Mr Dixon started with Shell as a chemical engineer on the oil refining side in Geelong, the Netherlands, and in Sydney. Since 1978, he has been associated with Shell’s interests in LNG, especially in the Asia Pacific region for 25 years. As the inaugural President of Australia LNG, Mr Dixon had a fascinating role in securing the first LNG deal with China.
The top two steps the gas industry needs to take to survive in a carbon constrained economy…
Firstly to emphasise the benefits of gas to governments and to the general users of energy – carbon dioxide (CO2) emissions from gas are lower than from oil or coal for the same heat output. Secondly, gas is great, but there is plenty of competition: Australia has some desirable features as an LNG exporter but we also have a high cost base. Reducing costs without sacrificing safety and reliability is an ongoing challenge.
The greatest achievement of the gas industry in the past five years…
The success of developing unconventional gas – from shale and from coal seams – this must rate highest. These two developments look like ensuring adequate gas supplies and setting a cap on gas prices.
In Australia, the decision to go ahead with the Gorgon LNG Project is the most significant achievement, considering the enormous hurdles the project participants have had to overcome to reach a final investment decision, and the commitment they are making at a time of financial upheaval and economic uncertainty.
In the short and long term…
The gas sector has a very bright future. Despite concerns over CO2 emissions and oil resources, global demand for gas will ensure the industry grows and prospers, as long as we don’t see regulatory strangulation. Even if the developed world continues to become more energy efficient, the less developed economies are demanding energy as they grow and as the world’s population grows.
Gas is the choice of fuel, particularly for power generation, over renewable and nuclear which won’t be viable on a large scale for decades, or emissions-intensive coal. Some may see this choice as a transition to a more stringent carbon-emissions regime, others might see it as a long-term strategy, given oil peaking and the larger reserves-to-production ratio of worldwide gas resources.
The top two government incentives/policy measures you would like to see implemented today…
At present, Australia does seem to have a confused policy toward gas. Investment in liquefaction facilities is welcomed, but is muted by concerns that such facilities emit CO2 locally through the need to consume energy in order to liquefy the gas, which will be used elsewhere in preference to coal. Policies should encourage the development and use of gas, both as a step toward a lower-carbon environment and to realise the wealth of that natural resource. Many see Australia becoming the world’s largest producer of LNG and this vision ought to inspire suitable policies. The pace of these projects should not be forced, merely enabled, and not constrained by policies designed to make uneconomic alternatives superficially attractive.
The one piece of advice you would give new entrants to the gas industry…
Entering the gas industry almost certainly requires financial stamina above all else and from that stems the need to have some asset, physical or technological, which acts as an introduction and attraction to investors or partners. Perhaps the best advice is to engage an independent consultant!