Speech to the Australian Domestic Gas Outlook Conference
Hello all and thank you for the opportunity to speak at the 10th annual Australian Domestic Gas Outlook conference. I can’t join you there as Parliament is sitting here in Canberra.
I would like to start by acknowledging the traditional owners of the land on which you are all meeting today, the Gadigal people of the Eora Nation.
I pay my respects to Elders, past and present. I extend that respect to all First Nations people who are watching.
I also acknowledge the ministers from Western Australia, Queensland and the Northern Territory who will be contributing.
And the distinguished speakers from the gas sector.
The Australian Government recognises the critical role gas plays, both domestically and in our export markets.
Gas will be an important part of Australia’s energy mix for the foreseeable future.
It provides a reliable, cost-effective energy source for peak winter heating, seasonal storage and high temperature heat for industry.
As Energy Minister Chris Bowen recently noted, gas is a flexible fuel.
Gas is - and will remain critical for manufacturing.
Gas accounted for around 42 per cent of energy use in Australia’s manufacturing sector last year.
The Government is committed to reaching our net zero emissions target by 2050. We have legislated for net zero and we are determined to achieve it.
Natural gas will help us reach that target. It will be a critical fuel in the decarbonisation of Australia’s economy.
Gas is important -indeed it is absolutely essential - in the mining sector for energy intensive projects such as extraction, concentration and processing of critical minerals.
In order to decarbonise, the world needs our resources industry and our critical minerals.
So for emphasis: No gas means no processing of critical minerals and therefore no batteries for the storage of renewable energy, and that makes our pathway to net zero emissions all the more difficult.
At the same time we need to meet our gas export commitments.
Australia’s LNG export revenues are forecast to reach $90 billion this year, providing a considerable boost to the economy.
It is often forgotten, but our exports also make an important contribution to our neighbours’ energy security, stability and reliability. Moreover, we know that Australian gas will play an important role in our trading partners’ own net zero pathways.
We welcome foreign investment in our resources and energy sectors, especially from our LNG customers. Without the significant international investment of tens of billions of dollars over many decades, Australia would not have access to the gas produced off the coast of WA, and inland in Queensland, or the Bass Strait off Victoria.
Australia remains a stable investment environment, with strong legal, financial and economic frameworks.
Our nation can be both a reliable energy trade and investment partner, as well as a positive contributor to global energy security and decarbonisation.
We can only get to net zero by ensuring our economy remains strong and energy is affordable and reliable for businesses and households.
So it is essential that domestic gas prices do not get out of hand.
As the energy transition unfolds, if gas supply contracts faster than demand it results in the high prices and energy insecurity we’ve seen domestically and globally.
This will hurt most those who can least afford it.
Energy price rises forecast on the East Coast were untenable and that’s why the Government acted.
Our intervention is helping to take some of the sting out of power prices.
Our package is responsible and reasonable, timely and targeted.
I want to thank all of you for engaging constructively in the consultations on the pricing intervention, the code of conduct being developed by the ACCC, and the Australian Domestic Gas Security Mechanism reforms.
The Government intends for the ADGSM to remain a last resort. Last year the ACCC forecast a 56 petajoule shortfall on the east coast for 2023.
I responded by working closely with industry on a voluntary, industry-led solution though the Heads of Agreement that avoided the need to activate the ADGSM.
I want to make it clear that the Government is resolved to work with the gas industry to address the dysfunctions we inherited, which were exacerbated by Russia’s invasion of Ukraine.
The challenges are many but we need to work together with good will to successfully navigate the energy transition.
I wish you all the best for a successful and rewarding conference.