New east coast gas on backburner as costly winter looms
The "gold-plated, multinational megaphone" of gas producers won't make the federal government ease off on accelerating renewable energy investments or industry code.
Federal Industry Minister Ed Husic said there is clearly a role for gas in the energy transition, with many industries still relying on the fossil fuel.
New supply from Narrabri in NSW and the Beetaloo gas field southeast of Darwin will meet domestic needs while renewable energy generation gets built, he said on Wednesday.
"I know that that's not everyone's cup of tea," he told RN.
Mr Husic said the impact of high gas prices is felt by manufacturers who represent half the domestic demand for gas industrial users, tied to a lot of jobs in outer suburbs and regional Australia.
Price caps and the prospect of a new industry code for fairer supply have gas companies and investors concerned about what comes next, an industry conference has been told.
When the code - and what future market intervention will look like - becomes clear, Woodside hopes to have more confidence to make longer-term investments, chief executive Meg O'Neill said.
"When there's uncertainty around the market in which we're investing, it gives us pause," she said.
Mr Husic sees no barriers to investment with gas prices where they are.
"The gas producers, every time they use their very gold plated, multinational megaphone, they seem to get a lot of attention ... claiming that life's really tough for them," he said.
"We just will not be spooked. We do need to get the balance right."
But uncertainty clouds the Petroleum Resource Rent Tax (PRRT) changes for offshore gas in last week's budget, with the opposition yet to declare their support.
The industry would prefer a bipartisan approach to reaping another $2.4 billion in PRRT revenue over the next four years, rather than a harsher regime that may result from negotiations with the Greens and crossbenchers.
Shadow treasurer Angus Taylor told the National Press Club in his budget reply speech on Wednesday the coalition would "work our way through it systematically".
Australia needs gas to bring down emissions and deliver affordable energy, and will for a number of years yet, Mr Taylor said.
"We want a gas industry that's successful in this country, not one that's dying a death by a thousand cuts," he said.
Woodside Energy boss Meg O'Neill said recent "modifications" to price caps have been encouraging but the supply problem has not been solved.
"The challenging reality is that the Bass Strait asset, which we have a 50 per cent stake in, or mature assets that are in decline, they're going to provide year-on-year less gas into the market," she said.
Ms O'Neill said more gas would be needed as coal-fired power stations shut down.
Generous tax credits linked to carbon capture in the United States could also see Australia miss out on investment dollars.
Critics dismiss carbon capture as a licence to ramp up emissions and say it's too costly compared to other methods.
Chevron's Gorgon Gas Plant in WA, the world's biggest, is a "big, expensive failure", according to the Clean Energy Council.
The next major storage project is Moomba, a joint venture between Santos and Beach Energy.
"It works", Ms O'Neill said of the much-maligned technology.
Under the International Energy Agency's net zero by 2050 scenario, over a quarter of hydrogen will be derived from gas using carbon capture utilisation and storage (CCUS).
"Our trading partners who purchase our LNG today are likely to be the same partners who will buy our hydrogen tomorrow," Australian Petroleum Production and Exploration Association CEO Samantha McCulloch said.