There is not a single credible energy transition scenario that excludes natural gas according to Shell Australia.
Energy policy is of national strategic importance said Shell Australia Country Chair Cecile Wake and caution should be exercised in light of election dynamics.
Wake addressed the role of gas in Australia’s energy system at the Australian Domestic Gas Outlook (ADGO) 2025 conference.
“The conversation around energy policy and the energy transition has been polarised and politicised – it has been characterised as a zero-sum game and this has not served the millions of businesses and households that rely on secure, reliable and affordable energy,” said Wake.
“Australia has an extraordinary opportunity to thrive and prosper through the energy transition, but to do so we need to prioritise energy security for Australian consumers and for our regional trading and security partners and attract significant and sustained private investment to our shores.”
Wake said ideological and politicised debate about energy policy will not deliver sustained waves of private investment in the energy transition.
To move to ‘net zero’, Wake calls for investment in successful energy projects while maintaining environmental/community engagement standards and building low cost, reliable pathways to support emissions reduction targets and deliver energy security.
“If that can be done, the debate shifts from ideology to a balanced and rational discussion about the opportunities, the trade-offs and the choices we will all need to make,” said Wake.
“It moves the narrative to what is truly in the national interest.”
Shell will soon celebrate 125 years in Australia.
It delivered the first bulk kerosene shipment to the country in 1901.
Today, Shell is reported to meet almost 15 per cent of east coast gas demand, supplies energy to 25 per cent of Australian businesses and delivers material volumes of LNG to regional trading partners.
Shell is also building and operating a portfolio of solar, wind and gas-powered generation and battery projects across Australia.
“Australia cannot dismantle the current energy system faster than we can build the low carbon energy system of the future,” said Wake.
She explained there are three myths going largely unchallenged about gas that is distorting the energy debate:
- We can ban all new gas investment without consequence.
- LNG producers send all gas to exports.
- Gas producers pay no tax.
A report by Energy Quest found that a halt to investment in gas supply would be devastating. If, for example, gas for east coast electricity could be interrupted within two years it would run out by 2029.
“Industrial users, including manufacturers in the southeast, would face closure within a decade due to insufficient gas supply and lack of viable alternatives,” said Wake.
“Western Australia would run out of gas for electricity – which accounts for 60 per cent of the state’s power – from the early-2030s and its mining and industrial sectors would be left without gas from mid-2030s.
“Queensland’s long-term LNG export contracts would be broken and then LNG projects on both the east and west coasts would close prematurely.”
Grattan Institute’s Keeping the Lights On report from last year unveiled that without gas-powered generation, Australia would not be able to support deeper penetration of renewables and the nation’s electricity system would become increasingly unstable.
As for the myth about LNG producers sending all has to export, those exports represent 20 per cent of the nation’s export revenue.
“The gas industry also recognises the imperative for a well-functioning, well-supplied domestic market,” said Wake.
“We support the 15 per cent domestic gas reservation in WA and Queensland producers have responded to ensure that the east coast market has been fully supplied, even as Victorian production has declined and state government interventions have meant that supplies have not been replaced.”
On the topic of gas producers allegedly paying no tax, the industry paid $17 billion in tax for the 2023-24 financial year in the form of company income tax, PRRT, royalties and excise.
“As reported in the most recent ATO Tax Transparency Report, Shell Australia paid $1.6 billion in corporate income tax in FY2023, an amount which is expected to grow after more than a decade of massive capital investment,” said Wake.
“This material tax contribution helps fund essential services for all Australians.
“Beyond the taxes that we pay, according to the recent KPMG Report, commissioned by AEP, our industry makes a $105 billion annual contribution to the economy. It accounts for 3.7 per cent of GDP and supports 215,000 jobs along the gas supply chain, 30,000 of those are directly employed in the industry.”
Ultimately, gas, according to Wake, is needed to firm renewables and back coal exits.
Shell’s Global LNG Outlook Report 2025 forecasts global demand for LNG to rise by around 60 per cent by 2040.
“This is largely driven by economic growth in Asia, the impact of AI and efforts to cut emissions in heavy industry and transportation,” said Wake.
“It shows that demand in Asia is gathering pace with China and India building out re-gasification infrastructure and planning to add new gas connections to millions of people by 2030.”
Wake said it is increasingly difficult for international investors to allocate the billions of dollars of private capital that are needed for the Australian market.
“Energy policy inaction, a quagmire of regulatory approval complexity and retail politics are combining to starve Australia of the international investment it desperately needs,” she said.
“We have a potent opportunity to meet growing demand, while ensuring Australia’s own competitiveness and regional security, as we face into the 2030s and beyond.
“If we as a country don’t develop the reserves under our feet, we’ll be importing it in greater and greater quantities, while missing the economic opportunities in front of us.”
Real vision and a bipartisan approach, according to Wake, is needed to get Australia’s energy transition back on track.
She recommends reinvigorating investment through targeted regulatory reform to remove duplication, complexity and ambiguity, to give certainty to investors and deliver better outcomes for the environment; finding bipartisan solutions; and embedding a federal coordinator-general to oversee major energy transition projects and remove layers of duplicative approvals processes.
In other news, the founder of Riordan Fuels – Robert Riordan – retired earlier this year.
