Region’s energy future in our hands

Australian oil and gas companies are positioning to support the energy security and decarbonisation ambitions of China.

People commute in front of a coal-powered power station in Datong, China's northern Shanxi province. Picture: AFP

Australian oil and gas companies are positioning to support the energy security and decarbonisation ambitions of China and other Indo-Pacific nations, warning “we must not take for granted the competitive advantage Australia has”.

The Australian Petroleum Production and Exploration Association said “poor policies coupled with rising geopolitical and geostrategic forces will prove challenging for the economy” as threats to global energy security and supply chains are exposed by the Covid-19 pandemic.

In its submission to the federal government ahead of the March 29 budget, the lobby group also called for the removal of investment barriers, unlocking of gas reserves and increased focus on low-cost abatement, including bringing carbon capture and storage technologies to scale.

With Australia’s booming LNG exports playing a key role in reducing global emissions, APPEA said the nation’s competitive advantage “lies directly to our north”.

“China is forging ahead with its quest for self-reliance to improve the lives of its citizens, as outlined in its most recent five-year plan. How China tackles energy security and decarbonisation will be central to this,” the submission said. “It is inevitable that China will face an immediate challenge between self-reliance and the realities of delivering a more secure and stable future with Australia well placed to play a vital role.”

APPEA said securing the oil and gas sector’s future was directly tied to how Australia manages relationships with major regional trading partners. “China, India, and Japan currently account for 2.95 billion or 40 per cent of the world’s population, with Asia accounting for around 60 per cent … Over the next 15 years the number of global megacities (will) increase from 34 to 48, with 11 … in Asia. This region will be heavily reliant on Australia to achieve energy security and emissions reductions.”

After Australian coal and other exports were hit by Beijing with sanctions under China’s economic coercion campaign, federal ministers on the weekend ramped up criticism of Anthony Albanese over claims Labor had softened its position on Chinese relations.

“It’s Anthony Albanese’s own words where he seemed to indicate he was only interested in standing up for some Australian industries in dealings with China. China has been terribly unfair in … the punitive, coercive approach it’s taken to a number of Australian industries. We don’t want to leave any of them behind,” Finance Minister Simon Birmingham said.

Opposition Treasury spokesman Jim Chalmers said Mr Albanese had been firm on his position on China-Australia relations.

“He said China’s becoming more aggressive and more assertive, we want to see those trade sanctions withdrawn, and we don’t want to play politics with such an important relationship when our national economic interest is at stake here,” Dr Chalmers said.

With the Coalition and Labor backing net-zero emissions by 2050, APPEA said “how we seek as a country to transition to a lower-emissions economy will have consequential impacts on regional and global relationships”.

Chief executive Andrew McConville said companies must have access to investment allowances specific to new energy operations and projects. “We must reduce regulatory duplication and overlap, support sensible investment allowances, promote the creation of new job opportunities and underpin the investment in and adoption of new technology.”