speech how natural gas supports a lower carbon energy future
Danny Woodall - Operations Director, Chevron Australia
South East Asia Australia Offshore and Onshore Conference (SEAAOC)
18 September 2024
Good afternoon.
It’s great to be joining you all here today.
I would like to start by acknowledging the Traditional Owners of the land we meet on today, and pay my respects to their Elders, past, present and emerging. I extend that respect to all First Nations people here today, and to those on whose lands Chevron operates.
I would also like to acknowledge the Chief Minister of the Northern Territory Government, Lia Finocchiaro, and the Federal Minister for Resources Madeleine King, who both spoke earlier today, among other distinguished guests.
It’s great to see so many industry colleagues, business partners and government representatives in Darwin this week.
It’s my first time in the Top End, and I have been looking forward to speaking with you, meeting industry colleagues, and exploring the Territory over the next few days.
Today, I am going to start with a few milestones.
I’m sure many of you are aware of Chevon and our operated assets in Australia – the Gorgon and Wheatstone natural gas projects in Western Australia’s Pilbara.
This year marks 15 years since we took FID and commenced construction of Gorgon, and eight years since we started production.
And it’s been 13 years since we started building Wheatstone, and seven years since we started production.
Today, these world class assets are providing the reliable and affordable energy supply the world needs.
Just last month, they reached a new milestone in delivering that energy.
On Chevron’s equity basis, we have produced more than one billion barrels of oil equivalent in natural gas from the two projects since their start up.
It’s a significant feat for our company in Australia, and our talented and dedicated workforce.
Over the coming months, the projects are forecast to achieve another milestone, delivering more than 2600 LNG cargoes since exports began in 2016.
That’s natural gas for Western Australia, supporting the state’s economy and providing energy security, as well as for the country’s closest trading neighbours … Japan, Korea, China and others across the region.
Gorgon and Wheatstone have also delivered strong operational performance, particularly over the past three years, including industry leading reliability and record cargoes shipped in 2023.
Last month we also completed our best turnaround maintenance program to date on Gorgon, with a major reduction in downtime compared with our 2023 performance.
The reason I’m highlighting these milestones today is for them to serve as a reminder of the effort, expertise and partnership that is required to sustain our energy industry – Australia’s leading gas sector.
An industry that can often be taken for granted or dismissed.
Mostly because we have been successful in developing our projects and providing reliable energy to the country and region, but haven’t been so good at articulating the benefits that our sector brings.
It’s fair to say that Australia’s gas industry is under the spotlight right now – and has been for some time.
We’re at the centre of discussions on how we … as a community … are to meet the challenges of climate change while continuing to maintain the state’s energy security.
All this is occurring against the backdrop of increased ESG considerations for our operations.
So, while there are many challenges, I feel optimistic.
I’m optimistic because we’re having important discussions which will shape the future of our industry and, consequently, the security of our energy supply.
These discussions are making us ask, how as gas producers we can contribute in a lower carbon economy while meeting the energy needs of our communities and customers, now and in 2030, in 2040, into 2050 and beyond.
Today, there are about eight billion people on the planet. In 25 years, the global population is expected to grow to 10 billion people.
The population, and the energy needs of the population, are ever-increasing.
Access to energy is critical to support progress and prosperity for everyone.
Progress and prosperity depend on scalable energy solutions and innovations that are not only lower carbon, but also affordable, reliable and accessible.
To achieve our climate and energy goals and create a future of energy that works for all of us we must acknowledge and balance the three elements of the energy equation: economic prosperity, energy security and environmental protection.
In recent years, we have seen multiple examples from around the world that teach us what can happen when the three elements of the energy equation are unbalanced.
It creates vulnerabilities. And those vulnerabilities almost always have the greatest impact on those in society who are least able to withstand them.
We can’t allow our energy system to fall into crisis… and we can’t put the energy security of our closest trading partners and allies at risk.
As the EnergyQuest report, released by Australian Energy Producers, has shown this week, restricting gas supply is likely to have significant and far-reaching consequences for the economy and the daily lives of everyday people.
The need for policy that encourages investment in developing Australia’s gas resources is clear. And the risks of policy that stifles investment are even clearer.
If I leave you all with only one thought today – or one challenge – it’s that we all need to play a role in advocating for a more balanced, more nuanced, and more pragmatic public discussion about energy.
We know the energy transition will occur at different paces, in different places – including here in Australia.
One thing seems clear. Gas is going to play a critical role.
As Australian Energy Producers recently shared, the percentage of gas in Australia’s energy mix is higher today than any time in history at 27 per cent.
Between 2012 and 2022, natural gas and renewables both increased their contribution to Australia’s primary energy consumption by exactly the same amount – 220 petajoules per year.
Over this same period, it’s no coincidence that Australia’s greenhouse gas emissions decreased by around 20 per cent.
Gas is backing up the roll-out of renewables and supporting the phase out of coal, while driving the nation’s powerhouse mining and minerals sector, and it’s natural gas that is the largest energy source powering Australian manufacturing industry.
The importance of gas is set to continue to 2050 and beyond, as Australia and the world transforms to net zero.
That’s why Chevron is focused on continuing to safely produce natural gas for our customers – both in Western Australia and across the Asia Pacific region – while working to reduce the carbon intensity of our operations.
Last year, we achieved first gas production from Gorgon Stage Two, a project that added 11 new wells and subsea infrastructure in the Gorgon and Jansz offshore fields.
We also commenced fabrication on the $6 billion Jansz-Io compression project.
We’re looking forward to some of the major fabrication work, occurring just south of Perth in the Kwinana industrial precinct, coming to completion later this year.
More recently, we commenced the regulatory approvals process for the development of offshore gas fields in the Greater Gorgon Area.
These fields will provide feed gas for the existing Gorgon gas plant for decades to come.
To realise the full potential of the Gorgon and Wheatstone developments, multiple projects like these – involving additional wells and subsea infrastructure – will be needed. That’s billions of dollars of investment over decades.
As we plan to make these investments, policy and regulatory certainty is critical.
So, we were heartened by the release of the Australian Government’s Future Gas Strategy earlier this year.
The Strategy recognises the continuing role for gas through 2050 and beyond, and acknowledges that new sources of gas supply are needed to meet demand.
With this recognition of the critical, long-term role for gas in Australia, we’re hopeful for the return of policy and regulatory stability and renewed support for the industry.
We’re holding up our end of the bargain. We’re making plans to invest in new gas supply.
We’re working to produce that gas with lower emissions – in fact, last month we achieved 10 million tonnes of carbon dioxide injected at the Gorgon Carbon Capture and Storage system. This is significant greenhouse gas abatement on a global level.
And we’re continuing to invest in system optimisations that will increase our carbon dioxide injection rates over time.
We’re also ensuring that our operations are delivering benefits to all Australians… not just by supplying the gas that supports households, businesses and major industries… but through the taxes we pay.
In the last two years alone, Chevron’s income tax contributions have exceeded $7.7 billion, helping the Australian Government pay for things that matter, like healthcare, cost of living relief, among other things.
We now look forward to government playing its part…not just by providing the policy and regulatory certainty we need to invest with confidence… but by having that balanced, pragmatic conversation about energy I spoke of a moment ago.
As we look to the future, the history of partnership in our industry, and with government and communities, provides a strong foundation to meet the challenges – and opportunities – of a changing world.
Because addressing the complex energy issues that we face today can’t be done by one country, one company, or one industry alone. These challenges require partnerships with all stakeholders.
But by finding solutions and working together, Australia can be a leader in a transitioning world.
