AUSTRALIA’S oil and gas trade group has said the country should develop new fields to boost energy security in the wake of the crisis caused by Russia’s invasion of Ukraine.
The call was made by Ian Davies, Chair of the Australia Petroleum Production & Exploration Association (APPEA) during his opening speech of the trade group’s annual conference on 17 May.
Noting the International Energy Agency’s (IEA) requirements for Australia to maintain a 90-day oil stockpile, Davies said: “As a net importer of oil and refined products, a better way to achieve oil security would be to encourage investment in new oil developments; get new, material oil provinces, such as the Bedout Basin in Western Australia, up and running; and expand existing basins where possible.
“Combined with the investment already made to keep our two remaining Australian refineries open, this would better enable us to contribute to a global response – and provide far greater security for Australia – than a 90-day stockpile.”
The call for more development runs counter to the IEA’s warning last year that no new oil and gas developments can take place if the world is to limit warming to no more than 1.5°C.
Davies, who is CEO at Senex Energy, noted that Australia imports around 90% of its refinery feedstocks and 60% of its refined petroleum products, while 80% of its own oil output is exported due to the characteristics of the oil produced and its distance from domestic refineries.
“The focus of our opponents on stopping fossil fuel projects has had no effect on consumer demand, and no effect on emissions reduction. What it has done is to push fossil fuel developments to places such as the Middle East and Russia. Russia and some countries in the Middle East are not committed to a peaceful, rules-based world. Similarly, environmental protection and climate action are not necessarily priorities. This has created a supply crunch and has raised prices, hurting people and economies around the globe,” Davies said.
New investment in oil, gas and renewables is needed to support Australia’s next generation of manufacturing industries, he said. He noted that it took 150 years to build the existing energy and economic system and that the world now has less than three decades to reconstruct. He said that CCS is critical in preventing emissions from fossil fuels projects, and pointed to its use at the Gorgon LNG project in Western Australia and the Moomba project under development in South Australia. Though the use of CCS at both has not gone smoothly, with Gorgon struggling with years-long delays and Moomba requiring the development of a Government carbon credit scheme before the developer would sign off on investment in capture technology.
Last month, the Investor Group on Climate Change warned that investors should be cautious in assessing the interconnected risks of climate targets, policy changes and declining demand which could strand new gas projects.
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