Energy

BPH Energy reaffirms need for stalled gas project as Scott Morrison is censured for secret portfolios

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By Danica Cullinane - 
BPH Energy ASX offshore gas project Scott Morrison secret portfolios carbon storage

BPH Energy 董事长 David Breeze 表示,该公司的 PEP-11 海上天然气和拟议的碳储存项目具有“潜在的国家意义”。

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BPH Energy (ASX: BPH) managing director and executive chairman David Breeze has again emphasised the need for its controversial offshore gas project to go ahead as the domestic market faces more forecast shortages.

In the chairman’s address at BPH’s annual general meeting today, Mr Breeze cited Federal Government budget papers from August confirming that electricity and gas prices are expected to rise sharply over the next two years: retail electricity prices by 50% and retail gas prices by around 40% in 2022 and 2023.

He describes the company’s PEP-11 gas and proposed carbon storage project at Baleen (Seablue-1 well) offshore New South Wales as having “potential national significance” as he said it addresses both forecast gas shortages (having committed all gas from the project to domestic supply) and the objective of net zero emissions.

However, the project is still at a standstill after the permit’s renewal was blocked by former Australian Prime Minister Scott Morrison when he secretly appointed himself to the Resources portfolio between 2020 and 2021.

In June this year, BPH’s subsidiary Asset Energy, which holds an 85% operating interest in PEP-11, commenced proceedings in the Federal Court alleging that Mr Morrison was biased and failed to afford procedural fairness in his decision not to grant the permit extension.

An amended application to the Federal Court is listed for a one-day hearing next March.

First Australian prime minister to be censured by parliament

Following revelations that Mr Morrison took responsibility in a number of portfolios, an inquiry from former High Court Justice Virginia Bell released last week found these appointments “fundamentally undermined the principles of responsible government”.

Mr Morrison admitted that he only used his powers once – when he overrode Resources Minister Keith Pitt and vetoed the PEP-11 project.

A motion passed in the House of Representatives after midday today at 86 votes to 50, to censure Mr Morrison for failing to disclose these appointments.

He becomes the first former Australian prime minister to be censured by parliament, which means to formally condemn his actions.

Looming gas crisis

Mr Breeze says gas is increasingly becoming the key factor behind electricity prices because “it is gas that can provide the firming capacity that allows the grid to operate 24/7 throughout the year.”

“As far as electricity on the east coast is concerned, the key problem is that the scale and timing of the exodus of 24/7 power plants – mainly coal fired ones – have been such that even the substantial investment in renewable energy has been inadequate to deal with the shortfall … particularly given its intermittency.”

“There is only one way in which the price of gas can sustainably revert to lower levels and that’s through more supply,” he added.

The only two remaining permit areas in the entire NSW area is the PEP-11 permit offshore Newcastle and those surrounding Santos’ (ASX: STO) Narrabri project, another controversial project.

Mr Breeze noted wholesales prices for gas and electricity had surged to record and persistent highs due to supply constraints, which was further exacerbated by reduced coal-fired output and an increased demand for heating over winter.

Adding to this was the failure of large NSW gas retailet Weston Energy which led to gas price capping in the Sydney and Brisbane short-term trading markets and the Australian Energy Market Operator (AEMO) limiting the operations of two gas-powered generator in Victoria as low storage levels “presented a threat to system security”.

“There is significant risk that new gas projects will not come online in time to prevent expected supply shortages. As a result, we expect energy affordability will decline. This is a major concern, recognising that electricity affordability remains a top cost of living issue for households,” Mr Breeze said.

“The cost of these market interventions to Australian households and businesses is massive and is directly affecting inflation and household energy bills. The costs of these higher energy bills have been estimated to be at least $1-1.7 billion and could be as high as high as $4 billion. It is these costs that are now being reflected in energy and gas bills,” he added.

BPH believes PEP-11, if successful, could play a key role in meeting the domestic supply shortfall with Mr Breeze quoting Resources Minister Madeleine King’s comments that new exploration areas offshore Australia “are central to alleviating future domestic gas shortfalls”.