Media Release: Federal Budget must target new gas supply to ease cost-of-living pressures

Australia’s oil and gas industry has called on the government to use the Federal Budget to urgently unlock new gas supply to avoid forecast shortages, put downward pressure on prices and secure the economic and emissions reduction benefits of our abundant natural gas resources.

In its 2024-25 Federal Budget submission, Australian Energy Producers has called for a plan to avoid looming shortfalls on both coasts and continue to deliver affordable and reliable energy for homes and businesses.

Australian Energy Producers Chief Executive Samantha McCulloch said: “After more than a year of policy instability, government interventions and project approval delays, a recalibration of the policy and investment environment for natural gas is needed to secure our energy future.”

With no release of new acreage for petroleum exploration since August 2022, the industry has called for that round to finally be awarded and the long overdue acreage releases, normally held annually, to resume.

Price controls imposed on the east coast gas market in 2023 must not become a permanent fixture. The government should outline a plan to return to market signals and incentivise new supply ahead of the scheduled 2025 review of the Code of Conduct.

The government has also been urged to review the energy needs for critical minerals processing to ensure gas supply to power the manufacturing of the minerals required to get to net zero.

The submission highlights the important long-term role natural gas will play in Australia’s energy transition to net zero, as well as the growing opportunities for LNG exports to support regional emissions reductions.

Ms McCulloch said: “New gas supply is urgently needed from coast to coast to ensure reliable and affordable energy for homes and businesses.

“We are calling on the Federal Government to work with gas producers, energy users and state governments on an Action Plan to bring on new supply to address near-term structural shortfalls.

“Whether it’s through streamlining environmental approvals or fixing the broken offshore regulatory system, Australia needs to move quickly to secure the economic, energy security and emissions reduction benefits of natural gas.

“The release of new offshore petroleum exploration acreage is long overdue and this annual process needs to get back on track to maintain our domestic and regional commitments.

“We have proposed the establishment of an Australian LNG Producer-Consumer Taskforce to strengthen regional relationships and ensure Australia benefits from a potential 10-fold growth in Asian LNG demand.”

The submission also calls for Australia to be a regional carbon capture, utilisation and storage (CCUS) hub – including developing a national roadmap and creating Net Zero Zones to fast-track emissions reductions..

Ms McCulloch said: “Carbon capture is part of the net zero pathway in a multitude of ways – such as lowering emissions from industries, unlocking low carbon hydrogen and supporting carbon removal.

“It can also be a major economic driver for Australia through new jobs and investment.”

RECOMMENDATIONS

Ensuring reliable, afford energy for Australia

• Work with industry on an Action Plan to urgently bring on new gas supply to address near-term structural gas shortfalls in Eastern and Western Australia
• Develop a Future Gas Strategy that recognises the critical, long-term role of gas in achieving net zero by 2050
• Support exploration for natural gas and carbon capture, utilisation and storage (CCUS) through acreage releases
• Determine energy needs for future industries, including critical minerals processing

Restore investor confidence for new gas supply

• Fix the regulatory uncertainty and delays for offshore gas projects
• Streamline environmental approvals in the Environment Protection and Biodiversity Conservation (EPBC) Act reforms
• Implement taxation and fiscal policy settings that support investment in new gas supply
• Remove pricing controls and return to market signals for the east coast gas market to secure investment in new supply

Delivering Australia’s net zero transformation

• Develop a CCUS roadmap to support the scale-up of CCUS technologies
• Ensure the National Hydrogen Strategy recognises and incentivises hydrogen from natural gas with CCUS as part of Australia’s future low-carbon hydrogen mix
• Support the creation of Net Zero Zones to reduce the costs and fast-track emissions reductions in hard-to-abate industries
• Develop emissions policies that recognise the need for new gas supply to achieve net zero by 2050

Delivering on Australia’s commitment to remaining a reliable energy partner in our region

• Seize the LNG demand growth opportunity in our region
• Establish an Australian LNG Producer-Consumer Taskforce
• Advance Australia as a CCUS destination in the region
• Recognise the role of Australian LNG in our trading partners’ decarbonisation plans

View the Australian Energy Producers 2024-25 Federal Budget Submission here.

Media Contact: 0435 113 224