media statement OPINION: energy provides Australia a strategic edge on world stage

Balaji Krishnamurthy - President, Chevron Australia
The following appeared in The Australian print edition as,
“Energy provides Australia a strategic edge on world stage”. 

10 September 2024

 

Few countries are better positioned than Australia to be a global energy leader.

With abundant natural resources, talented people and a mature energy sector, the country has an unmatched opportunity to define its own energy future and support other nations in achieving their goals as well.

The capacity to support both domestic and regional energy security is what sets Australia apart and could give the country a strategic edge on the world stage.

Over the past four decades, Australia has developed a world-class gas industry of which Chevron has been proud to play a part.

From our foundational involvement in the North West Shelf Project to investing more than A$80 billion with our joint venture partners in the Gorgon and Wheatstone natural gas projects in Western Australia, we have been at the forefront of the sector’s development.

Gorgon and Wheatstone have become pillars of regional energy security and examples of the how LNG investment can enable domestic gas supply, benefitting local and international gas customers alike.

Today, Gorgon and Wheatstone produce nearly half of WA’s domestic gas supply, helping to power the state’s homes, businesses and industries including mining, manufacturing and critical minerals processing. They also supply approximately 6.5 percent of the world’s LNG, supporting the economies of Australia’s closest trading partners.

And the benefits of our gas projects go further than the energy they produce.

Since 2009, Chevron has paid more than A$15 billion in company tax and royalties, and was the country’s fourth largest company income tax payer in 2022-23, according to the ATO’s most recent publicly available tax data.

Our operations also require thousands of workers and billions of dollars in ongoing investment and maintenance, further contributing to Australian economic activity and job creation.

At Chevron, we recognise the importance of providing affordable and reliable energy supply as well as the role companies such as ours can play in reducing the carbon intensity of energy production through technologies such as carbon capture and storage.

It is a task to which we’re applying our technical know-how and more than a century of experience in solving complex energy problems.

Yet, the transition to a lower-carbon energy system is not solely a technological challenge, it is also an economic and social one.

The complexity and interconnectedness of the global energy system is often underestimated because of how seamlessly energy integrates into daily life, especially in more developed nations.

We flip a switch and expect light to come on, rarely considering how energy is produced, the supply chain that makes it possible, or that others around the world do not have the same experience as we do in this country.

Equally underappreciated is the vast scale of the system and the reality that the energy transition will progress at different paces in different places.

While renewables will play an increasing role, they alone cannot meet rising energy demand, particularly in Asia, which arguably faces the greatest energy transition challenge of any region.

Home to more than half the world’s people, the region must satisfy rising energy demand to support continued economic growth while diversifying its energy mix – all without access to the wealth of natural resources Australia enjoys for both conventional and renewable energy production.

This is where Australia’s natural gas, through LNG exports, plays a critical role.

According to the Asia Natural Gas and Energy Association, natural gas use in the region will more than double to 2050 and, as outlined in the Australian Government’s Future Gas Strategy, continued supply of LNG can reduce the carbon intensity of the region’s energy mix, including by replacing more emissions intensive fuels like coal.

The forecast growth in Asia’s gas use will require the ramp up of LNG imports, meaning that decisions made in this country about the development and export of energy resources will shape geopolitics, influence economies, and affect billions of lives.

Australia’s LNG exports can serve as a tool of regional security and economic diplomacy. As energy landscapes evolve and geopolitics shift, LNG can be a stabilising force, strengthening ties with the nations whose economic growth will define much of the next century.

With the east coast of this country facing gas shortages, there is understandably a focus on how best to ensure adequate gas supply for Australians.

Yet in addressing this challenge, we shouldn’t lose sight of the energy needs of our neighbours, or the benefits that Australia can reap by remaining their most trusted supplier of energy.

We don’t need to decide between gas for Australia or gas for export – we can, and should, do both.

By committing to the development of the country’s vast gas resources and putting in place stable and predictable energy policy that enables this to occur, energy can be a strategic advantage for Australia for the long term.