Australia's oil and gas upstream industry has been urged to think of decarbonisation not as a threat but as an opportunity to establish a new, large-scale industry producing carbon offsets.

"The question for us to contemplate is what the future looks like for development of Australia’s oil and gas resources," said APPEA chairman Kevin Gallagher in today's opening session of the APPEA conference in Perth.

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"Decarbonisation, through technologies like carbon capture and storage, and hydrogen production using natural gas, is critical. Currently, hydrogen is the only obvious pathway to eliminating Scope 1, 2 and 3 emissions associated with gas production and consumption."

But he added there were also opportunities to staple carbon credits to LNG cargoes. The timing of a zero-emissions energy transformation would be driven by how quickly Australia's LNG customers evolve.

"All of us here today are on different stages of the decarbonisation journey, but something we can all agree on is that a net-zero future is critical for our industry," said Gallagher.

"Decarbonisation is a new industry opportunity for Australia – through carbon capture and storage, biological sequestration in soil and vegetation, and development of a new hydrogen industry."

He went on to say that Australia can become a "carbon storage superpower" based on its vast pastoral and cropping lands, and its depleted oil and gas reservoirs.

"I urge everyone to therefore consider decarbonisation not simplistically as a threat – but as an opportunity to establish a new, large-scale industry producing carbon offsets that will be in heavy demand from emitting countries that lack Australia’s competitive advantages in carbon storage."