‘Myopic’ gas-sceptics ‘leading us to crisis’: Wesfarmers CEO

Australia’s failure to approve gas facilities had simply led to higher emissions projects being rubber-stamped elsewhere, the Wesfarmers boss says.

Wesfarmers chief executive Rob Scott said Australia’s gas-sceptic attitude has been the catalyst for the looming gas crisis. Picture Ross Swanborough.

Australia’s “myopic” reluctance to approve gas developments on the east coast has cost economic opportunities and ultimately pushed global emissions higher, Wesfarmers chief executive Rob Scott says.

In some of the most forthright comments from a national business leader on the nation’s attitude to gas, Mr Scott said Australia’s gas-sceptic attitude has been the catalyst for the looming crisis and the failure to approve gas facilities had simply led to higher emissions projects being rubber-stamped elsewhere.

The comments underscore a simmering frustration in Australia’s corporate sector at a perceived failure of successive governments to resolve a looming gas crisis, which could strike as soon as 2026.

“We have taken a somewhat myopic view and say ‘Well any carbon emissions are bad’ and therefore conclude we don’t want to approve this project,” Mr Scott told The Australian.

“The consequence is the opportunity and the jobs go offshore and it’s a no better outcome for the environment.”

The Australian Energy Market Operator earlier this year said gas power stations could need to turn to burning diesel as supplies dwindled.

While a crisis could be averted then, AEMO has warned the situation would be too precarious by 2028.

Despite these warnings, some critics have accused the federal Labor government and state counterparts of slow-walking developments, belying an imminent crisis.

Major developments such as Santos’s Narrabri project in NSW are stuck in regulatory considerations. Santos has said it expected to be ready to make a final investment decision on Narrabri next year, but the project remains in limbo until it can secure necessary regulatory approvals.

Santos is seeking to tap some 1500 petajoules of gas reserves from the projects. Daily production of up to 200 terajoules has been predicted, about half of NSW’s gas needs.

Companies will make a final investment decision on a project only after securing all environmental and government approvals, but Australia’s east coast faces sustained pressure to find new sources of gas.

ExxonMobil’s Longford facility supplies the bulk of gas to the east coast yet is struggling to maintain production as supplies begin to wane.

The source is expected to be exhausted by 2028.

Each government insists it values the importance of gas but cannot cut corners when assessing environmental approvals.

Yet an apparent lack of action on the east coast is in stark contrast with recent policy tweaks in Western Australia.

That state faces a looming gas shortage, with a recent government report finding WA staring at a 30 per cent shortfall over the next decade.

Moving quickly, WA in September said new onshore gas projects in the state would be allowed to sell 20 per cent of new supplies overseas via lucrative LNG contracts, an attempt to accelerate new supplies.

Mr Scott said the policy moves underscored the sizeable cultural differences between WA and its eastern counterparts.

“I think the WA governments of all persuasions deeply understand the importance of having competitive export industries and those are so critical to the state economies,” Mr Scott said.

“I think the reason the east coast has found itself in the problem it finds itself in terms of supply is grounded in the lack of regulatory certainty and lack of investment.”