Energy industry slams federal government over delays and anti-gas deal

Two leading industry bodies have lashed out at the federal government over moves they say will make energy more expensive and less reliable.

The Chamber of Minerals and Energy of Western Australia (CME) says the government’s delayed decision on the North-West Shelf project extension is the latest blow to investor confidence.

The project extension received environmental approval from the WA government in December following a lengthy and robust assessment.

‘Unacceptable’ delays

CME chief executive officer Rebecca Tomkinson said the decision to delay a ruling on environmental approval for the North West Shelf extension until at least 31 March comes after the project had already spent many years undergoing environmental assessment.

“Rigorous assessment processes are important to uphold Australia’s world-leading environmental standards, but the North West Shelf project extension has now been waiting an unacceptable six years,” Ms Tomkinson said.

“Delays like this do nothing to improve environmental outcomes, but they do significant damage to our ability to attract international investment.”

Duplicative processes

Ms Tomkinson said that delays such as this at the federal level once again illustrate how duplicative processes act as a handbrake on development.

“In a context of declining productivity and rising costs, late-stage project delays fly in the face of the certainty businesses are crying out for,” she said.

“The ability to provide process and timeline certainty can be the difference between that capital being deployed here in WA or heading overseas.”

Green partnership attacked

Meanwhile, Australian Energy Producers (AEP) says Australians are set to pay more for their electricity and face an increased risk of blackouts under the federal government’s deal with the Greens to keep gas out of the Capacity Investment Scheme (CIS).

AEP chief executive Samantha McCulloch said locking gas out of the CIS was at odds with the government’s own advice on the commodity’s critical role in delivering reliable and affordable electricity by backing up renewables in the National Electricity Market (NEM).

“Australia needs significant investment in new gas power generation to keep the lights on and power bills down,” Ms McCulloch said.

“Instead of encouraging this investment, the federal government has again capitulated to the Greens’ anti-gas agenda and ignored the repeated warnings from experts about the critical role of gas in our power mix.”

New gas capacity needed

The Australian Energy Market Operator (AEMO) has found the NEM needs 13 gigawatts of new gas-powered generation capacity to be built between now and 2050 and that renewables backed up by gas-powered generation are the lowest-cost way to supply electricity to homes and businesses.

“AEMO has made clear that gas is ‘the ultimate backstop for our grid’ and estimates that demand for gas power in the NEM will be almost double today’s levels in the early 2040s,” Ms McCulloch said.

“Australia urgently needs investment in new gas supply and infrastructure to avoid structural shortfalls on the east coast from 2027, but mixed signals on the importance of gas only serve to undermine investor confidence.”