media statement OPINION: natural gas key to our energy future

Danny Woodall - Director Operations and Maintenance, Chevron Australia
The following appeared in The Australian print edition as,
“Natural gas key to our energy future”. 

15 August 2024

As we navigate the complexities of the global energy transition, one thing is clear: natural gas will remain a central part of Australia’s energy mix for the foreseeable future.

Being a reliable and flexible fuel source, gas is foundational to our economic prosperity and an essential part of our everyday lives.

Gas provides about one quarter of Australia’s total energy needs and plays a crucial role in the industries that help drive our economy – mining, manufacturing and minerals processing. These sectors rely on gas not just for power, but as a feedstock and for heat in production processes that can’t easily be electrified.

Gas also supports emerging and innovative industries, including artificial intelligence, creating jobs, careers, and opportunities. And when in abundant supply, it helps keep electricity prices lower, easing pressure on the budgets of families and businesses.

And, as Australian communities prepare for the phase-out of coal-fired power, gas will become even more important to maintaining the reliable energy supply that underpins our current standard of living.

Unlike wind and solar, which depend on the weather, gas offers flexibility. It can be ramped up when the sun isn’t shining or the wind isn’t blowing and scaled back when conditions are ideal for renewable generation. That makes gas an ideal partner to renewables and a key element of a stable, lower-carbon electricity grid.

Yet too often the energy debate is framed as a binary choice: fossil fuels or renewables. 

The reality is more complex, with commentators often failing to recognise the fundamental energy challenge we face: global energy demand is only rising, not falling, as communities seek to advance their economies and living standards.

Energy demand is greater now than at any other time in human history and projected to increase further as the world’s population rises from eight billion people today to an estimated 10 billion by 2050.

And, despite significant technological advancements in energy production over the past century and the massive amount of energy produced around the world on a daily basis, three-quarters of a billion people still live without electricity.

The challenge of meeting current and future demand is immense, and many forms of energy are needed – from reliable supplies of natural gas that support energy system stability to new energy innovations that help close the gap to net zero.

The transition to a lower carbon energy future must be carefully managed to avoid exacerbating the demand dilemma and leaving communities worse off. Above all, the approach should be pragmatic, not ideological or wishful.

Governments must be allowed to debate policy in a way that recognises the realities of the energy system – and the importance of maintaining reliability and affordability for households and industry during the transition – without being accused of abandoning climate ambitions.

With the right policy settings in place, Australia can continue being a global energy leader. 

The country is in an advantaged position. It has abundant gas reserves, skilled workers, and strong relationships with key trading partners. These are inherent strengths, and we should be putting them to work to benefit all Australians.

The development of Australia’s gas resources makes a substantial economic contribution to the country. Recent economic analysis by KPMG found that the sector contributes $105 billion a year to the national economy and supports 215,000 jobs.

And contrary to a claim that’s often repeated, but rarely questioned, we do pay our fair share of tax. 

Last financial year, Australia’s gas sector returned a record $21.9 billion to state and federal governments in taxes and royalties, with Chevron’s contribution about a quarter of the total. That’s money that helps pay for things that matter like healthcare, education, cost of living relief, and financial support for those in the community who need it most.

At Chevron, we are committed to developing resources responsibly and benefiting the communities in which we operate. This means continuing to supply reliable energy, reducing net emissions from our operations, investing in innovation, and working collaboratively to meet Australia’s energy and climate aspirations.

So, as the country progresses towards a lower carbon future, let’s not lose sight of the role gas plays in keeping the lights on and safeguarding our economy.

We need a balanced, informed conversation about our energy future – one that recognises the value and role of all energy sources, and the importance of working together. 

Because when we do, we can have an energy system that is stronger, more resilient and reliable for all Australians.