The argument often made by producers – and by the Rudd-Gillard Labor governments at the time when exports of liquefied natural gas took off – that a reservation system would stymie investment is not borne out by the evidence from Western Australia. A reservation was legislated there in 2006 (in June’s Perth press conference,Albanese said that legislation “showed good vision”) and many billions of dollars in investment have followed.
Whilerecent campaigns by independent senators David Pocock and Zali Steggall,the Australia Institute and the influencer Konrad Benjamin,aka Punter’s Politics,may have raised the immediate political temperature around gas profits and taxation,producers and the government have been on notice regarding supply for many years. The problem of meeting east coast demand as the Bass Strait fieldsnear the end of their life,combined with the priority given to exports,was brought into sharp focus by the 2022 energy crisis that followed Russia’s invasion of Ukraine,which prompted dramatic electricity price hikes on our shores.
The reservation is a worthwhile short-term measure to ensure the resilience of our overall energy supply,though how the firms at the heart of gas exploration in this country will meet the new requirements and what storage will look like are not yet clear. Our current fixation with the Strait of Hormuz,like the 2022 shock,is a reminder of our continued vulnerability to interruptions of the global trade in fossil fuels.
In this context,true national resilience – and even energy independence – lies in accelerating our progress towards renewable sources of energy,which are far less prone to disruption.
The government has made it clear that gas has a major role to play in the transition. “You can’t have renewables unless you have firming capacity – simple as that,” was howthe re-elected Albanese put it a year ago. But we are entitled to ask whether the transition is proceeding quickly enough,particularly in the fields of transport,heavy industry and agriculture.
We can take heart at the news from our electricity grid,where the last two quarters in a row have seen renewables and batteries supplying roughly half the nation’s needs and successfully pushing down prices. As our political and international editorPeter Hartcher wrote recently:“That doesn’t make gas obsolete. Heavy industry depends on gas,and 5 million homes use it too. But it does make it a little less central;we have a glimpse of the future.”
It’s a future we must develop a clearer and more defined picture of. The government’s east coast gas reservation policy may help create calmer waters in the meantime,but we shouldn’t confuse such stops for fuel,however necessary now,with our ultimate destination.
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