Perth, 21 November 2024
Welcome
Good afternoon members, fellow directors of Australian Energy Producers, and secretariat.
Welcome to the 2024 Australian Energy Producers Annual General Meeting.
2024 – year in review
This has been another impactful year for our industry, and for Australian Energy Producers.
Today’s AGM marks one full year of operation under our new name.
Our name change was a necessary evolution to reflect the diversity of our industry, and the essential role that we are playing, and will continue to play, in Australia’s energy future.
As we approach the end of the year, it is worth reflecting on some of the highlights and milestones that shaped our industry in 2024.
There has been a clear shift in the national discourse about the role of gas.
There is growing recognition and acceptance that natural gas is critical to Australia’s long-term energy security, and plan to achieving net zero by 2050.
Our industry is working hard to play its part in the transformation of our energy systems.
Australian Energy Producers members have continued to advance major nation-building gas projects that will supply energy to our customers at home and abroad for decades to come.
And our industry has again stepped up in 2024 to deliver reliable domestic supply as markets tighten here in WA and on the east coast.
We continue to underpin the energy security of our trade partners.
Australia’s LNG trade remained the nation’s third biggest export commodity, worth $69 billion last financial year.
This flowed through to a record $17 billion in tax and royalties paid by our industry to state and federal governments in 2023-24, helping fund essential infrastructure like hospitals, schools and roads.
We should be proud of this enormous contribution.
And it reinforces the fact that when our industry does well, Australia does well.
Future Gas Strategy
Another major milestone in 2024 was the release of the Federal Government’s Future Gas Strategy in May.
The Strategy provided welcome clarity on the important role for gas in our energy mix, “to 2050 and beyond”.
The Strategy confirmed that natural gas and carbon capture, utilisation and storage technologies are critical to Australia’s energy and economic security, and to achieving net zero emissions by 2050.
It made clear that Australia needs continued investment in exploration and development of new gas supply to avoid forecast shortfalls and to meet long-term demand.
And, importantly, the Strategy also recommitted Australia to remaining a reliable, trusted provider of natural gas to our trade partners to support their energy security and decarbonisation goals.
There is much work still to be done to convert these positive messages into tangible actions, but it provides a solid foundation on which to build an enduring energy policy for Australia.
CCUS
Australia also has the potential to be a world leader in the deployment of CCUS, and we’ve seen some significant developments in recent months.
Australia is now home to two of the world’s largest CCUS projects, with the Santos and Beach Energy Moomba project starting operation last month, and Chevron Australia’s Gorgon CCS system, which in August marked 10 million tonnes of C02 permanently stored in its first five years.
Around Australia, our industry has several more carbon capture projects under development and which could be operating by 2030.
And the Australian Government’s ratification of the 2009 amendment to the London Protocol means Australia can formally begin working with our trading partners on regional approaches to CO2 transport and storage.
This presents a major strategic and economic opportunity for Australia to support emissions reductions beyond our own borders.
As does the Carbon Capture, Utilisation and Storage Action Plan the Western Australian Government has released today.
The Plan sets out a clear vision, backed by tangible actions, for CCUS to unlock new economic and emissions reductions opportunities for Western Australia.
I commend the Cook Government for its leadership on this issue.
Looking forward
Natural gas is not just a part of the energy transition – it is an essential part.
The new energy economy will be built by our industry — powering manufacturing, heating millions of homes and businesses, and backing up the rollout of renewables.
- Today, more than 5 million homes are connected to gas;
- Gas provides almost 40 per cent of the energy used by our manufacturing sector;
- Here in Western Australia, gas provides 60 per cent of our electricity;
- Around Australia, gas is supporting a growing role for renewables by being the reliable back-up in periods of peak demand.
As AEMO Chief Executive Daniel Westerman said a few weeks ago, natural gas will be the “ultimate backstop” for keeping the lights on to 2050 and beyond.
All this is contingent on continued investment in natural gas exploration and development.
Action needed to address gas shortfalls and support investment
However, investment in exploration and gas development has stalled amid continued uncertainty, approval delays and lawfare.
Many of the same barriers to supply that I spoke about at last year’s AGM remain today.
The delays and uncertainty for offshore projects as a result of onerous and ambiguous consultation requirements continue to delay new supply projects here in Western Australia, and in the Northern Territory and Victoria.
And, despite identifying the clarification of consultation requirements for offshore projects as an “immediate action” in the Future Gas Strategy, the Federal Government is yet to outline a clear path forward for addressing this issue.
Industry remains willing and ready to support the Government when it’s ready to act.
The threat of legal challenges from activist groups is another issue that continues to undermine Australia’s ability to attract investment.
The Federal Court’s decision in January in favour of Santos’ Barossa project shone a light on the extreme tactics of activist legal organisations like the Environmental Defenders Office.
Yet the EDO continues to receive $2 million a year in taxpayer funds.
Meanwhile, the Government’s intervention in the east coast gas market almost two years ago, and the subsequent introduction of price controls in the Mandatory Code, continues to mute the market signals needed to stimulate investment in new supply.
Addressing these barriers to new supply and investment should be a national priority.
The ACCC has warned that in the east coast gas market, “Gas shortfalls are projected to emerge from 2027 unless new sources of supply are made available.”
While here in the west, the Australian Energy Market Operator has forecast structural shortfalls from 2030.
Without meaningful steps towards growing gas exploration and production in Australia, we potentially risk compromising our own energy security as well as missing out on the considerable economic and strategic opportunities in the region.
Opportunities in our region
According to the International Energy Agency, demand for LNG in Southeast Asia could increase tenfold under current policies – a new market equivalent to Australia’s total LNG exports today.
Australia should be the frontrunner to meet this demand, but other countries are moving faster to secure these opportunities.
Last year, the United States overtook Australia as the biggest exporter of LNG in the world.
Under the Biden administration the US is on track to more than double its LNG export capacity by 2028 and that growth is expected to continue under President Trump.
Qatar has announced plans to almost double the country’s LNG production by 2030, which means Australia could fall even further behind and risk missing out on the significant economic and strategic benefits before us.
Federal election priorities
The upcoming federal election presents an opportunity to secure Australia’s long-term energy security, economic prosperity and to address cost of living pressures.
Key to this will be restoring Australia’s global competitiveness for investment in new gas supply.
Gas availability affects the cost of living though electricity prices and the prices of consumer goods including food and manufactured products.
Australia’s energy future requires immediate action to address the regulatory uncertainty, approval delays and threat of legal challenges holding up critical energy projects.
Supported by ongoing exploration to find and develop new onshore and offshore gas resources.
As the Future Gas Strategy outlines, without continued investment in exploration, acreage release and gas production, “there are real risks gas will become unaffordable and unavailable to Australian households and industry well before 2050.”
And by ensuring Australia is well placed to meet the growing LNG demand in our region, Australia can strengthen its strategic international role as a reliable energy partner, drive emissions reductions in Asia, and continue to reap the economic and energy security benefits that decades of LNG investment have delivered for Australia.
National Awareness campaign
Australian Energy Producers has an important role in advocating for these necessary reforms to decision-makers, but we also need to bring the Australian community on this journey.
Through our national advertising campaign, Keeping the Country Running, Australian Energy Producers is helping to inform the community about the critical role of gas in our economy.
The latest campaign materials showcase the role of gas in manufacturing, by providing the energy to make bricks, aluminium, and glass – all critical inputs to building the Australian home.
And you will see more about the role of gas in the Australian economy, and in our everyday lives, as the campaign evolves.
There is still much work to be done. And there will be more challenges ahead.
But with a strong, united industry voice in Australian Energy Producers, and with your support, our industry is well placed to continue to build on our success.
New Board
Following today’s meeting we will welcome new Directors to the Australian Energy Producers Board.
I thank the Directors for their efforts this year, and I thank them in advance for an even bigger year ahead.
Finally, I would like to acknowledge the work of the Australian Energy Producers Secretariat team.
Our industry would not have the strong voice it needs in Canberra, in our states and territories, or in communities around Australia, without them.
Thank you for your continued support.
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