Woodside Energy chief Meg O’Neill: Affordable energy is the key to Victoria’s prosperity

The Bass Strait gas fields have powered Victoria’s industry, fuelled its vehicles and heated its homes — no matter how the state’s economy evolves, the state’s prosperity depends on affordable energy and tapping new gas supplies.

In the 1950s, a Melbourne accountant named Rees Withers gathered a small band of explorers to start looking for oil in Victoria’s Gippsland region.

Withers and his team got close but they didn’t strike major oil or gas at the time.

So his company, called Woodside (Lakes Entrance) Oil NL, after the town of the same name, headed west.

What followed, of course, were the massive oil and gas discoveries off the coast of Western Australia, which led to the development of the North West Shelf Project – Australia’s largest resource project at the time.

Today, Woodside Energy has grown from humble beginnings to become a global energy company.

And we’ve returned to our birthplace of Victoria as part owner in the Bass Strait Project.

Operated by ExxonMobil’s local subsidiary, Esso, the Bass Strait Project was Australia’s first major offshore oil and gas development, located off the southeast coast of Victoria.

Bass Strait is a great example of a resource development underpinning economic growth.

Massive infrastructure costing billions of dollars has been built to develop, produce and process oil and gas, which is used to power industry, fuel vehicles, heat homes and manufacture products.

Every molecule of natural gas Woodside sells from Bass Strait is consumed by local manufacturers and powers generators and homes in eastern Australia.

The Bass Strait Project was Australia’s first major offshore oil and gas development. Picture: Supplied

As we look to the future, we know that no matter how our economy evolves, our prosperity depends on the strength of our energy system.

Affordable energy has the potential to keep costs down, with businesses having more capital to invest in things that increase productivity.

Investment in new gas supplies can help underpin the next wave of growth for the industries that are so important to Australia’s ongoing prosperity. For example, by supporting the emergence of a critical minerals processing sector.

Australian companies of the future will need reliable, affordable energy to be the best in the world at what they do.

This in turn can help our children and grandchildren enjoy the same opportunities we have today, if not better.

By this I mean good jobs in secure and competitive industries, that pay enough to buy a house and live comfortably.

Of course, one of the key differences our society faces, compared to previous generations, is that we will need to grow our economy while also tackling climate change.

There is no single solution to this complex challenge and we need to be guided by science and facts.

It is a fact gas is an ideal source of 24/7 power to support Australia’s expanding renewable energy grid.

It is also a fact when used to generate electricity, gas typically produces around half the life cycle emissions of coal.

But fields such as Bass Strait are experiencing natural decline and just last month competition watchdog, the Australian Competition and Consumer Commission, warned of the potential for structural gas shortfalls from 2027 unless supply increases or demand decreases.

The ACCC also flagged potential peak-period shortfalls as soon as this winter.

Woodside Energy CEO Meg O’Neill.

One of the key problems, the ACCC said, was new gas production and supporting infrastructure was not being brought online fast enough, “despite natural gas playing a critical role in the energy transition”.

The ACCC said lengthy regulatory approval processes and an uncertain policy environment were two of the factors delaying more gas being made available.

We should all be concerned by this and we need action at all levels of government.

We need action on reducing red and green tape that slows down development of new job-creating projects that would add new, needed energy supplies.

We also need to challenge activist organisations practising lawfare, which prioritises the political agendas of a few over the national interest.

Reducing red tape and improving business fundamentals across Australia were recently highlighted as opportunities by the Business Council of Australia’s Regulation Rumble 2024 report.

The report, which examined regulations, red tape, planning and tax, is designed to assist states and territories to understand how to make their jurisdiction more competitive at winning business investment.

Of course, we as an industry must step up too.

We need to sharpen our focus on technology and innovation to ensure Australia’s resources sector remains cost-competitive and a world leader.

We must also continue to decarbonise our businesses in line with national and international goals.

As we map a prosperous future, let’s work together to ensure Australia is a place where proudly homegrown companies such as Woodside can continue to invest in for the long term.

In a country as resource-rich as Australia, access to reliable and affordable energy has – and continues to be – the key to our prosperity.

Meg O’Neill is chief executive of Woodside Energy

Originally published as Woodside Energy chief Meg O’Neill: Affordable energy is the key to Victoria’s prosperity