By Anne Hyland
Former prime minister Scott Morrison’s decision to stop a controversial gas field from being explored off the NSW coastline is set to be overturned, after the federal government and two gas companies agreed to end a looming court battle.
The federal government and the gas companies, Asset Energy and Bounty Oil & Gas, applied to the Federal Court for consent orders to end the legal action which, if granted, would nullify the Morrison government’s decision.
Scott Morrison secretly swore himself in as resources minister to block PEP11, a controversial gas field being explored off the NSW coastline. Credit: James Brickwood
If the court gives the consent orders, PEP11 becomes a headache for the NSW government, weeks out from a state election. The NSW government has previously opposed the project, but the federal government is the ultimate decision-maker.
NSW Premier Dominic Perrottet said he had spoken and written to Prime Minister Anthony Albanese restating the state government’s opposition to the project.
“The NSW Liberal and Nationals government opposed the extension of PEP11 in 2022, and although a decision has yet to be made by the Federal Court of Australia, I reaffirm our opposition as we have done over a number of years,” Perrottet said. “The NSW Liberal and Nationals government will always stand up for the best interests of our communities.”
The federal government was taken to court by Asset Energy and Bounty Oil & Gas, where the company claimed that the decision made by Morrison, who secretly swore himself in as resources minister while he was prime minister, was “infected by actual bias” and that he and the government had “breached the requirements of procedural fairness in that he predetermined the application”.
The government denied the claims.
Morrison had sworn himself into that portfolio without informing the then resources minister Keith Pitt, who intended to approve the project’s exploration request. Asset Energy and Bounty Oil & Gas were seeking to extend their permit to explore and drill for gas off the NSW coastline, in an area that stretches from Sydney’s North Head to Newcastle.
The gas exploration area, located no further than 50 kilometres off the NSW coast, is known by its title name, Petroleum Exploration Permit 11 or PEP11. It covers an enormous area of 4574 square kilometres, and runs parallel to the state’s pristine beaches, popular tourist destinations, past some of the country’s most expensive residential real estate and – at the time of Morrison’s decision – past a number of blue-ribbon federal electorates.
In former political staffer Nikki Savva’s book Bulldozed, she wrote that Morrison acquired the portfolio to override Pitt, after coming under pressure from fellow MPs about the controversial project, including from “his friend Lucy Wicks in Robertson and inner-urban Liberals”.
Savva said Pitt told her he had considered resigning after Morrison’s action, and had also discussed with his staff unilaterally releasing a statement approving PEP11, at the time Morrison announced he was blocking it. In his time as resources minister, Pitt had been promoting a gas-led recovery policy of the Morrison government.
Following the announcement that the federal government and two companies had agreed to end their legal battle over PEP11, Morrison maintained he had made the right decision.
“As prime minister I took action to lawfully prevent PEP11 from proceeding, as promised. I listened to the concerns of the community, did my own homework, and made the right decision,” he told this masthead. “It was the right thing to do.”
Pitt declined to comment until the Federal Court has issued its order.
Federal Resources Minister Madeleine King will have to consider again whether her government grants an extension of the PEP11 permit.Credit: Trevor Collens
The federal government was facing a possible compensation claim from Asset Energy and Bounty Oil & Gas. If the court consents to the parties request to end the legal action, then the federal government may only be liable for those companies’ legal costs.
However, federal Resources Minister Madeleine King will have to consider again whether the federal government grants an extension of the permit, which comes amid a gas crisis gripping the nation.
“I assure Australians that any decisions that I take as the federal minister for resources will always be based on sound evidence and in accordance with the law. Australians quite rightly expect this of their elected leaders,” King said in a statement.
“I am not going to provide an ongoing commentary on future official decisions that come before the [Commonwealth-New South Wales Offshore Petroleum Joint Authority], whether in relation to PEP11 or any other matter.”
Sophie Scamps, an independent MP in the northern Sydney beaches electorate of Mackellar, called the decision a “setback”. Scamps defeated Liberal MP Jason Falinski at the last federal election; the PEP11 gas field was an issue in that electorate.
“The Albanese government now has a chance to show it can do what the Liberal party never could, and that is act in the best interests of communities up and down the east coast of Australia and finally cancel the PEP11 licence,” said Scamps.
The federal government has been accused by the gas industry of having no plan to fix a looming gas shortage, which the Australian Competition and Consumer Commission has warned could start as early as 2027, potentially destabilising the energy grid.
Amid soaring gas prices that were hurting households, the federal government legislated a one-year, $12-per-gigajoule price cap on uncontracted gas last December. It also introduced a permanent code of conduct to enforce the sale of gas at a “reasonable price”, drawing outrage from the gas industry.
Gas companies have argued environmental approvals, finance, state gas bans and a lack of pipelines are preventing dozens of gas supply projects from being approved.
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