Loopy bunch of Labor climate cultists back gas ‘to 2050 and beyond’
The Albanese government has shed its ambivalence towards gas, adopting a strategy that locks in its use beyond 2050 to underpin renewables, power manufacturing, and help trade partners manage their energy transitions.
Resources Minister Madeleine King said the Future Gas Strategy, to be released on Thursday, will be “based on facts and data, not ideology or wishful thinking”.
Resources Minister Madeleine King has always argued internally that there can be no energy transition without gas as a firming fuel. Is this really her? She looks different in every photo? Did Dr. Jim clone her in a secret socialist government firming experiment gone wrong?
It will include measures to help abate emissions from gas production in a bid to dampen a backlash from the Greens, teal independents and elements of the Labor left.
These measures will include promoting the use of carbon capture and storage, long advocated by companies such as Santos, and minimising the release of methane when gas is extracted.
At the same time, the strategy will contain initiatives to facilitate the increased extraction of gas including the introduction of “use it or lose it” provisions to stop companies sitting on untapped reserves.
“Our electricity markets must adapt to remain fit for purpose throughout the energy transformation, and we will assess so-called ‘use it or lose it’ provisions for retention leases, to get the gas we have already discovered flowing sooner,” Ms King said.
Last month, the West Australian government urged Canberra to flex its “use it or lose it” powers on energy companies that hold the rights for major offshore gas fields.
The WA government recommends the Albanese government no longer extend the retention licences on these gas fields, which would force the titleholders to develop the assets or lose them within five years.
New investors will also be needed.
“The strategy also makes it clear that we can’t rely on past investments to get us through the next decades, as existing fields deplete,” Ms King writes in The Australian Financial Review.
“That will mean a continued commitment to exploration, and an openness to the kinds of foreign investment that have helped build the industry into the powerhouse it is today.”
The strategy will be a foundational document for the government and is similar in intent to the Morrison government’s gas-led recovery. That was proposed by Scott Morrison as the nation emerged from the pandemic, but was derided by the then-Labor opposition.
The strategy will underscore the importance of projects, such as Woodside’s Scarborough LNG project off the WA coast and the Beetaloo Basin proposal in the Northern Territory. However, such ventures would still need to clear the usual environmental and other approval hurdles.
LNG was Australia’s third-largest export last financial year, accounting for 14 per cent of all export income.
It is unclear what, if any, implications it will have for the reserve capacity mechanism, which is a back-up that ensures there is sufficient generation capacity in the grid. Energy Minister Chris Bowen and his state counterparts negotiated a mechanism that excluded gas.
A week ago, Mr Bowen argued Australia had no option but to seek new supplies of gas even as the government accelerated the rollout of renewables.
Labor has struggled internally with the politics of gas because of pressure from the Greens and elements of its own party to veto new developments and wean the nation off the fuel. At the same time, it has had to deal with the reality of the energy transition and the demands of its industrial base.
But Ms King, who has always argued internally that there can be no energy transition without gas as a firming fuel, says those calling for the end of gas were unrealistic because it would be needed “through to 2050 and beyond”.
“The energy transformation will take time – it will take investment in renewables, new industry processes, new technologies,” she said.
“Turning off gas overnight would do untold damage to our economy, impede efforts to get to net zero here and have a severe impact on our region, which is the fastest growing in the world.
“Pretending otherwise is counterproductive and won’t help Australia and our region get to net zero by 2050.”
She said it would remain a vital component of manufacturing and, in that vein, a necessary part of the government’s Future Made in Australia policy.
Gas is also needed to smelt and refine critical minerals which will help Australia and the world lower emissions.
Nor, she said, could Australia leave its gas-dependent trading partners such as Japan and South Korea, high and dry.
“Australia is and will remain a reliable and trusted trade and investment partner,” she said.
“Our trade partners have made large investments over decades in Australia’s resources industry and are relying on Australian gas to transition their economies to net zero.”
Ms King said the strategy would be underpinned by key principles, which included Australia remaining committed to net zero emissions by 2050 and that gas must remain affordable for domestic users throughout the transition.
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