Investment certainty builds strong nations
Drawing on Shell’s 125 years in Australia, Country Chair Cecile Wake explores why investment certainty matters and how well-designed energy policy can support energy security, new supply and Australia’s long-term prosperity.
Opinion piece by Shell Australia Country Chair Cecile Wake, published in The Australian.
Investment certainty builds strong nations
Australia's prosperity has always depended on confidence to invest here for the long term.
Gas projects that power homes, support manufacturing and underpin Australia's standing in the region are capitalintensive, long-dated and compete globally for capital. Australia does not have a right to that capital. We have to earn it.
This year, Shell celebrates 125 years of operations and investment in Australia. Since 1901, Shell has grown with Australia - from the first bulk shipment of kerosene into Port Phillip Bay to today's gas, LNG, power and energy solutions. Our history here shows that when policy settings are stable and credible, capital flows, industries grow, nations strengthen and living standards rise.
Why policy certainty matters
That is why policy certainty matters. If Australia becomes harder, slower or less predictable to invest in, then capital will go elsewhere, leaving fewer projects, weaker productivity, lower competitiveness and declining living standards.
What we are seeing in gas policy today is also playing out across the wider economy.
Gas is a clear test of whether Australia can get this balance right. It remains essential for energy security, manufacturing, firming renewable power and strategic relationships in Asia. In a more volatile world, Australia's resources, capability and reputation as a reliable energy supplier are strategic advantages we should strengthen, not squander.
Getting energy policy right
The debate over domestic gas reservation matters well beyond the gas industry. Our national interest is best served by a secure, affordable domestic gas market and a thriving LNG export industry. Our gas resource endowment means that Australia does not have to choose between domestic supply and exports - if the regulatory settings are right.
The stated objectives of the Gas Market Review and its proposed Domestic Supply Obligation are to streamline regulation, encourage investment, put downward pressure on domestic gas prices for industry, protect Australia's reputation as a reliable regional energy supplier and support a Future Made in Australia. That is a lot of heavy lifting for one regulatory instrument and will inevitably require trade-offs. In navigating those trade-offs, the litmus test must be “will this create the conditions for investment in more supply?”
Because without investment in more gas supply none of the other objectives can be sustainably achieved.
There is no lasting energy security in simply reallocating scarcity. If policy settings discourage investment, delay approvals or create uncertainty over export rights, today's intervention risks becoming tomorrow's shortage. Perversely, it would create a market failure where none exists today.
Creating the conditions for new supply
Most key stakeholders agree we need a well-designed domestic reservation that strengthens investment in new supply and restores balanced, genuine long-term contracting as the primary mechanism for securing supply.
A reservation should supplement domestic supply, not supplant it. It should be prospective, transparent, rulesbased and commercially workable. It should recognise existing domestic contributions, reward domestic producers and ensure equitable contribution across exporters while protecting foundation contracts.
There is no actual or impending market failure, so the reservation should be calibrated to actual demand today with a modest buffer while preserving the ability to increase it if new supply lags demand. Producers should not be forced to supply gas below an investable threshold or accept bids regardless of price, credit quality, contract duration or delivery profile. Incentives for long-term contracting should be balanced. The regulation should favour clarity and simplicity over complexity and ambiguity.
These should not be controversial parameters.
Certainty builds trust.
Australia has lost strategic industries before. We should not repeat that mistake with energy.
The opportunity is to design a framework that delivers supply confidence for Australian users and regional trade partners, delinking domestic prices from international volatility, while preserving the investment conditions needed for new supply.
After 125 years in Australia, Shell's lesson is straightforward. Certainty builds trust. If Australia gets the balance right, gas can continue to support energy security, productivity, competitiveness and prosperity for decades to come.