Why the NGIP gas roadmap is much ado about nothing
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The Australian Government’s first full National Gas Infrastructure Plan (NGIP) and the Future Gas Infrastructure Investment Framework to ostensibly secure our gas supplies have been released to much fanfare.
Unfortunately, the plans put forward by Industry, Energy and Emissions Reduction Minister Angus Taylor, which are part of the government’s flawed gas-led recovery, are decidedly uninspiring and have drawn the usual criticisms from green groups.
Such choice statements include Environment Centre NT saying that the NGIP uses taxpayer funds to “hurtle the Territory towards climate collapse” while the Project Country Alliance lashed the government for wasting money on projects that “can’t stand up for themselves”.
So just what has got their collective beards in a knot?
Simply put, according to the NGIP, Australia will need to bring one new petroleum basin on line before 2030 to meet project east coast demand.
It singled out the Narrabri gas project, the Beetaloo sub-basin, the Galilee basin, and the North Bowen basin as critical basins to unlock out to 2030 and flagged the need for strategic expansions to existing pipeline capacity and the construction of entirely new pipelines to transport these gas supplies.
In his statement, Taylor brought up the more than 400% increase in gas prices that the UK and Europe had experienced in recent months due to gas shortages as the reason for getting new supplies into the system.
This is more than a little farcical given the many differences between Europe and Australia.
For starters, unlike Europe, Australia is a net gas exporter and while gas supplies are diminishing in the east, it doesn’t detract from the fact that there’s still plenty of gas being exported from Queensland’s extensive coal seam gas fields.
Secondly, the weather isn’t really comparable either. Even Tasmania doesn’t see much snow at sea level.
Will prices rise in the east? Almost certainly? Will they climb more than 400%? That’s pretty unlikely.
Taylor also called on industry to contribute to a new Expression of Interest (EOI) process to identify critical mid-stream gas infrastructure projects that require support to accelerate delivery.
As a somewhat grudging nod to the growing voices calling for emissions reduction, the statement added that this included gas infrastructure projects that also supported hydrogen, carbon capture and storage, and biomethane.
Essentially, the NGIP brings very little that is new or of any real value to the table.
Much as the green lobby would disagree, Australia still has a thirst for natural gas and while renewable energy has been growing strongly, it has done so at the expense of thermal coal.
And it is likely to remain so in the short to medium term at the very least until a lot more renewable generation capacity and storage (whether by batteries, pumped hydro or hydrogen) is available to keep the lights on when there’s less sunlight or less wind.
And where there’s demand, market forces will prevail.
All of the basins deemed critical by the Australian government are already seeing varying levels of exploration and development.
Certainly, the natural gas sector won’t say no to free or subsidised infrastructure, but again, sufficient demand will mean that the infrastructure will get built, government support or not.
Said infrastructure funds are really better spent ensuring that Australia is ready to face the long-term energy future rather than propping up a mature industry that is capable of paying its own way.
More battery rechargers, green hydrogen infrastructure and the like will likely prove more valuable to the Australia of 2050 and beyond.