Climate Change and Energy Minister Chris Bowen is set to announce commitments from Australia Pacific LNG and SENEX to supply 300 petajoules of gas to 2030.
In a big move by the Albanese Government that aims to fix a looming shortfall, new deals with major gas producers will be enough to secure gas supply for Australia’s east coast energy market for the rest of the decade.
The energy market operator and Australian Competition & Consumer Commission warned there would not be enough gas to power factories, generate power, cook and heat homes in 2027.
300 petajoules is equivalent to half the annual total east coast domestic market demand – and almost 140PJ to the end of 2027.
The commitments will be enforceable under the gas code of conduct, which Labor mooted in late 2022.
The centrepiece of the code included a cap of $12 a gigajoule on new supplies. Both the gas industry and the Greens criticised the code for very different reasons, however, a Senate committee has concluded it would have the desired effect of lowering prices.
Bowen has warned the minor party, along with the coalition, not to scupper the scheme, but the Greens will move to disallow the code on the basis that it supports new gas fields, benefits gas users and flies in the face of a worsening climate crisis.
The Coalition is thus far quiet in the matter ahead of the House of Representatives final sitting week for 2023.
The Coalition has asked for an outline of what the government’s expanded Capacity Investment Scheme (CIS) will cost taxpayers.
“The new (gas) commitments will provide more affordable gas to the Australian market in the short to medium term and will provide the energy security that Australia needs as it makes its transition to net-zero emissions,” Bowen said.
“If the Greens and Liberals team up and disallow the code and scrap these commitments, it will threaten energy security for millions of households and thousands of manufacturing jobs across the country. That kind of reckless and pointless peacocking risks domestic gas supply, higher prices, as well as manufacturing jobs and the energy transition.”
Costs unknown
Climate Change Minister Chris Bowen was questioned repeatedly on the ABC's Insiders program about the government's financial commitment to supporting 32 gigawatts of new renewable energy through an expanded CIS.
Bowen stated that the budget would address the issue as a normal contingent liability and risk, emphasizing the policy's suitability for reducing emissions and increasing reliability.
Ted O’Brien, the opposition spokesman for climate change and energy, criticised the plan, suggesting it was more about Bowen's personal ambition, highlighting the lack of a clear cost. He accused Labor of misleading claims about reducing power bills, pointing out the potential for increased costs due to the proposed infrastructure.
Greens leader Adam Bandt accused the government of feigning climate action while promoting new coal and gas projects. He advocated for regulating gas exports and utilising domestic gas for the business transition, criticising Labor's approach to new gas fields.
Bowen, set to attend the UN Climate Change Conference in Dubai in early December, will soon update the parliament on Australia's emissions projections. These projections indicate a 42% reduction in emissions by 2030, supported by a 82% renewable energy target and other policies.