The Australian government has unveiled a plan to secure domestic gas supplies for the next two decades as part of the nation’s “gas-fired recovery” out of the Covid-19 pandemic.
The government released its National Gas Infrastructure Plan (NGIP) and the Future Gas Infrastructure Investment Framework last week.
The NGIP sets out a long-term development pathway, locking in supply for Australian households and manufacturers out to 2040.
For the plan to come to fruition, the government states at least one new basin will need to be brought online before 2030 to meet projected gas demand on the country’s east coast.
The “critical basins” the government has identified that could potentially be unlocked by 2030 include the Narrabri gas project in New South Wales, the Beetaloo sub-basin in the Northern Territory and the Galilee and North Bowen basins in Queensland.
The NGIP also calls for “strategic expansions” to existing pipeline capacity and the construction of entirely new pipelines to transport gas supplies to east coast markets.
Investments in gas run an extremely high risk with proposed mega gas facilities becoming doomed cost-heavy stranded assets
Greenpeace Australia Pacific chief executive David Ritter
It also claims expanded transportation capacity will be needed from northern states to southern states to account for the expected decline in gas supply from states in Australia’s south-east.
When unveiling the plan, the government also called on industry to contribute to a new expression of interest (EOI) process to identify critical projects that require support to accelerate delivery.
It added this would include projects that enhance competition in the market and allows for the consideration of gas infrastructure that also supports hydrogen, carbon capture & storage and biomethane.
“The government wants industry to make these investments and the Investment Framework and EOI will allow us to take action to accelerate the development of critical projects to final investment decision,” Australia’s Minister for Industry, Energy and Emissions Reduction, Angus Taylor, said.
Taylor also said that the NGIP aims to guide industry to priority areas that need to be addressed to avoid a supply shortfall over the next 20 years.
He cited the recent gas crisis in Europe, which has seen prices increase more than 400% in recent months due to gas shortages, as justification for the government's plan to shore up gas supplies.
“The government cannot sit back and allow that to happen here. Australian prices have remained 60% to 70% lower than prices in Asia and Europe even in light of this major energy shock,” Taylor added. “Unlocking basins and getting gas to where it is needed will support our job-creating industries. Our focus on gas and energy security has helped to grow our manufacturing sector, which is now at more than 1 million jobs – levels not seen since 2009.”
Environmental groups hit out at the government’s announcement to boost the nation’s gas supplies.
Greenpeace Australia Pacific chief executive David Ritter claimed Australia was not at risk of a gas supply shortfall and should instead be investing more money in renewables.
“There is no gas shortfall and soon there will be no market for dirty Australian gas as the world moves to renewable energy, with some of Australia’s biggest gas customers setting binding emissions reduction targets," he said.
“Investments in gas run an extremely high risk with proposed mega gas facilities becoming doomed cost-heavy stranded assets — sending billions and billions of investor and taxpayer dollars down the drain.
“By locking in huge investment losses through gas, the Morrison government has shown it’s not only a climate wrecker, but also economically illiterate.”
Citing its own analysis, climate activist group 350.org claims the Australian government has committed A$1.5 billion (US$1.1 billion) to the gas industry since September last year. “Every dollar that the Morrison government gives to their mates in the fossil-fuel industry could be better spent supporting sustainable jobs, renewable energy and helping households to get off gas,” 350 Australia senior campaigner Shani Tager said.
The Australian government first unveiled its plan for a gas-led recovery for the nation’s economy from the Covid-19 pandemic in September last year.
The government is looking to unlock gas supplies and deliver an efficient pipeline and transportation market to make energy more affordable and support jobs as Australia looks to recover from its worst recession since World War 2. The slump was caused by the pandemic.