Energy prices and shortages used to justify government’s gas bet

By Melissa Coade

March 24, 2022

Scott Morrison and Angus Taylor. (AAP Image/Lukas Coch)

Priority projects for natural gas infrastructure will be accelerated as part of a controversial federal plan to give more money towards its Future Gas Infrastructure Investment Framework

Industry, energy and emissions reduction minister Angus Taylor announced an extra $50.3 million for gas infrastructure projects in seven key areas. Carbon capture and storage infrastructure projects will also be prioritised by the government and included in next week’s budget costings. 

“Our investment will help keep the lights on and homes heated in southern Australia, and support our industries and businesses to keep operating,” Taylor said in a statement, also noting a government plan published in November 2021 said there was a need for more gas storage to provide greater supply flexibility during winter peaks, along with the need to get more northern gas to the south.

But experts have consistently criticised the ‘staggering folly’ of the government’s gas plan and that public money should not be used to underwrite a gas expansion that will add to greenhouse gas emissions

Writing for The Conversation in 2020, Murdoch University academics Adjunct Professor Bill Hare and Ursula Fuentes said natural gas could not be described as a transition fuel. What is more, they also argued more national gas projects undermined Australia’s commitment to the Paris climate agreement.

Meanwhile, Taylor said seven projects in Victoria, Queensland, the Northern Territory and the East Coast Gas Grid Expansion Stage 2 (APA Group) expansion along Australia’s East Coast would all be accelerated. The minister said grant agreements from the government would be finalised after engagement with project leaders.

“The government has a clear stance on both natural gas and CCS – we will strongly back these sectors which are critical to both affordable and reliable energy for all Australians, as well as emissions reduction,” Taylor said. 

“This is in complete contrast to the Labor Party which is willing to risk Australia’s energy security and investment in regional Australia to appease gas activists.” 

Taylor also contends carbon capture and storage (CCS) and the development of CO2 infrastructure alongside building major gas pipelines will deliver low-cost clean hydrogen production.

The Mandarin has previously reported concerns by Australian experts that hydrogen made from natural gas adds to more fugitive emissions – methane that is leaked into the environment during the extraction and processing of natural gas.

In his statement, Taylor reiterated the risk of high energy prices to suggest Europe’s lack of investment in supply and infrastructure (Russia contributes about 32% of European and UK gas consumption and the price of gas in these markets have increased by more than 300% in the past 12 months) had contributed to its own price woes.

“Our prices have remained around 75 to 80% below these international highs. We must continue to invest in gas to keep our price internationally competitive to support local business,” Taylor said. 

“The ACCC and AEMO have made multiple warnings of the forecast gas supply shortfall in the east coast market as early as this decade. This, along with the energy crisis in Europe, should act as a warning of what could happen in Australia if there is not enough investment in the gas sector at home,” he said.


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