Australia’s Government Defends Natural Gas Developments

Days before presenting a bill to control emissions from large polluters, Australia’s government said that natural gas should continue to play a key role in energy supply in the country, Australian Minister for Climate Change and Energy, Chris Bowen, said.

“Some call for an immediate ban on future gas. Or the cancelling of long-term contracts with key trading partners. These options are both irresponsible and not countenanced by the Government,” Bowen said in a speech on Monday.  

“These are the same trading partners we will need to help drive the energy transformation – the sovereign risk created would be untenable,” the minister added.  

Australia’s Labor government, in office for 10 months now, is looking to strengthen the country’s climate pledges, but it isn’t giving up on natural gas developments.

The government plans for 82% of the electricity mix to be renewable by 2030, but gas will be needed for the remainder of electricity supply as a flexible fuel for peaking generation, Bowen said in the speech. 

“This is before we get to the needs of industrial manufacturers for gas as feedstock and direct energy. And I’m an optimist about the role for biofuels and green hydrogen in that task, but we’re a way off yet,” he added.

“Electrification will ramp up. Renewable adoption will grow. But there will still be a need for gas as a supporting fuel, especially for industrial and commercial users.”

Australia’s energy market have seen changes over the past year after the Russian invasion of Ukraine roiled global markets and sent gas prices skyrocketing.

Last month, the Federal Court of Australia quashed a decision by former Prime Minister Scott Morrison to block a natural gas exploration license offshore Australia’s east coast, ruling that the refusal to allow exploration was biased. 

However, Australia’s main energy trade partners and allies are increasingly concerned about the latest proposals of the Labor government for energy market interventions in Australia, which could undermine new investment plans in Australian natural gas and other energy resources. 

By Tsvetana Paraskova for Oilprice.com

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