October 22, 2021

Opinion editorial: We need multiple options and pathways forward from Glasgow

This article by APPEA Chief Executive Andrew McConville first appeared in The Australian on 21 October 2021.

Apathy is an obstacle to progress. With the noise and array of opinions leading into COP26, no one, it seems, is apathetic and so we should take solace that progress can be made.

A failure to make progress in Glasgow would be a lost opportunity. We should not however, delude ourselves that it will be easy. The solutions to reducing emissions and addressing climate change are complex. We should not think otherwise.

The complexity comes from the need to reduce emissions while preserving energy and economic security. We in the developed world often fail to recognise that our economic development has been made possible through technology which allowed us to move away from the farm, get into the classroom, educate our populations and build secondary and tertiary industries.

Industries built on having a secure, reliable, and affordable supply of energy. Something that the United Nations estimates 3 billion people still do not have.

Singapore is a modern economic wonder. Spend any time there and you will understand that the city-state’s greatest fears are secure access to water and energy. Lee Kwan Yew, the “father of Singapore” was asked what he believed contributed most to Singapore’s success. Lee said air conditioning – which, not surprisingly, requires reliable energy supply and has helped Singapore’s GDP per capita grow 100 fold over the past fifty years. 96 per cent of Singapore’s electricity is generated from natural gas.

In 2020, 84 per cent of the world’s energy still came from hydrocarbons including oil and natural gas. So as much as some would like, and as the current crisis in Europe confirms, we cannot simply turn of the barbecue, throw away the keys to the HiLux, turn off the lights, cool the smelters, stop fertilising and hope for the best.

More than 400 million people in Asia live in energy poverty which is an opportunity for Australia not inconsistent with the aims of COP26 and entirely consistent with the Sustainable Development Goals.

Australia is the largest exporter of liquified natural gas to China, Japan and Korea, all of whom have sought to secure their supplies of energy while improving air quality and reducing emissions as natural gas has replaced coal in electricity generation.

The International Energy Agency recently reported that since 2010 coal-to-gas switching has reduced global emissions by around 750 Mt CO2 than they otherwise would have been. It is the equivalent of putting 2 million electric vehicles on the road.

The Australian government estimates Australia’s LNG has the potential to lower emissions in LNG-importing countries by around 170 Mt of CO2 each year by providing an alternative to higher emissions fuels – the equivalent of over one-third of Australia’s total annual emissions

And natural gas is key to supporting the greater uptake of renewables in Australia where it can provide firming capacity and assist with demand management. It is almost ironic that opposition to natural gas may actually slow the uptake of renewable energy.

There is no one I have met in the oil and gas sector that does not agree on the importance of transitioning to lower emissions, decarbonised energy and the importance of achieving net zero emissions.

But in the frenzy of coverage surrounding COP26 we seem to have forgotten, the focus is on net zero which is possible, not absolute zero emissions which is not. Accepting this then means we start to focus on the right things: not the type or source of energy, but the emissions from it – a point made quite clearly by the Head of the International Energy Agency just a fortnight ago.

COP-26 should not be used as a vehicle to demonize different forms of energy, instead it should be used as a forum to consider how we use technology to decarbonise energy while preserving energy security as a key pillar of economic growth for the entire world, not just the developed part of it.

Despite the noise that will come from COP26, there is a great deal of sensible, pragmatic middle ground between most nations. While different quarters will and should have different expectations depending on where they sit on the development curve and what might drive their economies, the key to our future energy and economic security lies in decarbonising energy in all its forms.

The role of government should not be to dictate the choices we can make. Rather the role of government is to create the economic conditions and incentives that allow markets to work and innovate to produce the solutions we need. We are seeing this in our industry with the rise of carbon capture and storage (CCS) as a means of decarbonising energy at scale, while hydrogen made from natural gas will be the first economically available supply of what will be a key future energy source.

We need multiple options and multiple pathways on the road forward from Glasgow. Four billion people in the world need it and economies like Australia, built on resources like natural gas, should demand it.

While many are very quick to loudly shout about the variability in the problems we face, we must also agree to variability in the solutions. Let’s hope those making the decisions at COP26 don’t lose sight of this when the noise is deafening for them to perhaps do otherwise.

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