Media Release: Federal Budget should focus on boosting new gas supply and emissions reductions

Australia’s oil and gas industry has urged the Federal Government to use the 2023-24 Budget to encourage investment in new gas supply and emissions reduction measures to put sustained downward pressure on gas prices, help deliver energy security, and fast-track the path to net zero.

The Australian Petroleum Production & Exploration Association (APPEA) said the sector had never been more important to the nation’s economic and cleaner energy future, and ensuring a dependable investment environment would deliver more benefits to Australians.

APPEA’s 2023-24 Federal Budget submission, released today, calls for a national carbon capture utilisation and storage (CCUS) roadmap to provide clear policy direction, identify and progress priority hubs for low emissions projects and promote Australia as a regional carbon storage leader.

APPEA Chief Executive Samantha McCulloch said: “Capturing and permanently storing emissions from industrial facilities, including hydrogen production, and directly from the atmosphere makes the most of our world class geological resources and is critical to reaching net zero.”

APPEA also calls on the government to encourage investment in new gas supply to meet demand and drive down prices, rather than interventionist policies which have the opposite effect.

Key measures include – letting the market work to bring down prices; progressing new acreage releases; encouraging New South Wales and Victoria to lift moratoriums which are contributing to the highest gas prices in the country; and giving major project status to new supply and low emissions technology projects.

Ms McCulloch said: “Australia’s natural gas is essential to ensuring a future energy system that is secure, reliable, affordable and central to reaching net zero.

“The significant contribution from the sector underpins state and federal investment in roads, schools and hospitals, allowed Australia to weather the economic downturn and will play a role in our economic success for decades to come.

“But the value of our energy resources and their contribution to the economy, jobs and net zero cannot be taken for granted and clear and stable policies are essential to provide industry with confidence to invest in the new energy supplies needed.

“The recent government price cap intervention – combined with the proposed Mandatory Code of Conduct – lets the government permanently determine gas prices.

“This – along with ongoing legal hurdles and delays for new oil and gas projects – create significant uncertainty and make investors nervous to allocate new capital to the sector and the economy.

“The government should take note of the lessons from the price cap implementation when considering permanent regulation of gas prices through a mandatory Code of Conduct. It would send a positive signal to investors to recommit to an open, market-based economy.”

APPEA is also calling for the government to keep the scope of the proposed Environmental Protection Agency consistent with its pre-election commitments, while removing existing duplication under the Environment Protection and Biodiversity Conservation Act, avoiding new duplication, and streamlining approvals.

Ms McCulloch said: “We want to improve environmental standards and build business certainty, avoiding added costs to project approvals and delays at a time when new supply is so important.”

The full suite of APPEA recommendations to be considered for the 2023-24 Federal Budget include:

Accelerating the pathway to net zero

Develop a national CCUS roadmap to:

• Provide clear CCUS policy direction and consistent regulatory frameworks. Support collaboration to ensure CCUS and carbon removal technologies are available across the economy.
• Identify and advance priority hubs for CCUS, low-carbon hydrogen and hard-to-abate industry.
• Demonstrate that Australia is “open for business” as a regional CO2 storage focal point.

Enabling investment for a secure, affordable energy future

• Let the market work to unlock new gas supply and drive down Australia’s energy prices.
• Support new oil and gas development through acreage releases, and encourage states to lift moratoriums on new exploration and development.
• Assign major project status for new energy supply and low emissions technology projects.
• Ensure a modern and competitive fiscal system that removes regulatory and investment barriers to efficient market operation.

Protecting and preserving Australia’s environment

• Remove existing duplication, avoid new duplication, and streamline EPBC Act approvals.
• Limit the scope of the independent Environmental Protection Agency consistent with the government’s pre-election commitment.
• Finalise the decommissioning legislative reform and financial assurance framework.

View the APPEA 2023-24 Federal Budget Submission here.

To view this media release as a PDF, please click here.