The Federal Government has released a Future Gas Strategy discussion paper and opened consultation as it seeks to find a balance between demand and supply in the energy transition.

The strategy will cover medium-term issues, to 2035, and long term, to 2050.

Minister for Resources and Northern Australia Madeleine King said Australia’s gas policy settings were important for Australia’s energy security, for business and industry, for the environment and for local economies.

The strategy aims to avoid possible shortfalls, increase resilience to future developments and promote energy security and affordability.

Minister King said the strategy “will help government, industry and households make decisions about the future role of gas”.

“We need to ensure gas demand decreases faster than supply through the energy transition,” she said.

“Gas shortages, supply disruptions and high prices are among the consequences of reducing supply faster than demand.”

The strategy will entail a partnership of gas and renewables in electricity to provide reliable energy to communities while transiting to net zero.

Australian Energy Producers Chief Executive Samantha McCulloch said the consultation paper highlighted the urgent need for investment in new gas supply to avoid future shortfalls and underpin the net-zero transformation in Australia and the region.

She said Australian households would be dependent on gas for decades, especially in industries such as mining and manufacturing where jobs rely on affordable gas supply.

“The strategy must recognise the many variables that will determine future gas demand and ensure Australia is able to capture the economic, energy security and emissions reduction opportunities of the sector and those industries that rely on gas while examining the decarbonisation of gas production,” Ms McCulloch said.

The strategy would be important in WA, which needs to meet future demand while moving to renewable energy sources.

Rystad Energy said gas demand would remain robust through to 2033, with new gas plants needed to support planned coal retirements and the expansion of renewables in the power sector alongside an almost doubling of industrial demand for gas.

In a report for AEP - The Western Australian Domestic Gas Study – Rystad said new gas supply is needed to offset declining production from legacy fields and to meet growing demand.

“Gas is critical to WA’s cleaner energy future and net-zero targets, powering WA’s growing resources sector and supporting the South West electricity system as coal-fired power exits,” AEP WA Director Caroline Cherry said. 

In its submission to a WA parliamentary inquiry into the WA Domestic Gas Policy, AEP recommended the review should focus on promoting new gas supply, arguing timely and affordable delivery of gas to the domestic market could be helped by:

• Removing the export prohibition for onshore gas projects.
• Avoiding changes to the current offshore domestic market obligations (DMO).
• Establishing a regulatory framework for unconventional gas reserve development.
• Faster approvals to unlock new gas supply.
• A framework for price transparency developed in collaboration with industry.

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