Speech: Samantha McCulloch addresses the 2025 Australian Domestic Gas Outlook Conference

‘Examining the effectiveness of the Future Gas Strategy, one year on’

Australian Energy Producers Chief Executive Samantha McCulloch

Australian Domestic Gas Outlook (ADGO) Conference, Sydney

I would like to begin by acknowledging the traditional owners of the land on which we are meeting, the Gadigal People, and I pay my respect to their Elders past, present and emerging.

When I submitted my presentation topic to the conference organisers in September, I knew it would be difficult to predict where Australia’s gas and energy policy debate would be in six months’ time.

In an election campaign, a lot can change in six days.

This is the nature of politics and energy policy, which are inexorably linked in Australia. Especially during an election.

With the election starting gun fired less than a week ago, natural gas is centre stage of the energy and political debate.

I see this as a positive, and as an opportunity for Australia.  

We should welcome a contest of ideas, of ambition, for delivering more reliable, affordable and cleaner energy for all Australians.

Because for too long we have seen a drift in gas and energy policy debate in Australia.

At the lack of recognition of the essential role of natural gas in Australia’s economic and energy security.

Australian gas producers have been calling for governments to act on the repeated warnings of impending gas shortfalls and the urgent for new gas supply.

We have long argued that ensuring Australia’s future gas supply should be a national priority.

Today, around the country, we are having that necessary conversation.

As we head towards the election, there is bipartisan recognition and support for the long-term role of natural gas in our economy.  

As we heard from Minister King this morning, the release of the Labor Government’s Future Gas Strategy last year was a milestone moment.

And Opposition Leader Peter Dutton’s announcement last week of the Coalition’s National Gas Plan, reinforced by Senator McDonald this morning, also marked a significant and largely welcome development in the national discourse.

Indeed, there is much in the Coalition’s gas plan that responds to what industry has been calling for:

• The need to increase gas production and supply to meet Australia’s long-term energy needs;
• Streamlining environmental approvals;
• Providing more certainty and protection from lawfare for critical energy projects;
• Support for pipeline and storage to address infrastructure constraints and to ensure we can get gas where it is needed, when it is needed as our energy system evolves.
• And today’s announcement that gas will be elevated to critical mineral status is further welcome news.

But the Coalition’s proposal to limit exports of uncontracted gas and force a short-term oversupply of the market risks undermining the case for investment in long-term, secure gas supply.

As we have seen over the past three years, major market interventions can have unintended consequences.

While we await further detail on the Coalition’s policy, we will continue to work with both major parties on sustainable solutions that promote a functioning, competitive and well supplied east coast gas market.

Because one thing we all agree on is that Australia needs more gas to meet our energy needs to 2050 and beyond.

Just over a year ago at this conference I said Australia needed to stop debating whether gas had a future in the net zero transition and address the real and pressing issues facing our energy sector today. 

We called for a national plan to address the looming gas supply crisis; 

To progress the essential gas projects that have been stuck in regulatory purgatory for years;

To fix the broken regulatory approval systems and provide certainty and stability to support investment in the next generation of gas supply.

12 months on, have we made meaningful progress?

Arguably the most significant development was on the 9^th of May last year, Resources Minister Madeleine King released the Australian Government’s Future Gas Strategy.

I commend Minister King for her leadership on getting her Cabinet colleagues to support this important document.

It is fair to say that prior to the Strategy’s release there was uncertainty and unease on where the Albanese Government stood on the role of natural gas in its energy policy.

This was, after all, a new government that early on made some major policy changes that sent shockwaves through the Australian gas market and in Japan and Korea.

The release of the Future Gas Strategy, following extensive public consultation, was a necessary and important line in the sand.

The Strategy stated unequivocally that Australia will need natural gas through to 2050 and beyond, and that Australia’s transition to net zero will require continued investment in gas exploration and development.

It also committed that Australia would remain a reliable and trusted LNG trade and investment partner.

The Strategy was, on the whole, well received by gas producers, users and our trade partners.

To those in the sector, it might have stated the obvious, but these were important principles that needed to be articulated by the Australian Government.  

I observed at the time that the Strategy needed to provide clear direction on national energy policy and be backed by  tangible actions in order to achieve its objectives.

And that for the Strategy to deliver on its potential it would require a whole-of-government response and national leadership to bring state governments on board.

This remains true today.

The Future Gas Strategy was never going to silence the vocal minority that argue for closing down gas production in Australia overnight.

But it has provided the foundation on which to build an enduring, bipartisan gas policy.

However, much of the hard work for the Government to deliver on the Strategy lies ahead.

A policy document alone cannot change public sentiment, or build industry trust and confidence.

This takes time, and runs on the board. As we have heard a lot already this election campaign, governments are ultimately judged on their record, not just what they say. 

While the Strategy outlined six principles and some immediate actions, it was light-on in detail of tangible reforms.

In particular, the principle that new sources of gas supply will be needed to meet Australia’s long-term energy needs was welcome, but to date there has been little in the way of concrete actions to support this investment. 

The fact is that investor confidence is undermined every time there is intervention in the market, moving the goal posts for the industry.

It is eroded by the protracted environmental approvals and delays from activist lawfare, and the lack of action to address them.

Investor confidence takes a hit every time the gas industry is used as a bargaining chip in a deal with the Greens in the Senate.

It takes a hit when the North West Shelf extension is forced to undergo six years of state regulatory approvals and now faces further delays by the Commonwealth.

Investment confidence in Australia’s gas industry also takes a hit when we no longer have annual acreage releases, and the long-overdue awarding of offshore acreage is linked to restrictions on the use of seismic surveys.

The sharp decline in exploration activity, which has fallen by 74% in annual terms over the last decade, is the canary in the coalmine.

It dictates the gas supply pipeline for the next 10 to 20 years. At this rate, it’s at risk of running empty.

But there are green shoots.  

This includes the recent supply commitments and new project announcements by the Gippsland Basin Joint Venture, by Amplitude Energy, and by 3D Energi and ConocoPhillips – some of which we heard about yesterday.

It also includes a more balanced discussion on the role of gas. As was pointed out yesterday, we are no longer debating if gas should have a role in the transition, but what that role looks like.

The Future Gas Strategy made clear that Australia will need more gas exploration and development in the transition to a net zero economy by 2050.

This would have been news to many Australians.

It’s why Australian Energy Producers has, over the last 18 months, had a national advertising campaign backed by our members to raise awareness in the community about the critical role of gas in our electricity mix; in powering manufacturing; and our industry’s contribution to the economy and jobs.

The reality is that Australia runs on natural gas.  

Natural gas meets around 26% of Australia’s energy needs – that’s three times the share of renewables.

It’s fuelling industry, with almost 40% of the energy used by manufacturing coming from gas.

More than 5 million homes are connected to the gas network. In Victoria it’s four in every five.

And natural gas is critical to the national economy. Australia’s natural gas industry contributes $105 billion a year to our economy and supports 215,000 jobs.

Last financial year the industry paid $17 billion in taxes and royalties to state and federal governments, helping pay for schools, hospitals and roads.

The Australian Taxation Office confirms that oil and gas companies are now among Australia’s biggest taxpayers.  

In the discussion around gas exports, we should not miss that a large part of this economic contribution, the billions of dollars in taxes and royalties delivered to the economy each year, is due to our world-leading export industry.

And this is a long-term economic and strategic opportunity for Australia.

We are on the doorstep of the fastest growing region for energy demand in the world, with LNG demand set to increase as much as 8-fold by 2050, according to International Energy Agency scenarios.

But whether Australia grasps this opportunity, or whether we cede this to the United States, to Qatar and others, remains to be seen.

Closer to home, we know Australia will need considerably more gas to keep the lights on.  

As AEMO Chief Executive Daniel Westerman puts it, “Flexible gas-powered generation will remain the ultimate backstop in a high-renewable power system.” 

AEMO’s Integrated Systems Plan sees the gas supply needed for power generation increasing by 170% of today’s levels over the next two decades.

AEMO analysis also shows gas demand in industry and manufacturing increases when emissions reductions ambitions increase.

Which is why calls to ban new gas investment are so profoundly misguided.

Last year we commissioned a study by EnergyQuest to  model the impact of the Australian Greens’ policy of “no new investment in gas”. The results will not be a surprise to anyone in this room.

It found that within a few years there would be widespread and devastating shocks across the economy.

• Gas for east coast electricity would run out by 2029
• Manufacturers in the southeast would face closure within a decade
• In WA, there’d be no gas for electricity or mining by the mid-2030s
• And, perversely, it would result in higher emissions as coal and diesel replace gas in power generation.

This is the reality of the Greens gas policy.

The fact is Australia needs more gas, not less.

AEMO’s recent Gas Statement of Opportunities forecast that we have a few more years to plan for – and avert – gas shortfalls in the southern states.

This is good news, but we have been here before.

AEMO and the ACCC have been warning of potential gas shortfalls in eastern Australia for over a decade.

They’ve repeatedly called for the removal of regulatory barriers to new supply, but their calls have fallen on the deaf ears of successive state and federal governments.

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.  

The Victorian Government has been so successful in blocking gas development that Victorians now face the prospect of relying on imported gas.

It is an absurd situation for a gas-rich nation. And a spectacular policy failure.

LNG import terminals should not be needed as a long-term solution.

The ACCC has warned that importing LNG could push up gas prices and disincentivise much-needed investment in local gas projects. 

The priority must be on providing reliable and affordable gas sourced close to where it is needed.   

We know that the gas is there.

And as we heard from several speakers yesterday, Australia has enough undeveloped gas resources to avoid the worst of the forecast shortfalls, to meet our long-term energy needs and to continue to supply LNG to our trade partners.   

What is needed is national leadership to address a complex problem with a considered policy response.

Irrespective of how we got here, industry recognises that east coast gas shortfalls cannot be allowed to materialise.

Ensuring Australian homes and businesses have reliable and affordable gas supply is a non-negotiable.

Just last week, we saw Queensland LNG producers again stepping up with further supply commitments to the domestic market to improve on the ACCC’s forecast for the third quarter.

This quarter-to-quarter approach is far from ideal.

But without actions to increase new gas production in the southern states, it will continue to fall to Queensland to do the heavy lifting and we will continue to lurch from one ACCC report to the next.

We heard repeatedly yesterday, and indeed at almost every ADGO conference, that the only sustainable solution to put downward pressure on prices is to increase supply.

More supply means more investment, and policy and market settings that send the right signal for that investment.

That’s why it is critical that short term solutions to east coast supply pressures do not ultimately undermine the long-term investments needed for new gas supply.

We have already seen that retrospective market interventions and blunt instruments do enormous damage to investment confidence, trade relations and market operations. We cannot repeat these mistakes.

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

Our Australian Energy Producers’ federal election platform highlights four priorities to achieving this:

1. Boosting Australian gas supply to ease cost of living pressures by streamlining environmental approvals, fast-tracking development ready gas projects that could unlock 440 PJs of east coast gas supply, resuming annual acreage releases, and stopping lawfare by defunding the EDO.
2. Restoring Australia’s global competitiveness for investment by providing a stable, efficient and competitive regulatory environment.
3. Delivering real emissions reductions with gas and carbon capture, utilisation and storage by through a national CCUS roadmap, and including gas in the Capacity Investment Scheme, an
4. Remaining a reliable LNG trade partner and capturing the enormous economic and strategic opportunities of growing LNG demand in our region.

With the federal election campaign now well underway, the clear bipartisan support and recognition of the importance of gas that we heard from Minister King and Senator McDonald is welcome.

This provides an encouraging foundation for delivering the whole-of government reforms needed to drive the next wave of investment and opportunity for Australian gas and Australian industry.

 It will require collaboration. Consultation. And bipartisanship.

It must not be dictated by the Greens and some on the crossbench that do not have Australia’s best interests at heart.

Because Australia’s economic and energy should always be a national priority that is above politics.

ENDS