APPEA, the peak body for Australia’s oil and gas industry, said the NSW Government’s decision to effectively lockup most of New South Wales from gas development was “a body blow for local consumers, thousands of jobs, the environment and businesses”.
APPEA NSW director Ashley Wells said after nearly a decade of uncertainty on gas development, this decision to effectively limit future gas development to a single project—the Narrabri Gas Project—will mean NSW customers face higher gas prices for the long term.
“If NSW is to meet its energy agreement with the Commonwealth, it will have to now build an import terminal and at today’s LNG prices, that means customers would be paying well over $20/GJ for delivered gas
“It is pretty simple, the cheapest gas is the gas closest to market. This shortsighted decision will mean higher gas prices in NSW are the norm not the exception,” Mr Wells said.
“For the NSW Government to effectively ban a proven, safe and highly regulated industry doesn’t make sense.
“The failure of NSW to respond to increasing gas demand and develop its gas reserves will have unfortunate consequences, in the form of lost jobs, higher energy prices, and foregone economic opportunity. Manufacturing jobs will go to other states and territories or overseas.
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“Appeasement of vocal and extreme minorities will continue to mean that NSW will face ongoing economic and energy security risks.
“Embarrassingly, it means NSW will continue to have to import its gas from interstate for the foreseeable future. It has been well-documented by the ACCC that currently transporting natural gas from Queensland down to southern customers already adds an extra $2-$4 in costs—representing a 20-40 per cent increase in the wholesale gas price.
Mr Wells said if NSW wanted to have an advanced manufacturing industry, it needed gas.
“Natural gas fires up the barbie in the summer, is the source of delicious meals on the cooktop and provides heating and warmth during the winter months. It also powers many of our manufacturing industries.”
“New gas supply is essential not only to meet our existing needs, but to support New South Wales transition to a renewable energy future. As we have seen in South Australia, Britain, the US and elsewhere, natural gas plays a critical role in complementing intermittent renewable energy sources such as wind and solar.
“Lowering greenhouse gas emissions is also critical, and together natural gas development and renewables have a major role to play in reducing the greenhouse gas footprint of the coal-dependent NSW energy system.
“It could have been done so differently, to everyone’s benefit. In Queensland, farmers and the gas industry mutually prosper and landholders have been paid hundreds of millions in payments for access to gas reserves on their land.”
“The oil and gas sector is vital for manufacturing, keeping the lights on, reducing emissions and employing thousands of people,” he said.
“Most people think gas is only used in electricity generation but in fact it is used doing things such as providing feedstock to manufacturing plants and helping create everyday products such as clothes, computers, phones, fertilisers and vital medical equipment such as heart valves.
“These are things other forms of energy such as renewables simply can’t do.
“Our industry is doing the heavy lifting when it comes to combatting climate change. Already the Australian Government estimates Australia’s LNG has the potential to lower emissions in LNG importing countries by around 170 million tonnes of CO2-e each year by providing an alternative to higher emissions fuels—the equivalent of almost one-third of Australia’s total annual emissions.
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“Natural gas plays an important role in complementing renewable energy and our industry is also leading the world in the practical development of carbon capture and storage and hydrogen to ensure a cleaner, lower carbon energy future.
“The need for gas for a cleaner energy future is publicly supported by the United Nations, CSIRO, Australia’s Chief Scientist, the Australian Energy Market Operator, the Australian Energy Market Commission, the former Chief Scientist of NSW, the Independent Planning Commission and the Australian Council of Learned Academies.
“The NSW Government needs to urgently reconsider this decision.”
Santos CEO and managing director Kevin Gallagher echoed this sentiment, saying, “The only way to address gas shortfalls and price spikes at times of high demand is by developing local gas resources close to market instead of relying on imports from other states or overseas.
“With pipelines often full during periods of peak demand, there is no physical pathway to get more gas from Queensland into New South Wales and so the need for projects like Narrabri has never been more important for NSW.
“The Narrabri Gas Project was approved almost a year ago, but we are still waiting for the outcome of an appeal against the approval.
“The Narrabri community is looking forward to the jobs, business opportunities and regional development that the project would bring, and NSW gas customers are looking forward to having more reliable and more affordable gas from Narrabri,” Mr Gallagher said.