Shell says green power shift will lift need for Australia’s LNG
The Australian boss of global energy giant Shell sees demand for liquefied natural gas exports continuing to grow until at least the late 2030s even as COVID-19 hastens the shift away from planet-warming fossil fuels.
Shell, which believes its oil output may have hit a peak in 2019 and is now likely to gradually decline, has revealed a brighter outlook for its liquefied natural gas (LNG) assets including those in Queensland and off Western Australia.
Europe’s largest oil company has been accelerating plans to slash its carbon footprint ahead of a target for net-zero emissions by 2050 and diversify away from fossil fuels in favour of renewable sources such as wind and solar farms.
Shell’s Australian chairman Tony Nunan said the company was pushing further into clean energy sectors, but its extensive natural gas assets locally remained core to its long-term plans and would continue to receive investment.
“Even though we believe the transition itself will accelerate off the back of what happened with COVID, the demand for products like LNG we still believe will be strong because they support that transition,” he said on Thursday.
“We believe it’s an important business for us, and that’s why we want to continue to invest in the business and for it to grow consistent with demand.”
Demand for LNG cargoes was expected to grow 4 per cent a year for the “next 15-20 years”, Mr Nunan said, as countries increasingly looked to the fuel to support their accelerating uptake of weather-dependent renewable energy.
LNG, a fuel widely used in heating, power and manufacturing, accounts for $50 billion of Australia’s export earnings a year. It is regularly touted as a vital “transition fuel” in the shift to a greener power grid because it burns with fewer greenhouse gas emissions than coal but is still capable of dispatching around-the-clock energy to support weather-dependent wind and solar generators.
However, LNG’s role in the transition is increasingly under question, with scientists and investors voicing concerns around emissions released in drilling and shipping, and ever-growing advances in renewable technology. Climate advocates say gas remains a heavy source of emissions and its role must be limited if the world is to achieve the Paris climate accord’s goals of limiting global warming to well below two degrees.
“Often times debates are defined by the extremes – on one extreme there is view that all energy must transition today to the lowest-carbon form … but on the other extreme we know customers need products today that service their needs,” Mr Nunan said.
“I’ve always been of the view that the solution space sits between those positions, and that’s supporting customers to both service what they need today but help them to continue that transition that they are all on themselves to a lower-carbon future.”
Shell’s Australian assets include Queensland’s QCLNG plant, the Prelude floating LNG project north of Broome and its stakes in the giant North West Shelf, Gorgon and Browse LNG joint ventures.
But the the Anglo-Dutch giant’s global push into renewable energy is gathering pace in Australia. In the past year, Shell has been expanding its Australian footprint with its 120-megawatt Gangarri solar farm development in Queensland, a $617 million acquisition of electricity supplier ERM Power and its acquisition of solar farm developer Esco Pacific.
Extracted from The Sydney Morning Herald