Petroleum industry and Climate Council battle over gas
Removing barriers to unlock new gas supply and projects is key to meeting demand from 2023 onward, says the Australian Petroleum Production and Exploration Association.
The call comes following the release of the Australian Energy Market Operator’s (AEMO) Gas Statement of Opportunities on Monday, which shows supply from committed projects will significantly reduce from 2023.
A lack of reliable gas supply could also see a downturn impact Gladstone, which exports huge volumes of Australia’s LNG via its port and the city’s emerging hydrogen industry, scheduled to be exporting by 2030.
“A recent EY report found that there is a $350 billion economic boost and 220,000 jobs at
stake if we can get the investment settings right,” APPEA chief executive Andrew McConville said.
“Today’s report underscores that need.
“New supply can only come from a new wave of investment across exploration, development, construction and operation,” he said.
“To make that investment at a time of growing international competition for capital, the
industry needs policy certainty.
“It is no coincidence that the last wave of industry investment came at a time of greater regulatory stability.”
Mr McConville said Investment Settings needed for the gas industry included maintaining open markets to allow investment certainty, reducing and streamlining regulation, continuing work on the Strategic Basins Plan and improving fiscal settings.
He said Australia’s natural gas industry was more essential than ever to support Australia’s economic recovery and ensure secure energy supplies were maintained to households, businesses and industry across the nation.
APPEA members are taking all steps necessary to ensure the production and delivery of gas supplies continues, be it from new gas supply agreements to local companies or massive new projects such as West Barracouta project which will bring much-needed new gas supply to the Australian east coast domestic market this year.
“Natural gas is an economic and environmental strength for Australia,” Mr McConville said.
“Not only can it deliver jobs, it is also critical to reducing emissions both in Australia and in our region, through replacement of coal, as a feedstock for hydrogen and in support of more renewables.
“The investment window is there, but it can only be met through the right regulatory and policy environment.
“Today’s Gas Statement of Opportunities underscores the risk of not getting it right, and we look forward to working with State and Federal Governments to facilitate more investment and keep bringing supply to the Australian and international markets.”
Meanwhile, the Climate Council has stated the AEMO report indicates there will be no shortfall in gas supply.
Climate Council senior researcher Tim Baxter said gas had no role to play in the nation’s COVID economic recovery.
“The Morrison Government’s ‘gas-fired recovery’ fantasy is just that, an expensive, dangerous, and unnecessary fantasy,” said Climate Council senior researcher, Tim Baxter.
“There will be no shortfall, and in the electricity sector, gas is already being out-competed by clean, affordable renewable energy.
“In the next few years, electrification and efficiency will also lead to a decline in gas use in other areas such as manufacturing and industry.”
A recent Climate Council analysis found that gas generation in Australia’s largest electricity grid fell by 19 per cent in 2020 while solar and wind had a record year despite the COVID-19 pandemic.
“Gas is a fossil fuel driving climate change,” Mr Baxter said.
“We’ve just been hit with devastating floods, which is the latest in a line of extreme weather events exacerbated by climate change.
“We’ve also experienced record drought, the Black Summer bushfires and scorching heatwaves.
“Gas is also driving up power prices, and prices for our manufacturing industries.
“It has no role to play in our economic recovery.
“As the sunniest and one of the windiest places on the planet, Australia should be cashing in on its renewable advantage, and in doing so, rapidly reducing greenhouse gas emissions.
“It’s a win-win.”