The Australian Government‘s broader intention to intervene in the Australian gas market will not achieve the goal of bringing down the cost of living pressures for Australian households and may worsen the situation, according to Woodside.
In a statement, Woodside said a policy of this magnitude, introduced without real engagement with industry, generates a climate of uncertainty, resulting in a reduction in investment activity across all energy markets. This will make addressing the underlying structural issues in the energy market more difficult, not easier.
Woodside urges the Federal Government to review this extraordinary involvement and bring together energy providers, merchants, manufacturers, and infrastructure owners to work on a solution.
Woodside CEO Meg O’Neill expressed her worries concerning the Government’s current approach.
“The Prime Minister last Friday correctly acknowledged that Australia has not invested enough in its own energy security. And yet the unprecedented market intervention announced risks driving investment out of the system,” O’Neill said.
According to O’Neill, the investment, including in natural gas, is critical to supporting renewable energy sources as we work to decarbonise without turning off the lights.
“The policy will not address falling domestic gas supply and the increasingly critical role of gas in providing dispatchable power. These are the primary factors that are driving higher energy prices in the east coast gas market, rather than solely the impact of the tragic war in Ukraine,” O’Neill stated.
O’Neill highlighted the need to immediately restore gas supplies. She added that Woodside has been looking into ways to enhance supply, such as new LNG import facilities, exploration spending, and east coast expansion. Regrettably, according to O’Neill, the anticipated market intervention will make it extremely difficult for the industry to invest economically in increasing supply.
“No one wants to see energy shortages and gas rationing. We must develop a comprehensive, longer-term solution that addresses gas supply and reliability, the overall energy mix and infrastructure, without undermining the market-based economy,” O’Neill said.
Woodside continues eager to work with the government, members of parliament, and other stakeholders to address the difficulties confronting the east coast gas and energy markets.
