Calls to pull Narrabri gas project out of limbo amid looming gas crisis

NSW could be on track for its own gas crisis like our neighbours in Victoria. But a $3.6 billion project in a small country town could provide the answer.

NSW could be on track for its own gas crisis like our neighbours in Victoria if the future of the Narrabri gas project remains in limbo.

The project — which could supply half the natural gas used in businesses and households in NSW — has been facing delays after a court ruled in favour of an Indigenous group who claimed the Native Title Tribunal should have considered climate change before issuing approval to the $3.6bn proposal.

Experts are calling for clarity on Narrabri’s future along with caps on how much coal is being exported overseas amid a gas crisis engulfing Australia’s east coast that will put businesses at the greatest risk of shortages.

Grattan Institute energy expert Tony Wood said Victoria’s current gas crisis — which is one unplanned outage away from a full-blown crisis — could be replicated in NSW if the state doesn’t plan to boost its gas supply.

“Narrabri has been there since 2008, it’s not made a lot of progress. When you get that sort of push back from local communities, governments are very nervous but consultation takes a long time,” he said.

Tony Wood, Energy and Climate Change Program Director at the Grattan Institute.

“It’s taken a long time already … What we really need is an answer yes or no as the lack of certainty isn’t helping.

“We’ve almost waited too long in Victoria; we don’t want to do that in NSW.”

Mr Wood said the Australian Energy Market Operator had been warning off a gas crisis for years but governments had refused to listen.

“The AEMO has been talking about this for several years. There has been no sensible solution to solve this problem, we have not been paying attention.”

Mr Wood said NSW had more flexibility as it was not as reliant on gas as Victoria and large gas users could be asked to turn down their usage compared to households.”

A spokesman for Santos said a “complex approvals and appeals process” would mean it was unlikely they would be pumping gas by the time NSW hits a projected gas shortfall in 2026.

A Santos Ltd. pilot well operates on a farm property in Narrabri in 2017. Picture: Brendon Thorne/Bloomberg

“A complex approvals and appeals process means NSW will not have access to the gas under its feet in 2026. Locally produced gas close to market will always be the gas with the lowest cost of supply for customers,” a spokesman said.

“The long time frames for planning and environmental assessment processes combined with appeal processes, are slowing down the delivery of all kinds of critical infrastructure that has broad community and economic benefits for communities across NSW and around Australia.

“This includes everything from new housing developments to roads and renewable energy projects.”

The spokesman said the “scales have tipped too far against the public interest” by stalling access to projects like Narrabri.

“Everyone supports proper processes that ensure the protection of the environment, but regulatory reform to get the balance right is desperately needed at all levels of governments.”

Protesters at Santos headquarters, 60 Flinders Street on March 10, 2020 in Adelaide. Picture Matt Turner.

Curtin University energy economist Dr Liam Wagner also called for caps on how much coal is being exported to guarantee domestic energy security — particularly for businesses who would be the most impacted by a shortage in NSW.

“(We have to do) more than electrifying residential consumption … They have been exporting too much. There is a lot of gas in the ground and there has been no curtailment of exports and no security for consumers directly,” he said.

Mr Wagner said the Narrabri project “could not be rushed” as it was being stalled due to environmental concerns.

In the case of a gas shortage in NSW, he said businesses like fertiliser producers who are the biggest consumers of gas in the state would be most at risk but households should be able to keep the lights on.

“It would be large industrial consumers of natural gas being impacted. It would not have much of an impact on residential consumers, it would really be the industry who would be asked to curtail demand,” he said.

Originally published as Calls to pull Narrabri gas project out of limbo amid looming gas crisis