Energy Minister Angus Taylor has issued a warning that the energy crisis in Europe could happen in Australia if more isn’t done to boost gas supply.
Speaking from Gladstone on Tuesday, he will announce $50.3m in the upcoming federal budget to accelerate seven priority gas projects to increase storage and supply in Australia’s southern states.
The competition regulator last month warned a gas shortage was forecast in NSW, Victoria, South Australia and Tasmania from as soon as this year, which would likely continue into 2023 and “beyond”.
Mr Taylor said the government was accelerating priority gas projects so Australia did not experience the “devastating” impacts of a gas supply shortfall being seen in Europe.
He said Russia’s invasion of Ukraine had created an unacceptable risk to global gas security, as it accounted for about 32 per cent of total European and UK gas consumption.
Mr Taylor pointed to the Australian Competition and Consumer Commission’s (ACCC) warning about gas supply shortages hitting this year in the southern states, along with an east coast gas market shortfall occurring from as early as 2026.
The Australian Energy Market Operator (AEMO) has also issued a warning about gas supply “scarcity risks” from as early as winter next year in the southern states.
He said that the International Energy Agency had noted significant price increases in Europe had been driven in part by a lack of investment in supply and infrastructure.
“The ACCC and AEMO have made multiple warnings of the forecast gas supply shortfall in the east coast market as early as this decade,” he said.
“This, along with the energy crisis in Europe, should act as a warning of what could happen in Australia if there is not enough investment in the gas sector at home.
“Gas prices in the UK and Europe have increased by more than 300 per cent over the past 12 months.
“Our prices have remained around 75 to 80 per cent below these international highs.
“We must continue to invest in gas to keep our price internationally competitive to support local business.”
Mr Taylor said the projects selected for early works included the APA’s southwest pipeline expansion project in Victoria and the Lochard Energy’s Heytesbury Underground Gas Storage project.
Transition Energy Corporation’s gas infrastructure project in Queensland’s Bowen Basin will also get support, along with the APA’s Surat Hub project and its Project Range project.
Stage two of the east coast grid expansion has also been selected, along with a feasibility study into the most efficient infraxjmtzywstructure to deliver natural gas from the Beetaloo sub-basin in the Northern Territory to the east coast gas market.
Mr Taylor said the government would also support the development of carbon capture storage alongside the major gas pipelines.
The Coalition will support feasibility studies for CO2 pipelines from the Gladstone region to the Surat and Cooper basins.
There will also be a feasibility study for a CO2 pipeline from the Upper Spencer Gulf region in South Australia to the Cooper Basin.
“The government has a clear stance on both natural gas and carbon capture storage – we will strongly back these sectors which are critical to both affordable and reliable energy for all Australians, as well as emissions reduction,” Mr Taylor said.
He said this contrasted with the Labor Party, claiming they were “willing to risk Australia’s energy security and investment in regional Australia to appease gas activists”.
