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Future Gas Strategy

The Future Gas Strategy was released on 9 May. Gas continues to be important to Australia through the energy transition with natural gas currently meeting 27% of our energy needs and nearly 20% of export income. The Minister for Resources, Madeleine King, highlights in the document that gas is a transition fuel that is required until renewable alternatives are viable. She also highlights the need for greenhouse gas emissions associated with gas to decline, abated or offset. In line with this the Strategy anticipates that demand for gas may increase until alternative energy sources are available but by 2050 demand is expected to be significantly reduced. 

The Future Gas Strategy was released on 9 May. Gas continues to be important to Australia through the energy transition with natural gas currently meeting 27% of our energy needs and nearly 20% of export income. The Minister for Resources, Madeleine King, highlights in the document that gas is a transition fuel that is required until renewable alternatives are viable. She also highlights the need for greenhouse gas emissions associated with gas to decline, abated or offset. In line with this the Strategy anticipates that demand for gas may increase until alternative energy sources are available but by 2050 demand is expected to be significantly reduced. 

The Strategy draws heavily from the Future Gas Strategy Analytical Report that includes detailed data and analysis on gas supply, consumption and emissions. It was also informed by extensive industry and public consultation.

The objectives of the Strategy are to:

  • Support decarbonisation of the Australian economy; 
  • Safeguard energy security and affordability;
  • Entrench Australia’s reputation as an attractive trade and investment destination; and
  • Help our trade partners on their own paths to net zero.

The Strategy outlines six enduring principles that will underpin future government policies and actions. These are:

  1. Australia is committed to supporting global emissions reductions to reduce the impacts of climate change and will reach net zero emissions by 2050. This means any gas production and use must be optimised, abated or offset; 
  2. Gas must remain affordable for Australian users throughout the transition to net zero. This not only includes reducing costs but also ensuring timely development and avoiding delays to ensure affordability;
  3. New sources of gas supply are needed to meet demand during the economy-wide transition. The intention is for natural gas exploration and development to focus on optimising existing discoveries and infrastructure, along with robust environmental approval processes;
  4. Reliable gas supply will gradually and inevitably support a shift towards higher value and non-substitutable gas uses. Households will continue to have a choice over how their energy needs are met;
  5. Gas and electricity markets must adapt to remain fit for purpose throughout the energy transformation; and
  6. Australia is, and will remain, a reliable trading partner for energy, including Liquefied Natural Gas (LNG) and low emissions gases. This will support the energy security and decarbonisation efforts of our trading partners. 

Six key actions have been identified:

  1. Prevent gas shortfalls to minimise price escalations: This involves a mix of policy and regulatory settings including leveraging the powers of the Australian Energy Market Operator, limiting exports as a last resort, updating retention lease policies to encourage development of existing discoveries. The government will also consider whether to introduce a firmer policy of “use it or lose it” and continuing to improve the legislative framework;
  2. Reduce gas-related emissions: In addition to the Safeguard Mechanism and sector decarbonisation plans that are in place, the government will also reduce or eliminate gas venting and flaring by working with regulators and industry, minimise the use of marine seismic surveys where possible and consider reducing gas demand in the sectoral decarbonisation plans;
  3. Support households and businesses through the transition to net zero: This involves managing short-term affordability of energy by working with states and territories to manage pricing impacts and strengthening the Gas Market Code;
  4. Empower First Nations people to benefit from the transition to net zero: Reforms will include clarifying the consultation requirements for offshore petroleum and greenhouse gas storage activities and pursuing an appropriate level of benefit sharing for First Nations people that may include new job opportunities, improved education and direct community investment;
  5. Promote geological storage of carbon dioxide and support our region’s transition to net zero: To achieve this the government will continue to release offshore acreage for greenhouse gas storage, ensure any future offshore exploration acreage releases consider energy security and transition needs, finalise the offshore regulatory regime review, leverage Hydrogen Headstart and Regional Hydrogen Hubs to grow clean energy exports and establish a Transboundary Carbon Capture and Storage Program for energy security and carbon management solutions; and
  6. Update the strategy, including reviewing and updating the Gas Market Code, Heads of Agreement and Australian Domestic Gas Security Mechanism, tailoring policy responses to emerging issues and ensuring the strategy supports Australia’s commitments under the Paris Agreement. 

The Strategy will form the basis for policy relating to the gas over the coming years and is a critical part of the Government’s energy transition plan. 
 

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