Australian carbon storage hub a $600 billion opportunity: Wood Mackenzie

CHRIS O’KEEFE: For our gas supplies in New South Wales, we produce something like 3 percent of all the gas we use in this State. We produce hardly any. Now you’ve got projects like Narrabri, which is sitting in regulatory purgatory. For some reason it can’t get approved by Governments or both persuasions. Yet we are now seeing forecasts from the ACCC, the Australian Competition and Consumer Commission, that New South Wales and Victoria will use more gas than we produce. So, we’ve got a problem here, don’t we? The Australian Energy Producers Chief Executive, Samantha McCulloch, is on the line. Samantha, G’day.

SAMANTHA MCCULLOCH: Hi Chris, thanks for having me.

CO: No, you’re very welcome. It is a little bit disappointing given we’ve got Narrabri ready to go. There is plenty of gas under our feet here in New South Wales, yet it just seems to be a reluctance from Government to produce it.

SM: Well, that’s right, Chris. I think what the ACCC report from today shows is that the industry is ensuring that we will have sufficient gas supply at least in the third quarter this year, but we’re also having warnings from the ACCC from the Australian Energy Market Operator that we will have structural shortfalls and gas supply as early as 2028.

We really need Government to be ensuring that we’ve got the incentives and the investment environment there to be able to explore for gas, develop that gas, and ensure reliable and affordable energy for the households and the businesses that will continue to rely on gas for decades to come.

CO: How much of that gas will be used in New South Wales if we do get Narrabri off the ground? And how can we ensure that it stays here to give NSW households cheap and reliable gas instead of it being sold offshore?

SM: Well, certainly Narrabri, it’s a really important project for NSW. It will supply the domestic market and it’s actually a key project identified by the Australian Energy Market Operator and others to really help to alleviate those shortfalls that are being projected. So, it’s important that that project can move forward its been stuck in regulatory purgatory, I think, for years and years now. It’s important that that project and others can move forward and ensure that reliable supply of gas. You know, the situation we have is that, you know, a lot of the domestic gas traditionally has come from Victoria.

For those existing fields, particularly in the Bass Strait, they’re in the sort of decline phase now. Victoria’s gas supply will almost halve between now and 2028. And we haven’t seen the new supply able to be developed to replace that. That’s why we’re continuing to see, you know, Queensland really doing the heavy lifting, having to send the gas south to keep the lights on, as you said, in Victoria and New South Wales.

CO: Do you think that it’s because gas is demonised as a fuel source?

SM: Look, there’s certainly been efforts to demonize gas as a fuel source, but the fact is gas is going to be essential for our transition to net zero. It’s essential as we seek to phase out coal and deploy more renewable energy particularly in the power system. But gas today provides around 42 percent of the energy needed by our manufacturing sector and that can’t be replaced or electrified easily. So, we know gas is going to be really key to their transition and we need to be investing in new gas supply to ensure that we can have that affordable and reliable energy for those households for the manufacturing.

CO: Well, Samantha, when you hear Chris Bowen admit on this program that gas will be part of our energy mix in this country, Chris Bowen of all people, he admits we will be burning gas for a long time in this country, you know that regardless of who demonizes it, it is here to stay. I appreciate you coming on. Thank you so much.

SM: Thanks so much, Chris.

CO: And if it’s here to stay, we need to produce something, especially right here in New South Wales.

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