By Sarah Byrne
THE INDUSTRY needs supporters, not opponents, according to Western Australian premier Colin Barnett who addressed an audience at the opening of LNG18 in Perth in mid-April.
Reflecting on Woodside’s trouble with receiving environmental approval for a land based project in Broome and INPEX building a 900 kilometre subsea pipeline to Darwin for $5 billion to avoid environmental and land ownership issues, Mr Barnett said it shouldn’t be up to politicians to fight these ongoing problems.
Acknowledging the validity of some of the communities concerns of the impact of mega LNG projects, Mr Barnett said it is no longer sufficient to simply say these projects are good for the economy.
“It is necessary to show direct benefits to deal with the inevitable protests on a detailed and factual basis and to resolve any negatives,” he said.
Companies need to step up and get involved with regards to anti-development and environmental protesters, Mr Barnett said.
LNG18 opened with a plenary discussion on the transformation of gas with industry heavyweights Woodside managing director Peter Coleman, Chevron chief executive John Watson and Shell chief executive Ben van Beurden participating in a plenary session facilitated by Maria van der Hoeven from the Clingendael Institute.
Along the same lines as many discussions at LNG18, Mr Watson said Australia’s costs are high and although it is important to maintain strong labour and environmental standards, it is critical to have a competitive offering going forward.
“Australia has the resources, but it must put together an offering to make companies like mine want to invest, because we do have options,” he said.
In order to remain competitive the liquefied natural gas (LNG) industry should learn from its past so that is can secure its future, Mr Coleman said.
“The world isn’t going to wait for gas to be affordable, it will find another source, so we need to work to make is affordable,” he said.
Mr Coleman said the challenge for the industry is making investments in an uncertain world.
“We need to be aggressive in developing new markets.”
Mr Coleman and Mr van Beurden like most presenters at LNG18 stressed the importance of reducing the cost of Australian LNG projects in order for the nation to compete internationally.
Considering the industry’s cyclical nature, taking a long term view on investment is important, however Mr van Beurden said companies must not spend money they don’t have.
“We have to make sure we are more efficient, but also reduce some of the activity we might have done,” he said.
Mr van Beurden raised concerns that the measures companies take as a result of the commodity price cycle will destroy capabilities in the supply chain.