Australia: Beyond coal
Published by Poppy Clements,
Editorial Assistant
Hydrocarbon Engineering,
Within the OECD, Australia stands apart – not only because of its distance from most of its fellow countries, but because of its abundant energy resources and its high per-capita emissions of carbon. Australia has significant fossil energy reserves (coal, natural gas and petroleum), as well as renewable energy (biomass, solar energy, wind and hydropower). Australia also possesses the world’s largest reserves of uranium, but does not have any nuclear power plants, and exports its uranium.
Australia’s energy wealth could be considered an embarrassment of riches, except that so much of the riches are the wrong type: coal. The country is finding it impossible to abruptly stop using a fuel source that is so plentiful and is so much a part of the existing energy infrastructure. If there was a sport called ‘The OECD Clean Energy Games’, Australia would be in the penalty box, holding hands with the US and Canada. These three countries possess abundant fossil energy reserves. They share a goal of carbon-neutrality by 2050, and they have a major fight ahead to transition to a clean energy economy. Among these three, Australia has the highest per-capita carbon dioxide equivalent (CO2e) emissions: approximately 16.46 CO2e/capita in 2022, relative to 15.82 CO2e/capita in the US and 14.77 CO2e/capita in Canada.
Globally, critics are skeptical that Australia will be able to make the drastic cuts in fossil energy production and use that are needed. Recently, however, discussions between Australia and the US revealed potential to expand investment in renewable and clean energy. Australian Prime Minister, Anthony Albanese, and US President, Joe Biden, met and agreed upon a new pact on clean energy policy and investment. The Biden Administration is devoting billions of dollars to clean energy development, and it is possible that Australia will be designated a ‘domestic supplier’ to the US, potentially allowing Australian companies to benefit from the huge investments being made in the US. Indeed, many Australians believe that the investments earmarked for natural gas would be better spent on strategic minerals, green hydrogen, solar energy, and wind turbines.In the near- and mid-term, however, it is more likely that Australia will continue to pursue success in natural gas production and LNG exports. According to the ‘Statistical Review of World Energy’, the industry standard long-published by BP and now produced by the Energy Institute (EI), in 2021, Australia gained the number one spot in global LNG exports, surpassing Qatar. In 2022, Qatar reclaimed the number one spot.
Australia has mineral wealth that is vital to the energy industry, including lithium, vanadium, cobalt, and rare earth metals. These strategic minerals are essential for batteries, turbines, solar panels, and computers that help make renewable energy technologies viable. Mining and processing are energy intensive, but channeling natural gas and ultra-low-sulfur petroleum fuels to these ventures may hasten a phase-out of coal. Australia is the world’s largest exporter of lithium, but it has yet to capture the value-added of processing its mineral wealth into finished batteries.
This article will explore Australia’s energy market, how the fuel types are changing, and how the oil industry is adapting.
Australian primary energy
Australia has faced international criticism over its dependence on fossil energy, yet in fairness this is a herculean task given its vast fossil energy reserves and their contribution to national wealth. Historically, fossil energy contributed approximately 95 – 96% to Australia’s primary energy mix. According to BP and the EI, fossil energy accounted for 96.3% of Australia’s energy mix in 2008, and the country cut this to 85.6% in 2022. This has been achieved primarily by cutting coal use by an average of 3.2%/yr during the 2008 – 2022 period. In 2022, oil provided 34.6% of Australian primary energy, followed by coal at 25.9% and natural gas at 25.1%. Oil demand growth has been moderated in recent years, though part of this was caused by the COVID-19 pandemic. Demand has been recovering, but at a slower pace than that seen pre-pandemic.
This article was originally published in the August 2023 issue of Hydrocarbon Engineering magazine. To read the full article, sign in or register for a free subscription.
Written by Nancy Yamaguchi, Contributing Editor.
Read the article online at: https://www.hydrocarbonengineering.com/special-reports/09082023/australia-beyond-coal/
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