In,the federal government secured the minor party’s support for new vehicle pollution limits and changes to the tax regime for oil and gas projects in exchange for a pledge to delay reforms aimed at streamlining the offshore approval regime,which the industry says is “broken”.
Woodside’s Meg O’Neill says more investment in oil and gas is needed to meet future demand.Tony McDonough
O’Neill,who also chairs the gas industry group Australian Energy Producers,welcomed the government’s resolution of the tax changes without having to give in to pressure from the Greens and crossbench for more aggressive increases.
“This helps us make future investment decisions,” she says in a speech to be delivered at the group’s annual conference in Perth.
However,she adds,the fact that it came at the expense of addressing the ambiguity in the consultation process for offshore approvals would make it more challenging for the industry to progress projects vital to Australia’s ongoing energy security.
“Leaving this issue unresolved makes the timely development of new energy supply more difficult,” O’Neill says.
“The industry stands ready to work with the government to progress these necessary reforms as soon as possible.”
Australia’s enduring reliance on gas – a major source of greenhouse gas emissions that are dangerously heating the planet – has come into sharper focus as governments step up commitments to decarbonise. Policies banning gas hook-ups in new residential buildings and encouraging people to switch gas appliances to electric alternatives are successfully driving down long-term gas demand forecasts.
However,the shift is not happening fast enough to avert the threat of shortfalls for a fuel that remains widely used in heating,cooking,power and manufacturing. The speed and scale of declining output from ExxonMobil and Woodside’s 50-year-old gas assets in the Bass Strait,without enough new projects to replace them,have sparked fresh alerts that southern states,including Victoria and NSW,could face winter gas shortfalls by next year and annual shortages by 2028.
‘Leaving this issue unresolved makes the timely development of new energy supply more difficult.’
Meg O’Neill,Woodside chief executive
The Albanese government’s “future gas strategy,” released by Resources Minister Madeleine King this month,endorses energy market operator warnings that new supplies are necessary to avoid shortfalls. It also recognises that gas will play a key role in the shift to net zero emissions because it generates fewer emissions than coal but can still be relied upon to back up weather-reliant renewables.
“These outcomes would likely increase volatility and drive up prices for households and businesses already battling inflationary and cost-of-living pressures,” she says. “So I am pleased the government is talking about solutions.”
However,plans to develop new gas fields across Australia are often struggling to proceed due to what developers argue is ambiguity in the rules governing community consultation requirements,leaving them exposed to legal action from environmental groups and traditional owners.
Industry leaders decried the system as “broken” and vulnerable to exploitation by activists intent on halting new fossil fuel supplies. Others,however,see the slowdown in new projects following years of uninterrupted growth of the emissions-intensive industry as a positive and maintain that oil and gas developments,by their very nature,come with grave environmental,cultural and economic risks,meaning robust consultation requirements are vital.
Labor has said it remains committed to developing reforms to streamline offshore approval requirements and will bring them back to parliament at a later date,which is not expected to fall before the next election due by May next year.
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