Australia’s inability to settle its energy and carbon policies threatens investor confidence in our industry. What’s the way forward?
It is not uncommon for there to be a period of heightened uncertainty around policy in the lead-up to a federal election. That period ends at the election and, regardless of the outcome, we are looking for responsible policy that supports long-term sustainable development. Our preferred option would be a single global carbon price and second to that an economy-wide national carbon price. In the absence of these, a range of measures will be needed to achieve lowest cost abatement, preserve our international competitiveness, develop new and cleaner technologies and ensure efficiency and certainty.
It is true that we have endured a decade of uncertainty on climate and energy policy and that this does not create the ideal investment climate, but our industry has learnt to deal with this and not be distracted by the volatility in Canberra. Investor confidence depends on a range of factors – not just policy paramaters. We can see that market conditions support investment in competitive growth projects, given the expected strong growth in demand for LNG in the years ahead.
Woodside has flagged its ambitions to build a sustainable hydrogen business. What are the next steps?
We are exploring the potential of both blue and green hydrogen. Blue hydrogen is carbon neutral, from gas, and Green hydrogen from renewable sources. Blue hydrogen is cheaper today. If we start with Blue, the market and infrastructure can be developed economically, then the production infrastructure can shift to Green once costs become competitive and when demand grows.
There are challenges, like the cost of electrolysis, scale up risk, regulations, shipping technology, but none of them are insurmountable and we are working to overcome them.
Woodside has taken an important initial step in the process of understanding the emerging demand for hydrogen in Korea, one of our key markets, by making a small investment in a consortium that plans to build 100 hydrogen refuelling stations in Korea. This is a great information-gathering opportunity that will prepare us well to play a part in future hydrogen supply. We are also watching closely developments in Japan.
Hydrogen has the potential to significantly benefit Australia. Producing, consuming and exporting hydrogen could lower emissions, reduce energy costs and deliver energy security – while bringing new employment and industry opportunities.
In the upstream, hydrogen will ultimately become another bulk energy product like LNG so building a sustainable cost advantage will be important and that is something we are focused on.
What are the big themes you expect to dominate conversations at this year’s APPEA conference?
Our industry has spent a lot of time talking about the challenges and problems, but I think this year we’ll be talking about opportunities and solutions.
The world is going to need more natural gas but as we look to meet international demand, we cannot afford to overlook local needs. We are seeing innovative responses to the gas supply challenge in eastern Australia that should reassure local manufacturers about future supply.
We’ll be meeting in Queensland, where the state government last year announced the release of new land for oil and gas exploration, setting aside some future acreage for domestic gas use only.
The APPEA conference is always a great opportunity to discuss how we, as an industry, can work together to ensure we preserve our social licence to operate and how we can maintain the innovative edge that keeps Australia at the forefront of global gas supply.
Mr Coleman will present in the plenary session The future’s not what it used to be – the new energy landscape, on Tuesday 28 May, 11.00am – 12.30pm