Woodside Energy chief executive Meg O’Neill has slammed extremists who are doing the damnedest to scupper under development and new gas projects in Australia, the region’s largest liquefied natural gas exporter.
Addressing the National Press Club in Canberra, O’Neill said that development of Australia’s gas industry has only been possible with the support of international investors and customers looking to secure their own energy supplies. But now they are questioning whether Australia still wants their investment.
“A vocal minority wants to shut down the industry and the jobs and livelihoods that go with it. They have deep pockets and are using both protest action and the courts to create uncertainty and destabilise regulatory processes to frustrate existing and new projects,” she said.
“We respect every Australian’s right to express their opinion – and we share the commitment to decarbonisation – but extremism is not the answer. We need confidence in stable regulatory outcomes, or we risk choking our energy industry, impacting both domestic and international supply,” added O’Neill.
“This concerns our regional partners, who depend on current Australian gas projects to help them meet their decarbonisation commitments and to keep the lights on in Asian megacities.”
O’Neill said that the challenge, as she sees it, is for Australia to use its vast natural gas resources for three interrelated goals: To provide affordable and reliable energy for Australians, to maintain strategic partnerships and regional energy security, and to progress global decarbonisation.
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“We want to develop new projects in Australia, across both hydrocarbons and new energy opportunities, but that will only be possible if policy settings provide the certainty to underpin long-term investment.”
Securing future investment
During 2022, the world experienced what the International Energy Agency has termed “the first truly global energy crisis” and Australia, for all its vast natural resources, was not immune.
“Those who can least afford it have felt it most acutely, sometimes having to choose between food and heating through winter. This should not be happening in Australia. Australians should be able to expect reliable energy. That needs to come from having the right investment climate – rather than arbitrary market intervention – and the right honest conversations between all participants in the energy system,” said O’Neill.
But, she said, a longer-term view is needed to ensure new supply will be there to meet anticipated demand.
“Woodside and other companies are actively considering what we might be able to do to help – from infrastructure to enable LNG imports, to buildout of gas storage – but we also know these can only be progressed in concert with government.
“[This] requires a clear investment framework and regulatory certainty to attract the capital from international markets that is needed for large-scale projects.”
The same partners who invested in Australia’s gas projects can provide the capital to develop lower-carbon hydrogen and renewable projects, but only if they consider it a secure investment, added O’Neill.
“For Australia to remain an attractive destination for global capital, fiscal and regulatory certainty is paramount.
“We urge the government, in any changes to the tax framework, to consider the long-term and preserve Australia’s ability to attract the next generation of investment, jobs and energy supply,” said O’Neill.
“In terms of regulatory certainty, agreement on clear processes and response times for project approvals is essential to unlocking reliable supply. Otherwise, energy investment will find another home, taking jobs and opportunities with it.”
Gas in tandem with renewables
Globally, we are going to need to use all the tools to address climate change while advancing developing economies, Woodside’s chief executive said.
“That’s going to require rapid scale-up of renewables and investment in ongoing gas supply as existing gas fields deplete.”
Even in its Net Zero Emissions scenario, the Paris-headquartered IEA has estimated an average of US$365 billion of upstream oil and gas investment is needed every year to 2030, and US$171 billion every year thereafter to 2050.
“When used to generate electricity, natural gas emits around half the life cycle emissions of coal. Gas is a flexible source of energy and provides a stable baseload,” she added.
Australia’s federal government is targeting increasing the share of renewables in the electricity grid to 82% by 2030, leaving an 18% gap that could be filled by natural gas. However, today gas-fired power only accounts for 7% of the national energy market.
O’Neill admitted that Australia’s gas industry needs to do more to reduce emissions but that it is moving in the right direction.
“We employ engineers – creative, practical problem-solvers, who are prioritising this challenge – and commercial analysts, who are figuring out ways to finance it,” she said.
“We have geologists, who used to explore for new oil and gas reservoirs, who are now looking at how we can safely inject and store carbon dioxide in depleted reservoirs.”
However, in the absence of certainty at a national level, Australian states have implemented complex and conflicting regulations for emissions reduction, moving away from the concept of tackling the lowest-cost abatement options first, and adding to the cost of doing business… not just for energy producers, but for all industrial segments, O’Neill commented.
Getting it right in future
“You might guess from my name that I’m of Irish heritage. I grew up in Boulder, Colorado, (in the US) but my Nanna grew up in a village in County Mayo, in Western Ireland, with no electricity – relying on a peat fire for heating, cooking and light,” O’Neill shared.
“As a society, we have come a long way since then, in just two generations. And we should not be regressing. We should instead be extending access to electricity to hundreds of millions of people in the developing world who still live without it. To do that, we need new supplies of affordable and reliable energy.”
However, against that backdrop, there is the need to decarbonise which will require the rapid scale-up of renewables alongside investment in ongoing gas supply as existing gas fields deplete.
Woodside is aiming to spend US$5 billion by 2030 to progress new energy opportunities and lower-carbon services.
Admitting the Australian company – which was founded in 1954 – historically has not always “got it right” in its relations with First Nations peoples, O’Neill said the company is on a journey in its relations with First Nations peoples and “working to get it right” by listening to and learning from these peoples.
“For Woodside, a big part of this is working with the Traditional Owners of Murujuga, in northern Western Australia, where our largest Australian operations are based,” she said.
TORONTO – Canada’s main stock index was down more than 200 points in late-morning trading, weighed down by losses in the technology, base metal and energy sectors, while U.S. stock markets also fell.
The S&P/TSX composite index was down 239.24 points at 22,749.04.
In New York, the Dow Jones industrial average was down 312.36 points at 40,443.39. The S&P 500 index was down 80.94 points at 5,422.47, while the Nasdaq composite was down 380.17 points at 16,747.49.
The Canadian dollar traded for 73.80 cents US compared with 74.00 cents US on Thursday.
The October crude oil contract was down US$1.07 at US$68.08 per barrel and the October natural gas contract was up less than a penny at US$2.26 per mmBTU.
The December gold contract was down US$2.10 at US$2,541.00 an ounce and the December copper contract was down four cents at US$4.10 a pound.
This report by The Canadian Press was first published Sept. 6, 2024.
TORONTO – Canada’s main stock index was up more than 150 points in late-morning trading, helped by strength in technology, financial and energy stocks, while U.S. stock markets also pushed higher.
The S&P/TSX composite index was up 171.41 points at 23,298.39.
In New York, the Dow Jones industrial average was up 278.37 points at 41,369.79. The S&P 500 index was up 38.17 points at 5,630.35, while the Nasdaq composite was up 177.15 points at 17,733.18.
The Canadian dollar traded for 74.19 cents US compared with 74.23 cents US on Wednesday.
The October crude oil contract was up US$1.75 at US$76.27 per barrel and the October natural gas contract was up less than a penny at US$2.10 per mmBTU.
The December gold contract was up US$18.70 at US$2,556.50 an ounce and the December copper contract was down less than a penny at US$4.22 a pound.
This report by The Canadian Press was first published Aug. 29, 2024.
The crypto market has recently experienced a significant downturn, mirroring broader risk asset sell-offs. Over the past week, Bitcoin’s price dropped by 24%, reaching $53,000, while Ethereum plummeted nearly a third to $2,340. Major altcoins also suffered, with Cardano down 27.7%, Solana 36.2%, Dogecoin 34.6%, XRP 23.1%, Shiba Inu 30.1%, and BNB 25.7%.
The severe downturn in the crypto market appears to be part of a broader flight to safety, triggered by disappointing economic data. A worse-than-expected unemployment report on Friday marked the beginning of a technical recession, as defined by the Sahm Rule. This rule identifies a recession when the three-month average unemployment rate rises by at least half a percentage point from its lowest point in the past year.
Friday’s figures met this threshold, signaling an abrupt economic downshift. Consequently, investors sought safer assets, leading to declines in major stock indices: the S&P 500 dropped 2%, the Nasdaq 2.5%, and the Dow 1.5%. This trend continued into Monday with further sell-offs overseas.
The crypto market’s rapid decline raises questions about its role as either a speculative asset or a hedge against inflation and recession. Despite hopes that crypto could act as a risk hedge, the recent crash suggests it remains a speculative investment.
Since the downturn, the crypto market has seen its largest three-day sell-off in nearly a year, losing over $500 billion in market value. According to CoinGlass data, this bloodbath wiped out more than $1 billion in leveraged positions within the last 24 hours, including $365 million in Bitcoin and $348 million in Ether.
Khushboo Khullar of Lightning Ventures, speaking to Bloomberg, argued that the crypto sell-off is part of a broader liquidity panic as traders rush to cover margin calls. Khullar views this as a temporary sell-off, presenting a potential buying opportunity.
Josh Gilbert, an eToro market analyst, supports Khullar’s perspective, suggesting that the expected Federal Reserve rate cuts could benefit crypto assets. “Crypto assets have sold off, but many investors will see an opportunity. We see Federal Reserve rate cuts, which are now likely to come sharper than expected, as hugely positive for crypto assets,” Gilbert told Coindesk.
Despite the recent volatility, crypto continues to make strides toward mainstream acceptance. Notably, Morgan Stanley will allow its advisors to offer Bitcoin ETFs starting Wednesday. This follows more than half a year after the introduction of the first Bitcoin ETF. The investment bank will enable over 15,000 of its financial advisors to sell BlackRock’s IBIT and Fidelity’s FBTC. This move is seen as a significant step toward the “mainstreamization” of crypto, given the lengthy regulatory and company processes in major investment banks.
The recent crypto market downturn highlights its volatility and the broader economic concerns affecting all risk assets. While some analysts see the current situation as a temporary sell-off and a buying opportunity, others caution against the speculative nature of crypto. As the market evolves, its role as a mainstream alternative asset continues to grow, marked by increasing institutional acceptance and new investment opportunities.
