By Nick Toscano
Australian oil and gas giant Woodside Energy has pointed to crippling blackouts that left millions without electricity across Europe last month as a “forceful reminder” for the Albanese government to prioritise energy security alongside goals to switch to cleaner sources of power.
While authorities are still searching for the cause of the unprecedented loss of power in Spain, Portugal and southern France on April 28, Woodside, the largest Australian gas producer, has seized on the consequences of the disruption to drive home the importance of ensuring reliable energy supplies.
Woodside's Karratha gas plant.Credit: Aaron Bunch
“What we can see with certainty is that these events reinforce the need to focus on energy security and energy affordability as well as – and not instead of – emissions reduction,” Woodside chief Meg O’Neill will tell the Australian Energy Producers conference in Brisbane on Tuesday.
“When we lose sight of any one of these, all three are at risk.”
As investigations continue, some analysts and commentators have raised questions about the Spanish grid’s rapid shift to solar farms and wind turbines, which account for more than half of the country’s electricity, and which can make it more challenging to balance fluctuations in supply and demand.
Rystad Energy analyst Pratheeksha Ramdas said: “Spain’s high renewable penetration exposed difficulties in balancing intermittent supply, while Portugal’s complete reliance on imports underscored its lack of flexibility and energy storage.”
Spain’s grid operator, Red Electrica, and government leaders have denied any link to the expansion of wind and solar power.
O’Neill’s comments on the European blackouts come as Australian oil and gas executives seek to press the Albanese government to focus in its second term on making it cheaper and easier to drill for fossil fuels. Actions they are seeking include cuts to red tape, a simplification of environmental permitting and greater clarification on who must be consulted over offshore oil and gas projects to avoid ambiguity and 11th-hour lawsuits that force costly delays.
Woodside is also awaiting an imminent decision from the federal government on whether it will be allowed to extend the life of its giant North West Shelf operations in Western Australia for another 40 years.
An approval will end long-running uncertainty over the future of the NWS project, and it will mark the strongest sign yet from the Albanese government on its commitment to letting gas play a role in Australia’s future energy mix.
Woodside chief executive Meg O’Neill recently faced shareholder AGM backlash over the oil and gas group’s climate policies.Credit: Trevor Collens
The Labor government, which returned to power on May 3, has promised to accelerate the build-out of renewable energy and slash planet-heating emissions. However, it has consistently highlighted the gas industry’s ongoing importance to the economy, both as a multibillion-dollar exporter of LNG to Asia, and as a supplier of traditional energy for the millions of Australian homes and businesses that still rely on fossil fuels.
Last week, two major conservation groups lost their bid to further delay federal Environment Minister Murray Watts’ decision to greenlight the extension of the NWS project.
The Conservation Council of WA and Greenpeace Australia had lodged a “reconsideration request” earlier this year, which pushed out the deadline for the approval of the controversial project from March 31 until May 31.
The request was lodged to bring more of Woodside’s Burrup Hub vision into the environment minister’s assessment. The hub on the Burrup Peninsula in WA’s north-west is expected to generate 4.3 billion tonnes of emissions over its lifespan, more than 10 times the nation’s current annual total.
Producing and burning natural gas releases carbon dioxide and methane emissions that are contributing to dangerous climate change. Although more Australians are making the switch from gas-powered appliances to electric alternatives, authorities say demand is not falling at the speed needed to avert supply shortfalls in the coming years as eastern Australia’s Bass Strait gas fields rapidly deplete.
The federal government, meanwhile, has released a “future gas strategy” recognising that the fuel will continue to be needed in the clean energy transition to power gas-fired power stations that can back up the rollout of more renewable energy.
O’Neill said the government’s future gas strategy, led by Resources Minister Madeleine King, had made a powerful case for the role of gas in Australia and the region, but must be backed by decisive reforms to boost supply.
“With a new federal parliament elected, it is an opportunity to finally cut red and green tape, to simplify and streamline Australia’s approvals system.”
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