Bowen promotes need for more gas as Bass Strait falters

Australian Financial Review

Chris Bowen has emphatically declared Australia needs to develop new sources of natural gas as a critical part of the nation’s future energy mix, putting the climate change minister on a collision course with Greens, teals and anti-gas activists.

In a blunt speech on Friday in Perth that follows 18 months of mostly muted public support from Mr Bowen for additional supply, the climate change and energy minister said his 82 per cent renewable energy target by 2030 would increasingly need gas for the remaining 18 per cent.

Alongside the fuel’s flexibility as a source of firmed power generation, gas would continue to be a feedstock and energy source for industrial manufacturers, he said.

Adopting a line that was repeatedly used by his Coalition predecessor Angus Taylor, Mr Bowen also acknowledged the quickening depletion of the Bass Strait gas field meant “new sources are going to be required to underpin reliability and security”.

Global energy giant ExxonMobil said in March that it expected the number of wells it operated in the Bass Strait – one of the country’s biggest sources of domestic gas – would halve by the middle of next year.

Pressure is growing on the Albanese government to address community cost of living concerns, which polls suggest voters are regularly prioritising over accelerated climate policy.

A Grattan Institute submission to Labor’s Future Gas Strategy inquiry, obtained on Friday, warned there is “no plan to prevent future shortfalls” in gas as supply dips in key areas, led by Victoria.

“There will be an annual shortfall in a few years unless something significant is done, either on demand or supply. This should be a first-order priority for governments and industry,” wrote Grattan energy expert Tony Woods.

Gas is a flexible fuel necessary for peaking and firming as we undertake this transformation — Chris Bowen, Climate Change and Energy Minister

Mr Bowen’s words also coincided with a speech by West Australian Premier Roger Cook lauding the benefits of his state’s gas exports to north Asia’s efforts to decarbonise.

“Our Asian partners can’t decarbonise without us, and we shouldn’t decarbonise without them,” Mr Cook said.

Mr Bowen’s full-throated defence of gas puts him at odds with the Greens and independent MPs including Monique Ryan, Kylea Tink and Sophie Scamps, who are all calling for an end to new gas projects, particularly those involving fracking.

His speech also triggered memories of remarks he delivered in June 2022 to the National Press Club – at the height of last year’s energy crisis – when he said he made “no apologies” for insisting Australia hold back gas to support local users even as allies in Asia and Europe scrambled to find alternatives to Russian supplies.

Speaking at a WA energy transition summit hosted by the Committee for Economic Development of Australia, Mr Bowen said Labor was committed to “honouring our long-term contracts with key trading partner, continuing to be a trusted and reliable energy supplier”.

“Yes, our role as an energy supplier will transform as we realise our vision of becoming a renewable energy superpower, including in green hydrogen,” he said.

​“But we won’t be jeopardising our strong international energy partnerships, we won’t be creating sovereign risk.”

Labor was openly criticised in March for “quiet quitting” its gas export industry by the Japanese companies including Inpex, whose $60 billion Ichthys project in Darwin is Japan’s biggest foreign investment.

Since then, the Albanese government has watered down its $12 per gigajoule gas price cap by allowing exemptions for gas producers that pump additional supply into the domestic market.

“We are and always have been a reliable energy supplier – and that is what we will remain, even as that energy mix diversifies to meet global decarbonisation demands,” he said.

​Noting Labor’s 82 per cent renewable energy target by the end of this decade, Mr Bowen said that as ageing coal-fired power stations left the grid the remaining “18 per cent will increasingly be focussed on gas”.

“Gas is a flexible fuel necessary for peaking and firming as we undertake this transformation.

​“Unlike coal-fired power stations (or, for that matter, nuclear power stations), gas-fired power stations can be turned on and off at very short notice, making them vital for peaking and firming.”

Mr Bowen said Labor’s “code of conduct” reforms, which require gas exporters to satisfy domestic demand first, “supports investment certainty to deliver additional supply we need to ensure Australian users have access to the gas they need, while ensuring Australia meets its supply commitments to our trading partners”.

In a separate speech at the same forum, Resources Minister Madeleine King chided the gas industry for taking too long to develop major established gas fields such as Woodside’s Scarborough and Browse in WA, both of which now face concerted campaigns by anti-gas groups.

In recent days Labor faced criticism in the west over the pace of approvals. But Ms King said it was “unfair as well as untrue” to suggest delays in bringing Scarborough and Browse online “is the fault of governments alone”.

“Over the decades since the discoveries of those fields, corporate decisions to put off capital expenditure have occurred for various reasons, and in the meantime expectations of the community have changed”.

She added the government was now working to “ensure there is clarity for everyone - everyone – around the consultation requirements for all offshore projects”.

In his submission, Mr Woods noted that “Victoria is running out of gas and no solution has been identified”.

“Across Australia, the major barriers to new supply are uncertain demand and questionable field resources,” he wrote. “Traditional gas fields such as offshore have been highly exploited over many years, and new sources of gas have been only incremental in size.”