Interview with Katie Woolf, Mix 104 Darwin

Interviewer
Katie Woolf
Subject
Hydrogen hubs, Darwin, Beetaloo gas, geosequestration, energy exports to Japan.
E&OE

KATIE WOOLF: We now know that the Federal Government, well, they're set to spend nearly half a million dollars in new grants to accelerate Australia's clean hydrogen industry, with funding to be prioritised for regional areas. Now, the funding will go towards creating up to seven clean hydrogen industrial hubs, with the Government identifying these seven locations based on their interest, existing capabilities and infrastructure and resources. Now, joining me on the line right now to talk further about this is the Energy and Emissions Reduction Minister, Angus Taylor. Good morning to you. 

ANGUS TAYLOR: Good morning, Katie. Thanks for having me.
 
KATIE WOOLF: Thanks for joining us this morning. Now, Minister, we know that the Federal Government's already committed, I believe, $1.2 billion to a hydrogen investment. What's the purpose of the additional 150 million?
 
ANGUS TAYLOR: It's all about getting that critical infrastructure in place to support these hubs. We see Australia is uniquely positioned across the world in terms of our capacity to produce clean hydrogen, whether it's from renewables or from gas, or indeed, even from coal, and do it in a way which is very, very low or zero emissions. We have many sites, Darwin is one of them. Darwin is a very, very good potential site but we need to make sure we get that infrastructure in place to support the development of the industry. This is no different from the early development of the LNG sector or the iron ore sector in Australia. We've done it before; we know a lot about how to do it but we do know we've got to get that critical infrastructure in place to attract that private sector investment, build up those markets and build up, of course, the processing facilities that are going to be critical to building this industry.

KATIE WOOLF: So why is Darwin being considered? Is it because, is it because we do have rich gas resources?

ANGUS TAYLOR: Yes. So, Darwin has a number of things that are very useful. One is, you've got a capable workforce that has particularly been built up with the development of the LNG sector. Secondly, you've got good potential for renewables being there in the north, good irradiation. You've got a gas resource, which is extremely useful. There's some gas- CO2 sequestration options at Darwin. You've got the Beetaloo Basin being developed. So, all of those things in combination put Darwin in a very strong position. Now, most countries in the world would die for having a location like that. We've got seven we've identified in Australia. So having significant commitment to getting these up and running is a real opportunity. The other thing you have in Darwin is the relationship already with big export customers in Japan and this is where one of the early markets will be. We know that. We've been in close dialogue with the Japanese on the potential to build that export market, and Darwin is well positioned on that front as well. 

KATIE WOOLF: And so how are you going to determine which hubs, or which locations, realistically end up with these hubs? And just how big a chance is Darwin in with here? 

ANGUS TAYLOR: Well, it's been nominated as one of seven priority areas. So, you know, we've only nominated seven, it's one of them, and that puts it right on the list. What we do need though is we need the private sector investment coming forward. That's critical. You can't build an industry like this purely with public money. Public money is critical to get that infrastructure supporting and enabling infrastructure in place. You know, the facilities you need to be able to produce and export and supply domestically but the private sector money is crucial. So, we do need to see that coming forward but look, we're going to be working very closely to give Darwin the very best chance of being one of these hubs. I certainly think it has the makings of it and as I say, we wouldn't have put it on the priority list if we didn't believe that. 

KATIE WOOLF: So the reality of it is, by the sounds of it, that private investment is going to be crucial when it comes down to determining which locations these hubs actually do end up set up in?

ANGUS TAYLOR: Yeah. That's right. Now, you've already attracted an enormous amount of private sector investment in recent years and so, again, Darwin has a track record in doing that, but this is an industry that is ultimately going to be a public private partnership. We need that private sector money coming forward. It can't purely be done on the government purse. So, that will be really critical. I do know there's a number of players who are working on this now in the private sector, to make the sort of investments that are going to be necessary. So we'll continue to encourage that. 

KATIE WOOLF: Now, obviously, the aim is not only to have cleaner energy, but it is also about creating jobs. How many jobs could we see created here in the Northern Territory, if indeed this does get off the ground for us? 

ANGUS TAYLOR: Well look, when we did the national hydrogen strategy a couple of years ago, which got the ball rolling on all of this, we saw the potential to create around 8000 jobs across Australia. So, you know, if there's seven hubs, you can do the math on what a typical hub might be but, you know, you're talking certainly a thousand jobs in a particular hub over time and about $11 billion a year in GDP over the next 30 years. But the truth is that it's growing faster than we expected. If anything, there's upside on that. So we do think it's significant. Critical to that is not just the production of hydrogen, but the customer sectors that use the hydrogen. So hydro- I mean, what's extraordinary about hydrogen is it can be used in so many different applications. It can be used to produce fertiliser, ammonium nitrate. It can be used to, as a source of energy going into electricity generators, obviously has great potential in the transport sector. So many of the jobs will come on the customer side, not just on the supply side and we certainly want to see that happening in these hubs. 

KATIE WOOLF: Minister, my understanding is that WA and also Tassie have got the likes of Twiggy Forrest backing them. How do we compete with that? 

ANGUS TAYLOR: Well, you've had no shortage of private sector investment in Darwin in recent years. In fact, just as I was listening, and before I came on, you were talking about exactly that. Darwin has done this well and knows a lot about how do it, attract that private sector investment. The relationship that is really going to count in the early days to build a very fast export market, will be the Japanese. There's no question about that. That is where there's a large market. They desperately need clean hydrogen. We need it too, domestically but it's a smaller market in Australia than it is in Japan and having that pre-existing relationship and that investment that's come from the Japanese, I think, is a very, very strong starting point. 

KATIE WOOLF: I know that some people will be thinking to themselves, is it really going to be clean energy if indeed we do still use gas? I know that you've obviously pointed to solar and others as well, but I'll still put that to you. Is it really going to be clean energy if we are using gas from the Beetaloo?

ANGUS TAYLOR: Yes, and here's why. Gas can be made into hydrogen with a very clean stream of CO2. So it just, without going through the detailed chemistry, you get hydrogen and you get CO2, so it's not like burning coal in a coal-fired power station and that means it can be sequestered at very low cost. You've got good sequestration options, and they're only likely to improve with the Beetaloo. So we do see great potential to produce low emissions, affordable hydrogen quickly and that's the opportunity in this marketplace. Gas is, there's no question, it's part of it. Renewables are also part of it. If you can do both, then that's the best of possible, all possible worlds. And that's certainly what you have the potential to do in Darwin.

KATIE WOOLF: Minister, when are we going to know the outcome of where these hubs are going to be set up and if Darwin is one of the locations?

ANGUS TAYLOR:  It'll be in the first part of next year. As I say, we've sent a very strong signal in nominating the priority locations already, but we will make a decision on this in the first part of next year. 

KATIE WOOLF: Well, Minister, we really appreciate your time this morning. Thanks so much for coming on and giving us a bit further.

ANGUS TAYLOR: Good on you. Thanks Katie.

KATIE WOOLF: Thank you. That is the Federal Energy and Emissions Reduction Minister there, Angus Taylor.

ENDS