Friday, March 28
Opposition Leader Peter Dutton’s budget reply details the federal Coalition’s polluting policies on energy and climate change including $1.3 billion in handouts for multinational gas corporations during a cost of living crisis.
Also entirely absent from the budget reply was costings for the Opposition’s nuclear scheme, begging the question: was it ever a serious plan, or a ploy for more coal and gas?
Gas is a polluting fossil fuel whose role in the energy system is small and shrinking. Experts say that by subsidising the gas industry, the federal Coalition would be adding to dangerous climate pollution, and the policy would be unlikely to have a material impact on gas supply and prices this decade.
The below gas and energy experts are available for comment. To arrange interviews, please contact: Emily Watkins | 0420 622 408 | [email protected]
Tim Buckley, director, Climate Energy Finance, a public interest thinktank:
“Opposition Leader Peter Dutton’s new plan’s headline sounds good in theory: forcing the gas cartel to supply 10-20 per cent more fossil gas to domestic consumption, thereby reducing domestic gas prices by ~40 per cent. The reality will be very different. Peter Dutton says this will involve ramping up domestic production.
“In practice he means providing more than $1 billion of taxpayer subsidies to fund the enabling of new gas infrastructure, new pipelines, new gas storage and new gas power plants. This will take years and years to approve, and build. And new gas production and new gas enabling infrastructure will take years and years to develop, locking in fossil gas use for many decades to come.
“In practice, the largely tax haven-based multinational gas cartel will continue to feast at Australian energy users’ expense.
“The gas industry will be delighted by this proposed policy. More subsidies. More gas production. More profits for the long term!”
Josh Runciman, IEEFA lead gas analyst:
“The Coalition's proposal to divert 50-100 PJ of LNG exports to the domestic market each year will no doubt be welcomed by major gas users given the serious impacts of high gas prices on their viability.
“The Coalition's proposal to fast track offshore gas projects is unlikely to have a material impact on domestic gas supply and prices this decade. While the North West Shelf was flagged as a key project, it is not likely to come online until 2030, and there are limited other projects likely to benefit from fast tracked approvals.
“The Coalition's budget reply missed a key opportunity to address gas demand reduction opportunities and cost of living concerns. Increased government support for residential and industrial electrification would lower energy bills while reducing gas consumption, thereby freeing up gas supply for gas-reliant industries and electricity generation.
“The Coalition's proposal to fund new gas infrastructure faces key risks, including the risks of poor financial returns for taxpayers due to asset stranding. Gas pipelines typically require decades to recoup their investment costs, but gas demand on the east coast has fallen 32% over the past decade and is set to continue to fall according to the Australian Energy Market Operator. Jemena's $700 million northern gas pipeline, commissioned in 2019, now sits empty and unused, illustrating this risk.
“The Coalition's intent to push gas prices to $10/GJ will have implications for the development of some onshore gas basins, with the Beetaloo in particular likely to require prices above $10/GJ in Victoria to be financially viable. Generally speaking, gas developments closer to demand centres are more likely to be financially viable due to needing less new pipeline infrastructure.”