Woodside contributes to Australia’s gas strategy consultation to tackle offshore regulatory gridlock
The Australian government’s consultation paper, which aims to come to grips with a brewing cauldron of uncertainty surrounding the offshore regulatory approvals system, has hammered home the need for clear regulations in a bid to enable the country’s economic and energy security. One of the contributors to the government’s new gas strategy is Woodside.
The Australian government’s Department of Industry, Science and Resources has confirmed the receipt of 292 submissions to its Future Gas Strategy consultation paper but only 244 public responses have been published, as some were submitted privately. Woodside, which welcomed the opportunity to contribute to the government’s development of a future gas strategy, explains that there is “a growing recognition” of the “pivotal role” of gas at a time when access to secure, affordable, and reliable energy supply is becoming increasingly challenged in “a volatile and uncertain world.”
Many of the submissions have pointed out that gas will play a key role in “a responsible energy transition,” according to Woodside, which supports all four objectives of the strategy and sees them as interrelated goals: providing affordable and reliable energy for Australians; maintaining strategic partnerships and energy security in the region; and simultaneously progressing decarbonization of Australia’s trading partners and decarbonization in the country.
“Australia has the natural resources to support both the renewable and non-renewable energy developments which will be needed as populations increase and energy consumption rises. These natural endowments provide Australia with an opportunity to be a regional and global leader in the energy transition. But we must get the policy settings right to embrace the opportunities presented by a strong Australian gas industry. The industry needs fiscal and regulatory stability if it is to continue to take investment risks and develop Australia’s resources,” outlined Woodside.
In addition, the Australian energy giant is adamant that the government needs to provide certainty to workers and businesses on the medium- and long-term role of gas to enable them to make decisions and invest with confidence. Woodside claims that its submission has put forward “practical and constructive” short- and medium-term recommendations that address this and other issues impacting the gas industry, encompassing improving the regulatory framework to ensure approvals are provided promptly and with certainty.
“In this respect, it is encouraging that the Commonwealth and the Western Australian state governments are working to ensure there is clarity for all parties around the consultation requirements for offshore developments. In addition to the importance of gas domestically, governments must send a strong signal to our regional energy partners that Australia is open for business,” added the company,
Furthermore, Woodside recommended the appointment of an Energy Envoy for Australia who can support existing engagement with trading partners and reinforce the country’s ongoing efforts to maintain regional energy security while reducing emissions. The Australian player is convinced that this strategy and the future success of Australia’s gas industry and the jobs it supports require bipartisan support.
Meanwhile, Australian Energy Producers, representing Australia’s upstream oil and gas exploration and production industry, has welcomed the offshore consultation process, as it believes that the release of the paper kick-started “a long-overdue and important process to address uncertainty and complexity” within the national offshore regulatory approvals system.
Australian Energy Producers’ recent report highlighted that Australia would need substantial gas production over the following 26 years to ensure the security of the energy supply in 2050, even under a net-zero scenario. As a result, it was concluded that further investment in gas supply was needed to maintain production levels from operating fields to offset the decline.
The Australian government’s paper highlights the importance of expediting a resolution to the regulatory issues that are delaying new gas supply developments. The paper also follows repeated forecasts of gas shortfalls from Australian energy market authorities. Australian Energy Producers’ Chief Executive said urgent reforms were needed to address almost two years of regulatory uncertainty that was putting at risk the energy security of Australia and its international trade partners.
Samantha McCulloch, Australian Energy Producers’ Chief Executive, commented: “Timely and robust environmental approvals are critical for all energy projects to support Australia’s energy security and the net zero transformation. Regulations must provide clarity and certainty for industry, while maintaining comprehensive and meaningful consultation with traditional owners and stakeholders.
“We have been calling for the federal government to fast-track a solution to this broken offshore environmental approval system for months. The paper is a welcome step in the right direction at a time when Australian households and businesses require new gas supply to be developed to ensure reliable and affordable energy.”
While mentioning the regulatory approval backlog and explaining that Australia’s energy future would depend on natural gas, Kevin Gallagher, Santos’ Managing Director and Chief Executive Officer, pointed out that shutting down traditional energy industries was bound to drive energy prices up and drag energy security down while slowing the pace of the energy transition engine.
Bearing in mind all the challenges energy markets are facing on the global scene, EnergyQuest recently released its outlook for the east coast gas industry, painting a future of “great uncertainty,” due to the potential for large swings from balanced supply/demand, to tight supply, and the long-term possibility of oversupply.
On the other hand, EnergyQuest’s report examining the west coast gas industry brings forth an image of an opaque Western Australian (WA) domestic gas market, which has been accustomed to low prices and plentiful supply but is now seeing the opposite.
While emphasizing that tens of billions of dollars of economic benefits and jobs gas exports deliver for Australia were also at risk, McCulloch stated: “We need the right policy and regulatory settings to underpin these major investments and ensure our industry can continue to deliver for Australia and the region.
“Reliable, affordable and lower-carbon energy, such as gas, has never been more important to Australia in these times of geopolitical upheaval and cost of living pressures.”