Future Gas Strategy must explore new gas supply to alleviate cost-of-living pressures

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Image credit: Australian Energy Producers

In its submission to the Future Gas Strategy consultation, the Australian Energy Producers has emphasised the need for new gas supply to help ease cost-of-living burdens on households and businesses to avoid forecast shortfalls and pressure prices downwards.

“Natural gas provides secure, affordable energy with few viable alternatives available in industry today. Government should prioritise least-cost energy and climate policies that reduce the burden and cost-of-living pressures on Australian households and businesses,” Australian Energy Producers said in its submission.

The group also urges the government to increase gas production to secure economic and emission reduction opportunities for net zero fuel.

The blueprint outlines how natural gas aids renewable energy transition, enabling significant sectors like manufacturing and mining to produce products like bricks and beer bottles, and potentially playing a crucial role in processing minerals for net zero.

Adertisement

However, a broader net zero role would see the industry create new jobs and investment while also launching the most cost-effective low-carbon hydrogen pipeline and enabling carbon capture, utilisation, and storage (CCUS).

With domestic shortfalls expected in the coming years and rising LNG demand in Asia, Samantha McCulloch, CEO of Australian Energy Producers, said the national strategy was welcome and should address the clear need for new natural gas supply.

“Alternatives to gas — particularly in manufacturing and heavy industry — are at early stages of development and are far more expensive. We will be relying on gas for decades and failure to support investment in new supply will only drive up costs for Australian businesses,” McCulloch stated.

According to her, policy settings should stimulate investment while removing hurdles such as the uncertainty gripping the flawed offshore regulatory approvals system.

“The Future Gas Strategy needs to provide clear policy direction for the development of the nation’s abundant gas supplies to deliver the domestic energy and economic security our industry is committed to and our country needs,” she added.

However, McCulloch noted that the approach must also identify the huge economic benefits for Australians and prospects for global carbon reductions from coal-to-gas switching in Asia.

“This industry delivered $93 billion of LNG earnings last financial year – as well as over $16 billion in taxes and royalties to help fund public services and infrastructure and $45 billion in expenditure directly with Australian businesses,” she continued.

The Commonwealth predicts that Australian LNG can significantly decrease emissions in Asian countries by 166 Mt annually, a third of Australia’s annual total.

According to the International Energy Agency’s Stated Policies Scenario, LNG imports into the Southeast Asian region are predicted to increase by a factor of ten by 2050, adding demand for roughly equal to Australia’s total current LNG exports.

“Australia has a competitive advantage to use net zero to secure substantial economic and emission reduction benefits through natural gas while underpinning our domestic energy security,” McCulloch said.

The submission was released following an economic report indicating Australia will require substantial gas production 26 years from now to ensure reliable and affordable energy in 2050, even under a net zero scenario.

The EY study, commissioned by Australian Energy Producers, predicts a 56% to 35% increase in Australian gas demand across pathways to net zero.