Report stresses importance of gas in Australia’s net zero pathways

Image credit: Australian Energy Producers

A new report from Ernst & Young (EY) has underscored the essential role of gas in Australia’s energy landscape even under a net-zero emissions scenario.

The study, titled “The future role of natural gas in Australia and the region,” was commissioned by Australian Energy Producers to provide an independent assessment, emphasising that substantial gas production will be indispensable 26 years from now to ensure reliable and affordable energy in 2050.

EY’s analysis, based on around 350 net-zero pathways globally, indicates that gas is expected to play a significant role in the global transition to net zero.

The report recommended that Australia prepare for multiple gas production scenarios due to the uncertainties surrounding the transition.

It argued that ongoing investment in gas supply is necessary to maintain production levels from existing fields. As these fields decline, investments in new supply options will be crucial to meet projected demand.

The report also outlined three future scenarios – the Electrify Scenario, Blended Scenario, and Capture Scenario – each reflecting different levels of demand for Australian gas by 2050.

Samantha McCulloch, chief executive of Australian Energy Producers, underscored that gas serves as a safety net for Australia’s energy transition, providing affordability and reliability for households and businesses.

She said she advocates for the inclusion of natural gas as a core pillar in Australia’s energy and climate policies to accelerate the transformation and secure substantial economic benefits from achieving net-zero emissions.

“Australia needs to plan for both strong domestic and international demand for gas to secure the associated emissions reduction and economic opportunities,” McCulloch added.

She continued, “As well as keeping the lights on across Australia and the region, Australia’s gas industry delivered over $16 billion of government revenues last financial year and spent another $45 billion with Australian businesses, all the while supporting tens of thousands of jobs across the economy.”

The EY report concluded that Australia’s gas industry has a critical role to play in deploying net-zero technologies and fuels, including carbon capture, utilisation, and storage (CCUS), as well as low-carbon hydrogen.

“CCUS and hydrogen are key complements to natural gas in a zero emissions future — all plausible net zero pathways involve CCUS and hydrogen at different scales,” the report stated.