Article by Colin Packham, courtesy of The Australian
01.04.2025
The decision to prioritise emission reduction targets has driven Australia’s cost-of-living crisis and both sides of the political divide are pushing policies that discourage much-needed gas production, claims Beach Energy boss Brett Woods.
The country had lost sight of what underpinned the economy – cheap gas, he told a conference in Sydney on Tuesday.
“Australian politicians decided that our common agenda to decarbonise was a race that Australia must win at any cost, including a massive lowering of Australians’ standard of living,” Mr Woods said.
Australian households are reeling from the cost-of-living crisis stoked by rampant inflation that prompted the Reserve Bank to raise interest rates 13 times.
Although the RBA has since cut interest rates and inflation has tempered, a record number of Australians are unable to pay their utility bills.
The Coalition has sought to capitalise on by linking Labor’s commitment to emission reductions to high prices.
The federal Labor government insists its centrepiece policy of dramatically increasing renewable energy generation will lower Australia’s emissions and reduce prices.
Mr Woods’ comments would typically be seized on by the Coalition as an endorsement, but he also criticised the Opposition’s pledge to increase east coast gas supplies by forcing regional LNG exporters to withhold 20 per cent of uncontracted volumes that would otherwise be shipped overseas.
Mr Woods said that both sides of Australia’s political divide now realised the importance of gas, but both had adopted positions that made it extremely difficult to increase supplies.
“After a long education process, most sides of politics have now found religion, and recognise that gas is absolutely critical to Australia’s energy security, jobs, and to work alongside renewables,” Mr Woods said. “On May 3rd, voters face the prospect of duelling gas policies from both sides of government that disincentivise exploration and production of domestic gas close to where it is needed on the east coast.”
A chorus of global giants have joined local players in criticising the Coalition’s gas policy, including Chevron and ConocoPhillips, which along with Origin is a major equity owner in Australia Pacific LNG.
APLNG would be forced to divert some supplies to the local market under the Coalition policy. Global giant Shell, through its Queensland Curtis LNG facility, would also be affected.
Santos, which operates Queensland’s third LNG export facility, Gladstone LNG, would be largely unaffected by the Coalition’s policy as it has fully contracted all of its exports via long-term contracts.
ConocoPhillips said its APLNG facility was already a major supplier to the domestic market, and intervention would threaten its capacity to invest in new supplies.
“ConocoPhillips Australia invests $1bn year-on-year into Australia Pacific LNG, which remains the largest supplier of gas, contributing 154PJ to the domestic gas market in 2024,” the company said in a statement.
“APLNG makes a positive contribution to the domestic market and plays an increasingly important role as southern gas basins decline and gas development restrictions in NSW and Victoria persist.
“Our Otway Basin exploration projects have the potential to develop further resources, which if proven commercial, we plan to use to directly supply the growing demand of the southern Australian states.”
Deterring investing could be catastrophic as the country’s east coast faces a looming gas shortfall.
The Australian Energy Market Operator has warned it expects NSW and Victoria to experience structural supply shortfalls in 2029 as traditional sources of gas decline. Australia’s gas industry has urged the federal Labor government to rapidly approve new developments, but many proposals remain on hold.
Gas industry figures question Labor’s commitment to the fuel source, but the federal government insists it cannot cut corners on environmental surveys.
The supply outlook means Australia may have to import LNG for the east coast, which critics say will lead to higher prices.
Proponents of LNG imports insist Australia has run out of time to develop new supplies and developing import facilities will allow the country to take advantage of increased global supplies that could put downward pressure on prices.
Beach Energy shares rose 3c to $1.465 and Santos added 11c to $6.77 on Tuesday.
