MATT MCKENZIE: Industry wins Woodside’s North West Shelf project but Australia’s energy wars will rage on

Gas industry executives were on a war footing in Brisbane this week awaiting news from the Federal Government on the future of Woodside Energy’s North West Shelf plant.

That battle was won on Wednesday with an environmental green light to run the Karratha facility until 2070.

Yet it is too early to gauge whether this is a decisive turn of momentum in the energy wars or a final victory for an industry under pressure from changing community sentiment.

Santos chief Kevin Gallagher — never shy to share what pops into his mind — helmed the offensive, declaring Victoria’s investment climate as similar to North Korea.

Usually mild-mannered Woodside chief Meg O’Neill rained fire on Millennials and Zoomers, labelling them zealots opposed to fossil fuels while engaging in consumerist culture.

The impact of that style of advocacy on industry support from Generations Y and Z remains to be seen.

Tensions reached boiling point leading up to the approval decision.

A highly-anticipated State Government-backed study of the ancient Indigenous Murujuga Rock Art paved the way for ongoing operations while finding industry likely had a historical impact at the site.

UWA professor Benjamin Smith ripped up the report on the steps of State Parliament and UNESCO warned the Murujuga world heritage bid was under threat from industrial emissions.

There were revelations of an oil spill at Woodside’s Griffin field. Tuvalu’s Foreign Minister Maina Talia wanted the Karratha plan rejected to help protect the Pacific Island nation from climate change.

Prime Minister Anthony Albanese weighed in that emissions needed to be “net zero, not zero” and gas would help back up renewables for electricity.

At 2pm EST on Wednesday, Federal Environment Minister Murray Watt ripped off the bandaid, giving the all-clear for the plant to keep running subject to what he promised were strict conditions.

Local traditional owner Raelene Cooper — a leading opponent of the plan — hit back quickly: “see you in court”.

It’s clear neither side will be backing down.

In the pipeline

What is unclear is whether Senator Watt’s move marks a decisive shift in community thinking around gas.

That’s especially the case as Gens Y and Z become the dominant voting cohort. YouGov polling showed four in five Young Australians judged climate change a key factor when casting their ballots earlier this month.

Yet the Federal Government signalled it was keen to embrace the fuel last year with the release of the Future Gas Strategy. Westpac gave gas a boost this week by loosening up lending rules and dubbing it a “transition fuel”.

All the signs are that LNG will remain at the heart of the climate battle given the industry accounts for 8 per cent of national emissions — and even more offshore.

As the seven-year North West Shelf debate reaches a conclusion, another looms even larger.

The plant won’t be able to do much without gas to feed the turbines and Woodside is pursuing the $30 billion Browse project for that purpose.

Approval for the greenfields Browse development looks to be a much greater hurdle than for the Karratha plant — which has already operated for 40 years.

Browse was submitted to the EPA in 2018 but WA’s Environmental Protection Authority indicated last year it was not minded to approve the project amid concerns about Scott Reef and local wildlife.

Public comments were reopened in recent weeks indicating the saga will remain ongoing.

Even with Browse online there will be excess capacity at the Karratha plant, forcing Woodside to shut down one of five processing trains last year.

There are few projects of such scale in the pipeline in Australia and each will need their own approvals.

Inpex is considering a third processing train at Ichthys in Darwin. Chevron will need to spend billions of dollars on a multi-decade series of offshore developments to keep the Wheatstone and Gorgon plants running.

But Woodside has turned its attention to investment in the United States with the $27 billion Louisiana LNG plant.

Disapproval

Ms O’Neill has consistently said America’s red and green tape environment was faster than Australia’s.

“We’re chalk and cheese from where we were 20 years ago,” Ms O’Neill told the Australian Energy producers Conference in Brisbane.

She said a permit for seismic work or to drill a well will now take more than two years.

Santos’ Mr Gallagher said his big problem was that decisions could be challenged even after approval was granted — referencing the court-ordered delay of the company’s Barossa project.

“An approval has to be an approval,” he said.

“We’ve seen some retrospective intervention, not just by the current government, the previous (Coalition) government started this ball rolling. It’s like a drug, they get hooked on it.”

The Federal Government gave the industry a win here, too.

Resources Minister Madeleine King promised a rewrite of the industry’s rule book — perhaps the next big political test after the Karratha decision.

In the next breath, Ms King warned that she wanted gas to flow for local manufacturers.

“A well-supplied domestic gas market at a reasonable price is fundamental to the social licence of this industry to operate,” she said.

Shortages of gas are expected on both sides of the country, leaving three tough choices: bringing on new supply, shifting energy demand from gas to electricity, or rules to control exports.

Debate in Western Australia has focused on the role of gas in the power grid as the government’s shuts down coal by 2030. Projections by the Australian Energy Market Operator indicate gas will be the major source of back-up electricity as investment into green energy surges.

The reporter travelled to the AEP Conference as a guest of the lobby group.