A prominent left-leaning think tank has come to blows with an oil and gas industry group, over warnings of a domestic gas shortfall in Western Australia over the years ahead.
A prominent left-leaning think tank has come to blows with an oil and gas industry group, over warnings of a domestic gas shortfall in Western Australia over the years ahead.
Lobby group Australian Energy Producers issued a release this morning quoting the findings of a report by advisory firm EnergyQuest, which analysed the impacts of a policy proposal by the Australian Greens to ban new gas investment.
The report found such a move would result in the east coast running out of gas by 2029, and Western Australia running out by the early 2030s.
It suggested a ban on gas investment would result in WA pulling back from its plan to phase out coal generation in the state’s major grid by 2030.
That suggestion appears to be in line with state government policy, with WA backing the use of gas as a firming fuel to support the energy transition.
The federal government has also endorsed a role for gas in the future of the nation’s energy market, through its Future Gas Strategy released earlier this year which suggested the nation would need gas supply beyond 2050.
Speaking on the findings of the EnergyQuest research, AEP chief executive Samantha McCulloch said the Greens’ plan was completely unfeasible.
“The findings confirm the Greens don’t have a credible plan for Australia’s future,” she said.
“Their three-word slogan is not an energy policy, but a recipe for destroying Australia’s economy and energy security.
“Australians deserve to know what a vote for the Greens really means for jobs and their energy bills.”
Ms McCulloch said the projected role of gas in the WA grid – expected to grow significantly after the phase out of coal before dipping back as renewables use grows – meant new supply would be essential to the state’s economic prosperity.
“If anyone takes the Greens’ ban on new gas investment seriously, the state’s energy and economic security will be smashed,” she said.
By design or coincidence, The Australia Institute this morning issued research of its own, in a release titled "no shortage of gas or profits - only shortage of tax".
The institute, which has consistently pushed for greater taxation of existing gas projects, suggested no new fields would be required if local gas needs were prioritised.
Its research showed that around 80 per cent of gas produced in Australia was exported as LNG, and claimed that half of gas exported from Australia attracted no royalty payments – “effectively giving a public resource to multinational corporations for free”.
The organisation made a similar claim in June, which was downplayed by Premier Roger Cook.
Its opponents have pointed to the fact that most LNG project sit in Commonwealth waters, leaving them subject to federal taxes and not state-based royalties.
“The gas industry is talking out both sides of its mouth — it is saying there will be domestic shortages if we don’t start opening up new gas fields, while at the same time advocating to expand export facilities like the North West Shelf proposal,” Australia Institute research director Rod Campbell said today.
“We produce, burn and export a staggering amount of gas in this country. The gas industry itself is the biggest user of gas in Australia due to the gas it burns to process LNG exports.
“To suggest there will be a gas shortage is absurd.”
The Australia Institute accused gas producers of corporate greed.
The Australian Energy Market Operator has projected a growing gas shortfall in Western Australia past 2030, worsening significantly in 2031, despite a long-standing 15 per cent domestic gas reservation policy applied to offshore producers in the state.
A recently tabled report into the state of the domestic gas market in WA, which followed a year-long parliamentary inquiry into the matter, recommended a new flexible gas reservation model be applied to offshore projects exporting LNG from the state in the years ahead.
The WA government is yet to respond to the report’s recommendations.
Workers needed, too
The Australian Resources & Energy Employer Association released modelling of its own this morning, finding the state’s resources sector would need an extra 11,000 workers by the end of 2029.
That number factors in new, expanding and restarting mining and oil and gas projects in WA – of which there are 48 with a total value of $83 billion, according to AREEA’s analysis.
That includes 11 oil and gas projects.
“WA remains the powerhouse of Australia’s resources and energy industry, accounting for 40 per cent of the national forecast workforce growth over the next five years,” AREEA CEO Steve Knott said.
The report used its findings to call out industrial relations reform currently underway in federal parliament, which it claims has exacerbated challenges facing the sector.
“On top of international price volatility and the competitive squeeze on commodities including nickel and lithium, the Albanese Government has failed to articulate how these new IR laws will address the nation’s falling productivity growth and help secure more business investment,” Mr Knott said.
“To the contrary, the latest attempt to reunionise the Pilbara by enforcing collective bargaining strikes at the workplace outcomes that have underpinned productiveness and competitiveness of the resources industry for decades.”
