The economic and security importance of gas

Australia is one of the world’s largest LNG exporters, accounting for about 21% of last year’s global market and providing a considerable boost to our domestic economy.

About 70% of Australia’s gas production is exported, primarily on long-term contracts to Japan, China, the Republic of Korea, and Taiwan, and Singapore.

Australia is by far the largest LNG supplier to Japan, providing nearly half of Japanese LNG imports in 2022, worth an estimated $34 billion. Importantly, Australian LNG powers the great cities of Japan and provides for the people of our good neighbour. Japan is a nation that is driving to a decarbonised economy, and it will need our LNG as part of that journey.

These LNG trade and investment partnerships are more than simply commercial arrangements.

Energy security is crucial to the stability of our region.

Australian resources and energy have been one of the key ingredients in the stability and prosperity we have enjoyed in our region in recent decades.

Recent global events have increased the importance of Australia as a trusted energy export partner.

Nations like Japan and South Korea rely on Australian gas for energy security today. They’ve also planned to use Australian gas to support their energy shift from coal.

Japanese and South Korean demand, and their significant capital investment, has underpinned the development of Australia’s LNG industry and most Australian gas production for the benefit of Australian industry and consumers.

Australia will continue to welcome foreign investment in our resources and energy sectors.

We must get the balance between gas demand and supply right to protect ordinary Australians, to support Australian businesses and to support our energy grid in the transition to renewables.

The IEA has acknowledged that in all of its transition scenarios, continued investment in gas will be needed to meet demand.

This is why the Australian Government is developing the Future Gas Strategy, to understand the future demand for energy, particularly gas, and balance the needs of consumers, industry and future generations through the transition underway within our region.

The Future Gas Strategy will inform how Australia’s energy system can become cleaner, cheaper and more reliable while maintaining our international reputation as a trusted energy supplier to the region.

Despite some reports, the discussion paper is wholly cognisant of the need for Australia to consider the its trading relationships as we develop a Future Gas Strategy.

Equally, gas and the gas sector are a significant source of Australian greenhouse gas emissions.

I invite everyone with a personal and professional interest to contribute to the Future Gas Strategy, and to help us shape the future. I put it to you that is every single person here today.

Through the Future Gas Strategy, we will create a framework that balances energy security with affordability and investment certainty.

Commitment to net zero

The Australian Government has pledged to achieve net-zero emissions by 2050 and a 43 per cent reduction in emissions on 2005 levels by 2030.

We will work towards our targets in a sensible and systematic way.

The government’s Safeguard Mechanism will drive down emissions from Australia’s largest emitters, including gas producers, while maintaining the international competitiveness of our industries.

Companies in the oil and gas sector are already showing leadership in the deployment of low emissions technologies and our Safeguard Mechanism will further encourage this.

Carbon capture and storage

On carbon, capture and storage, let us be clear it will play an important role in managing carbon and reducing emissions, particularly in hard-to-abate sectors. The US, Canada, and others have leant in hard to ensure CCS continues as a carbon management proposition because – as the International Energy Agency has confirmed – we need CCS if we are to reach net zero.

Australian resource projects – backed by the CSIRO and our universities – are world leaders in developing commercial‑scale carbon capture technologies.

Australia hosts the world’s largest commercial CCS project, Chevron’s Gorgon LNG Project at Barrow Island in Western Australia. Eight million tonnes of stored CO2 is not to be sneezed at.

There are currently 18 CCS projects at various stages of progress in Australia, aiming to collectively sequester 20 million tonnes of CO2 a year by 2035.

I recently announced the opening of bidding for the 2023 Offshore Greenhouse Gas Storage Acreage Release.

The release of new acreage builds on the government’s investment to improve regulations to support offshore CCS projects as part of a $12 million package in the last Budget.

Conclusion

Our nation will continue to be both a reliable energy trade and investment partner, as well as being a positive contributor to global energy security and decarbonisation.

Australia’s critical minerals will play a pivotal role in the transition to net zero.

But so will traditional commodities like iron ore, copper, nickel and bauxite.

And gas will be part of the world’s energy mix for the foreseeable future.

While the global transition to net zero is a great challenge, it is also an enormous opportunity for Australia – for our resources sector and the workforce it supports.

Thank you.

Ministers