Australia’s conservative Liberal-National government began a push to boost natural gas supply and renewable energy as part of a $2 billion deal with its most populous state, as it looks to cut carbon emissions in the wake of devastating bushfires.
As part of a joint funding agreement with the state of New South Wales, Australia will upgrade parts of the east coast power grid, help pay for two new interstate transmission links and back emissions reduction projects.
The move has come under strong criticism from environmental groups with both the Climate Council and Beyond Zero Emissions issuing strongly worded condemnations.
The Australia Greens Party has also been highly critical of the move.
“Fossil fuels are the problem, burning coal, oil, and gas is driving climate change, which is making Australia’s extremes, more extreme,” said the Climate Council’s CEO, Amanda McKenzie.
Beyond Zero Emissions (BZE) said the federal and NSW state governments were pushing NSW closer to economic irrelevance with new investments in polluting and expensive gas.
In return for the proposed developments the NSW government in has committed to help bring on new supply of 70 petajoules (PJ) a year of gas for the east coast market, which faces a sharp decline in supply from its main gas source in the Bass Strait off Australia’s south coast.
Prime Minister Scott Morrison, who critics say has not done enough to address the impact of climate change, said the deal would stabilise the NSW power grid, cut electricity prices and spur development of more wind, solar and hydro power.
“It is about getting electricity prices down, getting emissions down, getting more power into the system, and getting the gas to make that happen,” Mr Morrison told reporters in Sydney.
The deal is intended to be first in a series with Australian states, all of which have more ambitious carbon reduction and renewable energy targets than the federal government.
Mr Morrison said this week gas would be key to cutting emissions from the power sector, which is 70 per cent dependent on coal, as the country transitions toward cleaner energy.
“Gas can help us bridge the gap while our investments in batteries, hydrogen and pumped hydro energy storage bring these technologies to economic parity with traditional energy sources,” he said in a speech on Wednesday.
New South Wales would be able to meet its gas commitment if the state’s Independent Planning Commission approves Santos Ltd’s Narrabri project, or if one of two liquefied natural gas (LNG) import terminals in the state go ahead.
“If we can develop Narrabri gas, it will be the most competitively-priced gas for NSW customers,” Santos Chief Executive Kevin Gallagher said in emailed comments.
“It will always be cheaper than LNG imports, especially when gas prices are high in Asia.”
The Australian Industry Group (AiGroup), which represents big and small businesses, today urged the government to go further and consider putting a price on carbon, a contentious issue that has led to the ouster of two prime ministers and an opposition leader over the past decade.
“Carbon price aversion should be rethought,” AiGroup Chief Executive Innes Willox said in an opinion piece in two major newspapers.
“The trauma and tragedy of the bushfire crisis is shaking climate politics and policy out of its rut. Evolution is needed,” he wrote.
The Climate Council’s CEO, Amanda McKenzie said; “Every dollar toward fossil fuel projects is a dollar toward making heatwaves worse and fires more damaging.
“It is just crazy, given everything we have lost this summer to even suggest opening new fossil fuel reserves,” said Ms McKenzie.
“More gas isn’t a climate policy it is a pollution policy. While fires are still threatening lives and properties, why is the government investing in making the problem worse,” she said.
“You don’t reduce emissions by increasing investment in fossil fuels,” said Climate Councillor and energy expert, Greg Bourne.
“The idea that gas will reduce prices is nonsensical.
“Gas is the reason power prices are so high along the east coast of Australia.
“Renewables are the cheapest form of new generation. Cheaper than coal, oil and gas,” said Mr Bourne.
Vanessa Petrie, CEO, BZE, said: “Gas only leads to higher energy prices, more greenhouse gas pollution, and worsening climate impacts such as the unprecedented bushfires that NSW has seen this summer.”
“We should be leapfrogging over this environmentally and financially disastrous fossil fuel, and backing clean, affordable clean energy innovation like renewable hydrogen and a fully renewables-powered industry sector instead.
“NSW industry is already struggling to stay competitive due to the high and fluctuating prices of coal and gas-fired energy.
“Global buyers and investors are increasingly demanding zero-carbon solutions that are aligned with climate goals, but we are squandering this opportunity because we are wasting time and money on backing gas and other fossil fuels.
“The future of heavy manufacturing in NSW and workers depends on staying economically competitive and attractive to investors.
“‘But gas is one of the most expensive energy sources around, and global investors are pulling their money out of carbon-intensive companies,” said Ms Petrie.
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