Opinion article by Samantha McCulloch in News Corp publications on ensuring Australians continue to have reliable and affordable gas

As Australia grapples with an uncertain gas supply outlook, rising energy prices and increasingly fragile energy systems, we only need to look across the Tasman Sea for a glimpse of what a future with no new gas development would mean for Australia.

New Zealand, which seven years ago banned new gas exploration in a short-sighted bid to tackle climate change, is now scrambling to avert an energy crisis of its own making – soaring gas and electricity prices, structural gas shortfalls, and the prospect of importing gas for the first time.

This should be a cautionary tale for Australia. However, we are unwittingly heading down the same path. LNG imports – once considered an impossibility for a gas-rich country like Australia – are now likely to be needed in Victoria and NSW within a few years.

The temptation for governments and political parties after years of ignoring the warning signs is to reach for short-term fixes – especially in an election campaign.

Yet as we have seen in the past two years, retrospective market interventions and blunt instruments not only fail to address the problem, they can also do enormous damage to investment confidence, trade relations and market operations. 

Ensuring Australians continue to have reliable and affordable gas should be a national priority. The current national focus on the need for new gas supply is welcome and long overdue, but it requires a considered, consultative and bipartisan response. Australia cannot afford to repeat past mistakes.

Much like New Zealand, Australia’s predicament is largely self-inflicted, and Victoria is ground zero for this gas policy negligence. The state that once produced most of eastern Australia’s natural gas supply has spent years demonising gas and actively discouraging new gas developments needed to replace the retiring Bass Strait fields.

The scale and speed with which gas shortfalls will hit Victoria means there are no easy fixes. That includes policies to force more gas from Queensland, because there simply isn’t sufficient pipeline capacity to move Queensland gas south in the quantities needed, when it is needed.

This election is an opportunity for major parties to unlock the economic, energy security and emissions reduction potential of Australia’s abundant gas resources.

As a priority, the next Federal Government must fix the broken regulatory approvals system that is delaying new gas supply projects and damaging Australia’s international competitiveness. It must also pressure Victoria and NSW to pull their weight and develop their own gas resources.

The fact is that Australia has enough undeveloped gas to meet our long-term energy needs and continue to supply LNG to our trade partners, but only if state and federal governments act now.

The Australian Energy Market Operator has confirmed that by expediting planned gas projects we could secure enough gas to defer structural shortfalls by five years to 2034.

The implications of continued policy negligence and inaction are profound for our economy and energy security. Australia runs on natural gas. The industry contributes $105 billion to the Australian economy each year and supports 215,000 jobs – and that’s not including the hundreds of thousands of manufacturing jobs that rely on gas. 

Australia will also need considerably more gas to back up renewables for reliable power as coal is phased out.

You would think, then, that policy makers would do everything they can to ensure Australians continue to have reliable and affordable gas. But as the New Zealand experience shows, politics and ideology can get in the way of the national interest.

Regardless of the election result, the next Federal Government will need to put energy security ahead of politics so that Australia does not become the next case study of a resources-rich country that squandered its energy edge.