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Is it the right time for oil exploration in Australia?
While the Australian Government is determined to extract fossil fuels in their quest to grow the economy, Australia’s people – angered by inaction after waves of devastating bushfires – are beginning to demand a more decisive response to climate change. Given this, Scarlett Evans, asks, is it the right time for new exploration in Australia?
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Credit: Henning Flusund
When it comes to the green revolution, Australia has not historically led the charge, and the country has become synonymous with some of the most fervent coal-loving agendas in the world. Such a stance has most recently been evidenced by the appointment of Queensland MP Keith Pitt – an outspoken supporter of coal and nuclear, and critic of wind and solar – as Minister for Resources and Northern Australia.
While a spike in renewable uptake is anticipated for the future, the current emphasis on more carbon-intensive resources has sparked opposition from environmentalists and general members of the public alike, who have seen the devastation caused by the most recent spate of bushfires. So do upcoming projects have any hope of success, or will they be continuously mired in controversy?
The future of Australia’s energy
According to consultancy firm Rystad Energy, Australia is anticipated to see a 22% spike in spending towards oil and gas exploration in the coming year. Speaking with Daniel Levy, a senior analyst at the firm, he says Australian exploration investment is forecast to increase from $1.62bn in 2020 to $2.01bn in 2022, before tapering off to a low of just $500bn in 2028.
“The majority of spending is currently targeting conventional hydrocarbons,” he says. “However, we expect that by 2027, investment in unconventional sources such as shale will overtake spending on conventional sources.”
David Dixon, another senior analyst with Rystad Energy, says a turn to renewables should certainly be expected, with photovoltaic technology currently boasting the largest pipeline. However, he advises the dominance of these eco-technologies will not kick in for some years yet.
We expect that by 2027, investment in unconventional sources such as shale will overtake spending on conventional sources
“There is certainly an anticipated shift away from coal towards renewables,” he says. “A few years ago this was driven by policy, but now it is simply economics. This is reflected in the amount of capacity being proposed in Australia, with total installed capacity on the grid being around 50-60GWac, and a total renewables projects pipeline of 146GWac!”
However, while there has certainly been a boom in renewable construction over the past few years, the traditional sources of coal, oil and gas are expected to make up the largest portion of Australia’s electricity mix for the short term.
With the ill effects of climate change so fresh in the minds of the public, what the government chooses to do now will have a serious impact on both public perception and environmental progression.
Equinor and the Great Australian Bight
One of the more contentious projects on the horizon is Equinor’s plan to drill for petroleum in the Great Australian Bight - an announcement that has sparked backlash from conservationists and which is even facing legal action from the Wilderness Society on the grounds that plans have not adequately taken environmental damages into account.
Speaking with Nathaniel Pelle, senior campaigner for Greenpeace Australia Pacific, he says the plan to establish a new oil frontier is ‘completely at odds’ with global concerns for climate change impacts.
“Burning fossil fuels is the number one cause of climate change, which fuelled this summer’s bushfire crisis,” he says. “If we are to prevent catastrophic climate change, our planet cannot afford to burn all the oil that companies already have in reserve, let alone open new frontier oil fields.”
If we are to prevent catastrophic climate change, our planet cannot afford to burn all the oil that companies already have in reserve
Pelle also noted the economic significance the Bight already plays for the country, producing 25% of its commercial seafood - something that the plan to drill would likely jeopardise. Any problems - including oil spills - would have a knock-on effect, impacting fishing throughout the country.
“Experts warn the risk of an oil spill in the Bight is a greater threat than usual because of the remote location, wild conditions, and lack of infrastructure,” he says. “An oil spill in the Bight would devastate fishing and tourism industries across Australia’s south, east and west coasts, with oil blanketing beaches anywhere from Sydney to Perth, including Tasmania.”
A similarly contentious plan was announced by BP and Chevron at the end of last year, when the mining giants said they will pledge A$116.5m ($80.11m) to exploration in Australia. The majority of these planned operations are intended to take place in South Australia.
A renewable future?
The push for these projects come from those who applaud the financial benefit such schemes can bring to regions, and South Australia Minister for Energy and Mining Dan van Holst Pellekaan voiced his support of the BP/Chevron plan, saying it will help to drive job creation, investment and royalties in the state. However, the preference for financial gain over ecological benefit is no longer going unchallenged.
On the matter of the country’s still-strong coal agenda, Greenpeace Australia Pacific campaigner Jonathan Moylan says governments are ‘failing’ in their obligations to Australian citizens, though he is optimistic about the gradual turn to renewable alternatives.
“Global thermal coal growth has ground to a halt, with an increasing number of financial institutions including BlackRock (the world’s largest asset manager), divesting from companies that fail to account for climate action in their strategies,” he says.
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If Australia remains on the same path and fails to take meaningful and drastic action to reduce emissions, it will cost A$29bn annually by 2050
According to Moylan, the main thing holding people back at this point is political will ‘and vested interests’, rather than anything from a technological perspective.
“Public pressure is shifting towards a 100% renewable electricity system,” he says. “There are significant opportunities for companies that embrace the evolution of our energy system, and severe risks for those that resist it. A recent study by the International Monetary Fund found that if Australia remains on the same path and fails to take meaningful and drastic action to reduce emissions, it will cost the nation A$29bn annually by 2050.”
“Phasing out dirty fossil fuels will mean cleaner air and water, a liveable climate and a natural world that flourishes in all its beauty,” he adds. “Rather than a warming planet marked by regularly occurring extreme weather events.”
The world is moving away from carbon-intensive energy sources, and it seems Australia is beginning to take note of this change. Whether the shift to renewables will come about soon enough still hangs in the balance, but one thing is for certain - public demand is such that staying quiet on environmental issues is no longer an option.