Commission urges massive gas-led economic recovery supported by taxpayers
A leaked report from the manufacturing taskforce of the National Covid Co-ordination Commission includes plans for massive gas subsidies and public investment.
Massive building of pipelines, development of new gas fields, scrapping bans on coal seam projects, state and federal governments underwriting gas prices – these are just some of the proposals contained in a leaked report from the manufacturing taskforce of the National Covid Co-ordination Commission (NCCC) that have been sent to Canberra.
The proposals are aimed at lowering energy prices which in turn would help Australia rebuild its manufacturing base.
The proposals include plans to build a $6 billion pipeline to connect Western Australia with the eastern states and the development of the Beetaloo Basin in the Northern Territory.
The gas industry has estimated the Beetaloo Basin, a huge shale gas resource south of Darwin, contains enough energy to power Australia for 200 years.
The NCCC has not officially released its report but it has been widely leaked today.
Criticised for no mention of climate change and emission targets
The commission’s report has already come under attack from anti-government media for advocating more fossil fuel use — and not mentioning climate change nor emissions reductions targets — and because the taskforce included people from the energy sector.
The manufacturing taskforce is led by Andrew Liveris, a Dow Chemical executive and a board member at Saudi Aramco.
The report urges the federal government to allow its agencies to partner with companies to accelerate development of new fields, and to take equity positions in major pipeline projects.
Bans on some coal seam gas projects in NSW and Victoria should be lifted, and red (and green) tape slashed to help unlock gas supply for the east coast of Australia.
Eastern states already face gas supply crunch
Last month Queensland and Northern Territory explorer Blue Energy (ASX: BLU) urged the federal and Queensland government to build a Bowen Basin southern gas pipeline that could unlock 15,000 petajoules (PJ) of discovered gas to provide vital “timely and reliable” energy supplies to the eastern states.
The case for tapping discovered gas and ensuring supply for domestic and industrial users on Australia’s east coast was outlined in the company’s report for the quarter ended December 31, 2019.
The gas shortage was identified by the March gas opportunities report issued by the Australian Energy Market Operator (AEMO).
That report predicts a shortage in eastern states from 2023.
Blue Energy said it had drawn the attention of the two governments to Queensland’s Northern Bowen Basin as the largest onshore, discovered gas resource — and one that remains undeveloped and not connected to the east coast domestic gas market.
Blue Energy said the AEMO report did not take into consideration what could happen with previous commitments to develop gas projects following the recent collapse in oil prices.
These projects, termed by AEMO “anticipated developments”, underpin gas supply to the east coast of Australia from 2023.
“Failure of any of these anticipated developments to eventuate will leave the southern states in a precarious energy position sooner rather than the expected 2023 forecast,” the report noted.
Bowen Basin gas ready to go
Blue Energy managing director John Phillips, commenting on the publication of the report’s recommendations, told Small Caps that the Bowen Basin was the most shovel-ready, lowest capital cost new gas project on the east coast Australia.
The basin has a huge gas reserve but, apart from supplying Townsville, it lacks a physical pipeline connection into the larger southern market area where the bulk of manufacturing is short of gas.
“There is enough gas in the North Bowen Basin to meet East Coast demand for 30 years at the current rate of use,” said Mr Phillips.
He argues that large-scale gas development would provide additional gas supply and provide more capacity for fast start gas fired generation to fill the gap as as the older coal-fired power station fleet is retired of.
“That’s a better environmental outcome,” he added.
And here’s another point: gas will pay royalties into state government coffers while renewable energy is not subject to royalty payments.
Mr Phillips said more gas supply will lower gas prices and would be a great impetus in rebuilding Australia’s manufacturing sector.