Yesterday the Labor government released its ‘Future Gas Strategy’, outlining a substantial role of fossil gas from now until 2050. The strategy gives the green light to developing new gas fields, betraying the requirement to stop fossil fuel expansion to limit global heating. Our nation’s shockingly low ambitions for the modernisation of industry and for decarbonisation are on display.
This is not a surprise — it's just our government saying the quiet part out loud after discreetly approving 116 new gas wells last year.
“Too expensive, too slow”
The year 2050 is Australia’s (legislated) deadline for reaching net zero greenhouse gas emissions. Incredibly, given this context, the ‘Future Gas Strategy’ is not an exit strategy for gas. It casually references the Step Change Scenario from AEMO’s Integrated Systems Plan, in which gas-powered electricity generation to firm intermittent renewables is set to increase (in absolute terms) over the next 26 years.
From the Future Gas Strategy, page 19
This forecast, for at least three decades of domestic gas use (assuming a several-year phase-out of gas after 2050), makes a mockery of the claim that nuclear is “too slow” to be part of Australia’s energy transition.
This government will do literally anything but consider nuclear energy, a low-carbon power source that provides 10% of the world’s electricity. As our globe warms, Labor’s commitment to maintaining the ban on nuclear energy is environmental vandalism.
Australia exports most of the gas it extracts
About three-quarters of the fossil gas extracted from this continent is sent overseas as liquefied natural gas (LNG), and Australia is one of the world's top three LNG exporters.
Per the strategy document, Australia’s current contracts for LNG exports expire by 2040, and yet our gargantuan gas exports are expected to drop by perhaps as little as 19% by 2050. Labor wants Australia to be the last gas exporter remaining as the world exits gas. This is despite an acknowledgement that our LNG is more emissions-intensive than the global average, and despite the risk of stranding our gas industry workers, who Labor wants to be seen to be protecting.
The document notes the important role of fossil gas in providing industrial process heat, and proposes direct substitutions of cleaner-burning gases (green hydrogen, biomethane and synthetic methane). Little responsibility is taken for developing these alternatives, with no mention of a desired timeline for the transition.
It is worth noting that nuclear reactors, in addition to producing electricity, can provide process heat for industry.
Household electrification
The ‘Future Gas Strategy’ dodges responsibility for the energy transition on several fronts, including home electrification. About half of Australia’s homes rely on fossil gas for heating and cooking, but our government downplays this opportunity to decarbonise (and improve the safety of Australian homes) because consumers might be “unable, or choose not to, electrify”.
Our Labor government is ready to rise to the challenge of ramping up gas extraction, but not to the challenge of electrifying our homes and small businesses (which stands to reduce domestic gas consumption by 21%).
When a government commits to a net zero target, it becomes the government’s job to make electrification the most viable choice for individuals.
It’s a good day for gas
Environmentalists aren’t the only ones who noticed the long-term support offered by this policy suite — stocks in gas companies Woodside, AGL and Santos rose on the day of the announcement.
This is a remarkable achievement for a document that says so little. It really is little more than an outline, but the shape looks like strong government support for fossil gas well into the future.
The Australian government has made clear that it is not ready to tackle the challenge of deep decarbonisation.