Powering Western Australia - APPEA's WA State Election Platform February 2021
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Powering APPEA’s WA
State Election
Western Platform
February
Australia 2021
Powering WA’s recovery
The oil and gas industry is a major
contributor to the Western Australian
53% $7
bıllıon
economy and to the wellbeing of all
Western Australians, providing essential Natural gas is the single largest
energy and jobs. energy source for Western Australia,
But like many industries, the sector faces generating more than 60% of WA’s
The value of Western Australian oil
significant challenges to recover from electricity1 and accounting for 53%
and gas projects under construction
the economic impacts of the COVID-19 of all energy consumed in 2018–19.2
or in the committed stage of
pandemic, as the oil price has dropped development was almost $7 billion
and investment dried up on both existing in 2019–20, with $63.4 billion worth
and new growth projects. of planned or possible projects.5
31%
With the full support of industry, the
incoming state government can stabilise
the economy, fast-track recovery and
support Western Australian jobs.
Natural gas powers our state economy.
APPEA believes that the collaborative Mining in WA is one of the largest
initiatives and actions set out in this consumers of natural gas, accounting
$27.1
document will help keep the Western for 31.1% of WA’s consumption of gas,
Australian economy strong. while manufacturing and minerals
processing accounts for 22.2% of
bıllıon
• Economic recovery and
attracting investment WA’s natural gas consumption.3
• Cleaner energy future
• Supporting responsible In 2019–20, Western Australian
onshore development liquefied natural gas (LNG) exports
$697
COVER IMAGE COURTESY CHEVRON
• Maximising local benefits were valued at $27.1 billion.6
mıllıon
Acknowledgment
#2
The Australian Petroleum Production &
Exploration Association (APPEA) acknowledges Western Australia
the Traditional Custodians of Country throughout In 2019–20, the industry contributed produces 13% of
Western Australia and their knowledge in caring royalty payments and North West global LNG. If WA
for land, sea, and community. We pay our respect Shelf grants of more than $697 million were its own nation, it would be the 2nd
to their Elders; past, present, and emerging. to the state government.4 largest exporter of LNG in the world.7
Energy for a better Australia
Economic recovery and
attracting investment
APPEA and Western Australia’s oil and gas
industry have worked constructively with
the Western Australian Government and
Opposition to help shield the state from The next WA State
potentially damaging economic fallout Government should:
from the COVID-19 global pandemic. • Commit to consulting
with industry on policies
Throughout the pandemic, industry actions have focused affecting its operation and
on the health of our workforce and the community, development, well before
protecting thousands of Western Australian jobs, and they are finalised.
maintaining essential energy supplies to our homes, • Work with industry to clarify
businesses, hospitals, schools, manufacturers, and mines. the WA Domestic Gas Policy
As the Western Australian and global economies recover and ensure stable policy
from the impact of COVID-19, it will be critical that settings that facilitate
investment and responsible
Western Australia attracts long-term business investment
onshore gas development.
to grow the state’s oil and gas industry which in turn will
help to create local jobs, support local communities, and • Continue to progress
generate government revenues for decades to come. initiatives that streamline
This can be achieved by providing an attractive, stable, and harmonise assessments
and effective regulatory regime as well as ongoing and reduce regulatory
engagement with industry to prevent ad hoc policy duplication between the
decisions. For example, the sudden changes to the WA state and Commonwealth
Domestic Gas Policy in August 2020 without industry governments and state
consultation could, contrary to its aim of increasing gas government agencies, such
supplies for domestic consumers, actually reduce supply as a bilateral agreement
with the Commonwealth
as a result of reduced investment and consequently, the
on project environmental
state’s energy security.
assessments, and the
Western Australia has a long history of world-leading ‘Environment Online’
gas developments for both export and domestic gas initiative for state agencies.
production. Despite the impact of COVID-19 there remains • Utilise existing, successful,
significant natural gas resources to be developed, both
IMAGE COURTESY CHEVRON
and collaborative forums,
onshore and offshore WA, providing new opportunities. such as the LNG Jobs
Our ability to secure the next wave of investment in Taskforce, to discuss
oil and gas exploration and production faces intense industry issues and
challenges. The investment landscape is riskier, due to maximise flow-on benefits
the impact of COVID-19 on the global oil price, and global from the industry to
competition for scarce mobile capital is fierce. the Western Australian
economy and community.
This means there is a heightened risk that shifting
regulatory and policy settings could significantly deter
long-term global investment opportunities.
2 Powering Western Australia: APPEA’s WA State Election Platform February 2021 3
Cleaner energy future The oil and gas industry has a key
role to play in a cleaner energy future,
Australia’s oil and gas industry supports a national Not only is natural gas supporting low-emissions
both in Western Australia and globally.
climate change policy that delivers greenhouse gas energy now, but it has the potential to unlock
emissions reductions consistent with the objectives Western Australia’s cleaner energy future.
of the Paris Agreement. The policy approach should
Hydrogen will be one technology contributing to
achieve emissions reductions consistent with net The next WA State
decarbonising WA’s energy sector and supporting
zero emissions across the Australian economy by Government should:
local jobs over the longer term. For Western Australian
2050 as part of a contribution to a goal of global
natural gas producers and exporters, development of a • Ensure whole-of-
net zero emissions by 2050.
hydrogen industry has many synergies. government economic,
Australia’s goal should be a national approach environmental,
The vast majority of the world’s hydrogen supply
to climate policy which supports our shared infrastructure and
today is made from natural gas using the steam
environmental objectives as well as the industries development policies
methane reforming (SMR) process. When combined
that provide jobs and economic growth. recognise the role
with measures such as offsets or CCS that manage
Many APPEA member companies have already the emissions generated during SMR, the resulting of natural gas as
committed to their own company targets for blue hydrogen has the potential for significant net we continue to move
emissions reductions, including steps to achieve net emissions savings. towards a low-carbon
zero emissions in their operations by 2050 or earlier. economy.
As a cheaper and technically achievable form of
Oil and gas companies are taking meaningful action hydrogen in the short term, blue hydrogen has an • Recognise
by implementing effective carbon offset policies, important role in accelerating hydrogen adoption that emissions
developing new technologies to reduce emissions and infrastructure development. management requires
and improve energy efficiency, and investing in a national approach,
The race to supply hydrogen and secure customers is
renewable energy portfolios. consistent with the
becoming increasingly competitive among Australian
objectives of the
Carbon offset initiatives, such as supporting savanna states and territories, as well as internationally. WA has
Paris Agreement,
fire management projects and planting native trees, significant advantages, but to progress this technology
and should not be
deliver significant environmental benefits and support will require leveraging the strengths of our world-class
managed jurisdiction-
jobs in remote communities. By developing carbon natural gas sector and the right policy and regulatory
by‑jurisdiction.
capture and storage (CCS) technology to prevent CO2 settings by state government.
from being release d into the atmosphere, several • Be a proactive
Important customer relationships, export infrastructure
APPEA member companies are contributing a safe, partner with industry
and supply chains developed by our LNG industry are
large-scale emissions abatement solution to achieve and researchers on
in place and can be leveraged. Japan and South Korea
our shared climate goals. development of low
are two of the largest consumers of Western Australian
emission technologies,
Natural gas is a lower emissions form of energy and LNG and both nations plan to use hydrogen as a key
one of which is
plays an essential role in reducing greenhouse gas component of meeting their emissions reduction targets.
hydrogen where WA
emissions from WA’s energy sector, industry, and
As the world moves to a lower carbon future, has potential to be
households. Gas-fired generators are an essential
Western Australian LNG and adopting lower emission a leading hydrogen
partner to renewable energy generation to provide
technologies, including hydrogen, will also play a crucial producer and exporter
grid stability, as they can be rapidly started to provide
role in assisting our international partners to meet their of the future.
baseload power whenever renewables such as wind
emissions reduction goals.
and solar are intermittent.
4 Powering Western Australia: APPEA’s WA State Election Platform February 2021 5
Supporting responsible Maximising local benefits
onshore development
The Western Australian oil and gas industry is renowned Oil and gas developments provide a range of benefits to WA’s
for exploration and production of large offshore reserves, regional communities, from the South West to the Kimberley.
but there are also significant opportunities to support Not only through the opportunity for employment, but also
The next WA State The next WA State
jobs and regional development opportunities onshore. Government should through supply chain contracts with local businesses and Government should:
ensure any outstanding the many community investment initiatives undertaken by
The two main areas of current interest are the Perth Basin, that spans • Continue to support
policy implementation
from Bunbury to Geraldton, and the Canning Basin, that stretches companies to support regional Western Australia. initiatives that
and regulatory
maximise the local
across the southern and western parts of the Kimberley. requirements are The Western Australian oil and gas industry is committed to creating more benefits of the oil
Many of these resources can be developed using conventional finalised as soon as opportunities for Western Australian businesses in our suburbs and regions. and gas sector,
possible, with ongoing The Forward Work Plans initiative, a product of the Premier’s LNG Jobs
techniques of exploration and production, such as those at Mitsui’s such as Forward
consultation on key Taskforce, provides a two-year look-ahead at work in the sector for local
Waitsia development and Strike Energy’s West Erregulla discovery Work Plans.
operational elements businesses to identify potential contracting opportunities. This successful
in the Perth Basin. But some, including those in the Canning Basin, • Continue to support
with industry, to initiative will be expanded to include many Tier 1 contractors to further
may require what is known as hydraulic fracture stimulation (HFS) initiatives that
support the timely facilitate local jobs and maximise the local benefits of the oil and gas sector.
to stimulate commercial gas flows. and responsible provide training
In September 2018, the state government’s Independent Scientific development of Creating secure, local jobs is the best way to ensure shared economic opportunities in
Panel Inquiry into Hydraulic Fracture Stimulation in Western Australia Western Australia’s prosperity. The industry supports government initiatives that make it priority skills areas
found that the international standards for onshore development and onshore oil and gas easier for Western Australians to find jobs and be trained for future jobs and demonstrate
HFS, if properly executed and located, limit risks to the environment industry. in the oil and gas sector, such as the Jobs and Skills WA website. government support
and communities to a low level. The government agreed with the 44 for the future of the
Encouraging more Western Australians to consider a career in oil and gas
sector, such as the
recommendations of the Inquiry and put in place an implementation will help secure a pipeline of skilled local workers, reduce the sector’s
Jobs and Skills WA
plan to enact the required regulatory changes (without which HFS reliance on a fly-in-fly-out workforce, and demonstrate support for the website.
activities cannot take place). future of the sector.
• Recognise that
Very few of the 20 actions of the implementation plan have been The LNG Jobs Taskforce has also initiated a standardised training course
completed, when all were to be finalised by end 2020. The uncertain working across industry for LNG plant operators. With the skills competency
interstate fly-in-
fly-out will still be
regulatory landscape and unknown code of practice requirements framework now in place for LNG operators, and state government required for some
for HFS activities have deterred and delayed investment. to create agreement to fund the development of essential learning materials, specialised skillsets
The Western Australian oil and gas industry looks forward the industry is looking forward to launching this course in 2021. and activities
to working with the incoming state government to create local jobs The Western Australian oil and gas industry, working side-by-side with (e.g. maintenance
turnarounds)
local jobs and support regional economic growth through the state government and regional communities, is helping to drive
responsible onshore development. and support economic and social recovery across the state.
which are not
readily available in
Western Australia
growth in the short- to
medium-term.
6 Powering Western Australia: APPEA’s WA State Election Platform February 2021 7
About APPEA
The Australian Petroleum Production & Exploration Association (APPEA) is the
national peak body representing Australia’s upstream oil and gas explorers and
producers. Its purpose is to be the effective voice of the oil and gas industry on
the issues that matter, working collaboratively with industry, government, and
the community to achieve shared goals.
Endnotes
APPEA members account for nearly all of Australia’s petroleum production, the majority of which is 1 Australia. Department of Industry, Science, Energy and Resources.
produced on and offshore Western Australia. APPEA also represents about 120 associate member (2020). Australian Energy Update 2020, Australian Energy
companies that provide a wide range of goods and services to the upstream oil and gas industry. Statistics. https://www.energy.gov.au/publications/australian-
energy-update-2020.
APPEA is forward-looking and outcomes focused, aiming to raise awareness of the economic,
environmental, and social benefits of the oil and gas industry in Western 2 ibid.
Australia and across the country. 3 Australia. Australian Energy Market Operator. (2020). 2020
Western Australian Gas Statement of Opportunities, December
2020. https://aemo.com.au/en/energy-systems/gas/gas-
forecasting-and-planning/wa-gas-statement-of-opportunities-wa-
gsoo.
4 Western Australia. Department of Mines, Industry Regulation
and Safety (2020), Western Australian Mineral and Petroleum
Statistics Digest 2019–20. https://www.dmp.wa.gov.au/About-
Us-Careers/Statistics-Digest-3962.aspx.
5 ibid.
6 Western Australia. Department of Jobs, Tourism, Science and
Innovation (2020), Western Australian Liquefied Natural Gas
Profile, October 2020.
7 ibid.
8 Powering Western Australia: APPEA’s WA State Election Platform February 2021 9
Perth
Level 10
190 St George’s Terrace
Perth WA 6000
PO Box 7039 Cloisters Square
WA 6850
perth@appea.com.au
Brisbane
Level 3
348 Edward Street
Brisbane QLD 4000
PO Box 12052
George Street QLD 4003
brisbane@appea.com.au
Canberra
Level 1
60 Marcus Clarke Street
Canberra ACT 2601
GPO Box 2201
Canberra ACT 2601
Phone: 02 6247 0960
appea@appea.com.au
Melbourne
Suite 1, Level 10
34 Queen Street
Melbourne VIC 3000
melbourne@appea.com.au
www.appea.com.au
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