Add Category
London: The head of one of Australia’s largest liquefied natural gas producers says demands to shut down the fossil fuel industry are only adding to Europe’s energy crisis and delaying efforts to reach net-zero emissions by mid-century.
Kevin Gallagher, the chief executive officer of Santos, said the issue now gripping Britain, where the nation potentially faces energy rationing and three-hour rolling blackouts this winter, was a direct result of underinvestment by governments in the industry.
Santos is developing an onshore carbon capture storage project at the Moomba gas fields in South Australia.Credit:
Countries across Europe are drawing up winter contingency plans against the disruption of flows of gas from Russia because of the war in Ukraine, which could lead to rationing and a curb in exports of energy to other countries.
A shortage of gas in Europe, as well as maintenance issues with several French nuclear power plants and low water levels at Norway’s hydropower plants, have raised the risk Britain could be unable to secure the gas it needs or the imports of electricity it typically receives from the continent.
“The supply constraints we’re seeing were already being felt prior to the Russian invasion,” Gallagher told an Australian business community event in London. “While the war in Ukraine has inflamed the issue, the structural and policy issues were there long before the war began.”
He said the world had an insatiable demand for energy because it “fuels human development, improving living standards and economic prosperity”, which meant a transition to net-zero needed to ensure continued access to reliable and affordable energy supplies.
“We need our overseas investors to have certainty. Without it, the ramifications are frightening.”
Kevin Gallagher, chief executive officer of Santos
Global climate targets, such as those under the Paris Agreement, have been put at major risk by the crisis, with several European countries, including Germany, the Netherlands and Austria restarting mothballed coal-fired power plants to end their massive reliance on Russian gas.
Gallagher said the situation was a “reminder to us all” of the need to invest in new oil and gas supply while other low-emissions technologies were developed and could be implemented “affordably and at scale”.