working towards net zero by 2050.
This position of strength will help to meet not only Australia’s climate commitments but those of our neighbours, as well as:
- enhance our international reputation,
- attract green investment,
- drive emissions reduction, and
- maintain the international competitiveness of our industries.
Carbon Capture Utilisation and Storage
Turning to Carbon Capture Utilisation and Storage (CCUS), I acknowledge this is a key technology for lowering emissions.
CCUS isn’t just there to support the oil and gas industry, and it can be used to significantly reduce emissions from hard-to-abate sectors.
For instance, the International Energy Agency reports that CCUS is virtually the only solution for deep emissions reductions from cement production.
There is no doubt industry needs to do better in deploying these technologies – we all know that the future of the industry very much depends on getting this right and showing the public it can work.
There have been false starts, but industry must continue its efforts to get runs of the board.
The IEA is clear about its necessary role in a net zero world, and we continue to watch in earnest as technology improves and costs go down, and we continue targeted support in hard-to-abate sectors.
It is important to acknowledge the investment that the US administration under President Biden is making in CCUS technologies.
The President’s Bipartisan Infrastructure Law (as it is called) will provide $US2.25 billion ($A3 billion) to accelerate carbon storage projects to capture tens of millions of tonnes of CO2.
That is an enormous investment, and an acknowledgement that CCUS will play a role particularly in hard to abate sectors.
The government is committed to ensuring affordable domestic gas supply during the energy transition. A shortfall of domestic gas would see Australians face higher prices, disruptions in supply and unplanned outages.
The 2023 Gas Statement of Opportunities (GSOO), which was released overnight, reports that in the medium term, annual physical gas supply from existing, committed and anticipated production is forecast to be adequate through to 2027.
But the AEMO urges investment is needed in the near term to ensure adequate gas supply from 2027. AEMO has also signalled its concerns about gas supply on peak demand days in winter 2023.
The market operator is right to signal these concerns to market participants, so an appropriate market response can occur ahead of winter.
AEMO has highlighted the importance of the work the Government has done in securing Australia’s domestic gas supply through the new Heads of Agreement, signed in September 2022, and the new Australian Domestic Gas Security Mechanism reforms which are due to take effect on 1 April 2023.
We have worked closely with industry and market advisory bodies on the implementation detail of the reforms. But the ADGSM will remain a measure of last resort.
I am committed to working with industry to find commercial solutions to the challenges we encounter. Just as I did last year, when I secured a new Heads of Agreement with East Coast LNG Exporters to prevent a gas supply shortfall.
The agreement ensured additional gas supply, improved security and affordability of domestic gas supplies in future years and also introduced transparency measures to improve the information available to customers.
I know there have been challenging times with the introduction of a price cap to bring to a halt skyrocketing gas prices that had become unsustainable for the community and manufacturers.
Thanks to the combination of actions, here are now some positive signs to be found.
Finally, I would like to touch on decommissioning and the potential this important work will bring.
Offshore oil and gas decommissioning activities are expected to increase over the coming decades. This will bring challenges – but also opportunities.
Companies need to be actively planning and provisioning for decommissioning throughout the life of a project.
They need to be able to pay for and undertake activities in a safe, environmentally friendly and timely way.
This will help the industry maintain its social licence to operate. And it’s just the right thing to do.
I am committed to ensuring the regulatory regime is robust, and the necessary safeguards are in place. But I am also very excited about the opportunity for WA and Australia to benefit from the significant investment that will be required.
I want us to capture this investment opportunity to build a competitive, world-class decommissioning and sustainable industry to service demand in Australia and the Asia-Pacific.
I want us to build supply chains to dismantle, dispose and ethically recycle the infrastructure. I want us to build a highly skilled Australian workforce that can support your industry do the job it needs to do.
It will require multidisciplinary expertise across oil and gas, logistics and transport, and waste and environmental management, and skilled jobs in regional and Northern Australia.
It will require the industry to plan its decommissioning ‘campaigns’ in a way that is efficient and cost-effective for industry and regulators alike.
If you want a skilled workforce, you need to plan and invest in it now, rather than trying to compete for a small pool of high skilled people later.
There are opportunities to be innovative, to use new technologies, to make decommissioning safer, cheaper, faster and achieve better environmental outcomes.
The action we take now to capitalise on these opportunities will affect our future. And the communities who live and work in your industry.
And of course, there are other nations working on decommissioning and I think of the extraordinary activity taking place in the North Sea off Scotland where 20 billion pounds is expected to be spent on the decommissioning of gas and oil infrastructure.
There will be lessons to be learned, and just as expertise from the North Sea gas industry helped to develop the Australian industry, I’ve no doubt our expert friends in Scotland will assist us again to build a world class decommissioning industry.
It is important we work together, to ensure decommissioning in offshore Australia is done well and done the right way to benefit us all.
Providing a stable investment environment is critical to encouraging the investment needed to seize the opportunities in the net zero economy, particularly opportunities in clean energy trade and investment.
There are many challenges ahead, but I applaud the fact the industry has taken up the challenge of net zero.
The gas industry of Australia has continued to develop since the Esso/BHP Joint Venture discovered the Barracouta gas field in the Bass Strait in 1965.
Then in WA, the North-West Shelf Project emerged in the 1980s, providing an economic boom to the state, and energy security for the region. It was similarly the case in Queensland, where onshore gas development has provided export capacity and secures energy for the East Coast.
Today, the industry in this country accounts for at least 80,000 direct jobs and many more indirect jobs.
And since 1965, it would be hard to put a figure on the number of jobs this industry has created, and livelihoods it has been important too.
Many regional communities know this industry is integral to their prosperity and the liveability of their towns, particularly in the regions.
A lot is said about the gas industry in this country and around the world, but I want to take this opportunity to thank – in particular – the workers of this industry for making it a success.
All elements of the industry are important – capital investment, management, regulatory stability, exploration.
But without those doing the hard yards on sometimes difficult sites in uncomfortable conditions, with long swings away from their families, there would not be a gas industry.
So I thank them all. And I think everyone here today and wish you the very best for the remainder of the conference.