New gas supply strategy needed from new NSW govt: Appea
Australia’s peak oil and gas industry body Appea on March 26 urged the incoming New South Wales (NSW) Labor government to enable investment in new gas supply to avoid forecast shortfalls and put downward pressure on prices.
Appea CEO Samantha McCulloch said repeated recent warnings from independent authorities like the Australian Competition and Consumer Commission and the Australian Energy Market Operator could not be ignored in the state any longer.
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“New South Wales is a big gas user but has left its own reserves in the ground and outsourced its energy security, exacerbating the cost-of-living pressures on NSW households and businesses,” McCulloch said. “Bans and regulatory uncertainty have made new supply investment very difficult and left users paying A$2/GJ extra when gas is transported from Queensland, often over untapped NSW reserves.”
McCulloch said that the new government needs to recognise the key role of natural gas in a cleaner energy future as identified by international and national energy authorities and echoed by the prime minister.
“The state needs to provide a clear strategy to promote investment in new supply in order to help avoid forecast shortfalls in the east coast energy market and put downward pressure on prices,” she said. “This could include fast-tracking new supply options like the long-delayed Narrabri gas project, which could supply enough natural gas to meet up to half of the state’s gas demand.”
Santos, which is developing the Narrabri gas project, has previously said that the project has the potential to supply enough gas to meet up to half of NSW’s demand. The Narrabri project got state government approval in June 2020 and the federal government green-light in November of the same year. In December last year, Australia’s National Native Title Tribunal allowed Santos to move ahead with the project.
McCulloch said states which have put in place investment-friendly environments benefited greatly – with better energy security, cheaper energy, emissions reductions and substantial economic benefits.
“Queensland, for example, forecasts A$7bn in gas royalties in coming years to build hospitals and roads while over 30,000 jobs are supported by its CSG [coal seam gas] and LNG developments,” she said. “New South Wales, meanwhile, is missing out on the public revenue and jobs that local gas production provides while risking the lights going out.”