APPEA 2019 – That’s a wrap!
Opening the final day of the 59th APPEA Conference Senator the Hon Matt Canavan told delegates the May 18 federal election showed Australians did not support radical action on climate change, but rather a sensible, balanced approach, which he said must be based on international agreement.
He said Australian voters had rejected carbon pricing policies in four consecutive elections, indicating the returned Coalition Government would continue its policy of encouraging emissions reduction projects under its Climate Solutions Fund
called on the states to support a national approach to energy policy,
criticising the WA EPA’s requirement for full carbon offsets on emissions from
new resources projects, and attacking the moratorium on onshore gas exploration
and development in Victoria. Calling both polices ‘non-sensical’, he said
action to increase the supply of gas was paramount.
In his summary, Canavan strongly recommitted the Federal Government’s support of the industry. He encouraged the sector to double its efforts to share positive stories in order to even up the debate often dominated by ‘noisy bullies.’ He said the industry should be proud of what it provides Australian communities and the economy
The first plenary session of the day, ACCC Chair, Rod Sims said removing supply restrictions was vital for the Australian gas market. Sims cited the creation of an integrated gas market, extending the life of some declining conventional gas reserves and unlocking the potential of unconventional gas resources, particularly CSG in Queensland, to support his claim.
He cautioned however, that the industry had not yet achieved ‘the security of supply and sustainable prices for the domestic market in the east coast.
“Domestic wholesale gas prices have risen two to three times higher than historical prices in a relatively short period, putting many trade-exposed Australian manufacturers under extreme pressure to remain internationally competitive.”
Sims claimed there was a need for more transparency, saying that the ‘opaqueness’ the industry has operated in had “hindered the market’s ability to respond efficiently to the changing market conditions.”
To end the plenary session, Ticky Fullerton, Business Editor, Sky News, facilitated a panel discussion with Rod Sims, ACCC; Nathan Fay, ExxonMobil Australia; Santos CEO, Kevin Gallagher; and Andrew Hodge, Macquarie Securities.
Starting the conversation with price, Nathan Fay said we had to be pragmatic about the discussion of costs and seriously look at the supply side of the equation. Fay argued that more gas supply into the market, delivered with reasonable transport costs would lead to lower the costs for gas users.
Kevin Gallagher said the Narrabri Gas Project, which Santos has already spent $500M on, could deliver up to 50% of NSW’s gas needs long term.
Gallagher said the project would deliver gas more cheaply as it is closer to its market, and would inspire investment confidence more broadly with the clear message that Australia could ‘get the work done’.
Highlighting some of the steps already taken by industry on this matter, he said Santos has worked hard to reduce its production costs. “In Queensland, we’ve reduced the cost of drilling coal seam gas wells by a massive 84 per cent since 2015.” He committed to bringing that experience to the Narrabri Gas Project.
Moving to policy, Nathan Fay said as an industry we needed to be concerned about the unintended consequences of major decisions being made about our resources. He referenced ConocoPhilip’s CEO comment to conference on Tuesday that they didn’t have to be in Australia, due to the amount of international competition for investment.
“Australia must compete to secure its share of investment in what is currently a booming oil and gas landscape globally,” Fay said.
“We look forward to the establishment of a comprehensive and stable long-term energy policy in Australia. One which promotes investment and free market principles to drive supply and demand.” Kevin Gallagher added to the political discussion from Santos’ position, stating that what was needed was carbon policy certainty. He acknowledged that this would only come from a bi-partisan agreement, which he said was essential to ensuring the industry knew where it was headed in the long-term.
APPEA’s Environment and Safety Excellence Awards
Congratulations to all the winners of the prestigious APPEA awards, presented at the Conference Dinner.
Award recipients showed excellence and outstanding leadership of the Australian oil and gas industry by applauding examples of performance. Winners were recognised across four categories, judged by an independent panel.
Winner of the Environment Project Excellence Award was Santos, for their Zero Waste Well initiative.
Winner of the Safety Project Excellence Award was Subsea 7, for their Greater Western Flank 2 Subsea Installation.
The Environment Company Excellence Award went to Woodside Energy for demonstrating a sustained company-wide focus on environmental partnerships and performance.
The Safety Company Excellence Award went to BHP Petroleum for their delivering changes in HSE culture – reflects a leading ‘one team’ approach.Click here for more information on the Awards
APPEA Daily Digest by Deloitte
Read a snapshot of the latest themes and insights from APPEA2019 as seen from Deloitte.
From resilience to transformation, navigating the future to harnessing opportunities, the Daily Digest brings to life a short, sharp and succinct overview of the headline themes.