The Liberal-led Coalition appears to be having its own ‘drill-baby-drill’ moment ahead of the soon-to-be announced federal election date, with promises to fast-track drilling permits to unleash “bucketloads” of new gas.
Assuming it’s the victor in the upcoming election – which the polls expect it to win – the Peter Dutton-led Coalition wants to create market conditions that deliver a major uptick in natural gas supply.
Taking its cue from the recently elected Trump administration in the U.S., Dutton wants to take a scalpel to approval times for companies seeking to develop new gas projects.
North West Shelf
Plans to extend the life of Woodside Energy’s (ASX: WDS) huge North West (NWS) Shelf gas operations in WA will also be music to the ears of the energy giant’s CEO Meg O’Neill.
She has publicly vented frustration over protracted delays at the NWS having waited years for WA Government approval.
In a recent speech, O’Neill bluntly warned the government that it if didn’t get a jig along, Westside may overlook Australia for alternative investment options offshore.
“We are at the point where we are looking at business decisions that are ahead of us, things like drilling new wells to bring new gas to the market, particularly the domestic gas market, which needs it as early as 2028,” she said during Woodside’s recent results update for 2024.
“We are having to ask ourselves – can we make that decision with confidence, not knowing if federal approval is going to be granted?"
Averting east coast shortages
O’Neill was referring to the pending east coast shortage of LNG, which she adds will only result in adding more coal to the energy mix for longer.
But it’s not just O’Neill sounding the alarm bells. Industry sources unanimously concur that consumers in the most populous south-eastern states are likely to experience gas shortage within three years without additional supplies being made available.
Beyond the NWS, the Coalition’s plans to reignite greater exploration of LNG will also include what it says are huge untapped gas fields in Bass Strait’s Gippsland Basin.
Gas reserves in this region have been supplying the eastern seaboard for decades. However, new projects have not replaced those that are drying out, due to Victoria’s longstanding ban on conventional gas exploration which as only lifted on 1 July 2021.
Put Australia first
The Coalition’s resources spokeswoman Susan McDonald recently reiterated plans to give companies access to accelerated approvals in exchange for commitments to set aside a quota of their projects’ production for local buyers only.
These comments are clearly aimed at Woodside a major exporter of LNG.
If it wins this year’s election, the coalition plans to extend the life of Woodside’s 40-year-old North West Shelf project to 2070.
While Woodside got the greenlight from the WA government in December after a six-year wait, it is still awaiting Federal Government approval.
The Albanese government is in no hurry to grant approval and is citing potential concerns over 50,000-year-old Indigenous rock art in the region.
‘Bloody cowboys’
Meanwhile, federal resources minister Madeleine King is accusing the Coalition of behaving like “bloody cowboys” for bypassing due process under national environmental law.
“Objectively, the North West Shelf has been very important to WA, but the decision around this has to be decided on what is presented and what is obliged to be presented to the minister,” King said.
King has also accused the Coalition of wanting to supercharge supply in Victoria without a single explanation of how they plan to do it.
Tony Wood, energy program director at the Grattan Institute doubts the Coalition’s proposal will unlock greater supplies of domestic gas in Victoria, given that previous surveys suggest there’s little gas left in the state.
Wood also noted that the Coalition’s plans to “open the floodgates” to bring on new supplies will require environmental reform.
In an attempt to speed up timelines, the Coalition has vowed to defund the Environmental Defenders Office. However, it has no current plans to change the EPBC Act.
Coal remains ‘reliable back-up’
While the Albanese government allegedly supports the expansion of the gas industry in Australia, it is also sees coal as a reliable back up to weather-reliant renewables.
As a result, energy minister Chris Bowen recently backed new powers allowing states to mandate the extension of retiring coal- and-gas-fired power plants.
Following this decision, the NSW and Victoria Labor governments were quick to extend the closure dates for Eraring, Yallourn and Loy Yang coal power stations.
Meanwhile, Australian Energy Producers have welcomed the Coalition’s plan to accelerate approvals and are looking forward to seeing further details around its gas policy.
