Chris Bowen is being urged to reset his gas policies after conceding more supply is needed
8:33PM MAY 1, 2024

Gas producers have blamed Labor’s market interventions and regulatory uncertainty for crushing investor confidence and delaying new supply, demanding an urgent policy reset after Chris Bowen conceded more gas will be needed as the electrification of Australia accelerates.

The Energy Minister is also facing calls to underwrite new gas investment and increase supply through the north-south pipeline as he leaves open the possibility of extending the mandatory gas code to retailers.

Australian Energy Producers chief executive Samantha McCulloch urged the government to use its future gas strategy, which is due to be released within weeks, to progress approvals for new gas supply and address “near-term structural shortfalls”.

The government must also unveil “tangible, near-term actions” to address regulatory uncertainty and instability and restore investor confidence, she said.

“A reset of Australia’s gas policy is urgently required to bring on the new supply needed to deliver affordable and reliable energy for Australian households and industry. Eighteen months of government interventions and regulatory uncertainty have dampened investor confidence and delayed … new gas supply.”

The Coalition has accused the Albanese government of “killing off gas at a time when Australia needs it most”, while the peak body for commercial and industrial energy users said the jury was still out on whether the gas code and Australian Domestic Gas Security Mechanism would be enough to shore up future supply and security.

Energy Users Association of Australia chief executive Andrew Richards, who hosted Mr Bowen at the organisation’s national conference on Wednesday, said it was “becoming pretty obvious” the federal government needed to do more despite being limited by anti-gas states.

“There’s lots we’re doing at a federal level to encourage electricity supply. Could we use some of those mechanisms to encourage more gas supply? And more gas supply from more gas suppliers so we can improve competition on the way through?” Mr Richards said.

“Over the years we’ve seen the previous federal government underwrite new generation investment. You could underwrite new gas investment. Large industrial users may be big but can’t step in and underwrite a 20-year gas contract. The commonwealth could do that and they’d never pay a dollar and customers would always need the gas.

“The Capacity Investment Scheme was set up so the commonwealth was never really on the hook and it allows the market to still function. What can we learn from that and apply to the gas market?”

With “plenty of gas up north” and states like Victoria moving away from gas, Mr Richards said part of the solution could be to increase the north-south pipeline capacity.

Opposition energy spokesman Ted O’Brien said Labor’s No.1 job in coming into office was to get more gas supply into the market but declared “its entire suite of policies are delivering the opposite”. Mr O’Brien would not say what the Coalition would do to invest in new gas. “What we need is more investment and we also need pressure on the states for more exploration,” he said.

Mr Bowen didn’t indicate new government policies were being developed when asked where the extra gas would come from.

“There are a number of gas proposals under development, whether it’s Beetaloo, Narrabri, Surat, Bowen Basin, a whole bunch,” he said.