Santos boss Kevin Gallagher says energy buyers aren’t matching green ambition with action

Santos chief Kevin Gallagher says the oil and gas industry is frustrated by political and investor pressure to accelerate decarbonisation in a market which favours hydrocarbons.

Santos chief executive Kevin Gallagher will expose a growing gap between energy buyers’ climate commitments and their willingness to pay for clean fuels, warning that the pace of the global energy transition is falling short.

The remarks underscore the deep frustrations within the oil and gas industry which has bristled at political and investor pressure to accelerate decarbonisation, while the market continues to favour hydrocarbons.

Mr Gallagher will tell an oil and gas conference in Brisbane on Wednesday that major energy consumers which have publicly pledged to shift to renewable energy are still heavily reliant on oil and gas.

Santos chief executive Kevin Gallagher at the Moomba carbon capture and storage plant.

“There is a fundamental disconnect between what people say they want and their purchasing behaviour,” Mr Gallagher will tell the room.

“While we work to decarbonise, we must confront a sobering reality: the pace of the energy transition is not matching our ambitions.”

Santos meanwhile faces sustained criticism from environmental groups and climate advocates over its continued investment in gas projects.

It is poised to deliver two major projects, an LNG development in the NT and an oil facility in Alaska, which will drastically increase its production profile.

Critics argue that new gas developments undermine global efforts to reduce greenhouse emissions and shift to low-carbon energy systems.

But Mr Gallagher will be steadfast about Santos’ position that gas is a critical enabler of the energy transition, necessary for ensuring reliability and affordability as renewables scale up.

Critics insist that too much gas will slow the uptake of renewables. But Mr Gallagher will insist authorities should be “guided by pragmatism”.

“We must therefore manage the energy transition pragmatically, not ideologically,” Mr Gallagher will say.

Ideology is widely seen as a key reason for a looming east coast gas shortfall as new developments that could relieve supply pressure continue to be held-up by opposition.

The Australian Energy Market Operator predicted that the east coast faces gas shortfalls as early as 2029 unless new supply is brought online. Santos’ Narrabri project in NSW — recently cleared by the Native Title Tribunal — has been positioned as one of the solutions to address looming gaps in domestic availability of gas.

But Narrabri and other potential projects continue to be delayed by political inaction, which the gas industry says is being advanced by environmentalists.

A role for carbon capture and storage has failed to get widespread traction as part of a push to hit net zero by 2050.

Originally published as Santos boss Kevin Gallagher says energy buyers aren’t matching green ambition with action