Australia is a resource-rich country. It is a major exporter of minerals, energy, and food, yet it has worked diligently to avoid over-reliance on resource extraction. It has an open market and a diverse economic base. Australia is a key member in numerous international organisations including the Organization for Economic Cooperation and Development (OECD), the World Trade Organization (WTO), the Group of Twenty (G20), and Asia-Pacific Economic Cooperation (APEC). The country has also expanded trade and economic cooperation via bilateral agreements and free trade agreements with virtually every major economy in the Asia-Pacific region. Australia is viewed as highly attractive to foreign investment, which has made it possible to complete long-term, capital-intensive projects including LNG installations.
Yet there is a limit to how many more drilling, mining, and heavy industry installations Australia can accommodate. The country’s economy is carbon-intensive on a per-capita basis. Its population is approximately 24.8 million, accounting for only 0.32% of the world’s population. Yet according to BP, Australia accounted for 1.2% of global carbon emission in 2018. BP’s ‘Statistical Review of World Energy’ reported that Australia relied on fossil energy for 92.8% of primary energy needs in 2018 – one of the highest levels among OECD countries.
It is noteworthy that the subtitle of BP’s 2019 Statistical Review is ‘Energy in 2018: an unsustainable path’. BP reported that global coal consumption grew for the second consecutive year, following three years of declines. Carbon dioxide (CO2) emissions expanded by 2%, twice the average increase seen between 2007 and 2017. BP’s Chief Economist, Spencer Dale, observed that some of the world’s increase in energy demand stemmed from severe weather – a symptom of global climate change. Thus, the cycle worsened in 2018. Dale concluded “Last year’s developments sound yet another warning alarm that the world is on an unsustainable path.”1
Australia is in the midst of battling global climate change, and the country has relatively more to lose if the battle is lost. The actions taken on this issue will affect the Australian energy industry more than any other single factor. This article will discuss Australia’s love-hate relationship with fossil energy, the challenge of global climate change, the growth of the LNG industry, the shrinking of the downstream oil industry, and the impact this has had on refined product trade…
Written by Nancy Yamaguchi, Contributing Editor, Hydrocarbon Engineering.
- ‘Statistical Review of World Energy 2019’, BP, Group Chief Economist’s analysis.
Read the article online at: https://www.hydrocarbonengineering.com/special-reports/06082019/whats-up-in-the-land-down-under/