/ 10 May 2024

A lot of hot air


The Squiz 

The Albanese Government released its Future Gas Strategy yesterday, which it says “establishes the role gas will play in the transition to net zero by 2050”. It includes support for new gas fields, initiatives to increase the extraction of gas, and “use it or lose it” provisions to stop companies sitting on untapped reserves. It also ties in with the Future Made in Australia policy to subsidise Oz’s clean energy and manufacturing. Resources Minister Madeleine King says it’s “based on facts and data, not ideology or wishful thinking”, but the Climate Council has labelled it a “regressive echo of the past”

I am lost…

Gas currently accounts for 27% of Oz’s energy – it was our third largest export last year bringing in 14% of our export income and employing 20,000 people – so it’s big business. But like other non-renewable energy resources – e.g. coal – it’s unpopular with environmentalists – especially the Greens… They don’t want any new gas projects and claim the Government is bowing to pressure from fossil fuel donors. But the Government argues we can’t switch off gas overnight because the energy transition will take time, it would hurt our economy, and it has to ensure Aussie homes have a reliable supply. It also says for industries like manufacturing and minerals processing, there is no realistic alternative and our gas industry is fundamental in other countries’ shift towards renewables. To try and appease its critics, the Government is promising emissions reduction measures like carbon capture and storage.

What other reactions have there been?

As you’d expect, gas stock prices jumped following the announcement, with AGL up 2.4% and Strike Energy – which is involved in Aussie gas exploration/development – up a whopping 9%. Industry association Australian Energy Producers was also pleased, saying it recognises “the critical role of natural gas for Australia’s energy security”. Less enthusiastic were several Independent/teal MPs, including David Pocock who says it’s “stupid given we export 75% of our gas”, and Kylea Tink, who called it “‘gas-fired recovery’ 2.0”. That’s a reference to the former Morrison government’s post-Covid recovery plan. The Coalition continues to support gas, but several Labor MPs have also raised objections, including Josh Burns who says “not a cent of public money” should be spent on new gas projects unless they assist with the energy transition and there’s “so much more to do”.

* To find out more about Australia’s energy debate, check out the latest Squiz Shortcut.

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