Australia needs more gas, and illogical blockers to its development should be removed.
So says the world’s foremost energy authority, the International Energy Agency, in its latest report on Australia’s energy future.
The IEA report, released yesterday, has criticised government policies which have restricted – and in some cases completely stopped – natural gas development.
The “sustainable development of new gas resources is critical for natural gas to play a growing role in the energy transition”, the report said.
With its “abundant” natural gas resources, Australia had a positive role to play as a global leader in supply of liquefied natural gas, to satisfy the growing demand for LNG, particularly in Asia, the IEA said.
It commended Australia’s commitment to increasing renewable energy generation. However, it also noted the importance of providing an outlook of energy security.
Since its last report, five years ago, there had been substantial investment in renewable energy, but little new investment in alternative sources for power generation, the most prominent of which is natural gas.
Experience in South Australia and other States, with blackouts and electricity load shedding, had shown the problems which can arise without sufficient dispatchable power and a well-integrated electricity grid.
Experience in the USA in the same period had demonstrated the success of complementary investment in natural gas for energy as well as renewables.
It also addressed the “tight” domestic supply situation, especially in the manufacturing-heavy East Coast market:
“In the longer term, gas will become more important to balance peak power demand and variable renewable power sources, potentially raising power sector issues if gas availability is constrained over a short or medium time frame.
“Hence, additional gas supply and better functioning markets are both needed,” the report said.
“The sustainable development of new gas resources is critical for natural gas to play a growing role in the energy transition, satisfying a growing domestic gas demand in power generation and industry and to honour export contracts at the same time.”
The last point was reinforced with a warning that the Federal Government should use its power to intervene in export markets only as a “last resort”.
IEA’s assessment was welcomed by the Australian industry’s key representative voice, APPEA CEO Dr Malcolm Roberts.
The message to policymakers from the IEA’s Executive Director, Dr Fatih Birol, could not have been clearer,” Dr Roberts said.
“The number-one step Australia can take to deliver secure and affordable energy – removing bans on unconventional gas projects.
“Coal seam gas from Queensland already supplies almost 60 per cent of the east coast gas market. States that have blocked unconventional gas projects are using more and more coal seam gas, but are paying a hefty premium to transport this gas from interstate.
“As Dr Birol stated this morning, more gas supply will put downward pressure on energy prices and smooth Australia’s transition to a low-emissions future.”