Speech to the World Energy Cities Partnership
Thank you Ben. (Introduced Ben Harvey, Chief Reporter The West Australian.)
I would like to begin by acknowledging the Traditional Custodians of the land on which this event is taking place, the Whadjuk Nyoongar people, and pay my respects to their Elders past and present.
I extend that respect to the First Nations people in the audience.
Hello all and thank you for the opportunity to speak today.
I’m very pleased this event is taking place in Perth, the only Australian city included in the World Energy Cities Partnership.
Congratulations to City of Perth Lord Mayor Basil Zempilas on bringing this conference to Perth. And congratulations on your re-election as Lord Mayor.
Clearly a long career in politics beckons.
This event brings together Australian and an impressive group of international representatives and provides an opportunity to learn from each other and help us advance towards a sustainable energy future.
City of Light
As we know, Astronaut John Glenn dubbed Perth the ‘City of Light’ as he orbited over our city in 1962 in the Friendship 7 spacecraft.
But Perth is now the City of Light for different reasons.
Perth has grown to become an energy hub for our entire region.
It is a hub for energy companies that keep the lights on across the Indo-Pacific – or some 60 per cent of the world’s population.
We have a very important role here in Perth, one that is critical for regional energy security.
This energy security provided by our State has been an important factor in the stability we have enjoyed in our region over many decades.
But this role in lighting and powering homes and industry across Asia is now undergoing a historic shift as our neighbours look to Australia’s vast reserves of critical minerals and rare earths to build the renewables they need to reduce emissions.
The importance of traditional resources
I am both a proud Western Australian and the Federal Minister for Resources.
This gives me a unique perspective on how important the resources industry is to our state, the nation and our international trading partners.
Our Prime Minister Anthony Albanese also understands the vital role that this state and the resources industry plays in our economy.
- One of the key pledges of this Government is to achieve net-zero emissions by 2050 and a 43 per cent reduction in emissions on 2005 levels by 2030.
- The previous Government shirked its responsibilities in reducing emissions and so now we are playing catch up.
The world’s path to reaching net zero runs through Australia’s resources sector.
Australia holds some of the world’s richest deposits of minerals in the world.
Our nation has vast gas reserves and provides more than half of the world’s seaborne iron ore trade.
The majority of that iron ore comes from mines in the Pilbara region.
The opening up of iron ore provinces in the Pilbara in the 1960s laid the foundations for the juggernaut of an industry that we know today and which underwrites our economy.
This iron ore industry was central to Australia establishing strong trade relationships with Japan, South Korea and China.
Australia’s first export licence for iron ore was issued in 1960 and in that year we exported only 500 tonnes of product.
In 2022 we exported 884 million tonnes of iron ore.
Just a few weeks ago I was at a celebration for BHP exporting three billion tonnes of iron ore to China. An incredible achievement.
Iron ore is essential for the creation of steel.
And the world can’t make the wind turbines and solar panels we need to create renewable power without steel made from iron ore from Western Australia.
To make steel at scale you still need to combine iron ore and metallurgical coal, which our nation has in abundance (albeit in the eastern states).
About half of our coal exports are of this type, helping our trading partners build essential infrastructure, including for renewable energy.
GAS AND THE CITY OF LIGHT
Australia is one of the world’s largest LNG exporters, accounting for just over 20 per cent of last year’s global market. LNG exports provide a considerable contribution to our domestic economy as well as energy security to our region.
Natural gas is supporting the security and reliability of Australia’s electricity grid during the transition to net-zero and will be required domestically for some time for manufacturing and processing the minerals essential to the global energy transition.
Thanks to the efforts of this Government, we have gas available to firm up renewable generation in the National Electricity Market.
Companies in the oil and gas sector are showing leadership in the deployment of low emissions technologies.
Almost every gas and energy company in Australia had a net zero commitment before the Commonwealth Government did.
We are now reviewing our greenhouse gas storage regulations to ensure they’re fit for purpose in a decarbonising world.
The IEA has made it clear that the world will struggle to get to net zero without Carbon Capture Use and Storage – and certainly we have seen unprecedented demand for offshore acreage for carbon management.
I note that the Managing Director of Chevron Australia Mark Hatfield is speaking next, so it’s worth reminding all that Chevron’s Gorgon LNG Project at Barrow Island is the world’s largest CCS project.
The project has not met its ambitious targets.
And clearly we need to work harder on improving technology and processes.
But the eight million tonnes of CO2 stored at Gorgon is no small thing. That’s eight million tonnes of CO2 not released into the atmosphere.
This City of Light needs energy security.
The region needs energy security.
And the world needs our energy so we can process our critical minerals.
But in order to continue to use and explore for gas to support the energy transition we need CCS to work. It’s that simple.
The central role of critical minerals
Critical minerals are crucial to the production of low-emissions technologies.
Australia has the world’s second largest resources of lithium, the second largest of cobalt, and the fourth largest of rare earth elements.
At the moment the entire world is seeking access to our critical minerals and rare earths.
Last week I was in Washington DC where Prime Minister Anthony Albanese and I held discussions with The President and American officials about increasing investment in the sector and securing supply chains between Australia and the US.
We announced the doubling of funding available through the Critical Minerals Facility to $4 billion – bringing the total in Government support for the sector to almost $6 billion.
And just a few weeks earlier I travelled to Berlin, Paris, Brussels and London where government representatives and industry all sought increased access to Australian critical minerals and rare earths.
Australia needs to embrace this opportunity, leveraging off our reputation as a reliable and stable miner and supplier of minerals to the world.
But we also need to be much more involved in downstream processing.
Our nation produces most of the world’s hard rock lithium, with exports forecast to reach $16 billion this year.
But last year almost all of that unprocessed product was exported.
By exporting so much unprocessed product offshore, we are missing out on an immense economic opportunity for Australia.
This government wants to ensure that we undertake more of the processing closer to where the ore is: in Australia.
We want to capture more value from the clean energy opportunity, and also increase our country’s energy and economic resilience.
I’ve previously spoken about the essential role of gas in the processing of critical minerals.
The World Energy Cities partnership I think could play a leading role explaining to the broader community, particularly to younger people, about the need for gas in this energy transition.
Australia is a resources superpower.
But we can become a renewable energy superpower, with the engine room here in Perth, The City of Light.
Unlocking the full potential of our critical minerals endowments is at the heart of the government’s ambition to be a clean energy superpower.
In June this year, I released a new Critical Minerals Strategy.
It sets a framework for policy direction and government decision-making. It is a guide for future action.
The strategy has been informed by extensive consultation with stakeholders from across industry, academia, governments, environmental groups, and First Nations communities.
I think one of the key takeaways of the strategy is that Australia needs to play to its natural advantage over other producers in the form of its Environmental, Social and Governance standards.
Our critical minerals come with a gold standard guarantee that they were produced by a country that has robust regulatory and policy frameworks and boasts strong environmental protections.
If other nations truly want to green their economies – they should buy green and gold standard critical minerals.
An integrated approach
Development of our critical minerals industry needs to be backed with good policy if it is to succeed.
The government is supporting our manufacturing and resources industries to decarbonise by establishing initiatives such as the Powering the Regions Fund and the Resources Methane Abatement Fund to keep Australian industry competitive in a changing global economy, and ensure our regions thrive.
One of the most notable programs to support decarbonisation is a new agreement between the Federal Government and the Western Australian Government under the Rewiring the Nation program to provide up to $3 billion dollars to expand and modernise electricity grids in the South-West and the North-West networks in Western Australia.
This agreement will help industry in the Pilbara to lower emissions and in turn will help Australia meet its emissions reduction targets.
This investment is expected to support around 1800 construction jobs and unlock future projects across WA.
And it will be crucial to the success of major projects in the North such as Perdaman’s urea plant and the green steel plans of giant South Korea company POSCO.
As we are all aware the energy transition will be a massive undertaking.
But it is not a case of throwing out traditional resources and embracing something new.
Traditional resources will have an important role to play in the transition and our economies for the foreseeable future.
Governments, industry and stakeholders need to continue to work together in the quest to achieve net zero emissions, while at the same time increasing the prosperity of our nations.
The Australian Government will continue to strongly back our resources sector while working in a practical way towards achieving our net zero objectives – as well as those of our trade and investment partners.