As energy prices rise, the heat is on for NSW to find its own gas supply

As prices rise and interstate supplies get sent overseas, the battle has begun for NSW to keep the pilot lights on.Clarissa Bye

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August 19, 2021 - 5:00PM

Opening up more sources of gas will be critical to preventing price hikes over the next two years, but NSW’s best chance at creating its own supply is being throttled by court appeals from greenie activists.

Despite the nation’s consumer watchdog issuing a stark warning about a looming gas shortfall for NSW, the new $3.6bn Narrabri Gas Project has been delayed by an appeal on climate-change grounds.

Approved last year by the NSW Independent Planning Commission, the project in the state’s central west will enable NSW to begin to build its own gas supply instead of piping it from interstate.

It comes amid rising gas prices, with Australian supplies from other states tied up in overseas contracts.

But NSW Energy Minister Matt Kean has recently moved to block any further exploration of gas mining in NSW apart from Narrabri – a decision that should be reversed, according to the industry.

And the powerful Australian Workers’ Union has also weighed into the gas price debate, claiming Australians are being slugged with the highest gas prices ever.

A three-day appeal against the Santos Narrabri Gas Project is set to be heard in the NSW Land and Environment Court from August 30.

The Environmental Defenders Office, representing an action group, appealed against the approval of the gas mine saying it “failed to properly assess the climate impacts” of its greenhouse gas emissions, among other reasons. Santos chief executive Kevin Gallagher said the scarcity of new gas developments on the east coast was “frightening”.

Mr Gallagher said the company had already spent more than $1.5bn and gone through the independent approval process, but gas supply was being “choked”.

Meanwhile, the company had drilled more than 700 wells and spend $2bn in gas developments in Queensland in the past two years.

“We wanted to spend up to $215m on Narrabri this year and next, but without a project approval, that’s just not viable,” he said.

Australian Workers’ Union national secretary Daniel Walton said NSW residents were “getting unnecessarily smashed on their gas bills”.

“Australia has never produced more gas and yet Australians are being slugged with the highest gas prices we’ve ever faced,” he said.

The Australian Petroleum Production and Exploration Association believes Mr Kean needs to rethink his policy locking up NSW’s gas supply.

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“Australia has abundant gas resources and the real answer to more supply and competitive prices is safely developing more gas resources close to customers,” chief executive Andrew McConville said.

The Daily Telegraph asked Mr Kean what he was doing to keep prices down. His spokesman said: “The NSW government has recently approved the Narrabri Gas Project and the Port Kembla LNP import terminal that will help to bolster supply and drive down prices into the future.”