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Australia’s LNG shipments slump for the first time in years – best2daynews

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Proponents of gas say it as the necessary “transition” fuel in the transition to clean energy – a power source with half the typical life-cycle emissions of coal, that can still be reliably called on to back up renewables when the wind isn’t blowing and the sun isn’t shining. Gas is also a widely used feedstock in a range of manufacturing processes, such as making fertilisers, which do not yet have commercially viable green alternatives.

However, others, including powerful investors, are increasingly sceptical about the role of gas in a world that’s getting serious about ratcheting up climate action, electrification, and phasing out the consumption of all fossil fuels.

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Despite Russia’s invasion of Ukraine in 2022 choking global energy supplies, boosting fuel prices and temporarily brightening the LNG demand outlook, there are questions about the longer-term viability of new and recently sanctioned gas projects across Australia.

An estimated 40 per cent of institutional investors in Australia are already applying some level of exclusion to new oil and gas projects due to concerns about long-term climate-related risk, according to the Investor Group on Climate Change, a coalition of superannuation and retail funds investing on behalf of 7.5 million Australians.

Still, many companies and their financial backers in the energy sector are betting billions of dollars that gas will continue to have a place in the mix until at least 2050, based on projections that – while consumption may have peaked in some regions – demand from Australia’s key buyers in Asia must keep rising to support economic growth.

Perth-based Woodside Energy is pressing ahead with the development of the $16.5 billion Scarborough project off the coast of Western Australia, which targets first gas production by 2026, while Adelaide-based Santos is pursuing the Barossa project north-west of Darwin.

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