Canberra draws up plan to open at least one new gas basin
The Morrison government will try to open up at least one new gas basin this decade in a move that will draw ire from environmental and climate groups.
The Morrison government will work to open up at least one new gas basin by the end of the decade and potentially pump millions of dollars into gas infrastructure projects as part of its efforts to shore up the nation’s energy supply.
In a move that will draw ire from environmental and climate change groups, Energy Minister Angus Taylor on Friday will release a national gas investment framework spelling out the government’s plans to grow and support the gas sector.
The government wants to see the Narrabri Basin in NSW and the Northern Territory’s Beetaloo Basin brought into production by 2026, with Queensland’s Galilee and North Bowen Basins targeted for development by at least 2028.
Mr Taylor will on Friday unveil an investment framework under which the government will consider investing in priority infrastructure projects – such as pipelines, storage facilities, and gas import terminals – that will help support the development of gas resources for domestic consumers.
The government will on Friday formally open an expression of interest process aimed at attracting infrastructure proposals that could benefit from government support.
That infrastructure could also ultimately be used for hydrogen and biogas, both of which are touted to play an increasingly significant role in Australia’s energy sector.
The latest plans to help grow Australia’s gas industry come just weeks after the Morrison government announced its new target of net zero emissions by 2050.
Earlier this year, the International Energy Agency released an analysis that found that the development of new oil and gas fields must stop this year if the world is to avoid climate change and meet a global target of net zero emissions by the middle of this century.
Climate protesters have this week staged blockades in both Perth and the Burrup Peninsula targeting Woodside Petroleum’s headquarters and operations following the company’s decision to go ahead with the development of the $16bn Scarborough liquefied natural gas project.
But the government’s latest national gas infrastructure plan warns that existing gas basins in both southern and northern Australia will begin to decline in the coming years.
“Maximising supply from these existing basins, additional southern storage and an import terminal … will help to ensure the risk of shortfalls is alleviated in the short term,” the report says.
“In the longer term, modelling for this plan indicates that without action, progressive declines in production from existing northern and southern basins will lead to shortages of gas. This means new basin supply must be developed by the end of this decade.”
Steve Davies, the chief executive of the Australian Pipelines and Gas Association, said the latest report showed that the government was “on the right track”.
“It’s not the most popular thing at the moment but the reality is natural gas provides more energy to Australia than the electricity sector,” he told The Australian.
“Whilst electricity is decarbonising itself, we are just not going to be getting rid of natural gas.”
Andrew McConville – the chief executive of the Australian Petroleum Production & Exploration Association, the oil and gas sector’s main lobby group – said demand for natural gas remained strong.
He said the government’s latest report confirmed the importance of bringing gas to the market.
“Our members have announced more than $27bn in new investment this year alone and analysis from EY suggests that could reach $350bn under the right investment settings,” he said in a statement.
“As the (Australian Competition and Consumer Commission) has found, the most affordable supply to develop is the supply closest to the market, and we look forward to working with both state and federal governments to bring new projects online, continue to power Australian homes and industry and keep creating local jobs.”
The government’s support for new fossil fuel projects have previously attracted legal challenges from activist groups.
Resources Minister Keith Pitt was hit with a legal action earlier this year from the Northern Territory-based The Environment Centre over his decision to approve $21 million of Northern Australia Infrastructure Facility grants to Beetaloo Basin gas explorer Imperial Oil and Gas. The matter was heard by the Federal Court earlier this month.