Joel Fitzgibbon backs gas projects

Labor frontbencher Joel Fitzgibbon has offered the Morrison government bipartisan support for taxpayer backing of gas projects.

Labor frontbencher Joel Fitzgibbon. Picture: AAP

Labor frontbencher Joel Fitzgibbon has offered the Morrison government bipartisan support for taxpayer backing of gas projects in a move that will cause anger within opposition ranks.

The opposition resources spokesman said the federal government was “well placed to underwrite long-term gas transport agreements” to encourage private investment in gas pipelines. His comments came after COVID-19 Commission Advisory Board chairman Nev Power confirmed he had advised the Morrison government it should underpin new investment in gas pipelines by guaranteeing offtake agreements.

“Typically when this has been done previously the government has recouped any investment or cost that it has had progressively over time,” Mr Power told the COVID-19 Senate committee.

Mr Power, the former chief executive of Fortescue Metals Group, played down the prospect of a renewables-led recovery, saying new projects required significant government subsidies and “substantial timeframes” before they were completed.

“We haven’t recommended a green recovery per se,” Mr Power said. “Our focus has been on where private sector investment is prepared to invest in the short term to create jobs and economic growth.”

While Mr Fitzgibbon backed Mr Power’s proposal, opposition energy spokesman Mark Butler labelled the government’s push for a gas-led recovery “just more spin from a government without a plan”.

“For seven years, the Liberal government has dismally failed to ensure Australian users have ­access to affordable gas, as Australia became the world’s largest gas exporter,” Mr Butler said.

“Now we are meant to believe that the government has a plan for a domestic gas boom, all delivered by Angus Taylor who has a standout record of scandal and failure in this government.

“To ignore the massive potential of renewable energy and ­renewables-related industry is exactly the type of ideological bias that has undermined progress under the Coalition government.”

Mr Fitzgibbon, who has ­responsibility for gas extraction and networks as resources spokesman, said Mr Power was “spot on” for recommending government support of gas pipelines.

“More gas extraction and more gas pipelines will be critical to our economic recovery. Without more competitively priced gas our manufacturing sector will further decline,” he said.

“More gas and a pipeline network which creates a more competitive environment will rejuvenate our manufacturing sector, pave the way for new gas-powered peaking generators and facilitate the transition to renewable technologies.”

Grattan Institute director Tony Wood said the government guarantee of offtake agreements — a pre-construction agreement between suppliers and producers — could leave taxpayers “on the hook” in a market downturn.