Projects are needed to address the looming gas supply shortage to test Australia’s climate targets

Mandatory pollutant caps will be an important factor in reaching Labour’s legally binding target of reducing emissions by 2030.

Asked if there was room for new gas fields under the 2030 climate target, Acting Minister for Resources Catherine King said the safeguard mechanism would guide companies through the voluntary emissions reduction commitments already made.

“Protection reforms provide long-overdue reassurance and are consistent with the more than 70 percent of protections that already have corporate commitments to net zero by 2050,” she said.

Opposition spokeswoman Susan McDonald said the federal government’s reform agenda has been rushed and has reduced industry confidence in new projects.

“Workers implement policies that sound good but don’t work. Legislation was rushed and
rammed through practically without consultation.”

ACCC Chair Gina Cass-Gottlieb warned that gas would be needed for some time to secure supply in the grid.

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“At times when renewable energy cannot generate and stored power is not available, there will continue to be demands for gas power generation for security of supply purposes, and there are also some commercial industrial users that their manufacturing and production processes are designed for gas required.”

New gas projects are usually large enough to trigger government emissions caps, which have a threshold of 100,000 tonnes of annual CO2 emissions.

Any new project would likely be forced to conform to the existing emissions budget applicable to the country’s gas industry and to comply with new regulations, including meeting world “best practice” emissions efficiency standards.

Santos wants his Narrabri gas field in northern NSW to start production in 2025 and meet up to half of the state’s demand. But the company faces another legal challenge, with traditional owners filing an appeal in federal court last week.

Cooper Energy said this week it must review plans for an offshore gas project in Victoria’s Otway Basin that would provide utility giant AGL with up to 10 petajoules of gas per year from 2025.

Cass-Gottlieb said it’s possible that outages of around 12 percent of annual demand could hit the east coast this year unless Queensland’s liquefied natural gas (LNG) exporters deliver on their promise made as part of the im Agreement reached with the federal government last year to ensure full coverage of the east coast market.

The ACCC last week threatened exporters with a $50 million fine if they failed to deliver. One company, Shell, has offered 8 petajoules to the market, but no deals have been announced so far.

LNG exporters’ processing plants are among the largest emitters covered by the safeguards mechanism, and they are needed to develop new supplies, with the ACCC reporting that they control more than 90 percent of the East Coast’s peak gas reserves.