Australian gov’t urged to focus on boosting new gas supply and emissions reductions

The Australian Petroleum Production & Exploration Association (APPEA) has called on the Federal Government to consider adding investment in new gas supply and emissions reduction measures in the 2023-24 Federal Budget, as well as to set up a national carbon capture utilization and storage (CCUS) roadmap.

APPEA said the oil and gas sector had never been more important to Australia’s economic and cleaner energy future and investment in new gas supply and emissions reduction measures would put sustained downward pressure on gas prices, help deliver energy security, and fast-track the path to net zero.

The association is calling for a national CCUS roadmap to provide clear policy direction and consistent regulatory frameworks, support collaboration to ensure CCUS and carbon removal technologies are available across the economy, identify and advance priority hubs for CCUS, low-carbon hydrogen and hard-to-abate industry, and demonstrate that Australia is “open for business” as a regional CO2 storage focal point.

“Capturing and permanently storing emissions from industrial facilities, including hydrogen production, and directly from the atmosphere makes the most of our world-class geological resources and is critical to reaching net zero,” said APPEA Chief Executive Samantha McCulloch.

APPEA is urging the government to encourage investment in new gas supply, with key measures including letting the market work to bring down prices, progressing new acreage releases, encouraging New South Wales and Victoria to lift moratoriums contributing to the highest gas prices, giving major project status to new supply and low emissions technology projects, and ensuring a modern and competitive fiscal system that removes regulatory and investment barriers.

“The recent government price cap intervention – combined with the proposed Mandatory Code of Conduct – lets the government permanently determine gas prices. This – along with ongoing legal hurdles and delays for new oil and gas projects – creates significant uncertainty and make investors nervous to allocate new capital to the sector and the economy,” said McCulloch.

“The government should take note of the lessons from the price cap implementation when considering permanent regulation of gas prices through a mandatory Code of Conduct. It would send a positive signal to investors to recommit to an open, market-based economy.”

APPEA is also calling on the government to keep the scope of the proposed Environmental Protection Agency consistent with its pre-election commitments while removing existing duplication under the Environment Protection and Biodiversity Conservation Act, avoiding new duplication, and streamlining approvals.

This includes limiting the scope of the independent agency consistent with the government’s pre-election commitment and finalizing the decommissioning legislative reform and financial assurance framework.

“Australia’s natural gas is essential to ensuring a future energy system that is secure, reliable, affordable and central to reaching net zero,” McCulloch said. “But the value of our energy resources and their contribution to the economy, jobs and net zero cannot be taken for granted and clear and stable policies are essential to provide industry with confidence to invest in the new energy supplies needed.”