Australia’s energy contradiction

Australia’s energy contradiction

The Energy Institute’s “Statistical Review of World Energy” for 2025 provides an interesting snapshot of how the world’s energy is supplied and, importantly, where Australia fits into the picture. The numbers reveal just how dependent we (and the rest of the world) are on oil, gas, and coal. But most interestingly, this report raises questions about Australia’s approach to nuclear energy, coal exports and decarbonisation.

2025 Energy Supply (by exajoules and percentage of total)

Source: Energy Institute, Montgomery

The Energy Institute’s report revealed that the world supplied 600.3 exajoules of energy. Oil accounted for 201.0 exajoules or 31.5 per cent. Second was coal at 166.0 exajoules or 27.7 per cent, and gas achieved the bronze medal with 150.7 exajoules or 25.1 per cent.

So, oil, gas and coal combined made up 517.7 exajoules or 86.2 per cent of the world’s energy supply.

Combining hydro and renewables, supply was 51.6 exajoules or 8.6 per cent, and nuclear accounted for the balance with 31.0 exajoules or 5.2 per cent.

How does Australia compare?

Focusing on Australia, oil accounted for 2.24 exajoules or 40.5 per cent. Second was coal at 1.46 exajoules or 26.4 per cent, and gas came in third place with 1.39 exajoules – a 25.1 per cent share.

Oil, gas and coal combined made up 5.09 exajoules or 92.0 per cent of Australia’s energy supply.

Combining hydro and renewables, supply was 0.44 exajoules or 8.0 per cent of Australia’s energy supply. Nuclear, despite Australia having one of the largest reserves of uranium in the world, and acceptance that we are comfortable signing up for nuclear-powered submarines, accounted for nil.

The numbers raise some important questions

What amazed me, when analysing the data, was the fact that Australia accounted for 0.9 per cent of the world’s energy supply, 1.1 per cent of the world’s oil supply and 1.1 per cent of the world’s renewables supply. This prompted the following questions:

1. If Australia intends to acquire three U.S.-made Virginia class nuclear-powered submarines and then build a new class of “SSN-AUKUS” submarines at the Osborne Naval Shipyard in South Australia (at an estimated investment of A$370 billion), then why wouldn’t we mine and export uranium when Australia has an estimated 30 per cent global share of uranium reserves?
2. Given much of Australia’s steaming coal is regarded as “relatively clean” on a global basis, wouldn’t it be beneficial if its exports were promoted by our government instead of many developing countries burning “dirtier coal” from elsewhere?
3. Given Australia’s current renewables share of the world renewable energy supply sits at 1.1 per cent, who does Chris Bowen seriously believe the inestimable cost of decarbonising the Australian economy will benefit?

Australia’s energy choices deserve scrutiny

The numbers highlight an interesting disconnect. Australia remains overwhelmingly reliant on oil, gas and coal for its own energy supply, while our significant uranium reserves contribute nothing to our domestic energy supply. These figures raise important questions about how Australia uses its resources and whether costs and benefits to our current energy policies are being appropriately weighed.

MORE BY DavidINVEST WITH MONTGOMERY

Chief Executive Officer of Montgomery Investment Management, David Buckland has over 40 years of industry experience.
David is a deeply knowledgeable and highly experienced financial services executive. Prior to joining Montgomery in 2012, David was CEO and Executive Director of Hunter Hall for 11 years, as well as a Director at JP Morgan in Sydney and London for eight years.

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