The “gold-plated, multinational megaphone” of the gas industry won’t make the federal government ease off on accelerating renewable energy investments.
Federal Industry Minister Ed Husic said there is clearly a role for gas in the energy transition, with many industries still relying on the fossil fuel.
New supply from Narrabri in NSW and the Beetaloo gas field southeast of Darwin will meet domestic needs while renewable energy generation gets built, he said on Wednesday.
“I know that that’s not everyone’s cup of tea,” he told RN.
Mr Husic said the impact of high gas prices is felt by manufacturers who represent half the domestic demand for gas industrial users, tied to a lot of jobs in outer suburbs and regional Australia.
Woodside Energy has warned new gas from the Bass Strait to supply eastern states is on the backburner after a round of price controls.
Price caps and the prospect of a new industry code for fairer supply have leading gas companies and investors concerned about what comes next, an industry conference has been told.
When the new mandatory code – and what future market intervention will look like – becomes clear, Woodside hopes to have more confidence to make longer-term investments, chief executive Meg O’Neill said.
“When there’s uncertainty around the market in which we’re investing, it gives us pause,” she said.
Mr Husic sees no barriers to investment with gas prices where they are – domestically and internationally.
“The gas producers, every time they use their very gold plated, multinational megaphone, they seem to get a lot of attention … claiming that life’s really tough for them,” he said.
“We just will not be spooked. We do need to get the balance right.”
More renewables will bring permanent energy bill relief but the market watchdog says new supply is needed in the east coast market, even in an economy transitioning from fossil fuels.
Gladstone’s massive liquefied natural gas plants – run by Santos, ConocoPhillips and Shell – are under pressure to ship less to China, Japan and South Korea and make more available domestically.
The Australian Energy Market Operator has warned of gas supply risks for the southern states this winter and says investment is needed now to make sure there’s enough gas from 2027 onwards.
Ms O’Neill said recent “modifications” to price caps have been encouraging but the supply problem has not been solved.
“The challenging reality is that the Bass Strait asset, which we have a 50 per cent stake in, or mature assets that are in decline, they’re going to provide year-on-year less gas into the market,” she told reporters.
Ms O’Neill said more gas would be needed as coal-fired power stations shut down.
Generous tax credits linked to carbon capture in the United States could also see Australia miss out on investment dollars.
Plans for carbon capture and storage (CCS) at Woodside’s depleted Angel field off the northwest coast of Western Australia have stalled, despite greenhouse gas permits.
Critics dismiss carbon capture and storage as a licence to ramp up emissions and argue the technology is too costly compared to other methods.
Chevron’s Gorgon Gas Plant in WA – the biggest attempt at a CCS project in the world – is a “big, expensive failure”, according to the Clean Energy Council.
Australia’s next major storage project is Moomba, a joint venture between Santos and Beach Energy.
“It works”, Ms O’Neill said of the much-maligned technology.
Mr Husic said he hadn’t taken a personal view on carbon capture but will wait until it “stacks up”.
– AAP
