Darren Chester (Gippsland, National Party, Shadow Minister for Regional Education) Share this | Link to this | Hansard source

My purpose in supporting the member for O'Connor in moving this motion is to highlight the role that natural gas has played in our nation historically but also the role it continues to play today and into the future. I also want to take the opportunity to raise my concerns about some of the extreme green madness I'm seeing in my own state. It's coming primarily from members of the Greens party but also from some members of the Labor Party. They want to abandon gas altogether as an energy source in my state. It reminds me of the debate we've been having in Victoria in relation to native timber, where we have a coalition of Labor and Greens members in the urban areas telling country people what jobs they can and can't have. They're quite happy to take hardwood timber from other countries and other states but not prepared to use their own timber from their own state.

My direct experience in this area relates to the offshore oil and gas activity in the Bass Strait basin. For more than 50 years now, the joint venture partners have worked in Bass Strait generating oil and gas; in more recent times, gas has been the more dominant resource harvested. That has underpinned the wealth of Gippsland, and Victoria more broadly. It has provided a cheap and reliable energy source which has been incredibly important for my region, and we're directly impacted by government policies in this area.

It's important to point out that natural gas remains a key pillar of the Australian economy. It employs 80,000 people in the industry supply chain, largely in regional areas like mine. Natural gas is connected to more than five million Australian homes, and in 2022 it provided 42 per cent of the energy consumed by the Australian manufacturing sector. I find it to be madness to listen to the Victorian environment minister calling for a complete ban on new gas connections in residential areas. It is also important to note the contribution the natural gas sector provides to governments, with $17.1 billion in taxes, royalties and charges in 2023-24, which obviously allows governments to invest in critical services and public infrastructure.

I am reminded of the Treasurer's budget speech last year, when he noted the improved fiscal outlook—the improvement to the budget bottom line—and he attributed that to higher prices for 'the things we sell overseas'. I've got to say I was staggered. The Treasurer of Australia couldn't bring himself to say what those things were. He couldn't say 'coal', 'iron ore', 'gas' or 'agricultural products'. He was too embarrassed for some reason—a Labor treasurer too embarrassed to mention what those things we sell overseas are. I'm not embarrassed to mention them. I'm proud of the people right across Australia, particularly in regional Australia, in those industries. They leave their homes, often travelling interstate—they're often fly-in fly-out workers—to access these resources which underpin the wealth of our nation. They keep the lights on. They earn those export dollars that pay for the schools, the hospitals, the roads—everything we want in our own electorates—and the Treasurer of Australia was only prepared to say 'the things we sell overseas'.

This industry is desperate for some policy certainty going into the future. It's desperate for some policy certainty from government so it can make the long-term investment decisions which will allow those companies to continue to be part of the energy solution both at home here in Australia and abroad, particularly in the Asian region. It's desperate for policy certainty which will allow it to continue to employ those thousands of Australians in a wide range of areas. I believe in a balanced approach to the challenge of reducing our emissions. I believe we will be seeing more and more renewables in the market in the future. In fact, gas is an important element to that balanced approach because gas can underpin the intermittency of some of the solar and wind resources we're bringing onstream around Australia at the moment. I support the member for O'Connor in urging the federal government to take urgent action to provide that policy certainty which allows industry to bring on that new gas supply needed to address the forecast shortfalls, to ensure we can have energy security and to rebuild investor confidence around our nation.

In conclusion, I point out that Australian natural gas is the foundation of energy security and helping us achieve net zero in our region. Australian LNG represents a significant pillar of energy and demand in the region, and the forecast demand is expected to grow. Demand in the South-East Asian region is forecast to increase as much as tenfold by 2050. These exports, as I've already pointed out, are so critical in helping us as a nation achieve the funding required to invest in the resources and public infrastructure we want in our electorates right across Australia. I urge those opposite to come on board and support the gas sector.

Dan Repacholi (Hunter, Australian Labor Party) Share this | Link to this | Hansard source

I rise in response to the motion moved by the member for O'Connor. I start by clearly stating my support for gas. We need it; there's no doubt about that. There's a lot in this motion I agree with and that the government agrees with. It is true that it is an important part of our economy and it employs a lot of people. There's a new gas-fired peaking station in Kurri, right next door to my electorate, and I'm sure a lot of people in my electorate have a job just because of this—and that's great.

The motion also points out:

(c) natural gas is essential to Australia achieving its net zero target by 2050.

This is all very true. That's why natural gas plays a very important role in our energy policy. We can't put more renewable energy into the grid without firming baseline supply of energy provided by gas.

The motion goes on to state other basic facts and figures, like:

(b) natural gas is connected to more than five million Australian homes and provided 42 per cent of the energy consumed by the Australian manufacturing sector in 2022—

and—

(c) the natural gas sector provided $17.1 billion in taxes, royalties and charges in 2023-24 …

At the end of the day the Labor Party backs gas, and our policies show this.

What I'm confused about is why someone who was a member of the previous government wants to have a discussion with us about energy policy certainty. The member for O'Connor, who I have a lot of respect for, must be having some trouble with his memory, because, if mine serves me correctly, there's one very important detail he's leaving out—well, actually, there are 23 important details he's leaving out in this discussion about energy policy certainty! When they were in government they had over 20 energy policies, and just a few weeks ago, from his nice building in the city, the Leader of the Opposition announced No. 23—a policy that will impact my electorate but that he announced 200 kilometres away from my electorate without speaking to any of the voters in the Hunter. Maybe I'm being a little too harsh; maybe I can't refer to this as energy policy No. 23 because, usually, a policy has some details with it. This one doesn't seem to have that.

Either way, that lot opposite have made more energy policies over the past decade than I have fingers and toes on both my hands and feet put together. But here they are today wanting to talk to us about energy policy. Forgive me for my confusion, but I don't think this is a topic they are even slightly qualified to discuss. The only thing you can be certain about with energy policies announced by those opposite is it won't be long until another one is announced.

Let's compare and contrast that with our track record on energy. Our country went from having a government that went through energy policies faster than I can go through a burger to this government, which has taken immediate and strong action to shore up gas supply and manage price impacts by introducing the mandatory Gas Market Code, strengthening the Australian Domestic Gas Security Mechanism and releasing the Future Gas Strategy, and this has worked. The mandatory gas code has now secured more than 600 petajoules of domestic gas for east coast users out till 2033—and, by the way, that is something the coalition voted against. Maybe they were worried that our policies might actually work.

The coalition have no leg to stand on when it comes to gas. They have no credibility whatsoever. We know it, the public knows it and industry knows it too. They called on you to vote for the PRRT reform, which you stood in the way of. They called on you to support legislation to implement the London protocol amendments, which you held up in the Senate for way longer than it needed to be. They called on you to support the Gas Market Code and you refused. Those opposite filled this motion with a lot of facts and figures, but let's get one thing straight: the track record of those opposite shows that, once again, it falls to the Labor government to clean up their mess and drive a responsible, orderly energy transition across the economy, with affordable renewables being the centrepiece, backed up by firmed hydro, batteries and gas-fired power stations.

Melissa McIntosh (Lindsay, Liberal Party, Shadow Minister for Energy Affordability) Share this | Link to this | Hansard source

Since the Albanese Labor government took office, gas prices have gone up 25 per cent. It's no wonder that so many Aussie manufacturers who rely on gas have closed their doors over the last two years. Let's not forget the five million Australian homes that use gas to power the heater in the middle of winter, cook the food and heat up water. It is a national disaster that this government has turned its back on the gas industry in this country.

Households are going into financial hardship to pay their energy bills. I have food charities in my Western Sydney electorate of Lindsay that are now paying families' power bills. Many mums and dads work so hard in my community, but under this cost-of-living crisis they are getting smashed with higher mortgage rates, higher grocery bills and higher petrol costs. But these parents are proud and don't want to take food away from those in need, so they've asked charities to help them out with paying their electricity and gas bills instead.

Recently, with the deputy leader of the opposition and shadow minister for industry, I visited a steel manufacturer in Emu Plains. They told us that their gas bill has gone up almost 40 per cent in the last two years. A local gym owner in Penrith told me that their power bill has more than doubled since Labor took office. Another manufacturer in Jamisontown spoke to me about their energy bills rising 100 per cent. This manufacturer looked at putting solar panels on their roof to assist with their energy costs, but the roof structure just can't hold them. We also need to remember that it doesn't matter how many solar panels there are in the world; we still need gas to power furnaces to create plastics and for steel and for the sovereign manufacturing that is so important in Australia.

These cases that I just mentioned are not extraordinary, but they are the crippling reality of doing business under the Labor government. These figures are dire for so many manufacturers across the country, particularly those in Western Sydney, like those in Emu Plains, Penrith and Saint Marys in my own community. Renewables are only driving up the cost of electricity and gas. Does the government think an additional 28,000 kilometres of transmission lines across the country isn't going to raise costs? These costs will be baked into the bills of every young person renting, every mum and dad in the suburbs and every senior trying to get by.

Under Labor, 90 per cent of our 24/7 base-load power is going to be forced out of the energy grid in a matter of years. This is real, and we need to take action today to prevent blackouts and brownouts continuing to occur in our energy system. That's why the coalition supports gas alongside renewables and nuclear to boost our 24/7 base-load capacity and ensure energy security into the decades to come. Manufacturers, small businesses, regional communities and suburbs across Australia need and deserve reliable and affordable energy.

Gas being up 25 per cent isn't something the Labor government likes to talk about. Another figure they shy away from is $275. This is the figure that the Prime Minister repeated around 100 times going into the 2022 election. He said that, in 2025, energy bills would be lowered, based on 2022 prices, by $275. That has not happened at all. Every single Australian knows this is a broken promise. The default market offer price for Western Sydney has gone up almost $1,000, factoring Labor's accounting. The government need to own up to their mistake and admit that the $275 figure will never eventuate for families and business owners.

A renewables-only approach sends negative signals to international markets who rely on our natural resources. One of our closest partners, Japan, needs our gas. We also need our gas. Unless this government does something soon, we will see our neighbours and allies go elsewhere for energy sources. We need more gas projects approved to get more gas into our domestic market to drive down energy costs and firm up our energy system. Gas sites can be turned on and rapidly produce energy for consumption across Australia. Gas is vital to produce an energy resource to power our factories and our homes. Gas is vital for domestic energy security. We need 24/7 power to keep the lights on across Australia. Gas is vital for our international partners and, in turn, our security in supporting affiliates with energy and other products that will assist our own geostrategic interests. It's about time this Albanese Labor government wakes up and backs our gas industry, for the sake of our nation.

Jerome Laxale (Bennelong, Australian Labor Party) Share this | Link to this | Hansard source

Over my time in this parliament, nowhere I have seen the Liberals and Nationals in debate acknowledge—and they do not acknowledge it in this motion—that we are living in a climate crisis and that we need to take immediate action. It is not in this motion, it's not what they're saying in parliament and it's not even in any policy that they put forward to the electorate. How can the alternative government of Australia, in 2024, still not acknowledge the need for meaningful action to address climate change? The Liberals and Nationals still haven't come to terms with where Australia and the world are on this. Nothing tells us this more than their pathological and incessant opposition to renewables. They oppose renewables offshore. They oppose renewables onshore. They oppose transmission, even when it's to connect their own project, Snowy 2.0, to the grid. They promote conspiracy theories about renewables in parliament and they use inflammatory language at rallies outside of it. And their latest energy thought bubble relies on nuclear, something which would not be in the grid until at least 2040. Their 23rd energy policy now rests on this technology, the most expensive form of new power. Nuclear, of course, not only is incompatible with renewable energy but, due to its long lead time, will only give fossil fuels a new lease of life in electricity generation.

The science and the economics tell us that we need to replace fossil fuels with firmed renewable energy. It was for these reasons that this government was elected. Bennelong elected me to help reduce emissions, and Australia elected a parliament to take action on climate change. Australia has told us that we must reduce emissions, with renewables at the heart of our energy production. Our government has set achievable targets: a 43 per cent reduction in carbon emissions by 2030 and 82 per cent renewable energy in our grids by 2030. They're ambitious but they're achievable. Our focus is on growing renewable energy sources like solar and wind and clean dispatchable capacity such as battery storage to meet these targets. This transition is happening right now, and it must continue.

Since we came to office, renewables in the national energy market have increased by 25 per cent. Minister Plibersek has approved 55 renewable energy projects in two years, enough to power three million homes. To meet our targets, that growth must not only continue but accelerate. Over 90 per cent of coal will exit our energy market by 2040, and that is a good thing. To replace that coal, we cannot wait for nuclear and we certainly cannot afford nuclear. Experts have told us over and over that the best way to replace coal is predominantly with renewables, with gas helping us get there. We have been historically dependent on coal for electricity generation. Fossil fuels currently contribute around 68 per cent to total electricity generation. However, this has to end and is diminishing rapidly.

We are committed to ensuring that this transition happens in a way that provides reliable and affordable energy to all Australians. The role that gas will need to play in that is an important one, but it's not a dominant one. Gas will be a bridge to firm the renewable energy in our grid, because the great thing about gas is that it can be turned off when it's not needed. In a decarbonised economy, the role of gas around the world will change. We must plan for that change and be upfront about it. In the near term, gas will firm renewables as more wind, solar and storage come online. We must prioritise the expansion of renewable energy and ensure that gas is only used when necessary to support the transition. You see, unlike the Liberals, who've had 23 energy policies and been unable to land one, our policy is working. It's clear, it's transparent and we're delivering it.

The government want to reduce emissions, and we want an Australia powered by renewables. Our plan confronts the economic and environmental need to reduce our use of fossil fuels while also ensuring that our renewables transition is firmed when needed. Instead of attacking renewables and giving fossil fuels a new lease of life, this parliament should be working together to make the transition to renewable energy as quick and effective as possible.

Rowan Ramsey (Grey, Liberal Party) Share this | Link to this | Hansard source

South Australia is the state that is both the least and the most reliant on natural gas to supply its electricity. That sounds a bit strange, doesn't it? But in South Australia last year our electricity grid was 71.5 per cent renewable. More than 4,000 megawatts of installed capacity in South Australia is renewable. Some 2,740 megawatts of that comes from large-scale generation, and the other 1,300 megawatts comes from rooftop solar. Yet we pay the highest retail rate for our electricity in South Australia—and not by a small margin, but by 50 per cent. We are 50 per cent higher than the next highest state, Victoria, where they have 36.8 per cent renewable electricity. We have double the renewable capacity and double the renewable energy, but half as much again with the price. You have to ask yourself why this is.

Of course, there are two main reasons. The first is the intermittent nature of wind and solar and the need for an alternative dispatchable source capable of powering a whole network at any one time. The second is renewable subsidies. I won't go into those at length here, but they're invisible to the whole market but embedded in your retail bill. I took a snapshot on my PocketNEM last week. I know I'm not allowed to use props, but it shows me that the wholesale price in South Australia last Tuesday evening was $9,900 per megawatt hour, which, to put it in layman's terms, is roughly $9.90 a kilowatt hour or 20 to 25 times the retail price. I can tell you that at that time every peaking station in South Australia was going flat out. All the gas was on. We don't have coal in South Australia anymore. That was driven out by renewable energy. But every peaking station was on. Every battery was flat because we'd been through a wind drought, if you like, in recent months and we were totally reliant on either the gas or the electricity from Victoria, which is largely from coal, of course. As I said, it showed that at that time what we needed was more gas generation, but there was no other viable option.

So what are we doing at the moment? South Australia's last combined-cycle gas generator was built at Pelican Point and commissioned in 2001. I won't go into details as to why combined cycle is so much more efficient, but it not only uses a jet motor to run a generator; it also runs a steam turbine to harvest the heat. Everything apart from that—and there hasn't been a lot built—is what we call peaking generation, which is basically a jet turbine mounted on a generator. So when it's dark and becalmed, as it often is in autumn, we are almost totally reliant on gas in South Australia.

It's worth noting that when renewables begin their penetration into the market it's a very easy fit, because the full backup is available from the existing generators. However, as they gain market share, the cost of backup increases on a parabolic curve. The higher the level of renewable generation, the higher the unit cost of backup. That is because it's not used as often as it would be to make an economic return.

At this stage, the cheapest form of backup is gas. It's not perfect, and perhaps one day it'll be replaced. Here in Australia, interest in gas exploration is crashing. Approvals have stalled, and the government has imposed a cap on gas prices. Producers have had to comply, or are having to comply, with safeguard mechanisms, which are going up every year, year on year. Environmental approvals are on go-slow and drowning in red tape. Climate change activists have co-opted Indigenous bodies to frustrate, complicate, delay and increase the cost of new projects. The government has imposed a water trigger requirement and strengthened union bargaining positions.

I wonder why gas development has gone on an overseas holiday. It is pretty plain. The coalition has proposed a nuclear future, but, to get there, we need gas as an essential transitional energy source. The government has said they're heading for 100 per cent renewables, but guess what? In that case, gas is even more essential—not only for the transition but for the inevitable outcome in 2030 that we find we cannot reach the 82 per cent they've already laid down as their objective.

Gas is one of our economic strengths. Let's not give it away, as we've given away so many of our other economic strengths. As countries like China continue to build new power stations based on fossil fuels, we are shutting down our industry.

Meryl Swanson (Paterson, Australian Labor Party) Share this | Link to this | Hansard source

I rise to speak in response to the motion moved by the member for Gippsland. Firstly, I note that this motion calls for something our government has already delivered. That is strong, clear policy and certainty regarding natural gas. From the get-go, I congratulate the Minister for Resources, Madeleine King, on the gas strategy that she has put forward. It is sensible, and everyone that I speak to from industry says what a good job this government is doing.

It is truly incredible that the opposition believe they can pretend to be experts on the subject of energy policy, like some kind of charade. The facts don't lie. They presided over 22 or 23 failed energy policies, if you count the latest nuclear fantasy. They wasted millions of taxpayer dollars over a decade full of delays. And let us not forget their former leader who secretly appointed himself to the energy portfolio. That was certainly a surprise for the minister that was already in that portfolio. They couldn't even decide amongst themselves if the science of climate change is real. As the government, we know that it is real. We aren't going to engage in a pointless culture war about it.

The opposition has a plan to change the nation based on three paragraphs in a speech, with absolutely no detail and full of untested declarations. Now they propose this cash splash giveaway to gas companies and pushing down on the nuclear button without even engaging the communities it would impact. Really? Are we going to accept this? We just can't. Should we really be taking notes from these people on energy when, again, they had 10 years to get this right, and they squandered our opportunities?

Natural gas is the foundation of our transition to a cleaner, more affordable energy system in Australia and our road map towards a future powered by renewables. But these things don't happen overnight, and we're seeing that more and more. As we move in a progressive direction into a greener future, towards net zero by 2050, we do need gas. That is the bottom line to this.

Interestingly, gas usage is increasing the world over. It is a key ingredient in our recipe for reducing emissions and fighting climate change. Natural gas is stable, it's secure and, quite frankly, it keeps the lights on. Since the Albanese Labor government came to office, there's been a 25 per cent increase in renewables in the national energy market, and that's a terrific thing. Not dissimilar to those opposite, yes, I have the AEMO app on my phone. I watch energy prices pretty much every week to see where things are going. At the moment things are heading in the right direction. But we are reliant on a lot of change and a lot of innovation. This has driven our total emissions and emissions intensities to all-time lows, which is very important. Because we've done those things, we need to carefully consider how gas fits into our net zero commitments. Our future gas strategy also seeks to do this through a base of solid evidence that comes after a year of work and extensive public consultation.

It is time for a policy that makes sense. It is time for a policy that is cohesive over multiple portfolios, and that is what we are delivering. Let me paint the opposition a picture. Our Future Gas Strategy allows us to harness the power of gas as a transition fuel. Our Future Made in Australia plan enables us to invest in key green industries like renewables, harnessing our economic competitiveness on a global scale and rebuilding our manufacturing industry, which is so vital. Our fee-free TAFE program will train up our next generation of skilled workers who can make this plan a reality. This is a nation-building plan, and this is what nation-building looks like. This is not about ideology, politics and game-playing; it's about data, facts and, most importantly, results not only for now but for future generations. Our strategy is one that looks to the future, not just to the next election. Since coming to government, the Albanese government has taken immediate and strong action to shore up gas supply and manage price impacts. But, most importantly, we're keeping the lights on on the eastern seaboard, and that's what matters. (Time expired)

David Gillespie (Lyne, National Party) Share this | Link to this | Hansard source

This is a very important motion, and I'd like to thank the member for proposing it. Natural gas, or methane, is an essential part of the Australian economy. Most of the Western and Eastern world, across the northern and southern hemispheres, relies on gas. Gas in Australia is plentiful. We have coal-seam related gas. Many other places have their gas possibly associated with distillate, or oil. Countries like Canada have it in their oil sands, others with a lot of shale gas. It's critical that we get more gas out of our territory, because we are running out.

I would just like to open with observations in the Guardian, which doesn't usually speak favourably about gas. The headline: 'Gas shortfalls for eastern states worse than predicted just months ago, ACCC warns'. I quote:

East coast gas shortfalls could emerge as soon as 2027 … and in some states in 2026—unless new sources of supply are made available, the competition watchdog has warned …

The Australian Competition and Consumer Commission and AEMO have issued threat notices several times because of the very thin reserves of available gas for the eastern and southern states. They have had to extend the life of Eraring—thank goodness. That reliable source of energy is working 90 per cent of the time.

Across Australia, 80,000 people are working in the gas industry. It provides 32 per cent of all industrial processes. In fact, on the manufacturing side, 44 per cent of our processes rely on gas. Twenty per cent of our gas is used for household, or residential, use. It's also a key feedstock for fertilisers, chemicals and electricity generation. Open-cycle gas turbines that you can turn on, the electricity generators of which you can spin courtesy of a gas-fired turbine, can be made available in minutes if gas is at the power station. But the electricity is expensive if the gas is expensive. The energy density is not nearly as high as other forms, like nuclear. If we have low gas levels or expensive gas, we've got expensive electricity, uneconomic manufacturing and expensive fertiliser. It's critical for our food supply. The royalties from the gas industry in Australia give us $17 billion every year, let alone all the investment activity, with up to $300 billion invested in the gas industry in Australia. Many thousands of associated jobs rely on it.

The other thing is that our neighbours, our allies, Japan and Korea—nations in Asia that don't have any natural resources like gas or coal—depend on it. In fact, there is a huge requirement for these countries to use our empty gas fields for their carbon capture and storage. There are many fields that will be able to provide that. East Timor will get a lot of revenue from the empty gas fields that are on their territory. We've got four fields in Western Australia that can take gas, and we have three in the eastern states. It is also the feedstock for 99 per cent of the world's hydrogen. CH4 is where hydrogen comes from. It's made by splitting the hydrogen off methane.

Even though this government has a gas strategy and talks big, the other side of government is that the environmental approvals have all been frozen, and you can't get gas out of the ground at a minute's notice or in the short term. There is a long lag period. So we don't want rhetoric; we want faster approvals and for people to appreciate that gas is an essential. America have reduced their footprint by 40 per cent by replacing their coal with gas. We could do that now. It is feasible. We've just got to approve everything and get cracking.

Rebekha Sharkie (Mayo, Centre Alliance) Share this | Link to this | Hansard source

There being no further speakers, the debate is adjourned. The resumption of the debate will be made an order of the day for the next day of sitting.

Federation Chamber adjourned at 19:0 7