In a world of turmoil, Labor reassures that gas exports are a priority
Resources Minister Madeleine King says fresh outbreaks of conflict overseas underline Australia’s importance as a trusted supplier of gas, as she pushed back on industry concerns that the Albanese government was more focused on destroying demand for gas than stoking investment in new supply.
Geopolitical tensions in the Middle East drove oil prices 4 per cent higher on Monday, putting further pressure on prices for gas, which is typically sold on long-term contracts that are pegged to the oil price.
Resources Minister Madeleine King says world events increase Australia’s importance as a trusted energy partner. Dion Georgopoulos
Santos chief executive Kevin Gallagher said the past two days of violence in Israel and the Gaza Strip should not alone have a major impact on commodity prices, but he said there was a risk to prices if tensions disrupted shipping lanes in the Suez Canal.
The flare up in the Middle East comes after Ms King and Energy Minister Chris Bowen spent the weekend with major Japanese gas customers in Melbourne and assured them Australia would be a reliable supplier.
Ms King will use Tuesday’s second day of The Australian Financial Review Energy & Climate Summit to soothe industry concerns that the government’s Future Gas Strategy is focused on destroying demand for gas at a faster rate than supply falls. These concerns were prompted by the release of a discussion paper linked to the strategy.
“Despite some reports, the discussion paper is wholly cognisant of the need for Australia to consider its trading relationships as we develop a future gas strategy,” she will tell the Summit.
“We must get the balance between gas demand and supply right.”
Ms King will say “recent global events” have increased the importance of Australia as a trusted energy partner and note that the International Energy Agency expects continued investment in gas will be needed to meet demand.
“This is why the Australian government is developing the future gas strategy to understand the future demand for energy, particularly gas and balance the needs of consumers, industry and future generations through the transition under way within our region.”
Labor’s nuanced narrative on gas stands in stark contrast to federal opposition energy spokesman Ted O’Brien, who told the Summit on Monday that “we need more gas, and lots of it”.
Mr O’Brien also said Australia could not cut emissions to net zero by 2050 without nuclear power.
Energy and Climate Change Minister Chris Bowen will also address the Summit on Tuesday to argue that hydrogen will be crucial to helping Australia reach net zero and could also create a $50 billion industry with 16,000 jobs by 2050.
While Australia cannot compete with the trillions of dollars in tax breaks and subsidies on offer in the United States Inflation Reduction Act, the Albanese government is still attempting to kickstart hydrogen projects through its $2 billion Hydrogen Headstart program.
Mr Bowen will announce expressions of interest will open for the hydrogen funding until November 10.
Proponents will have about six months to prepare their applications, including securing offtake agreements and finance, before shortlisted projects will be announced in early 2024.
“Renewable hydrogen is at the heart of our vision for Australia as a prosperous, self-reliant nation in a net zero future,” he will tell the Summit.
“As a renewable energy superpower and as a country that makes things, renewable hydrogen is a game-changer for green manufacturing. It opens the door to green metals, green fertiliser and green chemicals – products the world increasingly needs through the net zero transformation.”
Read more from the AFR Energy & Climate Summit
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- Business lacking ‘the will’ to urgently cut emissions: Fortescue Fortescue Energy CEO Mark Hutchinson wants companies to bring forward their net zero targets. Those with 2040 or 2050 horizons are not acting urgently enough.
- Chanticleer | The startling reason Boral is stopping production almost every day Vik Bansal, chief executive of the building products giant, has provided a reality check on how the energy transition is actually rolling out for the Australian industry.
- How 3.5m households could be the ‘unsung heroes’ on road to net zero Energy produced by solar panels on 3.5 million Australian households is equivalent to four Snowy Hydros, but not enough is being done to capitalise on it.
- Opinion | The energy transition is gridlocked, regulators have no answers It’s crunch time for the switch to renewables and regulators are pleading with business to invest more and quickly. But progress is stalling and the obstacles in the way are getting bigger.
- Chanticleer | Israel-Hamas war will rock an already edgy oil market Peter Coleman says a ‘worry factor’ from the Israel-Hamas war will lift oil prices in the short term. Longer term, it’s more evidence energy abundance is over.
- AEMO, CEOs in call-to-arms on clean energy build-out The nation’s energy market operator will urge developers to exploit all available government schemes to get projects into construction, and get community backing.
- Why BHP is against ‘sugar hit’ subsidies for critical minerals BHP boss Mike Henry says governments will stoke investment more sustainably through policy reform than by handing out subsidies that distort markets.
- ‘Go hard, be brave’, says $15b green bank boss National Reconstruction Fund chairman Martijn Wilder said Australia needs a WWII-style “Marshall Plan” to decarbonise the economy fast.
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