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Open up new oil and gas fields: APPEA

APPEA chairman Ian Davies wants new oil and gas fields opened up to meet demand.

Australia must open up new oil basins and expand existing developments to reduce its reliance on a 90-day stockpile, industry body APPEA said, as it pushes for more supply sources to help combat record energy prices.

While the International Energy Agency warned last year that no new oil or gas fields or coal mines should be opened up if the world is to reach net-zero emissions by 2050, the Australian Petroleum Production and Exploration Association said new sources of supply needed to be sanctioned.

“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,” APPEA chairman Ian Davies told the industry conference on Tuesday, referencing an area where Santos is developing its Dorado project.

“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.”

Australia currently imports around 90 per cent of its refinery volumes and 60 per cent of its refined petroleum products, APPEA said, at a time of increased focus on global energy security following Russia’s invasion of Ukraine.

Prices for LNG, oil and coal have soared after international sanctions were placed on Russia although APPEA said Australia was still in a better position than its overseas counterparts. Australia’s east coast spot prices for gas averaged $16 per gigajoule compared with $42 GJ in North Asia and $46 GJ in Europe.

“The record high oil, gas and coal prices we are experiencing globally are good for no one,” Mr Davies said.

“A lot has been said in recent years about the competitiveness of east coast gas prices. But the fact is that Australian customers will always pay less for Australian gas than our customers in Asia.”

While major nations such as Germany are using the geopolitical crisis to accelerate a shift to green energy, the APPEA chairman said a combination of renewables and oil and gas were required to power the global economy.

“These are sectors where renewables simply cannot replace oil and gas today. To be clear, the world requires renewables to be successful; and it requires oil and gas to be successful,” Mr Davies said.

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“To reach net zero, we need all forms of energy to work together. We will need to invest in new, low-cost oil and gas supply sources – as well as renewable energy and energy-efficient technologies – to support the next generation of manufacturing industries.”

A push to kill fossil fuels by activists was misguided, APPEA said, and would simply push supply to rival nations with less stringent pollution goals.

“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,” Mr Davies said.

“This has created a supply crunch and has raised prices, hurting people and economies around the globe.”

The godfather of Queensland’s coal seam gas industry, Richard Cottee, on Tuesday slammed Andrew Forrest for accusing the energy industry of greenwashing its environmental credentials, saying the billionaire had engaged in bullying behaviour not backed up by facts.

Mr Forrest, the chairman of iron ore giant Fortescue Metals Group, accused the country’s major energy producers of greenwashing the oil and gas industry on Monday and “putting lipstick on a pig”, saying companies must come clean on their contribution to climate