A study by consultancy firm EnergyQuest predicts that following the Greens’ renewable energy policy would lead to “blackouts ... for millions of homes and businesses in southeastern Australia in as little as two years,” adding that halting investment in gas supply would also “devastate the economy.”
The report was commissioned by Australian Energy Producers, the peak body for Australia’s oil and gas industry.
The Greens have said they want an immediate ban on the construction of new coal, oil, and gas infrastructure, arguing it will help transition the economy to zero-carbon energy while maintaining a safe climate.
They say that by investing in wind power, solar energy, and energy storage and rewiring Australia’s electricity grid, the economy can be re-powered without new gas investment.
However, the study says this would result in blackouts, manufacturers’ closings, and the cancellation of long-term Queensland export contracts.
“A halt to investment in gas supply would devastate the economy. Gas for East Coast electricity could be interrupted within two years and would run out by 2029,” it said.
International Demand Set to Grow
According to an earlier study this year by Rystad Energy, LNG demand in the region will almost double from 252 million tonnes per annum (mtpa) in 2022 to 450 mtpa by 2032.That means Australian projects, with their nearby location and legacy relationships, remain attractive to Asian buyers.
The largest source of demand is expected to come from China, followed by Southeast Asia and South Asia, while legacy markets in Japan and Korea would still see new buyers emerge.
Shutting down Australia’s LNG industry would mean the loss of potential earnings from that demand. Australia would also fail to fulfil its existing international LNG contracts, leading to manufacturing job losses.
“New export projects are critical in delivering economic benefits such as the estimated $17 billion of government receipts this financial year and $41 billion of industry spending in Australia. Our LNG can also reduce emissions in importing nations by enabling the switch from other fuels,” said Australian Energy Producers Chief Executive Samantha McCulloch.
“Instead, the Greens policy would undermine energy security, drive up energy prices and extend the reliance on coal – both in Australia and for our key trading partners—ultimately increasing emissions and slowing the energy transformation.”
Even leaving aside the international market, the peak body says investment in new gas supply is urgently needed to meet domestic demand.
“The Future Gas Strategy is clear that the Australian economy will need gas to 2050 and beyond,” McCulloch said.
The government’s strategy for gas involves using it beyond 2050, when Australia is due to meet a legislated target of net zero greenhouse gas emissions.
At the same time, the government warned that emissions from coal and gas could grow by 1.7 billion tonnes by 2050 if their use was extended another 15 years.
However, if Labor finds itself in a minority government after the next election, it may find itself pressured to submit to the demand of the Greens and most Teal MPs, who also back the proposal.
Greens leader Adam Bandt said Australians were “getting ripped off by big gas corporations who pay next to no tax while sending gas, and profits, overseas.”
“Gas is as dirty as coal, and the gas corporations are peddling misinformation because they know the Greens will force them to pay their fair share of tax to the Australian people in a power-sharing parliament,” he said.
