Prime Minister Scott Morrison
Photo by: Bloomberg
PERTH (miningweekly.com) – The Australian Petroleum Production & Exploration Association (Appea) has welcomed an agreement between the federal and New South Wales governments to facilitate increased gas supply, lower emissions and a more stable power supply.
Prime Minister Scott Morrison on Friday announced a landmark agreement aimed at lowering power prices for consumers, reducing carbon emissions and strengthening grid reliability.
The governments have committed to deliver on a number of initiatives that will increase gas and electricity supply in New South Wales by encouraging investment, improve grid security by supporting transmission interconnection and network access, and support emissions reduction projects.
The A$2-billion agreement will include a New South Wales-based emissions reduction initiative using A$960-million in federal funding, matched by A$1.01-billion in direct funding from New South Wales.
The state and federal government will also jointly underwrite the delivery of HumeLink and the Queensland-New South Wales interconnectors to strength grid reliability, while the state government has committed to facilitate investment opportunities to inject an additional 70 petajoules of gas per year into the east coast market.
The state government will also undertake to remove barriers to coal supply to the Mount Piper power station, and will support new generation projects through the federal government’s A$1-billion Underwriting New Generation investment programme.
“There is no credible plan to lower emissions and keep electricity prices down that does not involve the greater use of gas as an important transition fuel,” Morrison said on Friday.
“This plan is about getting greater access to that gas, as a vital accompaniment to our record investment in renewables. Our agreement also outlines a responsible transition of the New South Wales electricity sector to lower emissions technologies, while recognising the critical contribution that energy-dependent manufacturing jobs make to the economy.”
Appea CEO Andrew McConville said the economic case for developing local gas resources is irrefutable: well-paid and secure local jobs, state royalties, more secure supply and downward pressure on gas and electricity prices.
“If industry can further explore and develop gas resources with governments allowing proper environmental assessment and approvals processes to occur, Australia can continue its shift to a lower carbon, sustainable energy economy.
“It’s important for Australia’s oil and gas industry to be recognised for the positive role it can continue to play in the broader energy and emissions reduction debate. Natural gas is the perfect complement to the growing use of renewables and will continue to be so for decades to come.”
McConville said that Appea had argued strongly that arbitrary restrictions on gas development in states including Victoria and New South Wales were not only forcing homes and businesses to pay higher gas prices, but they were slowing the transition to a lower emissions economy.
“It is pleasing to see the Prime Minister working with state governments to resolve this impasse.” McConville said.
“In particular, Victoria’s unscientific, politically-motivated bans on onshore gas development must end.”
It is hoped that the new landmark agreement would pave the way for oil and gas major Santos to develop its Narrabri gas project, which is awaiting a final environmental approval after years of assessment.
The project could deliver up to 50% of New South Wales’ gas needs, and Santos has pledged to deliver all of the project’s gas supply to the domestic market.