A major energy conference this week heard from policymakers, regulators, energy users and companies right across the supply chain, and beyond the broad agreement that there is, now more than ever, an urgent need for policy stability and certainty, the role of natural gas was high on the agenda.
In his keynote address to the Australian Financial Review’s National Energy Summit, , Federal Energy and Environment Minister Josh Frydenberg set the tone:
“By restricting gas developments and legislating their own renewable energy targets, the states and territories are putting politics and ideology not just ahead of lower energy prices, but also in both instances going against the expressed recommendations of the Chief Scientist Alan Finkel in his review for the COAG Leaders.”
And he went further:
“We clearly need more gas supply and Australia has got it.
Given the states are sitting on decades’ worth of resource, it is simply not good enough to outsource their responsibilities to Canberra to restrict exports, while relying on Queensland to produce more than 99 per cent of the east coast unconventional gas supply.
By relying on Queensland to do the heavy lifting, the southern states are forcing unnecessary scarcity onto consumers and increasing wholesale gas prices by up to 25 per cent, which is the cost of transportation from up north.”
Australia’s major gas producers told the audience why the industry shouldn’t be demonised in the current energy debate, and on the same day that the Victorian Opposition unveiled a policy to allow conventional gas exploration and development if elected, the companies criticised state based moratoria and bans that unnecessarily restrict access to east coast resources at a time when the market needs it most.
Santos’ Angus Jaffray told the conference that without the $60 billion investment that industry has made in the LNG export industry, much of the nation’s gas reserves would remain untapped, and the market would be even tighter.
Shell Australia’s new country chair, Zoe Yujnovich, took aim at a common claim levelled against industry by activist groups, and by Federal Opposition Leader Bill Shorten in his address to the conference – the claim that Australian exported gas is cheaper for commercial customers in Japan than it is for commercial customers here.
In a wideranging speech that punctured a raft of myths about the industry, Ms Yujnovich said:
“Allow me to be absolutely clear on this point – Australian gas is never cheaper for manufacturers in Japan than it is for Australian factories,” she says.
“To suggest otherwise is a classic example of a disingenuous comparison, or shenanigan, designed to diminish public support for an export industry.”
Origin Energy CEO Frank Calabria joined the fray, confirming that the integrated energy major is working to being more gas to the domestic market on the east coast.
But it wasn’t just the gas producers lining up to take a swing at false claims made about the industry. Pipeliner Mick McCormack, the boss of APA Group, didn’t hold back, taking aim at city based activists who he said have the least to lose from restricting gas development.
To wide agreement from those in the room, McCormack also called for State Governments to listen to the advice of their scientific advisors, and for ‘fact above folklore’ to take precedence in the ongoing debate over whether onshore gas development should be allowed to proceed.
So, at the end of a two-day conference which aimed to identify some workable solutions to the current energy imbroglio in Australia, what was the result?
In short, more questions than answers – apart from the clear acknowledgment that gas has a role to play in the country’s future energy policy settings, regardless of what industry opponents continue to claim.