The Environmental Protection Agency’s approval of the Wheatstone project will augment Australia’s position as a global liquefied natural gas (LNG) giant.
Australia’s attempts to replace Qatar as the world’s largest LNG exporter have been bolstered by last week’s Environmental Protection Agency (EPA) approval of the 25 million tonnes per year Wheatstone LNG project, off the coast of Onslow in Western Australia’s Pilbara region. The joint venture project between Chevron, Apache, Kuwait Foreign Exploration Company and Shell is anticipated to generate 6,500 direct jobs and $21 billion in revenue for the government.
Visiting the Middle East in June 2011, Western Australian Premier Colin Barnett stated that ‘we are closing on Qatar’s position. I expect Australian LNG exports to triple to 160 million tonnes per annum by the end of the next decade.’ Mr Barnett’s projection is more than double Qatar’s current export capacity of 77 million tonnes per year.
To ensure that vision is realised, it is imperative that new projects are supported by strategic policy driven by state and national bureaucracies.
Australia must engage global markets and not rely solely on regional states. LNG will drive European energy consumption over the coming decade, as states move away from nuclear energy after the Fukushima Daiichi incident and while current deficiencies remain in the renewables sector. Australian gas represents a “win-win” scenario for both Europe and Australia, providing market opportunities for Australia and allowing Europe to achieve greater energy stability and reduce its dependence on sometimes unreliable Russian and Ukrainian supplies.
The State Government’s decision to deny approval for further LNG sites will ensure efficiency and prevent the duplication of infrastructure that exists in the iron ore sector. It is imperative, however, that the decision does not prove a significant “barrier to entry” to other prospective players and projects, such as ExxonMobil’s Scarborough venture. The government should provide greater concessions to energy companies, formulate legislation and develop strategic partnerships to ensure access to existing facilities, including the North-West Shelf, Barrow Island and the Browse project.
Policymakers must recognise that promoting and capitalising on Australian LNG reserves will serve the dual purposes of ensuring future economic opportunities and promoting Australia’s global geopolitical position.
FDI Northern Australia and Energy Security Research Programmes