Transcript: Samantha McCulloch, Chief Executive of Australian Energy Producers, joined Sally Sara on ABC Radio National to discuss the Federal Court decision to give the green light to the Santos Barossa Project.
Sally Sara: What's your response to this ruling?
Samantha McCulloch: This is certainly a welcome decision and it does put an end now to this latest round of lawfare that we've seen against the Barossa project. Here we're talking about a project that's really important for Australia and for our region. It's a $6 billion investment that will really deliver critical gas supply to Australia and to our trading partners, as well as hundreds of jobs and substantial economic benefits. This is a very much welcome and this verdict now allows the project to immediately move ahead with those pipeline laying activities.
Sally Sara: What does it mean for the wider industry? How's it being interpreted?
Samantha McCulloch: It's a welcome decision that's providing more confidence for investment. What we've seen over the last 12 or 18 months in terms of the offshore regulatory environment, is a lack of clarity around the requirements. It's a system that the government has acknowledged needs to be addressed because we haven't had the certainty that's needed around environmental approvals to enable projects to move forward. So, it's certainly a welcome development, there's still going to be a need for regulatory changes to deal with some of the complexity and uncertainty that we are seeing in the offshore environment. But it's, again, an important step forward for the industry.
Sally Sara: What's the industry calling for exactly when it comes to clarification of the regulations?
Samantha McCulloch: So, this is not specifically to the current Barossa decision, but what we've seen is a lack of clarity and certainty around consultation requirements for environmental approvals. This is seeing projects really been delayed by months and months, we've seen the consultation requirements expand, and to the point that's really causing consultation fatigue, not just for those that need to be consulted, but also adding considerable cost and delays to these projects. It's coming at a time when there's an urgent need to bring new gas supply online, including for the Australian domestic market on both the east and west coasts, but also because of that important role that gas is playing in supporting the energy transition in our region and helping to decarbonise our trading partners.
Sally Sara: And is it correct even though there's been a win for Santos with this particular decision, they still have several more permissions that they need to gain to go ahead with the project in total, they can resume work on this pipeline, but permission for the wider project, they still have some more regulatory hurdles to jump?
Samantha McCulloch: Well, this is typical for all of these major projects. We currently have around $36 billion of oil and gas investments around Australia that's around half the pipeline of all resource projects for these offshore projects. They do need to seek environmental approvals for particular activities as they move forward with those projects. And again, because of the urgent need for new gas and the importance of these projects, we really need to see that certainty in the offshore regulatory environment.
Sally Sara: Some conservationists have expressed concerns about what the long-term looks like for communities such as the Tiwi islands, that some of those islands may be in grave danger from rising sea levels by 2070. How can companies like Santos and the industry guarantee the survival of these communities and the safety of this project, given that some of the components of these projects are still yet to be tested when it comes to carbon capture and storage, in particular?
Samantha McCulloch: Let's take a step back and look at net zero. Now the industry is absolutely committed to net zero by 2050, we're taking steps and investing in technologies including carbon capture and storage to facilitate that. But importantly, a successful transition to net zero requires natural gas, it requires more natural gas and it requires projects like Barossa to be able to move forward. That's because we're relying on gas more and more as we seek to phase out coal, and to support the increased deployment of renewables, particularly in the power sector, but gas also has a long-term role to play in terms of manufacturing, it's a feedstock for key industrial activity. So, this is consistent with International Energy Agency's scenarios of net zero, where gas plays this long-term role. And in more recent work that the Australian energy producers has released by Ernst and Young mapped out actually net zero scenarios for Australia. We looked at three different scenarios all of them require continued investment in natural gas and stay long term role for natural gas and supporting the transition to net zero.
Sally Sara: Are you satisfied that CCS will work on a large scale, there are deep concerns about it.
Samantha McCulloch: CCS is a proven technology. It works. There are more than 30 projects operating around the world. And we know that this will be a key technology for net zero and that's supported by the International Energy Agency, the IPCC – that you cannot get to net zero without this technology. It has to play a role. And we know it can play a role and actually, when we look around the world, there's very significant momentum around this technology. There are more than 500 projects being developed around the world, including in the United States, including in Europe, because these countries have recognised this important role.
Sally Sara: But you understand there are deep concerns about that technology still.
Samantha McCulloch: I would suggest that those concerns in some ways are somewhat disingenuous, because we know this technology works. We've got a project in Norway that's been operating for more than a quarter of a century, storing million tons of Co2 each year. We know this technology works. We know we need it, and the oil and gas industry has actually been at the forefront of ensuring that we can deploy this technology. It's important not just for our industry but also heavy industry, cement, steel, chemicals production.
Sally Sara: Samantha McCulloch, we need to leave it there. Thank you.
Samantha McCulloch: Thanks very much.
