Transcript: Samantha McCulloch on 5AA Mornings with Matthew Pantelis – Report on new investment on gas supply

Australian Energy Producers Chief Executive Samantha McCulloch on 5AA with Matthew Pantelis discussing the impact of the Greens reckless policy to ban new investment in gas supply.

Matthew Pantelis: Let’s talk about gas. Because, as you’d be aware, the greens and one of those texters there covering the point off. Want exploration for gas and mining for gas to end. And what does that mean in the future, will Australian energy producers say expect lights out, manufacturing to close, higher emissions as we rely on coal. They call it reckless. Samantha McCulloch is Chief Executive of Australian Energy Producers. Samantha, good morning.

Samantha McCulloch: Good morning. Matthew, thanks for having me.

MP: So, you’ve prepared an independent report, or had one prepared for you by EnergyQuest, talk us through the summary of that.

SM: Well, indeed, we’ve all had the slogans from the greens and other groups calling for no new gas. And what EnergyQuest have done now is actually model the consequences of that, and they’ve confirmed that, of course, this would trigger major economic disruptions for Australia. But the fact is that today, gas is playing such a crucial role in our energy mix. It’s a reliable partner to back up renewables in power generation. It’s a major source of energy for our manufacturing sector. And EnergyQuest found, if we ban investment in supply, well, we run out of gas, the power generation within around five years in the southern states, including South Australia, and industrial users would find themselves without gas within a decade. And that would be, you know, force many manufacturers to close, but would have devastating consequences for jobs, for the economy, and ironically, for the Greens it also would lead to an increase in emissions, according to EnergyQuest, because we’d have coal and diesel stepping in to replace gas in power generation.

MP: That’s crazy, just absolutely crazy. In the meantime, though, Samantha, and it drives me, and I know listeners to despair. We have so much gas in this country. We’re told we shouldn’t be exploring for it. What we do produce goes off overseas, and our bills here come in at around $500 over winter, because, well, there’s just not enough of it, and it’s in demand, and we pay for the nose, but something we have in great abundance, and state and federal government sit on their hands and say nothing to see here. It’s just crazy.

SM: Matthew, you’re correct that Australia is very fortunate. We have abundant natural gas resources. We have enough to export overseas and to support the domestic market, but the fact is that we haven’t been investing in the exploration and the development of gas resources where they’re needed, and particularly in states like Victoria, where there’s very high demand. And you know, that delay in investment and delay in developing our gas resources in those states is contributing to these shortfalls that are now being projected. And I want to highlight that this is not a question of exports or the domestic market. Now the gas industry is firmly committed to ensuring supply to the domestic market, but the fact is that we don’t have the infrastructure today to get the gas from Queensland, which has built a thriving export industry, to Victoria in the quantities, when it’s needed, where it’s needed. So it’s actually not a question, that stopping exports out of Queensland would solve the problem in Victoria. It wouldn’t. We need to be investing in the infrastructure and the exploration and the new supply close to those sources of demand.

MP: It is problems at our end with our phone system. But we were, we were talking about the fact, in fact, I was asking you the Victorian Government would be in no hurry, given their policies, to build a pipeline to Queensland.

SM: Thanks, Matt. Look, there are pipelines. There is an extensive network of gas pipelines along the east coast, but we need to be investing in the expansion of those networks to be able to move the gas around to where it’s needed. That is problematic at the moment. You know, there are a lot of challenges and a lot of roadblocks in the past to the investment that’s needed, whether that’s government policy, whether that’s interventions, whether it’s approval processes that just take far too long, or the increasing anti gas activism and lawfare as well that’s really slowing down the investment in the infrastructure and the new gas supply that’s needed, and that’s going to be the key to actually putting downward pressure on prices, really ensuring that we’ve got plenty of affordable, reliable energy for Australian households and businesses.

MP: Exploration still a thing? Are government still going hard on looking for gas?

SM: The fact is that our exploration figures are the lowest they’ve ever been. We’ve seen a decline of around 80% in exploration expenditure in the last decade or so. We’ve seen at a federal government level, delays in releasing new acreage for exploration. We welcomed some acreage release just a month or so ago, but we’ve been waiting two or three years for that release, which you know used to be an annual process. Now there are delays, of course, in sort of investigating and exploring and developing gas, so we need to get moving now to ensure that we do have plenty of gas for Australian businesses in the coming years.

MP: Yeah, that’s the key thing here in South Australia. How are we placed? We regularly get Extinction Rebellion protesting at Santos themed events and at Santos themselves, trying to make the point they think we’ve got enough gas and we don’t need any more exploration. I’m hoping that, in fact, I don’t think Santos will be too concerned about the protests that occur. They simply want to get on with it.

SM: Well, I think South Australia should be really proud of the gas industry. It’s built, I mean, the Moomba project, which is now going to be host to one of the world’s largest carbon storage projects. It’s really testament to the benefits that the gas industry can bring to the state. And of course, the gas supply that you have there in South Australia has supported record levels of renewables in the power system. So you need gas there to back up renewables. So we do need to continue to invest in that new supply, though. So continuous investment is key to maintaining supply to meet existing demand. But we also know that demand is growing in key areas, and that includes in power generation, as we phase out coal and to deploy more renewables in power, but also manufacturing, if we want to manufacture critical minerals, if we want to be a country that’s making products that we rely on every day, like bricks and aluminium and glass, that all requires gas as an input. So it’s really key that we continue to invest in that new supply. And it just goes to how irresponsible calls are from the Greens and other groups to ban investment in new supply.

MP: Absolutely. And you’ll be heartened by the stand of the SA government, at least, and probably others too, that say, well, this is a key part of the future, and the transition to renewables is gas, and we need it, and we need to keep exploring for it and getting on with that side of it. Is there any way we can get prices cheaper? Do we just need more of it to bring down prices and have a new policy in place that says locals, first, imports second.

SM: The key is really getting that supply and getting it near to where that demand is. So the more supply we have, then the cheaper the gas will be. So we need to be investing in the new supply. A lot of the challenges around the market and the higher prices that we’ve seen in recent years is because of this supply-demand imbalance. Have really got to get on with the task of investment, investing in that new supply.

MP: Indeed. All right. Samantha McCulloch, thank you so much for your time. Thanks very much. Chief Executive Australian Energy producers on the Greens call, which they say is reckless, it is, and it would have, as they say, devastating impact on Australia, on the country. We’d run out of gas in as little as two years. Blackouts would loom for millions of homes and businesses, manufacturers closing, and ultimately, long term Queensland export contracts being