PESA Australia business environment review 2021
Candice Bell A *A KPMG Australia, 71 Eagle Street, Brisbane, Qld 4000, Australia.
The APPEA Journal 62 S519-S526 https://doi.org/10.1071/AJ21224
Accepted: 12 April 2022 Published: 13 May 2022
© 2022 The Author(s) (or their employer(s)). Published by CSIRO Publishing on behalf of APPEA.
Abstract
With a backdrop of energy transition and an accelerating need to decarbonise, the oil and gas business environment was complex and conflicted through 2021. The complexity of the energy transition was continually highlighted by academia and international agencies. While asserting gas and LNG as a fuel critical to the energy transition, they continued to warn that the transition away from fossil fuels is not occurring fast enough to arrest catastrophic climate change. International cooperation culminating at COP26 somewhat faltered in the face of the immense challenges the energy transition poses. Complexity was also demonstrated through the rise in LNG spot prices as Asia’s demand for energy rebounded. Though high spot LNG prices through this period proved lucrative for producers, the surge in prices pushed some Asian markets back to emission-intensive yet low-cost coal for energy generation, signalling the volatility and challenges of LNG’s position as an energy transition fuel. Conflict was seen when environmentally focused activist investors disrupted business-as-usual operations for several Australian and international firms, with all signs pointing to an intensification of this trend in the coming years. In response, capital markets rallied behind low-carbon energy investments with trillions of dollars flowing towards renewables, hydrogen and CCS projects. Finally, to compound the complexity of the myriad external forces, oil and gas firms coalesced around four key decarbonisation responses. Oil and gas firms focused efforts on: (1) strengthening and refining net zero commitments; (2) operational decarbonisation including CCS investment; (3) investment in low-carbon fuels including hydrogen; and (4) consolidation, to strengthen balance sheets, build business model resilience and diversify their portfolios.
Keywords: Australia, carbon abatement, carbon capture and storage, climate change, decarbonisation, energy, energy transition, gas, hydrogen, LNG, mitigation, natural resources, net zero, oil and gas.
Candice Bell is an Earth Scientist with 10 years’ experience in the upstream oil and gas industry. Candice currently works for KPMG as a Climate and Energy Transition Manager, where she supports industry and government to anticipate, manage and drive decarbonisation and the energy transition. Prior to KPMG, Candice worked at Origin Energy, where she held several roles across the APLNG value chain including in gas trading, integrated planning and transformation, and at Bechtel where she worked in project controls for the construction and commissioning of the Queensland Curtis LNG plant on Curtis Island. Candice has a degree in Earth Science from Queensland University of Technology. |
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