If you’ve seen the protests or follow any environmental activists on social media you would think that Australia’s natural gas industry is on the ropes, as groups like Lock the Gate (LTG) boldly declare that “times up” for fossil fuels. As per usual, their take on our energy industry doesn’t square with reality.
In fact, just this week the Department of Industry, Innovation and Science reported that the value of Australia’s resource and energy exports is expected to reach the highest level on record, $230 billion in 2017-18, largely thanks to our booming domestic LNG industry.
The numbers tell a promising story. Up $7.6 billion in the last year, Australia’s LNG exports will likely eclipse metallurgical coal as the country’s second largest resource and energy export in 2018-19, and by 2022-23 LNG export value is expected to reach $38.8 billion.
While LTG and like-minded groups may try to paint this growth as a travesty, the reality is this is great news for Australia’s economy and even better news for the region at large as it shifts from more carbon-intensive coal to cleaner burning natural gas.
The economic benefits of a successful LNG export industry are well-known. Not only does it create local jobs for those who work directly for natural gas companies – during both the construction and the ongoing operational phase— the influx of cash in regional towns benefits all local industries; from gas field services firms to the local restaurants that serve hungry workers.
In the words of Matt Canavan, Minister for Resources and Northern Australia, “these commodities play an important role in helping our region develop its infrastructure and build prosperity.”
And despite what activists’ claim, Australian’s need not feel bad about this prosperity as our country’s natural gas will be an important part of decreasing the Asia Pacific region’s carbon output.
In fact, according to the International Energy Agency’s World Energy Outlook 2017, the shift toward a global cleaner energy economy hinges upon what happens in China, or in their words “when China changes, everything changes.” From the report:
“China is entering a new phase in its development. The president’s call for an ‘energy revolution,’ the ‘fight against pollution’ and the transition toward a more services-based economic model is moving the energy sector in a new direction- with the emphasis in the energy policy now firmly on electricity, natural gas and cleaner, higher efficiency and digital technologies.”
So much of China’s progress towards cleaner energy and decreased air pollution relies upon the country phasing out more carbon-intensive coal in favor of natural gas, for which they are increasingly turning to Australia exports. From the Australian:
“Queensland is exporting gas at record rates as resurgent oil prices boost LNG contract revenue and a Chinese push to reduce coal-fired power and heating pushes LNG spot prices and medium-term demand forecasts higher… It is now hitting Australia’s third-biggest export, LNG, where spot prices are up 53 per cent in the past two months as the dramatic push for better air drives more gas demand.”
It’s rare in industry, policy making, or life in general that you are presented with a clear win-win situation but that’s what Australia’s LNG export industry is; a way to boost local economies and help China and other coal-dependent export destinations decrease their carbon output.