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Business chamber falls for “oldest trick in gas industries’ playbook”

Santos’ Wilga Park gas-fired power station (recently upgraded) in the Pilliga.
 Image courtesy of Wando Conservation & Cultural Centre

Fossil Fool Bulletin • 10/12/2019

A new report commissioned by the NSW Business Chamber arguing strongly in favour of new LNG import terminals wrongly suggests Australia will be experiencing gas shortages by 2025.

Written by consulting group EnergyQuest, the report ‘Running on Empty’ suggests NSW needs to develop the high cost Narrabri Gas Project and LNG import terminals to avoid future gas shortages.

The NSW Business Chamber has backed up the report with a press release claiming gas shortages are coming, and calling on the NSW government to: ‘rapidly approve the Narrabri Gas Project, subject to Planning Commission endorsement; support the proposed LNG import terminals at Port Kembla and Newcastle; and begin a program of upgrades to ageing gas pipeline infrastructure across the state’.

Bruce Robertson, gas analyst with IEEFA, says this is not the first time NSW consumers have been threatened with shortages.

A tactic for unpopular projects

“The gas industry has consistently argued there will be gas shortages as a tactic to gain approval for unpopular projects,” says Robertson.

Robertson says in 2014 AGL claimed NSW consumers would face gas shortages by 2016 if their Gloucester Gas Project was not quickly approved.

“The Gloucester Gas Project did not proceed, and no gas shortages ensued,” says Robertson.

“Australia has abundant gas for everyone, and yet the gas companies would have us believe we are running out.

“The gas companies’ latest ruse is to coerce the NSW Business Chamber into supporting its failing industry.

“It’s purely a tactic to get unnecessary, costly, high emitting LNG import terminals approved to further line the pockets of gas companies at the expense of Australian consumers’ energy bills.”

Australia is the world’s second largest exporter of LNG. 70% of Australian east coast gas is sold on the export market leaving just 30% to supply the domestic market.

Gas companies are proposing to build four LNG import terminals around the nation to supplement supply, whilst also insisting Santos’ high cost gas Narrabri Gas Project is needed.

“If LNG import terminals are built, Australia will be exporting Australian gas and then re-importing it for domestic supply to consumers at higher costs due to the expensive liquefaction, re-gasification and shipping costs involved,” says Robertson.

“Expensive import terminals will embed high cost gas into our energy system and line the pockets of the gas industry.

“The NSW Business Chamber is ensuring the destruction of its members’ businesses by supporting the gas industries’ plans to develop high cost gas for domestic markets while exporting Australia’s low-cost gas overseas.

“It is lamentable that the NSW Chamber has fallen for the oldest trick in the gas industries playbook.”

Business Chamber fails on vision

Lock the Gate Alliance spokesperson Georgina Woods said the Council’s narrow focus on expensive gas from Narrabri failed to provide a vision for sustainable industry supplied by low-cost and inexhaustible renewable energy.

“Santos is an architect of the gas price crisis and it is in that company’s interests for gas prices to stay high enough to crash the state’s manufacturing industry,” she said.

“Coal seam gas produced at Narrabri would entrench the pattern of high-cost, low-yield and unreliable gas supplies. What manufacturing needs in NSW is a bit of vision and an industry plan for switching to cheap and reliable renewable energy.

Woods said opening up the north west of NSW to coal seam gas production would risk damaging the Great Artesian Basin and other aquifers relied on by farming communities, particularly during this time of severe drought.

“Farmers and communities in the north west do not deserve to be sacrificed for the profits of big gas companies and neither does our manufacturing industry,” she said.

“The NSW Business Chamber needs to look ahead to how its members can access the reliable low-cost energy that renewables can provide.

“It needs to tell the Government to support switching industry to cheaper, sustainable energy to bring down costs and safeguard our precious groundwater.”

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