Australian energy industry calls for gas supply boost in federal budget

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Australia’s oil and gas sector is urging the government to prioritise unlocking new gas supplies in the upcoming Federal Budget to avert projected shortages, ease cost-of-living pressures, and secure economic and emissions reduction benefits from abundant natural gas resources.

The Australian Energy Producers, in their budget submission, emphasised the critical need for a comprehensive plan to address looming shortfalls on both coasts and ensure a steady supply of affordable and reliable energy for households and businesses.

Samantha McCulloch, chief executive of Australian Energy Producers, expressed concerns about the policy instability, government interventions, and delays in project approvals that have plagued the industry for over a year.

McCulloch stressed the urgency of recalibrating the policy and investment environment for natural gas to secure the nation’s energy future.

Highlighting the absence of new acreage for petroleum exploration since August 2022, the industry’s plea includes an immediate release of new exploration acreage and a resumption of the overdue annual acreage releases.

The submission also calls for a cautious approach to the price controls imposed on the east coast gas market in 2023, urging the government to outline a plan that restores market signals and incentivizes new supply before the scheduled 2025 review of the Code of Conduct.

Additionally, the government is urged to review the energy needs for critical minerals processing, ensuring a stable gas supply to power the manufacturing of minerals essential for achieving net-zero emissions.

The submission underscores the pivotal role natural gas will play in Australia’s energy transition to net zero, emphasising opportunities for LNG exports to support regional emissions reductions.

“We are calling on the Federal Government to work with gas producers, energy users and state governments on an Action Plan to bring on new supply to address near-term structural shortfalls,” McCulloch remarked.

Proposals include streamlining environmental approvals, fixing the offshore regulatory system, and establishing an Australian LNG Producer-Consumer Taskforce to strengthen regional relationships.

The submission also advocates for Australia to become a regional hub for carbon capture, utilisation, and storage (CCUS).

McCulloch stated that CCUS is integral to the net-zero pathway, offering ways to lower emissions, unlock low-carbon hydrogen, and support carbon removal, while also serving as an economic driver for Australia through job creation and increased investment.