Chevron WA projects ‘bigger than the NSW economy’
June 9th, 2016
Social media lit up this week as Chevron Managing Director Roy Krzywosinski told the APPEA Conference in Brisbane about the contribution of natural gas to the Australian economy.
As we have noted , the recent national economic output figures showed GDP rising due to higher prices for export commodities, and from the turbo boost of new production of LNG from Queensland coal-seam gas fields and exported from the new $70 billion production facilities at Gladstone.
The Queensland development has given that State’s economy a major shot in the arm (plus 40,000 jobs in the five-year construction phase) as well as setting the scene for a royalties bonanza in the years ahead.
However, it is only when the WA developments are included that the awesome scale of the national development of LNG can be fully appreciated.
As Mr Krzywosinski pointed out, the Chevron projects alone – Gorgon and Wheatstone – are so big that they dwarf the total economies of our big resource States and even surpass Victoria and NSW in terms of total product.
“To put it in perspective, these two projects combined are bigger than the economy of Australia’s biggest State, NSW,” Mr Krzywosinski told the APPEA conference.
“And that is just two projects,” he added. There are three more at Gladstone and another two – offshore NT and northern WA.
Total investment by the sector over the past 5-6 years is $200 billion – a capital commitment unprecedented in Australia’s history.
When all the new export facilities are producing in the next 2-3 years, Australia will have become the world’s biggest exporter of LNG – a fact which is not only great news for the Australia economy, but also very positive for global carbon emissions reduction, as we’ve previously noted.
To the extent that Australian LNG is used to replace coal energy, this is an unequivocal win for the global environment, as gas for power produces less than half the carbon emissions of coal-fired electricity.
There is also optimism that gas could be used in place of diesel in road, rail and sea transport, as we have previously reported. This would also be a massive win for the environment and cement Australia’s place as a great contributor to global carbon emissions reduction.
As Professor Peter Hartley, of Rice University (University of WA) pointed out to the APPEA conference, not only are there carbon emission advantages of deploying a greater share of gas power, there are also significant cost and efficiency advantages.
Renewable energy is much more expensive to create and transport and is incapable of providing continuous supply. In terms of economic efficiency, it falls well behind natural gas and nuclear energy, Professor Hartley said.