23 Apr 2017
Claims that Queensland’s LNG plants in Gladstone are nothing more than a giant straw, sucking out all of Australia’s gas and sending it overseas are uninformed and misleading.
The reality is Queensland’s gas-producing regions are contributing gas to the domestic market. They are fuelling industry and keeping the lights on in households across the eastern states.
For example, Shell’s QGC business will sell more than 75 petajoules net of domestic gas purchases into the domestic market this year, which represents more than 10 per cent of east coast demand and 40 per cent of Queensland’s demand.
Queensland’s – particularly regional Queensland’s contribution to the energy market should be celebrated, not derided.
Queensland’s gas industry is nothing short of a success story.
Where else has $70 billion of projects – the size, scale and community benefit of which dwarf anything that came before them – spring from the ground in less than 10 years.
The numbers are revealing. In 2015-16 alone, Queensland’s gas industry directly and indirectly supported almost 40,000 jobs, and provided more than $12 billion in total value-added activities in the state through direct, indirect and consumption-based activities.
Yet critics would have you believe that Queensland is to blame for gas shortages.
However, the real blame lies at the feet of the same southern politicians who now attack the industry.
NSW and Victoria have imposed serious barriers to gas operations in their states, yet they still expect the industry to supply their markets.
There is plenty of undeveloped gas in eastern Australia. The question is whether the industry will be allowed to develop it.
For example, if Santos had been able to develop the Narrabri Gas Project as it intended back in 2010-11, there would be no talk of east coast gas shortages today.
In Victoria the Government, supported by the Opposition, has effectively banned all forms of gas extraction in the state. Yet this same state’s industrial base is crying out for more gas.
Queensland has more promising gas fields that can be developed in the Galilee and Bowen basins. No doubt, the Sunshine State will be called on to do more heavy lifting going forward.
Unfortunately, there is a real risk that this gas may be stranded because of a lack of pipeline infrastructure.
Queensland’s Natural Resources and Mines Minister, Dr Anthony Lynham, has made a sensible and constructive contribution on how to get this gas out of the ground.
He suggests that the states and the Commonwealth work together more closely to help develop new gas pipelines. Once again, Queensland’s political leaders are taking the lead in reaching out across state and party divides for the greater good.
Dr Lynham’s call for the Commonwealth to develop it itself has merit and is worth considering. After all, government investment and co-investment in productive infrastructure is not a new thing.
For example, all levels of government are far and away the largest investors in the development of road networks because they know that having efficient roads not only provides a public good but also leads to productivity gains in the broader economy.
Government investment in pipeline infrastructure can also deliver a public good. It would bring new energy supplies to market, support jobs and help put downward pressure on the cost of living.
But even as Queensland powers ahead, many southern politicians still refuse to take a responsible approach to Australia’s gas supply issues.
Queensland can’t do all the heavy lifting. It’s time for NSW and Victoria to step on the gas too.
This blog post was first published in The Sunday Mail on 23 April.