the vital role of natural gas in our energy future

Danny Woodall – General Manager Operations
Tuesday 25 February 2025 | Speech to the Energy Club of Western Australia

 
Good evening. It’s a pleasure to be here.

I would like to start by acknowledging the Traditional Owners of these lands, the Wadjuk people of the Noongar nation, and pay my respects to their Elders, past, present and emerging.

I extend that respect to all First Nations people in the room and to those on whose lands Chevron operates.

I would also like to thank the Energy Club of Western Australia for inviting me to speak this evening and for organising such a great event.

So, to get started here, I’d like to ask each of you to take a moment to look at the table in front of you. What do you notice?

Wine glasses? Bread? How about the room we’re in?

I can tell you from up here the lights are pretty bright, and, for those of you who aren’t giving a speech in front of a couple hundred people, I’m sure the temperature is pretty comfortable.

All of these things – the glassware, the food, the lights, the air conditioning – what do they have in common?

They’re all made possible, in some way, by natural gas. The heat to manufacture the glass. The fertiliser to grow the grain for the bread. The power to run the lights and air conditioning.

Here, and in every aspect of our lives, it’s tough to find anything that doesn’t rely on gas.

Gas provides 26 per cent of the nation’s total energy needs, with Western Australia the country’s most dominant user, consuming more gas each year than New South Wales, Queensland and Victoria combined.

For mining, minerals processing and manufacturing – the bedrock industries of this state – gas is crucial.

It’s becoming even more crucial for electricity generation with the planned phase out of state-owned coal powered generation by 2030.

The flexibility of gas means it can be ramped up if the sun isn’t shining and the wind isn’t blowing or turned down when weather conditions are optimal for renewable generation. And, at a time when economic concerns are highlighted in the media every day, the gas industry is playing its part.

A KPMG report released last week found that Australia’s gas sector purchases about $33 billion of goods and services a year from other Australian businesses, and directly makes up 3.7 per cent of Gross Domestic Product.

It employs more than 30,000 full-time workers, about a quarter of these in Perth, and, contrary to the misinformation being spread by our critics, we do pay our fair share of tax.

More than $17 billion was returned to state and federal governments in taxes and royalties from our sector last financial year. Chevron alone paid nearly $6 billion in 2023.

These numbers are impressive and demonstrate the importance of our industry and the significant economic benefits that it contributes to the country.

But there’s a simpler truth about natural gas that can’t be reduced to a statistic, and it’s this: our lives are better when we have access to the reliable, affordable energy that gas provides.

It ensures our homes and businesses remain comfortable, regardless of the weather outside.

It opens up innovative new industries, like critical minerals, creating jobs, careers, and opportunities, and, when in abundant supply, it helps keep power bills lower, reducing pressure on household budgets.

It’s this human impact that makes me proud to work in this industry, and it’s why all of us – producers, consumers, governments, communities – have a mutual interest and a shared responsibility to ensure that natural gas supply remains secure.

That's the objective for Chevron and our operated assets right here in Australia, the Gorgon and Wheatstone natural gas developments.

After close to a decade of operations, Gorgon and Wheatstone are world class assets, and pillars of energy security for Australia and the broader Asia Pacific region.

Combined, they supply about 6.5 per cent of the world’s LNG and nearly half of Western Australia’s domestic gas.

We’ve increased Wheatstone domestic gas production capacity by 12 percent over the past two years, while Gorgon’s domestic gas plant is the single largest supplier of gas to Western Australia.

With customers both at home and abroad, it’s crucial that our facilities consistently perform at their best, which is why we’re continuously improving our operations.

Last year, we completed our best turnaround maintenance program to date at Gorgon, with a major reduction in downtime compared with the year before.

We’re also working to identify and mitigate vulnerabilities before they happen to reduce the likelihood of trips and other unplanned events that impact production.

This means our customers can rely on receiving energy when they need it.

But for us to continue playing our role as a reliable energy supplier for decades to come, we have to keep investing, investing in improvements to our existing facilities and in the development of additional offshore fields. That investment is not guaranteed.

When we look to the US, which is now the world’s largest producer of LNG, the business-friendly policies of the Trump administration are likely to result in increasing competition for market share as well as investment dollars.

That’s because companies invest in locations where it’s easier to do business and where returns are more certain.

Chevron, with development opportunities across the globe including here in Western Australia, is no different.

The fight for capital is on, and it will be won by the countries that offer the most attractive and stable fiscal and regulatory settings. That’s not to say that we, as energy producers, don’t have a role to play.

Shareholders have choices, and they expect the companies they invest in to operate both responsibly and competitively, and their expectations are rising. This means we need to evolve the way we work to enhance our performance and set ourselves up for the future.

So, like many others in our sector, we’re reviewing our operating model across the world as well as here in Australia. We have a strong foundation to build on, but we need to sharpen our focus and make changes to the way we work.

As part of this process, we’re seeking to leverage our strengths, standardise what we can, and centralise where it makes sense to become more efficient and deliver more consistent results.

Technology will play a major part in our journey to become more competitive. We’re using technology to advance both safety and efficiency and we’ve had great success so far.

One example is our digital twins which, for those of you who aren’t aware, are essentially virtual replicas of our plants. When combined with artificial intelligence, our digital twins are being used to help predict and diagnose impacts to processes or issues with equipment.

I was told recently that the digital twins of Gorgon and Wheatstone had the highest number of users across Chevron globally, more than all other assets combined. This speaks to our agility and willingness to adopt new technologies that enhance safety and create efficiencies.

Other technologies we’re exploring include:

• using drones for maintenance inspections,
• increasing the use of continuous remote operations for offshore facilities, and
• incorporating artificial intelligence into job planning and predictive maintenance programs.

Above all, the most important advantage of these technologies is that they make our work safer, removing people from harm’s way, while delivering business value.

On artificial intelligence, we see the potential for the technology to usher in a new era of possibilities. On the demand side, power use for AI is set to rise exponentially.

According to a report by Goldman Sachs, an AI-powered query needs nearly 10 times as much electricity as a regular internet search. Because of that, power demand at data centres across the world is forecast to grow at 160 per cent by the end of this decade.

In the US, Chevron is working to meet this surge in demand. We’re exploring opportunities for gas-fired power plants to be built alongside data centres so that they can be supplied with affordable, reliable natural gas. Adding carbon capture and storage to these projects could also reduce the carbon intensity of the power supply.

But it’s the potential of AI to transform the energy sector which excites me even more. As I mentioned before, we’re already applying technology in our everyday work.

Thinking more broadly though, how can we harness AI to solve some of the greatest challenges we face in our industry? How can we use AI to help us develop resources more safely and efficiently? What role could it play in assessing the trade-offs between affordability, reliability and producing cleaner energy?

These are complex questions, but I believe there's a role artificial intelligence can play to help us get smarter in navigating the trade-offs as well as supporting us in our everyday working lives.

Becoming more efficient and incorporating technology will also play a role in future gas developments in Australia.

We’re developing a deep queue of competitive future supply projects that will keep our Gorgon and Wheatstone facilities full as existing supply naturally declines.

We’re progressing approvals to begin developing the first backfill fields for Gorgon, the Geryon and Eurytion fields, in a development to be known as Gorgon Stage 3, or GS3.

With around 40 trillion cubic feet of discovered resource in the Greater Gorgon area, GS3 is the first in a series of planned subsea tiebacks to maintain gas supply at Gorgon.

We’re working to deliver reliable, competitive and predictable capital projects by leveraging standardisation and simplification. Repeatable, off-the-shelf designs instead of the bespoke, one-time solutions of the past.

This delivery model relies on strong collaboration with our business partners, so thanks to those of you in the room who are working with us to support our success.

Ahead of GS3, we’re advancing the Jansz-Io Compression Project which will help maintain gas supply to the Gorgon LNG plant by maximising recovery from the Jansz-Io field.

Installation of the offshore infrastructure has started, and fabrication continues, with Western Australian companies and workers playing a significant role in completing this multi-billion-dollar project.

This year, we’re also planning to drill two exploration and appraisal wells, Dino South 1 and Wheatstone Deep.

We have a tremendous amount of resource here in Australia, and we have a strong track record of exploration and commercialization, so we have high expectations for many decades to come.

It’s for these reasons, we announced last year an asset swap with Woodside.

The swap would see us transfer our non-operated interest in the North West Shelf Project to Woodside in exchange for their interests in Wheatstone and the Julimar-Brunello Development. Once closed, the transaction will enable us to focus on the key assets which we operate in Australia.

Further, increasing our equity stake in Wheatstone positions us to unlock future value by enabling long-term asset development and monetization.

So, while we’re aiming to maintain our traditional energy business in Australia, we’re striving to reduce the carbon emissions intensity of our operations and grow lower carbon businesses.

At Gorgon, we’re well underway with works to optimize the carbon capture and storage system that will enhance its performance and increase carbon dioxide injection rates over time.

Gorgon CCS has now stored more than 10.5 million tonnes of carbon dioxide equivalent, representing carbon abatement at a global scale.

We’re also progressing additional carbon abatement activities at Gorgon and Wheatstone.

Just last year, we completed a range of operational initiatives, designed to reduce greenhouse gas emissions by about 140,000 tonnes.

While we’ve made notable inroads so far, we recognise that there’s more to do to reduce net emissions from our facilities.

But as we, and society as a whole, work to advance net zero aspirations, there are some realities that we need to face.

For example, while the IEA says that emissions reductions from now until 2030 are projected to come from readily available technology, by 2050 almost half of the reductions need to come from technologies that are currently only at the demonstration or prototype phase.

These technologies need to be developed and implemented over the next 25 years.

At the same time, the world’s already massive energy system is forecast to keep growing as communities demand even more energy to advance their economies and standards of living.

These challenges are real, and overcoming them requires us to have a better, more pragmatic conversation about energy.

One that recognises the importance of balancing energy security, economic prosperity and environmental protection.

A conversation based on facts and real-world, practical experience, not on ideology and sensationalism.

Where we can acknowledge that there are trade-offs that have to be made without being accused of abandoning global climate ambitions.

And where all perspectives can be heard, not just those who shout the loudest.

Australia’s energy security and economic prosperity is far too important for partisan politics or to be treated as an activist punching bag.

There is a lot at stake, but this country has natural advantages and a strong basis from which to meet the challenges, and take advantage of the opportunities, that lie ahead.

Securing our energy future requires all of us to play our part.

Thank you.