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Creating clarity during the energy transition

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      Gas, Policy & Regulation, Transmission & Distribution — 5 mins read

      Navigating a perception minefield - challenges for the natural gas sector

      Perception may not be reality but it weighs heavily on many players in Australia’s economy.

      One industry feeling a growing burden in this regard is natural gas. Its peak body, the Australian Petroleum Production & Exploration Association (now renamed Australian Energy Producers), acknowledges that “it is clear we need to do more to educate the Australian public about what our industry does.”

      Woodside Energy CEO Meg O’Neill, who is currently the Australian Energy Producers chair, has said that "we know that many in the community do not really appreciate the central role that natural gas plays in the Australian economy and the vital role that natural gas is already playing and will continue to play in reducing Australia’s emissions.”

      The two headline-hogging features of this situation are the retail cost of gas, especially for large business consumers, and the determination of climate change activists to drive gas out of domestic use and most notably to prevent new exploration and development of the fuel.

      Entwined with these are one of the most important aspects of the economy: Australia’s role in international gas trade. The domestic shenanigans of the past year are notoriously having an impact on some overseas LNG buyers, especially in Japan.

      The great big hairy question: boosting community perception

      Whichever way one views this situation it is clear that Australian Energy Producers and its members are right to be concerned about perceptions of the industry. The great big hairy question for them is how community perception can be substantially improved.

      APPEA’s “Keeping the Country Running” public awareness campaign sought to explain how gas is essential for Australian homes and businesses while supporting the transition to clean energy. But in June this year, the associated television advertisement was pulled after claims it was misleading.

      Combatting current anti-gas sentiment is not easy and there are no quick fixes.

      Media interest in gas and energy policy

      The media will take a keen interest in all this during the months ahead, not least as the tension between the role of gas to help sustain reliable electricity supply in the largest state market, New South Wales, and the expansion of wind and solar power (with the massively expensive support of much new transmission infrastructure) will continue to occupy centre stage — while Victoria has both power and winter gas supply reliability to deal with.

      The Australian Energy Market Operator is now saying that more than 1,500 megawatts of new gas generation is needed in NSW and Victoria by 2026-27 in order to meet NEM reliability standards.

      Anything and everything to do with energy in Australia (and in most of the rest of the world) in the 21st century is, of course, political — and the rhetoric of politicians and the policies of governments will have a key role in the next stages of natural gas perception in the community.

      Traditional gas players diversifying

      The industry association is not alone in its attempts to re-invent itself. In May this year, for example, Beach Energy teamed up with Belgian Parkwind to bid for an offshore wind licence in Victoria. Beach hopes to capitalise on its local skilled workforce and the offshore equipment it already owns.

      Also, the APA Group has been quietly investing in wind and solar projects and recently acquired Alinta Energy’s Pilbara portfolio, which includes the Port Hedland and Newman power stations. In 2022, it purchased Basslink and started branding itself as a ‘leading infrastructure business’, rather than a gas network.

      The gas sector needs to deal with both a seemingly cynical public and a green lobby emboldened by the international climate debate. Discussion of gas as essential to supporting the energy transition are greeted with scepticism; concerns that large energy-dependent industry could be driven offshore are derided as ‘scaremongering’. There doesn’t seem much room for reasoned debate but the challenge for the gas sector and its lobby group is to strive harder to mount a compelling case for its essential economic and social role

      In some respects this is no new thing; when in recent decades has energy policy not been contentious for the body politic? And, it follows, when has managing policy development (and therefore the political mindset) not been at the forefront of the “to do” list for Australian Energy Producers and other industry bodies?

      The stakes in this arena are always high, but it seems safe to say that they have never been higher than now.

      Disclosure: Keith Orchison was CEO of Australian Energy Producers' forerunner, the Australian Petroleum Exploration Association, from 1980 to 1991.

      Keith Orchison AM, Coolibah Pty Ltd

      Energy Monthly

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      September 3, 2024 | Aerial UTS Function Centre | Sydney

      Industrial Net Zero Conference 2024

      September 10, 2024 | Sheraton Grand Sydney Hyde Park

      Women in Energy & Renewables Summit 2024

      New call-to-action