Australia is rapidly losing ground in the global race for energy investment, particularly in natural gas, due to policy uncertainty and regulatory hurdles, according to a new report from consultancy Wood Mackenzie, commissioned by the Australian Energy Producers (AEP).
The report, titled “Australia’s Natural Gas Investment Competitiveness,” warns that sluggish growth in exploration and development could threaten Australia’s energy security, economic growth, and emissions reduction goals.
Key Findings:
- Global gas exploration investment has grown nearly 30% in the past five years, while Australia’s grew only 15% in the same period.
- 95% of Australian gas industry executives surveyed say Australia is less attractive for investment today than it was in 2020.
- Over 20% of affected projects have been either cancelled or moved offshore due to shifting policies.
- Major international oil companies have allocated just 1.2% of their global exploration budgets to Australia in the last five years.
- Australian firms, which previously spent over 42% of their exploration budgets at home (1990–2019), have averaged just 15% since 2020.
AEP’s Call for Policy Reform
AEP CEO Samantha McCulloch stressed the need for bipartisan support to restore investor confidence.
“Without a stable policy and regulatory environment, Australia risks losing its energy edge and missing out on the next wave of global investment,” McCulloch said.
She called for:
- Streamlined project approvals
- Support for energy infrastructure
- Recognition of gas’s role in the energy transition
Global LNG Shift Leaves Australia Behind
Wood Mackenzie’s analysis indicates Australia is being outpaced in the next wave of liquefied natural gas (LNG) expansion, once led by the country in the mid-2010s. Now, the U.S. and Qatar are setting the pace, with Australia’s LNG investment falling to just a quarter of global levels.
Asia Pacific Opportunity and Competitive Pressure
Demand for LNG is forecast to grow 58% by 2050, with Asia Pacific consuming three-quarters of the total. Despite being geographically and resource-rich, Australia’s diminishing policy appeal means countries like the U.S., Canada, Qatar, Norway, and emerging markets in Africa and Southeast Asia are absorbing the lion’s share of new capital.
McCulloch also warned that carbon capture, utilisation and storage (CCUS) investments—key to decarbonisation efforts—will go elsewhere unless supportive regulatory frameworks are urgently implemented.
Australia remains resource-rich but policy-poor in the eyes of investors. Without decisive reforms, the nation risks being left behind in the global energy transition and LNG boom it once helped lead.
